Document:

exv10w1

 

Exhibit 10.1

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

     This Amended and Restated Employment Agreement (“Agreement”) is made and entered into as of
March 2, 2006 (the “Effective Date”), by and among Mariner Energy, Inc., a Delaware corporation
(“MEI”), Mariner Energy Resources, Inc., a Delaware corporation (“MERI”) (MEI and MERI may be
separately referred to as an “Employer” or collectively referred to as the “Employers”), and Judd
Hansen (“Executive”).

     1. Employment. During the Employment Period (as defined in Section 4 hereof), (i) MEI
shall employ Executive, and Executive shall serve, as Vice President of MEI, and (ii) MERI shall
employ Executive, and Executive shall serve, as Vice President of MERI.

     2. Duties and Responsibilities of Executive.

    (a) During the Employment Period, Executive shall devote his full time and attention
during normal business hours to the business of the Employers, will act in the best
interests of the Employers and will perform with due care his duties and responsibilities.
Executive’s duties will include those normally incidental to the positions set forth in
Section 1 hereof as well as whatever additional duties may be assigned to him by the Board
of Directors of MEI (the “MEI Board”), the Chief Executive Officer of MEI, the Board of
Directors of MERI (the “MERI Board”), or the Chief Executive Officer of MERI. Executive
agrees to cooperate fully with the MEI Board, the Chief Executive Officer of MEI, the MERI
Board, and the Chief Executive Officer of MEI, and not to engage in any activity that
materially interferes with the performance of Executive’s duties hereunder. During the
Employment Period, Executive will not hold employment other than that set forth in Section 1
hereof without the advance written approval of the Board of MEI and the Board of MERI. It
shall not be a violation of this Agreement for Executive to (1) serve on corporate, civic,
or charitable boards or committees (except for boards or committees of a business
organization that competes with an Employer in any business in which the Employer is
regularly engaged), which are listed on Exhibit A so long as such service does not
materially interfere with the performance of Executive’s duties and responsibilities under
this Agreement, as determined in the good faith opinion of the Board of MEI and the Board of
MERI, (2) manage personal investments, or (3) take vacation days and reasonable absences due
to injury or illness, as set forth herein and/or permitted by the general policies of the
Employers.

    (b) Executive represents and covenants to the Employers that he is not subject or a
party to any employment agreement, noncompetition covenant, nondisclosure agreement, or any
other agreement, covenant, understanding, or restriction that would prohibit Executive from
executing this Agreement and fully performing his duties and responsibilities hereunder, or
would in any manner, directly or indirectly, limit or affect
the duties and responsibilities that may now or in the future be assigned to Executive
hereunder.

 

 

    (c) Executive acknowledges and agrees that Executive owes the Employers a duty of
loyalty and that the obligations described in this Agreement are in addition to, and not in
lieu of, the obligations Executive owes the Employers under the common law. MEI and MERI
each acknowledge that Executive’s simultaneous employment with the Employers will not be
considered a violation of any provision of this Section 2.

     3. Compensation.

    (a) During the Employment Period (as defined in Section 4 hereof), (i) MEI shall pay to
Executive an annualized base salary of $93,750 (the “MEI Base Salary”) (ii) and MERI shall
pay to Executive an annualized base salary of $93,750 (the “MERI Base Salary”), in
consideration for Executive’s services under this Agreement, payable on a not less than
semi-monthly basis, in conformity with MEI’s customary payroll practices for executive
salaries. For all purposes of this Agreement, Executive’s Base Salary shall include any
portion thereof which is deferred under any nonqualified plan or arrangement. Each year, the
MEI Board and the MERI Board shall independently review Executive’s MEI Base Salary and MERI
Base Salary, respectively, based on market survey data, corporate performance, and
performance of Executive. If, in its sole and complete discretion, either the MEI Board or
the MERI Board determines that an increase in Executive’s Base Salary is appropriate, such
Board may make such adjustment, and such adjusted salary shall thereafter be Executive’s
Base Salary for purposes of this Agreement. Neither Executive’s MEI Base Salary or his MERI
Base Salary may be reduced except as part of a general reduction of salaries paid to
management employees that is necessitated by business conditions, as determined by the
respective Board.

    (b) Executive may be eligible for an annual discretionary performance bonus with
respect to each calendar year during the Employment Period from either or both Employers
(the “MEI Annual Bonus” and the “MERI Annual Bonus”). The amount, if any, of Executive’s
Annual Bonus will be determined by the respective Board in its sole and complete discretion
based on market survey data, corporate performance, and performance of Executive. Annual
Bonus determinations will be made by the respective Board at a time convenient to such Board
but typically within 60 calendar days of the end of each calendar year. Each of the MEI
Board and the MERI Board will on an annual basis (at or near the beginning of each calendar
year in the Employment Period) establish a target bonus for Executive for the upcoming year,
and will communicate such target to Executive. If either Board determines to award
Executive an Annual Bonus, it will be payable in conformity with MEI’s customary payroll
practices for executive bonuses. Either Board may also award additional bonuses or other
compensation to Executive at any time in its sole and complete discretion.

    (c) MEI shall act as agent for MERI with respect to (i) the payment of MERI’s Base
Salary, Annual Bonus, and any other bonuses or compensation payable by
MERI to Executive, and (ii) coverage of Executive under the MEI employee benefit plans,
including retirement, welfare, deferral and incentive plans, all as provided in that certain
Agency Agreement by and between MEI and MERI, entered into as of March 2, 2006. Any salary,
bonus, and other compensation payments hereunder shall be subject to such payroll and other
taxes, withholdings, and deductions as may be required by

 

 

applicable law or with respect to
Executive’s coverage in MEI’s employee benefit plans. Further, in the event Executive is no
longer employed by MERI but continues to be employed by MEI, MEI shall assume the financial
obligations described in this Section 3 and Executive’s MEI Base Salary, Annual Bonus and
other forms of compensation may be adjusted accordingly to reflect Executive’s duties with
MEI.

     4. Term of Employment. The initial term of this Agreement shall be for the period
beginning on the Effective Date and ending at midnight (EST) on March 2, 2007 (the “Initial Term”).
On March 3, 2007 and on March 3 of each succeeding year (each such date being referred to as a
“Renewal Date”), this Agreement shall automatically renew and extend for a period of 12 months (a
“Renewal Term”) unless written notice of non-renewal is delivered from an Employer to the Executive
(or the Executive to an Employer) at least 90 days prior to such Renewal Date (in which case the
Termination Date shall be the day immediately prior to such Renewal Date). Notwithstanding any
other provision of this Agreement, this Agreement may be terminated at any time during the Initial
Term or the Renewal Term (if any) in accordance with Section 6. The period from the Effective Date
through the Termination Date of this Agreement, regardless of the time or reason for such
termination, shall be referred to herein as the “Employment Period.” In the event that this
Agreement is not renewed by an Employer or by Executive with respect to either or both Employers,
Executive shall become an at-will employee of such Employer and such Employer shall have the right
to terminate Executive’s employment with the Employer at any time.

     5. Benefits. Subject to the terms and conditions of this Agreement, Executive shall be
entitled to the following benefits during the Employment Period:

    (a) Reimbursement of Business Expenses. Each Employer agrees to reimburse Executive
for reasonable business-related expenses incurred in the performance of Executive’s duties
under this Agreement.

    (b) Benefit Plans and Programs. To the extent permitted by applicable law and subject
to the terms and eligibility requirements of any such plan or program, Executive will be
eligible to participate in all benefit plans and programs, including improvements or
modifications of the same, that are maintained by MEI generally for executive employees,
subject to the eligibility requirements and other terms and conditions of those plans and
programs. Neither MEI nor MERI will, however, by reason of this Section 5(b) be obligated
either (1) to institute, maintain, or refrain from changing, amending, or discontinuing any
such benefit plan or program, or (2) to provide Executive with all benefits provided to any
other person or individual employed by an Employer or any affiliates of an Employer.

     6. Termination of Employment.

    (a) Employer’s Right to Terminate. At any time during the Initial Term or any Renewal
Term, each Employer shall independently have the right to terminate this Agreement with
respect to itself and to terminate Executive’s employment with such Employer for any of the
following reasons:

 

 

      (1) Upon Executive’s death (in which case the Termination Date shall be the
date of Executive’s death);

      (2) Upon Executive’s Disability (as defined below);

      (3) For Cause (as defined in Section 7); or

      (4) For any other reason whatsoever, in the sole and complete discretion of the
Employer.

     (b) Executive’s Right to Terminate. At any time during the Initial Term or any Renewal
Term, Executive will have the right to terminate this Agreement and Executive’s employment
with either Employer for:

      (1) Good Reason (as defined in Section 7); or

      (2) For any other reason whatsoever, in the sole and complete discretion of
Executive.

    (c) “Disability.” For purposes of this Agreement, “Disability” means that Executive
has sustained sickness or injury that renders Executive incapable of performing the duties
and services required of Executive hereunder for a period of 90 consecutive calendar days or
a total of 120 calendar days during any 12 month period.

    (d) “Notices.” Any termination of this Agreement by an Employer under Section 6(a)
(other than termination due to the death of Executive), or by Executive under Section 6(b)
shall be communicated by a Notice of Termination to the other party. A “Notice of
Termination” means a written notice that (1) indicates the specific termination provision in
this Agreement relied upon and (2) if the termination is by an Employer for Cause or by
Executive for Good Reason, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive’s employment under the provision so
indicated. The Notice of Termination must specify the Termination Date. In the case of a
termination by an Employer for Cause or due to Executive’s Disability, or by Executive for
Good Reason, the Termination Date may be as early as the date notice is given but no later
than 30 calendar days after notice is given, unless otherwise agreed to in writing by both
parties. In the case of a termination by an Employer or by Executive for any other reason,
the Termination Date may be as early as 14 calendar days after notice is given but no later
than 60 calendar days after notice is given, unless otherwise agreed to by the parties in
writing.

     7. Severance Payments.

    (a) Termination by MEI. If (1) MEI terminates this Agreement and Executive’s
employment with MEI during the Initial Term or the Renewal Term (if any) pursuant to Section
6(a)(4), (2) Executive signs and does not revoke a waiver and release agreement
substantially similar to Exhibit B with respect to MEI, and (3) Executive continues to
comply with Executive’s ongoing obligations under Sections 11 and 12 of this Agreement,
then, subject to Section 7(h), MEI shall pay Executive severance in

 

 

accordance with Section
7(c). Such severance payments shall be in addition to payment by MEI of all previously
unpaid amounts (including, without limitation, salary, bonuses, equity plans, incentive
compensation plans, fringe benefits, and expense reimbursements) owed to Executive by either
Employer under this Agreement with respect to periods prior to the Termination Date.

    (b) Termination of MEI Employment by Executive. If (1) Executive terminates this
Agreement and Executive’s employment with MEI during the Initial Term or the Renewal Term
(if any) pursuant to Section 6(b)(1), (2) Executive signs and does not revoke a waiver and
release agreement substantially similar to Exhibit B with respect to MEI, and (3) Executive
continues to comply with Executive’s ongoing obligations under Sections 11 and 12 of this
Agreement, then, subject to Section 7(h), MEI shall pay Executive severance in accordance
with Section 7(c). Such severance payments shall be in addition to payment by MEI of all
previously unpaid amounts (including, without limitation, salary, bonuses, equity plans,
incentive compensation plans, fringe benefits, and expense reimbursements) owed to Executive
by either Employer under this Agreement with respect to periods prior to the Termination
Date.

    (c) Severance Amount. If MEI is required to pay Executive severance by the express
terms of Section 7(a) or 7(b), MEI shall pay Executive the following as severance:

      (1) The sum of Executive’s MEI Base Salary and MERI Base Salary at the highest
rate in effect prior to the Termination Date as salary continuation for a period of
eighteen months commencing on the date on which Executive’s employment with MEI is
terminated (the “Termination Date”) (the “Severance Period”), payable in equal
monthly installments pursuant to MEI’s customary payroll practices for executive
salaries; provided, however, that, at the option of MEI, the amounts payable under
this Section 7(c) may be paid by MEI in one lump sum.

      (2) Executive, Executive’s spouse, and Executive’s dependents will continue to
be eligible for coverage under MEI’s group health plan or any successor plan on the
same basis as active executive employees of MEI, their spouses, and their dependents
for the duration of the Severance Period. If and when group health coverage under
another employer’s plan is made available to Executive, Executive’s spouse, or
Executive’s dependents, MEI’s obligations
under this paragraph will cease with respect to each person to whom such
coverage is made available, notwithstanding that such person may not in fact become
covered under such other employer’s plan. Executive’s portion of the premium for
such coverage shall be withheld from the salary continuation payments described in
paragraph (1) immediately above or, if salary continuation has been paid in a lump
sum, Executive shall reimburse MEI for Executive’s portion of the premium on a
monthly basis.

      (3) An amount equal to the sum of amounts paid or payable to Executive as
bonuses by both Employers for the year prior to the year in which

 

 

the Termination
Date occurs. This amount will be payable in one lump sum to Executive within 30
days after the end of the Severance Period.

      (4) Executive shall become 100% vested in all of the shares of restricted stock
granted to Executive under the Mariner Energy, Inc. Equity Participation Plan to the
extent Executive is less than 100% vested in such shares as of the Termination Date.

      (5) Executive shall become 50% vested in all of the rights and interests
granted to Executive under MEI’s stock and other equity plans (other than the
Mariner Energy, Inc. Equity Participation Plan), including without limitation any
stock options, restricted stock, restricted stock units, performance units, and/or
performance shares to the extent Executive is less than 50% vested in such award as
of the Termination Date.

      (6) Payments under this Section 7(c) shall be in lieu of any severance benefits
otherwise due to Executive under any severance pay plan or program maintained by MEI
that covers its employees or executives generally. If Executive receives payment
under Section 8(a), payments otherwise payable under Section 7(c)(1) shall
terminate.

    (d) Termination of MEI Employment in Event of Executive’s Disability. If (1) MEI
terminates Executive’s employment with MEI during the Initial Term or the Renewal Term (if
any) pursuant to Section 6(a)(2), (2) Executive signs and does not revoke a waiver and
release agreement substantially similar to Exhibit B with respect to MEI, and (3) Executive
continues to comply with Executive’s ongoing obligations under Section 11 and 12 of this
Agreement, then, subject to Section 7(h), MEI shall pay Executive the severance described in
accordance with Section 7(e). Such severance payments shall be in addition to payment by
MEI of all previously unpaid amounts (including, without limitation, salary, bonuses, equity
plans, incentive compensation plans, fringe benefits, and expense reimbursements) owed to
Executive by either Employer under this Agreement with respect to periods prior to the
Termination Date.

    (e) Disability Severance. If MEI is required to pay Executive severance by the express
terms of Section 7(d), MEI shall pay Executive the following as severance:

      (1) The sum of Executive’s MEI Base Salary and MERI Base Salary at the highest
rate in effect prior to the Termination Date as salary continuation for the duration
of the Severance Period, payable in equal monthly installments pursuant to MEI’s
customary payroll practices for executive salaries; provided, however, that, at the
option of MEI, the amounts payable under this Section 7(e) may be paid by MEI in one
lump sum.

      (2) Executive, Executive’s spouse, and Executive’s dependents will continue to
be eligible for coverage under MEI’s group health plan or any successor plan on the
same basis as active executive employees of MEI, their spouses, and their dependents
for the duration of the Severance Period.

 

 

Executive’s portion of the premium for
such coverage shall be withheld from the salary continuation payments described in
paragraph (1) immediately above or, if salary continuation has been paid in a lump
sum, Executive shall reimburse MEI for Executive’s portion of the premium on a
monthly basis. If and when group health coverage under another employer’s plan is
made available to Executive, Executive’s spouse, or Executive’s dependents, MEI’s
obligations under this paragraph will cease with respect to each person to whom such
coverage is made available, notwithstanding that such person may not in fact become
covered under such other employer’s plan.

      (3) An amount equal to the sum of amounts paid or payable to Executive as
bonuses awarded by both Employers for the calendar year prior to the calendar year
in which the Termination Date occurs. This amount will be payable in one lump sum
to Executive within 30 days after the end of the Severance Period.

      (4) Executive shall become 100% vested in all of the shares of restricted stock
granted to Executive under the Mariner Energy, Inc. Equity Participation Plan to the
extent Executive is less than 100% vested in such shares as of the Termination Date.

      (5) Executive shall become 50% vested in all of the rights and interests
granted to Executive under MEI’s stock and other equity plans (other than the
Mariner Energy, Inc. Equity Participation Plan), including without limitation any
stock options, restricted stock, restricted stock units, performance units, and/or
performance shares to the extent Executive is less than 50% vested in such award as
of the Termination Date.

      (6) Payments under this Section 7(e) shall be in lieu of any severance benefits
otherwise due to Executive under any severance pay plan or program maintained by MEI
that covers its employees or executives generally.

    (f) “Cause” means the occurrence or existence, prior to occurrence of circumstances
constituting Good Reason, of any of the following events:

      (1) Executive’s gross negligence or material mismanagement in performing, or
material failure or inability (excluding as a result of death or Disability) to
perform, Executive’s duties and responsibilities as described herein or as lawfully
directed by the respective Board or the Chief Executive Officer of either Employer;

      (2) Executive’s having committed any act of willful misconduct or material
dishonesty against the Employer or any of its affiliates (including theft,
misappropriation, embezzlement, forgery, fraud, falsification of records, or
misrepresentation) or any act that results in, or could reasonably be expected to
result in, material injury to the reputation, business or business relationships of
either Employer or any of their affiliates;

 

 

      (3) Executive’s material breach of this Agreement, any fiduciary duty owed by
Executive to an Employer or its affiliates, or any written workplace policies
applicable to Executive (including an Employer’s code of conduct and policy on
workplace harassment) whether adopted on or after the date of this Agreement;

      (4) Executive’s having been convicted of, or having entered a plea bargain, a
plea of nolo contendre or settlement admitting guilt for, any felony, any crime of
moral turpitude, or any other crime that could reasonably be expected to have a
material adverse impact on an Employer’s or any of its affiliates’ reputations; or

      (5) Executive’s having committed any material violation of any federal law
regulating securities (without having relied on the advice of an Employer’s attorney
to perform required acts on the Chief Executive Officer’s behalf) or having been the
subject of any final order, judicial or administrative, obtained or issued by the
Securities and Exchange Commission, for any securities violation involving fraud,
including, for example, any such order consented to by Executive in which findings
of facts or any legal conclusions establishing liability are neither admitted nor
denied.

    (g) “Good Reason” means the occurrence, prior to occurrence of circumstances
constituting Cause, of any of the following events without Executive’s consent:

      (1) Any material breach by MEI of this Agreement, provided that Executive
provides the MEI Board written notice of such breach within 90 days from the first
date that he is aware, or reasonably should be aware, of such breach and such breach
is not remedied within 30 days of such Board’s receipt of such written notice;

      (2) Any requirement by MEI that Executive relocate outside of the Houston
metropolitan area;

      (3) Failure of any successor to assume this Agreement not later than the date
as of which it acquires substantially all of the equity, assets or businesses of
MEI;

      (4) Any material reduction in Executive’s title, responsibilities, or duties;
or

      (5) The assignment to Executive of any duties materially inconsistent with his
duties as Vice President of MEI.

    (h) Later Determinations. Notwithstanding any other provision of this Agreement, if
Executive’s employment with MEI is terminated such that Executive is entitled to severance
from MEI and within one year following such termination the MEI Board determines that Cause
exists or existed on, prior to, or after such termination,

 

 

Executive shall not be entitled
to any severance from MEI, and any and all severance payments from MEI to Executive in any
form or amount shall cease and any such payments or reimbursements already made to Executive
must be returned to MEI.

     8. Change of Control of MEI.

    (a) Upon the termination of Executive’s employment with MEI for any reason other than
Cause at any time on or within nine months after a Change of Control of MEI that occurs
during the Employment Period or upon the occurrence of a Change of Control of MEI within
nine months following a termination of Executive’s employment that entitles Executive to
severance under Section 7(c), MEI shall pay Executive, subject to Section 8(d) below, an
amount equal to 2.0 times the sum of Executive’s MEI Base Salary, his MERI Base Salary, plus
his Average Bonus Amount from each Employer. The Executive’s “Average Bonus Amount” shall be
the average annual amount paid or payable to Executive as bonuses for both Employer’s three
calendar years ended immediately prior to the occurrence of the Change of Control (or for
the number of calendar years that Executive has been an employee of MEI before the
occurrence of the Change of Control, if less than three); provided that any payment
otherwise payable under this Section 8(a) shall be subject to Section 7(h) notwithstanding
that such payment is not a severance payment.

    (b) Upon the occurrence of a Change of Control that occurs during the Employment Period
or within nine months following a termination of Executive’s employment that entitles
Executive to severance under Section 7(c), Executive shall become 100% vested in all of the
rights and interests granted to Executive under the MEI stock and other equity plans,
including without limitation any stock options, restricted stock, restricted stock units,
performance units, and/or performance shares to the extent Executive is less than 100%
vested in such award as of the Termination Date.

    (c) “Change of Control” means (i) after the Effective Date, any person or group of
affiliated or associated persons acquires more than 35% of the voting power of MEI; (ii) the
consummation of a sale of all or substantially all of the assets of MEI; (iii)
the dissolution of MEI; or (iv) the consummation of any merger, consolidation, or
reorganization involving MEI in which, immediately after giving effect to such merger,
consolidation or reorganization, less than 51% of the total voting power of outstanding
stock of the surviving or resulting entity is then “beneficially owned” (within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) in the aggregate by the
stockholders of MEI immediately prior to such merger, consolidation or reorganization.

    (d) Except as provided below, such Change of Control payments shall be in addition to
payment by MEI of all other amounts (including, without limitation, salary, bonuses, equity
plans, incentive compensation plans, fringe benefits, and expense reimbursements) owed to
Executive by either Employer under other provisions of this Agreement. Notwithstanding the
foregoing, if on or before the Change of Control Executive becomes or has become entitled to
payment pursuant to Section 7(c), the

 

 

     amount payable under this Section 8 shall be reduced
by the amount paid or payable to Executive under Section 7(c).

     9. Gross-up Parachute Payment. In the event that Executive shall become entitled to any
amounts (the “Regular Amounts”), whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with MEI, any person whose actions result in a change of ownership covered
by Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”), or any person
affiliated with MEI or such person, that will be subject to the tax (the “Excise Tax”) imposed by
Section 4999 of the Code (and any similar tax that may hereafter be imposed), MEI shall pay to
Executive an additional amount (the “Gross-up Payment”) such that the net amount retained by
Executive after payment of all applicable federal and state taxes on the sum of the Regular Amount
plus the Gross-up Payment, is equal to the net amount that would have been retained by Executive
after payment of all applicable federal and state taxes on the Regular Amount if it had not been
subject to the Excise Tax.

     10. Conflicts of Interest. Executive agrees that he shall promptly disclose to the MEI
Board and the MERI Board any conflict of interest involving Executive upon Executive becoming aware
of such conflict. Executive’s ownership of an interest not in excess of five percent in a business
organization that competes with an Employer shall not be deemed to constitute a conflict of
interest.

     11. Confidentiality. Each Employer agrees to provide Executive valuable Confidential
Information of the Employer and of third parties who have supplied such information to the
Employer. In consideration of such Confidential Information and other valuable consideration
provided hereunder, Executive agrees to comply with this Section 11.

     (a) “Confidential Information” means, without limitation and regardless of whether such
information or materials are expressly identified as confidential or proprietary, (i) any
and all non-public, confidential or proprietary information or work
product of the Employer or its affiliates, (ii) any information that gives the Employer
or its affiliates a competitive business advantage or the opportunity of obtaining such
advantage, (iii) any information the disclosure or improper use of which is reasonably
expected to be detrimental to the interests of the Employer or its affiliates, (iv) any
trade secrets of the Employer or its affiliates, and (v) any other information of or
regarding the Employer or any of its affiliates, or its or their past, present or future,
direct or indirect, potential or actual officers, directors, employees, owners, or business
partners, including but not limited to information regarding any of their businesses,
operations, assets (including any Oil and Gas Interests as defined below), liabilities,
properties, systems, methods, models, processes, results, performance, investments,
investors, financial affairs, future plans, business prospects, acquisition or investment
opportunities, strategies, business partners, business relationships, contracts, contractual
relationships, organizational or personnel matters, policies or procedures, management or
compensation matters, compliance or regulatory matters, as well as any technical, seismic,
industry, market or other data, studies or research, or any forecasts, projections,
valuations, derivations or other analyses, performed, generated, collected, gathered,
synthesized, purchased or owned by, or otherwise in the possession of, the Employer or its
affiliates or which Executive has learned of through his employment with the Employer.

 

 

Confidential Information also includes any non-public, confidential or proprietary
information about or belonging to any third party which has been entrusted to the Employer
or its affiliates. Notwithstanding the foregoing, Confidential Information does not include
any information which is or becomes generally known by the public other than as a result of
Executive’s actions or inactions. “Oil and Gas Interests” means: (a) direct and indirect
interests in and rights with respect to oil, gas, mineral and related properties (including
revenues or net revenues therefrom) and assets of any kind and nature, direct or indirect,
including without limitation working, royalty and overriding royalty interests, mineral
interests, leasehold interests, production payments, operating rights, net profits
interests, other non-working interests and non-operating interests; (b) interests in and
rights with respect to Hydrocarbons and other minerals or revenues therefrom and contracts
or agreements in connection therewith and claims and rights thereto (including oil and gas
leases, operating agreements, unitization and pooling agreements and orders, division
orders, transfer orders, mineral deeds, royalty deeds, oil and gas sales, exchange and
processing contracts and agreements and, in each case, interests thereunder), surface
interests, fee interests, reversionary interests, reservations and concessions; (c)
easements, rights of way, licenses, permits, leases, and other interests associated with,
appurtenant to, or necessary for the operation of any of the foregoing; and (d) interests in
equipment and machinery (including well equipment and machinery), oil and gas production,
gathering, transmission, compression, treating, processing and storage facilities (including
tanks, tank batteries, pipelines and gathering systems), pumps, water plants, electric
plants, gasoline and gas processing plants, refineries and other tangible personal property
and fixtures associated with, appurtenant to, or necessary for the operation of any of the
foregoing, regardless of location. “Hydrocarbons” means oil, condensate gas, casinghead gas
and other liquid or gaseous hydrocarbons.

     (b) Protection. In return for the Employer’s promise to provide Executive with
Confidential Information, Executive promises (i) to keep the Confidential
Information, and all documentation, materials and information relating thereto,
strictly confidential, (ii) not to use the Confidential Information for any purpose other
than as required in connection with fulfilling his duties for the benefit of the Employer,
and (iii) to return to the Employer all documents containing Confidential Information in
Executive’s possession upon separation from the Employer for any reason. For the sake of
clarity, Executive specifically acknowledges and agrees that (x) the definition of
Confidential Information in Section 11(a) includes (but is not limited to) any nonpublic
information about the Oil and Gas Interests (as defined above) and any other assets,
investments, properties, sites or locations in which the Employer or its affiliates have an
ownership or other interest or right, as well as any Oil and Gas Interests (as defined
above), assets, investments, properties, sites, locations, acquisitions or other business
prospects upon which the Employer or its affiliates have expended resources in the past, are
currently expending resources, or are contemplating expending resources in the future, and
(y) that any use by Executive of such Confidential Information other than as required in
connection with fulfilling his duties as Executive for the benefit of the Employer will be a
material breach of this Agreement. The immediately preceding sentence has been included for
the purpose of highlighting certain aspects of the

 

 

foregoing covenants and shall in no event
be read to limit or narrow the foregoing covenants.

     (c) Scope. Executive understands and agrees that all Confidential Information, in
whatever medium (verbal, written, electronic or other), is subject to this Agreement whether
provided directly to Executive or not, whether provided to Executive prior to the Effective
Date of this Agreement or not, and whether inadvertently disclosed to Executive or not.
Confidential Information which was or is available to Executive or to which Executive had or
has access will be deemed to have been provided to Executive. Executive also hereby agrees
that Confidential Information shall be deemed to include information regarding the assets of
the Employer, even if such information was learned by Executive prior to formation of the
Employer.

     (d) Value and Security. Executive understands and agrees that all Confidential
Information, and every portion thereof, constitutes the valuable intellectual property of
the Employer, its affiliates, and/or third parties, and Executive further acknowledges the
importance of maintaining the security and confidentiality of the Confidential Information
and of not misusing the Confidential Information.

     (e) Disclosure Required By Law. If Executive is legally required to disclose any
Confidential Information, Executive shall promptly notify the Employer in writing of such
request or requirement so that the Employer may seek an appropriate protective order or
other relief. Executive agrees to cooperate with and not to oppose any effort by the
Employer to resist or narrow such request or to seek a protective order or other appropriate
remedy. In any case, Executive will (a) disclose only that portion of the Confidential
Information that, according to the advice of Executive’s counsel, is required to be
disclosed (and Executive’s disclosure of Confidential Information to Executive’s counsel in
connection with obtaining such advice shall not be a violation of this Agreement), (b) use
reasonable efforts (at the expense of the Employer) to obtain assurances that such
Confidential Information will be treated confidentially, and (c)
promptly notify the Employer in writing of the items of Confidential Information so
disclosed.

     (f) Third-Party Confidentiality Agreements. To the extent that the Employer possesses
any Confidential Information which is subject to any confidentiality agreements with, or
obligations to, third parties, Executive will comply with all such agreements or obligations
in full. The immediately preceding sentence shall apply only if the Employer has provided
Executive with a copy of such agreements, and Executive may disclose such agreements and any
related Confidential Information to the Employer’s attorneys and rely on their advice
regarding compliance therewith.

     (g) Survival. The covenants made by Executive in this Section 11, other than Paragraph
(f) hereof, will be effective only during the Employment Period and for the two-year period
immediately following the Employment Period, and to that extent (and only that extent) shall
survive termination of this Agreement. The covenants made by Executive in Paragraph (f) of
this Section 11 will be effective during the period specified in the confidentiality
agreements described therein.

 

 

     12. No Solicitation. Executive shall not, for a period of one year after the Termination
Date, either as principal, agent, independent contractor, consultant, director, officer, employee,
employer, advisor, stockholder, partner, member, joint venturer, owner or in any other individual
or representative capacity whatsoever, whether paid or unpaid, either for his own benefit or for
the benefit of any other person or entity, either (A) contact or solicit, with respect to hiring,
any person known by Executive to be or to have been, at any time during the 12-month period
immediately preceding the Termination Date, an employee of an Employer or its affiliates, or (B)
induce or otherwise counsel, advise or encourage any employee of an Employer or its affiliates to
leave the employment of an Employer or their respective employment with such Employer’s affiliates,
as the case may be; provided, however, that this restriction shall not apply to any solicitations
contained in an advertisement directed generally to the public or the trade, nor to any contacts
resulting from such a solicitation. If Executive fails to comply with this Section 12, the
Employer shall be entitled to, among other remedies, compliance by Executive with the terms of this
section for an additional period of time that shall equal the period over which such noncompliance
occurred. Notwithstanding any other provision hereof, this Section 12 shall not apply (1) if the
Employer terminates Executive’s employment with the Employer and its affiliates pursuant to Section
6(a)(4) or pursuant to delivery by the Employer to Executive of a notice of non-renewal in
accordance with Section 4, (2) if Executive terminates Executive’s employment with the Employer and
its affiliates pursuant to Section 6(b)(1), or (3) after the occurrence of a Change of Control.

     13. Defense of Claims. Executive agrees that, during the Employment Period and for a
period of 36 months after the Termination Date, upon request from an Employer, Executive will
cooperate with an Employer and its affiliates in the defense of any claims or actions that may be
made by or against an Employer or any of its affiliates that relate to Executive’s prior areas of
responsibility, except if
Executive’s reasonable interests are adverse to such Employer or affiliates in such claim or
action. If Executive is not an employee of an Employer or an affiliate at such time, the Employer
agrees to compensate Executive for his time spent on such matters at the rate of $150 per hour, and
in addition, to pay or reimburse Executive for all of Executive’s reasonable travel and other
direct expenses incurred, or to be reasonably incurred, to comply with Executive’s obligations
under this Section 13, provided Executive provides reasonable documentation of same.

     14. Withholdings: Right of Offset. An Employer (or its agent) may withhold and deduct from
any payments made or to be made pursuant to this Agreement (a) all federal, state, local and other
taxes as may be required pursuant to any law or governmental regulation or ruling, (b) any
deductions consented to in writing by Executive, and (c) any other sums owed by Executive to the
Employer, any affiliate, or any employee benefit plan or program of the Employer or any affiliate.

     15. Severability. It is the desire of the parties hereto that this Agreement be enforced
to the maximum extent permitted by law, and should any provision contained herein be held
unenforceable by a court of competent jurisdiction or arbitrator (pursuant to Section 17), the
parties hereby agree and consent that such provision shall be reformed to create a valid and
enforceable provision to the maximum extent permitted by law; provided, however, if such provision
cannot be reformed, it shall be deemed ineffective and deleted herefrom without affecting any other
provision of this Agreement.

 

 

     16. Title and Headings; Construction. Titles and headings to Sections hereof are for the
purpose of reference only and shall in no way limit, define or otherwise affect the provisions
hereof. Any and all Exhibits referred to in this Agreement are, by such reference, incorporated
herein and made a part hereof for all purposes. The words “herein”, “hereof”, “hereunder” and
other compounds of the word “here” shall refer to the entire Agreement and not to any particular
provision hereof.

     17. Arbitration; Injunctive Relief; Attorneys’ Fees.

     (a) Subject to Section 17(b), any dispute, controversy or claim between Executive and
an Employer arising out of or relating to this Agreement, Executive’s employment with an
Employer, or the termination of either will be finally settled by arbitration in Houston,
Texas before, and in accordance with the rules for the resolution of employment disputes
then obtaining of, the American Arbitration Association. The arbitrator’s award shall be
final and binding on all parties.

     (b) Notwithstanding Section 17(a), an application for emergency or temporary injunctive
relief by either party shall not be subject to arbitration under this Section 17; provided,
however, that the remainder of any such dispute (beyond the application for emergency or
temporary injunctive relief) shall be subject to arbitration under this
Section 17. Executive acknowledges that Executive’s violation of Sections 11 and/or 12
of this Agreement will cause irreparable harm to the Employer, Executive agrees not to
contest that Executive’s violation of Sections 11 and/or 12 of this Agreement will cause
irreparable harm to the Employer and Executive agrees that the Employer shall be entitled as
a matter of right to specific performance of Executive’s obligations under Sections 11 and
12 and an injunction, from any court of competent jurisdiction, restraining any violation or
further violation of such agreements by Executive or others acting on his/her behalf,
without any showing of irreparable harm and without any showing that the Employer does not
have an adequate remedy at law. The Employer’s right to injunctive relief shall be
cumulative and in addition to any other remedies provided by law or equity.

     (c) Each party shall share equally the cost of the arbitrator and bear its own costs
and attorneys’ fees incurred in connection with any arbitration, unless a statutory claim
authorizing the award of attorneys’ fees is at issue, in which event the arbitrator may
award a reasonable attorneys’ fee in accordance with the jurisprudence of that statute.

     (d) Nothing in this Section 17 shall prohibit a party to this Agreement from (i)
instituting litigation to enforce any arbitration award or (ii) joining another party to
this Agreement in a litigation initiated by a person which is not a party to this Agreement.

     18. Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS. THE EXCLUSIVE
VENUE FOR THE RESOLUTION OF ANY DISPUTE RELATING TO THIS AGREEMENT OR EXECUTIVE’S EMPLOYMENT (THAT
IS NOT SUBJECT TO ARBITRATION UNDER

 

 

SECTION 17 FOR ANY REASON) SHALL BE IN THE STATE AND FEDERAL
COURTS LOCATED IN HARRIS COUNTY, TEXAS AND THE PARTIES HEREBY EXPRESSLY CONSENT TO THE JURISDICTION
OF THOSE COURTS.

     19. Entire Agreement and Amendment. This Agreement contains the entire agreement of the
parties with respect to Executive’s employment and the other matters covered herein (except to the
extent that other agreements are specifically referenced herein); moreover, this Agreement
supersedes all prior and contemporaneous agreements and understandings, oral or written, between
the parties hereto concerning the subject matter hereof and thereof, specifically including the
Employment Agreement entered into by and between MEI and Executive as of February 7, 2005. This
Agreement may be amended, waived or terminated only by a written instrument executed by both
parties hereto.

     20. Survival of Certain Provisions. Wherever appropriate to the intention of the parties
hereto, the respective rights and obligations of said parties, including, but not limited to, the
rights and obligations set forth in Sections 6 through 18 hereof, shall survive any termination or
expiration of this Agreement for any reason.

     21. Waiver of Breach. No waiver by a party hereto of a breach of any provision of this
Agreement by another party, or of compliance with any condition or provision of this Agreement to
be performed by such other party, will operate or be construed as a waiver of any subsequent breach
by such other party or any similar or dissimilar provision or condition at the same or any
subsequent time. The failure of a party hereto to take any action by reason of any breach will not
deprive such party of the right to take action at any time while such breach continues.

     22. Assignment. Neither this Agreement nor any rights or obligations hereunder shall be
assignable or otherwise subject to hypothecation by Executive (except by will or by operation of
the laws of intestate succession) or by either Employer, except that either Employer may assign
this Agreement to any successor (whether by merger, purchase or otherwise) to all or substantially
all of the equity, assets or businesses of such Employer, if such successor expressly agrees to
assume the obligations of such Employer hereunder.

     23. Notices. Notices provided for in this Agreement shall be in writing and shall be
deemed to have been duly received (a) when delivered in person or sent by facsimile transmission,
(b) on the first business day after such notice is sent by air express overnight courier service,
or (c) on the third business day following deposit in the United States mail, registered or
certified mail, return receipt requested, postage prepaid and addressed, to the following address,
as applicable:

     (1) If to MEI, addressed to:

Mariner Energy, Inc.

Attn: Chief Executive Officer

One BriarLake Plaza, Suite 2000

2000 West Sam Houston Parkway South

Houston, TX 77042

 

 

     (2) If to MERI, addressed to:

Mariner Energy Resources, Inc.

Attn: Chief Executive Officer

One BriarLake Plaza, Suite 2000

2000 West Sam Houston Parkway South

Houston, TX 77042

     (3) If to Executive, addressed to the address set forth below Executive’s name
on the execution page hereof;

or to such other address as either party may have furnished to the other party in writing in
accordance with this Section 23.

     24. Counterparts. This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a copy hereof containing
multiple signature pages, each signed by one party, but together signed by both parties hereto.

     25. Definitions. The parties agree that as used in this Agreement the following terms
shall have the following meanings: an “affiliate” of a person shall mean any person directly or
indirectly controlling, controlled by, or under common control with, such person; the terms
“controlling, controlled by, or under common control with” shall mean the possession, directly or
indirectly, of the power to direct or influence or cause the direction or influence of management
or policies (whether through ownership of securities or other ownership interest or right, by
contract or otherwise) of a person; the term “person” shall mean a natural person, partnership
(general or limited), limited liability company, trust, estate, association, corporation,
custodian, nominee, or any other individual or entity in its own or any representative capacity, in
each case, whether domestic or foreign.

     26. Code Section 409A Compliance. Notwithstanding anything in this Agreement to the contrary,
if any provision hereof would result in the imposition of an additional tax under Code Section 409A
and related regulations and Treasury pronouncements (“Section 409A”), that provision will be
reformed to avoid imposition of the applicable tax and no action taken to comply with Section 409A
shall be deemed to adversely affect Executive’s rights hereunder.

SIGNATURE PAGE FOLLOWS

 

 

     IN WITNESS WHEREOF, Executive, MEI and MERI have executed this Agreement to be effective for
all purposes as of the Effective Date.

	 	 	 	 	 
	 	 	EXECUTIVE:
	 
	 	 	 	 
	 

	 	Signature:
	 	/s/ Judd Hansen
	 

	 	 	 	 
	 

	 	 	 	Judd Hansen

	 	 	 	 	 	 	 
	 	 	Date:	 	March 1, 2006
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	15718 Woodcroft Dr.

Houston, TX 77095

	 	 	 	 	 
	 	 	MARINER ENERGY, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Scott D. Josey
	 

	 	 	 	 
	 

	 	 	 	          [Name, Title]
	 

	 	 	 	Chairman of the Board,
	 

	 	 	 	Chief Executive Officer and President

	 	 	 	 	 
	 

	 	Date:
	 	March 2, 2006

	 	 	 	 	 
	 	 	MARINER ENERGY RESOURCES, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Scott D. Josey
	 

	 	 	 	 
	 

	 	 	 	          [Name, Title]
	 

	 	 	 	Chairman of the Board,
	 

	 	 	 	Chief Executive Officer and President

	 	 	 	 	 
	 

	 	Date:
	 	March 2, 2006

 

 

Exhibit A

None

A - 1

 

Exhibit B

WAIVER AND RELEASE AGREEMENT

     This Waiver and Release Agreement (the “Agreement”) is between Mariner Energy, Inc., a
Delaware corporation, (“Employer”) and Judd Hansen (“Executive”), as provided pursuant to that
employment agreement between Executive and Employer dated March 2, 2006 (the “Employment
Agreement”) and attached hereto as Exhibit A.

WHEREAS, Executive’s employment with Employer is being terminated; and

     WHEREAS, Executive will be paid certain severance benefits in exchange for his release and
waiver of his claims against the Employer Releasee (as defined below) pursuant to this Agreement;

     NOW, THEREFORE, the parties agree to the following.

     1. Complete Release and Other Consideration from Executive. In exchange for the severance
benefits provided under Section 2 of this Agreement, Executive agrees as follows:

     (a) Complete Release. On behalf of Executive and Executive’s heirs and
assigns, Executive fully releases Employer and its direct and indirect, past present and
future, parents, subsidiaries, affiliates, divisions, predecessors, successors, and assigns,
and, with respect to all such entities, their partners, members, shareholders, owners,
officers, directors, attorneys, agents, representatives and employees (collectively, the
“Employer Releasees”), from any and all claims, demands, damages, losses, expenses,
liabilities and causes of action (including claims for attorneys’ fees) (collectively,
“Claims”), known or unknown, that Executive, his heirs, executors, administrators, and
assigns may have or may claim to have against any of the Employer Releasees based upon facts
occurring on or prior to the date Executive signs this Agreement, including but not limited
to any claims arising out of Executive’s employment relationship with and service as an
employee, officer or director of Employer, and the termination of such relationship or
service, (the “Release”); provided, however, that this Release shall not apply to Employer’s
obligations under this Agreement. This Release includes, without limitation, any claims
arising out of any contract (express or implied); any tort (whether based on negligent,
grossly negligent, or intentional conduct); or any federal, state, or local law, including,
without limitation, the Age Discrimination in Employment Act and the Employee Retirement
Income Security Act (“ERISA”), other than benefits that Executive is entitled to under the
terms of an ERISA plan. This Release does not include any claims under the Age
Discrimination in Employment Act that may arise after this Agreement is executed.

     (b) Confidentiality. Except as may be required by law or court order or as may
be necessary in an action arising out of this Agreement, Executive agrees not to
disclose the existence or terms of this Agreement to anyone other than Executive’s
immediate family, attorneys, tax advisors, and financial counselors, provided that

B-1

 

Executive first informs them of this confidentiality clause and secures their agreement to be bound by
it. Executive understands and agrees that a breach of this confidentiality provision by any
of these authorized persons will be deemed a material breach of this Agreement by Executive.

     (c) Executive agrees not to bring or join any lawsuit against any of the Employer
Releasees in any court (except as necessary to protect Executive’s rights under this
Agreement or with respect to Executive’s entry into this Agreement) relating to Executive’s
employment, events occurring during Executive’s employment or the termination of Executive’s
employment. Executive represents that, as of the effective date of this Agreement,
Executive has not brought or joined any lawsuit or filed any charge or claim against any of
the Employer Releasees in any court or before any government agency. If Executive brings or
joins any lawsuit against any of the Employer Releasees in any court (except as necessary to
protect Executive’s rights under this Agreement or with respect to Executive’s entry into
this Agreement) relating to Executive’s employment, events occurring during Executive’s
employment or the termination of Executive’s employment, and Executive is the prevailing
party in such lawsuit, Executive shall be obligated to return to the Employer all amounts
paid to Executive as benefits under this Agreement, to the extent permitted under applicable
law and ordered by the court. Further, if any Employer Releasee is the prevailing party in
any lawsuit Executive brings against such Employer Releasee relating to Executive’s
employment that has been waived in this Agreement, to the extent permitted by applicable law
(such as if Executive’s claims are found to be brought in bad faith), Executive agrees to
pay all costs and expenses incurred by such person or entity, including reasonable
attorneys’ fees, in defending against such lawsuit.

This Agreement is not intended to indicate that any Claims exist or that, if they do exist, they
are meritorious. Rather, Executive is simply agreeing that, in return for the Employer’s payment
provided by this Agreement, any and all potential Claims that Executive may have against the
Employer Releasees, regardless of whether they actually exist, are expressly settled, compromised
and waived. By signing this Agreement, Executive and the Employer Releasees are bound by it.
Anyone who succeeds to Executive’s rights and responsibilities, such as heirs or the executor of
Executive’s estate, is also bound by this Agreement. The waiver and release provisions of this
Agreement do not apply to any rights or claims that may arise after its effective date. This
Release also applies to any claims brought by any person or agency or class action under which
Executive may have a right or benefit.

B-2

 

     2. Consideration from Employers. In exchange for Executive’s obligations under this
Agreement, Employer shall pay Executive those severance payments and benefits described in Sections
7, 8, and 9, as applicable, of the Employment Agreement, which are incorporated herein by reference
and made a part of this Agreement. Executive acknowledges that Executive is not otherwise entitled
to receive such severance payments and benefits, these severance payments and benefits are
conditioned on Executive’s compliance with the terms of this Agreement and the Employment
Agreement, including without limitation Sections 11 and 12 thereof. Executive acknowledges and agrees that
Employer (or its agent) will withhold any taxes required by applicable law from the severance
payments and benefits.

     3. Right to Consult an Attorney; Period of Review. Executive is encouraged to consult with
an attorney before signing this Agreement. From the date this Agreement is first presented to
Executive, Executive will have 21 [45, if applicable] days in which to review this Agreement.
Executive may use as little or much of this 21 [45]-day review period as Executive chooses.

     4. Entire Agreement; Amendment; Continuing Obligations. This Agreement and the Employment
Agreement together contain the entire agreement of the parties with respect to the termination of
Executive’s employment and the other matters covered herein and therein; moreover, this Agreement
supersedes all prior and contemporaneous agreements and understandings, oral or written, between
the parties hereto concerning the subject matter hereof. This Agreement may be amended, waived or
terminated only by a written instrument executed by both parties hereto. Executive hereby
reaffirms and agrees to continue to abide by all of Executive’s continuing obligations under
Sections 11 through 18 of the Employment Agreement.

     5. Revocation. Upon signing this Agreement, Executive will have 7 days to revoke the
Agreement. To properly revoke the Agreement, Employer must receive written notice of revocation
from Executive by the close of business on the 7th day after the date the Agreement is signed by
Executive. Written notice must be delivered pursuant to Section 23 of the Employment Agreement.
Executive understands that failure to revoke his acceptance of this Agreement within 7 days after
the date he signs it will result in this Agreement being permanent and irrevocable.

     6. Choice of Law. This Agreement will be governed in all respects by the laws of the State
of Texas, without regard to its choice of law principles. This Agreement is subject to the
arbitration provisions in Section 17 of the Employment Agreement.

     7. Effectiveness of Agreement. This Agreement will be effective, and the severance
payments and benefits provided in Section 2 of this Agreement will be made and provided, only if
Executive executes this Agreement within 21 [45] days of receiving it and only if Executive does
not revoke this Agreement under Section 5 above.

B-3

 

	 	 	 	 	 
	 	 	EXECUTIVE:
	 
	 	 	 	 
	 

	 	Signature:	 	 
	 

	 	 	 	 
	 

	 	 	 	      Judd Hansen

	 	 	 	 	 
	 

	 	Date:	 	 
	 

	 	 	 	 

	 	 	 	 	 
	 	 	MARINER ENERGY, INC.
	 
	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 
	 

	 	 	 	          [Name, Title]

	 	 	 	 	 
	 

	 	Date:	 	 
	 

	 	 	 	 

B-4exv10w1

 

Exhibit 10.1

THIRD AMENDMENT TO

FIRST AMENDED AND RESTATED CREDIT AGREEMENT

     THIS THIRD AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”), dated as of March 31, 2006 (the “Effective Date”), is by and among
T-3 ENERGY SERVICES, INC., a Delaware corporation (the “Borrower”), T-3 OILCO ENERGY
SERVICES PARTNERSHIP, an Alberta general partnership (the “Canadian Borrower”), the BANKS
(as defined in the Credit Agreement defined below) signatory hereto, WELLS FARGO BANK, NATIONAL
ASSOCIATION (in its individual capacity, “Wells Fargo”) as agent (in such capacity,
together with its successors in such capacity, the “Agent”) for the Banks under the Credit
Agreement (as defined below) and COMERICA BANK, a Michigan banking corporation and authorized
foreign bank under the Bank Act (Canada) acting through its Canadian branch (the “Canadian
Lender”).

W I T N E S S E T H:

     WHEREAS, the Borrowers, the Banks, and the Agent are parties to that certain First Amended and
Restated Credit Agreement dated as of September 30, 2004 (as the same has been, and may hereafter
be, amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”);

     WHEREAS, the Borrowers, the Agent and the Banks desire to amend the Credit Agreement, subject
to the terms and conditions contained herein.

     NOW, THEREFORE, in consideration of the premises set forth above, the covenants and agreements
hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows intending to be legally bound
(all provisions of this Amendment being effective as of the Effective Date):

ARTICLE I

Definitions

     Section 1.1 Definitions. Capitalized terms used in this Amendment, to the extent not
otherwise defined herein, shall have the same meanings as in the Credit Agreement, as amended
hereby.

ARTICLE II

Amendment

     Section 2.1 Amendment to Section 2.8(a). The last sentence of Section 2.8(a) is
amended and restated in its entirety, to read as follows (the remaining portion of Section 2.8(a)
remains unchanged):

Letters of Credit shall expire no later than three years after the date of
issuance (but may include provision for automatic one year renewals unless
notice of non-renewal is timely sent by Issuing Bank), must be

THIRD AMENDMENT TO FIRST AMENDED

AND RESTATED TO CREDIT AGREEMENT — Page 1

 

 

satisfactory in form to the Issuing Bank, and must be issued pursuant to a
Letter of Credit Agreement.

     Section 2.2 Amendment to Section 11.5. Section 11.5 of the Credit Agreement is
amended and restated in its entirety to read, as follows:

Section 11.5 Capital Expenditures. The Borrower will not make,
and will not permit any of its Subsidiaries to make, Capital Expenditures
that exceed $15,000,000 in the aggregate during any single Fiscal Year.

ARTICLE III

Conditions Precedent

     Section 3.1 Conditions Precedent to Effectiveness of Amendment. The parties hereto
agree that this Amendment shall not be effective until the satisfaction of each of the following
conditions precedent and thereupon shall be effective as of the Effective Date:

     (a) The Agent shall have received a copy of this Amendment executed and delivered by
the Borrowers, the Required Banks, the Canadian Lender, and each Guarantor;

     (b) Each of the representations and warranties made in this Amendment shall be true
and correct on and as of the Effective Date as if made on and as of such date (other than
those which are made at the time of an Advance), both before and after giving effect to
this Amendment;

     (c) The Borrowers shall have paid all the reasonable fees and out-of-pocket expenses
of counsel for the Agent to the extent invoiced prior to the Effective Date; and

     (d) The Agent shall have received, in form and substance satisfactory to the Agent and
its counsel, such other documents, agreements, certificates and instruments as the Agent
shall reasonably require.

ARTICLE IV

Ratifications; Representation and Warranties

     Section 4.1 Ratifications. The terms and provisions set forth in this Amendment shall
modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement and
the other Loan Documents and except as expressly modified and superseded by this Amendment, the
terms and provisions of the Credit Agreement
and the other Loan Documents are ratified and confirmed and shall continue in full force and
effect. The Borrowers, the Agent and the Banks agree that the Credit Agreement as amended hereby
shall continue to be legal, valid, binding and enforceable in accordance with its terms.

THIRD AMENDMENT TO FIRST AMENDED

AND RESTATED TO CREDIT AGREEMENT — Page 2

 

 

     Section 4.2 Representations and Warranties. To induce the Agent and the several Banks
parties hereto to enter into this Amendment and to grant the consents and waivers contained herein,
each of the Borrowers represents to the Agent and the Banks as follows:

     (a) Each of the Borrowers hereby confirms that all representations and warranties made
in Article VIII of the Credit Agreement (other than those which are made at the time of an
Advance) are true and correct in all material respects on and as of the Effective Date,
both before and after giving effect to this Amendment, as if such representations and
warranties were being made on and as of the Effective Date;

     (b) Each of the Borrowers and each of the Guarantors hereby confirm that the
resolutions previously delivered to the Agent remain in full force and effect and authorize
the execution and delivery of this Amendment to the Agent; and

     (c) No Default or Event of Default exists under any of the Loan Documents.

ARTICLE V

Miscellaneous

     Section 5.1 Loan Documents. This Amendment shall be deemed to be a Loan Document for
all purposes under the Credit Agreement and the other Loan Documents.

     Section 5.2 Governing Law. Each of the Borrowers agrees to be bound by the terms of
Section 14.12 of the Credit Agreement, which is incorporated herein by reference.

     Section 5.3 Severability. Any provision of this Amendment which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.

     Section 5.4 Fees and Expenses. Each of the Borrowers agrees to pay on demand all
reasonable costs, fees, and expenses of the Agent in connection with the preparation, execution,
and delivery of this Amendment and any other documents prepared in connection herewith or
therewith, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Agent.

     Section 5.5 Counterparts; Facsimiles. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages are physically
attached to the same document. Signatures transmitted by facsimile or other electronic means shall
be effective as originals.

     Section 5.6 Effective Date. This Amendment shall become effective as of the Effective
Date when the Agent has received counterparts of this Amendment executed by each of the Borrowers
and the Banks and each of the conditions precedent set forth above has been

THIRD AMENDMENT TO FIRST AMENDED

AND RESTATED TO CREDIT AGREEMENT — Page 3

 

 

satisfied, whether or
not this Amendment has been executed and delivered by each and every Bank named on a signature page
attached hereto.

     Section 5.7 WAIVER OF TRIAL BY JURY. TO THE FULLEST EXTENT PERMITTED, BY APPLICABLE
LAW, EACH OF THE BORROWER, THE CANADIAN BORROWER, THE AGENT AND THE BANKS HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING
ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG THE BORROWER OR THE
CANADIAN BORROWER AND ANY OTHER PARTY TO THIS AGREEMENT ARISING OUT OF OR IN ANY WAY RELATED TO
THIS AGREEMENT, ANY OTHER LOAN DOCUMENTS, OR ANY RELATIONSHIP BETWEEN ANY OTHER PARTY TO THIS
AGREEMENT AND THE BORROWER OR THE CANADIAN BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT TO
THE BANKS TO PROVIDE THE FINANCING DESCRIBED IN THE CREDIT AGREEMENT.

     Section 5.8 FINAL AGREEMENT. THIS AMENDMENT, TOGETHER WITH THE CREDIT AGREEMENT AND
OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

THIRD AMENDMENT TO FIRST AMENDED

AND RESTATED TO CREDIT AGREEMENT — Page 4

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and
delivered by their proper and duly authorized officers effective as of the Effective Date.

	 	 	 	 	 
	 	BORROWER:

T-3 ENERGY SERVICES, INC.

 	 
	 	By:  	/s/ Michael T. Mino
 	 
	 	 	Michael T. Mino 	 
	 	 	Vice President 	 
	 

	 	 	 	 	 
	 	CANADIAN BORROWER:

T-3 OILCO ENERGY SERVICES PARTNERSHIP,

by its partners,

T-3 ENERGY SERVICES CANADA, INC.

 	 
	 	By:  	/s/ Michael T. Mino
 	 
	 	 	Michael T. Mino 	 
	 	 	Vice President 	 
	 

- and —

	 	 	 	 	 
	 	T-3 OILCO PARTNERS ULC

 	 
	 	By:  	/s/ Michael T. Mino
 	 
	 	 	Michael T. Mino 	 
	 	 	Vice President 	 
	 

	 	 	 
	 

	 	Address for Notices:
	 
	 	 
	 

	 	7135 Ardmore Street
	 

	 	Houston, Texas 77054
	 

	 	Fax No.: (713) 996-4123
	 

	 	Telephone No.: (713) 996-4110
	 

	 	Attention: Michael Mino

THIRD AMENDMENT TO FIRST AMENDED

AND RESTATED TO CREDIT AGREEMENT — Signature Page

 

 

	 	 	 
	 

	 	AGENT AND BANKS: 
	 
	 	 
	 

	 	WELLS FARGO BANK, NATIONAL
ASSOCIATION, successor-by-merger to Wells
Fargo Bank Texas, National Association, as Agent and a Bank

	 	 	 	 	 
	 	 	 
	 	By:  	            /s/ William S. Rogers
 	 
	 	 	William S. Rogers 	 
	 	 	Vice President 	 
	 

	 	 	 	 	 
	 	COMERICA BANK,

 	 
	 	By:  	/s/ Cyd Dillahunty
 	 
	 	 	Cyd Dillahunty 	 
	 	 	Vice President / Portfolio Manager 	 
	 

	 	 	 	 	 
	 	GENERAL ELECTRIC CAPITAL CORPORATION

 	 
	 	By:  	                  /s/ Jeffrey A. Skinner
 	 
	 	 	Jeffrey A. Skinner 	 
	 	 	Duly Authorized Signatory 	 
	 

	 	 	 
	 

	 	CANADIAN LENDER:
	 
	 	 
	 

	 	COMERICA BANK, a Michigan banking corporation and authorized foreign bank under
the Bank Act (Canada) acting through its Canadian branch,

	 	 	 	 	 
	 	 	 
	 	By:  	                  /s/ Alicia Mair
 	 
	 	 	Alicia Mair 	 
	 	 	Title:  	Branch Officer 	 
	 

THIRD AMENDMENT TO FIRST AMENDED

AND RESTATED TO CREDIT AGREEMENT — Signature Page

 

 

The undersigned Guarantors hereby consent and agree to the execution and delivery of this Amendment
and the documents referred-to in Article III thereof and the consummation of the transactions
contemplated in the Amendment, and the undersigned Guarantors (i) reaffirm their respective
obligations under each of their respective Guaranty Agreements, which Guaranty Agreements shall
continue in full force and effect notwithstanding the consummation of such proposed transactions,
and (ii) confirm that the Canadian Obligations are guaranteed thereunder and entitled to the
benefit of the Collateral provided in the Loan Documents.

	 	 	 
	 

	 	GUARANTORS:
	 
	 	 
	 

	 	A & B Bolt & Supply, Inc.
	 

	 	Cor-Val Holdings, Inc.
	 

	 	Preferred Industries Holdings, Inc.
	 

	 	T-3 Canadian Holdings, Inc.
	 

	 	T-3 Custom Coating Applicators, Inc.
	 

	 	T-3 Financial Services LP, Inc.
	 

	 	T-3 Investment Corporation III
	 

	 	T-3 Property Holdings, Inc.
	 

	 	T-3 Support Services, Inc.
	 

	 	T-3 Management Holdings, Inc.
	 

	 	T-3 Mexican Holdings, Inc.
	 

	 	O & M Equipment Holdings, Inc.
	 

	 	Manifold Valve Services, Inc.
	 

	 	Pipeline Valve Specialty, Inc.
	 

	 	United Wellhead Services, Inc.

	 	 	 	 	 
	 	 	 
	 	By:  	                      /s/ Michael T. Mino
 	 
	 	 	Michael T. Mino 	 
	 	 	Vice President of each
of the foregoing companies 	 
	 

	 	 	 	 	 
	 	 	Cor-Val, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	Cor-Val Holdings, Inc.,
	 

	 	 	 	its sole general partner

	 	 	 	 	 
	 	 	 
	 	By:  	                          /s/ Michael T. Mino
 	 
	 	 	Michael T. Mino, Vice President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	T-3 Management Services, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	T-3 Management Holdings, Inc.,
	 

	 	 	 	its sole general partner

	 	 	 	 	 
	 	 	 
	 	By:  	                        /s/ Michael T. Mino
 	 
	 	 	Michael T. Mino, Vice President 	 
	 	 	 	 

THIRD AMENDMENT TO FIRST AMENDED

AND RESTATED TO CREDIT AGREEMENT — Signature Page

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	 	Preferred Industries, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	Preferred Industries Holdings, Inc.,
	 

	 	 	 	its sole general partner

	 	 	 	 	 
	 	 	 
	 	By:  	                       /s/ Michael T. Mino
 	 
	 	 	Michael T. Mino, Vice President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	O&M Equipment, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	O & M Equipment Holdings, Inc.,
	 

	 	 	 	its sole general partner

	 	 	 	 	 
	 	 	 
	 	By:  	                        /s/ Michael T. Mino
 	 
	 	 	Michael T. Mino, Vice President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	T-3 Financial Services, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	T-3 Management Holdings, Inc.
	 

	 	 	 	its sole general partner

	 	 	 	 	 
	 	 	 
	 	By:  	                        /s/ Michael T. Mino
 	 
	 	 	Michael T. Mino, Vice President 	 
	 	 	 	 
	 

THIRD AMENDMENT TO FIRST AMENDED

AND RESTATED TO CREDIT AGREEMENT — Signature Page

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]