Document:

exv4w6

Exhibit 4.6

SECOND SUPPLEMENTAL INDENTURE

     This Second Supplemental Indenture (this “Supplemental Indenture”), dated as of
January 13, 2009, among Key Energy Mexico, LLC, a Delaware limited liability company (the “New
Guarantor”), a subsidiary of Key Energy Services, Inc., a Maryland corporation (the “Company”), the
existing Guarantors (as defined in the Indenture referred to herein) and The Bank of New York
Mellon Trust Company, N.A. (f/k/a The Bank of New York Trust Company, N.A.), as trustee under the
Indenture referred to herein (the “Trustee”). The New Guarantor and the existing Guarantors are
sometimes referred to collectively herein as the “Guarantors”, or individually as a “Guarantor.”

W I T N E S S E T H

     WHEREAS, the Company and the existing Guarantors have heretofore executed and delivered to the
Trustee an indenture (as supplemented by the First Supplemental Indenture dated January 22, 2008,
the “Indenture”), dated as of November 29,
2007, relating to the
83/8% Senior Notes due 2014 (the
“Securities”) of the Company;

     WHEREAS, Section 4.10 of the Indenture provides that if any Restricted Subsidiary
(other than a Foreign Subsidiary) of the Company that is not already a Guarantor incurs any
Indebtedness, or guarantees any other Indebtedness of the Company or a Guarantor, in either case in
excess of a De Minimis Amount, then the Company shall cause that Restricted Subsidiary to become a
Guarantor by executing a supplemental indenture and delivering it to the Trustee within 180 days of
the date on which it incurred or guaranteed such Indebtedness, as the case may be; and

     WHEREAS, pursuant to Section 9.1 of the Indenture, the Company, the Guarantors and the
Trustee are authorized to execute and deliver this Supplemental Indenture to amend or supplement
the Indenture without notice to, or the consent of, any Holder;

     NOW THEREFORE, to comply with the provisions of the Indenture and in consideration of the
foregoing and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the New Guarantor, the existing Guarantors, the Company and the Trustee mutually
covenant and agree for the equal and ratable benefit of the Holders of the Securities as follows:

     1. Capitalized Terms. Capitalized terms used herein without definition shall have
the meanings assigned to them in the Indenture.

     2. Agreement to Guarantee. The New Guarantor hereby agrees, jointly and severally,
with all other Guarantors, to guarantee to each Holder and to the Trustee the Guaranteed
Obligations, to the extent set forth in the Indenture and subject to the provisions in the
Indenture. The obligations of the Guarantors to the Holders of Securities and to the Trustee
pursuant to the Subsidiary Guarantees and the Indenture are expressly set forth in Article
X of the Indenture and reference is hereby made to the Indenture for the precise terms of the
Subsidiary Guarantees.

 

 

     3. Execution and Delivery. The New Guarantor agrees that its Subsidiary
Guarantee shall remain in full force and effect notwithstanding any failure to endorse on each
Security a notation of such Subsidiary Guarantee.

     4. NEW YORK LAW TO GOVERN. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE AND ENFORCE THIS SUPPLEMENTAL INDENTURE.

     5. Counterparts. The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement. This Supplemental Indenture may be executed in multiple counterparts which, when taken
together, shall constitute one instrument.

     6. Effect of Headings. The Section headings herein are for convenience only and
shall not affect the construction hereof.

     7. The Trustee. Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by
reason of this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the
Trustee subject to all the terms and conditions set forth in the Indenture with the same force and
effect as if those terms and conditions were repeated at length herein and made applicable to the
Trustee with respect hereto.

[Remainder of Page Intentionally Left Blank.

Signature Page Follows.]

2

 

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed and attested, all as of the date first above written.

	 	 	 	 	 	 	 
	 	 	Key Energy Mexico, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ WILLIAM M. AUSTIN
 

Name: William M. Austin
	 	 
	 

	 	 	 	Title: Vice President and Assistant Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	Key Electric Wireline Services, LLC	 	 
	 	 	Key Energy Fishing & Rental Services, LLC	 	 
	 	 	Key Energy Pressure Pumping Services, LLC	 	 
	 	 	Key Energy Services, LLC	 	 
	 	 	Key Energy Services Mexico, Inc.	 	 
	 	 	Key Energy Services (Mexico), LLC	 	 
	 	 	Key Energy Shared Services, LLC*	 	 
	 	 	Key Marine Services, LLC	 	 
	 	 	Misr Key Energy Investments, LLC	 	 
	 	 	Misr Key Energy Services, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ WILLIAM M. AUSTIN
 

Name: William M. Austin
	 	 
	 

	 	 	 	Title: Vice President and Assistant Treasurer	 	 
	 

	 	 	 	     * Signing in Capacity of President	 	 
	 
	 	 	 	 	 	 
	 	 	Key Energy Services, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ RICHARD J. ALARIO
 

Name: Richard J. Alario
	 	 
	 

	 	 	 	Title: President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	The Bank of New York Mellon Trust Company, N.A.
(f/k/a The Bank of New York Trust Company,
N.A.),	 	 
	 	 	as Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ JULIE HOFFMAN-RAMOS
 

Authorized Signatory
	 	 

3exv10w14

Exhibit 10.14

KIMBERLY R. FRYE

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

          THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (as from time to time amended in accordance
with the provisions hereof, this “Agreement”), is entered into this 22nd day of October, 2008, by
and between KIMBERLY R. FRYE, whose address is 2413 Ralph Street #6, Houston, Texas 77006 (the
“Executive”), KEY ENERGY SERVICES, INC., a Maryland corporation with executive offices at 1301
McKinney Street, Suite 1800, Houston, Texas 77010 (the “Parent”) and KEY ENERGY SHARED SERVICES,
LLC, a Delaware limited liability company (the “Company”).

          Whereas, the Executive and the Company are parties to that Restated Employment
Agreement dated as of August 1, 2007 (the “Original Employment Agreement”); and

          Whereas, the parties desire to amend and restate the Original Employment Agreement in
order to reflect her July 19, 2008 promotion to the position of Senior Vice President and General
Counsel, and to provide benefits commensurate with the office; and

          Whereas, the Executive is willing to serve as the Company’s Vice President and
Secretary, and the Parent’s Senior Vice President and General Counsel, pursuant to the terms and
conditions set forth herein;

          Now, Therefore, in consideration of the premises and mutual covenants and agreements
herein contained, the parties agree as follows:

     1. Employment; Term.

          (a) The Company hereby employs the Executive, and the Executive hereby accepts employment by
the Company, as the Company’s Vice President and General Counsel, and the Parent’s Senior Vice
President and General Counsel, effective July 19, 2008 (“Commencement Date”). The Executive shall
have the responsibilities, duties and authority commensurate with her positions, including without
limitation the general supervision and management of the Company’s Legal Department, its resources,
objectives, policies and programs and such other responsibilities, duties, functions and authority
as the Chief Executive Officer or, in certain circumstances, the Board shall from time to time
designate that do not effect a material decrease in the responsibilities, importance, scope or
dignity of the Executive’s position with the Company compared with those of such position as of the
Commencement Date, subject, however, to the supervision of the Chief Executive Officer. The
Executive will report to the Chief Executive Officer. Executive will, if appointed or elected,
serve as an officer or director of the Company, the Parent, subsidiaries or affiliates
(collectively, the “Key Companies”) and perform all duties incident to such offices.

          (b) Executive shall hold such positions with the Company and Parent hereunder until the close
of business on January 1, 2010, unless sooner terminated in accordance with Section 5, and at the
close of business on each anniversary of such date, commencing with January 1, 2010, the term of
the Executive’s employment hereunder shall be automatically extended for twelve

 

 

(12) months (unless sooner terminated in accordance with Section 5 hereof) unless either the
Executive or the Company shall have given written notice (in each case, a “Non-Renewal Notice”) to
the other that such automatic extension shall not occur, which Non-Renewal Notice shall have been
given no later than ninety (90) days next preceding the relevant Anniversary Date. (The entire
period of employment of Executive, until termination in accordance herewith, is referred to hereby
as the “Employment Period”).

          (c) The Executive will devote her full time and her best efforts to the business and affairs
of the Company and its Parent and subsidiaries; provided, however, that nothing contained in this
Section 1 shall be deemed to prevent or limit the Executive’s right to: (i) make investments in the
securities of any publicly-owned corporation; or (ii) make any other investments with respect to
which she is not obligated or required to, and to which she does not in fact, devote managerial
efforts that interfere with her fulfillment of her duties hereunder; or (iii) to serve on boards of
directors and to serve in such other positions with non-profit and for-profit organizations as to
which the Board may from time to time consent, which consent shall not be unreasonably withheld or
delayed. Reference is made to Section 7 hereof, which contains limitations on some of the above
activities.

          (d) The principal location at which the Executive will substantially perform her duties will
be the Company’s Houston, Texas offices, or as otherwise agreed between the Chief Executive Officer
and Executive. If any agreed change in location would increase the Executive’s one-way commuting
distance between her then-current principal residence and the offices to which she is assigned by
20 miles or more, the Company will pay to the Executive, and/or will reimburse the Executive for
each of the following expenses and costs incurred in connection with the Executive’s relocation and
will pay to the Executive the bonus specified in clause (vii) below: (i) the excess, if any, of (A)
the Executive’s aggregate tax basis in her primary residence at the time of its sale over (B) the
proceeds realized by the Executive from such sale net of ordinary and reasonable fees and expenses
incurred in connection with such sale (other than such fees and expenses described in clause (ii)
of this sentence), (ii) ordinary and reasonable realtor fees and closing costs incurred in
connection with the sale of the Executive’s primary residence, (iii) ordinary and reasonable
closing costs incurred in connection with the purchase of the Executive’s new primary residence in
the vicinity of the new location at which the Executive is to render her services hereunder, (iv)
ordinary and reasonable costs incurred to pack, transport, unpack, and insure the Executive’s
household furnishings and effects to her new primary residence, (v) ordinary and reasonable fees
for connecting utilities in her new primary residence, (vi) ordinary and reasonable costs for trips
to look for a new residence as well as up to thirty (30) days of temporary housing, and (vii) a
cash bonus calculated to pay all of the federal, state and local income and payroll taxes which the
Executive will incur, if any, as a result of (A) the Company’s reimbursement of the preceding
expenses and (B) the amount of such bonus (that is, a “gross-up” bonus). Each of the expenses or
other items reimbursable under this Section 1(d) shall be reimbursed in a separate payment. It
shall be a condition precedent to any payment pursuant to this Section 1(d) that Executive has been
continuously employed by the Company through the date on which such payment is made.

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

     2. Salary; Bonuses; Expenses.

          (a) During the Employment Period, the Company will pay base compensation to the Executive at
the annual rate of Two Hundred Seventy-Five Thousand Dollars ($275,000.00) per year (the “Base
Salary”), payable in substantially equal installments in accordance with the Company’s existing
payroll practices, but no less frequently than monthly. The Company will review the Base Salary on
a yearly basis following the end of each fiscal year of the Company to determine if an increase is
advisable, and the Base Salary may be increased (but not decreased) at the discretion of the Chief
Executive Officer and the Compensation Committee (the “Compensation Committee”) of the Board,
taking into account, among other factors, the Executive’s performance and the performance of the
Company.

          (b) The Executive shall be eligible to participate in all of the Company’s cash performance
compensation plans (collectively, the “Performance Cash Compensation Plans”) for the Company’s
executives providing for the payment of cash bonuses or other cash incentives payable upon the
achievement of goals set forth in the Company’s strategic plan as developed by the Compensation
Committee after consultation with the Chief Executive Officer and the Executive, payable in
accordance with the provisions thereof. The performance goals for the Performance Cash
Compensation Plans will be based on objective criteria specified in good faith in advance by the
Compensation Committee after consultation with the Chief Executive Officer and the Executive. The
Executive shall also receive such bonuses other than pursuant to the Performance Cash Compensation
Plans in such amounts and at such times as the Compensation Committee, after consultation with the
Chief Executive Officer, in its discretion determines are appropriate to recognize extraordinary
performance by the Executive. The Executive’s target bonus for each fiscal year will be one
hundred percent (100%) of Base Salary.

          (c) The Executive shall be reimbursed by the Company for reasonable travel, lodging, meal,
entertainment and other expenses incurred by her in connection with performing her services
hereunder in accordance with the Company’s reimbursement policies from time to time in effect.

     3. Equity-Based Incentives. The Executive shall be eligible to participate in awards of stock
options, restricted stock, stock appreciation rights, deferred stock and other equity-based
incentives (collectively, “Equity-Based Incentives”), at the discretion of the Board or the
Compensation Committee. Any performance goals for the grant of such Equity-Based Incentives will
be based on objective criteria mutually negotiated and agreed upon in good faith in advance by the
Board or the Compensation Committee after consultation with the Executive and the Chief Executive
Officer.

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

     4. Benefit Plans; Vacations.

          In connection with the Executive’s employment hereunder, she shall be entitled during the
Employment Period (and thereafter to the extent provided in Section 5(f) hereof) to the following
additional benefits:

          (a) At the Company’s expense, such fringe benefits as the Company may provide from time to
time for its senior management, but in any case, at least the benefits described on Exhibit A
hereto.

          (b) The Executive shall be entitled to no less than the number of vacation days in each fiscal
year determined in accordance with the Company’s vacation policy as in effect from time to time,
but not less than twenty (20) business days in any fiscal year (prorated in any fiscal year during
which she is employed hereunder for less than the entire year in accordance with the number of days
in such fiscal year in which she is so employed) and subject to the Company’s policies on
carryovers. The Executive shall also be entitled to all paid holidays and personal days given by
the Company to its senior management.

          (c) Nothing herein contained shall preclude the Executive, to the extent she is otherwise
eligible, from participation in all group insurance programs or other fringe benefit plans which
the Company may from time to time in its sole and absolute discretion make available generally to
its personnel, or for personnel similarly situated, but the Company shall not be required to
establish or maintain any such program or plan except as may be otherwise expressly provided
herein.

     5. Termination, Change in Control and Reassignment of Duties.

          (a) Termination by the Company. The Company shall have the right to terminate the
Executive’s employment under this Agreement and the Employment Period for Cause (as defined below)
at any time without obligation to make any further payments to the Executive hereunder except the
compensation described in Section 5(g) hereof. Except as otherwise provided in Section 5(b) hereof,
which Section shall apply in the event the Executive becomes unable to perform her obligations
hereunder by reason of Disability (as defined below), the Company shall have the right to terminate
the Executive’s employment hereunder and the Employment Period for any reason other than for Cause
(including, without limitation, by giving the Executive a Non-Renewal Notice pursuant to Section
1(b) hereof) only upon at least ninety (90) days prior written notice to her (provided that, in the
event the Company gives the Executive a Non-Renewal Notice pursuant to Section 1(b) hereof, only
the 90-day notice period therein provided shall be required). In the event the Company terminates
the Executive’s employment hereunder for any reason other than for Disability or Cause (including,
without limitation, by giving the Executive a Non-Renewal Notice pursuant to Section 1(b) hereof),
then for the purpose of effecting a transition during the ninety (90) day notice period of the
Executive’s management functions from the Executive to another person or persons, during such
period the Company may reassign the Executive’s duties hereunder to another person or other
persons. Such reassignment shall not reduce the Company’s obligations hereunder to make salary,
bonus and other payments to the Executive and to provide other benefits to her during the remainder
of her employment and, if applicable, following the termination of employment.

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

Notwithstanding a notice of termination that does not, when made, specify Cause, the Company
may, during the 90 day notice period (the “Cause Review Period”), convert the termination to a
Cause termination, subject to the procedural safeguards specified in the next paragraph.

          As used in this Agreement, the term “Cause” shall mean (i) the failure by the Executive to
substantially perform the major functions of her position in a satisfactory manner (other than (A)
any such failure resulting from her incapacity due to physical or mental illness or physical injury
or (B) any such actual or anticipated failure after the issuance of a notice of termination by the
Executive for Good Reason (as defined below)), after a written demand for substantial performance
is delivered by the Company to the Executive that specifically identifies the manner in which the
Company believes the Executive has not substantially performed her duties; or (ii) the engaging by
the Executive in misconduct that is, or is reasonably likely to be, materially injurious to the
Company, monetarily or otherwise; or (iii) the Executive’s conviction or plea of guilty or no
contest to a felony (or to a felony charge reduced to misdemeanor), or, with respect to her
employment, to any misdemeanor (other than a traffic violation) or, with respect to her employment,
knowing violation of any federal or state securities or tax laws; or (iv) willful violation of the
Key Energy Services, Inc. Amended and Restated Policy Regarding Acquisition, Ownership and
Disposition of Company Securities or the Code of Business Conduct, as same may be amended from time
to time. Notwithstanding the foregoing, the Executive’s employment shall not be deemed to have
been terminated for Cause unless (A) reasonable notice shall have been given to her setting forth
in detail the reasons for the Company’s intention to terminate for Cause, and if such termination
is pursuant to clause (i) or (ii) above and any damage to the Company is curable, only if Executive
has been provided a period of ten (10) business days from receipt of such notice to cease the
actions or inactions and otherwise cure such damage, and she has not done so (provided that only
one such period needs to be provided in any period of three (3) consecutive months); (B) an
opportunity shall have been provided for the Executive to be heard before the Board; and (C) if
such termination is pursuant to clause (i) or (ii) above, delivery shall have been made to the
Executive of a notice of termination from the Board finding that in the good faith opinion of a
majority of the Board (excluding the Executive, if applicable) she was guilty of conduct set forth
in clause (i) or (ii) above.

          (b) Termination upon Disability and Temporary Reassignment of Duties Due to Disability;
Termination upon Death

               (i) If the Executive becomes totally and permanently disabled during the Employment Period so
that she is unable to perform her obligations hereunder by reasons involving physical or mental
illness or physical injury for an aggregate of ninety (90) days (whether or not consecutive) during
any period of twelve (12) consecutive months during the Employment Period (“Disability”), then the
Executive’s employment hereunder and the Employment Period may be terminated by the Company within
sixty (60) days after the expiration of such ninety (90) day period (whether or not consisting of
consecutive days), such termination to be effective ten (10) days after written notice to the
Executive. In the event the Company shall give a notice of termination under this Section 5(b) (i),
then the Company may reassign the Executive’s duties hereunder to another person or other persons.
Such reassignment shall not reduce the Company’s obligations hereunder to make salary, bonus and
other payments to the Executive and to provide other benefits to him, during the remainder of her
employment and, if applicable, following the termination of employment.

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

               (ii) During any period that the Executive is totally disabled such that she is unable to
perform her obligations hereunder by reason involving physical or mental illness or physical
injury, as determined by a physician chosen by the Company and reasonably acceptable to the
Executive (or her legal representative), the Company may reassign the Executive’s duties hereunder
to another person or other persons, provided if the Executive shall again be able to perform her
obligations hereunder prior to the Company’s termination of the Executive’s employment hereunder
and the Employment Period in accordance with the terms of this Agreement, all such duties shall
again be the Executive’s duties. The cost of any examination by such physician shall be borne by
the Company. Notwithstanding the foregoing, if the Executive has been unable to perform her
obligations hereunder by reasons involving physical or mental illness or physical injury for an
aggregate of ninety (90) days (whether or not consecutive) during any period of twelve (12)
consecutive months during the Employment Period, then a determination by a physician of disability
will not be required prior to any such reassignment. Any such reassignment shall not be a
termination of employment and in no event shall such reassignment reduce the Company’s obligation
to make salary, bonus and other payments to the Executive and to provide other benefits to her
under this Agreement during her employment or, if applicable, following a termination of
employment.

               (iii) The Executive’s employment hereunder and the Employment Period shall automatically
terminate immediately upon the death of the Executive.

          (c) Termination by Executive. The Executive’s employment hereunder and the Employment
Period may be terminated by the Executive by giving written notice to the Company as follows: (i)
at any time for any reason other than Good Reason (including, without limitation, by giving the
Company a Non-Renewal Notice pursuant to Section 1(b) hereof) by notice of at least ninety (90)
days (provided that, in the event the Executive gives the Company a Non-Renewal Notice pursuant to
Section 1(b) hereof, only the 90-day notice period therein provided shall be required); or (ii) at
any time for Good Reason, provided that the Executive can only give a notice of resignation for
Good Reason in connection with a “Change in Control” of the Parent (as defined in Exhibit B)
beginning on the ninetieth (90th) day after the closing of the transaction or the event
constituting a Change in Control. In the event of a termination by the Executive of her
employment, the Company may reassign the Executive’s duties hereunder to another person or other
persons.

     As used herein, “Good Reason” shall mean the continued existence from the date
of the notice from the Executive referred to below until after the expiration of the
Cure Period of any one or more of only the following circumstances or conditions:

               (i) A material diminution in the Executive’s Base Compensation, authority,
duties or responsibilities,

               (ii) A material diminution in the authority, duties or responsibilities of a
supervisor to whom the Executive reports (including a requirement that the Executive
report to another individual rather than to the Board of Directors of the Company),

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

               (iii) A material diminution in the budget over which the Executive retains
authority,

               (iv) A material change in the geographic location at which the Executive must
perform the services required by this Agreement, provided, however, that no change
in such geographic location will be considered material if Executive has received
any reimbursement pursuant to Section 1(d) of this Agreement in connection with such
relocation; or

               (v) Any other action or inaction by the Company that constitutes a material
breach of this Agreement.

     The existence of any circumstance or condition shall not constitute Good Reason
unless (i) the Executive provided notice to the Company of the existence of the
circumstance or conditions within 90 days of the initial existence of such
circumstance or condition, and (ii) the circumstance or condition continued to exist
after the last day of the Cure Period. For purposes of this Section 5(c), the term
“Cure Period” means the period of 30 consecutive days beginning on the date notice
was given by the Executive of the existence of the circumstance or condition alleged
to be Good Reason.

          (d) Severance Compensation.

               (i) Termination by Executive for Good Reason or By the Company for Non Renewal or Other
than for Cause. In the event the Executive’s employment hereunder is terminated (A) by the
Executive for Good Reason or (B) by the Company other than for Cause, for Disability, or upon
Notice of Non-Renewal, the Executive shall be entitled, in addition to the other compensation and
benefits herein provided for, to severance compensation in an aggregate amount equal to two (2)
times her Base Salary at the rate in effect on the termination date, (but no less than the annual
Base Salary specified in Section 2(a)) payable in twenty-four (24) substantially equal monthly
installments commencing at the end of the calendar month in which the termination date occurs.
Each monthly installment payment required under this Section 5(d)(i) shall be payable on or about
the first day of the month to which it relates, and the right to any series of separate installment
payments under this Section 5(d)(i) shall at all times be a right to a series of separate payments
under Treasury Reg. 1.409A-2(b)(2)(iii).

               (ii) Termination following Disability. In the event the Executive’s employment should
be terminated by the Company as a result of Disability in accordance with Section 5(b) hereof, then
the Executive shall be entitled, in addition to the other compensation and benefits herein provided
for, to severance compensation in an aggregate amount equal to one (1) times her Base Salary at the
rate in effect on the termination date, payable in twelve (12) substantially equal monthly
installments commencing at the end of the calendar month in which the termination date occurs,
reduced by the amount of any employer-provided disability insurance proceeds actually paid to the
Executive or for her benefit during such time period.

               (iii) Change in Control. If the Executive’s employment is terminated within one (1)
year following a Change in Control of the Parent that is a “change in control event” as

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

defined in Treas. Reg. §1.409A-3(i)(5) and the Executive is entitled to severance compensation
pursuant to Section 5(d)(i) or 5(d)(ii) hereof as a result of such termination, the severance
compensation otherwise payable to the Executive (A) shall be increased by an amount (the “Enhanced
Severance Amount”) sufficient, when added to the amount payable under Section 5(d)(i) or 5(d)(ii)
hereof, to cause the total amount payable as the result of such termination to equal three (3)
times the Base Salary then in effect plus three (3) times the Executive’s annual target cash bonus
as provided in Section 2 (b) above and (B) the Enhanced Severance Amount shall be payable in one
lump sum on the effective date of such termination. In the event severance compensation becomes
payable in a lump sum pursuant to this Section 5(d)(iii), and if the Executive’s employment is or
has been terminated for Disability, such lump sum shall be reduced by a good faith estimate of the
aggregate amount of any disability insurance proceeds which will be actually paid to the Executive
or for her benefit (but only those proceeds from disability insurance provided by the Company to
the Executive pursuant to Section 4(a) hereof) during the remaining period over which such
severance would otherwise have been paid.

               (iv) Termination for Death. In the event of the Executive’s death during the
Employment Period, the Executive’s estate shall not be entitled to any severance compensation.

               (v) Termination by Executive other than for Good Reason or by Company for Cause. In
the event of the Executive’s termination by resignation under Section 5(c)(i) (i.e., other than for
Good Reason) or by the Company for Cause, the Executive shall not be entitled to any severance
under Section 5(d) or otherwise, any continued benefits under Section 5(f) (other than as required
by statute), or any accrued compensation under Section 5(g)(iii) (for prior year bonuses, to the
extent specified in that clause). Under the foregoing situations, the treatment of equity
incentives shall be as specified in Section 5(e)(ii), and the Executive shall receive the accrued
compensation described in Section 5(g).

               (vi) Release. Executive agrees that except in the case of a termination resulting
from Executive’s death, all payments under Section 5 (d), (e), (f), and (g)(iii) and Section 6 are
conditioned on the Executive’s prior execution and non-revocation of a full release of the Company
and its officers, employees, affiliates and agreements for all claims relating to her employment,
compensation, and termination and such other matters as the Company reasonably requests on
termination, in a form provided by the Company, which execution shall not occur earlier than the
day after termination of the Executive’s employment and not later than 60 days following delivery
by the Company to the Executive of the form for such release; provided, however, that if no form
for such release is delivered to the Executive within seven (7) days of the termination of
Executive’s employment, this Agreement shall be applied without regard to this Section 5(d)(vi);
and provided further, however, that any Release previously executed under this Section 5(d)(vi)
will be null and void if the Company reaches a determination of Cause within the Cause Review
Period. If any amount is payable under this Section 5 because of a separation from service that is
not an “involuntary separation from service” as defined in Treas. Reg. § 1.409A-1(n)(1) or a
separation from service which, pursuant to Treas. Reg. § 1.409A-1(n)(2) is entitled to treatment as
an “involuntary separation from service” as so defined, and if a form of release is delivered by
the Company to the Executive within seven (7) days of such separation from service, then any other
provision of this Agreement to the contrary notwithstanding, any such amount shall not be payable
until the sixtieth day after the date of such separation from service.

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

               (vii) For purposes of this Agreement, Executive’s employment will not be considered to have
terminated unless, as a result of a termination, Executive has had a “separation from service” (as
that term is defined in Treas. Reg. § 1.409A-1(h)) with the “Key Energy Controlled Group.” The
term “Key Energy Controlled Group” means the group of corporations and trades or businesses
(whether or not incorporated) composed of the Company and every entity or other person which
together with the Company constitutes a single “service recipient” (as that term is defined in
Treas. Reg. § 1.409A-1(g)) as the result of the application of Treas. Reg. § 1.409A-1(h)(3).

          (e) Effect of Termination or Change in Control upon Equity-Based Incentives.

               (i) In the event the Executive’s employment hereunder is terminated by the Company for any
reason other than for Cause or Disability (including, without limitation, by giving the Executive a
Non-Renewal Notice pursuant to Section 1(b) hereof), or in the event the Executive should terminate
her employment for Good Reason, then any Equity-Based Incentives held by the Executive which have
not vested prior to the effective date of such termination shall immediately vest and shall remain
exercisable until the earlier to occur of (x) the first anniversary of the effective date of such
termination and (y) the final stated expiration date of the Equity-Based Incentive. In addition, in
the event of such a termination, any Equity-Based Incentives held by the Executive which have
vested prior to the effective date of such termination shall remain exercisable until the earlier
to occur of (x) the first anniversary of the effective date of such termination and (y) the final
stated expiration date of the Equity-Based Incentive.

               (ii) In the event the Executive’s employment hereunder is terminated by the Company for Cause
or is terminated by the Executive other than for Good Reason (including, without limitation, by
giving the Company a Non-Renewal Notice pursuant to Section 1(b) hereof), then effective upon the
date such termination is effective, any Equity-Based Incentives which have not vested prior to the
effective date of such termination shall be forfeited. Any Equity-Based Incentives held by the
Executive entitling the Executive to retain or purchase securities of the Company which have vested
prior to the effective date of such termination shall remain subject to the terms and provisions of
the plan and/or the agreement under which they were awarded.

               (iii) In the event of the Executive’s death while employed by the Company or in the event that
the Executive’s employment should terminate as a result of Disability, then any Equity-Based
Incentives held by the Executive which have not vested prior to the effective date of such
termination shall immediately vest and shall also remain exercisable until the earlier to occur of
(x) the first anniversary of the death of the Executive or the effective date of such termination
and (y) the final stated expiration date of the Equity-Based Incentives. In addition, in the event
of such death or such a termination, any Equity-Based Incentives held by the Executive which have
vested prior to the effective date of such death or termination shall remain exercisable until the
earlier to occur of (x) the first anniversary of the effective date of such death or termination
and (y) the final stated expiration date of the Equity-Based Incentives.

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

               (iv) In the event of a conflict between the preceding terms and provisions of this Section
5(e) and any other terms and provisions governing any Equity-Based Incentives held (now or in the
future) by the Executive (including without limitation the terms and provisions contained in the
agreements and/or plans pursuant to which such Equity-Based Incentives were (or will in the future
be) granted), the preceding terms and provisions of this Section 5(e) shall control;
provided, however, that, if an Equity-Based Incentive does not by its terms require
any exercise, no requirement of exercise shall be implied from the preceding terms and provisions
of this Section 5(e).

               (v) Anything to the contrary in this Agreement notwithstanding, the final stated expiration
date of an Equity Based Incentive shall not be extended beyond the tenth anniversary of the date on
which such Equity-Based Incentive was granted.

          (f) Continuation of Benefits.

               (i) Subject to Section 5(f)(ii) hereof, in the event that Executive’s employment hereunder is
terminated by the Executive for Good Reason or by the Company for Disability or other than for
Cause (including, without limitation, by giving the Executive a Non-Renewal Notice pursuant to
Section 1(b) hereof) and not as a result of the death of the Executive, the Executive shall
continue to be entitled, at the Company’s expense, to the post-employment benefits under Section 4,
if any, that such benefits provide under their terms for a period of time following the termination
date ending on the first to occur of (I) the second anniversary of the termination date, (II) the
last date of eligibility under the applicable benefits or (III) the date on which the Executive
commences full-time employment with another employer. The Company will pay the premiums for COBRA
health coverage for Executive and her covered family members for the period COBRA provides. At such
time as the Company is no longer required to provide the Executive with life and/or disability
insurance, as the case may be, the Executive shall be entitled, at the Executive’s expense, to
convert such life and disability insurance, as the case may be, into individually owned policies,
except if and to the extent such conversion is not available from the provider of such insurance.

               (ii) In the event the Executive’s employment hereunder is terminated by the Company within one
(1) year of a Change in Control (other than a termination because of the Executive’s death) or is
terminated by the Company other than for Cause in anticipation of a Change in Control, the Company
shall pay to the Executive, in lieu of providing the benefits contemplated by Section 5(f)(i)
above, an amount in cash equal to the aggregate reasonable expenses that the Company would incur if
it were to provide such benefits for a period of time following the termination date ending on the
second anniversary of the termination date, which amount shall be paid in one lump sum on the date
of such termination.

               (iii) In the event the Executive’s employment hereunder is terminated by reason of death, the
Executive’s spouse and her dependents shall be entitled at the Company’s expense to continued
health coverage under COBRA under the Company’s group medical and dental plans applicable to
executives (with the Company’s payment of premiums lasting for a period of twenty-four months or
such shorter period as COBRA provides because of replacement coverage).

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

          (g) Accrued Compensation. In the event of any termination of the Executive’s
employment for any reason, the Executive (or her estate) shall be paid (i) any unpaid portion of
her Base Salary through the effective termination date, (ii) for any accrued but unused vacation
(payable in an amount equal to the Base Salary divided by 255 and multiplied by the number of
accrued but unused vacation days), (iii) any prior fiscal year bonus earned, but not paid (unless
Executive resigns without Good Reason or is terminated for Cause), (iv) any amounts for expense
reimbursement and similar items which have been properly incurred in accordance with the provisions
hereof prior to termination and have not yet been paid, including without limitation any sums due
under Sections 2(c), 2(d), and 4(c) hereof, and (v) any Gross-Up Payment which may become due under
the terms of Section 6 hereof. Such amounts shall be paid within ten (10) days of the termination
date.

          (h) Director/Officer Resignations. If the Executive’s employment hereunder shall be
terminated by her or by the Company in accordance with the terms set forth herein, then effective
upon the date such termination is effective, she will be deemed to have resigned from all positions
as an officer and director of the Company, the Parent, and of any of its Subsidiaries, except as
the parties may otherwise agree.

     6. Certain Tax Consequences.

          (a) Tax Consequences under Section 280G.

               (i) Whether or not the Executive becomes entitled to the payments and benefits described in
this Section 6, if any of the payments or benefits received or to be received by the Executive in
connection with a change in ownership or control of the Parent, as defined in section 280G of the
Code (a “Statutory Change in Control”), or the Executive’s termination of employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the
Company, any person whose actions result in a Statutory Change in Control or any person affiliated
with the Company or such person) (collectively, the “Severance Benefits ”) will be subject to any
excise tax (the “Excise Tax”) imposed under section 4999 of the Code after giving effect to Section
6(a)(iii)(B), the Company shall pay to the Executive an additional amount equal to the Excise Tax,
plus any amount necessary to “gross up” the Executive for additional taxes resulting from the
payments to the Executive by the Company under this Section 6(a) (the “Excise Tax Payment”). Each
Excise Tax Payment shall be made not less than five (5) business days prior to the due date for
payment of the Excise Tax.

               (ii) Notwithstanding the foregoing, if it shall be determined that the Executive would be
entitled to an Excise Tax Payment, but that if the Severance Benefits could be reduced by an amount
necessary such that the receipt of the Company Payments would not give rise to any Excise Tax (the
“Reduced Benefits”) and the Reduced Benefits would not be less than ninety percent (90%) of the
Severance Benefits before such reduction, then no Excise Tax Payment shall be made to the Executive
and the Severance Benefits, in the aggregate, shall be reduced to the Reduced Benefits. To
determine the Reduced Benefits, payments shall be reduced in the following order (1) acceleration
of vesting of any stock options for which the exercise price exceeds the then fair market value,
(2) any cash severance based on a multiple of Base Salary or Bonus, (3) any other cash amounts
payable to the Executive, (4) any benefits valued as parachute payments; and (5) acceleration of
vesting of any equity not covered by (1) above,

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

unless the Executive elects another method of reduction by written notice to the Company prior
to the change of ownership or effective control.

               (iii) For purposes of determining whether any of the Severance Benefits will be subject to the
Excise Tax and the amount of such Excise Tax:

                    (A) all of the Severance Benefits shall be treated as “parachute payments” within the meaning
of Code section 280G(b)(2) if the aggregate present value (determined as provided in Code Section
280G(d)(4)) of such Severance Benefits equals or exceeds three times the Executive’s “Base Amount”
(within the meaning of Code Section 280G(b)(3)), and all “excess parachute payments” within the
meaning of Code section 280G(b)(1) shall be treated as subject to the Excise Tax, unless the
Executive receives a written opinion from a nationally recognized law or accounting firm (“280G
Advisers”) selected by the Compensation Committee or the Board, and reasonably acceptable to the
Executive, that such other payments or benefits (in whole or in part) do not constitute parachute
payments, including by reason of Code section 280G(b)(4)(A), or such excess parachute payments (in
whole or in part) represent reasonable compensation for services actually rendered, within the
meaning of Code section 280G(b)(4)(B), in excess of the “Base Amount” as defined in Code section
280G(b)(3) allocable to such reasonable compensation, or are otherwise not subject to the Excise
Tax; and

                    (B) the value of any non-cash benefits or any deferred payment or benefit shall be determined
by a certified public accountant or appraisal company of recognized national standing forming part
of or selected by 280G Adviser and reasonably acceptable to the Executive, in accordance with the
principles of Code section 280G(d)(3) and (4).

               (iv) In the event that the Excise Tax is subsequently determined to be less than the amount
taken into account hereunder, the Executive shall repay to the Company, at the time that the amount
of such reduction in Excise Tax is finally determined (the “Reduced Excise Tax”), an amount (the
“Gross-Up Repayment”) equal to the sum of (A) the difference of the Excise Tax Payment and the
Reduced Excise Tax plus (B) an amount representing the difference between (1) the amount paid by
the Company to the Executive to “gross up” the Executive for taxes on payments made by the Company
to the Executive in respect of the Excise Tax and (2) the amount which should have been paid to the
Executive by the Company to “gross up” the Executive for taxes on payments made by the Company to
the Executive in respect of the Reduced Excise Tax; provided, however, that in no event shall the
Gross-Up Repayment exceed the actual aggregate cash refunds of, or cash reductions in, taxes paid
by the Executive by virtue of paying the Gross-Up Repayment; and provided, further, that if such
refunds or reductions are realized from time to time, the Executive shall make a repayment to the
Company at the time of each such realization equal to the excess of the Gross-Up Repayment due
after giving effect to such realization over the Gross-Up Repayment due immediately prior to giving
effect to such realization. The Executive shall (1) take such actions with respect to taxes and tax
returns as the Company may from time to time request in order to obtain such refunds and
reductions, including, without limitation, by taking positions on tax returns and filing amended
tax returns, (2) provide the Company with copies of all tax returns filed by the Executive which
reflect such refunds or reductions or are otherwise requested by the Company in order to determine
the Executive’s compliance with the immediately preceding clause (1), (3) permit the Company to
participate in any proceedings relating to such refunds and reductions and (4) take all such other

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

actions as may be reasonably requested by the Company from time to time in connection with the
realization of such refunds or reductions, including, without limitation, borrowing money from the
Company (on terms and conditions reasonably satisfactory to the Executive and the Company,
including, without limitation, having the Company make the Executive whole, on an after-tax basis,
for any interest costs) so that the payments made from time to time by the Executive to the Company
hereunder maximize (to the extent reasonably possible) such refunds and reductions, the aggregate
amount of such payments by the Executive not to exceed the Gross-Up Repayment (computed without
regard to the provisos to the first sentence of this Section 6(a)(iv)); provided, however, that the
Company shall bear and directly pay, or shall promptly reimburse the Executive for, all costs and
expenses (including any additional penalties and interest) incurred by the Executive in connection
with any actions taken or omitted by the Executive in accordance with instructions from the Company
pursuant to this sentence, and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including any additional penalties and interest) imposed
as a result of the Company’s payment of such costs and expenses. In the event that the Excise Tax
is subsequently determined to exceed the amount taken into account hereunder (including by reason
of any payment the existence or amount of which could not be determined at the time of the Excise
Tax Payment), the Company shall make an additional Excise Tax Payment in respect of such excess
(together with any interest or penalties payable by the Executive with respect to such excess) at
the time that the amount of such excess if finally determined, plus any additional taxes resulting
from the payment to the Executive by the Company for such excess and the interest and penalties
thereon. The Executive and the Company shall each reasonably cooperate with the other in connection
with any administrative or judicial proceedings concerning the existence or amount of liability for
Excise Tax with respect to the Severance Benefits.

               (v) The Executive shall give the Company written notice of any determination by the Executive,
or any claim by any taxing authority, that she owes Excise Tax on any Severance Benefit. Such
notice shall be given as soon as practicable but no later than ten (10) business days after the
Executive makes such determination or is informed of such claim, and shall, to the extent Executive
has or may reasonably obtain such information, apprise the Company of the amount of such Excise Tax
and the date on which it is required to be paid. If the Company gives the Executive written notice
at least thirty (30) days prior to the due date for payment of such Excise Tax, or within ten (10)
business days of having received the foregoing notice from the Executive (whichever is later), that
it disagrees with or wishes to contest the amount of the Excise Tax, the Company and the Executive
shall consult with each other and their respective tax advisors regarding the amount and payment of
any Excise Tax. In the event there is a contest with any taxing authority regarding the amount of
the Excise Tax, the Company shall bear and pay directly all costs and expenses (including
additional interest, penalties and legal fees) incurred in connection with any such contest, and
shall indemnify and hold the Executive harmless, on an after-tax basis, to the extent not otherwise
paid hereunder, on (x) the Excise Tax Payment (including any interest and penalties with respect
thereto) and (y) the Company’s payment of the Executive’s costs and expenses hereunder.

          (b) Tax Consequences Under Section 409A

               (i) In the event that any amount arising from this Agreement is includable in Executive’s
gross income for a taxable year of the Executive under Section 409A of the Internal

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

Revenue Code as the result of the terms of this Agreement and/or the administration of those
terms (“the Included Amount”), and a 20% additional tax is owed under Section 409A, then the
Company shall pay to the Executive an amount equal to the 20% additional tax imposed under Section
409A on the Included Amount, together with any underpayment penalties and interest (the “Additional
Tax”) resulting from the inclusion of the additional amount. The Company also will pay the
Executive an additional amount necessary to “gross up” the Executive for additional income taxes on
the Additional Tax payment.

               (ii) The payments required by this Section 6(b) will be made on the earlier of (a) the
thirtieth day following the date on which it is finally determined by a court or administrative
agency that the Included Amount was includible in Executive’s income as the result of the
application of Section 409A(a)(1)(B) to the Included Amount; or (b) the last day of the Executive’s
taxable year next following the taxable year in which the Executive remitted the taxes due as the
result of the application of Section 409A(a)(1)(B) to the Included Amount.

               (iii) It shall be a condition precedent to the Company’s obligations under this Section 6(b)
that the Executive (a) has given the Company written notice of any determination by the Executive,
or any claim by any taxing authority, that she owes Additional Tax as the result of the inclusion
of the Included Amount; (b) that such notice was given as soon as practicable but no later than ten
(10) business days after the Executive makes such determination or is informed of such claim; (c)
that such notice shall, to the extent Executive has or may reasonably obtain such information,
apprise the Company of the amount of such Additional Tax and the date on which it is required to be
paid. If the Company gives the Executive written notice at least thirty (30) days prior to the due
date for payment of such Additional Tax, or within ten (10) business days of having received the
foregoing notice from the Executive (whichever is later), that it disagrees with or wishes to
contest the inclusion of the Included Amount and/or the amount of the Additional Tax, the Company
and the Executive shall consult with each other and their respective tax advisors regarding the
amount and payment of any Additional Tax, and it shall be a further condition precedent to the
Company’s obligations hereunder that the Executive will take all reasonable steps requested by the
Company to contest the inclusion of the Included Amount and/or the amount of the Additional Tax
resulting from such inclusion, provided that in the event there is a contest with any taxing
authority regarding the inclusion and/or the amount of the Additional Tax, the Company shall bear
and pay directly all costs and expenses (including additional interest, penalties and legal fees)
incurred in connection with any such contest, and shall indemnify and hold the Executive harmless,
on an after-tax basis, to the extent not otherwise paid hereunder, on the Additional Tax (including
any interest and penalties with respect thereto) and the Company’s payment of the Executive’s costs
and expenses hereunder.

     7. Limitation on Competition.

               The Executive acknowledges that she has immediate and continuing access to the financial and
other confidential information of the Company. As an agreement ancillary to the receipt of such
information and the other undertakings in this Agreement, the Executive covenants as follows:

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

               During the Employment Period, and for such period thereafter (A) as the Executive is entitled
to receive severance compensation under this Agreement, or (B) in the event payment of Enhanced
Severance compensation is paid, for a period of three (3) years following the end of the Employment
Period, or (C) in the event the Executive’s employment is terminated by the Company for Cause or
the Executive terminates her employment for any reason other than Good Reason (including, without
limitation, by giving the Company a Non-Renewal Notice pursuant to Section 1(b) hereof), for a
period of twelve months following the Employment Period:

               (a) the Executive shall not, directly or indirectly, without the Company’s prior written
consent, participate or engage in, whether as a director, officer, employee, advisor, consultant,
investor, lender, stockholder, partner, joint venturer, owner or in any other capacity, any
Competitive Business (as defined below) conducted in any Competitive Market Area (as defined
below); provided, however, that the Executive shall not be deemed to be participating or engaging
in any such business (i) solely by virtue of her ownership of not more than five percent of any
class of stock or other securities which is publicly traded on a national securities exchange or in
a recognized over-the-counter market or (ii) her engaging in the practice of law, either at a law
firm or with another entity (so long as she satisfies her professional obligations to keep and not
use the confidences and Confidential Information of the Company and its affiliates (the “Key
Companies”) and so long as her employment does not include non-legal duties that are likely to
assist a Competitive Business in competing with the Key Companies);

               (b) the Executive shall not, without the Company’s prior written consent, (i) solicit (other
than by way of generalized employment advertising undertaken in the ordinary course of business)
the service of or employ any employee of the Key Companies for the Executive’s own benefit or for
the benefit of any person or entity other than the Key Companies, (ii) induce any such employee to
leave employment with the Key Companies, or (iii) employ or cause any other person or entity other
than the Key Companies to employ any former employee of the Key Companies whose termination of
employment with the Key Companies occurred less than six (6) months prior to such employment by the
Executive or such other person or entity; and

               (c) the Executive shall not, without the Company’s prior written consent, (i) induce or
attempt to induce any customer, supplier or contractor of the Company to terminate or breach any
agreement or arrangement with the Key Companies or otherwise to cease doing business with the Key
Companies, or (ii) induce or attempt to induce any customer, supplier or contractor of the Key
Companies (including any prospective customer, supplier or contractor which the Key Companies is
actively pursuing prior to the Executive’s termination of employment), not to enter into any
agreement or arrangement with the Key Companies or not to do business with the Key Companies.

               As used herein, the term “Competitive Business” shall mean any business: (1) that is
competitive with any business (A) which was conducted by the Company or any of its affiliated
companies on the date of termination of Executive’s employment hereunder or (B) which, on the date
of such termination or during the twelve months immediately preceding such termination, the Company
or any of its affiliated companies was actively investigating with a view to conducting or was
actively pursuing a plan to conduct; and (2) from which the Company

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

and such affiliated companies derive (or reasonably expect to derive) annual revenues of not
less than $1,000,000. As used herein, the term “Competitive Market Area” shall mean any geographic
market area (1) if the Company or any of its affiliated companies conducted business in such
geographic market area during the Employment Period or on the date of termination of Executive’s
employment hereunder, or (2) if, on the date of such termination or during the twelve months
immediately preceding such termination, the Company or any of its affiliated companies was actively
investigating with a view to conducting business in such geographic market area or was actively
pursuing a plan to conduct business in such geographic market area.

               The Executive agrees and acknowledges that a portion of the consideration to be paid by the
Company to the Executive pursuant to this Agreement is in consideration of the covenants under this
Section 7 and that such consideration is fair and adequate, even though the Executive will not
receive any severance compensation in the event she terminates her employment with the Company
other than for Good Reason or the Company terminates her employment for Cause. The Executive
acknowledges and agrees that any breach or anticipatory breach by her of any of the provisions of
this Section 6 would cause the Company irreparable injury not compensable by monetary damages alone
and that, accordingly, in any such event, the Company shall be entitled to injunctions, both
preliminary and permanent, enjoining or restraining such breach or anticipatory breach without the
necessity of showing irreparable injury (and the Executive hereby consents to the issuance thereof
without bond by a court of competent jurisdiction).

     8. Confidential Information.

          The Executive acknowledges that during the course of her employment with the Company she will
have access to trade secrets, confidential and proprietary information and know-how of the Key
Companies (“Confidential Information”). Except in the ordinary course of properly performing her
duties for the Company, the Executive shall not at any time, without the Company’s prior written
consent while employed or after termination of her employment, disclose, communicate or divulge, or
use for the benefit of herself or of any third party, any of the Confidential Information of the
Company. In the event the Executive learns during her employment with the Company any trade
secrets, confidential or proprietary information or know-how of any customer, supplier or
contractor of the Key Companies, the Executive shall maintain the confidence of such information.

     9. Return of Materials.

          Upon termination of the Executive’s employment for any reason, the Executive shall promptly
deliver to the Company or, with the Company’s consent, destroy all documents and other materials in
the Executive’s possession or custody (whether prepared by the Executive or others) that the
Executive obtained from the Key Companies or a customer, supplier or contractor of the Key
Companies during the Employment Period and which relate to the past, present or anticipated
business and affairs of the Key Companies, including without limitation, any Confidential
Information.

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

     10. Enforceability.

          If any provision of this Agreement shall be deemed invalid or unenforceable as written, this
Agreement shall be construed, to the greatest extent possible, or modified, to the extent allowable
by law, in a manner which shall render it valid and enforceable and any limitation on the scope or
duration of any such provision necessary to make it valid and enforceable shall be deemed to be a
part thereof. No invalidity or unenforceability of any provision contained herein shall affect any
other portion of this Agreement unless the provision deemed to be so invalid or unenforceable is a
material element of this Agreement, taken as a whole.

     11. Legal Expenses.

          The Company shall pay the Executive’s reasonable fees for legal and other related expenses
associated with any disputes arising hereunder or under any other agreements, arrangements or
understandings regarding Executive’s employment with the Company (including, without limitation,
all agreements, arrangements and understandings regarding bonuses, Equity-Based Incentives,
employee benefits or other compensation issues) if either a court of competent jurisdiction or an
arbitrator shall render a final judgment or an arbitrator’s final decision in favor of the
Executive on the issues in such dispute, from which there is no further right of appeal. If it
shall be determined in such judicial adjudication or arbitration that the Executive is successful
on some of the issues in such dispute, but not all, then the Executive shall be entitled to receive
a portion of such legal fees and other expenses as shall be appropriately prorated. For purposes
of this Section 11, the phrase “reasonable fees for legal and other related expenses” shall mean
only the reasonable fees incurred by the Executive for legal and other related expenses, to the
extent and only to the extent to which either (a) the reimbursement or payment of such fees and
expenses by the Company does not constitute “compensation” within the meaning of that word where it
appears in the phrase “a legally binding right during a taxable year to compensation” in the first
sentence of Treas. Reg. § 1.409A-1(b)(1); or (b) the reimbursement or payment of such fees and
expenses by the Company is a settlement or award resolving bona fide legal claims based on wrongful
termination, employment discrimination, the Fair Labor Standards Act, or worker’s compensation
statutes, including claims under applicable Federal, state, local, or foreign laws, or for
reimbursements or payments of reasonable attorneys fees or other reasonable expenses incurred by a
service provider related to such bona fide legal claims described in Treas. Reg. § 1.409A-1(b)(10).

     12. Notices.

          All notices which the Company is required or permitted to give to the Executive shall be given
by registered or certified mail or overnight courier, with a receipt obtained, addressed to the
Executive at her primary residence, or at such other place as the Executive may from time to time
designate in writing, or by personal delivery to the Executive, or by facsimile to the Executive
with oral confirmation of her receipt and with a copy immediately sent to the Executive by first
class U.S. Mail, and to counsel for the Executive as may be requested in writing by the Executive
from time to time. All notices which the Executive is required or permitted to give to the Company
shall be given by registered or certified mail or overnight courier, with a receipt obtained,
addressed to the Company at the address set forth above, or at such other address as the Company
may from time to time designate in writing, or by personal delivery to the Chief Executive Officer
of the Company, or by facsimile to the Chief Executive Officer with oral confirmation of her
receipt and with a copy immediately sent to the Chief

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

Executive Officer by first class U.S. Mail, and to counsel for the Company as may be requested
in writing by the Company. A notice will be deemed given upon personal delivery, the mailing
thereof or delivery to an overnight courier for delivery the next business day, or the oral
confirmation of receipt by facsimile, except for a notice of change of address, which will not be
effective until receipt, and except as otherwise provided in Section 5(a) hereof.

     13. Waivers.

          No waiver by either party of any breach or nonperformance of any provision or obligation of
this Agreement shall be deemed to be a waiver of any preceding or succeeding breach of the same or
any other provision of this Agreement. Any waiver of any provision of this Agreement must be in
writing and signed by the party granting the waiver.

     14. Headings; Other Language.

          The headings contained in this Agreement are for reference purposes only and shall in no way
affect the meaning or interpretation of this Agreement. In this Agreement, as the context may
require, the singular includes the plural and the singular, the masculine gender includes both male
and female reference, the word “or” is used in the inclusive sense and the words “including,”
“includes,” and “included” shall not be limiting. As used herein, the term “Subsidiary” shall mean
any corporation or other entity the voting equity of which the Company or another Subsidiary holds
at least fifty percent.

     15. Withholding and Timing of Payments.

          The Executive acknowledges and agrees that any or all payments under this Agreement may be
subject to reduction for tax and other required withholdings. Notwithstanding any provision of
this Agreement, if the payment of any amount under this Agreement would cause an amount to be
included in Executive’s taxable income under Section 409A of the Internal Revenue Code because the
timing of such payment is not delayed as provided in Section 409A(a) (2) (B) of the Internal
Revenue Code, then any such payment that Executive would otherwise be entitled to during the first
six months following the date of Executive’s separation from service shall be accumulated and paid
on the date that is six months after the date of Executive’s separation from service (or if such
payment date does not fall on a business day of the Company, the next following business day of the
Company), or such earlier date upon which such amount can be paid without causing any amount to be
included in the Executive’s taxable income under Section 409A of the Internal Revenue Code.

     16. Counterparts.

          This Agreement may be executed in duplicate counterparts, each of which shall be deemed to be
an original and all of which, taken together, shall constitute one agreement.

     17. Agreement Complete; Amendments.

          This Agreement, together with the Exhibits hereto, the agreements referred to herein, and the
instruments, agreements, plans, resolutions and other documents pursuant to which any Equity-Based
Incentives are held (now or in the future) by the Executive, constitutes the entire

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

agreement of the parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto. This Agreement may not be amended,
supplemented, canceled or discharged except by a written instrument executed by both of the parties
hereto, provided, however, that the immediately foregoing provision shall not prohibit the
termination of rights and obligations under this Agreement which termination is made in accordance
with the terms of this Agreement.

     18. Benefit of the Successors and Permitted Assigns of the Respective Parties Hereto.

          This Agreement and the rights and obligations hereunder are personal to the Company and the
Executive and are not assignable or transferable to any other person, firm or corporation without
the consent of the other party, except as contemplated hereby; provided, however, in the event of
the sale, merger or consolidation of the Company, whether or not the Company is the surviving or
resulting corporation, the transfer of all or substantially all of the assets of the Company, or
the voluntary or involuntary dissolution of the Company, then the surviving or resulting
corporation or the transferee or transferees of the Company’s assets shall be bound by this
Agreement and the Company shall take all actions necessary to insure that such corporation,
transferee or transferees are bound by the provisions of this Agreement; and provided, further,
this Agreement shall inure to the benefit of the Executive’s estate, heirs, executors,
administrators, personal and legal representatives, distributees, devisees, and legatees.
Notwithstanding the foregoing provisions of this Section 18, the Company shall not be required to
take all actions necessary to insure that a buyer, survivor, transferee or transferees of the
Company’s assets (“Transferee”) are bound by the provisions of this Agreement and such Transferee
shall not be bound by the obligations of the Company under this Agreement if the Company shall have
(a) paid to the Executive or made provision satisfactory to the Executive for payment to her of all
amounts which are or may become payable to her hereunder in accordance with the terms hereof and
(b) made provision satisfactory to the Executive for the continuance of all benefits required to be
provided to her in accordance with the terms hereof, in each case as if the Executive had been
terminated without Cause in anticipation of a Change in Control.

     19. Governing Law.

          This Agreement will be governed and construed in accordance with the laws of Texas applicable
to agreements made and to be performed entirely within such state, without giving effect to any
choice or conflicts of laws principles which would cause the application of the domestic
substantive laws of any other jurisdiction.

     20. Survival.

          The covenants, agreements, representations, warranties and provisions contained in this
Agreement that are intended to survive the termination of the Executive’s employment hereunder and
the termination of the Employment Period shall so survive such termination.

     21. Interpretation.

          The terms of this Agreement shall be construed and administered in a manner calculated to
avoid the inclusion of any amount in Executive’s gross income under Code Section 409A, and

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

any provisions regarding the timing of payments shall have an effective date of August 1,
2005, as required by Code Section 409A.

          The Company and the Executive each acknowledge and agree that this Agreement has been reviewed
and negotiated by such party and its or her counsel, who have contributed to its revision, and the
normal rule of construction, to the effect that any ambiguities are resolved against the drafting
party, shall not be employed in the interpretation of it.

          IN WITNESS WHEREOF, the parties have executed this Agreement, this 22nd day of October, 2008.

	 	 	 	 	 
	 	THE PARENT:

KEY ENERGY SERVICES, INC.

 	 
	 	By:  	/s/  RICHARD J. ALARIO
 	 
	 	 	      Richard J. Alario 	 
	 	 	      Chairman, President, and Chief Executive 

      Officer 	 
	 
	 	THE COMPANY:

KEY ENERGY SHARED SERVICES, LLC

 	 
	 	By:  	/s/  KIM B. CLARKE
 	 
	 	 	      Kim B. Clarke 	 
	 	 	      Vice President- Human Resources 	 
	 
	 	THE EXECUTIVE:

 	 
	 	/s/  KIMBERLY R. FRYE
 	 
	 	              Kimberly R. Frye 	 
	 	 	 

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

	 	 	 	 	 

EXHIBIT A

Company Paid Coverages

1. Medical and Dental Plan. Comprehensive medical and dental plans available to the Company’s
senior management, pursuant to which all medical and dental expenses incurred by the Executive, her
spouse and her children will be reimbursed by the Company, through insurance or, in the absence of
insurance, directly by the Company, so that the Executive has no out-of-pocket cost with respect to
such expenses.

2. Director and Officer Liability Insurance.

3. Voluntary annual physicals at the Executive’s option while employed, with a report by the
examining physician, if requested, to the Board regarding the Executive’s ability to perform job
related functions.

Amended and Restated Employment Agreement

of Kimberly R. Frye

 

 

EXHIBIT B

Definition of “Change in Control” of the Parent

          The occurrence of any of the following shall constitute a “Change in Control” of Key Energy
Services, Inc. (referred to herein in Exhibit B as the “Company”):

          (a) If any person (as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as
from time to time in effect (the “Exchange Act”), or any successor provision), other than the
Company, becomes the beneficial owner directly or indirectly of more than fifty percent (50%) of
the outstanding Common Stock of the Company, determined in accordance with Rule 13d-3 under the
Exchange Act (or any successor provision), or otherwise becomes entitled to vote more than fifty
percent (50%) of the voting power entitled to be cast at elections for directors (“Voting Power”)
of the Company;

          (b) If the Company is subject to the reporting requirements of Section 13 or 15(d) (or any
successor provision) of the Exchange Act, and any person (as defined in Section 3(a)(9) of the
Exchange Act, or any successor provision), other than the Company, purchases shares pursuant to a
tender offer or exchange offer to acquire Common Stock of the Company (or securities convertible
into or exchangeable for or exercisable for Common Stock) for cash, securities or any other
consideration, if after consummation of the offer, the person in question is the beneficial owner,
directly or indirectly, of more than fifty percent (50%) of the outstanding Common Stock of the
Company, determined in accordance with Rule 13d-3 under the Exchange Act (or any successor
provision);

          (c) If the stockholders or the Board approve any consolidation or merger of the Company (i) in
which the Company is not the continuing or surviving corporation unless such merger is with a
Subsidiary at least fifty percent (50%) of the Voting Power of which is held by the Company or (ii)
pursuant to which the holders of the Company’s shares of Common Stock immediately prior to such
merger or consolidation would not be the holders immediately after such merger or consolidation of
at least a majority of the Voting Power of the Company;

          (d) The stockholders or the Board shall have approved any sale, lease, exchange or other
transfer (in one transaction or a series of transactions) of all or substantially all of the assets
of the Company;

          (e) Upon the election of one or more new directors of the Company, a majority of the directors
holding office, including the newly elected directors, were not nominated as candidates by a
majority of the directors in office immediately before such election

          As used in this definition of “Change in Control,” “Common Stock” means the Common Stock, or
if changed, the capital stock of the Company as it shall be constituted from time to time entitling
the holders thereof to share generally in the distribution of all assets available for distribution
to the Company’s stockholders after the distribution to any holders of capital stock with
preferential rights.

Amended and Restated Employment Agreement

of Kimberly R. Frye

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00154-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00154-of-00352.parquet"}]]