Document:

10.4 Directors' Compensation Policy

MICROSEMI CORPORATION
DIRECTORS’ COMPENSATION POLICY 
As Amended Effective October 2012 
Directors of Microsemi Corporation, a Delaware corporation (the “Company”), who are not employed by the Company or one of its subsidiaries (“non-employee directors”) are entitled to the compensation set forth below for their service as a member of the Board of Directors (the “Board”) of the Company. This policy is effective with the first quarter of fiscal 2013 and supersedes all prior policies concerning compensation of the Company’s non-employee directors as to their service from and after that time.  The Board has the right to amend this policy from time to time.
	
				
	Cash Compensation
	 

	Annual Retainer
	

	$60,000
	

	Additional Chair Retainer
	

	$100,000
	

	Additional Committee Member Retainers
	 

	Audit Committee
	

	$12,000
	

	Compensation Committee
	

	$10,000
	

	Governance and Nominating Committee
	

	$7,500
	

	Additional Committee Chair Retainers
	 

	Audit Committee Chair
	

	$15,000
	

	Compensation Committee Chair
	

	$10,000
	

	Governance and Nominating Committee Chair
	

	$7,500
	

	Meeting Fee (per meeting)
	

	$1,500
	

	 
	 

	Equity Compensation
	 

	Annual Equity Award
	

	$120,000
	

	New Director Award
	

	$120,000
	

Cash Compensation 
Each non-employee director will be entitled to a cash retainer while serving on the Board in the amount set forth above (the “Annual Retainer”).  A non-employee director who serves as the Chair of the Board will be entitled to an additional cash retainer while serving in that position in the amount set forth above (the “Additional Chair Retainer”).  A non-employee director who serves as a member of the Audit Committee, the Compensation Committee or the Governance and Nominating Committee of the Board (including, for purposes of clarity, the Chair of each such Committee) will be entitled to an additional cash retainer while serving in that position in the applicable amount set forth above (an “Additional Committee Member Retainer”).  A non-employee director who serves as the Chair of the Audit Committee, the Compensation Committee or the Governance and Nominating Committee of the Board will be entitled to an additional cash retainer while serving in that position in the applicable amount set forth above (an “Additional Committee Chair Retainer”).  To the extent a non-employee director attends more than eight (8) meetings of the Board, or of the Audit Committee, the Compensation Committee or the Governance and Nominating Committee of the Board, during a particular fiscal year of the Company, and regardless of whether such attendance is in person or telephonic and regardless of length (in the case of committee meetings, only if the non-employee director is a member of such committee), the non-employee director will be entitled to a fee for attendance at each meeting of the Board or particular committee, as the case may be, by the non-employee director in excess of eight (8) during that fiscal year in the applicable amount set forth above (a “Meeting Fee”). 

1

The amounts of the Annual Retainer, Additional Chair Retainer, Additional Committee Member Retainer and Additional Committee Chair Retainers reflected above are expressed as annualized amounts.  These retainers will be paid on a quarterly basis, at the end of each quarter in arrears, and will be pro-rated if a non-employee director serves (or serves in the corresponding position, as the case may be) for only a portion of the quarter (with the proration based on the number of calendar days in the quarter that the director served as a non-employee director or held the particular position, as the case may be).  Meeting fees for attendance at one or more meetings that occur in a particular quarter will be paid at the end of that quarter.
Equity Awards
Annual Equity Awards for Continuing Board Members 
On each date set forth below, each non-employee director continuing in office after that date will automatically be granted an award of Company common stock determined by dividing the Annual Equity Award grant value set forth above by the Average Closing Price as of that date (rounded down to the nearest whole share).  For purposes of this policy, “Average Closing Price” as of a particular date means the average of the last/closing market prices (in regular trading on the principal exchange or market on which the Company’s common stock is then listed or admitted to trade) for a share of the Company’s common stock over the period of twenty consecutive trading days ending with the date in question (or on the immediately preceding trading day if that day is not a trading day).  In determining the Average Closing Price, the last/closing prices of a share of Company common stock taken into account will be equitably adjusted to account for (and mitigate the effect of) any split or reverse split of the Company’s common stock, or any dividend of Company common stock, that occur during the relevant twenty trading day period, and may (if and to the extent provided by the Board before the date of grant of the particular award) be adjusted to account for any other recapitalization, reorganization or other material transaction of or with the Company.
Such annual equity award grants will be made on the date of each annual meeting of the Company’s stockholders; provided that if more than one such meeting occurs during a particular calendar year, the grants will be made only in connection with the first such meeting to occur in that year.   
Initial Equity Awards 
For each new non-employee director appointed or elected to the Board, on the date that the new non-employee director first becomes a member of the Board, the new non-employee director will automatically be granted an award of Company common stock determined by dividing (1) the sum of the New Director Award grant value set forth above plus a pro-rata portion of the Annual Equity Award value by (2) the Average Closing Price as of that date (rounded down to the nearest whole share).  The pro-rata portion of the Annual Equity Award value for purposes of the applicable initial equity award will equal the Annual Equity Award value multiplied by a fraction (not greater than one), the numerator of which is 365 minus the number of calendar days that as of the particular grant date had elapsed since the start of the Company’s fiscal year.
An employee or former employee of the Company or one of its subsidiaries who ceases or has ceased to be so employed and becomes a non-employee director will not be eligible for an initial equity award grant, but will be eligible for cash compensation and annual equity awards on the same basis as other non-employee directors.
Provisions Applicable to All Non-Employee Director Equity Awards
Each award will be made under and subject to the terms and conditions of the Company’s 2008 Performance Incentive Plan or any successor equity compensation plan approved by the Company’s stockholders and in effect at the time of grant.  Each award will be fully vested at grant.
Expense Reimbursement 

2

All non-employee directors will be entitled to reimbursement from the Company for their reasonable travel (including airfare and ground transportation), lodging and meal expenses incident to meetings of the Board or committees thereof or in connection with other Board related business.  The Company will make reimbursement to a non-employee director within a reasonable amount of time following submission by the non-employee director of reasonable written substantiation for the expenses, and in all cases not later than the end of the calendar year following the calendar year in which the related expense was incurred. 

3Exhibit 10.1 - Nonqualified Retirement Savings and Investment Plan

PIONEER ENERGY SERVICES CORP.
NONQUALIFIED RETIREMENT 
SAVINGS AND INVESTMENT PLAN

PIONEER ENERGY SERVICES CORP
NONQUALIFIED RETIREMENT SAVINGS AND INVESTMENT PLAN 

PREAMBLE
WHEREAS, Pioneer Energy Services Corp. (the “Company”) desires to establish the Pioneer Energy Services Corp. Nonqualified Retirement Savings and Investment Plan (the “Plan”) to comply with Section 409A of the Internal Revenue Code and make other conforming changes.
NOW, THEREFORE, Pioneer Energy Services Corp. hereby establishes the Plan, effective April 1st, 2013, as follows:
ARTICLE I 
INTRODUCTION
1.1.Name.  The name of the Plan is the Pioneer Energy Services Corp. Nonqualified Retirement Savings and Investment Plan.
1.2.Purpose.  The purpose of the Plan is to make available to Eligible Employees a nonqualified, deferred compensation program that meets the requirements of Section 409A of the Code for amounts subject to the provisions thereof.  The Plan is not, and is not intended to be, a qualified plan for federal income tax purposes.  The Company acknowledges that the Plan is an “employee pension benefit plan” within the meaning of Section 3(2) of ERISA, as amended from time to time.  The Plan is intended to be an unfunded plan maintained “primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” which is eligible for the exemptions applicable to such plans under Title I of ERISA.
1.3.Effective Date.  The effective date of the Plan, is April 1st, 2013.

ARTICLE II
DEFINITIONS
2.1.Accounts.  The notional accounts described in Sections 4.1, 5.1 and 5.2. 
2.2.Administrative Committee.  The committee as defined in Section 9.5. 
2.3.Affiliate.  Any affiliate of the Company as determined by the Board.
2.4.Annual Account.  An amount equal to the following: (a) The sum of the Participant's Annual Deferral Amount and Discretionary Employer Contribution Amount for a Plan Year, plus (b) any amounts credited or debited to such Amounts pursuant to this Plan, less (c) any portion of the Annual Account which has been distributed to the Participant or his or her beneficiary pursuant to this Plan.
2.5.Annual Deferral Amount.  That portion of a Participant's Base Salary, Bonus earned for a Plan Year or Restricted Stock Unit that a Participant defers in accordance with Article IV for a Plan Year.
2.6.Base Salary.  A Participant's annual base compensation (including commissions) payable by an Employer for services performed during a calendar year.  Base Salary shall not include distributions from a nonqualified plan, bonus and incentive payments, overtime, stock options and other equity compensation grants, relocation expenses, non-monetary awards, director and other fees, fringe benefits (including without limitation vacation time paid but not taken), expense reimbursements and automobile and other allowances (or such other or different items as may be established by the Administrative Committee, in its sole discretion, prior to the Plan Year).  Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant under all qualified or nonqualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant's gross income under Code Sections 125, 402(e)(3) or 402(h).
2.7.Board.  The Company's Board of Directors.
2.8.Bonus.  Any compensation, in addition to Base Salary, payable to a Participant under (a) any management incentive plan maintained by an Employer; or (b) such other or different bonus or incentive arrangements as may be provided by the Administrative Committee in its sole discretion in the applicable deferral election forms for the year.
2.9.Code.  The Internal Revenue Code of 1986, as amended from time to time and any regulations thereunder.

2.10.Company.  Pioneer Energy Services Corp. and any successor to such company whether by merger, consolidation, liquidation or otherwise.  
2.11.Director.    Director shall mean a non-employee director who is on the Board of Directors.
2.12.Director Fees.  Retainer fees, meeting fees or other fees received by a Director.
2.13.Discretionary Employer Contribution Account.  The account established on an Employer's books and records under Section 5.1.
2.14.Discretionary Employer Contribution Amount.  The amount, if any, credited to a participant in accordance with Section 5.1.
2.15.Eligible Employee.  An Employee (or Director) who is eligible to participate in the Plan as provided in Section 3.1.
2.16.Employee.  Any management or highly compensated employee of an Employer. 
2.17.Employee Deferral Account.  The account established on an Employer's books and records under Section 4.1.
2.18.Employer.  The (a) Company and (b) any Affiliate designated by the Board or its Compensation Committee as participating in the Plan (and any successor to such Affiliate whether by merger, consolidation, liquidation or otherwise).  
2.19.ERISA.  The Employee Retirement Income Security Act of 1974, as amended from time to time.
2.20.Investment Fund.  Any investment fund (such as a mutual fund) or indices selected by the Administrative Committee, in its sole discretion, for the purpose of crediting or debiting investment gain or loss to Participant Accounts.  The Administrative Committee may, in its sole discretion, change, delete or add to the Investment Funds available under the Plan at any time.
2.21.Participant.  Any (a) Eligible Employee who is participating in the Plan in accordance with Section 3.2 ,(b) Employee or former Employee who has an Account hereunder and (c) any Director who is participating in the Plan in accordance with Section 3.2.

2.22.Performance-Based Compensation.  Compensation the entitlement to or amount of which is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least 12 consecutive months, as determined by the Administrative Committee in accordance with Treas. Reg. Section 1.409A-1(e).
2.23.Plan.  The Pioneer Energy Services Corp. Non-Qualified Retirement Savings and Investment Plan, as set forth herein and as amended from time to time.
2.24.Plan Year.  The Plan's annual accounting period is the calendar year.  
2.25.Restricted Stock Unit.  Restricted Stock Unit (“RSU”) shall mean RSUs as granted by Pioneer Energy Services Corp. RSUs shall also mean, without limitation, any RSU granted whose amount or time of vesting is dependent upon the performance of Pioneer Energy Services Corp..
2.26.Separation from Service.  The severing of an individual's employment with the Employer and all affiliates (within the meaning of Treas. Reg. Section 1.409A-1(h)(3)) for any reason other than death, as determined by the Administrative Committee in accordance with Section 1.409A-1(h) and any other applicable provisions of the regulations.  In determining whether a Participant has experienced a Separation from Service, the following rules shall apply:
(a)    A Participant shall be considered to have experienced a Separation from Service when the facts and circumstances indicate that the Participant and his or her Employer reasonably anticipate that either (i) no further services will be performed for the Employer after a certain date, or (ii) that the level of bona fide services the Participant will perform for the Employer after such date (whether as an Employee or as an independent contractor) will permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed by such Participant (whether as an Employee or an independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the Employer if the Participant has been providing services to the Employer less than thirty-six (36) months).

(b)    If a Participant is on military leave, sick leave, or other bona fide leave of absence, the employment relationship between the Participant and the Employer shall be treated as continuing intact, provided that the period of such leave does not exceed six (6) months, or if longer, for such period as the Participant retains a right to reemployment with the Employer under an applicable statute or by contract.  If the period of leave exceeds six (6) months and the Participant does not retain a right to reemployment under an applicable statute or by contract, the employment relationship shall be considered to be terminated for purposes of this Plan as of the first day immediately following the end of such six (6) month period.  In applying the provisions of this paragraph, a leave of absence shall be considered a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for the Employer.
(c)    A Participant who Separates from Service, as provided in this section, following the attainment of age 65 or who is 60 with 5 years of service shall be considered to have Retired.
2.27.Spouse.  The person who by law is legally married to a Participant on the date of determination.
2.28.Trust.  The employer grantor trust, if any, established by the Company or any Employer to which funds will be transferred in accordance with Section 6.2.  Such trust shall be subject to the claims of each Employer's creditors as provided under the terms of the trust agreement.
2.29.Unforeseeable Financial Emergency.  A severe financial hardship of the Participant resulting from (a) an illness or accident of the Participant, the Participant's Spouse, the Participant's beneficiary or the Participant's dependent (as defined in Code Section 152 without regard to paragraphs (b)(1), (b)(2) and (d)(1)(b) thereof), (b) a loss of the Participant's property due to casualty, or (c) such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined by the Administrative Committee, consistent with Code Section 409A and any regulations or other guidance thereunder, based on the relevant facts and circumstances.
2.30.Valuation Date.  The last day of each Plan Year and such other dates as may be established by the Administrative Committee in its sole discretion.

ARTICLE III
PARTICIPATION
3.1.Eligibility.  Any Employee or Director who has been designated by the Company as eligible to participate under this Plan shall elect to become a Participant as provided in Section 3.2.
3.2.Participation.  An Eligible Employee or a Director shall, to the extent consistent with Code Section 409A, commence participation as of the first day of the following Plan Year (or other date designated by the Company); provided that an Eligible Employee or Director shall not become a Participant hereunder until the Eligible Employee or Director has met all enrollment requirements as may be established by the Administrative Committee in its sole discretion consistent with Section 409A.  
ARTICLE IV
PARTICIPANT DEFERRALS
4.1.Elective Deferrals.  Any Eligible Employee or Director may elect to defer each Plan Year, as his or her Annual Deferral Amount, the receipt of such percentage or amount as may be established by the Administrative Committee in its sole discretion of his or her Base Salary earned during the year and Bonus for that year regardless of when such amounts are payable, including without limitation Director Fees, (less any required tax or other withholdings as provided in the applicable election form) or Restricted Stock Units.  Such election shall be made in whole percentages (or as otherwise permitted by the Administrative Committee in its sole discretion).  Any Base Salary or Bonus, Director Fees or Restricted Stock Units deferred under this Section 4.1 shall be credited on the books and records of the Employer in an Employee Deferral Account maintained in the name of the Eligible Employee or Director.  Unless otherwise determined by the Administrative Committee, a Participant shall be permitted to defer up to 80% of their Base Salary; up to 100% of any Bonus or up to 100% of any Restricted Stock Units, as permitted by 409A.  Also, a Director shall be permitted to defer up to 100% of their Director Fees or Restricted Stock Units unless otherwise determined by the Administrative Committee.
4.2.Election To Defer Compensation.  
(a)     A Participant's election to defer Base Salary or Bonus for a Plan Year shall be submitted prior to January 1 of the Plan Year in which such amounts are first earned (or at such earlier time as may be established by the Administrative Committee in its sole discretion).

(b)     Additionally, to the extent permitted by the Administrative Committee, a Participant may elect to defer RSUs prior to their being granted or RSUs that have a performance element as permitted under Code Section 409A and its regulations.
(c)     Notwithstanding subsection (a) above, the Administrative Committee may, in its sole discretion, permit a newly Eligible Employee  or Director (to the extent permitted under Code Section 409A and any regulations thereunder) to submit his or her election for the year in which the Eligible Employee or Director first becomes eligible to participate in the Plan within thirty (30) days after the date on which he or she first became so eligible (or at such earlier time as may be established by the Administrative Committee in its sole discretion).  Such election shall become effective as of the first pay period after the date on which the election form is submitted to the Administrative Committee.
(d)     Notwithstanding subsection (a) above, the Administrative Committee may, in its sole discretion, permit an Eligible Employee (to the extent permitted under Code Section 409A and any regulations thereunder) to submit an election to defer any Bonus which qualifies as Performance-Based Compensation no later than six (6) months before the end of the performance period (or at such earlier time as may be established by the Administrative Committee in its sole discretion).  To be eligible to make such a deferral election, the Eligible Employee must have continuously performed services for the Employer from the later of (1) the beginning of the performance period, or (2) the date upon which the performance criteria for such compensation are established, through the date upon which the Eligible Employee makes the deferral election for such compensation.  In no event shall a deferral election submitted under this Section 4.2(c) be permitted to apply to any amount of Performance-Based Compensation that has become readily ascertainable.
(e)     All elections made in accordance with this Section shall be irrevocable as of the last date such election may be made (or such earlier date as may be established by the Administrative Committee in its sole discretion).
(f)     Notwithstanding subsection (e) above, 
(i)    the deferral election of a Participant who is determined by the Administrative Committee to be suffering from a disability (within the meaning of Treas. Reg. Section 1.409A-3(j)(4)(xii)) shall, to the extent provided by the Administrative Committee in its sole discretion consistent with Section 1.409A-3(j)(4)(xii), be cancelled for the remainder of the Plan Year during which the Participant first suffers the disability; and

(ii)    the deferral election of a Participant who has experienced an Unforeseeable Financial Emergency shall, to the extent provided by the Administrative Committee in its sole discretion consistent with Section 1.409A-3(j)(4)(viii), be cancelled for the remainder of the Plan Year during which the Participant first experienced the Unforeseeable Financial Emergency.
To the extent permitted under Treas. Reg. Section 1.409A-3(j)(4)(viii), a Participant's deferral elections under this Plan shall also be cancelled if the Administrative Committee determines that such action is necessary for the Participant to obtain a hardship distribution from a tax qualified plan pursuant to Treas. Reg. Section 1.401(k)-1(d)(3).
4.3.Withholding and Crediting of Annual Deferral Amounts.  For each Plan Year, any elected deferral of Base Salary shall be withheld in equal amounts from each payment thereof which is made during the year, as adjusted from time to time for increases or decreases in Base Salary.  Any deferral of a Bonus or Restricted Stock Units shall be withheld at the time the Bonus is otherwise payable to the Participant.  These amounts shall be treated as the Participant's Annual Deferral Amount for the Plan Year and credited to the Participant's Annual Account for such Plan Year at the time such amounts would otherwise have been paid to the Participant.
4.4.Vesting.  A Participant's Employee Deferral Account shall be fully vested and nonforfeitable at all times.
ARTICLE V
EMPLOYER CONTRIBUTION CREDITS
5.1.Discretionary Employer Contribution Credits.  The Employer may, in its sole discretion, make additional contributions in such amounts and at such times as recommended by the Administrative Committee and approved by the Board or the Compensation Committee of the Board.  Such amounts shall be credited on the Employer's books and records to the Discretionary Employer Contribution Account maintained in the name of the Eligible Employee as of the date designated by the Company in its sole discretion.
5.2.Vesting.  
Each amount credited to a Participant's Discretionary Employer Contribution Account (and allocable earnings) shall vest as determined by the Board or the Compensation Committee of the Board.  

ARTICLE VI
ACCOUNTING AND ACCOUNT ADJUSTMENTS
6.1.Investment of Participant Accounts.  
(a)     The Participant may, to the extent permitted by the Administrative Committee in its sole discretion, elect one or more Investment Funds as the deemed investment(s) for his or her Accounts.  A Participant may elect to change his or her Investment Fund elections at such times and in such manner as may be established by the Administrative Committee in its sole discretion.  If a Participant does not make an election hereunder, the Participant's Accounts automatically shall deemed to be invested in such Investment Fund(s) as established by the Administrative Committee in its sole discretion.  
(b)     The value of a Participant's Accounts shall be adjusted upward or downward (on a pro rata basis) each Valuation Date to reflect any appreciation or depreciation in value of the Investment Fund(s) in which the Participant's Accounts are deemed to be invested under subsection (a) above since the last Valuation Date.  The value shall also be adjusted for any (i) all Participant and Employer contribution credits made since the last Valuation Date and (ii) payments made to the Participant (or his or her beneficiary) since that date.
6.2.Transfers to Employer Grantor Trust.  The Employer may (but is not required to) transfer to a Trust an amount equal to the amounts credited at any time to Employee Deferral Accounts under Section 4.1, and Discretionary Employer Contribution Accounts under Section 5.1 for its Employees at such time as it deems appropriate.  Title to and beneficial ownership of the assets of the Trust shall at all times remain with the Employer and Participants shall not have any property interest whatsoever in such assets.
6.3.Notice to Participants.  The Administrative Committee shall periodically provide statements to each Participant (at such times as it deems appropriate in its sole discretion) setting forth the balance of the Participant's Accounts and such other information as it deems appropriate.

ARTICLE VII
PAYMENT OF PLAN BENEFITS
7.1.Form and Amount of Payments.  
(a)     In connection with a Participant's election to defer an Annual Deferral Amount, the Participant shall elect the form in which his or her Annual Account for such Plan Year will be paid.  The Participant may elect to receive each Annual Account as follows:
(i)     Upon Retirement following Separation from Service, in the form of a lump sum or annual installments of two (2) to fifteen (15) years; or
(ii)     As a scheduled distribution on a specified date as provided by Internal Revenue Code Section 409A which shall occur prior to a Separation of Service.
If a Participant does not make any election with respect to the payment of an Annual Account, the Participant shall be deemed to have elected to receive such Annual Account in a lump sum.  Also, if the Participant has a Separation of Service without reaching Retirement, their account balance shall be paid in the form of a lump sum.  Additionally, to the extent that a Participant is a “specified employee” as determined as required by Section 409A shall not receive a distribution, following their Separation of Service for at least six months following their Separation of Service.  Any subsequent distributions as a result of a Participant's election to be paid upon Retirement shall be made as provided by this Plan.
(b)     The determination of the amount to be distributed under this Section shall be based upon the value of the Participant's vested Accounts as of the last Valuation Date preceding the date of distribution, determined in accordance with Section 6.1.  The amount of each installment payment hereunder shall be determined by dividing the value of the Accounts as of the last Valuation Date by the number of installments if any remaining to be paid (including the current installment).
(c)     Any payments to be made hereunder, payment shall be paid on or about February 15 of each year.
7.2.Number/Form of Distribution Options.  Notwithstanding the foregoing, the Administrative Committee may, in its sole discretion consistent with Code Section 409A, limit the number or forms of distributions that a Participant may elect to have under Section 7.1.

7.3.Further Deferrals.  Notwithstanding Sections 7.1, a Participant may, to the extent permitted by the Administrative Committee in its sole discretion consistent with Code Section 409A and any regulations thereunder, elect to further defer the date when payment of his or her Accounts are made, provided that --
(a)     the election is made more than 1 year prior to the date payment is otherwise scheduled to begin; 
(b)     the election does not become effective for 12 months; 
(c)     the date on which payment is to begin is delayed for at least 5 years; and
(d)     the election meets such other or different requirements as may be determined by the Administrative Committee to be necessary to comply with Code Section 409A.
7.4.Withdrawals for Unforeseeable Financial Emergencies.  
(a)     In the event of an Unforeseeable Financial Emergency, the Participant may, to the extent permitted by the Administrative Committee in its sole discretion, apply for payment of all or a part of his or her vested Account as may be necessary to satisfy the Unforeseeable Financial Emergency.  
(b)     The Administrative Committee shall have the authority, in its sole discretion, to approve a payment under subsection (a) above.  The payment shall not exceed the lesser of (i) the vested portion of the Participant's Accounts, valued as of the close of business on or around the date on which the amount becomes payable, as determined by the Administrative Committee in its sole discretion, or (ii) the amount necessary to satisfy the Unforeseeable Financial Emergency, plus amounts reasonably necessary to pay taxes reasonably anticipated as a result of the distribution.  Such payment shall be made in a lump sum no later than sixty (60) days after the Administrative Committee's decision to approve the payment.
(c)     Notwithstanding the foregoing, a Participant may not receive a payment under subsection (a) above to the extent that the Unforeseeable Financial Emergency is or may be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship or (iii) by suspension of deferrals under this Plan (to the extent permitted under Code Section 409A).

ARTICLE VIII
DEATH BENEFITS
8.1.Form and Payment of Death Benefits.
(a)     Upon a Participant's death, the Participant's vested Accounts, if any, shall be paid to the Participant's beneficiary (determined in accordance with Section 8.2) in a single lump sum payment.  Payment of such death benefits shall be made within ninety (90) days following the Participant's date of death.  
(b)     The amount of the death benefit to be paid to a beneficiary hereunder shall be determined in accordance with Section 7.
8.2.Participant's Beneficiary. 
(a)     If a Participant is married at the time of his or her death, the Participant's beneficiary shall be his or her Spouse, unless the Participant names another beneficiary in accordance with subsection (c) below and the named beneficiary is alive (or, in the case of a trust, in existence) on the Participant's date of death.
(b)     If a Participant is not married at the time of his or her death, the Participant's beneficiary shall be the individual or trust the Participant has designated in accordance with subsection (c) below prior to his or her death.  If the Participant dies without naming a beneficiary or if the named beneficiary is no longer living (or, in the case of a trust, in existence) on the Participant's date of death, the Participant's beneficiary shall be his or her estate.
(c)     A Participant may make a beneficiary designation (or change a prior designation) as provided in subsection (a) or (b) above at any time prior to his or her death by delivery of a written designation to the Administrative Committee (on such forms or in such other manner as may be required or permitted by the Administrative Committee).  Both individuals and trusts may be designated as beneficiaries under this Section.
8.3.Proper Beneficiary.  If there is a dispute as to the proper beneficiary to receive payment hereunder, the Employer shall, to the extent consistent with Code Section 409A and any regulations thereunder, have the right to withhold such payment until the matter is finally resolved or adjudicated; provided, that any payment made in good faith by the Employer shall fully discharge the Employer, Company and Administrative Committee from all further obligations with respect to that payment.

ARTICLE IX
PLAN ADMINISTRATION
9.1.Administration.  The Administrative Committee shall, from time to time, establish such rules, forms and procedures for the administration of the Plan as it deems appropriate.  The Administrative Committee shall have full discretionary power and authority to interpret, construe and administer this Plan and to delegate all or a part of its duties and responsibilities hereunder.  The interpretation and construction of the Plan by the Administrative Committee (or its delegate), and any action taken hereunder, shall be final, binding and conclusive upon all parties in interest.  Neither the Administrative Committee nor any of its agents or employees shall be liable to any person for any action taken or omitted to be taken in connection with the interpretation, construction or administration of this Plan, so long as such action or omission to act is made in good faith.
9.2.Determination of Benefits.  The Administrative Committee shall make all determinations as to the rights to benefits under this Plan.  Subject to and in compliance with the specific procedures contained in the applicable regulations under ERISA:  (a) Any decision by the Administrative Committee denying a claim by a Participant or his beneficiary for benefits under this Plan shall be stated in writing and delivered or mailed to the Participant or beneficiary; (b) each such notice shall set forth the specific reasons for the denial, written in a manner that is intended to be understood by the claimant; and (c) the Administrative Committee shall afford a reasonable opportunity to the Participant or beneficiary for a full and fair review of the decision denying such claim.  The benefit claims procedures then in effect under Section 503 of ERISA, as amended, and any regulations thereunder, shall be followed by the Administrative Committee in making any benefit determinations under this Plan.  All interpretations, determinations and decisions of the Administrative Committee with respect to any claim hereunder shall be made in its sole discretion and shall be final and conclusive.
9.3.Liability for Benefit Payments.  The obligation to pay a Participant's benefits under the Plan shall, at all times, be the sole and exclusive liability and responsibility of the Employer that was responsible for the credits made to his or her Accounts under the Plan, but only to extent of such credits and any applicable appreciation or depreciation determined in accordance with Section 6.1(b).  No other Employer or other person or entity shall be liable for such payments.
9.4.Expenses.  Unless the Company otherwise directs, the expenses of administering the Plan and any Trust shall be borne by each Employer on a proportionate basis as determined by the Administrative Committee. 

9.5.Administrative Committee.  The Plan shall be administered by an Administrative Committee consisting of at least three (3) members as may be appointed by the Company's Chief Executive Officer (“CEO”).  Members of the Administrative Committee may be Participants.  The CEO may appoint, remove or replace members of the Committee at any time upon advance notice.  No amendment shall be made to this Article or other Plan provisions regarding Administrative Committee authority under the Plan without prior approval by the Administrative Committee.
9.6.Indemnity of Committee.  The Company shall indemnify and hold harmless the members of the Administrative Committee against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to this Plan on account of such person's service on the Administrative Committee, except in the case of willful misconduct.
ARTICLE X
GENERAL PROVISIONS
10.1.Amendment, Suspension and Termination.
(a)     The Company reserves the right to amend the Plan by action of the Board or the Compensation Committee of the Board; provided, that the Company's CEO and Administrative Committee may amend the Plan without such prior authorization in the following circumstances:  
(i)    The Company's CEO may amend the Plan in any respect to the extent that the amendment does not result in an annual increase in the cost of maintaining the Plan in excess of $250,000.
(ii)    The Administrative Committee may, to the extent that the amendment does not result in an annual increase in the cost of maintaining the Plan in excess of $100,000, amend the Plan to:
(A)    Correct any defect, supply any omission or reconcile any inconsistency in order to carry out the intent and purposes of the Plan;
(B)    Maintain the Plan's status as a “top-hat” plan for purposes of ERISA; or
(C)    Comply with applicable law or Internal Revenue Service regulations.

Any amendment adopted by the Administrative Committee may be signed by any member of the Committee.  Notwithstanding the foregoing, no amendment shall deprive a Participant of his or her Accounts hereunder determined as of the date of such amendment.
(b)     Each Employer reserves the right by action of its board of directors (or by such other means as may be prescribed by the Board or the Compensation Committee of the Board) to withdraw from the Plan with respect to its Eligible Executives and Participants or suspend the accrual of further benefits under Section 4.1, 5.1 or 5.2 at any time.  No such withdrawal or suspension shall deprive a Participant of his or her vested Accounts as of the date of withdrawal or suspension.
(c)     The Company reserves the right by action of the Board or the Compensation Committee of the Board to terminate the Plan at any time; provided that upon termination, no Participant shall be deprived of his or her vested Accounts hereunder determined as of the date of termination.  Upon termination of the Plan, the vested Accounts shall be paid in accordance with the terms of the Plan in effect on the date of termination.
10.2.Transfer of Accounts.  If an Eligible Employee ceases to be an Eligible Employee on account of becoming eligible for the Company's Executive Deferred Compensation Plan, the liability for the Employee's Accounts shall, to the extent provided by the Administrative Committee in its sole discretion, be transferred to and made a part of the Employee's account payable under that Plan; provided, that the payment (and other relevant aspects) of such transferred Accounts shall, to the extent necessary to comply with Code Section 409A, be handled in accordance with the terms of this Plan in effect on the date of transfer.
10.3.Nontransferability of Benefits.  The rights of a Participant and any beneficiary under the Plan are not subject to the claims of their creditors and may not be voluntarily or involuntarily transferred, assigned, alienated, accelerated or encumbered.  Notwithstanding the preceding sentence, the Accounts payable to a Participant under the Plan may, consistent with the requirements of Code Section 409A, be offset by any liability of the Participant owing to the Employer or any Affiliate.

10.4.Participant's Rights Unsecured.  The Plan is intended to be unfunded for purposes of both the Code and ERISA.  The right of a Participant or his or her beneficiary to receive payment of the Participant's Accounts hereunder shall be a general unsecured claim against the Employer's general assets, and neither the Participant nor his or her beneficiary shall have any rights in or against any amount credited to any investment account, Trust, or any other specific assets of the Employer.  To the extent that any person acquires a right to receive payments from an Employer under the Plan, such right shall be no greater than the right of any general unsecured creditor of the Employer.
10.5.Domestic Relations Orders.  If a court determines that a Spouse or former Spouse of a Participant has an interest in the Participant's vested Accounts under a final domestic relations order, the Administrative Committee (or its delegate) may, in its sole discretion consistent with Code Section 409A, distribute the Spouse's or former Spouse's interest to that Spouse or former Spouse in accordance with such order.
10.6.Applicable Law.  This Agreement shall be construed and enforced in accordance with the laws of the State of Texas, to the extent applicable.
10.7.Compliance with Section 409A.  This Plan is intended to comply with the distribution and other applicable requirements of Section 409A of the Code.  The Plan shall be interpreted and applied in accordance with the requirements of Section 409A (to the extent applicable).
10.8.Protective Provisions.  A Participant shall cooperate with the Employer or Administrative Committee by furnishing any and all information requested by the Employer or Administrative Committee in order to facilitate the payment of benefits hereunder, and by taking such physical examinations as the Employer or Administrative Committee may deem necessary and taking such other action as may be requested by the Employer or Administrative Committee.
10.9.Effect on Employment Rights.  Nothing in this Plan shall be construed as (a) giving any Participant any right to continued employment with an Employer or any Affiliate, or (b) affecting the eligibility for, or calculation of, any benefit provided to any Participant by the Employer to the extent permitted by law.  No Participant shall have the right to receive any benefit under the Plan except in accordance with the Plan's terms.
10.10.Severability.  If any provision of the Plan shall be held invalid or unlawful for any reason, such event shall not affect or render invalid or unenforceable the remaining provisions of the Plan.

10.11.Notice.  Any notice, consent, election, claim or demand required or permitted to be given under the provisions of this Plan shall be in writing, and shall be signed by the party giving or making the same.  If such notice, consent, election, claim or demand is to be mailed, it shall be sent by United States certified mail, postage prepaid, addressed to the addressee's last known address.  The date of such mailing shall be deemed the date of notice, consent, election, claim or demand.
10.12.Tax Liability.  Any required federal, state or local tax withholding may be withheld from any payment made pursuant to this Plan or from any other compensation payable to the Participant.  Notwithstanding the foregoing, a Participant may, to the extent permitted by the Administrative Committee consistent with Code Section 409A, elect to pay any required employment taxes (and any resulting income taxes) that arise as of the date of deferral (or, if later, vesting) hereunder either (a) by direct payment or (b) through the withholding of such amounts from other compensation due the Participant.  In the alternative, the Administrative Committee may, in its sole discretion, offset such taxes against the Participant's vested Accounts to the extent permitted under Treas. Reg. Section 1.409A-3(j)(4) or other applicable regulations. 
10.13.No Guarantee of Benefits.  Nothing in this Plan shall constitute a guarantee by Employer, Company, Administrative Committee or any other person or entity that the Employer's assets will be sufficient to pay any benefits hereunder.
10.14.Incapacity of Recipient.  If the Administrative Committee determines that any person to whom any benefits are payable hereunder is (a) unable to care for his or her affairs because of illness or accident or (b) a minor, any payment due under the Plan may be paid to the duly appointed guardian or conservator of such person or to any third party who is eligible to receive payment from the Plan for the account of such person.  Any such payment shall be a complete discharge of the Employer's liability for such payments hereunder.
10.15.Construction.  Titles of articles and sections herein are for convenience of reference only and are not to be taken into account in interpreting the Plan.  The masculine whenever used herein shall include the feminine.  The singular shall include the plural and the plural shall include the singular whenever used herein unless the context requires otherwise.

10.16.Successors.  The provisions of this Plan shall bind and inure to the benefit of the Employers and their successors and assigns.  The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of an Employer, and successors of any such corporation or other business entity.
IN WITNESS WHEREOF, Pioneer Energy Services Corp. has caused this document to be executed by its duly authorized officer, this 29th day of January, 2013.
PIONEER ENERGY SERVICES CORP.
By:  /s/ Lorne Phillips
Title:  Chief Financial Officer

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