Document:

Exhibit 10.1

Exhibit
10.1

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement, dated effective as of August 1, 2010, is between
Allis-Chalmers Energy Inc. (the “Company”) and Victor M. Perez (“Executive”).

R E C I T A L S:

A. Executive is currently employed by the Company pursuant to an Amended and Restate
Employment Agreement dated August 5, 2009 (the “Existing Employment Agreement”) which terminates on
August 3, 2011;

B. The Company wishes to continue to employ Executive, and Executive desires to continue
employment with Company by entering into a written agreement to specify the terms and conditions of
Executive’s continued and future employment with the Company;

C. Executive is to be employed as Chief Financial Officer of the Company.

D. The Company considers the maintenance of a sound management team for the Company, including
Executive, essential to protecting and enhancing its best interests and those of its stockholders;

E. The Company recognizes that the possibility of and potential for a “Change in Control,” as
defined herein, may result in the departure or distraction of members of the Company’s management
team, to the detriment of the Company and its stockholders; and

F. The Company has determined that appropriate steps should be taken to obtain and retain the
continued attention and dedication of certain selected members of the Company’s management team to
their assigned duties without the distraction arising from the possibility of a change in control
of the Company.

NOW, THEREFORE, in consideration of Executive’s past and future employment with Company and
other good and valuable consideration, the parties agree as follows:

Section 1. Definitions. As used in this Agreement, the following terms will have the
following meanings:

(a) Agreement refers to this Executive Employment Agreement.

(b) Board of Directors means the board of directors of the Company.

(c) Cause has the meaning ascribed to it in Section 7(a)(ii).

(d) Change in Control means:

(i) The acquisition after the date hereof by any individual, entity or group,
or a Person (within the meaning of Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended), in each case, other than an Excluded
Person, of ownership of a majority of either: (i) the then outstanding shares
of Common Stock (“Outstanding Common Stock”) of the Company; or (ii) the combined
voting power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (“Outstanding Voting Securities”);

 

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(ii) Approval by the stockholders of the Company of a reorganization, merger or
consolidation, in each case, unless, either (1) immediately following such
reorganization, merger or consolidation, a majority of the then outstanding shares
of common voting securities of the entity resulting from such reorganization, merger
or consolidation and a majority of the combined voting power of the then outstanding
voting securities of such entity entitled to vote generally in the election of
directors (or similar governing persons) are then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Common Stock and Outstanding Voting Securities,
respectively, immediately prior to such reorganization, merger or consolidation, or
(2) a majority of the members of the board of directors (or similar governing body)
of the entity resulting from such reorganization, merger or consolidation were
members of the Board of Directors at the time of the execution of the initial
agreement providing for such reorganization, merger or consolidation; or

(iii) Approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company;

(iv) The sale or other disposition of all or substantially all of the assets of
the Company and its subsidiaries taken as a whole, other than by way of a merger or
consolidation and other than to a third party, with respect to which following such
sale or other disposition, a majority of the then outstanding shares of common stock
of such third party and a majority of the combined voting power of the then
outstanding voting securities of such third party entitled to vote generally in the
election for directors (or similar governing persons) are then beneficially owned,
directly or indirectly, by all or substantially all of the individuals and entities
who were the beneficial owners of the Outstanding Common Stock and Outstanding
Voting Securities, respectively, immediately prior to such sale or other
disposition.

Notwithstanding the foregoing, in any circumstance in which the foregoing definition of
“Change in Control” would be operative and with respect to which the income tax under
Section 409A of the Code would apply or be imposed, but where such tax would not apply or be
imposed if the meaning of the term “Change in Control” met the requirements of Section
409A(a)(2)(A)(v) of the Code, then the term “Change in Control” herein shall mean, but only
with respect to the transaction and the compensation so affected, a transaction or related
transactions that constitute a “Change in Control” (as defined above) and that also
constitute a “change in control event” within the meaning of Treas. Reg. §1.409A-3(i)(5).

 

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(e) Code means the Internal Revenue Code of 1986, as amended.

(f) Common Stock means the common stock, $.01 par value of the Company.

(g) Company means Allis-Chalmers Energy Inc., including any successor to Allis-Chalmers
Energy Inc.

(h) Confidential Information has the meaning ascribed to it in Section 9(b).

(i) Constructive Termination means the termination of Executive’s employment with the
Company by resignation if:

(i) a Good Reason occurs or exists,

(ii) Executive gives written notice to the Company of that Good Reason within
ninety (90) days of its initial occurrence or existence (or the date Executive
becomes aware of such Good Reason, if later),

(iii) the Company fails to cure that Good Reason within thirty (30) days of the
date of Executive’s written notice of the Good Reason, and

(iv) Executive resigns from the employment of the Company and,

(1) where the Good Reason is defined in Section 1(n)(i) and such Good
Reason occurs within 6 months after a Change in Control, the effective date
of such resignation is after (but not more than 6 months after) the end of
the 30-day cure period referred to in Section 1(i)(iii), and (unless
otherwise agreed to in writing by Executive and Company) no sooner than 6
months after the date of a Change in Control and

(2) in all other cases, the effective date of such resignation is,
after (but not more than 6 months after) the end of the 30-day cure period
referred to in Section 1(i)(iii).

(j) Disability with respect to Executive shall be deemed to exist if the Executive
either (i) is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to result in death
or can be expected to last for a continuous period of not less than 12 months, or (ii) is,
by reason of any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than three months
under an accident and health plan covering employees of the Company.

(k) Executive refers to Victor M. Perez.

(l) Existing Agreement refers to the employment agreement between Executive and the
Company identified in the recitals to this Agreement.

 

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(m) Excluded Person means any Person who beneficially owns more than 10% of the
outstanding shares of Allis-Chalmers at any time prior to the date hereof.

(n) Good Reason means, with respect to a Constructive Termination, any of the following
to which the Executive did not consent in writing:

(i) the Company demotes or assigns Executive to a lesser position, as measured
by title, responsibility, prestige, authority, duties, or reporting relationship,
that is not consistent with the highest position held by Executive with Company at
any time during Executive’s employment with Company after the date hereof, or any
action or inaction, which results in a diminution in such position, authority,
duties or responsibilities;

(ii) the Company decreases Executive’s compensation, or any element thereof,
below the highest level in effect at any time during Executive’s employment with
Company or reduces Executive’s benefits and perquisites below the highest levels in
effect at any time during Executive’s employment with Company (other than as a
result of any routine amendment or termination of any executive, group, or other
benefit plan or program, which amendment or termination is applicable to all
participants in said plan or program);

(iii) the Company requires Executive to relocate to a principal place of
business more than 50 miles from the principal place of business occupied by Company
on the date hereof; or

(iv) the Company breaches any other material term of this Agreement.

(o) Inventions has the meaning ascribed to it in Section 8(a).

(p) Salary has the meaning ascribed to it in Section 5(a).

(q) Separation Payment Period means the period of one year following the date of the
Executive’s Termination of employment pursuant to Section 7(a)(iii), unless such termination
occurs within the 18-month period beginning on the date of a Change in Control, in which
case it means two years following the date of such termination.

(r) Separation Payments has the meaning ascribed to it in Section 7(b)(ii).

Section 2. Employment. Company hereby employs Executive, and Executive hereby accepts
employment by Company, upon the terms and subject to the conditions hereinafter set forth. The
Existing Employment Agreement is hereby terminated and superseded by this Agreement, effective as
of the date hereof.

Section 3. Duties. Executive shall be employed as the Chief Financial Officer and shall
report directly to the Chief Executive Officer of the Company. Executive agrees to devote such time
as is necessary to perform his duties attendant to his executive position with the Company, in a
manner consistent with Executive’s employment prior to the date hereof. Executive shall be allowed
to engage in other activities as an investor as well as participate in
activities of charitable organizations of his choice so long as they do not materially
interfere with his duties for Company.

 

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Section 4. Term. The term of employment of Executive hereunder shall commence on the date of
this Agreement and shall terminate at 11:59 p.m. on August 1, 2012; unless previously terminated
under Section 7 of this Agreement, or unless said term is extended, in writing, by the Executive
and Company.

Section 5. Compensation and Benefits. In consideration for the services of Executive
hereunder, Company shall compensate Executive as follows (except as set forth herein, Executive
acknowledges payment in full of all amounts due to him for services rendered prior to the date
hereof):

(a) Salary. Company shall pay Executive, semi-monthly in arrears with its normal
payroll procedures, a salary which is equivalent to an annual rate of $315,000.00 per annum
less applicable statutory deductions and withholdings (the “Salary”) payable in accordance
with the Company’s regular payroll procedures currently in effect. Any increase in the
Salary shall be in the sole discretion of the Compensation Committee.

(b) Incentive Bonus. Executive shall be entitled to receive such cash incentives as
the Compensation Committee and Board of Directors establishes for executives of the Company.
Executive shall also be eligible to receive from Company such other annual management
incentive bonuses as may be provided in management incentive bonus plans adopted from time
to time by Company.

(c) Vacation. Executive shall be entitled to four (4) weeks paid vacation per year.
Unless otherwise approved by the Compensation Committee of the Board of Directors of the
Company, a maximum of ten days accrued vacation not taken in any calendar year shall be
carried forward and may be used in the next subsequent calendar year. Executive shall
schedule his paid vacation to be taken at times which are reasonably and mutually convenient
to both Company and Executive.

(d) Insurance Benefits. Company shall provide accident, health, dental, disability and
life insurance for Executive under the group accident, health, dental, disability and life
insurance plans as may be maintained by Company for its full-time, salaried Executives.

(e) Car Allowance. The Executive will be paid a $1,000 per month car allowance during
the term of this Agreement.

Section 6. Expenses. The parties recognize and anticipate that in connection with the
services to be performed by Executive pursuant to the terms of this Agreement, Executive may incur
and be required to make payments for travel, entertainment of business associates and similar
expenses. Company shall reimburse Executive for all reasonable expenses of types authorized by
Company and incurred by Executive in the performance of his duties hereunder, consistent with past
practices. Executive shall comply with such reporting requirements with respect to expenses as
Company may establish from time to time.

 

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Section 7. Termination.

(a) General. Executive’s employment hereunder shall commence on the Effective Date and
continue until the end of the term specified in Section 4, except that the employment of
Executive hereunder shall terminate prior to such time in accordance with the following:

(i) Death or Disability. Upon the death of Executive during the term of his
employment hereunder; or, at the option of Company, in the event of Executive’s
Disability, upon 30 days’ notice to Executive.

(ii) For Cause. For “Cause” immediately upon written notice by Company to
Executive. A termination for Cause shall mean a termination because of: (i) an act of
material dishonesty, fraud, misrepresentation, misappropriation, or embezzlement by
Executive involving the Company or its property or employees; (ii) Executive’s
unauthorized, material and intentional or grossly negligent use or disclosure of any
confidential information or trade secrets of the Company; (iii) any material violation
by Executive of a substantive law or regulation applicable to the Company’s business,
which violation, in the sole but reasonable discretion of the Board of Directors, does
or is reasonably like to cause material injury to the Company; (iv) Executive’s
conviction of, or plea of nolo contendere or guilty to a felony or any other crime
which involves moral turpitude; (v) Executive’s continued failure, in the sole but
reasonable discretion of the Board of Directors, to perform the principal duties,
functions and responsibilities of his position (other than any such failure resulting
from Executive’s Disability), or to follow the directives of the Board of Directors,
after written notice from the Company identifying the deficiencies in performance and a
reasonable cure period of not less than thirty (30) days of any breach capable of cure;
(vi) gross negligence or willful misconduct in the performance of Executive’s duties;
or (vii) a material and willful breach of Executive’s fiduciary duties to the Company.

(iii) Without Cause. Without Cause upon notice by the Board of Directors to
Executive or upon notice by Executive to the Board of Directors if Executive’s
employment has been terminated by Constructive Termination.

(iv) Resignation. Resignation by the Executive.

(b) Separation Pay.

(i ) Termination Upon Death or Disability For Cause or by Resignation.
Executive shall not be entitled to any separation pay or other compensation upon
termination of his employment pursuant to Section 7(a)(i), (ii) or (iv) except for
his Salary and any incentive compensation earned but unpaid as of the date of
termination, unpaid expense reimbursements under Section 6 for expenses incurred in
accordance with the terms hereof prior to termination, and compensation for accrued,
unused vacation as of the date of termination all of which shall be paid to the
Executive within 30 days of the date of termination.

 

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(ii) Termination Without Cause. In the event Executive’s employment hereunder
is terminated pursuant to Section 7(a)(iii), Company shall pay Executive Separation
Payments as Executive’s sole remedy in connection with such termination.
“Separation Payments” are payments made at the semi-monthly rate of Executive’s then
current salary, including car allowance, in effect immediately preceding the date of
termination. Separation Payments shall be paid by Company in equal semi-monthly
payments in arrears or in accordance with its then-current normal payroll procedure
for the duration of the Separation Payment Period. Company shall also pay Executive
his Salary and any incentive bonus compensation earned but unpaid as of the date of
termination, unpaid expense reimbursements under Section 6 for expenses incurred in
accordance with the terms hereof prior to termination, all of which shall be paid to
the Executive within 30 days of the date of termination. In addition, Executive
and/or his or her qualified beneficiaries shall continue to receive health benefits
and coverage under the Company’s group health care plan or such other equivalent
health coverage Executive may agree. Such coverage shall be provided on the
foregoing terms for the duration of the Separation Payment Period.

(c) Section 409A Matters.

(i) Section 409A Limits on Payments to Specified Employees. Notwithstanding
any other provision of the Agreement to the contrary, if Executive is a “specified
employee,” as defined in Section 409A of the Code, except to the extent permitted
under Section 409A of the Code, no benefit or payment that is subject to Section
409A of the Code (after taking into account all applicable exceptions to Section
409A of the Code, including but not limited to the exceptions for short-term
deferrals and for “separation pay only upon an involuntary separation from service”)
shall be made under this Agreement on account of Executive’s “separation from
service,” as defined in Section 409A of the Code, until the later of the date
prescribed for payment in this Agreement and the 1st day of the 7th calendar month
that begins after the date of Executive’s separation from service (or, if earlier,
the date of death of Executive). Any such benefit or payment payable pursuant to
this Agreement within the period described in the immediately preceding sentence
will accrue and will be payable in a lump sum cash payment, without interest, on the
payment date set forth in the immediately preceding sentence.

(ii) References to termination. All references in this Agreement to the
termination of Executive’s employment with Company shall mean and shall be deemed to
occur if and when a termination of employment that constitutes a “separation from
service” within the meaning of Section 409A(a)(2)(A)(i) of the Code and applicable
administrative guidance issued thereunder has occurred.

 

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(iii) Special rules for reimbursements. To the extent that any amount or
benefit hereunder is includable in gross income for federal income tax purposes and
constitutes or is treated hereunder as a reimbursement received or to be received by
Executive, such reimbursement shall be administered consistently
with the following additional requirements as set forth in Treas. Reg.
§1.409A-3(i)(1)(iv): (1) Executive’s eligibility for or receipt of benefits or
reimbursements in one year will not affect Executive’s eligibility for or the amount
of benefits or reimbursements in any other year, (2) any reimbursement of eligible
expenses will be made on or before the last day of the year following the year in
which the expense was incurred, (3) Executive’s right to benefits or reimbursement
is not subject to liquidation or exchange for another benefit, and (4) the right to
reimbursement of expenses incurred or to the provision of benefits in kind shall
terminate one year from the Executive’s termination of employment.

(iv) Constructive Termination. The Company and the Executive acknowledge and
agree that the definitions of Good Reason and Constructive Termination and the
provisions of this Agreement relating thereto are intended to comply, and shall be
interpreted and administered so as to comply, with the requirements of Treas. Reg.
§1.409A-1(n)(2)(i).

Section 8. Inventions; Assignment.

(a) Inventions Defined. All rights to discoveries, inventions, improvements, designs
and innovations (including all data and records pertaining thereto) that relate to the
business of Company, whether or not patentable, copyrightable or reduced to writing, that
Executive may discover, invent or originate during the term of his employment hereunder, and
for a period of six months thereafter, either alone or with others and whether or not during
working hours or by the use of the facilities of Company (“Inventions”), shall be the
exclusive property of Company. Executive shall promptly disclose all Inventions to Company,
shall execute at the request of Company any assignments or other documents Company may deem
necessary to protect or perfect its rights therein, and shall assist Company, at Company’s
expense, in obtaining, defending and enforcing Company’s rights therein. Executive hereby
appoints Company as his attorney-in-fact to execute on his behalf any assignments or other
documents deemed necessary by Company to protect or perfect its rights to any Inventions.

(b) Covenant to Assign and Cooperate. Without limiting the generality of the
foregoing, Executive hereby assigns and transfers to Company the world-wide right, title and
interest of Executive in the Inventions. Executive agrees that Company may apply for and
receive patent rights (including Letters Patent in the United States) for the Inventions in
Company’s name in such countries as may be determined solely by Company. Executive shall
communicate to Company all facts known to Executive relating to the Inventions and shall
cooperate with Company’s reasonable requests in connection with vesting title to the
Inventions and related patents exclusively in Company and in connection with obtaining,
maintaining and protecting Company’s exclusive patent rights in the Inventions.

 

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(c) Successors and Assigns. Executive’s obligations under this Section 8 shall inure
to the benefit of Company and its successors and assigns and shall survive the expiration of
the term of this Agreement for such time as may be necessary to protect the proprietary
rights of Company in the Inventions. In addition to any obligations imposed
by law upon any successor to the Company, the Company will require any successor to all
or substantially all of the Company’s business and/or assets to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such successor had taken place.

Section 9. Confidential Information.

(a) Acknowledgment of Proprietary Interest. Executive acknowledges the proprietary
interest of Company in all Confidential Information. Executive agrees that all Confidential
Information learned by Executive during his employment with Company or otherwise, whether
developed by Executive alone or in conjunction with others or otherwise, is and shall remain
the exclusive property of Company. Executive further acknowledges and agrees that his
disclosure of any Confidential Information will result in irreparable injury and damage to
Company.

(b) Confidential Information Defined. “Confidential Information” means all
confidential and proprietary information of Company, including without limitation (i)
information derived from reports, investigations, experiments, research and work in
progress, (ii) methods of operation, (iii) market data, (iv) proprietary computer programs
and codes, (v) drawings, designs, plans and proposals, (vi) marketing and sales programs,
(vii) client lists, (viii) historical financial information and financial projections, (ix)
pricing formulae and policies, (x) all other concepts, ideas, materials and information
prepared or performed for or by Company and (xi) all information related to the business,
products, purchases or sales of Company or any of its suppliers and customers, other than
information that is publicly available.

(c) Covenant Not To Divulge Confidential Information. Company is entitled to prevent
the disclosure of Confidential Information. Company agrees to and has provided Confidential
Information to Executive since Executive’s employment with the Company and Executive
acknowledges and agrees that, during the course of his employment, Executive will be exposed
to, have access to, and gain knowledge of Confidential Information. As a portion of the
consideration for the employment of Executive and for the compensation being paid to
Executive by Company, Executive agrees at all times during the term of his employment
hereunder and thereafter to hold in strict confidence and not to disclose or allow to be
disclosed to any person, firm or corporation, other than to his professional advisors (who
have the obligation to maintain the confidentiality of such information) and to persons
engaged by Company to further the business of Company, and not to use except in the pursuit
of the business of Company, the Confidential Information, without the prior written consent
of Company.

(d) Return of Materials. In the event of any termination or cessation of his
employment with Company for any reason, or request by the Company at anytime, Executive
shall promptly deliver to Company all documents, data and other information derived from or
otherwise pertaining to Confidential Information. Executive shall not take or retain any
documents or other information, or any reproduction or excerpt thereof, containing or
pertaining to any Confidential Information.

 

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Section 10. Noncompetition.

(a) Until termination of Executive’s employment hereunder, Executive shall not do any
of the following:

(i) engage directly or indirectly, alone or as a shareholder, partner,
director, officer, executive of or consultant to any other business organization, in
any business activities that:

(1) relate to the oil and gas drilling services industry (the
“Designated Industry”); or

(2) were either conducted by Company prior to the termination of
Executive’s employment hereunder or proposed to be conducted by Company at
the time of such termination;

(ii) approach any customer or supplier of Company in an attempt to divert it to
any competitor of Company in the Designated Industry; or

(iii) solicit or encourage any employee or Executive of Company to end his
relationship with Company or commence any such relationship with any competitor of
Company.

(b) Executive’s noncompetition obligations hereunder shall not preclude Executive from
owning less than five percent of the common stock of any publicly traded corporation
conducting business activities in the Designated Industry. If at any time the provisions of
this Section 10 are determined to be invalid or unenforceable by reason of being vague or
unreasonable as to area, duration or scope of activity, this Section 10 shall be considered
divisible and shall be immediately amended to only such area, duration and scope of activity
as shall be determined to be reasonable and enforceable by the court or other body having
jurisdiction over the matter, and Executive agrees that this Section 10 as so amended shall
be valid and binding as though any invalid or unenforceable provision had not been included
herein.

Section 11. General.

(a) Notices. All notices and other communications hereunder shall be in writing or by
written telecommunication, and shall be deemed to have been duly given upon delivery if
delivered personally or via written telecommunication, or five days after mailing if mailed
by certified mail, return receipt requested or by written telecommunication, to the relevant
address set forth below, or to such other address as the recipient of such notice or
communication shall have specified to the other party in accordance with this Section 11(a):

If to Company, to:

c/o Allis-Chalmers Energy Inc.

5075 Westheimer, Suite 890

Houston, Texas 77056

Attention: General Counsel

If to Executive, to the last address for Executive appearing on the Company’s records

 

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(b) Withholding. All payments required to be made to Executive by Company under this
Agreement shall be subject to the withholding of such amounts, if any, relating to federal,
state and local taxes as may be required by law.

(c) Equitable Remedies. Each of the parties hereto acknowledges and agrees that upon
any breach by Executive or Company of his or its obligations hereunder, Company shall have
no adequate remedy at law and accordingly shall be entitled to specific performance and
other appropriate injunctive and equitable relief.

(d) Severability. If any provision of this Agreement is held to be illegal, invalid
or unenforceable, such provision shall be fully severable, and this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision never
comprised a part hereof, and the remaining provisions hereof shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement a provision as
similar in its terms to such illegal, invalid or unenforceable provision as may be possible
and be legal, valid and enforceable.

(e) Waivers. No delay or omission by either party in exercising any right, power or
privilege hereunder shall impair such right, power or privilege, nor shall any single or
partial exercise of any such right, power or privilege preclude any further exercise thereof
or the exercise of any other right, power or privilege.

(f) Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, and all of which together shall constitute one and the
same instrument.

(g) Captions. The captions in this Agreement are for convenience of reference only
and shall not limit or otherwise affect any of the terms or provisions hereof.

(h) Reference to Agreement. Use of the words “herein,” “hereof,” “hereto,” “hereunder”
and the like in this Agreement refer to this Agreement only as a whole and not to any
particular section or subsection of this Agreement, unless otherwise noted.

 

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(i) Binding Agreement. This Agreement shall be binding upon and inure to the benefit
of the parties and shall be enforceable by the personal representatives and heirs of
Executive and the successors and assigns of Company. This Agreement may be assigned by the
Company to any successor to all or substantially all of the Company’s business as a result
of a merger, consolidation, sale of stock or assets, or similar transaction; provided that
in the event of any such assignment, the Company shall remain liable for all of its
obligations hereunder and shall be liable for all obligations of all such
assignees hereunder. The Company will require any successor to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession had taken place. If Executive dies
while any amounts would still be payable to him hereunder, such amounts shall be paid to
Executive’s estate. This Agreement is not otherwise assignable by Executive.

(j) Entire Agreement. This Agreement contains the entire understanding of the
parties, supersedes all prior agreements and understandings relating to the subject matter
hereof and may not be amended except by a written instrument hereafter signed by each of the
parties hereto.

(k) Governing Law. This Agreement and the performance hereof shall be construed and
governed in accordance with the laws of the State of Texas, without regard to its choice of
law principles.

(l) Venue. Any dispute between Executive and Company that arises out of or concerns,
in whole or in part, this Agreement or the employment relationship between Executive and
Company shall be exclusively resolved in a federal or state court located in Harris County,
Texas. To the extent necessary, Executive and Company agree to submit to the jurisdiction
of such courts, and to waive any objection to such jurisdiction or venue.

(m) Gender and Number. The masculine gender shall be deemed to denote the feminine or
neuter genders, the singular to denote the plural, and the plural to denote the singular,
where the context so permits.

[signature page follows]

 

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EXECUTED
August 11, 2010, and effective as of the date and year first above
written.

	 	 	 	 	 	 	 
	 	 	ALLIS-CHALMERS ENERGY INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ Theodore F. Pound III 	 	 
	 

	 	 	 	 

Theodore F. Pound III
	 	 
	 

	 	 	 	General Counsel & Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 

	 	/s/ Victor M. Perez	 	 
	 	 	 	 	 
	 

	 	Victor M. Perez	 	 

 

- 13 -Exhibit 10.2

Exhibit
10.2

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement, dated effective as of August 1, 2010, is between
Allis-Chalmers Energy Inc. (the “Company”) and Theodore F. Pound III (“Executive”).

R E C I T A L S:

A. Executive is currently employed by the Company pursuant to an employment agreement dated
December 3, 2007 (the “Existing Employment Agreement”) which terminates on December 3, 2010;

B. The Company wishes to continue to employ Executive, and Executive desires to continue
employment with Company by entering into a written agreement to specify the terms and conditions of
Executive’s continued and future employment with the Company;

C. Executive is to be employed as General Counsel and Secretary.

D. The Company considers the maintenance of a sound management team for the Company, including
Executive, essential to protecting and enhancing its best interests and those of its stockholders;

E. The Company recognizes that the possibility of and potential for a “Change in Control,” as
defined herein, may result in the departure or distraction of members of the Company’s management
team, to the detriment of the Company and its stockholders; and

F. The Company has determined that appropriate steps should be taken to obtain and retain the
continued attention and dedication of certain selected members of the Company’s management team to
their assigned duties without the distraction arising from the possibility of a change in control
of the Company.

NOW, THEREFORE, in consideration of Executive’s past and future employment with Company and
other good and valuable consideration, the parties agree as follows:

Section 1. Definitions. As used in this Agreement, the following terms will have the
following meanings:

(a) Agreement refers to this Executive Employment Agreement.

(b) Board of Directors means the board of directors of the Company.

(c) Cause has the meaning ascribed to it in Section 7(a)(ii).

(d) Change in Control means:

(i) The acquisition after the date hereof by any individual, entity or group,
or a Person (within the meaning of Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended), in each case, other than an Excluded
Person, of ownership of a majority of either: (i) the then outstanding shares
of Common Stock (“Outstanding Common Stock”) of the Company; or (ii) the combined
voting power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (“Outstanding Voting Securities”);

 

- 1 -

 

(ii) Approval by the stockholders of the Company of a reorganization, merger or
consolidation, in each case, unless, either (1) immediately following such
reorganization, merger or consolidation, a majority of the then outstanding shares
of common voting securities of the entity resulting from such reorganization, merger
or consolidation and a majority of the combined voting power of the then outstanding
voting securities of such entity entitled to vote generally in the election of
directors (or similar governing persons) are then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Common Stock and Outstanding Voting Securities,
respectively, immediately prior to such reorganization, merger or consolidation, or
(2) a majority of the members of the board of directors (or similar governing body)
of the entity resulting from such reorganization, merger or consolidation were
members of the Board of Directors at the time of the execution of the initial
agreement providing for such reorganization, merger or consolidation; or

(iii) Approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company;

(iv) The sale or other disposition of all or substantially all of the assets of
the Company and its subsidiaries taken as a whole, other than by way of a merger or
consolidation and other than to a third party, with respect to which following such
sale or other disposition, a majority of the then outstanding shares of common stock
of such third party and a majority of the combined voting power of the then
outstanding voting securities of such third party entitled to vote generally in the
election for directors (or similar governing persons) are then beneficially owned,
directly or indirectly, by all or substantially all of the individuals and entities
who were the beneficial owners of the Outstanding Common Stock and Outstanding
Voting Securities, respectively, immediately prior to such sale or other
disposition.

Notwithstanding the foregoing, in any circumstance in which the foregoing definition of
“Change in Control” would be operative and with respect to which the income tax under
Section 409A of the Code would apply or be imposed, but where such tax would not apply or be
imposed if the meaning of the term “Change in Control” met the requirements of Section
409A(a)(2)(A)(v) of the Code, then the term “Change in Control” herein shall mean, but only
with respect to the transaction and the compensation so affected, a transaction or related
transactions that constitute a “Change in Control” (as defined above) and that also
constitute a “change in control event” within the meaning of Treas. Reg. §1.409A-3(i)(5).

 

- 2 -

 

(e) Code means the Internal Revenue Code of 1986, as amended.

(f) Common Stock means the common stock, $.01 par value of the Company.

(g) Company means Allis-Chalmers Energy Inc., including any successor to Allis-Chalmers
Energy Inc.

(h) Confidential Information has the meaning ascribed to it in Section 9(b).

(i) Constructive Termination means the termination of Executive’s employment with the
Company by resignation if:

(i) a Good Reason occurs or exists,

(ii) Executive gives written notice to the Company of that Good Reason within
ninety (90) days of its initial occurrence or existence (or the date Executive
becomes aware of such Good Reason, if later),

(iii) the Company fails to cure that Good Reason within thirty (30) days of the
date of Executive’s written notice of the Good Reason, and

(iv) Executive resigns from the employment of the Company and,

(1) where the Good Reason is defined in Section 1(n)(i) and such Good
Reason occurs within 6 months after a Change in Control, the effective date
of such resignation is after (but not more than 6 months after) the end of
the 30-day cure period referred to in Section 1(i)(iii), and (unless
otherwise agreed to in writing by Executive and Company) no sooner than 6
months after the date of a Change in Control and

(2) in all other cases, the effective date of such resignation is,
after (but not more than 6 months after) the end of the 30-day cure period
referred to in Section 1(i)(iii).

(j) Disability with respect to Executive shall be deemed to exist if the Executive
either (i) is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to result in death
or can be expected to last for a continuous period of not less than 12 months, or (ii) is,
by reason of any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than three months
under an accident and health plan covering employees of the Company.

(k) Executive refers to Theodore F. Pound III.

(l) Existing Agreement refers to the employment agreement between Executive and the
Company identified in the recitals to this Agreement.

 

- 3 -

 

(m) Excluded Person means any Person who beneficially owns more than 10% of the
outstanding shares of Allis-Chalmers at any time prior to the date hereof.

(n) Good Reason means, with respect to a Constructive Termination, any of the following
to which the Executive did not consent in writing:

(i) the Company demotes or assigns Executive to a lesser position, as measured
by title, responsibility, prestige, authority, duties, or reporting relationship,
that is not consistent with the highest position held by Executive with Company at
any time during Executive’s employment with Company after the date hereof, or any
action or inaction, which results in a diminution in such position, authority,
duties or responsibilities;

(ii) the Company decreases Executive’s compensation, or any element thereof,
below the highest level in effect at any time during Executive’s employment with
Company or reduces Executive’s benefits and perquisites below the highest levels in
effect at any time during Executive’s employment with Company (other than as a
result of any routine amendment or termination of any executive, group, or other
benefit plan or program, which amendment or termination is applicable to all
participants in said plan or program);

(iii) the Company requires Executive to relocate to a principal place of
business more than 50 miles from the principal place of business occupied by Company
on the date hereof; or

(iv) the Company breaches any other material term of this Agreement.

(o) Inventions has the meaning ascribed to it in Section 8(a).

(p) Salary has the meaning ascribed to it in Section 5(a).

(q) Separation Payment Period means the period of one year following the date of the
Executive’s Termination of employment pursuant to Section 7(a)(iii), unless such termination
occurs within the 18-month period beginning on the date of a Change in Control, in which
case it means two years following the date of such termination.

(r) Separation Payments has the meaning ascribed to it in Section 7(b)(ii).

Section 2. Employment. Company hereby employs Executive, and Executive hereby accepts
employment by Company, upon the terms and subject to the conditions hereinafter set forth. The
Existing Employment Agreement is hereby terminated and superseded by this Agreement, effective as
of the date hereof.

Section 3. Duties. Executive shall be employed as the General Counsel and Secretary of the
Company and shall report directly to the Chief Executive Officer. Executive agrees to devote
substantially all of his business time as is necessary to perform his duties attendant to his
executive position with Company. Executive shall be allowed to engage in other
activities as an investor as well as participate in activities of charitable organizations of
his choice so long as they do not materially interfere with his duties for Company.

 

- 4 -

 

Section 4. Term. The term of employment of Executive hereunder shall commence on the date of
this Agreement and shall terminate at 11:59 p.m. on August 1, 2012; unless previously terminated
under Section 7 of this Agreement, or unless said term is extended, in writing, by the Executive
and Company.

Section 5. Compensation and Benefits. In consideration for the services of Executive
hereunder, Company shall compensate Executive as follows (except as set forth herein, Executive
acknowledges payment in full of all amounts due to him for services rendered prior to the date
hereof):

(a) Salary. Company shall pay Executive, semi-monthly in arrears with its normal
payroll procedures, a salary which is equivalent to an annual rate of $285,000.00 per annum
less applicable statutory deductions and withholdings (the “Salary”) payable in accordance
with the Company’s regular payroll procedures currently in effect. Any increase in the
Salary shall be in the sole discretion of the Compensation Committee.

(b) Incentive Bonus. Executive shall be entitled to receive such cash incentives as
the Compensation Committee and Board of Directors establishes for executives of the Company.
Executive shall also be eligible to receive from Company such other annual management
incentive bonuses as may be provided in management incentive bonus plans adopted from time
to time by Company.

(c) Vacation. Executive shall be entitled to four (4) weeks paid vacation per year.
Unless otherwise approved by the Compensation Committee of the Board of Directors of the
Company, a maximum of ten days accrued vacation not taken in any calendar year shall be
carried forward and may be used in the next subsequent calendar year. Executive shall
schedule his paid vacation to be taken at times which are reasonably and mutually convenient
to both Company and Executive.

(d) Insurance Benefits. Company shall provide accident, health, dental, disability and
life insurance for Executive under the group accident, health, dental, disability and life
insurance plans as may be maintained by Company for its full-time, salaried Executives.

(e) Car Allowance. The Executive will be paid a $1,000 per month car allowance during
the term of this Agreement.

Section 6. Expenses. The parties recognize and anticipate that in connection with the
services to be performed by Executive pursuant to the terms of this Agreement, Executive may incur
and be required to make payments for travel, entertainment of business associates and similar
expenses. Company shall reimburse Executive for all reasonable expenses of types authorized by
Company and incurred by Executive in the performance of his duties hereunder, consistent with past
practices. Executive shall comply with such reporting requirements with respect to expenses as
Company may establish from time to time.

 

- 5 -

 

Section 7. Termination.

(a) General. Executive’s employment hereunder shall commence on the Effective Date and
continue until the end of the term specified in Section 4, except that the employment of
Executive hereunder shall terminate prior to such time in accordance with the following:

(i) Death or Disability. Upon the death of Executive during the term of his
employment hereunder; or, at the option of Company, in the event of Executive’s
Disability, upon 30 days’ notice to Executive.

(ii) For Cause. For “Cause” immediately upon written notice by Company to
Executive. A termination for Cause shall mean a termination because of: (i) an act of
material dishonesty, fraud, misrepresentation, misappropriation, or embezzlement by
Executive involving the Company or its property or employees; (ii) Executive’s
unauthorized, material and intentional or grossly negligent use or disclosure of any
confidential information or trade secrets of the Company; (iii) any material violation
by Executive of a substantive law or regulation applicable to the Company’s business,
which violation, in the sole but reasonable discretion of the Board of Directors, does
or is reasonably like to cause material injury to the Company; (iv) Executive’s
conviction of, or plea of nolo contendere or guilty to a felony or any other crime
which involves moral turpitude; (v) Executive’s continued failure, in the sole but
reasonable discretion of the Board of Directors, to perform the principal duties,
functions and responsibilities of his position (other than any such failure resulting
from Executive’s Disability), or to follow the directives of the Board of Directors,
after written notice from the Company identifying the deficiencies in performance and a
reasonable cure period of not less than thirty (30) days of any breach capable of cure;
(vi) gross negligence or willful misconduct in the performance of Executive’s duties;
or (vii) a material and willful breach of Executive’s fiduciary duties to the Company.

(iii) Without Cause. Without Cause upon notice by the Board of Directors to
Executive or upon notice by Executive to the Board of Directors if Executive’s
employment has been terminated by Constructive Termination.

(iv) Resignation. Resignation by the Executive.

(b) Separation Pay.

(i) Termination Upon Death or Disability For Cause or by Resignation.
Executive shall not be entitled to any separation pay or other compensation upon
termination of his employment pursuant to Section 7(a)(i), (ii) or (iv) except for
his Salary and any incentive compensation earned but unpaid as of the date of
termination, unpaid expense reimbursements under Section 6 for expenses incurred in
accordance with the terms hereof prior to termination, and
compensation for accrued, unused vacation as of the date of termination all of
which shall be paid to the Executive within 30 days of the date of termination.

 

- 6 -

 

(ii) Termination Without Cause. In the event Executive’s employment hereunder
is terminated pursuant to Section 7(a)(iii), Company shall pay Executive Separation
Payments as Executive’s sole remedy in connection with such termination.
“Separation Payments” are payments made at the semi-monthly rate of Executive’s then
current salary, including car allowance, in effect immediately preceding the date of
termination. Separation Payments shall be paid by Company in equal semi-monthly
payments in arrears or in accordance with its then-current normal payroll procedure
for the duration of the Separation Payment Period. Company shall also pay Executive
his Salary and any incentive bonus compensation earned but unpaid as of the date of
termination, unpaid expense reimbursements under Section 6 for expenses incurred in
accordance with the terms hereof prior to termination, all of which shall be paid to
the Executive within 30 days of the date of termination. In addition, Executive
and/or his or her qualified beneficiaries shall continue to receive health benefits
and coverage under the Company’s group health care plan or such other equivalent
health coverage Executive may agree. Such coverage shall be provided on the
foregoing terms for the duration of the Separation Payment Period.

(c) Section 409A Matters.

(i) Section 409A Limits on Payments to Specified Employees. Notwithstanding
any other provision of the Agreement to the contrary, if Executive is a “specified
employee,” as defined in Section 409A of the Code, except to the extent permitted
under Section 409A of the Code, no benefit or payment that is subject to Section
409A of the Code (after taking into account all applicable exceptions to Section
409A of the Code, including but not limited to the exceptions for short-term
deferrals and for “separation pay only upon an involuntary separation from service”)
shall be made under this Agreement on account of Executive’s “separation from
service,” as defined in Section 409A of the Code, until the later of the date
prescribed for payment in this Agreement and the 1st day of the 7th calendar month
that begins after the date of Executive’s separation from service (or, if earlier,
the date of death of Executive). Any such benefit or payment payable pursuant to
this Agreement within the period described in the immediately preceding sentence
will accrue and will be payable in a lump sum cash payment, without interest, on the
payment date set forth in the immediately preceding sentence.

(ii) References to termination. All references in this Agreement to the
termination of Executive’s employment with Company shall mean and shall be deemed to
occur if and when a termination of employment that constitutes a “separation from
service” within the meaning of Section 409A(a)(2)(A)(i) of the Code and applicable
administrative guidance issued thereunder has occurred.

 

- 7 -

 

(iii) Special rules for reimbursements. To the extent that any amount or
benefit hereunder is includable in gross income for federal income tax purposes and
constitutes or is treated hereunder as a reimbursement received or to be received by
Executive, such reimbursement shall be administered consistently with the following
additional requirements as set forth in Treas. Reg. §1.409A-3(i)(1)(iv): (1)
Executive’s eligibility for or receipt of benefits or reimbursements in one year
will not affect Executive’s eligibility for or the amount of benefits or
reimbursements in any other year, (2) any reimbursement of eligible expenses will be
made on or before the last day of the year following the year in which the expense
was incurred, (3) Executive’s right to benefits or reimbursement is not subject to
liquidation or exchange for another benefit, and (4) the right to reimbursement of
expenses incurred or to the provision of benefits in kind shall terminate one year
from the Executive’s termination of employment.

(iv) Constructive Termination. The Company and the Executive acknowledge and
agree that the definitions of Good Reason and Constructive Termination and the
provisions of this Agreement relating thereto are intended to comply, and shall be
interpreted and administered so as to comply, with the requirements of Treas. Reg.
§1.409A-1(n)(2)(i).

Section 8. Inventions; Assignment.

(a) Inventions Defined. All rights to discoveries, inventions, improvements, designs
and innovations (including all data and records pertaining thereto) that relate to the
business of Company, whether or not patentable, copyrightable or reduced to writing, that
Executive may discover, invent or originate during the term of his employment hereunder, and
for a period of six months thereafter, either alone or with others and whether or not during
working hours or by the use of the facilities of Company (“Inventions”), shall be the
exclusive property of Company. Executive shall promptly disclose all Inventions to Company,
shall execute at the request of Company any assignments or other documents Company may deem
necessary to protect or perfect its rights therein, and shall assist Company, at Company’s
expense, in obtaining, defending and enforcing Company’s rights therein. Executive hereby
appoints Company as his attorney-in-fact to execute on his behalf any assignments or other
documents deemed necessary by Company to protect or perfect its rights to any Inventions.

(b) Covenant to Assign and Cooperate. Without limiting the generality of the
foregoing, Executive hereby assigns and transfers to Company the world-wide right, title and
interest of Executive in the Inventions. Executive agrees that Company may apply for and
receive patent rights (including Letters Patent in the United States) for the Inventions in
Company’s name in such countries as may be determined solely by Company. Executive shall
communicate to Company all facts known to Executive relating to the Inventions and shall
cooperate with Company’s reasonable requests in connection with vesting title to the
Inventions and related patents exclusively in Company and in connection with obtaining,
maintaining and protecting Company’s exclusive patent rights in the Inventions.

 

- 8 -

 

(c) Successors and Assigns. Executive’s obligations under this Section 8 shall inure
to the benefit of Company and its successors and assigns and shall survive the expiration of
the term of this Agreement for such time as may be necessary to protect the proprietary
rights of Company in the Inventions. In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor to all or substantially all
of the Company’s business and/or assets to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be required to
perform it if no such successor had taken place.

Section 9. Confidential Information.

(a) Acknowledgment of Proprietary Interest. Executive acknowledges the proprietary
interest of Company in all Confidential Information. Executive agrees that all Confidential
Information learned by Executive during his employment with Company or otherwise, whether
developed by Executive alone or in conjunction with others or otherwise, is and shall remain
the exclusive property of Company. Executive further acknowledges and agrees that his
disclosure of any Confidential Information will result in irreparable injury and damage to
Company.

(b) Confidential Information Defined. “Confidential Information” means all
confidential and proprietary information of Company, including without limitation (i)
information derived from reports, investigations, experiments, research and work in
progress, (ii) methods of operation, (iii) market data, (iv) proprietary computer programs
and codes, (v) drawings, designs, plans and proposals, (vi) marketing and sales programs,
(vii) client lists, (viii) historical financial information and financial projections, (ix)
pricing formulae and policies, (x) all other concepts, ideas, materials and information
prepared or performed for or by Company and (xi) all information related to the business,
products, purchases or sales of Company or any of its suppliers and customers, other than
information that is publicly available.

(c) Covenant Not To Divulge Confidential Information. Company is entitled to prevent
the disclosure of Confidential Information. Company agrees to and has provided Confidential
Information to Executive since Executive’s employment with the Company and Executive
acknowledges and agrees that, during the course of his employment, Executive will be exposed
to, have access to, and gain knowledge of Confidential Information. As a portion of the
consideration for the employment of Executive and for the compensation being paid to
Executive by Company, Executive agrees at all times during the term of his employment
hereunder and thereafter to hold in strict confidence and not to disclose or allow to be
disclosed to any person, firm or corporation, other than to his professional advisors (who
have the obligation to maintain the confidentiality of such information) and to persons
engaged by Company to further the business of Company, and not to use except in the pursuit
of the business of Company, the Confidential Information, without the prior written consent
of Company.

(d) Return of Materials. In the event of any termination or cessation of his
employment with Company for any reason, or request by the Company at anytime, Executive
shall promptly deliver to Company all documents, data and other information
derived from or otherwise pertaining to Confidential Information. Executive shall not
take or retain any documents or other information, or any reproduction or excerpt thereof,
containing or pertaining to any Confidential Information.

 

- 9 -

 

Section 10. Noncompetition.

(a) Until termination of Executive’s employment hereunder, Executive shall not do any
of the following:

(i) engage directly or indirectly, alone or as a shareholder, partner,
director, officer, executive of or consultant to any other business organization, in
any business activities that:

(1) relate to the oil and gas drilling services industry (the
“Designated Industry”); or

(2) were either conducted by Company prior to the termination of
Executive’s employment hereunder or proposed to be conducted by Company at
the time of such termination;

(ii) approach any customer or supplier of Company in an attempt to divert it to
any competitor of Company in the Designated Industry; or

(iii) solicit or encourage any employee or Executive of Company to end his
relationship with Company or commence any such relationship with any competitor of
Company.

(b) Executive’s noncompetition obligations hereunder shall not preclude Executive from
owning less than five percent of the common stock of any publicly traded corporation
conducting business activities in the Designated Industry. If at any time the provisions of
this Section 10 are determined to be invalid or unenforceable by reason of being vague or
unreasonable as to area, duration or scope of activity, this Section 10 shall be considered
divisible and shall be immediately amended to only such area, duration and scope of activity
as shall be determined to be reasonable and enforceable by the court or other body having
jurisdiction over the matter, and Executive agrees that this Section 10 as so amended shall
be valid and binding as though any invalid or unenforceable provision had not been included
herein.

Section 11. General.

(a) Notices. All notices and other communications hereunder shall be in writing or by
written telecommunication, and shall be deemed to have been duly given upon delivery if
delivered personally or via written telecommunication, or five days after mailing if mailed
by certified mail, return receipt requested or by written telecommunication, to the relevant
address set forth below, or to such other address as the recipient of such notice or
communication shall have specified to the other party in accordance with this Section 11(a):

If to Company, to:

c/o Allis-Chalmers Energy Inc.

5075 Westheimer, Suite 890

Houston, Texas 77056

Attention: General Counsel

If to Executive, to the last address for Executive appearing on the Company’s records

 

- 10 -

 

(b) Withholding. All payments required to be made to Executive by Company under this
Agreement shall be subject to the withholding of such amounts, if any, relating to federal,
state and local taxes as may be required by law.

(c) Equitable Remedies. Each of the parties hereto acknowledges and agrees that upon
any breach by Executive or Company of his or its obligations hereunder, Company shall have
no adequate remedy at law and accordingly shall be entitled to specific performance and
other appropriate injunctive and equitable relief.

(d) Severability. If any provision of this Agreement is held to be illegal, invalid
or unenforceable, such provision shall be fully severable, and this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision never
comprised a part hereof, and the remaining provisions hereof shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement a provision as
similar in its terms to such illegal, invalid or unenforceable provision as may be possible
and be legal, valid and enforceable.

(e) Waivers. No delay or omission by either party in exercising any right, power or
privilege hereunder shall impair such right, power or privilege, nor shall any single or
partial exercise of any such right, power or privilege preclude any further exercise thereof
or the exercise of any other right, power or privilege.

(f) Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, and all of which together shall constitute one and the
same instrument.

(g) Captions. The captions in this Agreement are for convenience of reference only and
shall not limit or otherwise affect any of the terms or provisions hereof.

(h) Reference to Agreement. Use of the words “herein,” “hereof,” “hereto,” “hereunder”
and the like in this Agreement refer to this Agreement only as a whole and not to any
particular section or subsection of this Agreement, unless otherwise noted.

 

- 11 -

 

(i) Binding Agreement. This Agreement shall be binding upon and inure to the benefit
of the parties and shall be enforceable by the personal representatives and heirs of
Executive and the successors and assigns of Company. This Agreement may be
assigned by the Company to any successor to all or substantially all of the Company’s
business as a result of a merger, consolidation, sale of stock or assets, or similar
transaction; provided that in the event of any such assignment, the Company shall remain
liable for all of its obligations hereunder and shall be liable for all obligations of all
such assignees hereunder. The Company will require any successor to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession had taken place. If Executive dies
while any amounts would still be payable to him hereunder, such amounts shall be paid to
Executive’s estate. This Agreement is not otherwise assignable by Executive.

(j) Entire Agreement. This Agreement contains the entire understanding of the
parties, supersedes all prior agreements and understandings relating to the subject matter
hereof and may not be amended except by a written instrument hereafter signed by each of the
parties hereto.

(k) Governing Law. This Agreement and the performance hereof shall be construed and
governed in accordance with the laws of the State of Texas, without regard to its choice of
law principles.

(l) Venue. Any dispute between Executive and Company that arises out of or concerns,
in whole or in part, this Agreement or the employment relationship between Executive and
Company shall be exclusively resolved in a federal or state court located in Harris County,
Texas. To the extent necessary, Executive and Company agree to submit to the jurisdiction
of such courts, and to waive any objection to such jurisdiction or venue.

(m) Gender and Number. The masculine gender shall be deemed to denote the feminine or
neuter genders, the singular to denote the plural, and the plural to denote the singular,
where the context so permits.

[signature page follows]

 

- 12 -

 

EXECUTED
August 11, 2010, and effective as of the date and year first above
written.

	 	 	 	 	 	 	 
	 	 	ALLIS-CHALMERS ENERGY INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ Victor M. Perez 	 	 
	 

	 	 	 	 

Victor M. Perez

Chief Financial Officer

	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 

	 	/s/ Theodore F. Pound III	 	 
	 	 	 	 	 
	 

	 	Theodore F. Pound III	 	 

 

- 13 -

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