Document:

Exhibit 10.1

 

1992 STOCK
INCENTIVE PLAN

 

AMPEX
CORPORATION

1992
STOCK INCENTIVE PLAN

 

as
amended through June 10, 2005

 

1.                                       Purpose

 

The purpose of this plan (the “Plan”)
is to secure for Ampex Corporation (the “Company”) and its stockholders
the benefits arising from the ownership of stock options and stock appreciation
rights by directors and key employees of the Company and its parent and
subsidiary corporations, who are expected to contribute to the Company’s future
growth and success.

 

2.                                       Types
of Plan Benefits

 

(a)                                  Types of Awards.  Subject to Section 3(a), the Company may
in its sole discretion grant, with respect to the Company’s Class A Common
Stock (“Common Stock”), options (“Options”) and/or stock
appreciation rights (“Rights”) to eligible persons, as authorized by
action of the Board of Directors of the Company (or a Committee designated by
the Board of Directors).  As used in the
Plan, an “Award” shall mean an Option or a Right or both and an “Award
Owner” shall mean the owner of an Option or a Right or both.

 

(i)                                     Types of
Options.  Options granted pursuant to
the Plan may be either incentive stock options (“Incentive Stock Options”)
meeting the requirements of Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”), or non-statutory options (“Non-Statutory
Stock Options”), which are not intended to or do not meet the requirements
of Code Section 422.

 

(ii)                                  Types of Rights.  Rights granted pursuant to the Plan shall
entitle the Rights holder to receive shares of the Common Stock of the Company
equal in value to the appreciation of a specified number of shares of such
Common Stock as provided in Section 7, plus cash for any fractional share.
Rights may be either an alternative to or in tandem with the exercise of all or
any portion of an Option granted to a Rights holder (“Tandem Rights”) or
independent of any Options granted hereunder (“Non-Tandem Rights”).

 

3.                                       Administration

 

(a)                                  General
Provisions.  The Plan will be
administered by the Board of Directors of the Company (the “Board”),
whose construction and interpretation of the terms and provisions of the Plan
shall be final and conclusive.  Except
for all decisions with respect to Awards for officers and directors subject to Section 16
of the Securities Exchange Act of 1934, as amended (the “1934 Act”),
which shall be made only in accordance with the provisions of Section 3(b) below,
the Board may in its sole discretion grant Options to purchase shares of the
Company’s Common Stock, issue Rights to the appreciation in the value of such
shares, and issue shares upon exercise of such Options and Rights, and/or
distribute cash upon exercise of such Options and Rights, as provided in the
Plan.  The Board shall have authority,
subject to the express provisions of the Plan, to construe the respective Award
agreements and the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of the
respective Award agreements, which need not be identical; to advance the lapse
of any waiting or installment periods and exercise dates; and to make all other
determinations in the judgment of the Board of Directors necessary or desirable
for the administration of the Plan.  The
Board may correct any defect or supply any omission or reconcile any

 

 

inconsistency in the Plan or in any Award agreement in the manner and
to the extent it shall deem expedient to carry the Plan into effect and it
shall be the sole and final judge of such expediency.  No director shall be liable for any action or
determination taken or made under or with respect to the Plan or any Award in
good faith.  The Board may, to the full
extent permitted by law, delegate any or all of its powers under the Plan to a
committee (the “Committee”) appointed by the Board, and if the Committee
is so appointed all references to the Board in the Plan shall mean and relate
to such Committee unless the context requires otherwise.

 

(b)                                 Committee of
Non-Employee Directors.  Except with
respect to Awards to Non-Employee Directors (as defined below), all decisions
with respect to Awards to officers and directors subject to Section 16 of
the 1934 Act shall be made by a Committee that is composed solely of two or
more Non-Employee Directors.  A “Non-Employee
Director” shall mean a member of the Company’s Board of Directors who: (i) is
not currently an officer or employee of the Company or a parent or subsidiary
of the Company, or otherwise currently employed by the Company or a parent or
subsidiary of the Company; (ii) does not receive compensation, either
directly or indirectly, from the Company or a parent or subsidiary of the
Company, for services rendered as a consultant or in any capacity other than as
a director, except for an amount that does not exceed the dollar amount for
which disclosure would be required pursuant to Item 404(a) of Regulation
S-K; (iii) does not possess an interest in any other transaction for which
disclosure would be required pursuant to Item 404(a) of Regulation S-K;
and (iv) is not engaged in a business relationship for which disclosure
would be required under Item 404(a) of Regulation S-K.  All decisions with respect to Awards to any
Non-Employee Director shall be made by the Company’s Board of Directors,
without the participation or vote of such Non-Employee Director.  The limitations set forth in this Section 3(b) shall
automatically incorporate any additional requirements that may in the future be
necessary for the Plan to comply with Rule 16b-3.

 

4.                                       Eligibility

 

(a) Generally

 

(i)                                     Except as provided
in Section 4(b), Awards shall be granted only to persons who are, at the
time of grant, officers, employees, directors, consultants, advisors or other
service providers of the Company or of any Parent Corporation or Subsidiary (as
defined in Sections 17(c) and 17(e)); provided that any consultant,
advisor or service provider must render bona fide services not in connection
with the offer and sale of securities in a capital raising transaction.

 

(ii)                                  An eligible
individual may be granted Incentive Stock Options, Non-Statutory Stock Options,
Tandem Rights and/or Non-Tandem Rights. 
A person who has been granted an Award may, if he or she is otherwise
eligible, be granted one or more additional Awards if the Board shall so
determine.

 

(b)                                 Incentive Stock
Options.  No person shall be granted
any Incentive Stock Option under the Plan unless at the time such Option is
granted, such person is an employee of the Company, or of any Parent
Corporation or Subsidiary, and does not own, directly or indirectly, Common
Stock of the Company possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of any Parent Corporation or
Subsidiary (a “10% Stockholder”), unless the requirements of Section 6(d)(i) are
satisfied.

 

(c)                                  Limit on Awards.  Notwithstanding any other provisions of the
Plan, the maximum number of shares with respect to which Awards may be granted
to any individual during any single fiscal year (the “Individual Award Limit”)
shall be 83,182 shares (subject to adjustment as provided in Sections 13 and
14), which represents five percent of the Common Stock of the Company that was
outstanding on May 19, 1995 (as so adjusted).  To the extent required by Section 162(m)
of the Code

 

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or the regulations thereunder, in applying the Individual Award Limit
with respect to a participant, (i) if an Award is cancelled, the cancelled
Award shall continue to count against the Individual Award Limit; and (ii) if,
after grant, the exercise price of an Award is reduced, the transaction shall
be treated as the cancellation of the Award and a grant of a new Award, and
both the Award that is deemed cancelled and the new Award shall count against
the Individual Award Limit.

 

5.                    Stock
Subject to Plan

 

Subject to adjustment as provided in Sections
13 and 14 below, the maximum number of shares of Common Stock of the Company
that may be issued pursuant to Awards granted under the Plan is 712,500
shares.  Shares issued pursuant to the
Plan may be treasury shares of the Company. 
The Company shall have no obligation to issue unauthorized shares in
respect of Awards.  If Awards granted
under the Plan shall expire or terminate for any reason without having been
exercised in full, the shares subject to the unexercised portions of such
Awards shall again be available for subsequent Award grants under the
Plan.  Stock issuable upon exercise of
Awards granted under the Plan may be subject to such restrictions on transfer,
repurchase rights or other restrictions as shall be determined by the Board.

 

6.                                       Options

 

(a)                                  Forms of Option
Agreements.  As a condition to the
grant of an Option under the Plan, each recipient of an Option shall execute an
Option Agreement, substantially in the form of Exhibit A to the
Plan (in the case of Incentive Stock Options) or Exhibit B to the
Plan (in the case of Non-Statutory Stock Options).  The Option Agreement may be in such other
form not inconsistent with the Plan as shall be specified by the Board of
Directors at the time such Option is granted.

 

(b)                                 Purchase Price.  No consideration is to be paid for the grant
of an Option.  The purchase price per
share of stock deliverable upon the exercise of an Option shall be determined
by the Board on the date such Option is granted; provided, however, that (i) in
the case of any Option (other than an Incentive Stock Option granted to a 10%
Stockholder), the exercise price shall not be less than 100% of the Fair Value
(as defined in Section 17(b)) of such stock, as determined by the Board at
the grant of such Option, and (ii) in the case of any Incentive Stock
Option granted to a 10% Stockholder, the exercise price shall not be less than
110% of the Fair Value of such stock, as determined by the Board at the grant
of such Option.

 

(c)                                  Payment of
Exercise Price.  Payment of the
exercise price of an Option shall be in cash (by check) or, in the sole
discretion of the Board and to the extent authorized in the Option Agreement
and permissible under applicable law, in any of the following methods or any
combination thereof: (i) by surrender of shares of fully paid Common Stock
of the Company with a Fair Value equal to the aggregate exercise price; (ii) by
waiver of compensation owed by the Company to the Option holder; (iii) through
a cashless exercise arrangement between the Option holder and an NASD broker; (iv) by
the surrender of other Options held by the Option holder (other than Incentive
Stock Options) to purchase Common Stock of the Company, to the extent of the “spread”
on the surrendered Options (the “spread” being the amount by which the
Fair Value of the shares covered by the surrendered Options on the exercise
date exceeds the aggregate exercise price of the surrendered Options); or (v) by
any other lawful means.

 

(d)                                 Incentive Stock
Options.  Options granted under the
Plan that are intended to be Incentive Stock Options shall be specifically
designated as intending to be Incentive Stock Options and shall be subject to
the following additional terms and conditions:

 

(i)                                     10% Stockholder.  If any employee to whom an Incentive Stock
Option is to be granted under the Plan is at the time of the grant of such
Option a 10% Stockholder, then the

 

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following special provisions shall be applicable to the Incentive Stock
Option granted to such individual: (x) the exercise price per share of the
Common Stock subject to such Incentive Stock Option shall not be less than 110%
of the Fair Value of one share of Common Stock at the time of grant; and (y)
the option exercise period shall not exceed five years from the date of grant.

 

(ii)                                  Dollar Limitation.  Common Stock of the Company that is acquired
pursuant to the exercise of an Incentive Stock Option granted to an employee
under the Plan shall be deemed to be acquired pursuant to the exercise of an
incentive stock option under Code Section 422, only to the extent that the
aggregate Fair Value (determined as of the respective date or dates of grant)
of the Common Stock with respect to which such Incentive Stock Option, and all
other incentive stock options that are granted to such employee under the Plan
(and under any other incentive stock option plans of the Company, and any
Parent Corporation and any Subsidiary) are exercisable for the first time by
such employee in any one calendar year, does not exceed $100,000.  To effectuate the provisions of this Section 6(d)(ii),
the Board may designate the shares of Common Stock that are treated as acquired
pursuant to the exercise of an Incentive Stock Option by issuing a separate
certificate for such shares and identifying such certificates as Incentive
Stock Option stock in its stock transfer records.  Except as modified by the preceding
provisions of this Section 6(d) all the provisions of the Plan
applicable to Options shall be applicable to Incentive Stock Options granted
hereunder.

 

7.                                       Rights

 

(a)                                  Forms of Rights
Agreement.   As a condition to the
grant of Rights under the Plan, each Rights holder shall execute a Rights
Agreement, substantially in the form of Exhibit C to the Plan (in
the case of Tandem Rights) or Exhibit D to the Plan (in the case of
Non-Tandem Rights), or in such other form not inconsistent with the Plan, as
shall be specified by the Board at the time such Rights are granted.

 

(b)                                 Purchase Price.  No consideration is to be paid for the grant
of a Right.

 

(c)                                  Entitlement Under
Each Right.  To the extent the holder
of a Right is vested in such Right (as provided in the Rights Agreement), each
Right granted shall entitle the Right holder upon exercise of the Right to
receive, for each share covered by the Right, shares of Common Stock with a
Fair Value equal to the excess, if any, of (i) the Fair Value, on the
effective date of exercise, of one share of Common Stock over (ii) the
Fair Value, on the date of grant, of such share plus cash for any fractional
share.

 

8.                    Exercise
Period

 

(a)                                  Generally.  Each Award shall expire on such date as the
Board shall determine on the date such Award is granted, but in no event after
the expiration of ten years from the date on which such Award is granted (or
five years in the case of Incentive Stock Options described in Section 6(d)(i)),
and in all cases each Award shall be subject to earlier termination as provided
in the Plan.

 

(b)                                 Effect of
Termination of Status as Eligible Participant.  No Award may be exercised unless, at the time
of such exercise, the Award Owner is, and continuously since the date of grant
of his or her Award, has been an employee, director, consultant, advisor or
other eligible service provider of one or more of the Company, a Parent
Corporation or a Subsidiary (in each case, an “Eligible Participant”),
except that subject to Section 10 and if and to the extent the Award
agreement so provides:

 

(i)                                     the Award may be
exercised within the period of three months after the date the Award Owner
ceases to be an Eligible Participant of any of the foregoing entities (or
within such

 

4

 

lesser period as may be specified in the Award agreement, except that
no Award agreement shall provide for a shorter period than is permitted under
applicable federal and state securities laws);

 

(ii)                                  if the Award Owner
dies while an Eligible Participant or within three months after the Award Owner
ceases to be an Eligible Participant, the Award may be exercised by the
administrator of the Award Owner’s estate, or by the person to whom the Award
is transferred by will or the laws of descent and distribution, within the
period of one year after the date of death (or within such lesser period as may
be specified in the Award agreement, except that no Award agreement shall
provide for a shorter period than is permitted under applicable federal and
state securities laws); and

 

(iii)                               if the Award Owner
becomes disabled (within the meaning of Section 22(e)(3) of the Code)
while an Eligible Participant, the Award may be exercised within the period of
one year after the date the Award Owner ceases to be an Eligible Participant
because of such disability (or within such lesser period as may be specified in
the Award agreement, except that no Award agreement shall provide for a shorter
period than is permitted under applicable federal and state securities laws);

 

provided, however, that in no event may any Award be exercised after
the expiration date of the Award.  Any
Award or portion thereof that is vested on or before the date on which the
Award Owner ceases to be an Eligible Participant (the “Termination Date”),
but not exercised during the applicable time period specified above  (or any shorter period specified in the Award
agreement) shall be deemed terminated at the end of the applicable time period
for purposes of Section 5. Any Award or portion thereof that is not
vested, and will not become vested based on the applicable vesting schedule, on
or before the Termination Date shall be deemed terminated for purposes of Section 5
on the earlier of (i) the Termination Date or (ii) the date of the
Award Owner’s last day of active work at the Company (which, in the case of a
lay-off, shall be the effective date of the lay-off).

 

(c)                                  Effective Date of
Exercise.  Subject to the provisions
of Sections 8(a), 8(b) and 10, the exercise of an Award by an Award Owner
shall take effect on the date of receipt by the Company of written notice of
exercise by the Award Owner, provided such receipt is followed promptly by
receipt of any required payment for such exercise.

 

9.                                       Assignability
of Awards

 

To the extent required for registration on Form S-8
under the Securities Act of 1933, as amended (the “1933 Act”), no Award
granted under the Plan shall be assignable or transferable by the person to
whom it is granted, either voluntarily or by operation of law, except by will
or the laws of descent and distribution; provided that if the requirements for
registration on Form S-8 are subsequently amended to permit broader
transferability of options, Awards shall be transferable to the extent provided
in the Award agreement covering the Award, and the Board shall have discretion
to amend any such outstanding Award to provide for broader transferability of
the Award as the Board may authorize within the limitations of the requirements
for registration on Form S-8 and subject to applicable state
securities laws.  Notwithstanding the
foregoing, if required by the Code, each Incentive Stock Option under the Plan
shall be transferable by the holder thereof only by will or the laws of descent
and distribution and, during the Option holder’s lifetime, shall be exercisable
only the Option holder.  In the event of
any transfer of an Award hereunder that is permitted by the requirements for
registration on Form S-8 and by applicable state securities laws,
the transferee shall be entitled to exercise the Award in the same manner and
only to the same extent as the Award holder (or his or her personal
representative or the person who would have acquired the right to exercise the
Award by bequest or intestate succession) would have been entitled to exercise
the Award under Sections 6, 7 and 8 had the Award not been transferred.

 

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10.                       Vesting
of Awards

 

An Option or Right may be exercised, and
payment shall be made upon exercise of such Award, only to the extent that such
Award has vested.  Unless otherwise
specified by the Board at the time an Award is granted, an Award shall vest
based on the collective number of years of service with or for the Company, the
Parent Corporation and Subsidiaries, in accordance with the schedule or
terms set forth in the Award agreement executed by the Award Owner and a duly
authorized officer of the Company. 
Notwithstanding the foregoing, unless the Board specifically authorizes
a different vesting schedule with respect to an Award, an Award shall
become exercisable based on the number of full years of service that such Award
Owner has completed since the Award’s date of grant, in accordance with the
following schedule:

 

	
  Number of Years of 

  Service Since Date of Grant

  	
   

  	
  Percentage of 

  Award Available for 

  Exercise (Cumulative)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1 year

  	
   

  	
  25

  	
  %

  
	
  2 years

  	
   

  	
  50

  	
  %

  
	
  3 years

  	
   

  	
  75

  	
  %

  
	
  4 or more
  years

  	
   

  	
  100

  	
  %

  

 

The Board, in its discretion, may establish a
different vesting schedule at the time an Award is granted.

 

Notwithstanding anything to the contrary in
this Section 10, upon the exercise of an Award by a director or officer
who is subject to Section 16 of the 1934 Act, the Company shall determine
if such exercise complies with Rule 16b-3(d)(3).  If such exercise does not so comply, such
exercise shall not be given effect unless (i) the Company, within 5 days
of receipt of the notice of exercise, notifies the Award Owner, in writing, of
such noncompliance and the Award Owner responds in writing, in substance and
form satisfactory to the Company, within 5 days of receipt of the Company’s
notification, that such exercise is to remain effective.

 

11.                                 General
Restrictions

 

(a)  Award Owner Representations.  The Company may require any person to whom an
Award is granted, as a condition of exercising such Award, to give such written
assurances, in substance and form satisfactory to the Company, as the Company
deems necessary or appropriate in order to comply with applicable federal and
state securities laws.  If the Award
Owner is subject to Section 16 of the 1934 Act, the Company may require
that such Award Owner give written assurances, in substance and form
satisfactory to the Company, that such person has consulted with competent
counsel as to the application of Section 16(b) of the 1934 Act to
such exercise.

 

(b)  Stock Certificate Legends.  Certificates representing shares issued upon
exercise of the Award shall bear such legends as are deemed appropriate by
legal counsel to the Company, unless the Award Owner provides a written opinion
of legal counsel, satisfactory to the Company, that any such legend is not
required.

 

(c)  
Compliance With Securities Laws

 

(i)  Each Award shall be subject to the
requirement that, if at any time counsel to the Company shall determine that
the listing, registration or qualification of such Award or the shares subject
to such Award upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental or regulatory body, is necessary
as a condition of, or in connection

 

6

 

with the grant or exercise of such Award or the issuance or purchase of
shares thereunder, such Award shall not be effective or may not be accepted or
exercised in whole or in part (as applicable) unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained on conditions acceptable to the Board. 
Nothing herein shall be deemed to require the Company to apply for or to
obtain such listing, registration or qualification.

 

(ii)                                  The Company shall
provide each Award Owner with such information, statements, discussions and
analyses with respect to the Company in such manner and at such times as may be
required under state or federal securities laws.

 

12.                                 Rights
as a Stockholder

 

The Award Owner shall have no rights as a
stockholder with respect to any shares covered by the Award until the date on
the stock certificate issued to him or her for such shares.  Except as otherwise expressly provided in the
Plan, no adjustment shall be made for dividends or other rights for which the
record date is prior to the date on such stock certificate.

 

13.                                 Recapitalization

 

In the event that the outstanding shares of
Common Stock of the Company are changed into or exchanged for a different
number or kind of shares or other securities of the Company by reason of any
recapitalization, reclassification, stock split, stock dividend, combination or
subdivision, appropriate adjustment shall be made in the number and kind of
shares available under the Plan and under any Awards granted under the Plan
(including appropriate adjustment to applicable exercise prices).  Such adjustment to outstanding Awards shall
be made without change in the total value applicable to the unexercised portion
of such Awards as of the date of the adjustment.  No such adjustment shall be made with respect
to an Incentive Stock Option that would, within the meaning of any applicable
provisions of the Code, constitute a modification, extension or renewal of any
Option or a grant of additional benefits to the holder of an Option.

 

14.                                 Reorganization

 

In the event (i) the Company is merged
or consolidated with another corporation other than an Affiliate, and the
Company is not the surviving corporation, or (ii) all or substantially all
of the assets or more than 50% of the outstanding voting stock of the Company
is acquired by any other corporation other than an Affiliate, or (iii) there
is a reorganization or liquidation of the Company, the Board of Directors of
the Company, or the board of directors of any corporation assuming the
obligations of the Company, shall, as to all outstanding Awards, either (x) in
the case of a merger, consolidation or reorganization of the Company, make
appropriate provision for the protection of any such outstanding Awards by the
substitution on an equitable basis of appropriate stock of the Company, or of
the merged, consolidated or otherwise reorganized corporation that will be
issuable in respect of the shares of Common Stock of the Company (provided that
no additional benefits shall be conferred upon Award Owners as a result of such
substitution), or (y) upon written notice to the Award Owners, provide that all
vested unexercised Awards must be exercised within a specified number of days
of the date of such notice or they will be terminated, or (z) upon written
notice to the Award Owners, provide that all vested unexercised Awards shall be
purchased by the Company or successor within a specified number of days of the
date of such notice at a price equal to the value the Award Owners would have
received if they then exercised all their vested Awards and immediately
received full payment in respect of such exercise, as determined in good faith
by the Board.  In any such case, the
Board may, in its discretion, accelerate the exercise dates of all or any
individual outstanding Awards; provided, however, the Company may not
accelerate the exercise dates of any outstanding Awards to an Award Owner to
the extent such acceleration will cause the disallowance of

 

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a deduction under the “golden parachute payment” rules under
Section 28OG of the Code with respect to any payment to the Award Owner
under this Plan or otherwise.

 

15.                       No
Special Rights as an Eligible Participant

 

Nothing contained in the Plan or in any Award
granted under the Plan shall confer upon any Award Owner any right with respect
to the continuation of his or her employment or other status as an Eligible
Participant or interfere in any way with the right of the Company (or any
Parent Corporation or Subsidiary), subject to the terms of any separate
agreement to the contrary, at any time to terminate such employment or other
relationship or to increase or decrease the compensation of the Award Owner
from the rate in existence at the time of the grant of an Award.  Whether an authorized leave of absence, or
absence in military or government service, shall constitute termination or
cessation of services for purposes of this Plan shall be determined by the
Board.

 

16.                       Other
Employee Benefits

 

The amount of any income deemed to be received
by an Award Owner as a result of the exercise of an Award or the sale of shares
received upon such exercise will not constitute “compensation” or “earnings”
with respect to which any other benefits of such person are determined,
including without limitation benefits under any pension, profit sharing, life
insurance or salary continuation plan.

 

17.                                 Definitions

 

(a)  Affiliate.  The term “Affiliate” shall mean a
corporation or other person that, at the time of reference, directly or
indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, the Company.

 

(b)  Fair Value.  The term “Fair Value” of a share of
Common Stock shall mean (i) if the Common Stock is not traded on a
national securities exchange or “over the counter,” the fair value, as
determined in good faith by the Board using any reasonable valuation method
without application of a discount to reflect liquidity; (ii) if the Common
Stock is traded on a national securities exchange, the closing price for such
stock on the day immediately preceding the date of determination or if there is
no closing price on such date, the last preceding closing price, or (iii) if
the Common Stock is traded “over-the-counter,” the closing price on the
business day immediately preceding the date of determination, or if a closing
price is not available, the average of the highest bid and the lowest offer
reported on the business day immediately preceding the date of determination.

 

(c)  Parent Corporation.  The term “Parent Corporation” shall
mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of the corporations other than the
Company owns stock possessing 50% or more of the combined voting power of all
classes of stock in one of the other corporations in such chain.  The status of a corporation as a Parent
Corporation shall be determined as set forth above at the time of: (1) the
grant of the Award, for purposes of Sections 4, 6(d)(i) and 6(d)(ii); (2) the
exercise of the Award, for purposes of Sections 8(b) and 8(b)(i); (3) the
Award Owner’s death or disability, as applicable, for purposes of Sections 8(b)(ii) and
(iii); and (4) the vesting date, for purposes of Section 10.

 

(d)  Rule 16b-3.  The term “Rule 16b-3” shall
mean Rule 16b-3 promulgated by the Securities and Exchange
Commission pursuant to Section 16 of the 1934 Act, or any successor rule.

 

(e)  Subsidiary.  The term “Subsidiary” shall mean any
corporation in an unbroken chain of corporations beginning with the Company if
each of the corporations other than the last corporation in the unbroken chain
owns stock possessing 50% or more of the total combined voting power of all

 

8

 

classes of stock in one of the other corporations in such chain.  The status of a corporation as a Subsidiary
shall be determined as set forth above at the time of: (1) the grant of
the Award, for purposes of Sections 4, 6(d)(i) and 6(d)(ii); (2) the
exercise of the Award, for purposes of Sections 8(b) and 8(b)(i); (3) the
Award Owner’s death or disability, as applicable, for purposes of Sections 8(b)(ii) and
(iii); and (4) the vesting date, for purposes of Section 10.

 

18.                                 Amendment
of the Plan

 

(a)                                  General.  The Board may at any time and from time to
time modify or amend the Plan in any respect, except that the Board shall not
modify or amend the Plan in a manner that would require stockholder approval
under Section 422 of the Code, without obtaining such stockholder
approval, if such amendment would affect the status of any outstanding
Incentive Stock Option as an incentive stock option under Section 422 of
the Code.  As of June 1996, Section 422
of the Code required stockholder approval of amendments that (A) increase
the aggregate number of shares that may be issued pursuant to Incentive Stock
Options (except for permissible adjustments provided in the Plan), or (B) change
the designation of employees or the class of employees eligible to receive
Incentive Stock Options.  The termination
or any modification or amendment of the Plan shall not, without the consent of
an Award Owner, affect his or her rights under an Award previously granted to
him or her.  With the consent of the
Award Owners affected, the Board may amend outstanding Award agreements in a
manner not inconsistent with the Plan.

 

(b)                                 Amendments to
Comply with Tax and Securities Laws. 
Notwithstanding the provisions of Section 18(a), the Board shall
have the right, but not the obligation, without the consent of the Company’s
stockholders, to (i) amend or modify the terms and provisions of the Plan
and of any outstanding Incentive Stock Options granted under the Plan to the
extent necessary to qualify any or all such options for such favorable federal
income tax treatment, as may be afforded incentive stock options under Section 422
of the Code, and (ii) amend or modify the terms and provisions of the Plan
and of any outstanding Award granted under the Plan to the extent necessary or
advisable to comply with or conform to any securities laws to which, in the
opinion of counsel to the Company, the Plan or Award is subject.

 

19.                                 Withholding

 

The Company shall have the right to deduct
from any distribution of cash to an Award Holder, any amount equal to the
federal, state and local income taxes and other amounts as may be required by
law to be withheld (the “Withholding Taxes”) with respect to any
Award.  If an Award Holder is to
experience a taxable event in connection with the receipt of shares upon
exercise of an Award, the Award Holder shall pay the Withholding Taxes to the
Company prior to such issuance.  The
Committee, in its sole discretion, may authorize the Company to permit an Award
Holder to satisfy the obligation to pay Withholding Taxes by having the Company
withhold a portion of the shares otherwise issuable to the Award Holder having
a Fair Value, on the date preceding the date of issuance, equal to the
Withholding Taxes; provided that any such withholding with respect to an Award
Holder that is subject to Section 16(b) of the 1934 Act shall comply
with all requirements necessary to make such withholding an exempt transaction
under Section 16(b).

 

20.                                 Effective
Date and Duration of the Plan

 

(a)                                  Effective Date.  The effective date of the Plan is July 16,
1992 (the “Effective Date”), which was the date on which the Board and
the stockholders of the Company first approved the adoption of the Plan.  Awards may be granted under the Plan at any
time after the Effective Date and before the date fixed for termination of the
Plan, as provided in Section 20(b).

 

9

 

(b)                                 Termination.  The Plan shall terminate upon the earlier of (i) the
close of business on May 23, 2012, which is the day next preceding the
tenth anniversary of the date the Company’s Board and stockholders approved the
extension of the Plan, or (ii) the date on which all shares available for
issuance under the Plan shall have been issued pursuant to the exercise of
Awards granted under the Plan.  If the
date of termination is determined under (i) above, then Awards outstanding
on such date shall continue to have force and effect in accordance with the
provisions of the instruments evidencing such Awards.

 

21.                                 Rule 16b-3
Compliance

 

Transactions under the Plan are intended to
comply with all applicable conditions of Rule 16b-3.  To the extent any provision of the Plan or
action by the Board fails to so comply, it shall be deemed null and void, to
the extent permitted by law and deemed advisable by the Board.

 

10Exhibit 10.1

 

FIRST AMENDMENT TO OFFICE LEASE

 

THIS FIRST AMENDMENT TO OFFICE LEASE (this “Amendment”) is
entered into between CRESCENT 1301 MCKINNEY,
L.P., a Delaware limited partnership (“Landlord”), and KEY ENERGY SERVICES, INC., a Maryland
corporation (“Tenant”),
with reference to the following:

 

A. Landlord and Tenant entered into that certain Office Lease dated
effective as of January 20, 2005 (the “Lease”), covering approximately 25,137
square feet of Rentable Square Footage on floor 18 (the “Premises”) of the
building located at 1301 McKinney, Houston, Texas (the “Building”).

 

B. Landlord and Tenant now desire to amend the Lease as set forth
below. Unless otherwise expressly provided in this Amendment, capitalized terms
used in this Amendment shall have the same meanings as in the Lease.

 

FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:

 

1.             First
Expansion Space. Landlord leases to Tenant and Tenant leases from Landlord
approximately 13,772 square feet of additional Rentable Square Footage (the “First Expansion Space”)
located on floor 17 of the Building as shown on the attached Exhibit “A”,
which is incorporated into this Amendment for all purposes. The term “Premises” as used in
the Lease means and includes approximately 38,909 square feet of Rentable
Square Footage, being the sum of the Rentable Square Footage of the current
Premises (25,137 square feet of Rentable Square Footage) and the First
Expansion Space. The lease of the First Expansion Space is subject to all of
the terms and conditions of the Lease currently in effect, except as modified
in this Amendment.

 

2.             Base
Rent. Commencing on December 15, 2005, and continuing through the
Term, Tenant shall, at the time and place and in the manner provided in the
Lease, pay to Landlord as Base Rent for the First Expansion Space the amounts
set forth in the following rent schedule, plus any applicable tax thereon:

 

FIRST EXPANSION SPACE

 

	
  FROM

  	
   

  	
  THROUGH

  	
   

  	
  ANNUAL BASE

  RENT RATE PER

  SQUARE FOOT

  	
   

  	
  MONTHLY

  BASE RENT

  	
   

  
	
  December 15, 2005

  	
   

  	
  June 14, 2011

  	
   

  	
  $

  	
  11.50

  	
   

  	
  $

  	
  13,198.17

  	
  *

  
	
  June 15, 2011

  	
   

  	
  June 14, 2016

  	
   

  	
  $

  	
  12.50

  	
   

  	
  $

  	
  14,345.83

  	
   

  

 

* Provided that Tenant is not in monetary
default under the Lease beyond any applicable notice and/or cure period, the
monthly Base Rent and Operating Expenses for each of the initial 6 months
of the Term shall be abated (the “Rent Abatement Period”).

 

3.             Operating
Expenses. Commencing on December 15, 2005, Tenant’s Pro Rata share of
Operating Expenses payable under Article 4
of the Lease shall be increased to take the First Expansion Space into
consideration. Further, provided that Tenant is not in monetary default under
the Lease beyond any applicable notice and/or cure period, the monthly OE
Payment shall be abated for the Rent Abatement Period.

 

4.             Condition
of First Expansion Space. The First Expansion Space is accepted by Tenant
in “as is” condition and configuration subject to (a) all applicable
provisions of the “Work Letter” between Landlord and Tenant attached to this
Amendment as Exhibit “B”,
and (b) Landlord’s repair obligations under Section 10.B. of the Lease, and (c) any latent
defects in the First Expansion Space of which Tenant notifies Landlord within
1 year after the Commencement Date (other than work performed by Tenant
Parties [defined below]). Tenant hereby
agrees that the

 

 

First Expansion Space is in good order and
satisfactory condition and that, except as otherwise expressly set forth in
this Amendment or in the Lease, there are no representations or warranties of
any kind, express or implied, by Landlord regarding the First Expansion Space,
the Premises, the Building or the Property.

 

5.             Early
Access to the First Expansion Space. Following the Effective Date of this
Amendment, Tenant’s contractors may, upon advance written notice to Landlord,
enter the First Expansion Space for the purpose of performing work in
preparation for Tenant’s move-in (including, without limitation, installation
of furniture, fixtures and equipment) provided that (i) such work by
Tenant’s contractors during the prosecution of “Landlord’s Initial Work” and
the “Landlord Work” (as such terms are defined in the Work Letter attached as Exhibit “B”) is
conducted in a manner as to not unreasonably interfere with Landlord’s Initial
Work and the Landlord Work occurring in or around the First Expansion Space,
and (ii) prior to any such entry, Tenant’s contractors shall provide
Landlord with certificates of insurance or other evidence of insurance
reasonably acceptable to Landlord. Commencing on the date of Substantial
Completion (defined in the Work Letter) of the Landlord Work in the First
Expansion Space, and continuing through the Commencement Date, Tenant shall be
permitted access to the First Expansion Space for the purpose of installing
furniture, equipment or other personal property in the First Expansion Space,
and conducting Tenant’s business activities in the First Expansion Space once
the First Expansion Space and the balance of the Premises are suitable for
lawful occupancy. All early access to the First Expansion Space shall be
subject to the terms and conditions of the Lease and this Amendment except that
Tenant shall pay no Rent (defined in Section 4.A
of the Lease) for such early access even if Tenant has occupied the First
Expansion Space for the purpose of conducting business.

 

6.             Must
Take Space. By leasing the First Expansion Space, Tenant has leased the
Must Take Space set forth in Rider No. 3
to the Lease. Accordingly, Rider No. 3
to the Lease is deleted in its entirety.

 

7.             Additional
Parking Permits. In connection with the First Expansion Space, Paragraph 1 of Exhibit E to the
Lease shall be amended as follows:

 

(a)           to
reduce the number of reserved parking permits allowing access to reserved
spaces in the Building Garage from two (2) to one (1), so that Tenant
shall have one (1) reserved permit allowing access to a reserved space in
the Building Garage;

 

(b)           to
add five (5) additional unreserved parking permits allowing access to
unreserved spaces in the Building Garage; and

 

(c)           to
add nine (9) additional unreserved parking permits allowing access to
unreserved spaces in, at Landlord’s option, Houston Center Garage 1, 4 Houston
Center Garage, and/or First City Tower Garage.

 

The additional parking permits described in Subparagraphs (b) and (c) above
are hereinafter called the “First Expansion Space Parking Permits”. Tenant shall pay
Landlord’s quoted monthly contract rate (as set from time to time) for the
First Expansion Space Parking Permits, plus any taxes thereon. The current
monthly contract rates for the First Expansion Space Parking Permits are
$180.00 per permit for unreserved permits in the Building Garage, $170.00 per
permit for unreserved permits in the 4 Houston Center Garage, and $160.00 per permit
for unreserved permits in the Houston Center Garage 1 and First City Tower
Garage. Tenant’s failure to pay for the First Expansion Space Parking Permits
shall be an event of default under the Lease, subject to cure provisions for
monetary default as specified in the Lease. The First Expansion Space Parking
Permits are subject to all the terms and conditions set forth in the Lease.
Notwithstanding the foregoing, provided that Tenant is not in default under the
Lease beyond any applicable notice

 

2

 

and/or cure period, then during the Rent Abatement Period (defined in Paragraph 2 above) Tenant’s parking
charges for the First Expansion Space Parking Permits taken by Tenant shall be
abated 100%, and during the 48 consecutive months of the Term thereafter (the “Parking Charge Discount Period”),
the parking charges for the First Expansion Space Parking Permits taken by
Tenant shall be discounted by 50% of Landlord’s quoted monthly contract rate
(plus any taxes thereon); further, provided that Tenant is not in default under
the Lease beyond any applicable notice and/or cure period during the 24
consecutive months of the Term following the Parking Charge Discount Period,
the parking charges for the First Expansion Space Parking Permits taken by
Tenant shall be discounted by 35% of Landlord’s quoted monthly contract rate
(plus any taxes thereon).

 

8.             Additional
Downtown Club Memberships. In connection with the First Expansion Space, Section 31.M of the Lease is amended
to add up to fourteen (14) additional Memberships to the Club as may be
requested by Tenant pursuant to the terms of Section 31.M.
The additional Memberships are subject to all the terms and conditions of Section 31.M of the Lease.

 

9.             Consent.
This Amendment is subject to, and conditioned upon, any required consent or
approval being unconditionally granted by Landlord’s mortgagee(s). If any such
consent shall be denied, or granted subject to an unacceptable condition, this
Amendment shall be null and void and the Lease shall remain unchanged and in
full force and effect. If Landlord does not notify Tenant in writing within
thirty (30) days following the Effective Date of this Amendment, that this
Amendment has not been approved by Landlord’s mortgagee, then this Amendment
shall be deemed approved as between Landlord and Tenant.

 

10.          Broker.
Tenant represents and warrants that it has not been represented by any broker
or agent in connection with the execution of this Amendment, except Partners
Commercial Realty, L.P. d/b/a NAI Houston. Tenant shall indemnify and hold
harmless Landlord and its designated property management, construction and
marketing firms, and their respective partners, members, affiliates and
subsidiaries, and all of their respective officers, directors, shareholders,
employees, servants, partners, members, representatives, insurers and agents
from and against all claims (including costs of defense and investigation) of
any other broker or agent or similar party claiming by, through or under Tenant
in connection with this Amendment.

 

11.          Time
of the Essence. Time is of the essence with respect to Tenant’s execution
and delivery to Landlord of this Amendment. If Tenant fails to execute and
deliver a signed copy of this Amendment to Landlord by 5:00 p.m. (in the
city in which the Premises is located) on March 15, 2005, this Amendment
shall be deemed null and void and shall have no force or effect, unless
otherwise agreed in writing by Landlord. Landlord’s acceptance, execution and
return of this Amendment shall constitute Landlord’s agreement to waive Tenant’s
failure to meet such deadline.

 

12.          Miscellaneous.
This Amendment shall become effective only upon full execution and delivery of
this Amendment by Landlord and Tenant. This Amendment contains the parties’
entire agreement regarding the subject matter covered by this Amendment, and
supersedes all prior correspondence, negotiations, and agreements, if any,
whether oral or written, between the parties concerning such subject matter.
There are no contemporaneous oral agreements, and there are no representations
or warranties between the parties not contained in this Amendment. Except as
modified by this Amendment, the terms and provisions of the Lease shall remain
in full force and effect, and the Lease, as modified by this Amendment, shall
be binding upon and shall inure to the benefit of the parties hereto, their
successors and permitted assigns.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT
BLANK]

 

3

 

LANDLORD AND TENANT enter into this Amendment on March 15, 2005
(the “Effective Date”).

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  CRESCENT 1301 MCKINNEY, L.P.,

  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Crescent 1301 GP, LLC

  a Delaware limited liability company,

  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ROBERT H. BOYKIN, JR.

  
	
   

  	
   

  	
  Robert H. Boykin, Jr.

  
	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  	
  Leasing

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  KEY ENERGY SERVICES, INC.,

  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ WILLIAM M. AUSTIN

  
	
   

  	
   

  	
  Name: William M. Austin

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  

 

4

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