Document:

exv10w2

 

RESTRICTED STOCK AGREEMENT

TERMS AND CONDITIONS

(Rev. 2006)

     These Terms and Conditions constitute a part of the Restricted Stock Agreement, dated as of
the date set forth on the Signature Page to Restricted Stock Agreement Terms and Conditions made a
part hereof (the “Signature Page”), concerning certain Restricted Shares issued by Complete
Production Services, Inc., a Delaware corporation hereinafter referred to as “Company,” to the
individual listed on the Signature Page, hereinafter referred to as “Holder.” These Terms and
Conditions and the Signature Page are collectively referred to as the “Agreement.”

     WHEREAS, the Company wishes to afford the Holder the opportunity to own shares of its $0.01
par value Common Stock;

     WHEREAS, the Company wishes to carry out the Amended and Restated 2001 Stock Incentive Plan,
as the same may be amended from time to time (the “Plan”), the terms of which are hereby
incorporated by reference and made a part of this Agreement; and

     WHEREAS, the Administrator of the Plan has determined that it would be to the advantage and
best interest of the Company and its stockholders to issue the Restricted Shares provided for
herein to the Holder as an inducement to enter into or remain in the service of the Company or an
Affiliate of the Company and as an incentive for increased efforts during such service, and has
advised the Company thereof and instructed the undersigned officers to issue said Restricted
Shares.

     NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree
as follows:

ARTICLE I.

DEFINITIONS

     Whenever the following terms are used in this Agreement, they shall have the meaning specified
below unless the context clearly indicates to the contrary. The masculine pronoun shall include
the feminine and neuter, and the singular the plural, where the context so indicates. Capitalized
terms used but not defined in this Agreement shall have the meaning ascribed to such terms in the
Plan.

Section 1.1. Administrator

     “Administrator” shall mean the entity that conducts the administration of the Plan (including
the issue of Restricted Shares) as provided therein, and generally shall refer to the Compensation
Committee of the Board, unless and to the extent (a) the Board has assumed the authority for
administration of all or any part of the Plan, or (b) the Compensation Committee has delegated the
authority for administration of all or part of the Plan.

Section 1.2. Affiliate

     “Affiliate” shall mean any corporation, partnership, limited liability company or partnership,
association, trust or other organization which, directly or indirectly, controls, is controlled by,
or is under common control with, the Company. For purposes of the preceding sentence, “control”

 

 

(including, with correlative meanings, the terms “controlled by” and “under common control
with”), as used with respect to any entity or organization, shall mean the possession, directly or
indirectly, of the power (i) to vote more than 50% of the securities having ordinary voting power
for the election of directors of the controlled entity or organization, or (ii) to direct or cause
the direction of the management and policies of the controlled entity or organization, whether
through the ownership of voting securities or by contract or otherwise.

Section 1.3. Board

     “Board” shall mean the Board of Directors of the Company.

Section 1.4. Code

     “Code” shall mean the Internal Revenue Code of 1986, as amended.

Section 1.5. Common Stock

     “Common Stock” shall mean the common stock of the Company, par value $0.01 per share, and any
equity security of the Company issued or authorized to be issued in the future, but excluding any
warrants, options or other rights to purchase Common Stock. Debt securities of the Company
convertible into Common Stock shall be deemed equity securities of the Company.

Section 1.6. Company

     “Company” shall mean Complete Production Services, Inc., a Delaware corporation, or any
successor corporation.

Section 1.7. Holder

     “Holder” shall mean shall mean the Holder issued Restricted Shares under this Agreement and
the Plan and listed on the Signature Page.

Section 1.8. Exchange Act

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

Section 1.9. Plan

     “Plan” shall mean the Complete Production Services, Inc. Amended and Restated 2001 Stock
Incentive Plan, as amended and/or restated from time to time.

Section 1.10. Restricted Shares

     “Restricted Shares” shall mean the Restricted Shares issued under this Agreement and the Plan
and specified on the Signature Page, so long as such shares are subject to the Restrictions.

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Section 1.11. Restrictions

     “Restrictions” shall mean the vesting requirements set forth on the Signature Page and Section
3.2, the forfeiture requirements set forth in Section 3.1 and the restrictions on sale or other
transfer set forth in Section 3.3.

Section 1.12. Rule 16b-3

     “Rule 16b-3” shall mean that certain Rule 16b-3 under the Exchange Act, as such Rule may be
amended from time to time.

Section 1.13. Secretary

     “Secretary” shall mean the Secretary of the Company.

Section 1.14. Securities Act

     “Securities Act” shall mean the Securities Act of 1933, as amended.

Section 1.15. Termination of Employment

     “Termination of Employment” shall mean the time when the Holder-employer relationship between
the Holder and the Company or any Affiliate is terminated for any reason, including, but not by way
of limitation, a termination by resignation, discharge, death, disability or retirement, but
excluding (i) terminations where there is a simultaneous reemployment, continuing employment of the
Holder by the Company or any Affiliate, (ii) at the discretion of the Administrator, terminations
which result in a temporary severance of the Holder-employer relationship, and (iii) terminations
which are followed by the simultaneous establishment of a consulting relationship by the Company or
any Affiliate with the Holder. The Administrator, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Employment, including, but not by
way of limitation, the question of whether a Termination of Employment resulted from a discharge
for Cause, and all questions of whether particular leaves of absence constitute Terminations of
Employment. Notwithstanding any other provision of the Plan or this Agreement, the Company or any
Affiliate has an absolute and unrestricted right to terminate the Holder’s employment at any time
for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise
in writing.

ARTICLE II.

ISSUANCE OF RESTRICTED SHARES

Section 2.1. Issuance of Restricted Shares

     Effective as of the Issuance Date set forth on the Signature Page, the Company irrevocably
issues to the Holder the number of Restricted Shares set forth on the Signature Page, subject to
the Restrictions and the other terms and conditions set forth in this Agreement.

Section 2.2. Consideration to Company

     In partial consideration of the issuance of the Restricted Shares by the Company, the Holder
(i) agrees to render faithful and efficient services to the Company or its any Affiliate, with such
duties and responsibilities as the Company or any Affiliate shall from time to time prescribe, for
a period

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of at least one (1) year from the date the Issuance Date, (ii) agrees not disclose or use,
directly or indirectly, any proprietary or confidential information concerning the Company or any
Affiliate so long as such information is proprietary and/or confidential, except any disclosure or
use that is for the benefit of the Company or such Affiliate and is incidental to the Holder’s
employment, and (iii) agrees to abide by all of the terms and conditions of this Agreement and the
Plan. Nothing in the Plan or this Agreement shall confer upon the Holder any right to continue in
the employ of the Company or any Affiliate, or shall interfere with or restrict in any way the
rights of the Company and any Affiliate, which are hereby expressly reserved, to discharge the
Holder at any time for any reason whatsoever, with or without good cause.

Section 2.3. Rights as a Stockholder

     Except as otherwise provided herein, effective as of the Issuance Date set forth on the
Signature Page, the Holder shall have all the rights of a stockholder with respect to the
Restricted Shares, subject to the Restrictions. Thus, the Holder shall have the right to vote the
Restricted Shares and to receive all dividends or other distributions paid or made with respect to
the Restricted Shares (subject to Section 3.4).

ARTICLE III.

RESTRICTIONS ON SHARES

Section 3.1. Restrictions. 

     Upon Holder’s Termination of Employment, all Restricted Shares outstanding as of
such Termination of Employment shall be automatically forfeited and cancelled, without payment of
any consideration therefore, effective as of the date of such Termination of Employment. By
resolution, the Administrator may, on such terms and conditions as it deems appropriate, remove any
or all of the Restrictions (including without limitation, the Administrator may accelerate vesting)
at any time or from time to time.

Section 3.2. Lapse of Restrictions.

     The Restrictions shall lapse and the Restricted Shares shall vest in accordance with the
Vesting Schedule set forth on the Signature Page, conditioned upon the Holder’s continued
employment or service with the Company through the applicable effective date of vesting. The
vesting of the Restricted Shares and the removal of the Restrictions with respect to such
Restricted Shares shall cease upon the Holder’s Termination of Employment.

Section 3.3. Restrictions on Transfer.

     Holder shall not sell, exchange, transfer, alienate, hypothecate, pledge, encumber or assign
any Restricted Shares, or any rights with respect thereto. Neither the Restricted Shares nor any
interest or right therein or part thereof shall be liable for the debts, contracts, or engagements
of Holder or his successors in interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any
other legal or equitable proceedings (including bankruptcy) and any attempted disposition thereof
shall be null and void and of no effect.

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Section 3.4. Assets or Securities Issued With Respect to the Restricted Shares.

     Any and all cash dividends paid on the Restricted Shares and any and all shares of Common
Stock, capital stock or other securities or other property received by or distributed to Holder
with respect to, in exchange for or in substitution of the Restricted Shares as a result of any
stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification,
or similar change in the capital structure of the Company shall also be subject to the Restrictions
until such restrictions lapse or are removed pursuant to this Agreement or action by the
Administrator. In addition, in the event of any merger, consolidation, share exchange or
reorganization affecting the Restricted Shares, then any new, substituted or additional securities
or other property (including money paid other than as a regular cash dividend) that is by reason of
any such transaction received with respect to, in exchange for or in substitution of the Restricted
Shares shall also be subject to the Restrictions until such Restrictions lapse or are removed
pursuant to this Agreement or by action of the Administrator. Any such assets or other securities
received by or distributed to Holder with respect to, in exchange for or in substitution of any
Restricted Shares shall be immediately delivered to the Company to be held in escrow pursuant to
Section 3.5.

Section 3.5. Escrow of Shares.

     (a) The Secretary of the Company or any other person designated by the Administrator shall
retain physical custody of any certificates representing the Restricted Shares, or shall maintain
an account for Holder evidencing the issuance of such Restricted Shares, in escrow until and to the
extent (i) such Restricted Shares have vested and all Restrictions have been removed or lapsed as
to such shares under this Agreement, or (ii) such Restricted Shares have been forfeited and
cancelled pursuant to Section 3.1. To ensure the delivery of Holder’s Restricted Shares upon
forfeiture, Holder hereby appoints the Secretary of the Company or any other designated escrow
agent as Holder’s attorney-in-fact to assign and transfer unto the Company (or such designee), such
Restricted Shares, if any, pursuant to Section 3.1.

     (b) The Secretary, or other escrow agent, shall not be liable for any act he or she may do or
omit to do with respect to holding the Restricted Shares in escrow and while acting in good faith
and in the exercise of his or her judgment.

Section 3.6. Vested Shares — No Restrictions.

     (a) As and to the extent the Restricted Shares vest in accordance with the terms of this
Agreement and the Signature Page, the Restrictions on such shares shall lapse and, subject to
compliance with Section 3.6(b), vested Restricted Shares shall be released from any escrow and
delivered to the Holder or for the benefit of his or her account without the legend referenced in
Section 3.7. Such vested shares shall cease to be considered Restricted Shares subject to the
terms and conditions of this Agreement, and shall be shares of Common Stock of the Company free of
all Restrictions.

     (b) Notwithstanding the foregoing Section 3.6(a), vested shares shall not be delivered to the
Holder or for the benefit of or to his account unless and until the Holder shall have paid to the
Company in cash or made provisions for payment through withholding against income, the full amount
of all federal and state (or applicable foreign) withholding or other employment taxes applicable
to the taxable income of the Holder resulting from the grant of the shares of Common Stock or the
lapse or removal of the Restrictions.

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Section 3.7. Restrictive Legends and Stop Transfer Orders.

     (a) Any share certificate(s) (or electronic entry) evidencing the Restricted Shares issued
hereunder shall be endorsed with the following legend and any other legend required by any
applicable federal and state securities laws:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF
REPURCHASE IN FAVOR OF THE COMPANY AND MAY BE TRANSFERRED ONLY IN ACCORDANCE
WITH THE TERMS OF A RESTRICTED SHARES AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

     (b) Holder agrees that, in order to ensure compliance with the restrictions referred to
herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if
any, and that, if the Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.

     (c) The Company shall not be required: (i) to transfer on its books any shares of Common
Stock that have been sold or otherwise transferred in violation of any of the provisions of this
Agreement, or (ii) to treat as owner of such shares of Common Stock or to accord the right to vote
or pay dividends to any purchaser or other transferee to whom such shares shall have been so
transferred.

ARTICLE IV.

OTHER PROVISIONS

Section 4.1. Administration

     The Administrator shall have the power to interpret the Plan and this Agreement and to adopt
such rules for the administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules. All actions taken and all interpretations and
determinations made by the Administrator in good faith shall be final and binding upon the Holder,
the Company and all other interested persons. No member of the Administrator shall be personally
liable for any action, determination or interpretation made in good faith with respect to the Plan
or the Restricted Shares. In its absolute discretion, the Board may at any time and from time to
time exercise any and all rights and duties of the Administrator under this Plan except with
respect to matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations or
rules issued thereunder, are required to be determined in the sole discretion of the Compensation
Committee.

Section 4.2. Withholding Taxes

     Holder agrees that in the event the issuance of the Restricted Shares pursuant to this
Agreement or the vesting of the Restricted Shares or the expiration or removal of Restrictions
thereon results in the Holder’s realization of income which for federal, state or local income or
employment tax purposes is, in the opinion of the Company, subject to withholding of tax at source
by the Company, the Holder will pay to the Company an amount equal to such withholding tax or the
Company may withhold such amount from the Holder’s salary or from dividends deposited with the
Company with respect to the Restricted Stock. The Committee, in its discretion, may also permit
the withholding of vested shares of Common Stock in payment of the tax withholding obligation to
the extent permitted by the Plan and provided such share withholding will not result in any adverse
accounting consequences to the Company.

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Section 4.3. Adjustment for Stock Split etc.

     In the event of any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification, or similar change in the capital structure of the Company, the
Administrator shall make appropriate and equitable adjustments in the Restricted Shares, consistent
with the terms of the Plan. The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Restricted Shares, to any and all shares of capital stock or other
securities which may be issued in respect of, in exchange for, or in substitution of the Restricted
Shares, and shall be appropriately adjusted for any stock dividends, splits, reverse splits,
combinations, recapitalizations and the like occurring after the date hereof.

Section 4.4. Taxes Consequences; Section 83(b) Election

     Holder has reviewed with Holder’s own tax advisors the federal, state, local and foreign tax
consequences of this investment and the transactions contemplated by the Signature Page and this
Agreement. Holder is relying solely on such advisors and not on any statements or representations
of the Company or any of its agents. Holder understands that Holder (and not the Company) shall be
responsible for Holder’s own tax liability that may arise as a result of this investment or the
transactions contemplated by this Agreement. Holder understands that Holder will recognize
ordinary income for federal income tax purposes under Section 83 of the Code as and when
the Restrictions applicable to such shares lapse. Holder understands that Holder may elect to be
taxed for federal income tax purposes at the time the Shares are purchased rather than as and when
the Restrictions applicable to such shares lapse by filing an election under Section 83(b) of the
Code with the Internal Revenue Service within thirty (30) days from the date of purchase.

     HOLDER ACKNOWLEDGES THAT IT IS HOLDER’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO TIMELY
FILE THE ELECTION UNDER SECTION 83(b), EVEN IF HOLDER REQUESTS THE COMPANY OR ITS REPRESENTATIVES
TO MAKE THIS FILING ON HOLDER’S BEHALF.

Section 4.5. Conditions to Issuance of Stock Certificates or Electronic Delivery of the
Shares

     The Restricted Shares, or any portion thereof, may be either previously authorized but
unissued shares or issued shares of Common Stock that have then been reacquired by the Company.
The Company shall not be required to issue, deliver any certificate or certificates or
electronically deliver the Restricted Shares or portion thereof prior to fulfillment of all of the
following conditions:

     (a) The admission of such shares to listing on all stock exchanges on which such class of
stock is then listed;

     (b) The completion and continued availability of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations of the Securities and
Exchange Commission or of any other governmental regulatory body, which the Administrator shall, in
its absolute discretion, deem necessary or advisable;

     (c) The obtaining of any approval or other clearance from any state or federal governmental
agency which the Administrator shall, in its absolute discretion, determine to be necessary or
advisable;

     (d) The receipt by the Company (or Affiliate) of all amounts which, under federal, state or
local tax law, it is required to withhold upon the issuance of such shares; and

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     (e) The lapse of such reasonable period of time following the Issuance Date set forth on the
Signature Page as the Administrator may from time to time establish for reasons of administrative
convenience.

Section 4.6. Limitations Applicable to Section 16 Persons.

     Notwithstanding any other provision of the Plan or this Agreement, if Holder is subject to
Section 16 of the Exchange Act, the Plan, the Restricted Shares and this Agreement shall be subject
to any additional limitations set forth in any applicable exemptive rule under Section 16 of the
Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for
the application of such exemptive rule. To the extent permitted by applicable law, this Agreement
shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

Section 4.7. Notices

     Any notice to be given under the terms of this Agreement to the Company shall be addressed to
the Company in care of its Secretary, and any notice to be given to the Holder shall be addressed
to him at the address given beneath his signature hereto. By a notice given pursuant to this
Section 5.6 either party may hereafter designate a different address for notices to be given. Any
notice, which is required to be given to the Holder, shall, if the Holder is then deceased, be
given to the Holder’s personal representative if such representative has previously informed the
Company of his status and address by written notice under this Section 4.7 Any notice shall be
deemed duly given when delivered in person or enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.

Section 4.8. Titles

     Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.

Section 4.9. Construction

     This Agreement shall be administered, interpreted and enforced under the laws of the State of
Texas.

Section 4.10. Conformity to Securities Laws

     Holder acknowledges that the Plan is intended to conform to the extent necessary with all
provisions of the Securities Act and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, and state securities laws and
regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and
the Shares are to be issued, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be
deemed amended to the extent necessary to conform to such laws, rules and regulations.

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Section 4.11. Arbitration

     This Section 4.11 shall only apply to Holder’s who are employed with the Company or any
Subsidiary. In exchange for the Restricted Shares issued herein and the other promises exchanged
herein, the parties agree to submit any and all disputes, claims or controversies arising out of,
or relating to, Holder’s employment, to final and binding arbitration before the American
Arbitration Association in accordance with its rules relating to the resolution of employment
disputes, in effect at the time of the demand for arbitration. THE COMPANY AND THE HOLDER
UNDERSTAND AND AGREE THAT BY AGREEING TO THE PROVISIONS OF THIS SECTION 4.11 THEY ARE WAIVING THEIR
RIGHT TO A JURY OR COURT TRIAL.

     This Section 4.11 expressly applies to all claims arising out of and relating to Holder’s
employment, including without limitation to, any claims of employment discrimination, harassment,
retaliation and any other employment related claim. This Section 4.11 expressly applies, but is
not limited, to claims brought under Title VII of the Civil Rights Act, the Age Discrimination in
Employment Act, the Family Medical Leave Act, the Americans with Disabilities Act, the California
Labor Code, the Texas Labor Code, the Fair Employment and Housing Act, and all other state and
local laws. This Section 4.11 does not apply to those claims where expressly prohibited by law,
such as claims arising under the National Labor Relations Act, claims for medical and disability
benefits under applicable Workers’ Compensation statues and claims for unemployment benefits.
Holders, officers, Board members and anyone else acting as an agent of the Company or any Affiliate
are intended beneficiaries of this Section 4.11 and the parties agree that any claim against an
intended beneficiary of this Section 4.11 arising out of or relating to Holder’s employment will be
subject to this Section 4.11.

     This Section 4.11 may be enforced by any court of competent jurisdiction, and the party
seeking enforcement shall be entitled to an award of all costs, fees and expenses, including
attorneys’ fees, to be paid by the party against whom enforcement is ordered.

     The arbitration shall be held at the office of the American Arbitration Association in Harris
County, Texas before a single neutral arbitrator. The Company shall assume responsibility for any
costs payable to the American Arbitration Association in connection with the arbitration, including
the costs and fees of the arbitrator. However, the arbitrator shall make such orders with respect
to attorneys’ fees and other costs in accordance with applicable law.

     The award or decision of the arbitrator shall be final and binding on the parties and judgment
on the arbitrator’s decision may be entered in any court having jurisdiction. Each of the parties
consents to the exercise of personal jurisdiction over such person by such court and to the
propriety of venue of such court for the purpose of carrying out this provision; and each waives
any objections that such person would otherwise have to the same.

     This Section 4.11 shall in no way effect Holder’s or the Company’s right to seek emergency
injunctive relief from a court of competent jurisdiction, which relief may remain in full force and
effect pending the outcome of the arbitration proceedings.

     Notwithstanding the foregoing, the provisions of this Section 4.11 shall be deemed modified
and/or superceded to the extent necessary to be consistent with any applicable terms contained in
any employment agreement or other agreement between the Company and the Holder, which agreement
shall take precedence over this Section 4.11.

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Section 4.12. Amendments

     This Agreement may not be modified or amended in any way that adversely affects the Holder’s
rights hereunder, except by an instrument in writing signed by the Holder and by a duly authorized
representative of the Company.

Section 4.13. No Employment Rights

     Nothing in the Plan or this Agreement shall confer upon Holder any right to continue in the
employ of the Company or any Affiliate or shall interfere with or restrict in any way the rights of
the Company and Affiliates, which are expressly reserved, to discharge Holder at any time for any
reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a
written agreement between the Company and Holder.

Section 4.14. Successors and Assigns

     The Company may assign any of its rights under this Agreement to single or multiple assignees,
and this Agreement shall inure to the benefit of the successors and assigns of the Company.
Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon
Holder and his or her heirs, executors, administrators, successors and assigns.

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Signature Page to the Restricted Stock Award Agreement Terms and Conditions (2006)

Complete Production Services, Inc.

Amended and Restated 2001 Stock Incentive Plan

 

	 	 	 
	[Holder Name]

Holder’s Tax ID #: [SSN]

	 	[Street Address]

[City, State, Zip, Country

 

Complete Production Services, Inc., a Delaware corporation (the “Company”), pursuant to its Amended
and Restated 2001 Stock Incentive Plan (the “Plan”), hereby issues to you (“Holder”), shares of the
Company’s common stock, par value $0.01, that are subject to restrictions on transfer (“Restricted
Shares”) and the other terms and conditions contained in the Restricted Stock Award Agreement Terms
and Conditions (Rev. 2006) and the Plan.

	 	 	 
	Restricted Shares Issuance Date:

	 	 

	 
	 	 
	Total Restricted Shares:

	 	shares

 

Vesting Schedule**:

The Restricted Shares shall vest and the Restrictions shall lapse in a series of three (3) equal
annual installments on the following dates, provided Holder is still an employee on that vest date:

	 	 	 	 	 	 	 
	 

	 	Shares
	 	Vest Date
	 	 

	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 

	 	     /     /          
	 	 
	 
	 	 	 	 	 	 
	 

	 	 

	 	     /     /          
	 	 
	 
	 	 	 	 	 	 
	 

	 	 

	 	     /     /          	 	 

**The Restricted Shares will not vest and the Restrictions will not lapse under certain
circumstances, including your Termination of Employment. See the Restricted Stock Award Agreement
Terms and Conditions (Rev. 2006).

 

You and the Company agree that the Restricted Shares are granted under and governed by the terms
and conditions of the Restricted Stock Award Agreement Terms and Conditions (Rev. 2006), the Plan
and this Signature Page, which together are a binding agreement. You acknowledge that you have
read, understand and agree to be bound by the Restricted Stock Award Agreement Terms and Conditions
(Rev. 2006), this Signature Page and the Plan, including the provisions governing the resolution of
all disputes between you and the Company through arbitration, the vesting and forfeiture of your
Restricted Shares and the other restrictions contained therein.

	 	 	 
	COMPLETE PRODUCTION SERVICES, INC.

	 	HOLDER
	 
	 	 
	/s/ James F. Maroney
 

James F. Maroney
Vice President, Secretary and General Counsel

	 	 

[Holder Name]

 

 

 

EXHIBIT A

CONSENT OF SPOUSE

     I,                               , spouse of                      (“Holder”), have read and
approve the foregoing Restricted Stock Award Agreement Terms and Conditions ( 2006) and Signature
Page thereto made by and between Complete Production Services, Inc. (the “Company”), and
Holder, effective as of                               , 20      (the “Agreement”). In consideration of
issuing to my spouse the shares of the common stock of the Company set forth in the Agreement, I
hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under the
Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights
in said Agreement or any shares of the common stock of the Company issued pursuant thereto under
the community property laws or similar laws relating to marital property in effect in the state of
our residence as of the date of the signing of the foregoing Agreement.

	 	 	 
	 
	 	 
	Dated:                               ,      

	 	 

Signature of Spouseexv10w1

 

Exhibit 10.1

CHANGE IN CONTROL

EMPLOYMENT AGREEMENT

     This AGREEMENT by and between Digene Corporation (the “Company”), and Daryl J. Faulkner (the
“Employee”), is dated as of December 11, 2006.

     The Board of Directors of the Company (the “Board”) has determined that it is in the best
interests of the Company and its stockholders to assure that the Company and its subsidiaries will
have the continued dedication of the Employee, notwithstanding the possibility, threat, or
occurrence of a Change in Control (as defined below) of the Company. The Board believes it is
imperative to diminish the inevitable distraction of the Employee by virtue of the personal
uncertainties and risks created by a threatened or pending Change in Control, to encourage the
Employee’s full attention and dedication to the Company currently and in the event of any
threatened or pending Change in Control, and to provide the Employee with compensation arrangements
upon a Change in Control that provide the Employee with individual financial security and which are
competitive with those of other comparably situated companies and, in order to accomplish these
objectives, the Board has authorized the Company to enter into this Agreement.

     NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

     1. Effective Date.

          (a) The “Effective Date” shall be the first date during the “Change in Control Period” (as
defined in Section 1(b)) on which a Change in Control occurs. Anything in this Agreement to the
contrary notwithstanding, if the Employee’s employment with the Company is terminated prior to the
date on which a Change in Control occurs, and it is reasonably demonstrated that such termination
(i) was at the request of a third party who has taken steps reasonably calculated to effect a
Change in Control or (ii) otherwise arose in connection with or anticipation of a Change in
Control, then for all purposes of this Agreement the “Effective Date” shall mean the date
immediately prior to the date of such termination.

          (b) The “Change in Control Period” is the period commencing on the date hereof and ending on
the second anniversary of such date; provided, however, that commencing on the date
one year after the date hereof, and on each annual anniversary of such date (such date and each
annual anniversary thereof is hereinafter referred to as the “Renewal Date”), the Change in Control
Period shall be automatically extended so as to terminate two years from such Renewal Date, unless
at least 60 days prior to the Renewal Date the Company shall give notice that the Change in Control
Period shall not be so extended.

 

 

     2. Change in Control. For the purpose of this Agreement, a “Change in Control” shall
mean:

          (a) The acquisition, directly or indirectly, other than from the Company, by any person,
entity or “group” (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), excluding, for this purpose, the Company, its
subsidiaries, and any employee benefit plan of the Company or its subsidiaries which acquires
beneficial ownership of voting securities of the Company) (a “Third Party”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the
combined voting power of the Company’s then outstanding voting securities entitled to vote
generally in the election of directors; or

          (b) Individuals who, as of December 11, 2006, constitute the Board (the “Incumbent Directors”)
cease for any reason to constitute at least a majority of the Board; provided, that any
person becoming a director subsequent to such date whose election, or nomination for election by
the Company’s stockholders, was approved by a vote of at least a majority of the Incumbent
Directors who are directors at the time of such vote shall be, for purposes of this Agreement, an
Incumbent Director; or

          (c) Consummation of (i) a reorganization, merger or consolidation, or (ii) a liquidation or
dissolution of the Company or the sale of all or substantially all, but at least 40%, of the assets
of the Company (whether such assets are held directly or indirectly) to a Third Party; or

          (d) Any event or transaction that a majority of the Incumbent Directors who are “independent
directors” (as such term is defined under the Marketplace Rules of the National Association of
Securities Dealers, Inc.) determine to be a “Change in Control” for the purposes of this Agreement;

except that any event or transaction which would be a “Change in Control” under (a) or (c)(i) of
this definition shall not be a “Change in Control” if persons who were the stockholders of the
Company immediately prior to such event or transaction (other than the acquiror in the case of a
reorganization, merger or consolidation), immediately thereafter, beneficially own more than 50% of
the combined voting power of the Company’s or the reorganized, merged or consolidated company’s
then outstanding voting securities entitled to vote generally in the election of directors.

     3. Other Employment Agreement. The Employee and the Company have entered into an
agreement, dated November 13, 2006 (the “Employment Agreement”), which provides for certain
benefits to be paid to the Employee upon certain terminations of Employee’s employment with the
Company. Such Employment Agreement shall remain in full force and effect except that it shall be
superceded by this Agreement during the Employment Period; provided, however, that,
notwithstanding the foregoing, the authority of the Compensation Committee to end the period of
employment under the Employment Agreement shall remain in full force and effect during the
Employment Period, and the non-competition, non-solicitation and non-disparagement provisions of
the Employment Agreement shall remain in full force and effect during the Employment Period and, if
applicable, after the Date of Termination, in accordance with the provisions of the Employment
Agreement.

2

 

     4. Employment Period. The Company hereby agrees to continue the Employee in its
employ, and the Employee hereby agrees to remain in the employ of the Company, for the period
commencing on the Effective Date and ending on the second anniversary of such date (the “Employment
Period”).

     5. Terms of Employment.

          (a) Position and Duties.

               (i) During the Employment Period,

                    (A) the Employee’s position (including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time during the 90-day period
immediately preceding the Effective Date, and

                    (B) the Employee’s services shall be performed at the location where the Employee was employed
immediately preceding the Effective Date or any office or location less than forty (40) miles from
such location.

               (ii) During the Employment Period, and excluding any periods of vacation and sick leave to
which the Employee is entitled, the Employee agrees to devote reasonable attention and time during
normal business hours to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Employee hereunder, to use the Employee’s reasonable
best efforts to perform faithfully and efficiently such responsibilities. During the Employment
Period it shall not be a violation of this Agreement for the Employee to serve on corporate, civic
or charitable boards or committees, and manage personal investments, so long as such activities do
not significantly interfere with the performance of the Employee’s responsibilities as an employee
of the Company in accordance with this Agreement. It is expressly understood and agreed that to
the extent that any such activities have been conducted by the Employee prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities similar in nature and
scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with
the performance of the Employee’s responsibilities to the Company.

          (b) Compensation.

               (i) Base Salary. During the Employment Period, the Employee shall receive a base
salary (“Base Salary”) at a monthly rate at least equal to the highest monthly base salary paid or
payable to the Employee by the Company during the twelve-month period immediately preceding the
month in which the Effective Date occurs. During the Employment Period, the Base Salary shall be
reviewed at least annually and shall be increased at any time and from time to time as shall be
substantially consistent with increases in base salary awarded in the ordinary course of business
to other key employees of the Company and its subsidiaries with similar level of responsibilities.
Any increase in Base Salary shall not serve to limit or reduce any other obligation to the Employee
under this Agreement. Base Salary shall not be reduced after any such increase.

3

 

               (ii) Annual Bonus. In addition to Base Salary, the Employee shall be awarded, for
each fiscal year ending during the Employment Period, an annual bonus (an “Annual Bonus”) in cash
at least equal to the bonus paid or payable to the Employee for the last fiscal year preceding the
year in which the Effective Date occurs. In the event the Employment Period contains a partial
year, the Employee shall be awarded a pro-rated bonus, calculated in accordance with the prior
sentence, for such partial year period. Each Annual Bonus shall be determined and paid in full by
two and 1/2 months after the end of the fiscal year for which the bonus is payable.

               (iii) Incentive, Savings and Retirement Plans. In addition to Base Salary and Annual
Bonus payable as hereinabove provided, the Employee shall be entitled to participate during the
Employment Period in all incentive, savings and retirement plans, practices, policies and programs
applicable to other key employees of the Company and its subsidiaries.

               (iv) Welfare Benefit Plans. During the Employment Period, the Employee and/or the
Employee’s family, as the case may be, shall be eligible for participation in and shall receive all
benefits under welfare benefit plans, practices, policies and programs provided by the Company and
its subsidiaries (including, without limitation, medical, prescription, dental, disability,
employee life and accidental death and dismemberment insurance plans and programs), at least as
favorable as the most favorable of such plans, practices, policies and programs of the Company and
its subsidiaries in effect at any time during the 90-day period immediately preceding the Effective
Date or, if more favorable to the Employee and/or the Employee’s family, as in effect at any time
thereafter with respect to other key employees of the Company and its subsidiaries with similar
level of responsibilities.

               (v) Expenses. During the Employment Period, the Employee shall be entitled to receive
prompt reimbursement for all reasonable business expenses incurred by the Employee in accordance
with the most favorable policies, practices and procedures of the Company and its subsidiaries in
effect at any time during the 90-day period immediately preceding the Effective Date or, if more
favorable to the Employee, as in effect at any time thereafter with respect to other key employees
of the Company and its subsidiaries with similar level of responsibilities.

               (vi) Fringe Benefits. During the Employment Period, the Employee shall be entitled to
fringe benefits in accordance with the most favorable plans, practices, programs and policies of
the Company and its subsidiaries in effect at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Employee, as in effect at any time
thereafter with respect to other key employees of the Company and its subsidiaries with similar
level of responsibilities.

               (vii) Vacation. During the Employment Period, the Employee shall be entitled to paid
holidays and vacation in accordance with the most favorable plans, policies, programs and practices
of the Company and its subsidiaries as in effect at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Employee, as in effect at any time
thereafter with respect to other key employees of the Company and its subsidiaries with similar
level of responsibilities.

4

 

     6. Termination.

          (a) Death or Disability. This Agreement shall terminate automatically upon the
Employee’s death. If the Company determines in good faith that the Disability of the Employee has
occurred (pursuant to the definition of “Disability” set forth below), it may give to the Employee
written notice of its intention to terminate, or its intention to cause its subsidiary to
terminate, the Employee’s employment. In such event, the Employee’s employment with the Company
shall terminate effective on the 30th day after receipt of such notice by the Employee (the
“Disability Effective Date”); provided that, within 30 days after such receipt, the
Employee shall not have returned to full-time performance of the Employee’s duties. For purposes
of this Agreement, “Disability” means disability as defined in the Company’s Long Term Disability
Plan (or, if the Company does not have such a plan, a disability which, at least 26 weeks after its
commencement, is determined to be total and permanent by a physician selected by the Company or its
insurers and acceptable to the Employee or the Employee’s legal representative (with such agreement
as to acceptability not to be withheld unreasonably)).

          (b) Cause. The Company may terminate the Employee’s employment for “Cause.” For
purposes of this Agreement, “Cause” means (i) an act or acts of personal dishonesty taken by the
Employee and intended to result in substantial personal enrichment of the Employee at the expense
of the Company, (ii) repeated violations by the Employee of the Employee’s obligations under
Section 5(a) of this Agreement which are willful and deliberate on the Employee’s part and which
are not remedied in a reasonable period of time after receipt of written notice from the Company,
(iii) breach by the Employee of the Employee’s obligations under the Employee’s Non Competition,
Non Disclosure and Developments Agreement with the Company, (iv) violation by the Employee of any
of the Company’s policies, including, but not limited to, policies regarding sexual harassment,
insider trading, corporate disclosure, substance abuse and conflicts of interest, which violation
could result in termination of the Employee’s employment or (v) the conviction of the Employee of a
felony.

          (c) Good Reason. The Employee’s employment may be terminated by the Employee for Good
Reason. For purposes of this Agreement, “Good Reason” means

               (i) the assignment to the Employee of any duties inconsistent in any respect with the
Employee’s position (including status, offices, titles and reporting requirements), authority,
duties or responsibilities as contemplated by Section 5(a) of this Agreement, or any other action
by the Company which results in a diminution in such position, authority, duties or
responsibilities;

               (ii) any failure by the Company to comply with any of the provisions of Section 5(b) of this
Agreement;

               (iii) the Company’s requiring the Employee to be based at any office or location other than
that described in Section 5(a)(i)(B) hereof, except for travel reasonably required in the
performance of the Employee’s responsibilities;

               (iv) any purported termination by the Company of the Employee’s employment otherwise than as
expressly permitted by this Agreement; or

5

 

               (v) any failure by the Company to comply with and satisfy Section 12(c) of this Agreement;

provided, that within fifteen (15) days after the occurrence of any of the events listed in
clauses (i), (ii), (iii), (iv) or (v) above the Employee delivers written notice to the Company of
his intention to terminate for Good Reason specifying in reasonable detail the facts and
circumstances claimed to give rise to the Employee’s right to terminate his employment for Good
Reason and the Company shall not have cured such facts and circumstances within thirty (30) days
after delivery of such notice by the Employee to the Company (unless the Company shall have waived
its right to cure by written notice to the Employee); and provided further that
within fifteen (15) days after the expiration of such thirty (30) day period or the date of receipt
of such waiver notice, if earlier, the Employee delivers a Notice of Termination to the Company
under Section 6(d) based on the same Good Reason specified in the notice of intent to terminate
delivered to the Company under this Section 6(c).

     For purposes of this Section 6(c), any good faith determination of “Good Reason” made by the
Employee shall be conclusive.

          (d) Notice of Termination. A Notice of Termination shall communicate any termination
by the Company for Cause or by the Employee for Good Reason to the other party hereto given in
accordance with Section 15(b) of this Agreement. For purposes of this Agreement, a “Notice of
Termination” means a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee’s employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than fifteen (15) days after
the giving of such notice). The failure by the Employee to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of
the Employee hereunder or preclude the Employee from asserting such fact or circumstance in
enforcing his rights hereunder.

          (e) Date of Termination. “Date of Termination” means the date of receipt of the
Notice of Termination or any later date specified therein as permitted by Section 6(d), as the case
may be; provided, however, that (i) if the Employee’s employment is terminated by
the Company or a subsidiary of the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company or such subsidiary notifies the Employee of such
termination and (ii) if the Employee’s employment is terminated by reason of death or Disability,
the Date of Termination shall be the date of death of the Employee or the Disability Effective
Date, as the case may be.

     7. Obligations of the Company upon Termination.

          (a) Death. If the Employee’s employment is terminated during the Employment Period by
reason of the Employee’s death, this Agreement shall terminate without further obligations to the
Employee’s legal representatives under this Agreement, other than (i) those obligations accrued or
earned and vested (if applicable) by the Employee as of the Date of Termination, including, for
this purpose (A) the Employee’s full Base Salary through the Date of Termination at the rate in
effect on the Date of Termination, (B) subject to Section 7(e), any

6

 

compensation previously deferred by the Employee (together with any accrued interest thereon)
and not yet paid by the Company and (C) any accrued vacation pay not yet paid by the Company (such
amounts are hereinafter referred to as “Accrued Obligations”) and (ii) a lump sum payment equal to
the Employee’s annual Base Salary at the rate in effect on the Date of Termination. All such
Accrued Obligations and the payment described in subparagraph (ii) above shall be paid to the
Employee’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days after the
Date of Termination, or earlier if required by law.

          (b) Disability. If the Employee’s employment is terminated during the Employment
Period by reason of the Employee’s Disability, this Agreement shall terminate without further
obligations to the Employee, other than (i) the Accrued Obligations and (ii) continuation of health
care benefits coverage to which the Employee is entitled under Section 5(b)(iv) hereof for the
twelve (12) month period following the effective Date of Termination, with such coverage to be
provided at the same level and subject to the same terms and conditions (including, without
limitation, any applicable co-pay obligations, but excluding any applicable tax consequences for
the Employee) as in effect for officers of the Company generally during such period;
provided, however, that if benefits are being provided under the Company’s
Long-Term Disability Plan then in effect, nothing in this Section 7(b) shall provide any additional
benefits or coverage than that in effect for officers of the Company during such period under the
Company’s Long-Term Disability Plan. All of the Accrued Obligations shall be paid to the Employee
in a lump sum in cash within 30 days after the Date of Termination, or earlier if required by law.

          (c) Termination for Cause; Termination by Employee Other than for Good Reason. If,
during the Employment Period, the Employee’s employment is terminated for Cause or the Employee
terminates employment other than for Good Reason, this Agreement shall terminate without further
obligations to the Employee, other than Accrued Obligations. Subject to Section 7(e), all such
Accrued Obligations shall be paid to the Employee in a lump sum in cash within 30 days after the
Date of Termination, or earlier if required by law.

          (d) Termination for Good Reason; Termination by the Company Other than for Cause, Death or
Disability. If, during the Employment Period, the Company terminates the Employee’s employment
other than for Cause, Disability, or death or the Employee terminates his employment for Good
Reason:

               (i) subject to Section 7(e), the Company shall pay to the Employee the Accrued Obligations.

               (ii) the Company shall pay as a severance benefit to the Employee in a lump sum in cash (less
applicable withholding), the aggregate of the following amounts:

                    (A) an amount equal to the following formula: A x (B ÷ 365); where A equals the Annual Bonus
paid to the Employee for the last calendar year before the Date of Termination; and B equals the
number of days in the current calendar year through the Date of Termination; and

7

 

                    (B) an amount equal to two (2) times the sum of the Employee’s annual Base Salary at the
highest rate in effect at any time during the period beginning 90 days before the Effective Date
through the Date of Termination plus the Annual Bonus paid to the Employee for the last calendar
year before the Date of Termination; and

               (iii) for a period of two years after the Date of Termination, or such longer period as any
plan, program, practice or policy may provide, the Company shall continue benefits to the Employee
and/or the Employee’s family at levels substantially equal to those which would have been provided
to them in accordance with the plans, programs, practices and policies described in Section
5(b)(iv) of this Agreement if the Employee’s employment had not been terminated, including health,
disability and life insurance, in accordance with the most favorable plans, practices, programs or
policies of the Company and its subsidiaries in effect during the 90-day period immediately
preceding the Date of Termination or, if more favorable to the Employee, as in effect at any time
thereafter with respect to other key employees with similar level of responsibilities and their
families; provided, however, that the Company may, at its election, pay to the
Employee an amount in cash equal to the Company’s cost of providing any of such benefits for such
period, in lieu of continuing to provide the benefits. For purposes of eligibility for retiree
benefits pursuant to such plans, practices, programs and policies and for purposes of health
benefit continuation coverage pursuant to Section 601 et seq. of ERISA (“COBRA”), the Employee
shall be considered to have remained employed until the end of the period for which
Company-provided health plan coverage is continued under this clause (iii), and to have retired on
the last day of such period.

Notwithstanding anything to the contrary herein, payments under this Section 7(d) shall comply with
the applicable requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulatory guidance promulgated thereunder. Payment of the Accrued Obligations
(subject to Section 7(e)) and the lump amount described in clause (ii) of this Section 7(d) shall
be made within thirty (30) days after the Date of Termination, or earlier if required by law;
provided, however, that if the Employee is a “specified employee” within the
meaning of Section 409A(a)(2)(B)(i) of the Code, payment of the lump sum amount described in clause
(ii) of this Section 7(d) shall be made within five (5) business days following the date which is
six (6) months following the Employee’s separation from service following a Notice of Termination
(or, if earlier, the Employee’s death) if the Company reasonably determines that the aggregate
amount of: (1) payments under clause (ii) of this Section 7(d); (2) the portion of the welfare
benefits described in clause (iii) of this Section 7(d) provided on an after-tax basis, including
the cash payment, if any, in lieu of providing certain welfare benefits described in clause (iii)
of this Section 7(d); (3) the Gross-up Payment, if any, under Section 10 of this Agreement; and (4)
payments, if any, made under any other Company-provided separation pay arrangement, represent the
payment of non-qualified deferred compensation subject to the requirements of Section 409A of the
Code, including the requirement of a six-month delay in the commencement of payments described in
Code Section 409A(a)(2)(B)(i). The lump sum shall be adjusted for simple interest that accrues
during the initial six-month period following the Employee’s separation from service at the
applicable Federal rate provided for in Code Section 7872(f)(2).

8

 

If the Employee is subject to the six-month delay period, the benefit described in clause (iii) of
this Section 7(d) shall be provided as follows:

                    (A) To the extent such welfare benefits can be provided to the Employee on a before-tax basis,
such benefit shall be so provided.

                    (B) To the extent such welfare benefit must be provided on an after-tax basis, the Employee
shall pay the cost thereof (based on applicable COBRA rates) for the first six months, and the
Company shall reimburse such amounts within five (5) business days after the close of the six-month
delay period.

                    (C) If a cash payment in lieu of providing such welfare benefits is made, such payment shall
take place within five (5) business days after the close of the six-month delay period.

The Company shall have no obligation under this Section 7(d) unless the Employee executes and
delivers to the Company a valid general release agreement in a form reasonably acceptable to the
Company in which the Employee releases the Company from any and all possible liability, including,
without limitation, any and all liability based on the Employee’s employment or the termination of
his employment; provided, however, that nothing in such release shall include any
release of the Company’s indemnification obligations to or for the benefit of the Employee.

          (e) Previously Deferred Compensation. If the Employee has previously deferred
compensation under a plan or arrangement not described above which has not yet been paid by the
Company, the Employee’s right to payment of such compensation shall be considered vested and
nonforfeitable as of the Date of Termination. Such deferred compensation shall be paid to the
Employee in accordance with the terms of the deferred compensation plan or arrangement, subject to
the applicable requirements of Code Section 409A.

     8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the
Employee’s continuing or future participation in any benefit, bonus, incentive or other plans,
programs, policies or practices provided by the Company or its subsidiaries and for which the
Employee may qualify, nor shall anything herein limit or otherwise affect such rights as the
Employee may have under any stock option or other agreements with the Company or any of its
subsidiaries. Amounts which are vested benefits or which the Employee is otherwise entitled to
receive under any plan, policy, practice or program of the Company or any of its subsidiaries at or
subsequent to the Date of Termination shall be payable in accordance with such plan, policy,
practice or program.

     9. Full Settlement. The Company’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may
have against the Employee or others. In no event shall the Employee be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable to the Employee
under any of the provisions of this Agreement. Upon termination of the Employee’s employment
during the Employment Period, the Employee shall not be entitled to any benefits or payments other
than as provided in this Agreement.

9

 

     10. Certain Additional Payments by the Company.

          (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company to or for the benefit of the Employee
(whether paid or payable or distributed or distributable pursuant to the terms of this Agreement)
(a “Payment”) would be subject to the excise tax imposed by Code Section 4999, or any interest or
penalties with respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Employee shall
be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount equal to the
Excise Tax imposed upon the Payment.

          (b) Subject to the provisions of Section 10(c), all determinations required to be made under
this Section 10, including whether a Gross-Up Payment is required and the amount of such Gross-Up
Payment, shall be made by a firm of independent accountants selected by the Audit Committee of the
Company’s Board of Directors which firm may be, if consistent with applicable securities laws, the
firm of independent accountants engaged to audit the Company’s financial statements (the
“Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the
Employee within 15 business days after the Date of Termination or such earlier time as is requested
by the Company. The Gross-Up Payment, if any, as determined pursuant to this Section 10(b), shall
be paid to the Employee within five days of the receipt of the Accounting Firm’s determination (or
if later, within five (5) business days after the earliest date payment can be made consistent with
Section 409A of the Code with respect to a “specified person” described in Code Section
409A(a)(2)(B)(i)). If the Accounting Firm determines that no Excise Tax is payable by the
Employee, it shall furnish the Employee with an opinion that he has substantial authority not to
report any Excise Tax on his federal income tax return. Any determination by the Accounting Firm
shall be binding upon the Company and the Employee. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination by the Accounting
Firm hereunder, it is possible that a Gross-Up Payment which will not have been made by the Company
should have been made (“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to Section 10(c) and the
Employee thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Employee.

          (c) The Employee shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later than ten business days after
the Employee knows of such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Employee shall not pay such claim prior to
the expiration of the thirty-day period following the date on which it gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Employee in writing prior to the expiration of such
period that it desires to contest such claim, the Employee shall:

10

 

               (i) give the Company any information reasonably requested by the Company relating to such
claim,

               (ii) take such action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,

               (iii) cooperate with the Company in good faith in order effectively to contest such claim,

               (iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Employee harmless, on an after-tax basis, for any Excise Tax or income
tax, including interest and penalties with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 10(c), the Company shall control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of such claim and may,
at its sole option, if in compliance with applicable securities laws, either direct the Employee to
pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the
Employee agrees to prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Employee to pay such
claim and sue for a refund, the Company shall advance a portion of such payment equal to the
Gross-Up Payment to the Employee, on an interest-free basis, and shall indemnify and hold the
Employee harmless, on an after-tax basis, from any Excise Tax on the Payment or income tax,
including interest or penalties with respect thereto; and further provided that any
extension of the statute of limitations relating to payment of taxes for the taxable year of the
Employee with respect to which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company’s control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the Employee shall be
entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

          (d) If, after the receipt by the Employee of an amount advanced by the Company pursuant to
Section 10(c), the Employee becomes entitled to receive any refund with respect to such claim, the
Employee shall (subject to the Company’s complying with the requirements of Section 10(c)) promptly
pay to the Company the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Employee of an amount advanced by
the Company pursuant to Section 10(c), a determination is made that the Employee shall not be
entitled to any refund with respect to such claim and the Company does not notify the Employee in
writing of its intent to contest such denial of refund prior to the expiration of thirty days after
such determination, then such advance

11

 

shall be forgiven and shall not be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

     11. Confidential Information and Company Policies. During the Employment Period, the
Employee shall abide by, conduct himself in accordance with, and be subject to, the
non-competition, non-solicitation, non-disparagement and confidentiality provisions of the
Employment Agreement and the Company’s policies on sexual harassment, insider trading, corporate
disclosure, substance abuse and conflicts of interest and any other written policy of the Company,
the violation of which could result in termination of employment.

     12. Successors.

          (a) This Agreement is personal to the Employee and without the prior written consent of the
Company shall not be assignable by the Employee otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by the Employee’s
legal representatives.

          (b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

          (c) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) acquiring all or substantially all of the business and/or assets of the
Company (whether such assets are held directly or indirectly) to assume expressly 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. As used in this Agreement, “Company” shall
mean the Company as hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

     13. Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or any breach hereof, shall be settled in accordance with the terms of this Section 13.
All claims by the Employee for benefits under this Agreement shall first be directed to and
determined by the Board and shall be in writing. Any denial by the Board of a claim for benefits
under this Agreement shall be delivered to the Employee in writing within thirty (30) days and
shall set forth the specific reasons for the denial and the specific provisions of this Agreement
relied upon. The Board shall afford a reasonable opportunity to the Employee for a review of the
decision denying a claim and shall further allow the Employee to appeal to the Board a decision of
the Board within thirty (30) days after notification by the Board that the Employee’s claim has
been denied. Any further dispute, controversy or claim arising out of or relating to this
Agreement, or the interpretation or alleged breach hereof, shall be settled by arbitration in
accordance with Employment Dispute Resolution Rules of the American Arbitration Association (or
such other rules as may be agreed upon by the Employee and the Company). The place of the
arbitration shall be Washington, DC and any court having jurisdiction thereof may enter judgment
upon the award rendered by the arbitrator(s). Such an award shall be binding and conclusive upon
the parties hereto.

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     14. Legal Expenses. The Company agrees to reimburse the Employee, to the full extent
permitted by law, for all costs and expenses (including without limitation reasonable attorneys’
fees) which the Employee may reasonably incur as a result of any contest of the validity or
enforceability of, or the Company’s liability under, any provision of this Agreement, plus in each
case interest at the applicable Federal rate provided for in Code Section 7872(f)(2);
provided, however, that such payment shall be made only if the Employee prevails on
at least one material issue.

     15. Miscellaneous.

          (a) This Agreement shall be governed by and construed in accordance with the laws of the State
of Maryland without reference to principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

          (b) Any notices required or permitted to be given hereunder shall be sufficient if in writing,
and if delivered by hand, or sent by registered or certified mail, return receipt requested, or
overnight delivery using a national courier service, or by facsimile or electronic transmission,
with confirmation as to receipt, to the Company at the address set forth below and to the Employee
at the address set forth in the personnel records of the Company, or such other address as either
party may from time to time designate in writing to the other, and shall be deemed given as of the
date of the delivery or mailing:

Digene Corporation

1201 Clopper Road

Gaithersburg, Maryland 20878

Attention: General Counsel

with a copy to:

Ballard Spahr Andrews & Ingersoll, LLP

1735 Market Street, 51st Floor

Philadelphia, Pennsylvania 19103-7599

Attention: Morris Cheston, Jr., Esquire

or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee.

          (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.

          (d) The Company may withhold from any amounts payable under this Agreement such Federal, state
or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

13

 

          (e) The Employee’s failure to insist upon strict compliance with any provision hereof shall
not be deemed to be a waiver of such provision or any other provision hereof.

          (f) This Agreement contains the entire understanding of the Company and the Employee with
respect to the subject matter hereof. This Agreement supercedes all other agreements and
understandings between the Company and the Employee relating to the subject matter hereof, but only
during the Employment Period.

     IN WITNESS WHEREOF, the Employee has hereunto set his hand and, pursuant to the authorization
from its Board of Directors, the Company has caused these presents to be executed in its name and
on its behalf, all as of the day and year first above written.

	 	 	 	 	 
	 	 	  /s/ Daryl J. Faulkner
	 	 	 
	 	 	DARYL J. FAULKNER
	 
	 	 	 	 
	 	 	DIGENE CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Vincent J. Napoleon
	 

	 	 	 	 
	 

	 	Name:
	 	Vincent J. Napoleon
	 

	 	Title:
	 	Senior Vice President and General Counsel

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