Document:

EX-10.1

 

Exhibit 10.1

SUPERIOR WELL SERVICES, INC.

2005 STOCK INCENTIVE PLAN

I. PURPOSE

     The purpose of the SUPERIOR WELL SERVICES, INC. 2005 STOCK INCENTIVE PLAN (the “Plan”) is to
provide a means through which SUPERIOR WELL SERVICES, INC., a Delaware corporation (the “Company”),
and its Affiliates may attract able persons to serve as Directors or Consultants or to enter the
employ of the Company and its Affiliates and to provide a means whereby those individuals upon whom
the responsibilities of the successful administration and management of the Company and its
Affiliates rest, and whose present and potential contributions to the Company and its Affiliates
are of importance, can acquire and maintain stock ownership, thereby strengthening their concern
for the welfare of the Company and its Affiliates. A further purpose of the Plan is to provide
such individuals with additional incentive and reward opportunities designed to enhance the
profitable growth of the Company and its Affiliates. Accordingly, the Plan provides for granting
Incentive Stock Options, options that do not constitute Incentive Stock Options, Restricted Stock
Awards, Performance Awards, Phantom Stock Awards, Bonus Stock Awards, or any combination of the
foregoing, as is best suited to the circumstances of the particular employee, Consultant, or
Director as provided herein.

II. DEFINITIONS

     The following definitions shall be applicable throughout the Plan unless specifically modified
by any paragraph:

     (a) “Affiliate” means 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.

     (b) “Award” means, individually or collectively, any Option, Restricted Stock Award,
Performance Award, Phantom Stock Award, or Bonus Stock Award.

     (c) “Board” means the Board of Directors of the Company.

     (d) “Bonus Stock Award” means an Award granted under Paragraph XI of the Plan.

 

 

     (e) “Code” means the Internal Revenue Code of 1986, as amended. Reference in the Plan to any
section of the Code shall be deemed to include any amendments or successor provisions to such
section and any regulations under such section.

     (f) “Committee” means a committee of the Board that is selected by the Board as provided in
Paragraph IV(a).

     (g) “Common Stock” means the common stock, par value $0.01 per share, of the Company, or any
security into which such common stock may be changed by reason of any transaction or event of the
type described in Paragraph XII.

     (h) “Company” means Superior Well Services, Inc., a Delaware corporation.

     (i) “Consultant” means any person who is not an employee or a Director and who is providing
advisory or consulting services to the Company or any Affiliate.

     (j) “Corporate Change” shall have the meaning assigned to such term in Paragraph XII(c) of the
Plan.

     (k) “Director” means an individual who is a member of the Board.

     (l) An “employee” means any person (including a Director) in an employment relationship with
the Company or any Affiliate.

     (m) “Fair Market Value” means, as of any specified date, the mean of the high and low sales
prices of the Common Stock (i) reported by the National Market System of NASDAQ on that date or
(ii) if the Common Stock is listed on a national stock exchange, reported on the stock exchange
composite tape on that date (or such other reporting service approved by the Committee); or, in
either case, if no prices are reported on that date, on the last preceding date on which such
prices of the Common Stock are so reported. If the Common Stock is traded over the counter at the
time a determination of its fair market value is required to be made hereunder, its fair market
value shall be deemed to be equal to the average between the reported high and low or closing bid
and asked prices of Common Stock on the most recent date on which Common Stock was publicly traded.
In the event Common Stock is not publicly traded at the time a determination of its value is
required to be made hereunder, the determination of its fair market value shall be made by the
Committee in such manner as it deems appropriate. Notwithstanding the foregoing, the Fair Market
Value of a share of Common Stock on the date of an initial public offering of Common Stock shall be
the offering price under such initial public offering.

     (n) “Incentive Stock Option” means an incentive stock option within the meaning of section 422
of the Code

     (o) “1934 Act” means the Securities Exchange Act of 1934, as amended.

     (p) “Option” means an Award granted under Paragraph VII of the Plan and includes both
Incentive Stock Options to purchase Common Stock and Options that do not constitute Incentive Stock
Options to purchase Common Stock.

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     (q) “Option Agreement” means a written agreement between the Company and a Participant with
respect to an Option.

     (r) “Participant” means an employee, Consultant, or Director who has been granted an Award.

     (s) “Performance Award” means an Award granted under Paragraph IX of the Plan.

     (t) “Performance Award Agreement” means a written agreement between the Company and a
Participant with respect to a Performance Award.

     (u) “Phantom Stock Award” means an Award granted under Paragraph X of the Plan.

     (v) “Phantom Stock Award Agreement” means a written agreement between the Company and a
Participant with respect to a Phantom Stock Award.

     (w) “Plan” means the Superior Well Services, Inc. 2005 Stock Incentive Plan, as amended from
time to time.

     (x) “Restricted Stock Agreement” means a written agreement between the Company and a
Participant with respect to a Restricted Stock Award.

     (y) “Restricted Stock Award” means an Award granted under Paragraph VIII of the Plan.

     (z) “Rule 16b-3” means SEC Rule 16b-3 promulgated under the 1934 Act, as such may be amended
from time to time, and any successor rule, regulation or statute fulfilling the same or a similar
function.

     (aa) “Stock Appreciation Right” means a right to acquire, upon exercise of the right, Common
Stock and/or, in the sole discretion of the Committee, cash having an aggregate value equal to the
then excess of the Fair Market Value of the shares with respect to which the right is exercised
over the exercise price therefor.

III. EFFECTIVE DATE AND DURATION OF THE PLAN

     The Plan shall become effective upon the date of its adoption by the Board, provided the Plan
is approved by the stockholders of the Company within 12 months thereafter. Notwithstanding any
provision in the Plan, no Option shall be exercisable, no Restricted Stock Award, or Bonus Stock
Award shall be granted, and no Performance Award or Phantom Stock Award shall vest or become
satisfiable prior to such stockholder approval. No further Awards may be granted under the Plan
after 10 years from the date the Plan is adopted by the Board. The Plan shall remain in effect
until all Options granted under the Plan have been exercised or expired, all Restricted Stock
Awards granted under the Plan have vested or been forfeited, and all Performance Awards, Phantom
Stock Awards, and Bonus Stock Awards have been satisfied or expired.

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IV. ADMINISTRATION

     (a) Composition of Committee. The Plan shall be administered by a committee of, and
appointed by, the Board. In the absence of the Board’s appointment of a Committee to administer
the Plan, the Board shall serve as the Committee. Notwithstanding the foregoing, upon the
expiration of the reliance period set forth in section 1.162-27(f)(2) of the Treasury regulations,
the Plan shall be administered by a committee of, and appointed by, the Board that shall be
comprised solely of two or more outside Directors (within the meaning of the term “outside
directors” as used in section 162(m) of the Code and applicable interpretive authority thereunder
and within the meaning of the term “Non-Employee Director” as defined in Rule 16b-3).

     (b) Powers. Subject to the express provisions of the Plan, the Committee shall have
authority, in its discretion, to determine which employees, Consultants or Directors shall receive
an Award, the time or times when such Award shall be made, the type of Award that shall be made,
the number of shares to be subject to each Option or Restricted Stock Award, the number of shares
subject to or the value of each Performance Award or Bonus Stock Award, and the value of each
Phantom Stock Award. In making such determinations, the Committee shall take into account the
nature of the services rendered by the respective employees, Consultants, or Directors, their
present and potential contribution to the Company’s success, and such other factors as the
Committee in its sole discretion shall deem relevant.

     (c) Additional Powers. The Committee shall have such additional powers as are
delegated to it by the other provisions of the Plan. Subject to the express provisions of the
Plan, this shall include the power to construe the Plan and the respective agreements executed
hereunder, to prescribe rules and regulations relating to the Plan, and to determine the terms,
restrictions and provisions of the agreement relating to each Award, including such terms,
restrictions and provisions as shall be requisite in the judgment of the Committee to cause
designated Options to qualify as Incentive Stock Options, and to make all other determinations
necessary or advisable for administering the Plan. The Committee may correct any defect or supply
any omission or reconcile any inconsistency in the Plan or in any agreement relating to an Award in
the manner and to the extent it shall deem expedient to carry it into effect. The determinations
of the Committee on the matters referred to in this Paragraph IV shall be conclusive.

V. SHARES SUBJECT TO THE PLAN; AWARD LIMITS;

GRANT OF AWARDS

     (a) Shares Subject to the Plan and Award Limits. Subject to adjustment in the same
manner as provided in Paragraph XII with respect to shares of Common Stock subject to Options then
outstanding, the aggregate number of shares of Common Stock that may be issued under the Plan, and
the aggregate maximum number of shares of Common Stock that may be issued under the Plan through
Incentive Stock Options, shall not exceed 2,700,000 shares. Shares shall be deemed to have been
issued under the Plan only to the extent actually issued and delivered pursuant to an Award. To
the extent that an Award lapses or the rights of its holder terminate, any shares of Common Stock
subject to such Award shall again be available for the grant of an Award under the Plan. In
addition, shares issued under the Plan and forfeited back to

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the Plan, shares surrendered in payment of the exercise price or purchase price of an Award,
and shares withheld for payment of applicable employment taxes and/or withholding obligations
associated with an Award shall again be available for the grant of an Award under the Plan.
Notwithstanding any provision in the Plan to the contrary, the maximum number of shares of Common
Stock that may be subject to Options, Restricted Stock Awards and Performance Awards denominated in
shares of Common Stock granted to any one individual during the term of the Plan may not exceed
25% of the aggregate number of shares of Common Stock that may be issued under the Plan (as
adjusted from time to time in accordance with the provisions of the Plan), and the maximum amount
of compensation that may be paid under all Performance Awards denominated in cash (including the
Fair Market Value of any shares of Common Stock paid in satisfaction of such Performance Awards)
granted to any one individual during any calendar year may not exceed
$3.5 million, and any
payment due with respect to a Performance Award shall be paid no later than 10 years after the date
of grant of such Performance Award. Upon the expiration of the reliance period set forth in
section 1.162-27(f)(2) of the Treasury regulations, the limitations set forth in the preceding
sentence shall be applied in a manner that will permit Awards that are intended to provide
“performance-based” compensation for purposes of section 162(m) of the Code to satisfy the
requirements of such section, including, without limitation, counting against such maximum number
of shares, to the extent required under section 162(m) of the Code and applicable interpretive
authority thereunder, any shares subject to Options that are canceled or repriced.

     (b) Grant of Awards. The Committee may from time to time grant Awards to one or more
employees, Consultants, or Directors determined by it to be eligible for participation in the Plan
in accordance with the terms of the Plan.

     (c) Stock Offered. Subject to the limitations set forth in Paragraph V(a), the stock
to be offered pursuant to the grant of an Award may be authorized but unissued Common Stock or
Common Stock previously issued and outstanding and reacquired by the Company. Any of such shares
which remain unissued and which are not subject to outstanding Awards at the termination of the
Plan shall cease to be subject to the Plan but, until termination of the Plan, the Company shall at
all times make available a sufficient number of shares to meet the requirements of the Plan.

VI. ELIGIBILITY

     Awards may be granted only to persons who, at the time of grant, are employees, Consultants,
or Directors. An Award may be granted on more than one occasion to the same person, and, subject
to the limitations set forth in the Plan, such Award may include an Incentive Stock Option, an
Option that is not an Incentive Stock Option, a Restricted Stock Award, a Performance Award, a
Phantom Stock Award, a Bonus Stock Award, or any combination thereof.

VII. STOCK OPTIONS

     (a) Option Period. The term of each Option shall be as specified by the Committee at
the date of grant, but in no event shall an Option be exercisable after the expiration of 10 years
from the date of grant.

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     (b) Limitations on Exercise of Option. An Option shall be exercisable in whole or in
such installments and at such times as determined by the Committee.

     (c) Special Limitations on Incentive Stock Options. An Incentive Stock Option may be
granted only to an individual who is employed by the Company or any parent or subsidiary
corporation (as defined in section 424 of the Code) at the time the Option is granted. To the
extent that the aggregate fair market value (determined at the time the respective Incentive Stock
Option is granted) of stock with respect to which Incentive Stock Options are exercisable for the
first time by an individual during any calendar year under all incentive stock option plans of the
Company and its parent and subsidiary corporations exceeds $100,000, such Incentive Stock Options
shall be treated as Options which do not constitute Incentive Stock Options. The Committee shall
determine, in accordance with applicable provisions of the Code, Treasury Regulations and other
administrative pronouncements, which of a Participant’s Incentive Stock Options will not constitute
Incentive Stock Options because of such limitation and shall notify the Participant of such
determination as soon as practicable after such determination. No Incentive Stock Option shall be
granted to an individual if, at the time the Option is granted, such individual owns stock
possessing more than 10% of the total combined voting power of all classes of stock of the Company
or of its parent or subsidiary corporation, within the meaning of section 422(b)(6) of the Code,
unless (i) at the time such Option is granted the option price is at least 110% of the Fair Market
Value of the Common Stock subject to the Option and (ii) such Option by its terms is not
exercisable after the expiration of five years from the date of grant. An Incentive Stock Option
shall not be transferable otherwise than by will or the laws of descent and distribution, and shall
be exercisable during the Participant’s lifetime only by such Participant or the Participant’s
guardian or legal representative.

     (d) Option Agreement. Each Option shall be evidenced by an Option Agreement in such
form and containing such provisions not inconsistent with the provisions of the Plan as the
Committee from time to time shall approve, including, without limitation, provisions to qualify an
Incentive Stock Option under section 422 of the Code. Each Option Agreement shall specify the
effect of termination of (i) employment, (ii) the consulting or advisory relationship, or (iii)
membership on the Board, as applicable, on the exercisability of the Option. An Option Agreement
may provide for the payment of the option price, in whole or in part, by the delivery of a number
of shares of Common Stock (plus cash if necessary) having a Fair Market Value equal to such option
price. Moreover, an Option Agreement may provide for a “cashless exercise” of the Option by
establishing procedures satisfactory to the Committee with respect thereto. Further, an Option
Agreement may provide, on such terms and conditions as the Committee in its sole discretion may
prescribe, for the grant of a Stock Appreciation Right in connection with the grant of an Option
and, in such case, the exercise of the Stock Appreciation Right shall result in the surrender of
the right to purchase a number of shares under the Option equal to the number of shares with
respect to which the Stock Appreciation Right is exercised (and vice versa). In the case of any
Stock Appreciation Right that is granted in connection with an Incentive Stock Option, such right
shall be exercisable only when the Fair Market Value of the Common Stock exceeds the price
specified therefor in the Option or the portion thereof to be surrendered. The terms and
conditions of the respective Option Agreements need not be identical. Subject to the consent of
the Participant, the Committee may, in its sole discretion, amend an outstanding Option Agreement
from time to time in any manner that is not inconsistent

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with the provisions of the Plan (including, without limitation, an amendment that accelerates
the time at which the Option, or a portion thereof, may be exercisable).

     (e) Option Price and Payment. The price at which a share of Common Stock may be
purchased upon exercise of an Option shall be determined by the Committee but, subject to
adjustment as provided in Paragraph XII such purchase price shall not be less than the Fair Market
Value of a share of Common Stock on the date such Option is granted. The Option or portion thereof
may be exercised by delivery of an irrevocable notice of exercise to the Company, as specified by
the Committee. The purchase price of the Option or portion thereof shall be paid in full in the
manner prescribed by the Committee. Separate stock certificates shall be issued by the Company for
those shares acquired pursuant to the exercise of an Incentive Stock Option and for those shares
acquired pursuant to the exercise of any Option that does not constitute an Incentive Stock Option.

     (f) Restrictions on Repricing of Options. Except as provided in Paragraph XII, the
Committee may not, without approval of the stockholders of the Company, amend any outstanding
Option Agreement to lower the option price (or cancel and replace any outstanding Option Agreement
with Option Agreements having a lower option price).

     (g) Stockholder Rights and Privileges. The Participant shall be entitled to all the
privileges and rights of a stockholder only with respect to such shares of Common Stock as have
been purchased under the Option and for which certificates of stock have been registered in the
Participant’s name.

     (h) Options and Rights in Substitution for Options Granted by Other Employers.
Options and Stock Appreciation Rights may be granted under the Plan from time to time in
substitution for options and such rights held by individuals providing services to corporations or
other entities who become employees, Consultants, or Directors as a result of a merger or
consolidation or other business transaction with the Company or any Affiliate.

VIII. RESTRICTED STOCK AWARDS

     (a) Forfeiture Restrictions To Be Established by the Committee. Shares of Common
Stock that are the subject of a Restricted Stock Award shall be subject to restrictions on
disposition by the Participant and an obligation of the Participant to forfeit and surrender the
shares to the Company under certain circumstances (the “Forfeiture Restrictions”). The Forfeiture
Restrictions shall be determined by the Committee in its sole discretion, and the Committee may
provide that the Forfeiture Restrictions shall lapse upon (i) the attainment of one or more
performance measures established by the Committee that are based on (1) the price of a share of
Common Stock, (2) the Company’s earnings per share, (3) the Company’s market share, (4) the market
share of a business unit of the Company designated by the Committee, (5) the Company’s sales, (6)
the sales of a business unit of the Company designated by the Committee, (7) the net income (before
or after taxes) of the Company or any business unit of the Company designated by the Committee, (8)
the cash flow return on investment of the Company or any business unit of the Company designated by
the Committee, (9) the earnings before or after interest, taxes, depreciation, and/or amortization
of the Company or any business unit of the Company designated by the Committee, (10) the economic
value added, (11) the return on

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stockholders’ equity achieved by the Company, or (12) the total stockholders’ return achieved
by the Company, (ii) the Participant’s continued employment with the Company or continued service
as a Consultant or Director for a specified period of time, (iii) the occurrence of any event or
the satisfaction of any other condition specified by the Committee in its sole discretion, or (iv)
a combination of any of the foregoing. The performance measures described in clause (i) of the
preceding sentence may be subject to adjustment for specified significant extraordinary items or
events, and may be absolute, relative to one or more other companies, or relative to one or more
indexes, and may be contingent upon future performance of the Company or any Affiliate, division,
or department thereof. Each Restricted Stock Award may have different Forfeiture Restrictions, in
the discretion of the Committee.

     (b) Other Terms and Conditions. Common Stock awarded pursuant to a Restricted Stock
Award shall be represented by a stock certificate registered in the name of the Participant.
Unless provided otherwise in a Restricted Stock Agreement, the Participant shall have the right to
receive dividends with respect to Common Stock subject to a Restricted Stock Award, to vote Common
Stock subject thereto and to enjoy all other stockholder rights, except that (i) the Participant
shall not be entitled to delivery of the stock certificate until the Forfeiture Restrictions have
expired, (ii) the Company shall retain custody of the stock until the Forfeiture Restrictions have
expired, (iii) the Participant may not sell, transfer, pledge, exchange, hypothecate or otherwise
dispose of the stock until the Forfeiture Restrictions have expired, and (iv) a breach of the terms
and conditions established by the Committee pursuant to the Restricted Stock Agreement shall cause
a forfeiture of the Restricted Stock Award. At the time of such Award, the Committee may, in its
sole discretion, prescribe additional terms, conditions or restrictions relating to Restricted
Stock Awards, including, but not limited to, rules pertaining to the termination of employment or
service as a Consultant or Director (by retirement, disability, death or otherwise) of a
Participant prior to expiration of the Forfeitures Restrictions. Such additional terms, conditions
or restrictions shall be set forth in a Restricted Stock Agreement made in conjunction with the
Award.

     (c) Payment for Restricted Stock. The Committee shall determine the amount and form
of any payment for Common Stock received pursuant to a Restricted Stock Award, provided that in the
absence of such a determination, a Participant shall not be required to make any payment for Common
Stock received pursuant to a Restricted Stock Award, except to the extent otherwise required by
law.

     (d) Committee’s Discretion to Accelerate Vesting of Restricted Stock Awards. The
Committee may, in its discretion and as of a date determined by the Committee, fully vest any or
all Common Stock awarded to a Participant pursuant to a Restricted Stock Award and, upon such
vesting, all restrictions applicable to such Restricted Stock Award shall terminate as of such
date. Any action by the Committee pursuant to this Subparagraph may vary among individual
Participants and may vary among the Restricted Stock Awards held by any individual Participant.
Notwithstanding the preceding provisions of this Subparagraph, the Committee may not take any
action described in this Subparagraph with respect to a Restricted Stock Award that has been
granted to a “covered employee” (within the meaning of Treasury Regulation section 1.162-27(c)(2))
if such Award has been designed to meet the exception for performance-based compensation under
section 162(m) of the Code.

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     (e) Restricted Stock Agreements. At the time any Award is made under this Paragraph
VIII, the Company and the Participant shall enter into a Restricted Stock Agreement setting forth
each of the matters contemplated hereby and such other matters as the Committee may determine to be
appropriate. The terms and provisions of the respective Restricted Stock Agreements need not be
identical. Subject to the consent of the Participant and the restriction set forth in the last
sentence of Subparagraph (d) above, the Committee may, in its sole discretion, amend an outstanding
Restricted Stock Agreement from time to time in any manner that is not inconsistent with the
provisions of the Plan.

IX. PERFORMANCE AWARDS

     (a) Performance Period. The Committee shall establish, with respect to and at the
time of each Performance Award, the number of shares of Common Stock subject to, or the maximum
value of, the Performance Award and the performance period over which the performance applicable to
the Performance Award shall be measured.

     (b) Performance Measures. A Performance Award shall be awarded to a Participant
contingent upon future performance of the Company or any Affiliate, division, or department thereof
during the performance period. The Committee shall establish the performance measures applicable
to such performance either (i) prior to the beginning of the performance period or (ii) within 90
days after the beginning of the performance period if the outcome of the performance targets is
substantially uncertain at the time such targets are established, but not later than the date that
25% of the performance period has elapsed; provided such measures may be made subject to adjustment
for specified significant extraordinary items or events. The performance measures may be absolute,
relative to one or more other companies, or relative to one or more indexes. The performance
measures established by the Committee may be based upon (1) the price of a share of Common Stock,
(2) the Company’s earnings per share, (3) the Company’s market share, (4) the market share of a
business unit of the Company designated by the Committee, (5) the Company’s sales, (6) the sales of
a business unit of the Company designated by the Committee, (7) the net income (before or after
taxes) of the Company or any business unit of the Company designated by the Committee, (8) the cash
flow return on investment of the Company or any business unit of the Company designated by the
Committee, (9) the earnings before or after interest, taxes, depreciation, and/or amortization of
the Company or any business unit of the Company designated by the Committee, (10) the economic
value added, (11) the return on stockholders’ equity achieved by the Company, (12) the total
stockholders’ return achieved by the Company, or (13) a combination of any of the foregoing. The
Committee, in its sole discretion, may provide for an adjustable Performance Award value based upon
the level of achievement of performance measures.

     (c) Awards Criteria. In determining the value of Performance Awards, the Committee
shall take into account a Participant’s responsibility level, performance, potential, other Awards,
and such other considerations as it deems appropriate. The Committee, in its sole discretion, may
provide for a reduction in the value of a Participant’s Performance Award during the performance
period.

     (d) Payment. Following the end of the performance period, the holder of a Performance
Award shall be entitled to receive payment of an amount not exceeding the number

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of shares of Common Stock subject to, or the maximum value of, the Performance Award, based on
the achievement of the performance measures for such performance period, as determined and
certified in writing by the Committee. Payment of a Performance Award may be made in cash, Common
Stock, or a combination thereof, as determined by the Committee. Payment shall be made in a lump
sum or in installments as prescribed by the Committee. If a Performance Award covering shares of
Common Stock is to be paid in cash, such payment shall be based on the Fair Market Value of the
Common Stock on the payment date or such other date as may be specified by the Committee in the
Performance Award Agreement.

     (e) Termination of Award. A Performance Award shall terminate if the Participant does
not remain continuously in the employ of the Company and its Affiliates or does not continue to
perform services as a Consultant or a Director for the Company and its Affiliates at all times
during the applicable performance period, except as may be determined by the Committee.

     (f) Performance Award Agreements. At the time any Award is made under this Paragraph
IX, the Company and the Participant shall enter into a Performance Award Agreement setting forth
each of the matters contemplated hereby, and such additional matters as the Committee may determine
to be appropriate. The terms and provisions of the respective Performance Award Agreements need
not be identical.

X. PHANTOM STOCK AWARDS

     (a) Phantom Stock Awards. Phantom Stock Awards are rights to receive shares of Common
Stock (or the Fair Market Value thereof), or rights to receive an amount equal to any appreciation
or increase in the Fair Market Value of Common Stock over a specified period of time, which vest
over a period of time as established by the Committee, without satisfaction of any performance
criteria or objectives. The Committee may, in its discretion, require payment or other conditions
of the Participant respecting any Phantom Stock Award. A Phantom Stock Award may include, without
limitation, a Stock Appreciation Right that is granted independently of an Option.

     (b) Award Period. The Committee shall establish, with respect to and at the time of
each Phantom Stock Award, a period over which the Award shall vest with respect to the Participant.

     (c) Awards Criteria. In determining the value of Phantom Stock Awards, the Committee
shall take into account a Participant’s responsibility level, performance, potential, other Awards,
and such other considerations as it deems appropriate.

     (d) Payment. Following the end of the vesting period for a Phantom Stock Award (or at
such other time as the applicable Phantom Stock Award Agreement may provide), the holder of a
Phantom Stock Award shall be entitled to receive payment of an amount, not exceeding the maximum
value of the Phantom Stock Award, based on the then vested value of the Award. Payment of a
Phantom Stock Award may be made in cash, Common Stock, or a combination thereof as determined by
the Committee. Payment shall be made in a lump sum or in installments as prescribed by the
Committee. Any payment to be made in cash shall be based

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on the Fair Market Value of the Common Stock on the payment date or such other date as may be
specified by the Committee in the Phantom Stock Award Agreement. Cash dividend equivalents may be
paid during or after the vesting period with respect to a Phantom Stock Award, as determined by the
Committee.

     (e) Termination of Award. A Phantom Stock Award shall terminate if the Participant
does not remain continuously in the employ of the Company and its Affiliates or does not continue
to perform services as a Consultant or a Director for the Company and its Affiliates at all times
during the applicable vesting period, except as may be otherwise determined by the Committee.

     (f) Phantom Stock Award Agreements. At the time any Award is made under this
Paragraph X, the Company and the Participant shall enter into a Phantom Stock Award Agreement
setting forth each of the matters contemplated hereby, and such additional matters as the Committee
may determine to be appropriate. The terms and provisions of the respective Phantom Stock Award
Agreements need not be identical.

XI. BONUS STOCK AWARDS

     Each Bonus Stock Award granted to a Participant shall constitute a transfer of unrestricted
Common Stock on such terms and conditions as the Committee shall determine. Bonus Stock Awards
shall be made in shares of Common Stock and need not be subject to performance criteria or
objectives or to forfeiture. The purchase price, if any, for Common Stock issued in connection
with a Bonus Stock Award shall be determined by the Committee in its sole discretion.

XII. RECAPITALIZATION OR REORGANIZATION

     (a) No Effect on Right or Power. The existence of the Plan and the Awards granted
hereunder shall not affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or other change in
the Company’s or any Affiliate’s capital structure or its business, any merger or consolidation of
the Company or any Affiliate, any issue of debt or equity securities ahead of or affecting Common
Stock or the rights thereof, the dissolution or liquidation of the Company or any Affiliate or any
sale, lease, exchange or other disposition of all or any part of its assets or business or any
other corporate act or proceeding.

     (b) Subdivision or Consolidation of Shares; Stock Dividends. The shares with respect
to which Awards may be granted are shares of Common Stock as presently constituted, but if, and
whenever, prior to the expiration of an Award theretofore granted, the Company shall effect a
subdivision or consolidation of shares of Common Stock or the payment of a stock dividend on Common
Stock without receipt of consideration by the Company, the number of shares of Common Stock with
respect to which such Award may thereafter be exercised or satisfied, as applicable (i) in the
event of an increase in the number of outstanding shares shall be proportionately increased, and
the purchase price per share shall be proportionately reduced, and (ii) in the event of a reduction
in the number of outstanding shares shall be proportionately

-11-

 

reduced, and the purchase price per share shall be proportionately increased. Any fractional
share resulting from such adjustment shall be rounded up to the next whole share.

     (c) Recapitalizations and Corporate Changes. If the Company recapitalizes,
reclassifies its capital stock, or otherwise changes its capital structure (a “recapitalization”),
the number and class of shares of Common Stock covered by an Award theretofore granted shall be
adjusted so that such Award shall thereafter cover the number and class of shares of stock and
securities to which the Participant would have been entitled pursuant to the terms of the
recapitalization if, immediately prior to the recapitalization, the Participant had been the holder
of record of the number of shares of Common Stock then covered by such Award. If (i) the Company
shall not be the surviving entity in any merger or consolidation (or survives only as a subsidiary
of an entity), (ii) the Company sells, leases or exchanges or agrees to sell, lease or exchange all
or substantially all of its assets to any other person or entity, (iii) the Company is to be
dissolved and liquidated, (iv) any person or entity, including a “group” as contemplated by Section
13(d)(3) of the 1934 Act, acquires or gains ownership or control (including, without limitation,
power to vote) of more than 50% of the outstanding shares of the Company’s voting stock (based upon
voting power), or (v) as a result of or in connection with a contested election of Directors, the
persons who were Directors of the Company before such election shall cease to constitute a majority
of the Board (each such event is referred to herein as a “Corporate Change”), no later than (x) 10
days after the approval by the stockholders of the Company of such merger, consolidation,
reorganization, sale, lease or exchange of assets or dissolution or such election of Directors or
(y) 30 days after a Corporate Change of the type described in clause (iv), the Committee, acting in
its sole discretion without the consent or approval of any Participant, shall effect one or more of
the following alternatives, which alternatives may vary among individual Participants and which may
vary among Options held by any individual Participant: (1) accelerate the time at which Options
then outstanding may be exercised so that such Options may be exercised in full for a limited
period of time on or before a specified date (before or after such Corporate Change) fixed by the
Committee, after which specified date all unexercised Options and all rights of Participants
thereunder shall terminate, (2) require the mandatory surrender to the Company by selected
Participants of some or all of the outstanding Options held by such Participants (irrespective of
whether such Options are then exercisable under the provisions of the Plan) as of a date, before or
after such Corporate Change, specified by the Committee, in which event the Committee shall
thereupon cancel such Options and the Company shall pay (or cause to be paid) to each Participant
an amount of cash per share equal to the excess, if any, of the amount calculated in Subparagraph
(d) below (the “Change of Control Value”) of the shares subject to such Option over the exercise
price(s) under such Options for such shares, or (3) make such adjustments to Options then
outstanding as the Committee deems appropriate to reflect such Corporate Change (provided, however,
that the Committee may determine in its sole discretion that no adjustment is necessary to Options
then outstanding), including, without limitation, adjusting an Option to provide that the number
and class of shares of Common Stock covered by such Option shall be adjusted so that such Option
shall thereafter cover securities of the surviving or acquiring corporation or other property
(including, without limitation, cash) as determined by the Committee in its sole discretion.

     (d) Change of Control Value. For the purposes of clause (2) in Subparagraph (c)
above, the “Change of Control Value” shall equal the amount determined in clause (i), (ii) or
(iii), whichever is applicable, as follows: (i) the per share price offered to stockholders of the

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Company in any such merger, consolidation, sale of assets or dissolution transaction, (ii) the
price per share offered to stockholders of the Company in any tender offer or exchange offer
whereby a Corporate Change takes place, or (iii) if such Corporate Change occurs other than
pursuant to a tender or exchange offer, the fair market value per share of the shares into which
such Options being surrendered are exercisable, as determined by the Committee as of the date
determined by the Committee to be the date of cancellation and surrender of such Options. In the
event that the consideration offered to stockholders of the Company in any transaction described in
this Subparagraph (d) or Subparagraph (c) above consists of anything other than cash, the Committee
shall determine the fair cash equivalent of the portion of the consideration offered which is other
than cash.

     (e) Other Changes in the Common Stock. In the event of changes in the outstanding
Common Stock by reason of recapitalizations, reorganizations, mergers, consolidations,
combinations, split-ups, split-offs, spin-offs, exchanges or other relevant changes in
capitalization or distributions to the holders of Common Stock occurring after the date of the
grant of any Award and not otherwise provided for by this Paragraph XII such Award and any
agreement evidencing such Award shall be subject to adjustment by the Committee at its sole
discretion as to the number and price of shares of Common Stock or other consideration subject to
such Award. In the event of any such change in the outstanding Common Stock or distribution to the
holders of Common Stock, or upon the occurrence of any other event described in this Paragraph XII
the aggregate number of shares available under the Plan, the aggregate number of shares that may be
issued under the Plan through Incentive Stock Options, and the maximum number of shares that may be
subject to Awards granted to any one individual may be appropriately adjusted to the extent, if
any, determined by the Committee, whose determination shall be conclusive. Notwithstanding the
foregoing, except as otherwise provided by the Committee, upon the occurrence of a Corporate
Change, the Committee, acting in its sole discretion without the consent or approval of any
Participant, may require the mandatory surrender to the Company by selected Participants of some or
all of the outstanding Performance Awards and Phantom Stock Awards as of a date, before or after
such Corporate Change, specified by the Committee, in which event the Committee shall thereupon
cancel such Performance Awards and Phantom Stock Awards and the Company shall pay (or cause to be
paid) to each Participant an amount of cash equal to the maximum value (which maximum value may be
determined, if applicable and in the discretion of the Committee, based on the then Fair Market
Value of the Common Stock) of such Performance Award or Phantom Stock Award which, in the event the
applicable performance or vesting period set forth in such Performance Award or Phantom Stock Award
has not been completed, shall be multiplied by a fraction, the numerator of which is the number of
days during the period beginning on the first day of the applicable performance or vesting period
and ending on the date of the surrender, and the denominator of which is the aggregate number of
days in the applicable performance or vesting period.

     (f) Stockholder Action. Any adjustment provided for in the above Subparagraphs shall
be subject to any required stockholder action.

     (g) No Adjustments unless Otherwise Provided. Except as hereinbefore expressly
provided, the issuance by the Company of shares of stock of any class or securities convertible
into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon
the

-13-

 

exercise of rights or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other securities, and in any case
whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number of shares of Common Stock subject to Awards theretofore granted or the
purchase price per share, if applicable.

XIII. AMENDMENT AND TERMINATION OF THE PLAN

     The Board in its discretion may terminate the Plan at any time with respect to any shares of
Common Stock for which Awards have not theretofore been granted. The Board shall have the right to
alter or amend the Plan or any part thereof from time to time; provided that no change in the Plan
may be made that would impair the rights of a Participant with respect to an Award theretofore
granted without the consent of the Participant, and provided, further, that the Board may not,
without approval of the stockholders of the Company, (a) amend the Plan to increase the maximum
aggregate number of shares that may be issued under the Plan, increase the maximum number of shares
that may be issued under the Plan through Incentive Stock Options or change the class of
individuals eligible to receive Awards under the Plan, or (b) amend or delete Paragraph VII(f).

XIV. MISCELLANEOUS

     (a) No Right To An Award. Neither the adoption of the Plan nor any action of the
Board or of the Committee shall be deemed to give any individual any right to be granted an Option,
a right to a Restricted Stock Award, a right to a Performance Award, a right to a Phantom Stock
Award, a right to a Bonus Stock Award, or any other rights hereunder except as may be evidenced by
an Award agreement duly executed on behalf of the Company, and then only to the extent and on the
terms and conditions expressly set forth therein. The Plan shall be unfunded. The Company shall
not be required to establish any special or separate fund or to make any other segregation of funds
or assets to assure the performance of its obligations under any Award.

     (b) No Employment/Membership Rights Conferred. Nothing contained in the Plan shall
(i) confer upon any employee or Consultant any right with respect to continuation of employment or
of a consulting or advisory relationship with the Company or any Affiliate or (ii) interfere in any
way with the right of the Company or any Affiliate to terminate his or her employment or consulting
or advisory relationship at any time. Nothing contained in the Plan shall confer upon any Director
any right with respect to continuation of membership on the Board.

     (c) Other Laws; Withholding. The Company shall not be obligated to issue any Common
Stock pursuant to any Award granted under the Plan at any time when the shares covered by such
Award have not been registered under the Securities Act of 1933, as amended, and such other state
and federal laws, rules and regulations as the Company or the Committee deems applicable and, in
the opinion of legal counsel for the Company, there is no exemption from the registration
requirements of such laws, rules and regulations available for the issuance and sale of such
shares. No fractional shares of Common Stock shall be delivered, nor shall any cash in lieu of
fractional shares be paid. The Company shall have the right to deduct in

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connection with all Awards any taxes required by law to be withheld and to require any
payments required to enable it to satisfy its withholding obligations.

     (d) No Restriction on Corporate Action. Nothing contained in the Plan shall be
construed to prevent the Company or any Affiliate from taking any action which is deemed by the
Company or such Affiliate to be appropriate or in its best interest, whether or not such action
would have an adverse effect on the Plan or any Award made under the Plan. No Participant,
beneficiary or other person shall have any claim against the Company or any Affiliate as a result
of any such action.

     (e) Restrictions on Transfer. An Award (other than an Incentive Stock Option, which
shall be subject to the transfer restrictions set forth in Paragraph VII(c)) shall not be
transferable otherwise than (i) by will or the laws of descent and distribution, (ii) pursuant to a
qualified domestic relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder, or (iii) with the consent of the
Committee.

     (f) Governing Law. The Plan shall be governed by, and construed in accordance with,
the laws of the State of Delaware, without regard to conflicts of laws principles thereof.

-15-EX-10.16

 

Exhibit 10.16

INDEMNIFICATION AGREEMENT

     THIS AGREEMENT, dated August 30, 2005, is effective between Superior Well Services, Inc., a
Delaware corporation (the “Corporation”), and the undersigned director or officer of the
Corporation (“Indemnitee”).

     WHEREAS, the Corporation has adopted Amended and Restated Bylaws (as the same may be amended
from time to time, the “Bylaws”) providing for indemnification of the Corporation’s directors and
officers to the maximum extent authorized by the Delaware General Corporation Law (the “DGCL”); and

     WHEREAS, the Bylaws and the DGCL contemplate that contracts and insurance policies may be
entered into with respect to indemnification of directors and officers; and

     WHEREAS, there are questions concerning the adequacy and reliability of the protection which
might be afforded to directors and officers from acquisition of policies of Directors and Officers
Liability Insurance (“D&O Insurance”), covering certain liabilities which might be incurred by
directors and officers in the performance of their services to the Corporation; and

     WHEREAS, it is reasonable, prudent and necessary for the Corporation to obligate itself
contractually to indemnify Indemnitee so that he will serve or continue to serve the Corporation
free from undue concern that he will not be adequately protected; and

     WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service
for or on behalf of the Corporation on condition that he be so indemnified;

     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Corporation and Indemnitee do hereby covenant and agree as follows:

     1. Definitions. As used in this Agreement:

          (a) The term “Proceeding” shall include any threatened, pending or completed action, suit,
inquiry or proceeding, whether brought by or in the right of the Corporation or otherwise and
whether of a civil, criminal, administrative, arbitrative or investigative nature, in which
Indemnitee is or will be involved as a party, as a witness or otherwise, by reason of the fact that
Indemnitee is or was a director or officer of the Corporation, by reason of any action taken by him
or of any inaction on his part while acting as a director or officer or by reason of the fact that
he is or was serving at the request of the Corporation as a director, officer, trustee, employee or
agent of another corporation, partnership, joint venture, trust, limited liability company or other
enterprise; in each case whether or not he is acting or serving in any such capacity at the time
any liability or expense is incurred for which indemnification or reimbursement can be provided
under this Agreement; provided that any such action, suit or proceeding that is brought by
Indemnitee against the Corporation or directors or officers of the Corporation, other than an
action brought by Indemnitee to enforce his rights under this Agreement, shall not be deemed a
Proceeding without prior approval by a majority of the Board of Directors of the Corporation.

 

 

          (b) The term “Expenses” shall include, without limitation, any judgments, fines and penalties
against Indemnitee in connection with a Proceeding; amounts paid by Indemnitee in settlement of a
Proceeding; and all attorneys’ fees and disbursements, accountants’ fees, private investigation
fees and disbursements, retainers, court costs, transcript costs, fees of experts, fees and
expenses of witnesses, travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other disbursements, or expenses, reasonably
incurred by or for Indemnitee in connection with prosecuting, defending, preparing to prosecute or
defend, investigating, being or preparing to be a witness in a Proceeding or establishing
Indemnitee’s right of entitlement to indemnification for any of the foregoing.

          (c) References to Indemnitee’s being or acting as “a director or officer of the Corporation”
or “serving at the request of the Corporation as a director, officer, trustee, employee or agent of
another corporation, partnership, joint venture, trust, limited liability company or other
enterprise” shall include in each case service to or actions taken while a director, officer,
trustee, employee or agent of any subsidiary or predecessor of the Corporation.

          (d) References to “other enterprise” shall include employee benefit plans; references to
“fines” shall include any excise tax assessed with respect to any employee benefit plan; references
to “serving at the request of the Corporation” shall include any service as a director, officer,
employee or agent of the Corporation which imposes duties on, or involves services by, such
director, officer, trustee, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably
believed to be in the interests of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner “not opposed to the best interest of the Corporation” as
referred to in this Agreement.

          (e) The term “substantiating documentation” shall mean copies of bills or invoices for costs
incurred by or for Indemnitee, or copies of court or agency orders or decrees or settlement
agreements, as the case may be, accompanied by a sworn statement from Indemnitee that such bills,
invoices, court or agency orders or decrees or settlement agreements, represent costs or
liabilities meeting the definition of “Expenses” herein.

          (f) The terms “he” and “his” have been used for convenience and mean “she” and “her” if
Indemnitee is a female.

     2. Indemnity of Director or Officer. The Corporation hereby agrees to hold harmless and
indemnify Indemnitee against Expenses to the fullest extent authorized or permitted by law
(including the applicable provisions of the DGCL). The phrase “to the fullest extent permitted by
law” shall include, but not be limited to (a) to the fullest extent permitted by any provision of
the DGCL that authorizes or permits additional indemnification by agreement, or the corresponding
provision of any amendment to or replacement of the DGCL and (b) to the fullest extent authorized
or permitted by any amendments to or replacements of the DGCL adopted after the date of this
Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Any amendment, alteration or repeal of the DGCL that adversely affects any right of Indemnitee
shall be prospective only and shall not limit or eliminate any such right with respect to any
Proceeding involving any occurrence or alleged occurrence of any action or omission to act that
took place prior to such amendment or repeal.

2

 

     3. Additional Indemnity. The Corporation hereby further agrees to hold harmless and
indemnify Indemnitee against Expenses incurred by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, trustee, employee or agent of another corporation, partnership,
joint venture, trust, limited liability company or other enterprise, including, without limitation,
any predecessor, subsidiary or affiliated entity of the Corporation, but only if Indemnitee acted
in good faith and in a manner he reasonably believed to be in, or not opposed to, the best
interests of the Corporation. Additionally, in the case of a criminal proceeding, Indemnitee must
have had no reasonable cause to believe that his conduct was unlawful. The termination of any
Proceeding by judgment, order of the court, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not, of itself, create a presumption that Indemnitee did not
act in good faith and in a manner which he reasonably believed to be in, or not opposed to, the
best interest of the Corporation, and with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.

     4. Choice of Counsel. If Indemnitee is not an officer of the Corporation, he, together
with the other directors who are not officers of the Corporation (the “Outside Directors”), shall
be entitled to employ, and be reimbursed for the fees and disbursements of, counsel separate from
that chosen by Indemnitees who are officers of the Corporation. The principal counsel for Outside
Directors (“Principal Counsel”) shall be determined by majority vote of the Outside Directors, and
the Principal Counsel for the Indemnitees who are not Outside Directors (“Separate Counsel”) shall
be determined by majority vote of such Indemnitees, in each case subject to the consent of the
Corporation (not to be unreasonably withheld or delayed). The obligation of the Corporation to
reimburse Indemnitee for the fees and disbursements of counsel hereunder shall not extend to the
fees and disbursements of any counsel employed by Indemnitee other than Principal Counsel or
Separate Counsel, as the case may be, unless Indemnitee has interests that are different from those
of the other Indemnitees or defenses available to him that are in addition to or different from
those of the other Indemnitees such that Principal Counsel or Separate Counsel, as the case may be,
would have an actual or potential conflict of interest in representing Indemnitee.

     5. Advances of Expenses. Expenses (other than judgments, penalties, fines and settlements)
incurred by Indemnitee shall be paid by the Corporation, in advance of the final disposition of the
Proceeding, within 20 calendar days after receipt of Indemnitee’s written request accompanied by
substantiating documentation and Indemnitee’s written affirmation that he has met the standard of
conduct for indemnification and a written undertaking to repay such amount to the extent it is
ultimately determined that indemnitee is not entitled to indemnification. No objections based on or
involving the question whether such charges meet the definition of “Expenses,” including any
question regarding the reasonableness of such Expenses, shall be grounds for failure to advance to
such Indemnitee, or to reimburse such Indemnitee for, the amount claimed within such 20-day period,
and the undertaking of Indemnitee set forth in Section 7 hereof to repay any such amount to the
extent it is ultimately determined that Indemnitee is not entitled to indemnification shall be
deemed to include an undertaking to repay any such amounts determined not to have met such
definition.

3

 

     6. Right of Indemnitee to Indemnification Upon Application; Procedure Upon Application.
Any indemnification under this Agreement, other than pursuant to Section 5 hereof, shall be made no
later than 60 days after receipt by the Corporation of the written request of Indemnitee,
accompanied by substantiating documentation, unless a determination is made within said 60-day
period by (a) the Board of Directors by a majority vote of a quorum consisting of directors who are
not or were not parties to such Proceeding, (b) a committee of the Board of Directors designated by
majority vote of the Board of Directors, even though less than a quorum, (c) if there are no such
directors, or if such directors so direct, independent legal counsel in a written opinion or (d)
the stockholders, that Indemnitee has not met the relevant standards for indemnification set forth
in Section 3 hereof.

     The right to indemnification or advances as provided by this Agreement shall be enforceable by
Indemnitee in any court of competent jurisdiction. The burden of proving that indemnification is
not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its
Board of Directors, any committee thereof, independent legal counsel or its stockholders) to have
made a determination prior to the commencement of such action that indemnification is proper in the
circumstances because Indemnitee has met the applicable standards of conduct, nor an actual
determination by the Corporation (including its Board of Directors, any committee thereof,
independent legal counsel or its stockholders) that Indemnitee has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met
the applicable standard of conduct.

     7. Undertaking by Indemnitee. Indemnitee hereby undertakes to repay to the Corporation (a)
any advances of Expenses pursuant to Section 5 hereof and (b) any judgments, penalties, fines and
settlements paid to or on behalf of Indemnitee hereunder, in each case to the extent that it is
ultimately determined that Indemnitee is not entitled to indemnification. As a condition to the
advancement of such Expenses or the payment of such judgments, penalties, fines and settlements,
Indemnitee shall, at the request of the Company, execute an acknowledgment that such Expenses or
such judgments, penalties, fines and settlements, as the case may be, are delivered pursuant and
are subject to the provisions of this Agreement.

     8. Indemnification Hereunder Not Exclusive. The indemnification and advancement of
expenses provided by this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may be entitled under the Company’s Amended and Restated Certificate of Incorporation
(as the same may be amended from time to time), the Bylaws, the DGCL, any D&O Insurance, any
agreement, or otherwise, both as to action in his official capacity and as to action in another
capacity while holding such office; provided, however, that this Agreement supersedes all prior
written indemnification agreements between the Corporation (or any predecessor thereof) and
Indemnitee with respect to the subject matter hereof. However, Indemnitee shall reimburse the
Corporation for amounts paid to him pursuant to such other rights to the extent such payments
duplicate any payments received pursuant to this Agreement.

     9. Continuation of Indemnity. All agreements and obligations of the Corporation contained
herein shall continue during the period Indemnitee is a director or officer of the Corporation (or
is or was serving at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, limited liability company or other
enterprise) and shall continue thereafter so long as Indemnitee shall be subject

4

 

to any possible Proceeding (notwithstanding the fact that Indemnitee has ceased to serve the
Corporation).

     10. Partial Indemnification. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Corporation for a portion of Expenses, but not, however, for
the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion
of such Expenses to which Indemnitee is entitled.

     11. Settlement of Claims. The Corporation shall not be liable to indemnify Indemnitee
under this Agreement for any amounts paid in settlement of any Proceeding effected without the
Corporation’s written consent. The Corporation shall not settle any Proceeding in any manner which
would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent.

     Neither the Corporation nor Indemnitee will unreasonably withhold or delay their consent to
any proposed settlement. The Corporation shall not be liable to indemnify Indemnitee under this
Agreement with regard to any judicial award if the Corporation was not given a reasonable and
timely opportunity, at its expense, to participate in the defense of such action.

     12. Acknowledgements.

          (a) Corporation Acknowledgement. The Corporation expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on the Corporation hereby in order to
induce Indemnitee to serve or to continue to serve as a director or officer of the Corporation, and
acknowledges that Indemnitee is relying upon this Agreement in agreeing to serve or in continuing
to serve as a director or officer of the Corporation.

          (b) Mutual Acknowledgment. Both the Corporation and Indemnitee acknowledge that in certain
instances, Federal law or public policy may override applicable state law and prohibit the
Corporation from indemnifying its directors and officers under this Agreement or otherwise. For
example, the Corporation and Indemnitee acknowledge that the Securities and Exchange Commission
(the “SEC”) has taken the position that indemnification is not permissible for liabilities arising
under certain federal securities laws, and federal legislation prohibits indemnification for
certain ERISA violations. Indemnitee understands and acknowledges that the Corporation has
undertaken or may be required in the future to undertake with the SEC to submit the question of
indemnification to a court in certain circumstances for a determination of the Corporation’s right
under public policy to indemnify Indemnitee.

     13. Enforcement. In the event Indemnitee is required to bring any action or other
proceeding to enforce rights or to collect moneys due under this Agreement and is successful in
such action, the Corporation shall reimburse Indemnitee for all of Indemnitee’s Expenses in
bringing and pursuing such action.

     14. Exceptions. Any other provision herein to the contrary notwithstanding, the
Corporation shall not be obligated pursuant to the terms of this Agreement:

          (a) No Entitlement to Indemnification. To indemnify Indemnitee for any expenses incurred by
Indemnitee with respect to any proceeding instituted by Indemnitee to

5

 

          enforce or interpret this Agreement, if a court of competent jurisdiction determines that
Indemnitee was not entitled to indemnification hereunder;

          (b) Insured Claims. To indemnify Indemnitee for Expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid
in settlement) to the extent such Expenses or liabilities have been paid directly to Indemnitee by
an insurance carrier under a D&O Insurance policy maintained by the Corporation;

          (c) Remuneration in Violation of Law. To indemnify Indemnitee in respect of remuneration paid to
Indemnitee if it shall be determined by a final judgment or other final adjudication that such
remuneration was in violation of law;

          (d) Indemnification Unlawful. To indemnify Indemnitee if a final decision by a court having
jurisdiction in the matter shall determine that such indemnification is not lawful;

          (e) Misconduct, Etc. To indemnify Indemnitee on account of Indemnitee’s conduct which is finally
adjudged to have been knowingly fraudulent or deliberately dishonest or to constitute intentional
misconduct, a knowing violation of law, a violation of Section 174 of the DGCL or a transaction
from which Indemnitee derived an improper personal benefit;

          (f) Breach of Duty. To indemnify Indemnitee on account of Indemnitee’s conduct which is the
subject of any Proceeding brought by the Corporation and approved by a majority of the Board of
Directors which alleges willful misappropriation of corporate assets by Indemnitee, disclosure of
confidential information in violation of Indemnitee’s fiduciary or contractual obligations to the
Corporation, or any other willful and deliberate breach in bad faith of Indemnitee’s duty to the
Corporation or its stockholders; or

          (g) Claims Under Section 16(b). To indemnify Indemnitee for expenses or the payment of profits
arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the
Securities Exchange Act of 1934, as amended, or any similar successor statute.

     15. Severability. If any provision of this Agreement shall be held to be invalid, illegal
or unenforceable (a) the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be in any way affected or impaired thereby, and (b) to the fullest extent
possible, the provisions of this Agreement shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable. Each section of this Agreement
is a separate and independent portion of this Agreement. If the indemnification to which Indemnitee
is entitled with respect to any aspect of any claim varies between two or more sections of this
Agreement, that section providing the most comprehensive indemnification shall apply.

     16. Miscellaneous.

          (a) Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed, construed and

6

 

          interpreted in accordance with the laws of the State of Delaware, without giving effect to
principles of conflict of law.

          (b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter herein and merges all prior discussions
between them. No modification of or amendment to this Agreement, nor any waiver of any rights under
this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The
failure by either party to enforce any rights under this Agreement shall not be construed as a
waiver of any rights of such party.

          (c) Construction. This Agreement is the result of negotiations between and has been reviewed by
each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall
be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in
favor of or against any one of the parties hereto.

          (d) Notices. All notices, demands or other communications to be given or delivered under or by
reason of the provisions of this Agreement shall be in writing and shall be deemed to have been
given (i) when delivered personally to the recipient, (ii) when sent to the recipient by telecopy
(receipt electronically confirmed by sender’s telecopy machine) if during normal business hours of
the recipient, otherwise on the next business day, (iii) one business day after the date when sent
to the recipient by reputable overnight courier service (charges prepaid), or (iv) five business
days after the date when mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications shall be sent to the
parties at the addresses indicated on the signature page hereto, or to such other address as any
party hereto may, from time to time, designate in writing delivered pursuant to the terms of this
Section 16(d).

          (e) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original and all of which together shall constitute one instrument.

          (f) Successors and Assigns. This Agreement shall be binding upon the Corporation and its
successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, legal
representatives and assigns.

          (g) Subrogation. In the event of payment under this Agreement, the Corporation shall be subrogated
to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all
documents required and shall do all acts that may be necessary to secure such rights and to enable
the Corporation to effectively bring suit to enforce such rights.

7

 

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

	 	 	 	 	 	 
	 	 	SUPERIOR WELL SERVICES, INC.

	 

	 	By:
	 	/s/ THOMAS W. STOELK
	 

	 	 	 	 
	 

	 	Name:

Title:

Address:
	 	Thomas W. Stoelk

Vice President and Chief Financial Officer

1380 Rt. 286 East, Suite #121

Indiana, Pennsylvania 15701

Facsimile: (724) 465-8907

	 	 	INDEMNITEE:

	 

	 	 	 	/s/ ANTHONY J. MENDICINO
	 

	 	 	 	 
	 

	 	Name:

Address:
	 	Anthony J. Mendicino

	 

	 	 	 	 

	 

	 	 	 	 

	 

	 	 	 	 
 

	 

	 	 	 	Facsimile: (    )
         -   

8

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