Document:

Exhibit 10.1

 

Watson Wyatt Worldwide, Inc.

Performance Share Bonus Incentive Program

FY08

 

Summary

 

The
Performance Share Bonus Incentive Program (the Program) is a long-term bonus
program for senior executives, designed to strengthen incentives and align behaviors
to grow the business in a way that is consistent with the strategic goals of
the Company.  Incentives are provided
through grants of deferred stock units tied to a 3-year performance period with
vesting contingent upon meeting certain Company goal thresholds.  This bonus program does not replace the
Fiscal Year End Bonus (FYEB).

 

Eligibility

 

Associates
of Watson Wyatt & Company and its Affiliates will be eligible for
nomination to participate in the Program. 
Eligible participants will be nominated and approved by the Compensation
Committee of the Board (the Committee). 
Generally, associates eligible for nomination will be high performing,
senior-level executives that have direct impact or responsibility for driving
strategy throughout the organization.  A
list of participants nominated and approved by the Committee for the
performance period beginning July 1, 2007 and ending June 30, 2010 is
attached hereto as Attachment 1.

 

Performance
Period

 

The
performance period is a 3-year period that begins on July 1, 20xx and ends
on June 30, 20xx+3.  For example,
the performance period that began on July 1, 2007 will end on June 30,
2010.  Baseline metrics are established
at the beginning of the performance period. 
At the end of the performance period, performance metrics will then be
measured.  The Company will follow its
standard process for financial reporting following the close of the fiscal
year.  Once Company financial results are
finalized (August following end of fiscal year) the final performance
metric results for the most recent performance period can be determined.

 

Grants

 

Grants
of stock (performance shares) are made under the 2001 Deferred Stock Unit
Plan for Selected Employees.  Grants
are based on the value of the cash portion of the Fiscal Year End Bonus
target.  A multiplier, which varies by
participation tier, is then applied to that value to determine the cash value
of the performance shares.  The cash
value is then converted to a number of shares of stock based on the stock
market closing price on the last day of the fiscal year prior to the
grant.  For calculation purposes, band
and salary information will be based on what is in effect as of October 1
of the first fiscal year of the performance period.

 

 

1

 

All
performance share grants will be made by the Committee at the beginning of each
performance period (following the fiscal year end close process).  Final grant amounts will generally be
determined by the method outlined here. 
However, the Committee, at its discretion, may adjust final grant
amounts.

 

Vesting

 

The
performance shares will vest 3 years from the date of grant based on the
achievement of certain performance metrics and subject to the participant’s
continued employment on the vesting date unless waived in accordance with the
Termination Provisions herein.  Company
performance goals are established by the Committee at the beginning of each
performance period.  At the conclusion of
each performance period, Company performance metrics are measured against goals
over the same period to determine the percentage of the grant to be
awarded.  The actual award is determined
by an earnout schedule which defines performance level ranges and associated
earnout of grants.  Vested shares are
distributed to participants in September following the end of the
performance period and the fiscal year end close.

 

Performance
Metrics and Earnout

 

The
earnout for each performance period is determined by evaluating actual Company
performance, using pre-defined metrics, for the full 3-year performance
period.  Baselines for each metric will
be established at the beginning of each performance period by the
Committee.  The baseline will be
determined by recording the metric as of the last day of the prior fiscal year
(6/30).

 

For
grants under the Program covering the performance period beginning July 1,
2007 and ending June 30, 2010, two types of financial metrics will be
used:

 

1.   Earnings
Per Share (“EPS”) Growth; and

 

2.
  Revenue Growth.

 

Earnout Schedule

 

An
earnout schedule using total growth over the 3-year performance period for
E.P.S and Revenue is shown below:

 

2

 

 

 

Performance
Metrics for Performance period 7/1/2007 — 6/30/2010

 

Earnings
Per Share (E.P.S.) Growth — E.P.S. for the fiscal year before the start of the
performance period compared to E.P.S. of the 3rd year of the
performance period, expressed as a percentage. 
E.P.S. is defined as fully
diluted earnings per share from continuing operations.  The E.P.S. to be used for the fiscal year
before the start of the performance period is $2.60 which reflects fiscal 2007
fully diluted earnings per share from continuing operations.

 

Revenue Growth — Revenue
growth is defined as the percentage change in revenue from the fiscal year
prior to the performance period of the plan to the third year of the
performance period.

 

Revenue will be defined as
the amount stated in the Form 10-K.

 

In performance periods where
acquisitions occur:

 

Revenue at the start of the
performance period (as published in the Form 10-K) will be increased by
the revenue generated by the acquired company during the annual period
preceding the acquisition. In the event
an acquisition occurs after the first day of the performance period, the
acquisition revenue from the year preceding the acquisition will be discounted,
using Watson Wyatt’s revenue growth rate, from the year preceding the
acquisition to the beginning of the performance period. In addition, the
revenue to be counted for the acquired company in the year of acquisition will
be adjusted to be representative of a full year’s revenue.  Acquisition revenue used will be as
reported in the acquired company’s published financial reports (Form 10-K).
In the event such financial reports are unavailable, revenue generated by the
acquired company will be provided by the investment bankers familiar with the
acquired company.

 

For significant foreign
operations, revenue for use in the revenue growth calculations and E.P.S. for
use in the E.P.S. growth calculations will reflect a constant currency exchange
between the local currency and the U.S. dollar over the 3-year measurement
period.

 

 

3

 

Termination
Provisions

 

Performance
shares granted to a participant whose employment terminates prior to the
scheduled vesting date on account of the participant’s death, or permanent
disability (permanent disability to be determined pursuant to the terms of the
Company’s tax-qualified pension plan) shall vest as if the participant remained
employed through the scheduled vesting date. 
Performance shares granted to a participant whose employment terminates
prior to the scheduled vesting date on account of retirement (determined
pursuant to the terms of the Company’s qualified pension plan) shall vest as
the Committee may determine, in its sole discretion and on a case-by-case
basis.  Performance shares granted to a
participant whose employment terminates for reasons other than death, permanent
disability or retirement will not vest and shall be forfeited; provided,
however, that the Committee may determine, in its sole discretion and on a
case-by-case basis, to permit some or all of such participant’s performance
shares to vest.

 

Change
in Control or Capitalization

 

A
change in control or capitalization (merger, consolidation, reorganization,
stock split, acquisition, etc.) may affect the value of performance shares
granted, earnout of vested performance shares or other provisions of the
Program.  To assure fair and equitable
treatment of participants in the event of such a change in control or
capitalization, the Committee, at its discretion, may make changes to grants
and/or vesting that is consistent with the Change in Control and Change in
Capitalization provisions described in the 2001 Deferred Stock Unit Plan for
Selected Employees.  Under these
circumstances, the Committee may make appropriate adjustments to the number of
performance shares granted for any performance period, accelerate the vesting
of any performance shares granted, or provide for payment in cash in lieu of
shares.

 

 

4

 

Attachment 1

 

Watson Wyatt Worldwide, Inc.

Performance Share Bonus Incentive
Program

 

	
   

  	
   

  	
  Multiplier

  	
   

  	
  FY08

  	
   

  
	
  Tier One

  	
   

  	
  2.0

  	
   

  	
  ·  John Haley

  	
   

  
	
  Tier Two

  	
   

  	
  1.0

  	
   

  	
  · Carl Mautz

  · Gene Wickes

  · Kevin Meehan

  · Babloo Ramamurthy

  	
   

  
	
  Tier Three

  	
   

  	
  .75

  	
   

  	
  · Walter Bardenwerper

  · Paul Platten

  · Steve Mele

  	
   

  

 

 

5Exhibit 4.5

 

FIRST SUPPLEMENTAL INDENTURE

 

This FIRST SUPPLEMENTAL
INDENTURE (this “Supplemental Indenture”),
dated as of January 22, 2008, among Key Marine Services, LLC, a Delaware
limited liability company (the “New
Guarantor”), a subsidiary of Key Energy
Services, Inc., a Maryland corporation (the “Company”),
the existing Guarantors (as defined in the Indenture referred to herein) and
The Bank of New York Trust Company, N.A., as trustee under the Indenture
referred to herein (the “Trustee”). The
New Guarantor and the existing Guarantors are sometimes referred to
collectively herein as the “Guarantors”, or individually as a “Guarantor.”

 

W I T N E S S E T H

 

WHEREAS, the Company and the existing Guarantors have
heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of November 29, 2007, relating to
the 83/8% Senior Notes due 2014 (the “Securities”) of the Company;

 

WHEREAS, effective after the close of business on December 31,
2007, pursuant to the reorganization of certain of the Company’s Subsidiaries,
among other things, (i) certain of the Company’s then-existing
Subsidiaries that were also Guarantors were consolidated with or merged with
and into certain of the Company’s other Subsidiaries that were also Guarantors,
and (ii) Moncla Marine, L.L.C., a Louisiana limited liability company and
a Guarantor (the “Prior Guarantor”), was merged
with and into the New Guarantor, a newly-organized Subsidiary of the Prior
Guarantor;

 

WHEREAS, Section 10.9(a)(2)(A) of the
Indenture provides that a Guarantor may not consolidate with or merge with or
into another Person (whether or not such Guarantor is the resulting, transferee
or surviving Person) other than the Company or another Guarantor unless the
Person surviving any such consolidation or merger (if other than such
Guarantor) unconditionally assumes, pursuant to a supplemental indenture, all
the obligations of such Guarantor under the Indenture, the Securities, its
Subsidiary Guarantee and the Registration Rights Agreement;

 

WHEREAS, pursuant to Section 9.1 of the
Indenture, the Company, the Guarantors and the Trustee are authorized to
execute and deliver this Supplemental Indenture to amend or supplement the
Indenture without the consent of any Holder;

 

NOW THEREFORE, to comply with the provisions of the
Indenture and in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the New Guarantor,
the existing Guarantors, the Company and the Trustee mutually covenant and
agree for the equal and ratable benefit of the Holders of the Securities as
follows:

 

1.                                    CAPITALIZED
TERMS.  Capitalized terms used herein
without definition shall have the meanings assigned to them in the Indenture.

 

2.                                    AGREEMENT
TO GUARANTEE.  The New Guarantor hereby
agrees, jointly and severally, with all other Guarantors, to guarantee to each
Holder and to the Trustee the Guaranteed Obligations, to the extent set forth
in the Indenture and subject to the provisions in 

 

 

the Indenture.  The obligations of the Guarantors to the
Holders of Securities and to the Trustee pursuant to the Subsidiary Guarantees
and the Indenture are expressly set forth in Article X of the
Indenture and reference is hereby made to the Indenture for the precise terms
of the Subsidiary Guarantees.

 

3.                                    EXECUTION
AND DELIVERY.  The New Guarantor agrees that its Subsidiary Guarantee shall
remain in full force and effect notwithstanding any failure to endorse on each
Security a notation of such Subsidiary Guarantee.

 

4.                                    NEW YORK LAW TO GOVERN.  THE
LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE AND ENFORCE
THIS SUPPLEMENTAL INDENTURE.

 

5.                                    COUNTERPARTS.  The parties may sign any number of copies of
this Supplemental Indenture.  Each signed
copy shall be an original, but all of them together represent the same
agreement.  This Supplemental Indenture
may be executed in multiple counterparts which, when taken together, shall
constitute one instrument.

 

6.                                    EFFECT
OF HEADINGS.  The Section headings
herein are for convenience only and shall not affect the construction hereof.

 

7.                                    THE
TRUSTEE.  Except as otherwise expressly
provided herein, no duties, responsibilities or liabilities are assumed, or
shall be construed to be assumed, by the Trustee by reason of this Supplemental
Indenture.  This Supplemental Indenture
is executed and accepted by the Trustee subject to all the terms and conditions
set forth in the Indenture with the same force and effect as if those terms and
conditions were repeated at length herein and made applicable to the Trustee
with respect hereto.

 

 

[Remainder of
Page Intentionally Left Blank.

 

Signature
Page Follows.]

 

2

 

IN WITNESS WHEREOF, the
parties hereto have caused this Supplemental Indenture to be duly executed and
attested, all as of the date first above written.

 

	
   

  	
  KEY MARINE SERVICES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ NEWTON W. WILSON III

  
	
   

  	
   

  	
  Name: Newton W. Wilson III

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KEY ENERGY SERVICES MEXICO,
  INC.

  
	
   

  	
  KEY ENERGY SERVICES, LLC

  
	
   

  	
  KEY ENERGY PRESSURE PUMPING SERVICES, LLC

  
	
   

  	
  KEY ENERGY FISHING & RENTAL SERVICES, LLC

  
	
   

  	
  KEY ENERGY SHARED SERVICES, LLC

  
	
   

  	
  MISR KEY ENERGY INVESTMENTS, LLC *

  
	
   

  	
  MISR KEY ENERGY SERVICES, LLC*

  
	
   

  	
  KEY ELECTRIC WIRELINE SERVICES, LLC

  
	
   

  	
  KEY ENERGY SERVICES (MEXICO), LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ NEWTON W. WILSON III

  
	
   

  	
   

  	
  Name: Newton W. Wilson III

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  *
  SIGNING IN CAPACITY OF PRESIDENT

  
	
   

  	
   

  	
   

  
	
   

  	
  KEY
  ENERGY SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ RICHARD J. ALARIO

  
	
   

  	
   

  	
  Name: Richard J. Alario

  
	
   

  	
   

  	
  Title: President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK TRUST COMPANY, N.A.,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JULIE HOFFMAN-RAMOS

  
	
   

  	
   

  	
  Authorized Signatory

  

 

3

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