Document:

Exhibit 10.1

Exhibit 10.1

ALLIS-CHALMERS ENERGY INC.

EMPLOYEE PERFORMANCE AWARD AGREEMENT

Pursuant to the terms of the Allis-Chalmers Energy Inc. 2006 Incentive Plan

Amended and Restated Effective March 11, 2009

1. Grant of Performance Award. Allis-Chalmers Energy Inc., a Delaware corporation (“Company”), hereby grants to
Munawar H. Hidayatallah (“Participant”) performance awards in the form of 685,000 shares (the “Performance Award”) of
common stock, $0.01 par value per share, of the Company (“Common Stock”), subject to meeting the Performance Objectives
as described in Section 4 hereof, and in accordance with the terms and conditions of this document. This Performance
Award Agreement is dated as of September 17, 2007. The Performance Award in the form of Common Stock is awarded
pursuant to and to implement in part the Allis-Chalmers Energy Inc. 2006 Incentive Plan (as amended and in effect from
time to time, the “Plan”) and is subject to the restrictions, forfeiture provisions and other terms and conditions of
the Plan, which is hereby incorporated herein and is made a part hereof, and this Performance Award Agreement. By
execution of this Performance Award Agreement, Participant agrees to be bound by all of the terms, provisions,
conditions and limitations of the Plan as implemented by the Performance Award Agreement, together with all rules and
determinations from time to time issued by the Committee pursuant to the Plan. All capitalized terms have the meanings
set forth in the Plan unless otherwise specifically provided. All references to specified paragraphs pertain to
paragraphs of this Performance Award Agreement unless otherwise provided.

2. Settlement of Performance Award. The stock certificate(s) evidencing the Performance Award shall not be issued
or registered on the Company’s books and records until the Performance Objectives set forth in paragraph 4 below have
been met by the Participant and approved by the Committee and all other restrictions contained in this Performance
Award Agreement have lapsed. Upon resolution by the Committee that the Participant has achieved the Performance
Objectives, and subject to the other terms and conditions of this Performance Award Agreement, the Company will
promptly issue a stock certificate with respect to the vested portion of the shares of the Performance Award for which
the Performance Objectives have been met. However, in no event shall such stock certificate be issued to the
Participant later than 90 days after such shares have vested.

3. Risk of Forfeiture. Participant shall immediately forfeit all rights to any Performance Award which have not
vested and with respect to which the Performance Objectives have not been met or in the event of termination,
resignation, or removal of Participant from employment with the Company or any Affiliate under circumstances that do
not cause Participant to become fully vested, under the terms of the Plan and except as set forth in Section 7 hereof.

4. Performance Objectives. Subject to the provisions of this Performance Award Agreement including, without
limitation, the following provisions of this Paragraph 4, the Performance Award shall vest upon meeting the Performance
Objectives described as follows:

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	 	(a)	 	If the Total Shareholder Return (as defined below) as of April 1, 2008 (or upon any of the 30
subsequent trading days following such date) is no less than twelve percent (12%), then one-third (1/3)
of the Performance Award shall immediately be vested and freely transferable and nonforfeitable. If the
Total Shareholder Return as of April 1, 2009 (or upon any of the 30 subsequent trading days following
such date) is no less than twelve percent (12%), then an additional one-third (1/3) of such Performance
Award shall immediately be vested and freely transferable and nonforfeitable. If the Total Shareholder
Return as of April 1, 2010 (or upon any of the 30 subsequent trading days following such date) is no less
than twelve percent (12%), the remaining one-third (1/3) of such Performance Award shall immediately be
vested and freely transferable and nonforfeitable.

	 	(b)	 	Alternatively, if on April 1, 2011 or within thirty (30) subsequent trading days of such date,
the Cumulative Total Shareholder Return is no less than twenty-four percent (24%), then all such unvested
Performance Awards hereunder shall immediately be vested and nonforfeitable.

	 	(c)	 	For purposes of this Performance Award Agreement, the following terms shall have the meanings
described as follows:

The “Value” of the Company shall mean the closing price of the Common Stock of the Company on the New
York Stock Exchange on such date, if a trading date, or if not, on the last previous trading date,
multiplied by the number of shares of such stock then outstanding, plus the value of any other shares
of the Company then outstanding (valued in accordance with any reasonable valuation method, including
the valuation methods described in Treas. Reg. § 20.2031-2).

The “Total Shareholder Return” shall mean the sum of (I) the increase, if any, of (1) the Value of
the Company as of the applicable vesting review date over (2) the Value of the Company as of the
previous vesting review date (or April 1, 2007, in the case of the first vesting review date) plus
(II) dividends on all shares of the Company paid during the period from the previous vesting review
date (or April 1, 2007, in the case of the first vesting review date) to the applicable vesting
review date, such sum expressed as a plus or minus percentage of the Value of the Company as of the
previous vesting review date (or April 1, 2007, in the case of the first vesting review date).

The “Cumulative Total Shareholder Return” shall mean the sum of (i) the increase, if any, of (1) the
Value of the Company as of April 1, 2011 (or any of the thirty (30) subsequent trading days of such
date) over (2) the Value of the Company as of April 1, 2009, plus (ii) dividends on all shares of the
Company paid during the period from April 1, 2009 to April 1, 2011, such sum expressed as a plus or
minus percentage of the Value of the Company as of April 1, 2009.

The period from the date hereof until Performance Awards have become one hundred percent (100%) vested and the
Committee has determined that such Performance Objectives have been met shall be referred to as the “Restricted
Period.”

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5. Transferability. During the Restricted Period, the Participant shall not sell, assign, transfer, pledge,
exchange, hypothecate, or otherwise dispose of any right, title or interest in the Performance Award prior to vesting
in accordance with this Performance Award Agreement. Upon receipt by the Participant of stock certificate(s)
representing the vested shares pursuant to Paragraph 2 above, the Participant may hold or dispose of the shares
represented by such certificate(s), subject to compliance with (i) the terms and conditions of the Plan and this
Performance Award Agreement, (ii) applicable federal or state securities laws or other applicable law, (iii) applicable
rules of any exchange on which the Company’s securities are traded or listed, and (iv) the Company’s rules or policies
as established by the Company in its sole discretion.

6. No Ownership Rights. Prior to the vesting of the Performance Award, the Participant shall not have any rights
with respect to the shares of Common Stock represented by the Performance Award hereunder including the right to vote
the shares of Common Stock and the right to receive any dividends.

7. Termination of Employment; Death or Disability.

(a) If employment of Participant by the Company or any Affiliate is terminated for any reason, including
retirement, all Performance Awards outstanding at the time of such termination and all rights thereunder shall
be forfeited and no further vesting shall occur, except in the case of termination without Cause (as defined
in Participant’s Employment Agreement with the Company) of Participant, in which case the Performance Awards
shall vest in full.

(b) In the event of Participant’s death or disability prior to August 3, 2011, all Performance Awards
shall immediately vest in full.

8. Change in Control.

(a) Change in Control. Upon the occurrence of a Change in Control (as defined in the Plan), all
restrictions and conditions of the Performance Award shall automatically be waived without any required action
by the Company, Committee or the Board with the result that the Performance Award shall be fully vested and
the restrictions thereon shall have lapsed.

(b) Right of Cash-Out. If approved by the Board prior to or within thirty (30) days after such time as a
Change in Control shall be deemed to have occurred, the Board shall have the right for a forty-five (45) day
period immediately following the date that the Change in Control is deemed to have occurred to require
Participant to transfer and deliver to Company all unvested shares of the Performance Award hereunder with
respect to which the restrictions have not lapsed in exchange for an amount equal to the “cash value” (defined
below) of such shares of the Performance Award. Such right shall be exercised by written notice to
Participant. The cash value of such shares of the Performance Award shall equal the “market value” (defined
below) per share, multiplied by the number of unvested shares of the Performance Award hereunder with respect
to which the restrictions have not lapsed. For purposes of the preceding sentence, “market value” per share
shall mean the higher of (i) the average of the Fair Market Value per share of Common Stock on each of the
five trading days immediately following the date a Change in Control is deemed to have occurred or (ii) the
highest price, if any, offered in connection with the Change in Control. The amount payable to Participant by
Company pursuant to this Section 8(b) shall be paid in cash or by certified check and shall be reduced by any
taxes required to be withheld.

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9. Reorganization of Company and Subsidiaries. The existence of the Performance Awards shall not affect in any
way the right or power of the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger
or consolidation of the Company or any issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Performance Award or the rights thereof, or the dissolution or liquidation of Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar
character or otherwise.

10. Adjustment of Shares. In the event of stock dividends, spin-offs of assets or other extraordinary dividends,
stock splits, combinations of shares, recapitalizations, mergers, consolidations, reorganizations, liquidations,
issuances of rights or warrants and similar transactions or events involving Company, the Committee shall, in such
manner as it may deem equitable, make adjustments to the terms and provisions of this Performance Award Agreement.

11. Certain Restrictions. By executing this Performance Award Agreement, Participant agrees that if at the time
of delivery of certificates representing the Performance Award is not covered by an effective registration statement
filed under the Securities Act of 1933 (“Act”), the certificates so delivered may contain such legends as the Company
shall require and the Participant will acquire the shares of the Performance Award for Participant’s own account and
without a view to resale or distribution in violation of the Act or any other securities law, and upon any such
acquisition Participant will enter into such written representations, warranties and agreements as Company may
reasonably request in order to comply with the Act or any other securities law or with this Performance Award
Agreement. Participant agrees that the Company shall not be obligated to take any affirmative action in order to cause
the issuance or transfer of shares of the Performance Award hereunder to comply with any law, rule or regulation that
applies to the shares of Common Stock subject to this Performance Award Agreement.

12. Amendment and Termination. The Performance Award Agreement may not be terminated by the Board or the
Committee at any time without the written consent of Participant. This Performance Award Agreement may be amended in
writing by the Company and Participant, provided the Company may amend this Performance Award Agreement unilaterally
(i) if the amendment does not adversely affect the Participant’s rights hereunder in any material respect, (ii) if the
Company determines that an amendment is necessary to comply with Rule 16b-3 under the Exchange Act or other applicable
law, or (iii) if the Company determines that an amendment is necessary to meet the requirements of the Code or to
prevent adverse tax consequences to the Participant. No amendment or termination of the Plan will adversely affect the
rights and privileges of Participant under this Performance Award Agreement or to the Common Stock granted hereunder
without the written consent of Participant.

13. No Guarantee of Employment. Neither this Performance Award Agreement nor the Performance Award evidenced
hereby shall confer upon Participant any right with respect to continuance of employment or other service with the
Company or any Affiliate, nor shall it interfere in any way with any right Company or any Affiliate would otherwise
have to terminate such Participant’s employment or other service at any time.

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14. Tax Matters.

(a) Company shall have the right to (i) make deductions from the number of shares of Common Stock
otherwise deliverable upon vesting of the Performance Award and satisfaction of the conditions precedent under
this Performance Award Agreement in an amount sufficient to satisfy withholding of any federal, state or local
taxes required by law, or (ii) take such other action as may be necessary or appropriate to satisfy any such
tax withholding obligations.

(b) Under Section 83 of the Code, the difference between the purchase price paid, if any, for the shares
of Performance ``Award and their fair market value on the date of vesting when any forfeiture restrictions
applicable to such shares lapse will be reportable as ordinary income at that time. Participant may elect to
be taxed at the effective time of this award when the shares are acquired rather than when such shares vest
and cease to be subject to such forfeiture restrictions by filing an election under Section 83(b) of the Code
with the Internal Revenue Service within thirty (30) days after the date hereof. If such an election is made,
Participant will have to make a tax payment to the extent the purchase price, if any, is less than the fair
market value of the shares on the date hereof. No tax payment will have to be made to the extent the purchase
price, if any, is at least equal to the fair market value of the shares on the date hereof. Failure to make
this filing within the thirty (30) day period will result in the recognition of ordinary income by you as the
 shares of Restricted Stock vest and the forfeiture restrictions lapse.

PARTICIPANT ACKNOWLEDGES THAT IT IS PARTICIPANT’S SOLE RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A
TIMELY ELECTION UNDER SECTION 83(b) IF PARTICIPANT ELECTS TO DO SO, EVEN IF PARTICIPANT REQUESTS THE COMPANY
OR ITS REPRESENTATIVES TO MAKE THIS FILING ON PARTICIPANT’S BEHALF. PARTICIPANT MUST AND IS RELYING SOLELY ON
PARTICIPANT’S OWN ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT TO FILE ANY SECTION 83(b)
ELECTION.

(c) Neither Company nor the Board or Committee makes any commitment or guarantee that any federal or
state tax treatment will apply or be available to any person eligible for the benefits under this Performance
Award Agreement.

15. Community Interest of Spouse. The community interest, if any, of any spouse of Participant in any Performance
Award shall be subject to all of the terms, conditions and restrictions of this Performance Award Agreement and the
Plan.

16. Consent to Electronic Delivery; Electronic Signature. In lieu of receiving documents in paper format,
Participant agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the
Company may be required to deliver (including,

but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account
statements, annual and quarterly reports, and all other forms of communications) in connection with this and any other
award made or offered by the Company. Electronic delivery may be via a Company electronic mail system or by reference
to a location on a Company intranet to which Participant has access. Participant hereby consents to any and all
procedures the Company has established or may establish for an electronic signature system for delivery and acceptance
of any such documents that the Company may be required to deliver, and agrees that his or her electronic signature is
the same as, and shall have the same force and effect as, his or her manual signature.

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17. Severability. In the event that any provision of this Performance Award Agreement shall be held illegal,
invalid, or unenforceable for any reason, such provision shall be fully severable, but shall not affect the remaining
provisions of this Performance Award Agreement, and this Performance Award Agreement shall be construed and enforced as
of the illegal, invalid, or unenforceable provision had never been included herein.

18. Governing Law. This Performance Award Agreement shall be construed in accordance with the laws of the State
of Delaware to the extent federal law does not supersede and preempt Delaware law.

COMPANY:

ALLIS-CHALMERS ENERGY INC.

By: /s/ Theodore F. Pound III

Printed Name: Theodore F. Pound III

Title: General Counsel and Secretary

PARTICIPANT:

By: /s/ Munawar H. Hidayatallah

Munawar H. Hidayatallah

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6Exhibit 10.2

Exhibit 10.2

Munawar H. Hidayatallah

c/o Allis-Chalmers Energy Inc.

5075 Westheimer, Suite 890

Houston, Texas 77056

March 9, 2009

Allis-Chalmers Energy Inc.

5075 Westheimer, Suite 890

Houston, TX 77056

Attention: Management of Allis-Chalmers Energy Inc.

Re: Waiver of 2009 Bonus

To the Management of Allis-Chalmers Energy Inc.:

Reference is made to that certain Employment Agreement dated effective as of April 1, 2007, as amended, between
Allis-Chalmers Energy Inc. (the “Company”) and Munawar H. Hidayatallah (the “Employment Agreement”). Capitalized terms
used, but not otherwise defined, in this letter agreement, shall have the meanings ascribed to such terms in my
Employment Agreement.

Section 5(b) of my Employment Agreement provides, in relevant part:

(i) Executive shall be eligible to receive an annual bonus equal to 100% of Executive’s salary if the Company’s
Compensation Committee determines that the Company has met the performance goals established by the Compensation
Committee. Such performance goals shall be established no later than ninety days after the first day of the
performance year (provided that the outcome is substantially uncertain at the time the criteria are
established). The annual bonus (other than a bonus for the final year of the term of this Agreement) shall be
subject to Executive’s continued employment on the date of payment (other than by reason of death or
Disability), and shall be paid as soon as practicable after the Compensation Committee determines that the
performance goals were satisfied but in no event later than two-and-one-half months following the applicable
performance year. Such bonus shall be paid in cash or, at the option of Executive, made by written election
filed by Executive with the Company Secretary by the last day of the performance year in shares of the Company’s
Common Stock (for such purpose the shares shall be valued at “Fair Market Value” (as defined in the Incentive
Plan) at the payment date).

(ii) In addition, Executive shall be entitled to receive such other incentive bonuses as may be provided in
management incentive bonus plans adopted from time to time by Company.

 

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By this letter, I hereby waive my right to any bonus described in Section 5(b) of my Employment Agreement for
calendar year 2009.

The waiver provided here is for any bonus due to me under my Employment Agreement for the calendar year 2009 only
and does not constitute a waiver of any other compensation for which I am eligible under my Employment Agreement,
including any benefits or awards pursuant to any benefit plan of the Company.

This waiver shall be governed by the laws of the State of Texas without reference to its conflicts of law
principles. This waiver may be executed by facsimile or email transmission and in one or more counterparts, each of
which shall constitute an original and which, together, shall constitute on instrument.

Sincerely,

/s/ Munawar H. Hidayatallah

Munawar H. Hidayatallah

Accepted and Agreed:

Allis-Chalmers Energy Inc.

/s/ Theodore F. Pound III

Theodore F. Pound III

General Counsel and Secretary

 

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Victor M. Perez

c/o Allis-Chalmers Energy Inc.

5075 Westheimer, Suite 890

Houston, TX 77056

March 9, 2009

Allis-Chalmers Energy Inc.

5075 Westheimer, Suite 890

Houston, TX 77056

Attention: Management of Allis-Chalmers Energy Inc.

Re: Waiver of 2009 Bonus

To the Management of Allis-Chalmers Energy Inc.:

Reference is made to that certain Employment Agreement dated effective as of April 3, 2007 between Allis-Chalmers
Energy Inc. (the “Company”) and Victor M. Perez (the “Employment Agreement”). Capitalized terms used, but not otherwise
defined, in this letter agreement, shall have the meanings ascribed to such terms in my Employment Agreement.

Section 5(b) of my Employment Agreement provides, in relevant part:

Executive shall be entitled to receive a bonus equal to a maximum of 50% of his Salary based upon the
achievement of goals set forth in Schedule A attached hereto (which shall be amended each year in the discretion
of the Company). Such bonus shall be paid annually within 30 days after the completion of the Company’s audited
financial statements for each year. Executive shall also be eligible to receive from Company such annual
management incentive bonuses as may be provided in management incentive bonus plans adopted from time to time by
Company.

By this letter, I hereby waive my right to any bonus described in Section 5(b) of my Employment Agreement for
calendar year 2009.

The waiver provided here is for any bonus due to me under my Employment Agreement for the calendar year 2009 only
and does not constitute a waiver of (a) any increase to my Salary for calendar year 2009 or any subsequent years that
my Employment Agreement is in effect or (b) any other compensation for which I am eligible under my Employment
Agreement, including any benefits or awards pursuant to any benefit plan of the Company.

 

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This waiver shall be governed by the laws of the State of Texas without reference to its conflicts of law
principles. This waiver may be executed by facsimile or email transmission and in one or more counterparts, each of
which shall constitute an original and which, together, shall constitute on instrument.

Sincerely,

/s/ Victor M. Perez

Victor M. Perez

Accepted and Agreed:

Allis-Chalmers Energy Inc.

/s/ Theodore F. Pound III

Theodore F. Pound III

General Counsel and Secretary

 

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Theodore F. Pound III

c/o Allis-Chalmers Energy Inc.

5075 Westheimer, Suite 890

Houston, TX 77056

March 9, 2009

Allis-Chalmers Energy Inc.

5075 Westheimer, Suite 890

Houston, TX 77056

Attention: Management of Allis-Chalmers Energy Inc.

Re: Waiver of 2009 Bonus

To the Management of Allis-Chalmers Energy Inc.:

Reference is made to that certain Employment Agreement dated effective as of December 3, 2007, between
Allis-Chalmers Energy Inc. (the “Company”) and Theodore F. Pound III (the “Employment Agreement”). Capitalized terms
used, but not otherwise defined, in this letter agreement, shall have the meanings ascribed to such terms in my
Employment Agreement.

Section 5(b) of my Employment Agreement provides, in relevant part:

Executive shall be entitled to receive a cash bonus equal to 50% of his Salary on an annual basis. Such bonus
shall be paid annually within 30 days after the completion of the Company’s audited financial statements for
each year. Executive shall also be eligible to receive from Company such additional annual management incentive
bonuses as may be provided in management incentive bonus plans adopted from time to time by Company.

By this letter, I hereby waive my right to any bonus described in Section 5(b) of my Employment Agreement for
calendar year 2009.

The waiver provided here is for any bonus due to me under my Employment Agreement for the calendar year 2009 only
and does not constitute a waiver of (a) any increase to my Salary for calendar year 2009 or any subsequent years that
my Employment Agreement is in effect or (b) any other compensation for which I am eligible under my Employment
Agreement, including any benefits or awards pursuant to any benefit plan of the Company.

 

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This waiver shall be governed by the laws of the State of Texas without reference to its conflicts of law
principles. This waiver may be executed by facsimile or email transmission and in one or more counterparts, each of
which shall constitute an original and which, together, shall constitute on instrument.

Sincerely,

/s/ Theodore F. Pound III

Theodore F. Pound III

Accepted and Agreed:

Allis-Chalmers Energy Inc.

/s/ Munawar H. Hidayatallah

Munawar H. Hidayatallah

Chairman and Chief Executive Officer

 

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David Bryan

c/o Strata Directional Technology LLC

911 Regional Park Drive

Houston, Texas 77060

March 9, 2009

Allis-Chalmers Energy Inc.

5075 Westheimer, Suite 890

Houston, TX 77056

Attention: Management of Allis-Chalmers Energy Inc.

Re: Waiver of 2009 Bonus

To the Management of Allis-Chalmers Energy Inc. (“Allis-Chalmers”):

Reference is made to that certain Employment Agreement dated effective as of July 1, 2007, as amended, between
Strata Directional Technology LLC (fka Strata Directional Technology, Inc.) (the “Company”) and David Bryan (the
“Employment Agreement”). Capitalized terms used, but not otherwise defined, in this letter agreement, shall have the
meanings ascribed to such terms in my Employment Agreement.

Section 5(b) of my Employment Agreement provides, in relevant part:

Executive shall be entitled to receive a bonus equal to a maximum of 100% of his salary if the Company achieves
its budgeted EBITDA goals as determined by the Chief Executive Officer of Allis-Chalmers and the Compensation
Committee of the Board of Directors. Such bonus shall be paid annually within 30 days following Allis-Chalmer’s
release of its audited financial statements for each fiscal year during the term hereof. Executive shall also
be eligible to receive from Company such other annual management incentive bonuses as may be provided in
management incentive bonus plans adopted from time to time by Company.

By this letter, I hereby waive my right to any bonus described in Section 5(b) of my Employment Agreement for
fiscal year 2009 to be paid calendar year 2010.

The waiver provided here is for any bonus due to me under my Employment Agreement for the fiscal year 2009 only
and does not constitute a waiver of (a) any increase to my Salary for fiscal year 2009 or any subsequent years that my
Employment Agreement is in effect or (b) any other compensation for which I am eligible under my Employment Agreement,
including any benefits or awards pursuant to any benefit plan of Allis-Chalmers.

 

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This waiver shall be governed by the laws of the State of Texas without reference to its conflicts of law
principles. This waiver may be executed by facsimile or email transmission and in one or more counterparts, each of
which shall constitute an original and which, together, shall constitute on instrument.

Sincerely,

/s/ David Bryan                                                   

David Bryan

Accepted and Agreed:

Allis-Chalmers Energy Inc.

/s/ Theodore F. Pound III                                   

Theodore F. Pound III

Vice President and Secretary

Strata Directional Technology LLC

/s/
Theodore F. Pound III                                   

Theodore F. Pound III

Vice President and Secretary

 

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Terrence P. Keane

c/o Allis-Chalmers Energy Inc.

5075 Westheimer, Suite 890

Houston, TX 77056

March 9, 2009

Allis-Chalmers Energy Inc.

5075 Westheimer, Suite 890

Houston, TX 77056

Attention: Management of Allis-Chalmers Energy Inc.

Re: Waiver of 2009 Bonus

To the Management of Allis-Chalmers Energy Inc. (“Allis-Chalmers”):

Reference is made to that certain Employment Agreement dated effective as of July 1, 2007, as amended, between
AirComp LLC (the “Company”) and Terrence P. Keane (the “Employment Agreement”). Capitalized terms used, but not
otherwise defined, in this letter agreement, shall have the meanings ascribed to such terms in my Employment Agreement.

Section 5(b) of my Employment Agreement provides, in relevant part:

Executive shall be entitled to receive a bonus equal to (i) 50% of his annual base salary if the Company
achieves its budgeted EBITDA goals for the six month period between January 1, 2008 through June 30, 2008, and
(ii) 50% of his annual base salary if the Oilfield Services segment of Allis-Chalmers achieves its budgeted
EBITDA goals for the six month period between July 1, 2008 though December 31, 2008. For fiscal years 2009 and
2010, Executive shall be entitled to a bonus equal to 100% of his annual base salary if the Oilfield Services
segment of Allis-Chalmers meets its budgeted EBITDA goals established for those years. All EBITDA goals shall
be as established by the Chief Executive Officer and Compensation Committee of Allis-Chalmers. Such bonus shall
be paid annually within 30 days following Allis-Chalmers’ release of its audited financial statements for each
fiscal year during the term hereof. Executive shall also be eligible to receive from Allis-Chalmers such other
annual management incentive bonuses as may be provided in management incentive bonus plans adopted from time to
time by Allis-Chalmers.

By this letter, I hereby waive my right to any bonus described in Section 5(b) of my Employment Agreement for
calendar year 2009.

 

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The waiver provided here is for any bonus due to me under my Employment Agreement for the calendar year 2009 only
and does not constitute a waiver of (a) any increase to my Salary for calendar year 2009 or any subsequent years that
my Employment Agreement is in effect or (b) any other compensation for which I am eligible under my Employment
Agreement, including any benefits or awards pursuant to any benefit plan of the Company.

This waiver shall be governed by the laws of the State of Texas without reference to its conflicts of law
principles. This waiver may be executed by facsimile or email transmission and in one or more counterparts, each of
which shall constitute an original and which, together, shall constitute on instrument.

Sincerely,

/s/ Terrence P. Keane

Terrence P. Keane

Accepted and Agreed:

Allis-Chalmers Energy Inc.

/s/ Munawar H. Hidayatallah

Munawar H. Hidayatallah

Chairman and Chief Executive Officer

AirComp LLC

/s/ Theodore F. Pound III

Theodore F. Pound III

Vice President and Secretary

 

10

 

Mark Patterson

c/o Allis-Chalmers Energy Inc.

5075 Westheimer, Suite 890

Houston, Texas 77056

March 9, 2009

Allis-Chalmers Energy Inc.

5075 Westheimer, Suite 890

Houston, TX 77056

Attention: Management of Allis-Chalmers Energy Inc.

Re: Waiver of 2009 Bonus

To the Management of Allis-Chalmers Energy Inc.:

Reference is made to that certain Employment Agreement dated effective as of January 1, 2008 between
Allis-Chalmers Energy Inc. (the “Company”) and Mark Patterson (the “Employment Agreement”). Capitalized terms used, but
not otherwise defined, in this letter agreement, shall have the meanings ascribed to such terms in my Employment
Agreement.

Section 5(b) of my Employment Agreement provides, in relevant part:

Executive shall be entitled to receive a bonus in an amount up to 100% of his Salary on an annual basis upon
meeting the budgeted EBITDA goals as determined by the Chief Executive Officer of the Company and the
Compensation Committee. Such bonus shall be paid annually within 30 days after the completion of the Company’s
audited financial statements for each year. Executive shall also be eligible to receive from Company such
additional annual management incentive bonuses as may be provided in management incentive bonus plans adopted
from time to time by Company.

By this letter, I hereby waive my right to any bonus described in Section 5(b) of my Employment Agreement for
calendar year 2009.

The waiver provided here is for any bonus due to me under my Employment Agreement for the calendar year 2009 only
and does not constitute a waiver of (a) any increase to my Salary for calendar year 2009 or any subsequent years that
my Employment Agreement is in effect or (b) any other compensation for which I am eligible under my Employment
Agreement, including any benefits or awards pursuant to any benefit plan of Allis-Chalmers.

 

11

 

This waiver shall be governed by the laws of the State of Texas without reference to its conflicts of law
principles. This waiver may be executed by facsimile or email transmission and in one or more counterparts, each of
which shall constitute an original and which, together, shall constitute on instrument.

Sincerely,

/s/ Mark Patterson

Mark Patterson

Accepted and Agreed:

Allis-Chalmers Energy Inc.

/s/ Theodore F. Pound III

Theodore F. Pound III

Vice President and Secretary

 

12

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