Document:

Incentive Compensation Plan

 Exhibit 10.1 
 FORBES ENERGY SERVICES LTD. 
 INCENTIVE COMPENSATION PLAN 
 SECTION 1. PURPOSES OF THIS PLAN 
 The
purposes of the Forbes Energy Services Incentive Compensation Plan are to (i) promote the interests of Forbes Energy Services Ltd., a company incorporated under the laws of Bermuda (the “Company”) and its shareholders by
enabling the Company and each of its Affiliates to (A) attract, motivate, and retain their respective Employees and Directors by offering such Employees and Directors performance-based stock incentives and other equity interests in the Company
and other incentive awards and (B) compensate Consultants by offering such Consultants performance-based stock incentives and other equity interests in the Company and such other incentive awards that recognize the creation of value for the
shareholders of the Company and (ii) promote the Company’s long-term growth and success. To achieve these purposes, eligible Persons may receive the following Awards: (I) Stock Options, (II) Stock Appreciation Rights, (III) Restricted
Stock and (IV) such other stock-based incentive compensation determined appropriate by the Committee. 
 SECTION 2. DEFINITIONS 
 As used in this Plan, the following terms shall have the meanings set forth below unless the context otherwise requires: 
 2.1. “Affiliate” shall mean any Parent Entity or Subsidiary Entity, whether now existing or hereafter established. 
 2.2. “Award” shall mean the grant under the Plan of a Stock Option, Stock Appreciation Right, Restricted Stock, or any other stock-based
incentive compensation determined appropriate by the Committee. 
 2.3. “Book Value” shall mean the excess of the value of
the assets of an entity over the liabilities of such entity (determined in accordance with United States generally accepted accounting principles, consistently applied). 
 2.4. “Board” shall mean the Board of Directors of the Company, as the same may be constituted from time to time. 
 2.5. “Cause” shall mean, with respect to the termination of a Participant’s employment with the Company or an Affiliate, the occurrence of one or more of the following events: 
 (a) The Participant’s failure to substantially perform such Participant’s duties with the Company or any Affiliate as determined
by the Board; 
 (b) The Participant’s willful failure or refusal to perform specific directives of the Board or the
Company, which directives are consistent with the scope and nature of the Participant’s duties and responsibilities; 

 (c) The Participant’s conviction of a felony; or 
 (d) A breach of the Participant’s fiduciary duty to the Company or any Affiliate or willful violation in the course of performing the
Participant’s duties for the Company or any Affiliate of any policy, rule, or directive of the Company or any Affiliate, or of any law, rule or regulation (other than traffic violations or other minor offenses). No act or failure to act on the
Participant’s part shall be considered willful unless done or omitted to be done in bad faith and without reasonable belief that the action or omission was in the best interest of the Company. 
 2.6. “Change in Control” shall mean the occurrence of any one of the following events following the Effective Date: 
 (a) an event of a nature that would be required to be reported by the Company in response to Item 1 of a Current Report on Form 8-K
(or any successor to such form) promulgated pursuant to the Exchange Act or any similar disclosure requirement under the similar laws of another jurisdiction; provided, without limitation, such a Change in Control shall be deemed to have occurred
if (i) any Person or Group (other than (A) the Company, (B) an Affiliate, (C) any Employee benefit plan (including, without limitation, an Employee stock ownership plan) adopted by the Company or an Affiliate or (D) any
trustee or other fiduciary holding securities under any Employee benefit plan adopted by the Company or an Affiliate) becomes the “beneficial owner” (as defined in Rule 13d-3 (or any successor to such rule) promulgated under the Exchange
Act or the similar laws of another jurisdiction), directly or indirectly, of securities of the Company or any Material Affiliate representing fifty percent (50%) or more of the combined voting power of the Company’s or such Material
Affiliate’s then outstanding securities or (ii) during any period of twenty-four (24) months, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof, unless
the election by the Board or the nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of such twenty-four
(24) month period or whose election or nomination for election was previously so approved; 
 (b) a Corporate Transaction
is consummated, other than a Corporate Transaction that would result in substantially all of the holders of outstanding voting securities of the Company and all of the holders of the outstanding nonvoting stock of the Company, in each case,
immediately prior thereto owning (directly or indirectly and in substantially the same proportions relative to each other) not less than fifty percent (50%) of the combined voting power of the voting securities of the surviving entity
outstanding immediately after such Corporate Transaction (taking into account nonvoting securities that are convertible into voting securities as if such conversion had previously taken place); or 
 (c) the sale or other disposition of all or substantially all of the Company’s assets (evaluated on a consolidated basis).

  

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 Notwithstanding the preceding provision, with respect to any Award that constitutes a
“nonqualified deferred compensation plan” (as such term is defined under Section 409A of the Code), the term “Change in Control” shall mean only the occurrence of any one of the following events after the Effective Date:

 (x) any Person or Group (other than (A) the Company, (B) an Affiliate, (C) any Employee benefit plan
(including, without limitation, an Employee stock ownership plan) sponsored by the Company or an Affiliate or (D) any trustee or fiduciary holding securities under any Employee benefit plan sponsored by the Company or an Affiliate), becomes the
“beneficial owner” (as defined in Rule 13d-3 (or any successor to such rule) promulgated under the Exchange Act or the similar laws of another jurisdiction), directly or indirectly, of securities representing more than 50% of the total
voting power of the Company (taking into account nonvoting securities that are convertible into voting securities as if such conversion had previously taken place); 
 (y) a majority of the members of the Board is replaced during any twelve (12) month period by directors whose appointment is not
endorsed by a majority of the members of the Board before the date of the appointment or election; or 
 (z) a sale, transfer
or other conveyance of all or substantially all of the assets of the Company on a consolidated basis. 
 Notwithstanding any
of the preceding provisions of this subsection 2.6, the term “Change in Control” shall not include (I) the initial public offering of the Company or an Affiliate, (II) an event described in (a), (b) or (x) above that
occurs as a result of the conversion of any security of the Company or an Affiliate that is outstanding on the Effective Date for Common Stock or (III) an event described in (a), (b) or (x) above that occurs as a result of a reorganization
in which the Company becomes a wholly owned subsidiary of another entity and substantially all of the holders of outstanding voting securities of the Company immediately prior thereto own (directly or indirectly and in substantially the same
proportions relative to each other) not less than fifty percent (50%) of the combined voting power of the voting securities of such entity immediately after such reorganization (taking into account nonvoting securities that are convertible into
voting securities as if such conversion had previously taken place). 
 2.7. “Code” shall mean the Internal Revenue Code of
1986, as amended from time to time (or any successor to such legislation). 
 2.8. “Committee” shall mean the Compensation
Committee of the Board as such Compensation Committee may be constituted from time to time pursuant to the terms of the Compensation Committee Charter of the Board. Membership on the Committee shall be limited to Directors who (i) meet the
independence requirements of the Toronto Stock Exchange or, if the Shares are not then traded on the Toronto Stock Exchange, the principal securities exchange on which the Shares are traded, and any other applicable regulatory requirements,
(ii) qualify as “Non-Employee Directors” (as that term is defined in Rule 16b-3 (or any successor to such rule) promulgated under the Exchange Act) if then applicable, and (iii) satisfy the requirements of an “outside
director,” for purposes of Section 162(m) of the Code and such Treasury regulations as 

  

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may be promulgated thereunder. Once appointed by the Board, members of the Committee, shall, except for any period of suspension, hold office until their
successors are duly elected and qualified or until their earlier resignation, removal or death. All members of the Committee will serve at the pleasure of the Board. Notwithstanding the foregoing, if the composition of the Committee does not comply
with the foregoing provisions of this subsection, the entire Board shall constitute the Committee until such time as a Committee is appointed in accordance with the foregoing provisions of this subsection. 
 2.9. “Common Stock” shall mean the voting common stock, par value $.01 per share, of the Company. 
 2.10. “Company” shall mean Forbes Energy Services Ltd., a company incorporated under the laws of Bermuda, or any successor or Affiliate
who subsequently sponsors the Plan. A change in the identity of the Company shall be subject to the applicable shareholder approval requirements of Section 14 hereof. 
 2.11. “Consultant” shall mean any Person engaged by the Company or any Affiliate to render consulting or advisory services. 

2.12. “Continuous Service” means that the Participant’s service with the Company or any Affiliate, whether as an Employee,
Director or Consultant, is not interrupted or terminated. A Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or any
Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s Continuous Service. For example, a change in
status from an Employee of the Company to a Consultant of an Affiliate or a Director will not constitute an interruption of Continuous Service. Notwithstanding the foregoing, with respect to an Incentive Stock Option, an Employee’s Continuous
Service shall be deemed to have terminated in the event of a change in capacity from an Employee to a Consultant or non-employee Director. The Committee will determine, in its sole and absolute discretion, whether Continuous Service will be
considered interrupted in the case of any leave of absence approved by the Company, including sick leave, military leave or any other personal leave. 
 2.13. “Corporate Transaction” shall have the meaning prescribed under Treasury Regulations Section 1.424-1(a)(3), but shall not include the conversion of any security of the Company or any
Affiliate that is outstanding on the Effective Date for Common Stock or any transaction described in subsection 13.1. 
 2.14.
“Covered Participant” shall mean a Participant who, as of the close of the Company’s taxable year, is the principal executive officer (within the meaning of the amended disclosure rules under the Exchange Act) of the Company or
an individual acting in such a capacity, or whose total compensation for that taxable year is required to be reported to the Company’s shareholders under the Exchange Act by reason of such Participant being among the three (3) highest
compensated officers for the taxable year (other than the principal executive officer or the principal financial officer, within the meaning of the amended disclosure rules under the Exchange Act). 
  

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 2.15. “Designated Beneficiary” shall mean the beneficiary designated by a Participant,
in a manner authorized by the Committee, to exercise the rights of such Participant in the event of such Participant’s death. In the absence of an effective designation by a Participant, the Designated Beneficiary shall be such
Participant’s estate. 
 2.16. “Director” shall mean a member of the Board, whether an Employee, former Employee,
outside director or other non-Employee member. 
 2.17. “Disability” shall mean the Participant’s permanent and total
inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. The
determination of a Participant’s “Disability” shall be made in the sole and absolute discretion of the Committee. 
 2.18.
“Effective Date” shall mean the date on which the Plan is approved by the shareholders of the Company. 
 2.19.
“Employee” shall mean any person who is employed, within the meaning of Section 3401 of the Code, by the Company or an Affiliate. The provision of compensation by the Company or an Affiliate to a non-Employee Director solely
with respect to such individual rendering services in the capacity of a non-Employee Director, however, shall not be sufficient to constitute “employment” by the Company or an Affiliate. 
 2.20. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time (or any successor to such legislation)
or the similar laws of another jurisdiction. 
 2.21. “Expiration Date” shall mean the date that is ten (10) years from
the date on which this Plan is approved by the shareholders of the Company, or, in the event the Plan is subsequently amended to make any change described in the final paragraph of Section 14, the date that is ten (10) years from
the date on which such amendment is approved by the Board, or if earlier, the date on which such amendment is approved by the shareholders of the Company. 
 2.22. “Fair Market Value” shall, except to the extent otherwise provided herein, mean with respect to the Shares, as of any date, (i) if the Common Stock is listed or admitted to trade on a
United States national securities exchange, the closing price of the Common Stock on the composite tape of the principal United States national securities exchange on which the Common Stock is so listed or admitted to trade, on such date or, if
there is no trading in Shares on such date, then the closing price of the Common Stock as quoted on such composite tape on the next preceding date on which there was trading in such Shares, as published in The Wall Street Journal or such
other source as the Board deems reliable; (ii) if the Common Stock is not listed or admitted to trade on a United States national securities exchange, then the closing price of the Common Stock as quoted on the National Market System of the
NASD; (iii) if the Common Stock is not listed or admitted to trade on a United States national securities exchange or the National Market System of the NASD, the mean between the bid and asked price for the Common Stock on such date, as
furnished by the NASD through NASDAQ or a similar organization if NASDAQ is no longer reporting such information; or (iv) if the Common Stock 

  

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is not listed or admitted to trade on a United States national securities exchange or the National Market System of the NASD and if bid and asked prices for
the Common Stock are not so furnished by the NASD or a similar organization, the value established by the Board, determined in accordance with applicable guidance and regulations promulgated under Section 409A of the Code (or any successor
provision thereto). Fair market value shall be determined without regard to any restriction other than a restriction which, by its terms, will never lapse. 
 Notwithstanding the foregoing, for any period during which the Common Stock is not listed on a United States national securities exchange, but is listed on the Toronto Stock Exchange, the Fair Market Value of the
Common Stock shall equal the volume weighted average trading price of the Common Stock on the Toronto Stock Exchange for the five (5) trading days immediately preceding the determination date. The volume weighted average trading price shall be
calculated by dividing the total value of the Common Stock traded over the 5-day period by the total volume of Common Stock traded over the same period. 
 2.23. “Group” shall have the meaning ascribed to such term in Section 13(d) of the Exchange Act or the similar laws of another jurisdiction. 
 2.24. “Incentive Stock Option” shall mean a Stock Option granted under the Plan to an Employee that meets the requirements of
Section 422 of the Code. 
 2.25. “Insider” shall, for any period during which the Common Stock is listed on the
Toronto Stock Exchange, have the meaning ascribed to the term “insider” under the Toronto Stock Exchange Company Manual. 
 2.26.
“Material Affiliate” shall mean any Affiliate of which the Book Value or fair market value (whichever is greater) constitutes fifty percent (50%) or more of the Book Value of the Company. The fair market value of an Affiliate
will be determined in good faith by the Board. 
 2.27. “NASD” shall mean the National Association of Securities Dealers,
Inc. 
 2.28. “Non-Qualified Stock Option” shall mean a Stock Option to purchase Shares awarded pursuant to this Plan that
does not qualify as an Incentive Stock Option (including, without limitation, any option to purchase Shares originally designated as or intended to qualify as an Incentive Stock Option but which does not (for whatever reason) qualify as an Incentive
Stock Option). 
 2.29. “Optionee” shall mean any Participant who has been granted and holds a Stock Option awarded pursuant
to this Plan. 
 2.30. “Parent Entity” shall mean any entity (other than the Company) in an unbroken chain of entities
ending with the Company, provided each entity in the unbroken chain (other than the Company) owns, at the time of the determination, ownership interests possessing more than fifty percent (50%) of the total combined voting power of all classes
of ownership interests in one of the other entities in such chain; provided, however, that with respect to an Award of an Incentive Stock Option, the term “Parent Entity” shall refer solely to an entity that is taxed under Federal income
tax laws as a corporation. 
  

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 2.31. “Participant” shall mean any Person who has been granted and holds an Award
pursuant to this Plan. 
 2.32. “Performance Award” shall mean any Award granted under the Plan that provides the
Participant the right to exercise, purchase or otherwise benefit from the Award upon attainment of one or more specified Performance Goals. 
 2.33. “Performance Goal” shall mean any goal or target established by the Committee that must be satisfied before the Participant may benefit from a Performance Award. 
 2.34. “Performance Measure” shall mean each of the business criteria the Committee uses in establishing a Performance Goal. For purposes
of the Plan, Performance Measures are limited to earnings per share; return on assets; return on equity; return on capital; net profit after taxes; net profit before taxes; operating profits; stock price; sales, expenses and earnings before
interest, taxes, depreciation, amortization and loss on early extinguishment of debt (“EBITDA”). 
 2.35. “Performance
Period” shall mean the period established by the Committee over which a Performance Goal specified by the Committee with respect to such Performance Award will be measured. 
 2.36. “Performance Shares” shall mean the Shares payable under a Performance Award upon attainment of one or more specified Performance
Goals. 
 2.37. “Performance Units” shall mean a fixed dollar amount payable under a Performance Award in Shares, Restricted
Stock, cash, or any combination thereof, as the Committee may determine, upon attainment of one or more specified Performance Goals. 
 2.38.
“Person” shall mean an individual, partnership, limited liability company, corporation, joint stock company, trust, estate, joint venture, association or unincorporated organization or any other form of business organization.

 2.39. “Plan” shall mean this Forbes Energy Services Incentive Compensation Plan as it may be amended from time to time.

 2.40. “Reload Option” shall mean a Stock Option as defined in subsection 6.8 of this Plan. 
 2.41. “Restricted Stock” shall mean any Shares granted pursuant to this Plan that are subject to restrictions on transferability or a
substantial risk of forfeiture. 
 2.42. “Retirement” shall mean, with respect to any Employee of the Company or Affiliate,
the Employee’s retirement from employment with the Company and all of its Affiliates, other than for Cause, on or after the date the Employee attains age 60 provided the Employee has completed ten (10) years of service as of the date the
Employee retires from service, or on or after the Employee attains age 65. With respect to a non-employee Director, “Retirement” shall mean such non-employee Director’s termination of service as a member of the Board on or after the
date such non-employee Director completes five (5) years of service as a member of the Board. 
  

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 2.43. “Securities Act” shall mean the Securities Act of 1933, as amended from time to
time (or any successor to such legislation) or the similar laws of another jurisdiction. 
 2.44. “Shares” shall mean shares
of the Common Stock and any shares of capital stock or other securities hereafter issued or issuable upon, in respect of or in substitution or exchange for shares of Common Stock. 
 2.45. “Specified Employee” shall mean, for any period during which the Company is publicly traded on an established securities market or
otherwise, a Participant who, on the date of his separation from service, is treated as a “key employee” as defined under Section 416(i)(1)(A)(i), (ii), or (iii) of the Code (applied in accordance with the Treasury Regulations
thereunder and disregarding subparagraph (5) thereof). A Participant will be treated as a Specified Employee on the date of his separation from service if such event occurs within the 12-month period following the effective date of the
Company’s determination that the Participant is a Specified Employee in accordance with the preceding sentence. The determination date and the effective date of such determination shall be established by resolution of the Board. 
 2.46. “Stock Appreciation Right” shall mean the right of the holder thereof to receive cash, property or Shares with a Fair Market Value
in an amount equal to the excess of the aggregate Fair Market Value of the Shares subject to such Stock Appreciation Right on the date of exercise over the aggregate Fair Market Value of the Shares subject to such Stock Appreciation Right on the
date of the grant of such Stock Appreciation Right (or such higher value as may be specified in the Award agreement granting such Stock Appreciation Right). A Stock Appreciation Right may be issued on its own or in tandem with a Stock Option and
shall be subject to such limitations as the Committee may impose. 
 2.47. “Stock Option” shall mean any Incentive Stock
Option or Non-Qualified Stock Option. 
 2.48. “Subsidiary Entity” shall mean any entity (other than the Company) in an
unbroken chain of entities beginning with the Company, provided each entity (other than the last entity) in the unbroken chain owns, at the time of the determination, stock possessing more than fifty percent (50%) of the total combined voting
power of all classes of ownership interests in one of the other entities in such chain; provided, however, that with respect to an Award of an Incentive Stock Option, the term “Subsidiary Entity” shall refer solely to an entity that is
taxed under Federal income tax laws as a corporation. 
 2.49. “Termination Date” shall mean the date on which
a Participant’s Continuous Service with the Company (or any Affiliate) terminates due to death, Disability, Retirement, voluntary termination, with or without Cause, or otherwise. 
 SECTION 3. ADMINISTRATION OF THIS PLAN 
 3.1. Committee. This Plan shall be
administered and interpreted by the Committee. 
 3.2. Powers of the Committee. Subject to the provisions of this Plan and directions
from the Board, if any, the Committee is authorized to: 
 (a) determine the Persons to whom Awards are to be granted,
provided that Awards granted to members of the Board or the Committee shall be consistent for the position in which the individuals are serving; 
  

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 (b) determine the types and combinations of Awards to be granted; the number of Shares to
be covered by an Award; the exercise price or purchase price of an Award; the time or times when an Award shall be granted and may be exercised; the terms, performance criteria or other conditions, vesting periods or any restrictions for an Award;
any restrictions on Shares acquired under an Award; and any other terms and conditions of an Award; 
 (c) construe and
interpret the provisions of this Plan and each Award agreement; 
 (d) prescribe, amend and rescind rules and regulations
relating to this Plan; 
 (e) determine whether, to what extent, and under what circumstances, to allow alternative payment
options to exercise Awards, or pay withholding taxes imposed upon the grant, exercise or vesting of any Award, and the terms and conditions of such payment options; 
 (f) determine whether, to what extent and under what circumstances to permit loans from the Company to Participants to be used to pay the
exercise price or purchase price of Awards granted pursuant to this Plan, and the terms and conditions of such loans; provided, however, that such loans shall not be available to any Participant who is a Director or executive officer of the
Company or any Affiliate if such loan would be treated as a personal loan prohibited under Section 13(k) of the Exchange Act; 
 (g) rely upon Employees of the Company or outside service providers for such clerical and recordkeeping duties as may be necessary in connection with the administration of this Plan; 
 (h) accelerate or defer (with the consent of the Participant) the vesting of any rights pursuant to an Award; 
 (i) delegate to one or more senior officers of the Company its duties under this Plan pursuant to such conditions or limitations as the
Committee may establish, except that the Committee may not delegate to any person the authority to grant Awards to, or take other action with respect to, Persons who are subject to Section 16 of the Exchange Act; and 
 (j) make all other determinations and take all other actions necessary or advisable for the administration of this Plan. 
 3.3. Procedures. 
 (a)
Proceedings by the Board with respect to this Plan will be conducted in accordance with the governing corporate documents of the Company. 
  

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 (b) A majority of the Committee members shall constitute a quorum for action by the
Committee. All determinations of the Committee shall be made by not less than a majority of its members. 
 (c) All questions
of interpretation and application of this Plan or pertaining to any question of fact or Award granted hereunder will be decided by the Committee, whose decision will be final, conclusive and binding upon the Company and each other affected party.
Any member of the Committee or the Board acting as Plan administrator, and any officer or employee of the Company or any Affiliate acting at the direction of the Plan administrator, shall not be personally liable for any action or determination
taken or made in good faith with respect to the Plan, and shall, to the extent provided in subsection 15.9 hereof, be fully indemnified by the Company with respect to any such action or determination. 
 SECTION 4. SHARES SUBJECT TO PLAN 
 4.1.
Limitations. The maximum number of Shares that may be delivered pursuant to Awards granted under the Plan is 5,220,000 Shares, all of which Shares may be issued pursuant to Incentive Stock Options. Awards will not reduce the number of Shares
that may be issued pursuant to this Plan if the settlement of the Award will not require the issuance of Shares, as, for example, a Stock Appreciation Right that can be satisfied only by the payment of cash. The following Shares related to Awards
will be available for issuance again under the Plan: 
 (a) Common Stock related to Awards settled in cash; 
 (b) Common Stock related to Awards that expire, are forfeited or cancelled or terminate for any other reason without the issuance of
Common Stock; 
 (c) Common Stock equal in number to the shares of Common Stock surrendered in payment of the exercise price
or purchase price of an Award; and 
 (d) Common Stock tendered or withheld in order to satisfy withholding tax obligations.

 Shares to be issued may be made available from authorized but unissued Common Stock, Common Stock held by the Company in its treasury, or Common Stock
purchased by the Company on the open market or otherwise. During the term of this Plan, the Company will at all times reserve and keep available the number of Shares that shall be sufficient to satisfy the requirements of this Plan. 
 4.2. Maximum Individual Grants. No Participant may be granted during any fiscal year of the Company Stock Options or Stock Appreciation Rights,
the terms of which entitle, or will entitle, the Participant to an aggregate of more than 1,000,000 Shares. If a Participant’s Company Stock Option or Stock Appreciation Right is cancelled, the cancelled Award continues to be counted against
the maximum number of Shares for which such Awards may be granted in such fiscal year with respect to such Participant. If, following the grant of such an Award, the price of the Award is reduced, the transaction is treated as a cancellation of the
Award and the issuance of a new Award, both of which count against the maximum number of Shares for which such Awards may be granted in such fiscal year with respect to such Participant. 
  

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 SECTION 5. ELIGIBILITY AND GRANT OF AWARDS 
 5.1. Eligibility. The Committee shall determine, within the limitations of the Plan, the Employees, Consultants or Directors of the Company or any
Affiliate to whom Awards may be granted. In making such determination, as well as the determination of the type of Award and terms of such Award, the Committee may consider the position and responsibilities of the Person, the importance of such
Person to the Company, the duties of such Person, the past, present and potential contributions of such Person to the growth and success of the Company and such other factors as the Committee may deem relevant in connection with accomplishing the
purposes of this Plan. 
 An eligible Person may be granted more than one Award. The grant of an Award to an eligible Person shall not be
deemed either to entitle the Person to, or to disqualify the Person from, receipt of any other Award under the Plan. The Committee’s determinations under the Plan (including without limitation determinations of which Employees, Directors, or
Consultants, if any, are to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the agreements evidencing same) need not be uniform and may be made by it selectively among Employees, Directors and
Consultants who receive, or are eligible to receive, Awards under the Plan. 
 5.2. Grant of Awards. The grant of an Award shall be
authorized by the Committee and shall be evidenced by an Award agreement setting forth the type of Award being granted, the total number of Shares subject to the Award(s), the price (if applicable), the restriction or vesting periods (if
applicable), the term of the Award, the date of the grant of the Award, and such other terms, provisions, limitations, and, if applicable, Performance Goals, as the Committee, in its sole and absolute discretion, determines appropriate and not
inconsistent with the purposes of the Plan. The Company shall execute an Award agreement with a Participant after the Committee approves the issuance of an Award. Each Award will be deemed to have been granted as of the date on which the Committee
has completed the action declaring the Award, which date shall be specified by the Committee in the applicable Award agreement, notwithstanding any delay which may elapse in executing and delivering such Award agreement. 
 SECTION 6. STOCK OPTIONS 
 6.1.
Grants. The Committee may grant Stock Options alone or in addition to other Awards granted pursuant to this Plan to any eligible Person. Each Person so selected shall be offered a Stock Option to purchase the number of Shares determined by
the Committee. The Committee shall specify whether such Stock Option is an Incentive Stock Option or Non-Qualified Stock Option and any other terms or conditions relating to such Award; provided, however, only Employees of the Company or an
Affiliate may be granted Incentive Stock Options. To the extent that any Stock Option designated as an Incentive Stock Option does not qualify as an Incentive Stock Option (whether because of its provisions, the failure of the shareholders of the
Company to authorize the issuance of Incentive Stock Options, the time or manner of its exercise or otherwise), such Stock Option or the portion thereof which does not 

  

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qualify shall be deemed to constitute a Non-Qualified Stock Option. Each Person to be granted a Stock Option shall enter into a written agreement with the
Company, in such form as the Committee may prescribe, setting forth the terms and conditions (including, without limitation, the exercise price and vesting schedule) of the Stock Option. 
 6.2. Incentive Stock Options Limitations. 
 (a) Fair Market Value Restrictions. To the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any
calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the Stock Options or portions thereof that exceed such limit (according to the order in which they were granted) shall be treated as
Non-Qualified Stock Options. For this purpose, the Fair Market Value of the Shares shall be determined as of the date(s) on which the Incentive Stock Options are granted. 
 (b) Shareholder Approval of Plan. To the extent shareholder approval of this Plan is required by Section 422 of the Code, no
eligible Person shall be granted an Incentive Stock Option unless this Plan is approved by the shareholders of the Company within twelve (12) months before or after the date this Plan is adopted (or, if applicable, amended by the Board pursuant
to the final paragraph of Section 14 hereof). 
 (c) Failure to Qualify. Notwithstanding any provision
herein to the contrary, none of the Committee, the Board, the Company, any Affiliates, or the directors, officers or employees of the foregoing, shall have any liability to any Participant or any other Person if a Stock Option designated as an
Incentive Stock Option fails to qualify as such at any time. 
 6.3. Exercise Price. The exercise price of a Stock Option shall not be
less than one hundred percent (100%) of the Fair Market Value of the Shares subject to such Stock Option on the date of the grant of the Stock Option and, in any event, shall never be less than the par value of such Shares. Notwithstanding
anything herein to the contrary, in no event shall any Employee owning more than ten percent (10%) of the total combined voting power of the Company or any Affiliate be granted an Incentive Stock Option unless the exercise price of such
Incentive Stock Option shall be at least one hundred ten percent (110%) of the Fair Market Value of the Shares subject to such Incentive Stock Option on the date of the grant of such Incentive Stock Option. 
 6.4. Option Term. A Stock Option shall be exercisable for such period of time from the date of its grant as may be determined by the Committee;
provided, however, that no Incentive Stock Option shall be exercisable later than ten (10) years from the date of its grant. Notwithstanding any provision to the contrary, an Incentive Stock Option granted to any Employee owning more than ten
percent (10%) of the total combined voting power of the Company or any Affiliate shall not be exercisable later than five (5) years from the date of its grant. 
 6.5. Vesting of Stock Options. Each Stock Option granted pursuant to this Plan may only be exercised to the extent that the Optionee is vested in such Stock Option. Except as 

  

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otherwise provided under subsection 13.2 herein, each Stock Option shall vest separately in accordance with the vesting schedule determined by the
Committee, which will be incorporated in the Award agreement entered into between the Company and such Optionee. Unless otherwise provided in a specific Award agreement, Stock Options granted to an Employee or a Director pursuant to this Plan shall
become fully vested upon such Person’s Retirement and immediately exercisable according to the terms of the Award agreement evidencing such Stock Option. The vesting schedule may be accelerated if, in the discretion of the Committee, the
acceleration would not be inconsistent with the purposes of this Plan. 
 6.6. Time and Manner of Exercise. Except to the
extent otherwise provided in the applicable Award agreement, each Stock Option may be exercised, in whole or in part, by submitting to the Committee an exercise agreement in the form prescribed by the Committee and duly executed by Participant (or,
following Participant’s Disability or death, his legal representative, estate or heirs, as the case may be). Except as otherwise permitted by the Committee and expressly provided in the applicable Award agreement, the exercise price and
applicable tax withholding shall be paid in full at the time of exercise in a manner permitted under Section 10 herein. 
 (a) Voluntary Termination of Service. Unless otherwise provided in the applicable Award agreement, in the event the Continuous Service of a Participant terminates (other than upon such Participant’s death
or Disability, or for Cause), such Participant may thereafter exercise the vested portion of his Stock Option (to the extent that such Participant was entitled to exercise such Stock Option as of the Termination Date) but only within such period of
time ending on the earlier of (i) the date ninety (90) days following such Participant’s Termination Date or (ii) the expiration of the Award term under subsection 6.4. If, after termination, such Participant does not
exercise his Stock Option within the time specified herein, the Stock Option shall terminate and will no longer be exercisable. 
 (b) Death of Participant. Unless otherwise provided in the applicable Award agreement, in the event the Continuous Service of a Participant terminates by reason of such Participant’s death (or in the event such Participant dies
within ninety (90) days following such Participant’s Termination Date), such Participant’s estate or heirs may thereafter exercise such Participant’s Stock Option (to the extent that such Participant was entitled to exercise such
Stock Option as of the Termination Date) but only within such period of time ending on the earlier of (i) the first anniversary of such Participant’s Termination Date or (ii) the expiration of the Award term under subsection
6.4. If, after the Participant’s death, the Participant’s estate or heirs have not exercised the Participant’s Stock Option within the time specified herein, the Stock Option shall terminate and will no longer be exercisable.

 (c) Disability of Participant. Unless otherwise provided in the applicable Award agreement, in the event the
Continuous Service of a Participant terminates by reason of such Participant’s Disability, such Participant, or his legal representative, may thereafter exercise such Participant’s Stock Option (to the extent that such Participant was
entitled to exercise such Stock Option as of the Termination Date) but only within such period of time ending on the earlier of (i) the first anniversary of such Participant’s 

  

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Termination Date or (ii) the expiration of the Award term under subsection 6.4. If, after termination, such Participant or his legal
representative has not exercised the Participant’s Stock Option within the time specified herein, the Stock Option shall terminate and will no longer be exercisable. 
 (d) Termination For Cause. Unless otherwise provided in the applicable Award agreement, in the event the Continuous Service of a
Participant terminates for Cause, all Stock Options held by such Participant, whether or not vested, shall immediately terminate and will no longer be exercisable. 
 (e) Discretion of Committee. The Committee shall have the sole discretion, exercisable at any time, to extend the term during which
a Stock Option is to remain exercisable following the Participant’s Termination Date from the period otherwise in effect for that Stock Option and set forth in the Award agreement to such greater period of time as the Committee shall deem
appropriate; provided, however, that the term during which the Stock Option is exercisable shall not be extended to a date beyond the later of (i) the Award term under subsection 6.4 or (ii) thirty (30) days following the first
date on which the exercise of the Stock Option would no longer violate applicable federal, state, local or foreign laws and would no longer jeopardize the ability of the Company to continue as a going concern; and provided further that no extension
to the term of an Award benefiting an Insider shall be made without shareholder approval (excluding the Shares held directly or indirectly by Insiders benefiting from the extension). An extension of the time during which a Stock Option is
exercisable shall not be treated as the grant of a new Stock Option except to the extent required, with respect to an Incentive Stock Option, under Section 424(h) of the Code and, with respect to a Non-Qualified Stock Option, under
Section 409A of the Code. 
 (f) Payment In Lieu of Exercise. Notwithstanding any provision to the contrary
herein, the Participant (or, following the Participant’s Disability or death, his legal representative, estate or heirs, as the case may be) may make a written request to the Committee to receive a cash payment in lieu of the issuance of Shares
upon exercise of any one or more Stock Options. Following receipt of the Participant’s written request, the Committee shall determine, in its sole and absolute discretion, whether and under what conditions such cash payment may be made to the
Participant. Any cash payment made pursuant to this paragraph (f) shall be made in such manner as the Committee may deem appropriate and shall be equal to the Fair Market Value of the Shares that would otherwise have been issued under
the applicable Stock Option(s), less the aggregate exercise price and less applicable tax withholding. Notwithstanding the foregoing, the Committee shall have no obligation to make any cash payment requested under this paragraph (f) and
a cash payment made hereunder shall not entitle another Participant to uniform treatment. A Participant whose request for a cash payment is denied may exercise his Stock Option and receive Shares at the time and in the manner specified in the
applicable Award agreement. 
 (g) Lapsed and Cancelled Stock Options. Nothing contained in this Plan will be deemed to
extend the term of a Stock Option or to revive any Stock Option which has previously lapsed or been cancelled, terminated or surrendered. 
  

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 6.7. Transferability of Options. 
 (a) Incentive Stock Options. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Participant only by the Participant. 
 (b) Non-Qualified
Stock Options. A Non-Qualified Stock Option shall be transferable to the extent provided in the Award agreement; provided that, following a permissible transfer, the Non-Qualified Stock Option shall continue to be subject to the terms of the
Plan and the applicable Award agreement to the same extent as if not transferred. If the Non-Qualified Stock Option does not provide for transferability, then the Non-Qualified Stock Option shall not be transferable except by will or by the laws of
descent and distribution and shall be exercisable during the lifetime of the Participant only by the Participant. 
 (c)
Designated Beneficiaries. Notwithstanding the foregoing, the Participant may, by delivering written notice to the Committee, in a form satisfactory to the Committee, designate a third party who, in the event of the death of Participant, shall
thereafter be entitled to exercise the Stock Option. 
 (d) Evidence of Rights. The transferee of a Stock Option shall
not be permitted to exercise the Stock Option unless and until such transferee has provided the Committee a copy of the will and/or such other evidence as the Committee determines necessary to establish the validity of the transfer. 
 6.8. Reload Options. If an Optionee delivers Shares previously issued to the Optionee in full or partial payment of the exercise price for
any Stock Option, or if the Optionee elects to have the Company retain that number of Shares out of the Shares being acquired through the exercise of the Stock Option having a Fair Market Value equal to the exercise price of the Stock Option being
exercised, the Committee may, in its sole discretion, authorize the grant of a new Stock Option (a “Reload Option”) for that number of Shares equal to the number of surrendered Shares or newly acquired Shares being retained by the
Company in payment of the exercise price of the underlying Stock Option being exercised. The grant of a Reload Option will become effective upon the exercise of the underlying Stock Option. The exercise price of the Reload Option shall be the Fair
Market Value of a Share on the effective date of the grant of the Reload Option. Each Reload Option shall, subject to subsection 6.6(e) above, be exercisable no later than the time when the underlying stock option being exercised could last
be exercised. The Committee may also specify additional terms, conditions and restrictions for the Reload Option and the Shares to be acquired upon the exercise thereof. 
 SECTION 7. STOCK APPRECIATION RIGHTS 
 7.1. Grants. The Committee may, in its sole and absolute
discretion, grant Stock Appreciation Rights, whether alone or in addition to other Awards issued under the Plan, to any Employee, Director or Consultant. The Committee shall specify in the Award agreement the number of Shares subject to the Award,
whether the Stock Appreciation Right is granted in tandem with a Stock Option and, if so, whether the exercise of the Stock Appreciation Right will 

  

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result in the cancellation of all or part of the accompanying Stock Option and whether the exercise of the Stock Appreciation Right will be automatic upon
exercise of the accompanying Stock Option and any other conditions and restrictions as the Committee, in its sole and absolute discretion, determines appropriate and which are not inconsistent with the terms of the Plan. 
 7.2. Exercisability. Subject to the requirements of this subsection 7.2, a Stock Appreciation Right shall be exercisable in the time and manner
determined by the Committee and set out in the applicable Award agreement. Notwithstanding the foregoing, the Committee may accelerate the time at which any outstanding Stock Appreciation Right may be exercised if the Committee determines, in its
sole and absolute discretion, that such acceleration is not inconsistent with the purposes of this Plan. 
 (a) Stock
Appreciation Rights Granted in Tandem with Incentive Stock Options. Notwithstanding any provision herein to the contrary, a Stock Appreciation Right granted in tandem with an Incentive Stock Option (i) may be exercised only at the times and
to the extent the related Incentive Stock Option is exercisable, (ii) will expire upon the termination or expiration of the related Incentive Stock Option, (iii) may not result in a Participant realizing more than 100% of the difference
between the exercise price of the related Incentive Stock Option and the Fair Market Value of the Shares subject to the related Incentive Stock Option at the time the Stock Appreciation Right is exercised, and (iv) may be exercised only at such
times as the Fair Market Value of the Shares subject to the related Incentive Stock Option exceeds the exercise price of the related Incentive Stock Option. 
 (b) Stock Appreciation Rights Granted in Tandem with Non-Qualified Stock Options. Notwithstanding any provision herein to the
contrary, a Stock Appreciation Right granted in tandem with a Non-Qualified Stock Option (i) may be exercised at the time or times provided by the Committee, (ii) will expire upon the date specified by the Committee, and (iii) may not
result in a Participant realizing more than 100% of the difference between the Fair Market Value of the Shares on the date the Stock Appreciation Right is granted and the Fair Market Value of the Shares at the time the Stock Appreciation Right is
exercised. 
 7.3. Time and Manner of Exercise. Except to the extent otherwise provided in the applicable Award agreement, each Stock
Appreciation Right may be exercised, in whole or in part, by submitting to the Committee an exercise agreement in the form prescribed by the Committee and duly executed by the Participant (or, following the Participant’s Disability or death,
his legal representative, estate or heirs, as the case may be). The applicable tax withholding shall be paid in full at the time of exercise in a manner permitted under subsection 10.2 herein. Unless otherwise provided in the applicable
Award agreement, in the event the Participant’s Continuous Service terminates, the Participant (or, following the Participant’s Disability or death, his legal representative, estate or heirs, as the case may be) may thereafter exercise his
Stock Appreciation Right (to the extent that the Participant was entitled to exercise such Stock Appreciation Right as of the Termination Date), to the same extent that the Participant (or, following the Participant’s Disability or death, his
legal representative, estate or heirs, as the case may be) would be permitted to exercise a Stock Option following his Termination Date as provided under subsection 6.6 above. 
  

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 7.4. Payment of Benefit. The grant of the Stock Appreciation Right may provide that the
Participant will be paid either in cash or in Shares, or a combination thereof, at the sole discretion of the Committee. Upon exercise of a Stock Appreciation Right, the Participant shall be entitled to receive an amount equal to the excess of the
Fair Market Value of a Share on the date of the exercise of the Stock Appreciation Right over the greater of: (i) the Fair Market Value of a Share on the date of the grant of the Stock Appreciation Right (or such greater value established on
the date of grant and set forth in the Award agreement) or (ii) the par value of such Share, multiplied by the number of Shares with respect to which the Stock Appreciation Right is exercised. If a Stock Appreciation Right is payable in cash,
then the Participant shall receive his benefit in a lump sum cash payment equal to the amount to which the Participant is entitled upon exercise of the Stock Appreciation Right. If a Stock Appreciation Right is payable in Shares, then the
Participant shall receive that number of whole Shares having an aggregate Fair Market Value equal to the amount to which the Participant is entitled upon exercise of the Stock Appreciation Right. Any fractional Shares to which the Participant is
entitled upon exercise of a Stock Appreciation Right shall be paid in accordance with subsection 15.5. 
 7.5. Transferability.

 (a) Rights to Transfer. A stand-alone Stock Appreciation Right shall be transferable to the extent provided in the
Award agreement; provided, however, if the Award agreement does not provide for transferability, then the Stock Appreciation Right shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during
the lifetime of the Participant only by the Participant. A Stock Appreciation Right granted in tandem with a Stock Option may be transferred only at the times and to the extent the related Stock Option is transferable. 
 (b) Evidence of Rights. The transferee of a Stock Appreciation Right shall not be permitted to exercise the Stock Appreciation
Right unless and until such transferee has provided the Committee a copy of the will and/or such other evidence as the Committee determines necessary to establish the validity of the transfer. 
 SECTION 8. RESTRICTED STOCK 
 8.1. Grants. The Committee may, in its sole and
absolute discretion, grant Restricted Stock, whether alone or in addition to other Awards granted pursuant to this Plan, to an Employee, Director or Consultant of the Company or an Affiliate. The terms and conditions of the Restricted Stock shall be
specified in an Award agreement executed by the Participant. The Award agreement shall set forth the purchase price, if any, for the Shares, the rights, if any, of the Participant during the restriction period and the forfeiture restrictions
applicable to the particular Award, including the vesting schedule (which may be based on service, satisfaction of one or more Performance Goals or other factors) and such other conditions and restrictions as the Committee shall, in its sole and
absolute discretion, determine appropriate and which are not inconsistent with the terms of the Plan. 
 8.2. Payment for Restricted
Stock. Upon the Participant’s acceptance of an applicable Award agreement for Restricted Stock, the Participant shall pay to the Company the purchase price, if any, for the Shares, which in no event shall be less than the par value of such
Shares. 
  

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 Such purchase price may be paid in any manner permitted under Section 10 herein and set forth in the
applicable Award agreement. 
 8.3. Terms of Restricted Stock. 
 (a) Forfeiture of Restricted Shares. Subject to subsection 8.3(b) herein, and except as otherwise provided in the
applicable Award agreement, all Restricted Stock shall be forfeited and returned to the Company and all rights of the Participant with respect to such Restricted Stock shall terminate unless the Participant satisfies the requirements of the Award
agreement, which may include requirements for continuation of service, performance, and such other terms and conditions as the Committee, in its sole and absolute discretion, shall determine applicable with respect to the Restricted Stock.

 (b) Waiver of Restriction Period. Notwithstanding anything contained in this Section 8 to the
contrary, the Committee may, in its sole and absolute discretion, waive the restriction period (or Performance Period, if applicable) and any other conditions set forth in the applicable Award agreement under appropriate circumstances (which may
include the death or Disability of the Participant, or a material change in circumstances arising after the Award Date) and impose such terms and conditions (including forfeiture of a proportionate number of Shares of the Restricted Stock) as the
Committee shall deem appropriate. 
 8.4. Transferability of Restricted Shares. 
 (a) Rights to Transfer. An Award of Restricted Stock shall be transferable to the extent provided in the Award agreement. If the
Award agreement does not provide for transferability, then the Restricted Stock shall not be transferable except by will or by the laws of descent and distribution. 
 (b) Evidence of Rights. The transferee of an Award of Restricted Stock shall not be evidenced on the books and records of the
Company unless and until such transferee has provided the Committee a copy of the will and/or such other evidence as the Committee determines necessary to establish the validity of the transfer. 
 SECTION 9. OTHER AWARDS 
 9.1.
General. The Committee may, in its sole and absolute discretion, grant to any Employee, Director or Consultant other forms of Awards based upon, payable in or otherwise related to, in whole or in part, the Common Stock, if the Committee, in
its sole and absolute discretion, determines that such other form of Award is appropriate and not inconsistent with the purposes of this Plan. The types of Awards that may be issued under this Section 9 shall include but not be limited to
restricted stock units, dividend equivalent rights, and performance-based compensation. The terms and conditions of such other form of Award shall be specified in an Award agreement that sets forth the terms and conditions of such Award, including,
but not limited to, the price, the vesting schedule, and any Performance Goals, conditions and restrictions as the Committee shall impose as are not inconsistent with the terms of the Plan. In no event shall the price per Share of any Award based
upon, payable in or otherwise related to, in whole or in part, the Common Stock be less than the par value of such Share. To the extent that 

  

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any Award issued under this Section 9 constitutes a “nonqualified deferred compensation plan” under Section 409A of the Code, then
such Award shall be subject to the restrictions set forth in subsection 9.2 hereof. 
 9.2. Restrictions on Deferred
Compensation. 
 (a) Applicability of Code Section 409A. Notwithstanding any provision herein or in an
applicable Award agreement to the contrary, any Award issued hereunder that constitutes a deferral of compensation under a “nonqualified deferred compensation plan”, as such term is defined under Section 409A(d)(1) of the Code (or a
successor provision thereto), shall be subject to the requirements of this subsection 9.2 and the Award agreement shall include such terms and conditions as are required to comply with the requirements of Section 409A of the Code (or a
successor provision thereto) and applicable guidance published in the Internal Revenue Bulletin. 
 (b) Restrictions on
Distributions. A Participant shall not be permitted to exercise or otherwise receive payment in connection with an Award subject to this subsection 9.2 on a date earlier than the date on which any of the following events occur:

 (i) The Participant’s separation from service; 
 (ii) The date the Participant becomes Disabled; 
 (iii) The Participant’s death; 
 (iv) At a time or pursuant to a fixed schedule specified in the applicable Award agreement; 
 (v) Upon a Change in Control (as defined in subsection 2.5 for purposes of Awards that are subject to Code Section 409A); or 
 (vi) Upon the occurrence of an unforeseeable emergency (as defined under Section 409A(a)(2)(B)(ii)(I) of the Code). 
 The Committee may include one or more of the foregoing events in the applicable Award agreement as permissible events upon the earliest occurrence of which the Participant may exercise or otherwise receive payment in
connection with such Award. 
 (c) Delay for Specified
Employees. Notwithstanding the foregoing, or any provision of this Plan or the terms of an Award agreement to the contrary, a Participant who is a Specified Employee may not exercise or otherwise receive payment under any Award subject to this
subsection 9.2 following his separation from service prior to the earliest of (i) the first day of the seventh (7th) month
following the date of such Participant’s separation from service, (ii) the Participant’s death or (iii) the occurrence of a permissible acceleration event described in paragraph (d) hereof. 
  

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 (d) Prohibited Acceleration. The time at which, or the schedule
pursuant to which, a Participant may exercise or otherwise receive payment in connection with an Award subject to this subsection 9.2 may not be accelerated, except as follows: 
 (i) Income Inclusion under Code Section 409A. If the Award fails to meet the requirements of Section 409A of the Code,
the Participant may receive payment in connection with the Award before the Award would otherwise be paid, provided, however, that the amount paid to the Participant shall not exceed the lesser of (i) the amount payable under such Award or
(ii) the amount to be reported pursuant to Section 409A of the Code on the applicable Form W-2 (or Form 1099) as taxable income to the Participant. 
 (ii) Withholding Purposes. If the Company is required to withhold an amount to pay the Participant’s portion of the Federal
Insurance Contributions Act (FICA) tax imposed under Sections 3101, 3121(a) or 3121(v)(2) of the Code with respect to an amount that is or will be paid to the Participant under the Award before the amount otherwise would be paid, the Committee may
withhold an amount equal to the lesser of: (i) the amount payable under such Award or (ii) the aggregate of the FICA taxes imposed and the income tax withholding related to such amount. 
 An acceleration will not be deemed to have occurred where the time or schedule for receiving payment in connection with an Award is accelerated as the
result of the occurrence of an intervening event that is described in the Award agreement and that constitutes a permissible event described in paragraph (b) (except to the extent otherwise limited in accordance with paragraph
(c)). 
 (e) Delay for Compelling Business Reasons. Notwithstanding any provision of this subsection 9.2 to
the contrary, the date on which a Participant may exercise or otherwise receive payment under an Award subject to this subsection 9.2 may be delayed to a date later than the date specified in the Award agreement; provided such delay satisfies
the requirements of this paragraph (e). 
 (i) Going Concern. In the event the Board determines that the
exercise of the Award or the making of any payment under the Award on the date specified in the Award agreement would jeopardize the ability of the Company to continue as a going concern, the Committee may delay the exercise or payment of the Award
until the first calendar year in which the Board notifies the Committee that the exercise or payment would not have such effect. 
 (ii) Loss of Deduction. In the event the Board determines that the Company’s Federal income tax deduction for benefits recognized or paid under the Award would not be permitted due to the application of Section 162(m) of
the Code, the Committee may delay the date on which the Award would otherwise be exercised or the date on which the payment of such benefits would otherwise be made or commence, provided that the Award is exercised or the payment is made either
(i) in the first taxable year of the Participant in which the Company 

  

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reasonably anticipates (or should reasonably anticipate) that the Federal income tax deduction of such benefit would not be barred by application of
Section 162(m) of the Code or (ii) during the period beginning with the date of the Participant’s separation from service and ending on the later of the last day of the taxable year of the Company in which the Participant’s
separation from service occurred or, if later, the 15th day of the third month following the Participant’s separation from service. In the case
of a Specified Employee, however, the period described in clause (ii) of the immediately preceding sentence shall instead be measured from the first day of the seventh (7th) month following such Participant’s separation from service to the last day of the taxable year of the Company in which such date occurred or, if later, the 15th day of the third month following such date. 
 (iii)
Violation of Securities Laws. In the event the Board reasonably anticipates that the exercise of the Award or the payment or commencement of benefits under the Award will violate Federal securities laws or other applicable law (other than
Section 409A of the Code), the date on which the Award would otherwise be exercised or the date on which the payment of such benefits would otherwise be made or commence may be delayed until the earliest date on which the Board reasonably
anticipates that the exercise of the Award or the making or commencement of such payment would not cause such violation. 
 (f) Administrative Delay in Payment. An Award subject to this subsection
9.2 shall be exercised or paid on the date specified in accordance with the provisions of the foregoing paragraphs of this subsection 9.2; provided that, in the case of administrative necessity, the exercise or payment of such Award may
be delayed up to the later of (i) the last day of the calendar year in which the Award would otherwise be exercised or the payment would otherwise be made or (ii) the 15th day of the third calendar month following the date on which the Award would be exercised or the payment would otherwise be made. Further, if, as a result of events beyond the control of the Participant (or following
the Participant’s death, the Participant’s Designated Beneficiary), it is not administratively practicable for the Committee to calculate the amount of benefits due to such Participant as of the date on which the Award would otherwise be
exercised or payment would otherwise be made, the exercise or payment may be delayed until the first calendar year in which calculation of the amount is administratively practicable. 
 (g) No Participant Election. Notwithstanding the foregoing provisions, if the period during which payment of an Award will be made
occurs, or will occur, in two calendar years, the Participant shall not be permitted to elect the calendar year in which the payment shall be made. 
 SECTION 10. PAYMENTS UNDER AWARDS 
 10.1. Consideration for Shares. Except as otherwise provided in this Plan,
and subject to and in accordance with applicable law, consideration for Shares purchased under Awards may be submitted only in such amounts and at such intervals of time as specified in the applicable Award agreement: 
 (a) by payment to the Company of the amount of such consideration by cash, wire transfer, certified check or bank draft; 
  

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 (b) by execution of a promissory note, to be submitted with a stock power, endorsed in
blank relating to the Shares held as collateral for such note; 
 (c) by “cashless exercise”, pursuant to which the
Company withholds from the Shares that would otherwise be issued upon exercise of an Award that number of Shares with a Fair Market Value equal to the exercise price for the Award; 
 (d) through a broker-dealer acting on behalf of a Participant if (i) the broker-dealer has received a fully and duly endorsed copy of
the Award agreement and a fully and duly endorsed notice of exercise or purchase, along with written instructions signed by such Participant requesting that the Company deliver Shares to the broker-dealer to be held in a designated account on behalf
of such Participant; (ii) adequate provision has been made with respect to the payment of any withholding taxes due upon grant, exercise, or vesting; and (iii) the broker-dealer and such Participant have otherwise complied with applicable
securities laws; 
 (e) through the delivery of unrestricted Shares having a Fair Market Value equal to the Exercise Price and
owned by a Participant for more than six (6) months (or such shorter or longer period of time as is necessary to avoid a charge to earnings on the Company’s financial statements); 
 (f) any combination of one or more methods described herein; or 
 (g) any other consideration deemed acceptable by the Committee, in its sole and absolute discretion. 
 Notwithstanding any provision herein to the contrary, a Participant shall not be permitted to exercise an Incentive Stock Option pursuant to paragraphs (c)—(g)
above unless the Award agreement specifically permits such method of exercise on the date of grant. 
 10.2. Withholding
Requirements. The Plan Administrator shall notify each Participant of any tax withholding obligations arising as a result of the grant, exercise or vesting of an Award. As a condition to a Participant’s exercise of an Award and, if
applicable, the issuance of Shares, the Participant must satisfy the applicable withholding obligation as may be required by law. The amount, as determined by the Committee, of any federal, state or local tax required to be withheld by the Company
due to the grant, exercise, or vesting of an Award must be submitted in such amounts and at such time as specified in the applicable Award agreement: 
 (a) by payment to the Company of the amount of such withholding obligation by cash, wire transfer, certified check or bank draft; 
  

 - 22 - 

 (b) through either the retention by the Company of a number of Shares out of the Shares
being acquired through the Award or the delivery of unrestricted Shares owned by such Participant for more than six (6) months (or such shorter or longer period as is necessary to avoid a charge to earnings on the Company’s financial
statements) and having a Fair Market Value equal to the minimum withholding obligation; or 
 (c) pursuant to a written
agreement between the Participant and the Company authorizing the Company to withhold from such Participant’s regular wages the amount of such withholding tax obligation. 
 If the Participant elects to use and the Committee permits either method described in subsection 10.2(b) herein in full or partial satisfaction of any withholding tax liability resulting from the grant,
exercise or vesting of an Award hereunder, the Company shall remit an amount equal to the Fair Market Value of the Shares so withheld or delivered, as the case may be, to the appropriate taxing authorities. 
 SECTION 11. ISSUANCE OF CERTIFICATES AND SHAREHOLDER RIGHTS 
 11.1. Issuance of Share Certificates. Prior to the issuance of Common Stock hereunder, whether upon grant, exercise, or purchase under the applicable Award, a Participant shall submit the consideration, if any,
required under the applicable Award agreement; payment or other provision for any applicable tax withholding obligations; and all documents to be executed and delivered by such Participant in accordance with the provisions of this Plan and the
applicable Award agreement or as may otherwise be required by the Company or the Committee, including, without limitation, with respect to Restricted Stock, a stock power, endorsed in blank, relating to the Shares covered by such Award. The Company
will evidence the issuance of Shares hereunder by any means appropriate, including, without limitation, book-entry registration or issuance of a duly executed Share certificate in the name of the Participant, provided that stock certificates
evidencing Restricted Stock granted pursuant to this Plan shall be held in the custody of the Company or its duly authorized delegate until the restrictions thereon have lapsed. If certificates are issued, a separate certificate or certificates will
be issued for Shares issued in connection with each type of Award granted to the Participant and, to the extent applicable, shall include a legend giving appropriate notice of the restrictions on the Shares. 
 11.2. Shareholder Rights. No Person shall have any rights as a stockholder of the Company with respect to any Shares of Common Stock subject to an
Award unless and until such Person becomes the holder of record of such Shares pursuant to subsection 11.1 hereof, and except as otherwise provided by subsection 13.1, no adjustment will be made for dividends or other distributions in
respect of such Shares for which the record date is prior to the date on which such Person has become the holder of record. For these purposes, a Participant who receives a grant of Restricted Stock shall become a holder of record as of the grant
date or, if later, the date on which the applicable purchase price is paid, and shall thereafter be entitled to the voting and dividend rights appurtenant to such Shares. 
  

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 SECTION 12. COMPLIANCE WITH SECURITIES AND OTHER LAWS 
 12.1. Securities Laws. As a condition to the issuance or transfer of any Award or any security issuable in connection with such Award, the Company
may require an opinion of counsel, satisfactory to the Company, to the effect that (i) such issuance and/or transfer will not be in violation of the Securities Act or any other applicable securities laws and (ii) such issuance and/or
transfer will not be in violation of the rules and regulations of any securities exchange or automated quotation system on which the Common Stock is listed or admitted to trading. Further, the Company may refrain from issuing, delivering or
transferring any Award or any security issuable in connection with such Award until the Company has determined that such issuance, delivery or transfer will not violate such securities laws or rules and regulations and that the recipient has
tendered to the Company any federal, state or local tax owed as a result of such issuance, delivery or transfer, when the Company has a legal liability to satisfy such tax. The Company shall not be liable for damages due to delay in the issuance,
delivery or transfer of any Award or any security issuable in connection with such Award or any agreement, instrument or certificate evidencing such Award or security for any reason whatsoever, including, but not limited to, a delay caused by the
listing requirements of any securities exchange or automated quotation system or any registration requirements under the Securities Act, the Exchange Act, or under any other state, federal or foreign law, rule or regulation. The Company is under no
obligation to take any action or incur any expense to register or qualify the issuance, delivery or transfer of any Award or any security issuable in connection with such Award under applicable securities laws or to perfect any exemption from such
registration or qualification or to list any security on any securities exchange or automated quotation system. Furthermore, the Company will have no liability to any person for refusing to issue, deliver or transfer any Award or any security
issuable in connection with such Award if such refusal is based upon the foregoing provisions of this subsection 12.1. As a condition to any issuance, delivery or transfer of any Award or any security issuable in connection with such Award,
the Company may place legends on any agreement, instrument or certificate evidencing such Award or security, issue stop transfer orders with respect thereto and require such agreements or undertakings as the Company may deem necessary or advisable
to assure compliance with applicable laws or regulations, including, if the Company or its counsel deems it appropriate, representations from the recipient of such Award or security to the effect that such recipient is acquiring such Award or
security solely for investment and not with a view to distribution and that no distribution of the Award or the security will be made unless registered pursuant to applicable federal, state or foreign securities laws, or in the opinion of counsel to
the Company, such registration is unnecessary. 
 12.2. Code Section 162(m). With respect to any Performance Award granted to a
Covered Participant and for which the Company intends to comply with the requirements of Section 162(m) of the Code (as stated in the applicable Award agreement), the Committee shall establish, in writing, the Performance Goal(s) of the Award
and the method for computing the number of Shares or the amount of compensation payable to the Covered Participant (subject to the limitations set forth in Section 4.2 above) if the Performance Goals are attained, which shall be
established no later than the earlier of (i) the 90th day following the commencement of the relevant Performance Period (provided the outcome is substantially uncertain at the time the Performance Goal is established) and (ii) the date as
of which 25% of the Performance Period has elapsed. Prior to the payment of the compensation under any Performance Award granted to a Covered Participant, the Committee shall certify, in writing, that the Performance Goals and 

  

 - 24 - 

 
any other material terms were, in fact, satisfied by the Covered Participant. The Committee’s discretion to modify or waive the Performance Goal(s) and
any other term of a Performance Award with respect to which the Company intends to comply with the requirements of Code Section 162(m) shall be restricted to the extent required under that section. 
 12.3. Code Section 409A. It is the intent of the Company that the Plan comply in all respects with Section 409A of the Code and that any
ambiguities or inconsistencies in construction of the Plan be interpreted to give effect to such intention. 
 12.4. Toronto Stock
Exchange. This Section 12.4 shall apply for any period during which the Shares are listed on the Toronto Stock Exchange. To the extent any provision of this subsection 12.4 is inconsistent with any other provision of the Plan during such
period, the provisions of this subsection 12.4 shall govern. 
 (a) Limitations on Awards. 
 (i) The maximum number of Shares that may be reserved for issuance pursuant to Awards to or for the benefit of Insiders, together with any
other previously established or proposed share compensation arrangements may not at any time exceed 10% of the outstanding issue. 
 (ii) The maximum number of Shares that may be issued under the Plan to Insiders, together with any other previously established or proposed share compensation arrangements, within any one-year period, may not exceed 10% of the outstanding
issue. 
 For purposes of this subsection 12.4(a), an entitlement to acquire Shares granted under any share
compensation arrangement prior to the person becoming an Insider may be excluded in determining the number of Shares issuable to Insiders. 
 (b) Compliance with Manual. It is the intent of the Company that the Plan shall comply with the applicable requirements prescribed under the Toronto Stock Exchange Company Manual. 
 (c) Approval and Acceptance. This Plan (including any amendment other than an amendment referred to in Section 14) is subject
to the approval of the shareholders of the Company and to the approval or acceptance of any applicable securities regulatory authority or stock exchange, if required. Any Awards granted under this Plan prior to such approval and acceptance, if
necessary, will be conditional upon such approval and acceptance being given and no such Awards may be exercised unless and until such approval and acceptance is given. 
 (d) Surrender of Previous Incentive Awards. The Committee may not grant Awards to Insiders on the condition that such
Insiders surrender for cancellation Awards previously granted without the approval of the Toronto Stock Exchange and, if required by the Toronto Stock Exchange, the Company’s shareholders. 
  

 - 25 - 

 (e) Limitations on Payment with Shares. The Committee may not cancel any Awards
held by Insiders and subsequently regrant such Awards under different terms within three (3) months of the cancellation without the approval of the Toronto Stock Exchange and, if required by the Toronto Stock Exchange, the Company’s
shareholders. 
 SECTION 13. ADJUSTMENTS UPON CHANGES IN SHARES OR CORPORATE TRANSACTION 
 13.1. Capitalization Adjustments. If any change is made in the Common Stock subject to the Plan, or subject to any Award, without the receipt of
consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of Shares, exchange of Shares,
change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan shall be appropriately adjusted in the class(es) and maximum number of Shares available for issuance under the Plan pursuant to
subsection 4.1 and available for issuance under to subsection 4.2, and all outstanding Awards shall be appropriately adjusted in the class(es) and number of Shares and price per Share of Common Stock subject to such outstanding Awards.
The Committee shall make such adjustments, and its determination shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction “without receipt of consideration”
by the Company). 
 13.2. Change in Control. In the event of a Change in Control, unless the Committee determines otherwise, then with
respect to Awards held by Participants whose Continuous Service has not terminated: 
 (a) Notice and Acceleration.
(i) The Company shall provide each Participant written notice of such Change in Control, (ii) all outstanding Stock Options and Stock Appreciation Rights of such Participant shall automatically accelerate and become fully exercisable, and
(iii) the restrictions and conditions on all outstanding Restricted Stock and other Awards held by such Participant shall immediately lapse. 
 (b) Assumption of Grants. Upon a Change in Control where the Company is not the surviving corporation (or survives only as a subsidiary of another corporation), unless the Committee determines otherwise, all
outstanding Stock Options and Stock Appreciation Rights that are not exercised shall be assumed or replaced with comparable options or rights, by the surviving corporation. 
 (c) Other Alternatives. Notwithstanding the foregoing, in the event of a Change in Control, the Committee may take one or both of
the following actions: the Committee may (i) require that Participants surrender their outstanding Stock Options and Stock Appreciation Rights in exchange for a payment by the Company, in cash or Common Stock as determined by the Committee, in
an amount equal to the amount by which the then Fair Market Value of the shares of Common Stock subject to the Participant’s unexercised Stock Options and Stock Appreciation Rights exceeds the exercise price of the Stock Options, or the Fair
Market Value of the Stock Appreciation Rights on the Award date, as applicable, or (ii) after giving Participants an opportunity to 

  

 - 26 - 

 
exercise their outstanding Stock Options and Stock Appreciation Rights, terminate any or all unexercised Stock Options and Stock Appreciation Rights at such
time as the Committee deems appropriate. Such surrender or termination shall take place as of the date of the Change in Control or such other date as the Committee may specify. 
 13.3. Permitted Modifications Upon Changes in Shares or Change in Control. Notwithstanding any provision of this Section 13 to the
contrary, no Stock Option or Stock Appreciation Right may be substituted or assumed in connection with a capitalization adjustment described in subsection 13.1 or a Change in Control described in subsection 13.2 unless such
substitution or assumption complies with the requirements of Treasury Regulations Section 1.424-1. 
 SECTION 14. AMENDMENT OR
TERMINATION 
 The Board may, at any time, suspend or terminate the Plan and such suspension or termination may be retroactive or
prospective. Termination of this Plan shall not impair or affect any Award previously granted hereunder and the rights of the holder of the Award shall remain in effect until the Award has been exercised in its entirety or has expired or otherwise
has been terminated by the terms of such Award. Absent any prior action by the Board to terminate or suspend the Plan, the Plan shall automatically terminate on the Expiration Date. Except to the extent otherwise provided in Section 12.4(c),
the Board may also at any time, without shareholder approval, add to, repeal or otherwise amend any of the terms of the Plan or any Awards and, without limiting the generality of the foregoing, may make the following changes, deletions, revisions or
amendments (“amendments”), subject to the approval or acceptance of any applicable securities regulatory authority or stock exchange, if required: 
  

	 	(a)	any amendment to the vesting provisions of the Plan or any Award; 

  

	 	(b)	any amendment to the termination provisions of the Plan or any Award, provided that such amendment does not entail an extension beyond the expiry date of the Award or extend the
term of the Plan beyond the Expiration Date; 

  

	 	(c)	any amendment to the Persons eligible to receive Awards or otherwise relating to the eligibility of anyone to receive Awards other than an amendment that would have the potential of
broadening or increasing insider participation, which amendment shall require shareholder approval; 

  

	 	(d)	any amendment with respect to the method or manner of exercise of any Award; 

  

	 	(e)	any amendment of a “housekeeping” nature; and 

  

	 	(f)	any other amendment that under the rules of the Toronto Stock Exchange (or such other stock exchange on which the Shares may be listed) does not require shareholder approval;

 provided that no such addition, repeal, or amendment shall in any manner materially adversely affect the rights of any Participant under any
Awards theretofore granted under the Plan without such Participant’s consent. This Section 14 is intended to provide the Board with the broadest 

  

 - 27 - 

 
scope of amendment powers permitted by the rules of the Toronto Stock Exchange (or such other stock exchange on which the Shares may be listed), as such
rules may be amended from time to time. 
 Notwithstanding the foregoing, no amendment shall increase the number of Shares reserved for
issuance under the Plan as an Incentive Stock Option (other than in accordance with an adjustment pursuant to subsection 13.1 hereof), change the Employees or group of Employees eligible to receive Incentive Stock Options, or change the
identity of the granting company or the Shares issued upon exercise of Incentive Stock Options, unless such amendment is approved by the shareholders of the Company within twelve (12) months before or after the adoption of such amendment.

 SECTION 15. GENERAL PROVISIONS 
 15.1. No Limit on Other Compensation Arrangements. Nothing contained in this Plan shall prevent the Company from adopting or continuing in effect other compensation arrangements, and such arrangements may be either generally
applicable or applicable only in specific cases. 
 15.2. No Right to Employment or Continuation of Relationship. Nothing in this Plan
or in any Award, nor the grant of any Award, shall confer upon or be construed as giving any Participant any right to remain in the employ of the Company or an Affiliate or to continue as a Consultant or Director. Further, the Company or an
Affiliate may at any time dismiss a Participant from employment or terminate the relationship of any Consultant or Director with the Company or any Affiliate, free from any liability or any claim pursuant to this Plan, unless otherwise expressly
provided in this Plan or in any agreement evidencing an Award made under this Plan. No Consultant, Director or Employee of the Company or any Affiliate shall have any claim to be granted any Award, and there is no obligation for uniformity of
treatment of any Consultant, Director or Employee of the Company or any Affiliate or of any Participants. 
 15.3. GOVERNING LAW. THE
VALIDITY, CONSTRUCTION AND EFFECT OF THIS PLAN AND ANY RULES AND REGULATIONS RELATING TO THIS PLAN SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. 

15.4. Severability. If any provision of this Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any individual or Award, or would disqualify this Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable law, or if it cannot be
construed or deemed amended without, in the sole determination of the Committee, materially altering the intent of this Plan or the Award, such provision shall be stricken as to such jurisdiction, individual or Award and the remainder of this Plan
and any such Award shall remain in full force and effect. 
 15.5. No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to this Plan. If an Award vests or becomes exercisable with respect to a fractional Share, such installment will instead be rounded to the next highest whole number of Shares, except for the 

  

 - 28 - 

 
final installment, which will be for the balance of the total Shares subject to the Award. If a fractional Share is granted under an Award, the Committee
shall pay cash to Participant in an amount equal to the proportional Fair Market Value of such fractional Share in lieu of any such fractional Share, and any rights with respect to such fractional Share shall be cancelled, terminated and otherwise
eliminated. 
 15.6. Headings. Headings are given to the Sections and subsections of this Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision thereof. 
 15.7. Code Section 83(b) Elections. Neither the Company nor any Affiliate has any responsibility for a Participant’s election, attempt to elect or failure to elect to include the value of an Award
subject to Section 83 of the Code in the Participant’s gross income for the year in which the Shares are transferred to the Participant. Any Participant who makes an election pursuant to Section 83(b) will promptly provide the
Committee with a copy of the election form. 
 15.8. No Limitation Upon the Rights of the Company. The grant of an Award pursuant to
this Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, or changes of its capital or business structure; to merge, convert or consolidate; to dissolve or liquidate; or sell or transfer all or
any part of its business or assets. 
 15.9. Indemnification. The Company shall indemnify each present and future member of the
Committee or the Board acting in its capacity as Plan administrator, as well as any officer or employee acting at the direction of the Plan administrator or its authorized delegate, for all expenses (including the amount of judgments and the amount
of approved settlements made with a view to the curtailment of costs of litigation, other than amounts paid to the Company itself) reasonably incurred by him in connection with or arising out of any action, suit, or proceeding in which he may be
involved by reason of his performance of services in connection with the administration of this Plan, whether or not he continues to perform such services at the time of incurring such expenses; provided, however, that such indemnity shall not
include any expenses incurred by such individual (a) in respect of matters as to which he shall be finally adjudged in any such action, suit, or proceeding to have been guilty of gross negligence or willful misconduct in the performance of his
duties hereunder or (b) in respect of any matter in which any settlement is effected in an amount in excess of the amount approved by the Company on the advice of its legal counsel. The foregoing right of indemnification shall inure to the
benefit of the heirs, executors, or administrators of the estate of each such member of the Committee or the Board, as well as any employee acting at the direction of the Plan administrator or its authorized delegate, and shall be in addition to all
other rights to which such member, officer or employee shall be entitled as a matter of law, contract, or otherwise. 
 15.10. General
Assets. The proceeds to be received by the Company upon exercise of any Award or purchase of Shares pursuant to any Award will constitute general assets of the Company and may be used for any proper purposes. 
 15.11. No Assignment or Alienation. Any attempted assignment, transfer, pledge, hypothecation or other disposition of an Award or Shares issued in
connection with an Award contrary to the provisions of this Plan, the applicable Award Agreement, or the levy of any execution, attachment or similar process upon an Award or Shares issued in connection with an Award shall be null and void and
without effect. 
  

 - 29 - 

 15.12. No Limit on Other Compensation Arrangements. Nothing contained in this Plan
shall prevent the Company from adopting or continuing in effect other compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases. 
 15.13. Repricing. Notwithstanding any provision in this Plan to the contrary, repricing of Stock Options and Stock Appreciation Rights shall not
be permitted. For this purpose, a repricing means any of the following (or any other action that has the same effect as any of the following): (i) changing the terms of a Stock Option or a Stock Appreciation Right to lower its exercise price;
(ii) any other action that is treated as a repricing under generally accepted accounting principles; and (iii) canceling a Stock Option or Stock Appreciation Right at a time when its exercise price is equal to or greater than the fair
market value of the underlying Shares in exchange for another Stock Option, Stock Appreciation Right, Restricted Shares or other equity award. Such cancellation and exchange would be considered a repricing regardless of whether it is treated as a
repricing under generally accepted accounting principles and regardless of whether it is voluntary on the part of the Participant. 
 15.14.
Qualification of Plan. This Plan is not intended to be, and shall not be, qualified under Section 401(a) of the Code. 
 15.15.
Compliance within Jurisdiction. Notwithstanding any provision herein to the contrary, this Plan shall not be effective in any jurisdiction, and no Awards shall be granted to residents thereof, unless the Plan has been properly qualified under
the applicable securities laws, if any, of such jurisdiction. 
 15.16. Gender and Number. In construing the Plan, any
masculine terminology herein shall also include the feminine, and the definition of any term herein in the singular shall also include the plural, except when otherwise indicated by the context. 
 15.17. Extension of Exercise Period. Notwithstanding any provision herein to the contrary, and only to the extent that extension would not result
in characterization of an Award as deferred compensation under Section 409A of the Code, if the period during which an Award may otherwise be exercised hereunder expires during or within ten business days after a black out period imposed by the
Company under the Company’s Insider Trading Policy (a “Black Out Period”), then the period during which such Award may be exercised shall be extended to the date that is ten business days after the last day of such Black Out
Period, after which time such Award shall expire and terminate. 
 15.18. Company’s Right to Issue Other Shares. The Company
shall not by virtue of the Plan be in any way restricted from declaring and paying stock dividends, issuing further Shares or other securities, varying or amending its share capital or corporate structure, establishing other or additional security
based compensation arrangements, or conducting its business in any way whatsoever; provided, however, that the number of the Company’s securities issued to insiders of the Company, within any one year period, and issuable to insiders of the
Company, at any time, under the Plan, or when combined with all of the Company’s other security based compensation arrangements, shall not exceed 10% of the Company’s total issued and outstanding securities. 
  

 - 30 -Employment Agreement with John Crisp

 Exhibit 10.2 
 EMPLOYMENT AGREEMENT 
 THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as
of the 1st day of May, 2008, but is effective as of the Commencement Date (as hereinafter defined), by and between Forbes Energy Services LLC, a Delaware limited liability company (the “Employer”), and John E. Crisp, residing at 588 CR
101, George West, Texas 78022 (the “Employee”). 
 WITNESSETH: 
 1. Employment. Employer has employed and hereby continues to employ Employee, and Employee hereby accepts such continued employment, upon the
terms and subject to the conditions set forth in this Agreement. Employee shall be employed by Employer but may serve (and if requested by Employer shall serve) as an officer and/or director of its parent, Forbes Energy Services Ltd
(“Parent”), or any subsidiary or affiliate of Employer or Parent. 
 2. Term. The term of employment under this Agreement
shall commence on May 1, 2008 (the “Commencement Date”) and shall continue through April 30, 2011; provided, however, that beginning on May 1, 2009, and on every May 1 thereafter (each a “Renewal
Date”), the then existing term of this Agreement shall automatically be extended one additional year unless either party gives the other written notice of termination at least ninety (90) days prior to any such Renewal Date. Written notice
by Employer shall be solely pursuant to a duly adopted resolution of Employer’s or Parent’s board of directors. Following the date of termination of employment, Employee shall have no further rights, including but not limited to rights
under Section 8, or obligations hereunder, except obligations set forth in Sections 11 and 12. 
 3. Compensation and
Benefits. 
 (a) Employer shall pay to Employee as compensation for all services rendered by Employee a basic annualized salary of
$500,000.00 during the initial three (3) year term of this Agreement (the “Basic Salary”), or such other sums as the parties may agree on from time to time, payable semi-monthly or in other more frequent installments, as determined by
the Board (as hereinafter defined). The compensation committee of the board of directors of Parent (the “Compensation Committee”), by providing direction through the board of directors of Employer (collectively, the board of directors of
Parent, the Compensation Committee and the board of directors of Employer are referred to as the “Board”) shall have the right to increase Employee’s compensation from time to time and Employee shall be entitled to an annual review
thereof or more frequently as determined by the Board. In addition, the Board, in its discretion, may, with respect to any year during the term hereof, award a bonus or bonuses to Employee; provided, however, Employer shall annually provide
Employee with a bonus based on the terms to be determined by the Compensation Committee. Such terms shall be more particularly described in Appendix “A” to be attached hereto. Appendix “A” may be modified, supplemented, or
replaced from time to time as determined by the Compensation Committee and established by written agreement between Employer and Employee for the purpose of defining the then current bonus calculation methodologies from the applicable year(s). The
compensation provided for in this Section 3(a) shall be in addition to any pension or profit sharing payments set aside or allocated for the benefit of Employee in either a tax qualified plan or otherwise. 

 It is the intention of the parties that an Appendix “B” will be approved by the Board and
signed by the Chairman of the Compensation Committee and the Employee no later than June 30 of each calendar year (or portion thereof) covered by this Agreement, as amended. In the absence of an approval by the Compensation Committee of such an
Appendix “B” for any year (or portion thereof), the Appendix “B” for the prior year will remain in full force and effect. 
 (b) Employer shall reimburse Employee for all reasonable expenses incurred by Employee in the performance of his duties under this Agreement; provided, however, that Employee must furnish to Employer an itemized account, satisfactory
to Employer, in substantiation of such expenditures. 
 (c) Employee shall be entitled to such fringe benefits including, but not limited to,
medical and family insurance benefits as may be provided from time to time by Employer to other senior officers of Employer; provided, however, that any health insurance shall not provide for a preexisting condition limitation, and,
provided further, that during the term of this Agreement, such fringe benefits shall always be equal to, at a minimum, the maximum fringe benefits provided in a particular year to any other officer of Employer or Parent other than with
respect to the grant of an award under any Incentive Compensation Plan of Employer. 
 (d) To the extent permitted by applicable law and
terms of the benefit plans, Employer shall include in Employee’s credited service, in any case where credited service is relevant in determining eligibility for or benefits under any employee benefits plan, the Employee’s service for any
parent, subsidiary or affiliate of Employer or for any predecessor thereof and time served at prior employers. 
 (e) Employer shall provide
Employee with a vehicle or auto allowance during the term of the Agreement as approved by the President and Chief Executive Officer. Employer will also pay for auto insurance, maintenance and fuel, unless such auto allowance is set to cover
insurance and maintenance. Employee may use the automobile for personal use and will pay all taxes related to such personal use. 
 (f)
Employee shall be eligible to participate in such incentive compensation and stock option plans that have been approved or may in the future be approved by the shareholders of Parent or Employer and administered by the Board. 
 4. Duties. Employee is engaged and shall serve as President and Chief Executive Officer of (i) Parent, (ii) Employer and (iii) any
other direct or indirect subsidiaries of Parent that may be formed or acquired. In addition, Employee shall have such other duties and hold such other offices as may from time to time be reasonably assigned to him by the Board. These services shall
be provided from offices located in Alice, Texas or such other location as may be mutually agreed. 
  

 2 

 5. Extent of Services; Vacations and Days Off. 
 (a) During the term of his employment under this Agreement, Employee shall devote substantially his full business time, energy and attention to the
benefit and business of Employer as may be necessary in performing his duties pursuant to this Agreement, subject to the proviso in the following sentence. Employee shall not provide services of a business nature to any other person other than that
which has been disclosed and permitted by the Employer, including Permitted Activities under Section 12(e). 
 (b) Employee shall be
entitled to vacations and holidays with pay and to such personal and sick leave with pay in accordance with the policy of Employer as may be established from time to time by Employer and applied to other senior officers of Employer; provided,
however, that Employee shall annually be entitled to the maximum number of vacation days and holidays afforded to any other officer of Employer or Parent. 
 6. Facilities. Employer shall provide Employee with a fully furnished office of no less stature, type, and size than was provided as of the effective date of this Agreement, and the facilities of Employer shall
be generally available to Employee in the performance of his duties pursuant to this Agreement; it being understood and contemplated by the parties that all equipment, supplies and office personnel required for Employee’s performance of duties
under this Agreement shall be supplied by Employer. 
 7. Illness or Incapacity, Termination on Death. 
 (a) If during the term of his employment Employee becomes permanently disabled, as defined below, or dies, Employer shall pay to the Employee or his
estate compensation through the date of death or determination of permanent disability, including salary, any prior year bonus compensation earned but not yet paid and the pro-rated portion of any current year bonus as and when determined in the
ordinary course of the calculation of current year bonus due to other executive officers of Employer. Employer shall continue to provide medical insurance and other benefits to which Employee’s dependents would otherwise have been entitled for
one year following the date of death or determination of permanent disability. Effective upon the date of death or determination of permanent disability, any and all options, rights or awards granted in conjunction with Parent’s or
Employer’s incentive compensation and stock option plans shall immediately vest. Except for the benefits set forth in the preceding sentences and any life insurance benefits included in the benefit package provided at such time by Employer to
Employee, Employer shall have no additional financial obligation under this Agreement to Employee or his estate. After receiving the payments and health insurance benefits provided in this subparagraph (a), Employee and his estate shall have no
further rights under this Agreement. 
 (b) 
 (i) During any period of disability, illness or incapacity during the term of this Agreement that renders Employee at least temporarily unable to perform the services required under this Agreement for a period that
shall not equal or exceed ninety (90) continuous days (provided that a return to full work status of less than five full days shall be deemed not to interrupt the calculation of such 90 days), Employee shall receive the 

  

 3 

 
compensation payable under Section 3(a) of this Agreement plus any bonus compensation earned through the last day of such ninety (90) day period
but not yet paid, less any benefits received by him under any disability insurance carried by or provided by Employer. All rights of Employee under this Agreement (other than rights already accrued) shall terminate as provided below upon
Employee’s permanent disability (as defined below), although Employee shall continue to receive any disability benefits to which he may be entitled under any disability income insurance that may be carried by or provided by Employer from time
to time; Employer hereby agrees to provide such insurance on a same occupation basis. 
 (ii) The terms “permanently
disabled” and “permanent disability” as used in this Agreement shall mean that Employee is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for
a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under any long term disability plan maintained by Employer that covers Employee. In the absence
of such a long term disability plan, “permanently disabled” and “permanent disability” shall mean that Employee is unable to engage in any substantial gainful activity for a period of at least ninety (90) days in any
one-year period by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. In the event Employee becomes
“permanently disabled,” the Board may terminate Employee’s employment under this Agreement upon ten (10) days’ prior written notice. If any determination with respect to “permanent disability” is disputed by
Employee, the parties hereto agree to abide by the determination with respect to “permanent disability” of a panel of three physicians. Employee and the Board shall each appoint one member, and the third member of the panel shall be
appointed by the other two members. Employee agrees to make himself available for and submit to examinations by such physicians as may be directed by the Board. Failure to submit to any such examination shall constitute a breach of a material part
of this Agreement. 
 8. Other Terminations. 
 (a) 
 (i) Employee may terminate his employment hereunder for any reason whatsoever upon
giving at least thirty (30) days’ prior written notice. In addition, Employee shall have the right to terminate his employment hereunder on the conditions and at the times provided for in Section 8(d) of the Agreement. 
 (ii) If Employee gives notice pursuant to Section 8(a)(i) above, Employer shall have the right to relieve Employee, in whole or in
part, of his duties under this Agreement (without reduction in compensation through the termination date). 
  

 4 

 (b) 
 (i) Except as otherwise provided in this Agreement, Employer may terminate the employment of Employee hereunder only for “good cause” (as defined below) and upon written notice. 
 (ii) As used herein, “good cause” shall mean: 
 (1) Employee’s conviction of either a felony involving moral turpitude or any crime in connection with his employment by Employer
that causes Employer a substantial detriment, but specifically shall not include traffic offenses; 
 (2) actions or inactions
by Employee that clearly are contrary to the best interests of Employer; 
 (3) Employee’s willful failure to take
actions permitted by law and necessary to implement policies of the Board that the Board has communicated to him in writing, provided that such policies that are reflected in minutes of a Board meeting attended in its entirety by Employee shall be
deemed communicated to Employee; 
 (4) Employee’s continued failure to devote substantially his full business time,
energy and attention to his duties as an executive officer of Employer or its affiliates as contemplated in Section 5(a) above, following written notice from the Board to Employee of such failure; or 
 (5) any condition that either resulted from Employee’s current substantial dependence on alcohol, or any narcotic drug or other
controlled or illegal substance. If any determination of substantial dependence is disputed by Employee, the parties hereto agree to abide by the decision of a panel of three physicians appointed in the manner specified in Section 7(b)(ii) of
this Agreement. 
 (6) With respect to (2) through (5) above, such circumstances shall not constitute “good
cause” unless Employee has failed to cure such circumstances within 10 business days following written notice thereof from the Board identifying in reasonable detail the manner in which the Employer believes that Employee has not performed such
duties and indicating the steps Employer requires to cure such circumstances. 
 (iii) Termination of the employment of
Employee for reasons other than those expressly specified in this Agreement as good cause shall be deemed to be a termination of employment “without good cause.” 
 (c) 
 (i) If Employer shall
terminate the employment of Employee without good cause effective on a date earlier than the termination date provided for in Section 2 (with the effective date of termination as so identified by Employer being referred to herein as 

  

 5 

 
the “Accelerated Termination Date”), Employee shall continue to receive, until the termination date provided for in Section 2, the salary and
other compensation and benefits specified in Section 3, in each case in the amount and kind and at the time provided for in Section 3 (provided, however, that if such benefits are not available under Employer’s benefit plans or
applicable law, Employer shall be responsible for the cost of providing equivalent benefits); provided that, bonuses for each calendar year till the termination date shall be paid based on the greater of (x) the amount equal to the total
bonus paid for the last completed year for which bonuses have been paid or (y) the amount equal to the bonuses that would have been payable for the then current year (or, in the case of an Accelerated Termination Date that occurs between
January 1 of any year and the date that bonuses are paid based on the previous year, such previous year), determined on a basis consistent with the last completed year for which bonuses have been paid but using the projected bonus amounts for
the then current year (or, in the case of an Accelerated Termination Date that occurs between January 1 of any year and the date that bonuses are paid based on the previous year, such previous year) determined by extrapolating the information
as of the Accelerated Termination Date based on the best information available at the time of the calculation; provided further that, notwithstanding such termination of employment, Employee’s covenants set forth in Sections 11 and
12 shall remain in full force and effect. If Employee shall violate any of the provisions of Sections 10, 11 or 12 at any time prior to the expiration of one year after the termination of Employee’s employment with Employer, then, in addition
to its other rights and remedies, Employer shall have the right to terminate all further payments of compensation or benefits to Employee, and shall have no further obligation therefor.  
 (ii) If Employer shall terminate the employment of Employee without good cause effective on a date earlier than the termination date
provided for in Section 2, any and all options, rights or awards granted in conjunction with Parent’s or Employer’s incentive compensation and stock option plans (other than awards subject to performance criteria) shall immediately
vest. 
 (iii) The parties agree that, because there can be no exact measure of the damage that would occur to Employee as a
result of a termination by Employer of Employee’s employment without good cause, the payments and benefits paid and provided pursuant to this Section 8(c) shall be deemed to constitute liquidated damages and not a penalty for
Employer’s termination of Employee’s employment without good cause, and Employer agrees that Employee shall not be required to mitigate his damages. 
 (d) 
 (i) If a Change in Control of Employer, as defined in Section 8(d)(ii) shall
occur, and Employee shall: 
 (1) voluntarily terminate his employment within one year following such Change in Control and
such termination shall be as a result of Employee’s good faith determination that Employer: 
 (A) has after the Change
in Control reduced Employee’s annual base salary or potential bonus level or any incentive compensation or equity incentive compensation plan benefit (as in effect immediately before such Change in Control); 
  

 6 

 (B) has relocated Employee’s office to a location that is more than 10 miles from
the location in which Employee principally works for Employer or Parent immediately before such Change in Control; 
 (C) has
relocated the principal executive office of Parent, Employer or the office of Employer’s operating group for which Employee performed the majority of his services for Employer during the year before the Change in Control to a location that is
more than 10 miles from the location of such office immediately before such Change in Control; 
 (D) has required Employee,
in order to perform duties of substantially equal status to those duties Employee performed immediately before the Change in Control, to travel on Employer’s business to a substantially greater extent than is consistent with Employee’s
travel obligations immediately before such Change in Control; 
 (E) has failed to continue to provide Employee with benefits
substantially equivalent to those enjoyed by Employee under any of Employer’s life insurance, medical, health and accident or disability plans and incentive compensation or equity incentive compensation plans in which Employee was participating
immediately before the Change in Control; 
 (F) has taken any action that would directly or indirectly materially reduce any
of such benefits or deprive Employee of any material fringe benefit enjoyed by Employee immediately before the Change in Control; 
 (G) has failed to provide Employee with at least the number of paid vacation days to which Employee is entitled on the basis of years of service under Employer’s normal vacation policy in effect immediately before the Change in Control
giving credit for time served at Employer or Parent; 
 (2) voluntarily terminate his employment within one year following
such Change in Control and such termination shall be as a result of Employee’s good faith determination that as a result of the Change in Control and a change in circumstances thereafter significantly affecting his position other than those
listed in Section 8(d)(i)(1) above, he can no longer adequately exercise the authorities, powers, functions or duties attached to his position as an executive officer of Employer, Parent or any of their affiliates; 
  

 7 

 (3) voluntarily terminate his employment within one year following such Change in
Control, and such termination shall be as a result of Employee’s good faith determination that he can no longer perform his duties as an executive officer of Employer, Parent or any of their affiliates by reason of a substantial diminution in
his responsibilities, status, title or position; or 
 (4) have his employment terminated by Employer for reasons other than
those specified in Section 8(b)(ii) within one (1) year following such Change in Control; 
 then in any of the above four cases,
Employee shall have, instead of the rights described in Section 3(a), the right to immediately terminate this Agreement and receive from Employer, within fifteen business days following the date Employee notifies Employer of his constructive or
voluntary termination pursuant to this Section 8(d)(i)(1), (2) or (3) or within three business days of having his employment terminated under 8(d)(i)(4) above, (A) a lump sum cash payment equal to three times the amount of
Employee’s Basic Salary with respect to the year in which such termination has occurred plus three times the greater of (x) the amount equal to the total bonus paid for the last completed year for which bonuses have been paid or
(y) the amount equal to the bonuses that would have been payable for the then current year (or, in the case of termination date that occurs between January 1 of any year and the date that bonuses are paid based on the previous year), such
previous year determined on a basis consistent with the last completed year for which bonuses have been paid but using the projected bonus amounts for the then current year (or, in the case of a termination date that occurs between January 1 of
any year and the date that bonuses are paid based on the previous year, such previous year), determined by extrapolating the information as of the termination date based on the best information available at the time of the calculation; provided,
however, that if Employee for any reason did not receive a bonus in the immediately preceding year and would not have been eligible for a bonus under (y) of the previous clause, Employee shall be deemed for purposes of this
Section 8(d)(i) to have received a bonus in the amount of one-fourth of his annual Basic Salary for such year, and (B) medical plan coverage and other insurance benefits provided for himself and his spouse and dependents (to the extent his
spouse and dependents are covered under the medical plan and other insurance benefits as of the date of Employee’s termination of employment) for a period of three (3) years following the date of Employee’s termination of employment
(provided, however, that if such benefits are not available under Employer’s benefit plans or applicable laws, Employer shall be responsible for the cost of providing equivalent benefits), and (C) any and all options, rights or awards
(including restricted stock awards and restricted stock unit awards) granted in conjunction with the Parent’s or Employer’s incentive compensation or equity incentive compensation plans shall immediately vest. Employee shall not be
required to mitigate the amount of any payment provided for in this Section 8(d)(i) by seeking other employment or otherwise. Without duplication with the provisions under Section 9, to the extent the provision of any such medical benefits
are taxable to Employee or his spouse or dependents, Employer shall “gross up” Employee for such taxes based on Employee’s actual tax rate (certified to Employer by Employee), up to 35% (without a “gross up” on the initial
gross up). The obligation to provide this medical plan coverage shall terminate in the event Employee becomes employed by 

  

 8 

 
another employer that provides a medical plan that fully covers Employee and his dependents without a preexisting condition limitation. Employee shall be
eligible for payments pursuant to this Section 8(d) if Employee complies with the terms of Sections 11 and 12 of this Agreement. 
 (ii) For purposes of this Agreement, a “Change in Control” shall mean: 
 (1) the
obtaining by any person or persons acting as a group of fifty percent (50%) or more of the voting shares of Parent pursuant to a “tender offer” for such shares as provided under Rule 14d-2 promulgated under the Securities Exchange Act
of 1934, as amended, or any subsequent comparable federal rule or regulation governing tender offers; or 
 (2) a majority of
the members of the Parent’s board of directors is replaced during any twelve (12) month period by new directors whose appointment or election is not endorsed by a majority of the members of the Parent’s board of directors before the
date of such new directors’ appointment or election; or 
 (3) any person, or persons acting as a group, acquires (or has
acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Parent that have a total gross fair market value equal to or more than seventy-five percent (75%) of
the total gross fair market value of all of the assets of the Parent immediately before such acquisition or acquisitions (other than transfers to related persons as defined in Section 1.409A-3(i)(5)(vii)(B) of the Treasury Regulations).

 The determination of whether a Change in Control has occurred shall be made in accordance with Section 409A of the Code (as defined
below), and the Treasury Regulations and other guidance issued thereunder. 
 (iii) The provisions of Section 8(c) and
this Section 8(d) are mutually exclusive; provided, however, that if within one year following commencement of a Section 8(c) payout there shall be a Change in Control as defined in Section 8(d)(ii), then Employee shall be
entitled to the greater of the amounts payable to Employee under Sections 8(c) or 8(d)(i) reduced by the amount that Employee has previously received under Section 8(c) up to the date of the Change in Control. The triggering of the lump
sum payment requirement of this Section 8(d) shall cause the provisions of Section 8(c) to become inoperative. The triggering of the continuation of payment provisions of Section 8(c) shall cause the provisions of Section 8(d) to
become inoperative except to the extent provided in this Section 8(d)(iii). 
 (e) If the employment of Employee is terminated for good
cause under Section 8(b)(ii) of this Agreement, or if Employee voluntarily terminates his employment by written notice to Employer under Section 8(a) of this Agreement without reliance on Section 8(d), Employer shall pay to Employee
any compensation earned but not paid to Employee prior to the effective date of such termination. Under such circumstances, such 

  

 9 

 
payment shall be in full and complete discharge of any and all liabilities or obligations of Employer to Employee hereunder, and Employee shall be entitled
to no further benefits under this Agreement. Employee must, however, still comply with the obligations set forth in Sections 11 and 12 of this Agreement. 
 9. Gross-Up Payment. 
 (a) In the event that it shall be determined (as hereafter provided) that any
payment by Employer to or for the benefit of Employee, whether paid or payable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation
any equity incentive compensation plan, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (collectively, a “Payment”), would be subject to the excise tax imposed by Section 4999
of the Internal Revenue Code of 1986, as amended (the “Code”), or any successor provision thereto, by reason of being considered “contingent on a change in ownership or control” of Employer, within the meaning of
Section 280G of the Code, or any successor provision thereto, or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being
hereafter collectively referred to as the “Excise Tax”), then Employee shall be entitled to receive an additional payment or payments (collectively, the “Gross-Up Payment”). The Gross-Up Payment shall be in an amount such that
after payment by Employee of all taxes including any Excise Tax (and including any interest or penalties imposed with respect to such taxes and the Excise Tax, other than interest and penalties imposed by reason of Employee’s failure to file
timely a tax return or pay taxes shown due on Employee’s return) imposed upon the Gross-Up Payment, the amount of the Gross-Up Payment retained by Employee is equal to the Excise Tax imposed upon the Payment. 
 (b) All determinations required to be made under this Section 9, including whether an Excise Tax is payable by Employee and the amount of such
Excise Tax and whether a Gross-Up Payment is required to be paid by Employer to Employee and the amount of such Gross-Up Payment, if any, shall be made in good faith by a nationally recognized accounting firm (the “Accounting Firm”)
selected by Employer at Employer’s expense. For purposes of determining the amount of the Gross-Up Payment the Accounting Firm may use reasonable assumptions and approximations with respect to applicable taxes and may rely on reasonable good
faith interpretations of the Code for such purposes. Notwithstanding the foregoing, for purposes of determining the amount of the Gross-Up Payment Employee shall be deemed to pay federal income tax at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of Employee’s residence on the date on which the Gross-Up Payment is
calculated for purposes of this section, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. The Accounting Firm will provide its determination (the “Determination”),
together with detailed supporting calculations and documentation, to Employer and Employee within five days of the date Executive terminates employment, if applicable, or such other time as requested by Employer or by Employee (provided Employee
reasonably believes that any of the Payments may be subject to the Excise Tax). If the Accounting Firm determines that there is substantial authority, within the meaning of Section 6662 of the Code, or appropriate authority under any 

  

 10 

 
successor provisions, that no Excise Tax is payable by Employee, the Accounting Firm shall furnish Employee with a written opinion that failure to disclose
or report the Excise Tax on Employee’s federal income tax return will not constitute a substantial understatement of tax or be reasonably likely to result in the imposition of a negligence or similar penalty. Any determination by the Accounting
Firm shall be binding upon Employer, absent manifest error. Within ten days of the delivery of the Determination to Employee, Employee will have the right to dispute the Determination (the “Dispute”). The Gross-Up Payment, if any, as
determined pursuant to this Section will be paid by Employer to Employee within five days of the receipt of the Determination. The existence of the Dispute will not in any way affect Employee’s right to receive the Gross-Up Payment in
accordance with the Determination. If there is no Dispute, the Determination will be binding, final and conclusive upon Employer and Employee, subject to the application of Section 9(c). 
 (c) As a result of the uncertainty in the application of Section 4999 of the Code, at the time of the initial determination by the Accounting Firm
hereunder it is possible that part or all of the Gross-Up Payment that should have been made by Employer to Employee will not have been made (“underpayment”), or that part or all of the Gross-Up Payment that has been made by Employer to
Employee should not have been made (“overpayment”). If a claim regarding an underpayment is made by Employee, Employer may either increase the Gross-Up Payment by the amount of the claimed underpayment, or Employer may contest such claim
subject to the provisions of this Agreement. If a claim regarding an underpayment is made by the Internal Revenue Service (the “Service”), and such underpayment claim does not arise as a result of Employee’s failure to remit to the
Service any Excise Tax due on any Payment, then Employer may either increase the Gross-Up Payment by the amount of the claimed underpayment, or Employer may contest such claim. If Employer decides to contest the claim, Employer shall bear and pay
directly the costs and expenses (including additional interest and penalties) incurred in connection with such contest, including advancing to Employee any funds necessary to pay the claim while it is being contested, and shall indemnify and hold
Employee harmless on an after-tax basis for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such underpayment claim. In such case, Employee agrees to cooperate with and assist Employer in
contesting such claim. In the event that Employer exhausts its remedies and Employee is required to make a payment of any Excise Tax in regard to an underpayment, the Accounting Firm shall determine the amount of the underpayment that has occurred
and any such underpayment shall be promptly paid by Employer to or for Employee’s benefit, if not already paid during the process of contesting the claim. In the case of an overpayment, Employee shall, at the direction and expense of Employer,
take such steps as are reasonably necessary (including the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by, Employer, and otherwise reasonably cooperate with Employer to correct such
overpayment; provided, however, that (i) Employee shall not in any event be obligated to return to Employer an amount greater than the net after-tax portion of the overpayment that he has retained or has recovered as a refund from the
applicable taxing authorities, and (ii) this provision shall be interpreted in a manner consistent with the intent of this Section 9, which is to make Employee whole, on an after-tax basis, from the application of the Excise Tax, it being
understood that the correction of an overpayment may result in Employee repaying to Employer an amount which is less than the overpayment. 
  

 11 

 10. Inventions and Other Intellectual Property. Employee agrees that during the term of his
employment by Employer, he will disclose to Employer (and no one else) all ideas, methods, plans, developments or improvements known by him which relate directly or indirectly to the business of Employer, whether acquired by Employee before or
during his employment by Employer. Nothing in this Section 10 shall be construed as requiring any such communication where the idea, plan, method or development is lawfully protected from disclosure as a trade secret of a third party or by any
other lawful prohibition against such communication. 
 11. Confidential Information and Trade Secrets. 
 (a) Employer is engaged in the highly competitive business of providing production-focused oilfield services relating to fluid handling, well servicing
and workovers, and tubing testing in the Restricted Area (as defined below). The foregoing collectively referred to as “Forbes’s Business.” In this business, Employer generates a tremendous volume of Confidential Information and Trade
Secrets which it hereby agrees to share with Employee, and which Employee will have access to and knowledge of through or as a result of Employee’s employment with the Employer. “Confidential Information and Trade Secrets” includes
any information, data or compilation of information or data developed, acquired or generated by Employer, or its employees (including information and materials conceived, originating, discovered, or developed in whole or in part by Employee at the
request of or for the benefit of Employer or while employed by Employer), which is not generally known to persons who are not employees of Employer, and which Employer generally does not share other than with its employees, or with its customers and
suppliers on an individual transactional basis. “Confidential Information and Trade Secrets” may be written, verbal or recorded by electronic, magnetic or other methods, whether or not expressly identified as “Confidential” by
Employer. 
 (b) “Confidential Information and Trade Secrets” includes, but is not limited to, the following information and
materials: 
 (i) Financial information, of any kind, pertaining to Employer, including, without limitation, information about
the profit margins, profitability, income and expenses of Employer or any of its divisions or lines of business; 
 (ii) Names
and all other information about, and all communications received from, sent to or exchanged between, Employer and any person or entity which has purchased, contracted, hired, chartered equipment, vessels, personnel or services, or otherwise entered
into a transaction with Employer regarding Forbes’s Business, or to which Employer has made a proposal with respect to Forbes’s Business (such person or entity being hereinafter referred to as “Customer” or
“Customers”); 
 (iii) Names and other information about Employer’s employees, including their experience,
backgrounds, resumes, compensation, sales or performance records or any other information about them; 
 (iv) Any and all
information and records relating to Employer’s contracts, transactions, charges, prices, or sales to its Customers, including invoices, proposals, confirmations, statements, accounting records, bids, payment records or any other information
regarding transactions between Employer and any of its Customers; 
  

 12 

 (v) All information about the employees, agents or representatives of Customers who are
involved in evaluating, providing information for, deciding upon, or committing to purchase, sell or otherwise enter into a transaction relating to Forbes’s Business (each such individual being hereinafter referred to as a “Customer
Representative”) including, without limitation, with respect to any such individual, his name, address, telephone and facsimile numbers, email addresses, titles, positions, duties, and all records of communications to, from or with any such
Customer Representative; 
 (vi) Any and all information or records relating to Employer’s contracts or transaction with,
or prices or purchases from any person or entity from which Employer has purchased or otherwise acquired goods or services of any kind used in connection with Forbes’s Business (each such person or entity being hereinafter referred to as a
“Supplier”), including invoices, proposals, confirmations, statements, accounting records, bids, payment records or any other information documents regarding amounts charged by or paid to suppliers for products or services; 
 (vii) All information about the employees, agents or representatives of Suppliers who are involved in evaluating, providing information
for, deciding upon, or committing to purchase, sell or otherwise enter into a transaction relating to Forbes’s Business (each such individual being hereinafter referred to as “Supplier Representative”) including, without limitation,
with respect to any such individual, his name, address, telephone and facsimile numbers, email addresses, titles, positions, duties, and all records of communications to, from or with any such Supplier Representative; 
 (viii) Employer’s marketing, business and strategic growth plans, methods of operation, methods of doing business, cost and pricing
data, and other compilations of information relating to the operations of Employer. 
 (c) Employee acknowledges that all notes, data, forms,
reference and training materials, leads, memoranda, computer programs, computer print-outs, disks and the information contained in any computer, and any other records which contain, reflect or describe any Confidential Information and Trade Secrets,
belong exclusively to Employer. Employee shall promptly return such materials and all copies thereof in Employee’s possession to Employer upon termination of his employment, regardless of the reasons therefor (such date being hereinafter
referred to as the “Termination Date”). 
 (d) During Employee’s employment with Employer and thereafter, Employee will not
copy, publish, convey, transfer, disclose or use, directly or indirectly, for Employee’s own benefit or for the benefit of any other person or entity (except Employer) any Confidential Information and Trade Secrets. Employee’s obligation
shall continue in full force and effect until the later of the final day of any period of non-competition or eighteen (18) months after the termination of Employer’s employment. Employee will abide by all rules, guidelines, policies and
procedures relating to Confidential Information and Trade Secrets implemented and/or amended from time to time by Employer. 
  

 13 

 Employee acknowledges that any actual or threatened breach of the covenants contained herein will cause
Employer irreparable harm and that money damages would not provide an adequate remedy to Employer for any such breach. For these reasons, and because of the unique nature of the Confidential Information and Trade Secrets and the necessity to
preserve such Confidential Information and Trade Secrets in order to protect Employer’s property rights in the event of a breach or threatened breach of any of the provisions herein, Employer, in addition to any other remedies available to it
at law or in equity, shall be entitled to immediate injunctive relief against Employee to enforce the provisions of this Agreement and shall be entitled to recover from Employee its reasonable attorney’s fees and other expenses incurred in
connection with such proceedings. 
 12. Noncompetition and Nonsolicitation. 
 (a) During the term of Employee’s employment, Employer agrees to provide, and to continue to provide Employee, on a daily, weekly, monthly and
continual basis, access to, and the use of, its “Confidential Information and Trade Secrets” concerning Forbes’s Business, and Employer’s employees, Customers and Customer Representatives, Suppliers and Supplier Representatives
and Employer’s transactional histories with all of them, as well as information about the logistics, details, revenues and expenses of Forbes’s Business, in order to allow Employee to perform Employee’s duties under this Agreement,
and to develop or continue to solidify relationships with Customers, Customer Representatives, Suppliers and Supplier Representatives. Employee acknowledges that new and additional Confidential Information and Trade Secrets regarding each of these
matters is developed by Employer as a part of its continuing operations, and Employer hereby agrees to provide Employee access to and use of all such new, additional and continuing Confidential Information and Trade Secrets, and Employee
acknowledges that access to such new, additional and continuing Confidential Information and Trade Secrets is essential for Employee to be able to perform, and continue to perform, Employee’s duties under this Agreement. In addition, Employer
agrees to provide, and continue to provide, training, education, direction and development to Employee with respect to all of Employer’s business methods, processes, procedures, software and information, including newly developed and newly
discovered information, in order to ensure Employee can perform Employee’s duties hereunder and participate in Forbes’s business. 
 (b) In consideration of Employer’s agreement to provide Employee with access to and use of its Confidential Information and Trade Secrets, including new, additional and continuing Confidential Information and Trade Secrets, and to
provide training, Employee agrees to refrain from competing with Employer, or otherwise engaging in Restricted Activities within the Restricted Area, each as defined herein, during the Restricted Period. 
 (c) Restricted Period. Employee agrees that during the term of his employment with Employer, and for a period of one year thereafter, regardless of the
date or cause of such termination (the “Restricted Period”), and regardless of whether the termination occurs with or without cause, and regardless of who terminates such employment, Employee will not directly or indirectly, as an
employee, officer, director, shareholder, proprietor, agent, partner, recruiter, consultant, independent contractor or in any other individual or representative capacity, engage in any of the Restricted Activities within the Restricted Area.

  

 14 

 (d) Restricted Activities. Restricted Activities shall mean and include all of the following: 

(i) Conducting, engaging or participating, directly or indirectly, as employee, agent, independent contractor, consultant, partner,
shareholder, investor, lender, underwriter or in any other capacity with another company that is engaged in Forbes’s Business. The restrictions of this section shall not be violated by (i) the ownership of no more than 5% of the
outstanding securities of any company whose stock is publicly traded, (ii) other outside business investments approved in writing by the Chief Executive Officer or President of Employer that do not in any manner conflict with the services to be
rendered by Employee for Employer and its affiliates and that do not diminish or detract from Employee’s ability to render his attention to the business of Employer and its affiliates, (iii) employment by a certified public accounting firm
or a commercial or investment bank that may have as a client or customer: (A) a Competitor to Employer or (B) any of the clients or customers of Employer with whom Employer did business during the term of Employee’s employment, so
long as Employee does not directly or indirectly serve, advise or consult in any way such Competitor to Employer or client or customer of Employer, respectively, for a period of twelve (12) months after Employee’s termination, or
(iv) engaging in a Permitted Activity (as described in Section 12(e) below). 
 (ii) Recruiting, hiring or
attempting to recruit or hire, either directly or by assisting others, any other employee of Employer, or any of its customers or suppliers in connection with Forbes’s Business. For purposes of this covenant, “any other employee”
shall include employees, consultants, independent contractors or others who are still actively employed by, or doing business with, Employer, its Customers or Suppliers, at the time of the attempted recruiting or hiring, or were so employed or doing
business at any time within six months prior to the date of such attempted recruiting or hiring; 
 (iii) Communicating, by
any means, soliciting or offering to solicit the purchase, performance, sale, furnishing, or providing of any equipment, services, or product which constitute any part of Forbes’s Business to, for or with any Customer, Customer Representative,
Supplier or Supplier Representative; and 
 (iv) Using, disclosing, publishing, copying, distributing or communicating any
Confidential Information and Trade Secrets to or for the use or benefit of Employee or any other person or entity other than Employer. 
 (e)
Permitted Activities. The restrictions against competition contained in this Section 12 shall not prohibit Employee, in any manner, directly or indirectly, on his own behalf or on behalf of any corporation, partnership, trust, joint venture,
individual or other entity, from engaging in: 
 (i) other activities which do not compete with the Forbes’s Business;

  

 15 

 (ii) the items permitted by Section 4.18(b) of that certain Indenture dated
February 12, 2008 by and among the Company, Forbes Energy Capital Inc., Wells Fargo Bank, National Association, as Trustee and Collateral Agent, and certain other parties; or 
 (iii) the business of providing production-focused oilfield services as long as such activities have been or may be approved by the
independent members of Employer’s or Parent’s board of directors. 
 (f) Restricted Area. The Restricted Area shall mean and
include each of the following in which Forbes’s Business is conducted: 
 (i) The State of Texas; and 
 (ii) In a 25-mile radius of any Forbes location. 
 (g) Agreement Ancillary to Other Agreements. This covenant not to compete is ancillary to and part of other agreements between Employer and Employee, including, without limitation, Employer’s agreement to
disclose, and continue to disclose, its Confidential Information and Trade Secrets, and its agreement to provide, and continue to provide, training, education and development to Employee. 
 (h) Independent Agreements. The parties hereto agree that the foregoing restrictive covenants set forth herein are essential elements of this Agreement,
and that, but for the agreement of Employee to comply with such covenants, Employer would not have agreed to enter into this Agreement. Such covenants by Employee shall be construed as agreements independent of any other provision in this Agreement.
The existence of any claim or cause of action of Employee against Employer, whether predicated on this Agreement, or otherwise, shall not constitute a defense to the enforcement by Employer of such covenants. 
 (i) Equitable Reformation. The parties hereto agree that if any portion of the covenants set forth herein are held to be illegal, invalid, unreasonable,
arbitrary or against public policy, then such portion of such covenants shall be considered divisible both as to time and geographical area. Employer and Employee agree that, if any court of competent jurisdiction determines the specified time
period or the specified geographical area applicable herein to be illegal, invalid, unreasonable, arbitrary or against public policy, a lesser time period or geographical area which is determined to be reasonable, non-arbitrary and not illegal or
against public policy may be enforced against Employee. Employer and Employee agree that the foregoing covenants are appropriate and reasonable when considered in light of the nature and extent of the business conducted by Employer and the
Confidential Information and Trade Secrets and training provided by Employer to Employee. 
 13. Injunctive Relief. Employee agrees
that damages at law will be an insufficient remedy to Employer if Employee violates or attempts or threatens to violate the terms of Sections 10, 11 or 12 of this Agreement and that Employer would suffer irreparable damage as a result of such
violation or attempted or threatened violation. Accordingly, it is agreed that Employer shall be entitled, upon application to a court of competent jurisdiction, to obtain injunctive relief to enforce the provisions of such Sections, which
injunctive relief shall be in addition to any other rights or remedies available to Employer, at law or in equity. In the event 

  

 16 

 
either party commences legal action relating to the enforcement of the terms of Sections 10, 11 or 12 of this Agreement, the prevailing party in such
action shall be entitled to recover from the other party all of the costs and expenses in connection therewith, including reasonable fees and disbursements of counsel (both at trial and in appellate proceedings). 
 14. Compliance with Other Agreements. Employee represents and warrants that the execution of this Agreement by him and his performance of his
obligations hereunder will not conflict with, result in the breach of any provision of or the termination of or constitute a default under any agreement to which Employee is a party or by which Employee is or may be bound. 
 15. Waiver of Breach. The waiver by Employer of a breach of any of the provisions of this Agreement by Employee shall not be construed as a waiver
of any subsequent breach by Employee. 
 16. Binding Effect; Assignment. 
 (a) Employer is a subsidiary of Forbes Energy Services Ltd (the Parent), and Forbes’s Business, as defined in Section 11, is carried on by, and
the Confidential Information and Trade Secrets as defined in Section 11 has been, and will continue to be, developed by Employer, Parent and each of Parent’s or Employer’s subsidiaries and affiliates, all of which shall be included
within the meaning of the word “Employer” as that term is used in Sections 10, 11, 12 and 13 of this Agreement. This Agreement shall inure to the benefit of, and be enforceable by, Employer, Parent, and each of the subsidiaries and
affiliates included within the definition of the word “Employer” as used in Sections 10, 11, 12 and 13. 
 (b) The rights and
obligations of Employer under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of Employer. This Agreement is a personal employment contract and the rights, obligations and interests of Employee
hereunder may not be sold, assigned, transferred, pledged or hypothecated. 
 17. Indemnification. Employee shall be entitled
throughout the term of this Agreement and thereafter to indemnification by Parent and Employer in respect of any actions or omissions as an employee, officer or director of Parent, Employer (or any successor thereof) to the fullest extent
permitted by law. The parties acknowledge that Employee is also entitled to the benefits of a separate Indemnification Agreement between Employee and Parent and that this section shall be read as complimentary with and not in conflict with or
substitution for such Indemnification Agreement. Parent and Employer also agree to obtain directors and officers (D&O) insurance in a reasonable amount determined by the Board and to maintain such insurance during the term of this Agreement (as
such Agreement may be extended from time to time) and for a period of twelve (12) months following the termination of this Agreement, as so extended. 
 18. Entire Agreement. This Agreement (including Appendix “A” and Appendix “B”, as either may be amended from time to time) contains the entire agreement and supersedes all prior agreements
and understandings, oral or written, with respect to the subject matter hereof. This Agreement may be changed only by an agreement in writing signed by the party against whom any waiver, change, amendment, modification or discharge is sought.

  

 17 

 19. Construction and Interpretation. 
 (a) The Board shall have the sole and absolute discretion to construe and interpret the terms of this Agreement, unless another individual or entity is
charged with such responsibility. 
 (b) This Agreement shall be construed pursuant to and governed by the laws of the State of Texas (but
any provision of Texas law shall not apply if the application of such provision would result in the application of the law of a state or jurisdiction other than Texas). 
 (c) The headings of the various sections in this Agreement are inserted for convenience of the parties and shall not affect the meaning, construction or interpretation of this Agreement. 
 (d) Consistent with Section 12(i) the following sentences of this Section 19(d) shall apply. Any provision of this Agreement that is determined
by a court of competent jurisdiction to be prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non-authorization without invalidating
the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction. In any such case, such determination shall not affect any other provision of this Agreement, and the remaining
provisions of this Agreement shall remain in full force and effect. If any provision or term of this Agreement is susceptible to two or more constructions or interpretations, one or more of which would render the provision or term void or
unenforceable, the parties agree that a construction or interpretation that renders the term or provision valid shall be favored. 
 (e) This
Agreement shall be construed to the extent necessary to comply with the provisions of Section 409A of the Code and any Treasury Regulations and other guidance issued thereunder 
 20. Notice. All notices that are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given
when received if personally delivered; when transmitted if transmitted by telecopy or similar electronic transmission method; one working day after it is sent, if sent by recognized expedited delivery service; and five days after it is sent, if
mailed, first class mail, certified mail, return receipt requested, with postage prepaid. In each case notice shall be sent to: 
 To Employer: 
 Forbes Energy Services LLC 
 Attention: John E. Crisp, President and Chief Executive Officer 
 3000 South Business Highway 281 
 Alice, Texas 78332 
 Fax: (713) 481-8344 
  

 18 

 To Employee: 
 John E. Crisp 
 588 CR 101 
 George West, Texas 78022 
 Fax: (361) 396-0564 
 21. Venue; Process. The parties agree that all obligations payable and performable under this Agreement are payable and performable at the offices of Employer in Alice, Jim Wells County, Texas. The parties to this Agreement agree
that jurisdiction and venue in any action brought pursuant to this Agreement to enforce its terms or otherwise with respect to the relationships between the parties shall properly lie in the Judicial District Court for Jim Wells County or in the
United States District Court for the Southern District of Texas, Corpus Christi Division, Corpus Christi Office. 
 22. Six-Month
Delay. Notwithstanding any provision of this Agreement to the contrary, if, at the time of Employee’s termination of employment with Employer, he is a “specified employee” as defined in Section 409A of the Code, and one or
more of the payments or benefits received or to be received by Employee pursuant to this Agreement would constitute deferred compensation subject to Section 409A of the Code, no such payment or benefit will be provided under this Agreement
until the earlier of (a) the date that is six (6) months following Employee’s termination of employment with Employer, or (b) the Employee’s death. The provisions of this Section 22 shall only apply to the extent
required to avoid Employee’s incurrence of any penalty tax or interest under Section 409A of the Code or any Treasury Regulations and other guidance issued thereunder 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 19 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written.

  

			
	EMPLOYER:
	
	Forbes Energy Services LLC
		
	By:	 	 /s/ L. Melvin Cooper

		 	L. Melvin Cooper
		 	 Senior Vice President, Chief Financial Officer
 and
Assistant Secretary

	
	EMPLOYEE:
		
		 	 /s/ John E. Crisp

		 	John E. Crisp

 ACKNOWLEDGED AND AGREED TO FOR 
 PURPOSES OF GUARANTEEING THE 
 FINANCIAL OBLIGATIONS OF EMPLOYER 
 TO EMPLOYEE: 
 FORBES ENERGY SERVICES LTD

  

			
	By:	 	 /s/ L. Melvin Cooper

		 	L. Melvin Cooper
		 	 Senior Vice President, Chief Financial Officer
 and
Assistant Secretary

 Signature Page – Employment Agreement 

 APPENDIX A 
 [Bonus process to be established by the Compensation Committee by June 30, 2008] 
  

 A – 1 

 APPENDIX B 
 [The applicable EBITDA Target and any other financial terms that vary from year to year will be set forth each year on an Appendix B and are to be established by the Compensation Committee by June 30 of such
year.] 
  

 B – 1

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