Document:

exv10w11

 

Exhibit 10.11

AMENDED AND RESTATED

INTEGRATED PRODUCTION SERVICES, INC.

2003 PARCHMAN RESTRICTED STOCK PLAN

     1. ESTABLISHMENT AND EFFECTIVENESS OF PLAN. The Company establishes the Integrated
Production Services, Inc. 2003 Parchman Restricted Stock Plan as set forth herein. Restricted
Stock Awards granted under the Plan shall be subject to the terms and conditions of the Plan as set
forth herein, as it may be amended from time to time. The Plan amends and restates in its entirety
the Parchman 2003 Restricted Stock Plan (the “Original Plan”). The Company, Parchman Acquisition
Corp., (“Merger Sub”) and Parchman Energy Group, Inc. (“Parchman”) have entered into an Agreement
and Plan of Merger dated as of a date in January 2005, whereby it is contemplated that Parchman
will merge (the “Merger”) with and into Merger Sub and each share of common stock, par value $.001
per share, of Parchman (“Parchman Common Stock”) will be converted into, among other things, the
number of shares of Common Stock, par value $.01 per share, of the Company (“Company Common Stock”)
equal to the quotient of 2,000,000 divided by the number of shares of Parchman Common Stock issued
and outstanding immediately prior to the Merger (rounded down to the nearest whole share). In
anticipation of the consummation of the Plan, the Board of the Company, the holders of a majority
of the Company Common Stock and all the current holders of Restricted Stock Plan, have approved
this Plan which shall become effective upon the effectiveness of the Merger and shall remain in
effect as long as Restricted Stock Awards remain outstanding hereunder. If the Merger is not
consummated on or before January 31, 2005, this Plan shall terminate and shall have no force and
effect and the Original Plan shall remain in effect. If the Merger is consummated on or before
January 31, 2005, then the Original Plan shall be completely superceded in its entirety by this
Plan. Also, in anticipation of the consummation of the Merger, each holder of an outstanding
Restricted Stock Award under the Original Plan has executed and delivered an Amended and Restated
Restricted Stock Agreement which will supercede in its entirety the original Restricted Stock Award
issued under the Original Plan if the Merger is consummated and this Plan becomes effective.

     2. PURPOSE. The purposes of the Plan are (i) to attract and retain for the Company
the best available personnel, (ii) to provide performance incentives to Employees and to increase
their interest in the Company’s welfare, and (iii) to promote the success of the business of the
Company.

     3. DEFINITIONS. As used herein, unless the context requires otherwise, the following
terms shall have the meanings indicated below:

     (a) “Affiliate” means (i) any corporation, partnership or other entity which owns,
directly or indirectly, a majority of the voting equity securities of the Company, and (ii) any
corporation, partnership or other entity of which a majority of the voting equity securities or
equity interest is owned, directly or indirectly, by the Company.

     (b) “Award” means any Restricted Stock Award granted under the Plan, whether granted
singly or in combination, to a Grantor pursuant to the terms, conditions and limitations that the
Committee may establish in order to fulfill the objectives of the Plan.

 

 

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

     (d) “Change in Control” of the Company means the occurrence of any of the following
events: (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
other than SCF is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 80 percent or more of the
combined voting power of the Company’s then outstanding equity securities; (ii) as a result of, or
in connection with, any tender offer or exchange offer, merger, or other business combination (a
“Transaction”), the persons who were directors of the Company immediately before the Transaction
shall cease to constitute a majority of the Company or any successor to the Company unless a
majority of the Board has approved of the Transaction prior to its consummation; (iii) the Company
is merged or consolidated with another corporation and as a result of the merger or consolidation
(x) less than a majority of the outstanding voting securities of the surviving or resulting
corporation shall be owned immediately following such merger or consolidation in the aggregate by
the stockholders of the Company immediately prior to such merger or consolidation and (y) SCF shall
fail to own, directly or indirectly, immediately following such merger or consolidation, equity
securities of the surviving or resulting corporation representing at least 15 percent of the voting
power of such corporation’s then outstanding equity securities; or (iv) the Company transfers
substantially all of its assets to another corporation which immediately after such sale is neither
(x) controlled by the Company nor (y) is a corporation with respect to which SCF owns, directly or
indirectly, equity securities of the corporation representing at least 15 percent of the voting
power of such corporation’s outstanding equity securities. For purposes of this definition, the
“resulting corporation” of a merger of the Company with a subsidiary of another corporation shall
mean the parent corporation of such subsidiary. Notwithstanding anything to the contrary herein,
the Merger shall not constitute a Change in Control.

     (e) “Chief Executive Officer” means the individual serving at any relevant time as the
chief executive officer of the Company.

     (f) “Code” means the Internal Revenue Code of 1986, as amended, and any successor
statute. Reference in the Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to such section and any Treasury regulations promulgated under such
section.

     (g) “Committee” means the committee, as constituted from time to time, of the Board
that is appointed by the Board to administer the Plan, or if no such committee is appointed (or no
such committee shall be in existence at any relevant time), the term “Committee” for purposes of
the Plan shall mean the Chief Executive Officer provided that that Chief Executive Officer is a
member of the Board and, if the Chief Executive Officer is not a member of the Board, then the term
“Committee” for the purposes of the Plan shall mean the Board; provided, however, that if the
Common Stock is publicly traded, the Committee shall be a committee of the Board consisting solely
of two or more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of
two or more Non-Employee Directors, in accordance with Rule 16b-3, as necessary in each case to
satisfy such requirements with respect to Awards granted under the Plan. Notwithstanding the
foregoing provisions, the Chief Executive Officer has the authority to grant Restricted Stock
Awards to certain Employees, as described in Section 6 of this Plan.

2

 

     (h) “Common Stock” means the Common Stock, $.01 par value per share, of the Company or
the common stock that the Company may in the future be authorized to issue (as long as the common
stock varies from that currently authorized, if at all, only in amount of par value).

     (i) “Company” means Integrated Production Services, Inc., a Delaware corporation.

     (j) “Consultant” means any person (other than an Employee or a Director, solely with
respect to rendering services in such person’s capacity as a Director) who is engaged by the
Company to render consulting or advisory services to the Company and who is a “consultant or
advisor” within the meaning of Rule 701 promulgated under the Securities Act or Form S-8
promulgated under the Securities Act.

     (k) “Continuous Service” means that the provision of services to the Company or an
Affiliate in any capacity of Employee, Director or Consultant is not interrupted or terminated.
Except as otherwise provided in a particular Restricted Stock Agreement, service shall not be
considered interrupted or terminated for this purpose in the case of (i) any approved leave of
absence, (ii) transfers among the Company, any Affiliate, or any successor, in any capacity of
Employee, Director or Consultant, or (iii) any change in status as long as the individual remains
in the service of the Company in any capacity of Employee, Director or Consultant. An approved
leave of absence shall include sick leave, military leave, or any other authorized personal leave.

     (l) “Director” means a member of the Board.

     (m) “Disability” means the “disability” of a person as defined in a then effective
long-term disability plan maintained by the Company that covers such person, or if such a plan does
not exist at any relevant time, “Disability” means the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.

     (n) “Employee” means any person, including an Officer or Director, who is employed by
the Company or an Affiliate of the Company. The provision of compensation by the Company or an
Affiliate to a Director solely with respect to such individual rendering services in the capacity
of a Director, however, shall not be sufficient to constitute “employment” by the Company or that
Affiliate.

     (o) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any
successor statute. Reference in the Plan to any section of the Exchange Act shall be deemed to
include any amendments or successor provisions to such section and any rules and regulations
relating to such section.

     (p) “Fair Market Value” means, as of any date, the value of the Common Stock
determined as follows:

     (i) If the Common Stock is listed on any established stock exchange or traded on the
Nasdaq National Market or the Nasdaq SmallCap Market, or reported on the Over the-Counter
Bulletin Board published by the National Quotation Bureau, Inc., the Fair Market Value of a
share of Common Stock shall be the closing sales price for such a share of Common Stock (or
the closing bid, if no sales were reported) as quoted on such

3

 

exchange or market (or the exchange or market with the greatest volume of trading in
the Common Stock) or reported on the Over-the-Counter Bulletin Board on the day of
determination (or if no such price or bid is reported on that day, on last market trading
day prior to the day of determination), as reported in The Wall Street Journal or such other
source as the Committee deems reliable.

     (ii) In the absence of any such established markets for the Common Stock, the Fair
Market Value shall be determined in good faith by the Committee.

     (q) “Grantee” means an Employee, Director or Consultant to whom an Award has been
granted under the Plan.

     (r) “Non-Employee Director” means a Director of the Company who either (i) is not an
Employee or Officer, does not receive compensation (directly or indirectly) from the Company or an
Affiliate in any capacity other than as a Director (except for an amount as to which disclosure
would not be required under Item 404(a) of Regulation S-K), does not possess an interest in any
other transaction as to which disclosure would be required under Item 404(a) of Regulation S-K and
is not engaged in a business relationship as to which disclosure would be required under Item
404(b) of Regulation S-K or (ii) is otherwise considered a “non-employee director” for purposes of
Rule 16b-3.

     (s) “Officer” means a person who is an “officer” of the Company or any Affiliate of
the Company .

     (t) “Outside Director” means a Director of the Company who either (i) is not a current
employee of the Company or an “affiliated corporation” (within the meaning of the Treasury
regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company
or an “affiliated corporation” receiving compensation for prior services (other than benefits under
a tax qualified pension plan), has not been an officer of the Company or an “affiliated
corporation” at any time and is not currently receiving (within the meaning of the Treasury
regulations promulgated under Section 162(m) of the Code) direct or indirect remuneration from the
Company or an “affiliated corporation” for services in any capacity other than as a Director, or
(ii) is otherwise considered an “outside director” for purposes of Section 162(m) of the Code.

     (u) “Plan” means this Integrated Production Services, Inc. 2003 Parchman Restricted
Stock Plan, as set forth herein and as it may be amended from time to time.

     (v) “Qualifying Shares” means shares of Common Stock which either (i) have been owned
by the Grantee for more than six (6) months and have been “paid for” within the meaning of Rule 144
promulgated under the Securities Act, or (ii) were obtained by the Grantee in the public market.

     (w) “Regulation S-K” means Regulation S-K promulgated under the Securities Act, as it
may be amended from time to time, and successor to Regulation S-K. Reference in the Plan to any
item of Regulation S-K shall be deemed to include any amendments or successor provisions to such
item.

4

 

     (x) “Restriction Period” means the period during which the Common Stock under a
Restricted Stock Award is nontransferable and subject to “Forfeiture Restrictions” as defined in
Section 8(a) of this Plan and set forth in the related Restricted Stock Agreement.

     (y) “Restricted Stock Agreement” means the written agreement evidencing the grant of a
Restricted Stock Award executed by the Company and the Grantee, including any amendments thereto.
Each Restricted Stock Agreement shall be subject to the terms and conditions of the Plan.

     (z) “Restricted Stock Award” means an Award granted under Section 8 of this Plan of shares of
Common Stock issued to the Grantee for such consideration, if any, and subject to such restrictions
on transfer, rights of first refusal, repurchase provisions, forfeiture provisions and other terms
and conditions as are established by the Committee.

     (aa) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as it may be
amended from time to time, and any successor to Rule 16b-3.

     (bb) “SCF” means SCF IV, L.P., L.E. Simmons & Associates, Incorporated and their
affiliates.

     (cc) “Section” means a section of the Plan unless otherwise stated or the context
otherwise requires.

     (dd) “Securities Act” means the Securities Act of 1933, as amended, and any successor
statute. Reference in the Plan to any section of the Securities Act shall be deemed to include any
amendments or successor provisions to such section and any rules and regulations relating to such
section.

     (ee) “Ten Percent Shareholder” means a person who owns (or is deemed to own pursuant
to Section 424(d) of the Code) at the time an Option is granted stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the Company or of any
of its Affiliates.

     4. INCENTIVE AWARDS AVAILABLE UNDER THE PLAN. Awards granted under this Plan shall be
Restricted Stock Awards.

     5. SHARES SUBJECT TO PLAN. Subject to adjustment pursuant to Section 9(a) hereof, the
total amount of Common Stock with respect to which Awards may be granted under the Plan shall not
exceed 300,000 shares. Any shares of Common Stock covered by an Award (or a portion of an Award)
that is forfeited or canceled, or that expires shall be deemed not to have been issued for purposes
of determining the maximum aggregate number of shares of Common Stock which may be issued under the
Plan and shall again be available for Awards under the Plan. At all times during the term of the
Plan, the Company shall reserve and keep available such number of shares of Common Stock as will be
required to satisfy the requirements of outstanding Awards under the Plan. Nothing in this Section
5 shall impair the right of the Company to reduce the number of outstanding shares of Common Stock
pursuant to repurchases, redemptions, or otherwise; provided, however, that no reduction in the
number of outstanding shares of Common Stock shall (a) impair the validity of any outstanding
Award, whether or not that Award is fully

5

 

exercisable or fully vested, or (b) impair the status of any shares of Common Stock previously
issued pursuant to an Award as duly authorized, validly issued, fully paid, and nonassessable. The
shares to be delivered under the Plan shall be made available from (a) authorized but unissued
shares of Common Stock, (b) Common Stock held in the treasury of the Company, or (c) previously
issued shares of Common Stock reacquired by the Company, including shares purchased on the open
market, in each situation as the Committee may determine from time to time in its sole discretion.

     6. ELIGIBILITY. Awards may be granted to Employees, Officers, Directors, and
Consultants. The Committee in its sole discretion shall select the recipients of Awards; provided,
however, Awards may not be granted following the consummation of the Merger (it being the intent
that the only Awards to be granted under this Plan are awards in substitution of the awards
previously granted under the Original Plan).

     7. LIMITATION ON INDIVIDUAL AWARDS. The maximum number of shares of Common Stock that
may be subject to Awards granted to any one person under the Plan shall not exceed 90,000 shares of
Common Stock.

     8. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS. Each Restricted Stock Agreement
shall be in such form and shall contain such terms and conditions as the Committee shall deem
appropriate. The terms and conditions of such Restricted Stock Agreements may change from time to
time, and the terms and conditions of separate Restricted Stock Agreements need not be identical,
but each such Restricted Stock Agreement shall be subject to the terms and conditions of this
Section 8.

     (a) Forfeiture Restrictions. Shares of Common Stock that are the subject of a
Restricted Stock Award shall be subject to restrictions on disposition by the Grantee and to an
obligation of the Grantee to forfeit and surrender the shares to the Company under certain
circumstances (the “Forfeiture Restrictions”). The Forfeiture Restrictions shall be determined by
the Committee in its sole discretion, and the Committee may provide that the Forfeiture
Restrictions shall lapse on the passage of time, the attainment of one or more performance targets
established by the Committee or the occurrence of such other event or events determined to be
appropriate by the Committee. The Forfeiture Restrictions applicable to a particular Restricted
Stock Award (which may differ from any other such Restricted Stock Award) shall be stated in the
Restricted Stock Agreement.

     (b) Restricted Stock Awards. At the time any Restricted Stock Award is granted under
the Plan, the Company and the Grantee shall enter into a Restricted Stock Agreement setting forth
each of the matters addressed in this Section 8 and such other matters as the Committee may
determine to be appropriate. Shares of Common Stock awarded pursuant to a Restricted Stock Award
shall be represented by a stock certificate registered in the name of the Grantee of such
Restricted Stock Award or by a book entry account with the Company’s transfer agent. The Grantee
shall have the right to receive dividends with respect to the shares of Common Stock subject to a
Restricted Stock Award, to vote the shares of Common Stock subject thereto and to enjoy all other
stockholder rights with respect to the shares of Common Stock subject thereto, except that, unless
provided otherwise in the Restricted Stock Agreement, (i) the Grantee shall not be entitled to
delivery of the shares of Common Stock certificate until the

6

 

Forfeiture Restrictions have expired, (ii) the Company or an escrow agent shall retain custody
of the shares of Common Stock (or such shares shall be held in a book entry account with the
Company’s transfer agent) until the Forfeiture Restrictions have expired, (iii) the Grantee may not
sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the shares of Common Stock
until the Forfeiture Restrictions have expired, and (iv) a breach of the terms and conditions
established by the Committee pursuant to the Restricted Stock Agreement shall cause a forfeiture of
the Restricted Stock Award. At the time of such Award, the Committee may, in its sole discretion,
prescribe additional terms, conditions or restrictions relating to Restricted Stock Award,
including rules pertaining to the termination of the Grantee’s Continuous Service (by retirement,
Disability, death or otherwise) prior to expiration of the Forfeiture Restrictions. Such additional
terms, conditions or restrictions shall also be set forth in a Restricted Stock Agreement made in
connection with the Restricted Stock Award.

     (c) Rights and Obligations of Grantee. One or more stock certificates representing
shares of Common Stock, free of Forfeiture Restrictions, shall be delivered to the Grantee
promptly after, and only after, the Forfeiture Restrictions have expired and Grantee has satisfied
all applicable federal, state and local income and employment tax withholding requirements. Each
Restricted Stock Agreement shall require that (i) the Grantee, by his or her acceptance of the
Restricted Stock Award, shall irrevocably grant to the Company a power of attorney to transfer any
shares so forfeited to the Company and agrees to execute any documents requested by the Company in
connection with such forfeiture and transfer, and (ii) such provisions regarding transfers of
forfeited shares of Common Stock shall be specifically performable by the Company in a court of
equity or law.

     (d) Restriction Period. The Restriction Period for a Restricted Stock Award shall
commence on the date of grant of the Restricted Stock Award and, unless otherwise established by
the Committee and stated in the Restricted Stock Award Agreement, shall expire upon satisfaction of
the conditions set forth in the Restricted Stock Agreement pursuant to which the Forfeiture
Restrictions will lapse.

     (e) Securities Restrictions. The Committee may impose other conditions on any shares
of Common Stock subject to a Restricted Stock Award as it may deem advisable, including (i)
restrictions under applicable state or federal securities laws, and (ii) the requirements of any
stock exchange or national market system upon which shares of Common Stock are then listed or
quoted.

     (f) Payment for Restricted Stock. The Committee shall determine the amount and form
of any payment for shares of Common Stock received pursuant to a Restricted Stock Award; provided,
that in the absence of such a determination, the Grantee shall not be required to make any payment
for shares of Common Stock received pursuant to a Restricted Stock Award, except to the extent
otherwise required by law.

     (g) Forfeiture of Restricted Stock. Subject to the provisions of the particular
Restricted Stock Agreement, on termination of the Grantee’s Continuous Service during the
Restriction Period, the shares of Common Stock subject to the Restricted Stock Award shall be
forfeited by the Grantee. Upon any forfeiture, all rights of the Grantee with respect to the

7

 

forfeited shares of the Common Stock subject to the Restricted Stock Award shall cease and
terminate, without any further obligation on the part of the Company, except that if so provided in
the Restricted Stock Agreement applicable to the Restricted Stock Award, the Company shall
repurchase each of the shares of Common Stock forfeited for the purchase price per share paid by
the Grantee. The Committee will have discretion to determine whether the Continuous Service of a
Grantee has terminated and the date on which such Continuous Service terminates and whether the
Grantee’s Continuous Service terminated as a result of the Disability of the Grantee.

     (h) Lapse of Forfeiture Restrictions in Certain Events; Committee’s Discretion.

     Notwithstanding the provisions of Section 8(g) or any other provision in the Plan to the contrary,
the Committee may, in its discretion and as of a date determined by the Committee, fully vest any
or all Common Stock awarded to the Grantee pursuant to a Restricted Stock Award, and upon such
vesting, all Forfeiture Restrictions applicable to such Restricted Stock Award shall lapse or
terminate. Any action by the Committee pursuant to this Section 8(h) may vary among individual
Grantees and may vary among the Restricted Stock Awards held by any individual Grantee.

     (i) Withholding Taxes. The Committee may establish such rules and procedures as it
considers desirable in order to satisfy any obligation of the Company to withhold applicable
federal, state and local income and employment taxes with respect to the lapse of Forfeiture
Restrictions applicable to Restricted Stock Awards. Prior to delivery of shares of Common Stock
upon the lapse of Forfeitures Restrictions applicable to a Restricted Stock Award, the Grantee
shall pay or make adequate provision acceptable to the Committee for the satisfaction of all tax
withholding obligations of the Company.

     9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION AND CORPORATE EVENTS.

     (a) Capital Adjustments. The number of shares of Common Stock (or equity securities
of another entity in the context of a merger or consolidation) covered by each outstanding Award
granted under the Plan, the purchase price of such outstanding Award, and any other terms of the
Award that the Committee determines requires adjustment shall be adjusted to reflect, as deemed
appropriate by the Committee, any increase or decrease in the number of shares of Common Stock (or
other equity securities) resulting from a stock dividend, stock split, reverse stock split,
combination, reclassification, merger, consolidation or similar change, subject to any required
action by the Board or the shareholders of the Company and compliance with applicable securities
laws; provided, however, that a fractional share will not be issued with respect to any Award, and
either (i) any fraction of a share of Common Stock (or other equity securities) that would have
resulted will be cashed out at Fair Market Value or (ii) the number of shares of Common Stock (or
other equity securities) issuable under the Award will be rounded up to the nearest whole number,
as determined by the Committee. Except as the Committee determines, no issuance by the Company of
shares of capital stock of any class, or securities convertible into shares of capital stock of any
class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number
or price of shares of Common Stock subject to an Award.

8

 

     (b) Dissolution or Liquidation. The Committee shall notify the Grantee at least
twenty (20) days prior to any proposed dissolution or liquidation of the Company. Unless provided
otherwise in an individual Restricted Stock Agreement or in a then-effective written employment
agreement between the Grantee and the Company or an Affiliate, to the extent that the Company’s
repurchase rights relating to an Award have not expired or the Forfeiture Restrictions have not
lapsed, any such Award that is a Restricted Stock Award shall be forfeited and the shares of Common
Stock subject to such Award shall be returned to the Company, in each case, immediately prior to
consummation of such dissolution or liquidation, such Award shall terminate immediately prior to
consummation of such dissolution or liquidation.

     (c) Change in Control. Unless specifically provided otherwise with respect to Change
in Control events in a Restricted Stock Agreement or in a then-effective written employment
agreement between the Grantee and the Company, if, during the effectiveness of the Plan, a Change
in Control occurs, the Forfeiture Restrictions applicable to all outstanding Restricted Stock
Awards shall lapse and shares of Common Stock subject to such Restricted Stock Awards shall be
released from escrow (or transferred from book entry with the Company’s transfer agent), if
applicable, and delivered (subject to the Grantees’ satisfaction of the requirements of Section
8(i)) to the Grantees of the Awards free of any Forfeiture Restriction.

     10. ADMINISTRATION. This Plan shall be administered by the Committee. The Committee
shall interpret the Plan and any Awards granted pursuant to the Plan and shall prescribe such rules
and regulations in connection with the operation of the Plan as it determines to be advisable for
the administration of the Plan. The Committee may rescind and amend its rules and regulations from
time to time. The interpretation by the Committee of any of the provisions of this Plan or any
Award granted under this Plan shall be final and binding upon the Company and all persons having an
interest in any shares of Common Stock acquired pursuant to an Award.

     11. EFFECT OF PLAN. Neither the adoption of the Plan nor any action of the Board or
the Committee shall be deemed to give any Employee, Director or Consultant any right to be granted
an Award or any other rights except as may be evidenced by the Restricted Stock Agreement, or any
amendment thereto, duly authorized by the Committee and executed on behalf of the Company, and then
only to the extent and on the terms and conditions expressly set forth therein. The existence of
the Plan and the Awards granted hereunder shall not affect in any way the right of the Board, the
Committee or the stockholders of the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company’s capital structure or its business, any merger or
consolidation or other transaction involving the Company, any issue of bonds, debentures, or shares
of preferred stock ahead of or affecting the Common Stock or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of the Company’s assets or
business, or any other corporate act or proceeding by or for the Company. Nothing contained in the
Plan or in any Restricted Stock Agreement, or in other related documents shall confer upon any
Employee, Director or Consultant any right with respect to such person’s Continuous Service or
interfere or affect in any way with the right of the Company to terminate such person’s Continuous
Service at any time, with or without cause.

9

 

     12. NO EFFECT ON RETIREMENT AND OTHER BENEFIT PLANS. Except as specifically provided
in a retirement or other benefit plan of the Company or an Affiliate, Awards shall not be deemed
compensation for purposes of computing benefits or contributions under any retirement plan of the
Company or an Affiliate, and shall not affect any benefits under any other benefit plan of any kind
or any benefit plan subsequently instituted under which the availability or amount of benefits is
related to level of compensation. The Plan is not a “retirement plan” or “welfare plan” under the
Employee Retirement Income Security Act of 1974, as amended.

     13. AMENDMENT OR TERMINATION OF PLAN. The Board in its discretion may, at any time or
from time to time after the date of adoption of the Plan, terminate or amend the Plan in any
respect, including amendment of any form of Restricted Stock Agreement or instrument to be executed
pursuant to the Plan; provided, however, to the extent necessary to comply with the Code, including
Sections 162(m) and 422 of the Code, other applicable laws, or the applicable requirements of any
stock exchange or national market system, the Company shall obtain stockholder approval of any Plan
amendment in such manner and to such a degree as required. Any amendment or termination of the
Plan shall not affect Awards previously granted, and such Awards shall remain in full force and
effect as if the Plan had not been amended or terminated, unless mutually agreed otherwise in a
writing (including a Restricted Stock Agreement) signed by the Grantee and the Company.

     14. SHAREHOLDERS AGREEMENT. Every Grantee who receives shares of Common Stock
pursuant to this Plan shall be subject to the terms of the Shareholders Agreement among the
Company, SCF-IV, L.P., HSBC Capital (Canada) Inc. and certain other persons dated September 20,
2002, as the same may be amended or restated from time to time (the “Shareholders Agreement”). Any
Restricted Stock Agreement shall provide that the Grantee specifically acknowledges and agrees that
the Grantee is bound by the terms of the Shareholders Agreement when Common Stock is issued to such
Grantee and agrees that, if requested by the Company at any time, the Grantee (or other person in
whose name the Common Stock is registered) will immediately execute and deliver a counterpart
execution page to the Shareholders Agreement to the Company also as to better evidence that the
Grantee is a party thereto.

     15. SEVERABILITY AND REFORMATION. The Company intends all provisions of the Plan to
be enforced to the fullest extent permitted by law. Accordingly, should a court of competent
jurisdiction determine that the scope of any provision of the Plan is too broad to be enforced as
written, the court should reform the provision to such narrower scope as it determines to be
enforceable. If, however, any provision of the Plan is held to be wholly illegal, invalid, or
unenforceable under present or future law, such provision shall be fully severable and severed, and
the Plan shall be construed and enforced as if such illegal, invalid, or unenforceable provision
were never a part hereof, and the remaining provisions of the Plan shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its
severance.

     16. GOVERNING LAW. The Plan shall be construed and interpreted in accordance with the
laws of the State of Texas.

10

 

     17. INTERPRETIVE MATTERS. Whenever required by the context, pronouns and any
variation thereof shall be deemed to refer to the masculine, feminine, or neuter, and the singular
shall include the plural, and visa versa. The term “include” or “including” does not denote or
imply any limitation. The captions and headings used in the Plan are inserted for convenience and
shall not be deemed a part of the Plan for construction or interpretation.

11exv10w12

 

EXHIBIT 10.12

Strategic Customer Relationship Agreement

This Strategic Customer Relationship Agreement (this “Agreement”) is dated effective the 14th
day of October, 2004 (the “Effective Date”), and is entered into by and among Complete Energy
Services, Inc., a Delaware corporation (“Complete Energy”), CES Mid-Continent Hamm, Inc. (together
with its subsidiaries, “Mid-Continent Hamm”) and Continental Resources, Inc., an Oklahoma
corporation (“Continental”). Mid-Continent Hamm and Continental are sometimes individually
referred to as a “Party” and are sometimes referred to collectively as the “Parties”. Complete
Energy is a party to this Agreement only with respect to Section 11 hereof.

     WHEREAS, pursuant to that certain Stock Acquisition Agreement (the “Stock Acquisition
Agreement”) dated October 14, 2004, by and among Hamm Co., Stride Well Service, Inc., Hamm &
Phillips Service Company, Guard, Inc., Rigmovers, Inc., Environmental Technicians of Oklahoma, LLC,
Rental Tools, Inc., Oil Tool Rentals, Inc., (collectively, the “Seller Entities”), Harold Hamm,
Ronald L. Boyd, Virgil Row, Complete Energy and Mid-Continent Hamm, Mid-Continent Hamm indirectly
acquired certain assets of the Seller Entities;

     WHEREAS, prior to the execution of the Stock Acquisition Agreement, the Seller Entities
provided certain oil field related services to Continental and its subsidiaries in various areas on
a preferential basis; and

     WHEREAS, Continental and Mid-Continent Hamm desire to continue the mutually beneficial
supplier/customer relationship, on the terms set forth in this Agreement;

     NOW THEREFORE, in return for valuable consideration and the mutual covenants set forth herein,
the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

	1.	 	Preferred Customer Status
	 
	 	 	Mid-Continent Hamm will use commercially reasonable efforts to provide Continental, as
a preferred customer of Mid-Continent Hamm, with Priority Access to any services or
supplies that Mid-Continent Hamm provides to its customers at competitive, market prices
and under the terms of Mid-Continent Hamm’s standard agreements (or such other terms as the
Parties may mutually establish). “Priority Access” means that Mid-Continent Hamm will
provide services and supplies as from time to time requested by Continental on a timely
basis within the time frame specified by Continental at competitive market prices;
provided, however, if Mid-Continent Hamm does not have any available capacity to provide
the requested services and supplies on a timely basis, Mid-Continent Hamm will respond to
Continental’s request and will indicate when such capacity is expected to become available
for Continental. In this regard, Mid-Continent Hamm shall provide such requested supplies
and services to Continental as soon as practicable, and ahead of and before any such
supplies and services would

			
	Strategic Customer Relationship Agreement
	 	Page 1 of 7

 

 

	 	 	otherwise be provided by Mid-Continent Hamm to any other customer who, at the time of
Continental’s request, is not then being provided with such supplies and services pursuant
to a binding agreement for such with Mid-Continent Hamm.
	 
	 	 	Mid-Continent Hamm will not provide any services or supplies under this Agreement. Rather
all services and supplies will be provided pursuant to separate service or supply
agreements, and the terms and conditions of those separate agreements shall control the
provision of those services and supplies.
	 
	 	 	Further, Mid-Continent Hamm may, from time to time, revise both the services and supplies
that it sells and/or where its sells those services and supplies. Nothing in this
Agreement is intended to require Mid-Continent Hamm to provide services or supplies in any
particular geographic region or to hold capacity idle for Continental’s potential use.
Continental recognizes that Mid-Continent Hamm may reduce or eliminate services in any
geographic market from time to time.
	 
	2.	 	Continental’s Preferential Utilization of Services to be Supplied by Mid-Continent Hamm
	 
	 	 	In exchange for its preferred customer status and during the term of this Agreement,
Continental will use commercially reasonable efforts to provide Mid-Continent Hamm with the
first right to provide any services or supplies required in Continental’s operations so
long as such services or supplies can be supplied by Mid-Continent Hamm on a timely basis
and at competitive market prices. If Mid-Continent Hamm is not able to provide the
requested services or supplies within the time frame required by Continental, or if
Mid-Continent Hamm’s prices are not competitive, then Continental may obtain the requested
services from any other provider, other than its affiliates, subsidiaries, or related
entities.
	 
	3.	 	Continental’s Right to Enter into a Long-Term Commitment
	 
	 	 	During the term of this Agreement, Continental shall have the right to enter into one
or more long-term service agreements with Mid-Continent Hamm covering the following
equipment owned or operated by Mid-Continent Hamm: (a) up to an aggregate of ten (10)
rigs, (b) up to an aggregate of one hundred (100) frac tanks, (c) up to an aggregate of two
super heaters, and (d) such other specialty equipment as may be reasonably requested by
Continental. The terms of any such service agreement shall be mutually acceptable and
adhere to the following terms and conditions:

	 	a.	 	The term of any such long term service agreement shall be established by
Continental; provided, however, that the term of any such long term service agreement
must be a minimum of six (6) months and may not extend beyond five years after the
termination or expiration of this Agreement.

			
	Strategic Customer Relationship Agreement
	 	Page 2 of 7

 

 

	 	b.	 	The rigs and equipment to be supplied under the long term service agreement
will be designated by Mid-Continent Hamm from available rigs and equipment; provided
that if rigs or equipment are not immediately available, Mid-Continental will give
Continental priority to be provided with such rigs and equipment when they become
available. Continental shall have the right to request specific rigs subject to
availability. If Continental requests a rig or equipment that is located outside the
region in which Continental requires service (Texas Panhandle, Oklahoma, Wyoming,
South Dakota, North Dakota, and Montana), Continental may request that such rig or
equipment be moved to the region required by Continental, in which case Continental
will pay all costs associated with such move; provided however, that Mid-Continent
Hamm will not be required to provide services in any region where it is not then
currently providing service to customers.
	 
	 	c.	 	The rates for rigs and equipment will be based on Mid-Continent Hamm’s then
applicable rates for the location where Continental uses the applicable rigs and
equipment, as set forth in its price book, but in no event greater than prevailing
market rates for that location. The rates will be adjusted (up or down) from time to
time during the term of any such long term service agreement by Mid-Continent Hamm
upon at least thirty (30) days advance written notice to Continental to reflect
changes in its price book, but in no event greater than prevailing market rates for
the location in which such rigs or equipment are utilized by Continental.
	 
	 	d.	 	Subject to paragraph 3.e below, Continental will pay the following minimums
for the rigs and equipment under the long-term service agreement:

	 	1.	 	Rigs and super heaters: 55 hours per week.
	 
	 	2.	 	Frac tanks: daily rate.
	 
	 	The above minimums are subject to customary field practices (e.g., with respect to
weather policies) in the area in which the rigs or other equipment will be utilized
as provided in the particular long term service agreement.

	 	e.	 	If, during the term of any such long term service agreement, Continental
advises Mid Continent-Hamm of Continental’s intention not to use any of the rigs or
equipment, Mid Continent-Hamm shall use commercially reasonable efforts to use the
rigs or equipment to provide services to another customer. If the rig or equipment so
released by Continental is used by Mid-Continent Hamm for another customer,
Continental’s minimum payment requirements shall be credited for the hours or days (as
applicable) used for such service. In no event will Continental’s credit be greater
than minimum obligations of Continental over the period such rigs

			
	Strategic Customer Relationship Agreement
	 	Page 3 of 7

 

 

	 	 	 	or equipment is released by Continental. Continental may request any released rig
or equipment be returned to service Continental’s needs, and Mid-Continent Hamm
will provide such rig or equipment at the end of the job for which it has been
committed to another customer.

	4.	 	Independent Contractor Status
	 
	 	 	Each Party acknowledges and agrees that it is an independent contractor in the
performance this Agreement and nothing herein shall be construed to be inconsistent with
that status. No agent, employee, servant, contractor or subcontractor of a Party shall be
or shall be deemed to be the agent, employee or servant of the other Party or any of its
affiliates by virtue of this Agreement. Neither Party nor any agent, employee, servant,
contractor or subcontractor of that Party shall have the authority to bind the other Party
to any contract or arrangement.
	 
	5.	 	Waiver of Consequential Damages
	 
	 	 	Each Party hereby waives any right that it may have, or which it may in the future, to
recover any incidental, exemplary, punitive, consequential, indirect or similar damages
from the other Party, including but not limited to, lost profits or lost opportunities,
regardless of whether either Party has been notified of the possibility of any such
damages.
	 
	6.	 	Term and Termination
	 
	 	 	This Agreement shall continue for five (5) years and thereafter the term of this
Agreement shall automatically renew for consecutive one year terms. After the initial term
of this Agreement, either Party may terminate this Agreement by providing written notice to
the other Party of at least sixty (60) days.
	 
	 	 	In the event that either Party materially defaults in performing any of its obligations
hereunder, and the non-defaulting Party may give the defaulting Party notice of such
default, and if the defaulting Party has not cured such default within thirty (30) days,
the non-defaulting Party may terminate this Agreement by providing the defaulting Party
written notice of termination.
	 
	7.	 	Notices
	 
	 	 	Any notices to be given hereunder by either Party to the other may be effected either
by personal delivery in writing or by registered or certified mail, postage prepaid, with
return receipt requested. Mailed notices shall be addressed to the Parties at the
addresses appearing below, but each Party may change its address by giving written notice
in accordance with this paragraph. Notices not personally delivered shall be deemed
communicated as of three (3) days after mailing.

	 	 	 	 	 
	 

	 	If to Mid-Continent Hamm:
	 	CES Mid-Continent Hamm, Inc.
	 

	 	 	 	c/o Mr. Ron Boyd
	 

	 	 	 	P.O. Box 3907
	 

	 	 	 	Enid, OK 73702

			
	Strategic Customer Relationship Agreement
	 	Page 4 of 7

 

 

	 	 	 	 	 
	 

	 	If to Continental:
	 	Continental Resources, Inc.
	 

	 	 	 	c/o Mr. Harold Hamm
	 

	 	 	 	P.O. Box 1032
	 

	 	 	 	Enid, OK 73702

	8.	 	Entire Agreement
	 
	 	 	This Agreement supersedes any and all other agreements, either oral or in writing, and
contains all the covenants and agreements between the parties pertaining to the subject
matter hereof. Each Party to this Agreement acknowledges that no representations,
inducements, promises or agreements, orally or otherwise, have been made by either Party or
anyone acting on behalf of any Party hereto, which are not embodied herein, and that no
other agreement, statement or promise not contained in this Agreement shall be valid or
binding. Any modification of this Agreement will be effective only if it is in writing,
signed by the Party to be charged.
	 
	 	 	This Agreement does not cover the terms and conditions under which services and supplies
will be supplied by Mid-Continent Hamm to Continental; the terms and conditions of such
service and supply arrangements will be covered under separate and independent agreements,
and those separate and independent agreements will not be affected by this Agreement.
	 
	9.	 	Governing Law
	 
	 	 	This Agreement shall be governed by and construed in accordance with the laws of the
State of Oklahoma. Mid-Continent Hamm and Continental agree that all disputes arising
under the terms and conditions of this Agreement shall be determined in Enid, Garfield
County, Oklahoma.
	 
	10.	 	Assignment
	 
	 	 	This Agreement may not be assigned, whether by operation of law or otherwise, by
either Party without the prior written consent of the other Party, which consent will not
unreasonably be withheld. Any assignment of this Agreement by Mid-Continent Hamm or
Continental, whether by operation of law or otherwise, shall be conditioned upon the
assignee’s agreement to be bound by the terms of this Agreement, and such assignment shall
not relieve Mid-Continent Hamm or Continental of any of its primary obligations or
responsibilities under this Agreement. Any assignment made by Mid-Continent Hamm or
Continental hereunder shall not take away from Mid-Continent Hamm or Continental any
benefits contained in the Agreement.

			
	Strategic Customer Relationship Agreement
	 	Page 5 of 7

 

 

	11.	 	Complete Energy Guarantee
	 
	 	 	Complete Energy hereby guarantees the timely performance when due of the obligations
of Mid-Continent Hamm in connection with and to the extent provided for in the
Agreement.
	 
	12.	 	Multiple Counterparts
	 
	 	 	Multiple copies of this Agreement may be executed by the parties hereto. Each such
copy shall have the full force and effect of an original. No Party shall file this
Agreement of record.

			
	Strategic Customer Relationship Agreement
	 	Page 6 of 7

 

 

IN WITNESS WHEREOF, the Parties            have caused this Agreement to be duly executed by their
respective authorized officers effective as of the date first written above.

CES MID-CONTINENT HAMM, INC.

	 	 	 	 	 
	By:

	 	/s/ Ron L. Boyd	 	 
	 

	 	 	 	 
	 

	 	Ron Boyd

President	 	 
	 
	 	 	 	 

COMPLETE ENERGY SERVICES, INC.

 

	 	 	 	 	 
	By:

	 	/s/ Andrew L. Waite	 	 
	 

	 	 	 	 
	 

	 	Andrew L. Waite	 	 
	 

	 	President	 	 
	 
	 	 	 	 

CONTINENTAL RESOURCES, INC.

 

	 	 	 	 	 
	By:

	 	/s/ Harold Hamm	 	 
	 

	 	 	 	 
	 

	 	Harold Hamm

President & Chief Executive Officer	 	 
	 
	 	 	 	 

 

			
	Strategic Customer Relationship Agreement
	 	Page 7 of 7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00093-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00093-of-00352.parquet"}]]