CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT
This CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT ("AGREEMENT") is made
and entered into by and between KEY ENERGY SERVICES, INC., a Maryland
corporation ("COMPANY"), and XXXXXXX X. XXXXXXXX ("EXECUTIVE") as of this 1st
day of July, 1999.
WHEREAS, Executive was the Executive Vice President and Chief Financial
Officer of the Company;
WHEREAS, the Executive and the Company desire to terminate the
employment relationship between the Executive and the Company effective as of
July 1, 1999; and
WHEREAS, it is the desire of the Company and Executive that they enter
into a written agreement in order to confirm and establish their respective
rights, duties, and obligations, to resolve any and all claims and
differences that may exist or that in the future may arise, and generally to
provide mutual releases to one another from any and all claims or other
matters as set forth herein.
NOW, THEREFORE, for and in consideration of the premises and the
consideration more fully set forth hereinafter, and intending to be legally
bound hereby, the Company and Executive mutually agree as follows:
1. COMPANY REFERENCES. All references used herein to "Company" shall
refer to Key Energy Services, Inc. and its subsidiaries and affiliates and
the successors of the Company and its subsidiaries and affiliates.
2. TERMINATION DATE. The employment relationship between the
Executive and Company shall terminate and cease as of the close of business
on July 1, 1999 ("TERMINATION DATE"), and neither party shall have any
further rights or obligations with respect to or arising from such employment
relationship except as provided herein.
Effective as of the Termination Date, Executive hereby tenders, and
Company accepts, Executive's resignation from any and all board seats,
offices and positions that Executive may hold.
3. SEVERANCE BENEFITS.
(a) The Company has paid to Executive $100,000, including amounts
withheld for payroll taxes and other appropriate withholdings. In
addition, the Company will pay to Executive $725,000, subject to
withholdings for payroll taxes and other appropriate withholdings,
which payment shall be made on the date of the closing
of the sale by the Company of certain of its assets to be
specified by the Chief Executive Officer of the Company.
Executive also acknowledges that, with respect to the Company's
obligation to make the aforementioned payment of $725,000 to
him, he has already received an advance payment thereon in the
amount of $100,000.00. In the event that Executive revokes this
Agreement within the seven-day revocation period referred to at
the end of this Agreement, the Company and any other parties
that would otherwise have been released under SECTION 7 and
SECTION 8 hereof shall be entitled to set-off against any claims,
or judgments in favor of, Executive amounts paid hereunder.
Except as specifically provided in this Agreement, no other
amounts will be payable by Company to Executive resulting from
his termination of employment.
(b)(i) Executive was granted options with a date of grant of July 15,
1997 to acquire (A) 200,000 shares and (B) 50,000 shares of the
Company's common stock each at an exercise price of $20.4375 per
share. The Executive is fully (100%) vested with respect to
these options as of the date hereof. The company agrees that
such options shall remain exercisable for the three (3) month
period commencing on the Termination Date.
(b)(ii) The Executive was also granted options with a date of grant of
September 4, 1998 to acquire 100,000 shares of the Company's
common stock each at an exercise price of $7.125 per share. The
Company agrees that such options, when issued, (I) shall be
fully (100%) vested from the date of grant and (II) shall remain
exercisable for the five (5) year period commencing on the
Termination Date.
(b)(iii) In addition, the Executive was also granted options with a date
of grant of May 5, 1999 to acquire 300,000 shares of the
Company's common stock each at an exercise price of $3.00 per
share. The Company agrees that such options, when issued, (I)
shall be fully (100%) vested from the date of grant and (II)
shall remain exercisable for the five (5) year period commencing
on the Termination Date.
(b)(iv) With respect to each of the shares of the Company's common stock
acquired by the Executive in connection with the exercise by him
of any of the options described in sections 3 (b)(i) - (iii)
above, the Company agrees that the Executive is hereby granted
piggy-bag registration rights as set forth in Exhibit A hereto
for the shares of the Company's common stock acquired by him
pursuant to the exercise of such options for a period of five
(5) years from the Termination Date.
(c) The Executive shall be entitled to the benefits described in
Exhibit B hereto at the Company's expense for a period of time
following the Termination Date ending on the first to occur of
(i) the third anniversary of the Termination Date or (ii) the
date on which the Executive commences full-time employment by
another employer, but only if and to the extent the Executive is
eligible to receive through such other employer benefits which
are at least equivalent on an aggregate basis to those
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benefits described in Exhibit B hereto. If because of
limitations required by third parties or imposed by law, the
Executive cannot be provided such benefits through the Company's
plans, then the Company will provide the Executive with
substantially equivalent benefits, on an aggregate basis, at the
Company's expense. For purposes of the determination of any
benefits which require a particular period of employment by the
Company and/or the attainment of a particular age while employed
by the Company in order to be payable, the Executive shall be
treated as having continued in the employment of the Company
during such period of time as the Executive is entitled to
receive benefits under this Section 3 (c). At such time as the
Company is no longer required to provide the Executive with life
and/or disability insurance, as the case may be, the Executive
shall be entitled at the Executive's expense to convert such life
and disability insurance, as the case may be, except if and to
the extent such conversion is not available from the provider of
such insurance.
4. WELFARE BENEFIT PLAN CONTRIBUTIONS AND ACCRUALS. After the
Termination Date, except as provided in Section 3 (c) and Exhibit B, SECTION
5 AND SECTION 6 hereof, the Company shall not be obligated to continue, pay
for, or provide Executive's health, dental, disability, life insurance and
any other "welfare benefits" (as such term is defined under Section 3(1) of
ERISA) or fringe benefits or perquisites.
5. CHANGE IN CONTROL. In the event of a "Change in Control" of
the Company, the Company shall pay to the Executive (a) any further payment
he is entitled to receive pursuant to Section 3(a) and (b) in lieu of
providing the benefits contemplated by Section 3 (c) and Exhibit B hereof, an
amount in cash equal to the aggregate reasonable expenses that the Company
would incur if it were to provide such benefits for the period of time for
which the Executive is entitled to receive such benefits hereunder.
For purposes of this Agreement, a "Change in Control" of the
Company shall have the same meaning as set forth in Section 6.7 of the
Company's 1997 Incentive Plan.
6. PENSION PLAN CONTRIBUTIONS AND ACCRUALS. After the
Termination Date, no further contributions, either by Executive or by the
Company, shall be made to, or benefits accrued under, any employee pension
benefit plan (as defined in Section 3(2) of ERISA) or deferred compensation
plan or agreement (collectively, the "COMPANY PLANS") on behalf of Executive;
provided, however, Executive shall be entitled to receive any vested benefits
due to him under such Company Plans as determined in accordance with the
terms and conditions of such Company Plans.
7. RECIPROCAL RELEASES AND WAIVERS OF CLAIMS.
(a) Except with respect to a claim for any compensation or
benefits under the employee benefit plans in which the
Executive participated by virtue of his employment, and
except for claims under this Agreement, the Executive, as
his free and voluntary act, on behalf of himself and his
spouse, dependents,
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heirs, attorneys, successors and permitted assigns, hereby
fully releases and discharges the Company, and its
successors and assigns, and the active and former owners,
directors, officers, employees, and agents of the Company
(collectively, the "Releasees"), of and from any and all
debts, obligations, claims, demands, judgments or causes
of action of any kind whatsoever, known or unknown, in
tort, contract, by statute or on any other basis, for
equitable relief, compensatory, punitive or other damages,
expenses (including attorneys' fees), reimbursements of
costs of any kind, including but not limited to, any and
all claims, demands, rights and/or causes of action,
including, without limitation, any negligence claims and
those which might arise out of allegations relating to a
claimed breach of Executive's employment contract or stock
option agreements, or relating to purported employment
discrimination or civil rights violations, such as, but
not limited to, those arising under Title VII of the Civil
Rights Act of 1964, the Civil Rights Acts of 1866 and
1871, Executive Order 11246, as amended, the Age
Discrimination in Employment Act, the Employee Retirement
Income Security Act of 1974, the Equal Pay Act of 1963,
the Rehabilitation Act of 1973, the Civil Rights Act of
1991, the Americans with Disabilities Act, and the Family
and Medical Leave Act, as each such Act may be amended
from time to time, or any other applicable federal, state
or local employment discrimination statute or ordinance,
which the Executive might have or assert against any of
the Releasees by reason of (a) any event which occurred on
or before the time of his execution of this Agreement, in
connection with the Executive's employment by the Company,
and all circumstances related thereto, (b) the termination
of his employment (including any rights of the Executive
under any employment contract), or (c) any matter, cause
or thing whatsoever which may have occurred prior to the
time of his execution of this Agreement. It is understood
that the Executive's release under this paragraph, as
applied to former officers, former directors, former
employees, and former agents of the Company, is applicable
solely with respect to claims which arose during the
period when such released person was serving in such a
capacity for Company.
(b) Executive acknowledges that Company's agreement to provide
Executive with the payments and other benefits recited in
SECTION 3 hereof is in consideration for Executive's
release and waiver of claims, demands and causes of action
as set forth in the immediately preceding paragraph.
Executive understands and acknowledges that the Executive
would not receive the payments and benefits recited in
SECTION 3 hereof but for his execution of this Agreement.
The Company, on behalf of itself and its directors,
officers and employees, hereby releases and discharges the
Executive, and his heirs and assigns, of and from any and
all debts, obligations, claims, demands, judgments or
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causes of action of any kind whatsoever, known or unknown, in
tort, contract, by statute or on any other basis, for equitable
relief, compensatory, punitive or other damages, expenses
(including attorneys' fees), reimbursements or costs of any
kind, including but not limited to, any and all claims, demands,
rights and/or causes of action, including breach of fiduciary
duty, breach of the duty or confidentiality, tortious
interference with contract, defamation, libel, civil conspiracy,
false light invasion of privacy, actions which might arise out
of allegations relating to a claimed breach of Executive's
employment contract, or relating to purported employment
discrimination or civil rights violations, which the Company, or
its directors, officers or employees, might have or assert
against the Executive, but only with respect to or by reason of
any event which is known to the Company at the time of the
execution of this Agreement by an officer of the Company and
which occurred on or before said time of execution.
8. NO LITIGATION
(a) Except with respect to either:
(1) a claim for compensation or benefits under an employee benefit
plan (as described in section 3(3) of the Employment Retirement
Income Security Act of 1974, as amended ("ERISA")) in which the
Executive participated by virtue of his employment (in which
case, the Executive's remedy shall be the claims and appeals
procedures under the terms of said plan);
(2) upon exhausting administrative remedies described in clause
"(1)" above, any litigation under ERISA for employee benefits
of the type described in that clause;
(3) a claim that the Company is in violation of a provision of this
Agreement; or
(4) a claim alleging an offending act or omission which occurs
after the date that Executive executes this Agreement;
the Executive, on behalf of his spouse, dependants, heirs, attorneys,
successors, and assigns, promises not to initiate a lawsuit or to
bring any other claim, charge or action of any nature against the
Company, or its owners, directors, officers, employees, or agents, in
any court, government agency, arbitration proceeding, or otherwise,
relating in any way to the Executive's employment (or the termination
thereof) or other events, including, but not limited to, any claim,
charge or action under any federal, state or local statute, ordinance,
or rule of law. Except with respect to an
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alleged offending act or omission as described in clause "(4)" of
this paragraph (a), (i) the Executive agrees not to request, or to
directly or indirectly cause, any governmental agency or other person
to commence any investigation or bring any action against the Company
or its owners, directors, officers, employees or agents, and (ii) the
Executive waives any remedy or recovery in any such action which may
be brought on the Executive's behalf by any government agency or
other person or entity.
Executive affirms that he has no claims against the Company arising
out of his employment or any other matter, and that he has not filed
any lawsuits, charges, complaints, petitions, or accusatory pleading
against the Company with any governmental agency or in any court,
based upon or related in any way to any events occurring on or prior
to the date that he executes this Agreement.
(b) Except with respect to either: (1) a claim that the Executive is in
violation of a provision of this Agreement, or (2) a claim alleging
an offending act or omission which occurs after the date that
Executive signs this Agreement, the Company, on behalf of itself and
its directors, officers, and employees, promises not to initiate a
lawsuit or to bring a claim against the Executive, his heirs or
assigns, in any court, government agency, arbitration proceeding,
or otherwise, relating to the Executive's employment (or the
termination thereof) or other events, including, but not limited to,
any claim under any federal, state or local statute, ordinance, or
rule of law. Except with respect to an alleged offending act or
omission as described in clause "(2)" of this paragraph (b), (i) the
Company, on behalf of itself and its directors, officers, and
employees, agrees not to request, or to directly or indirectly cause,
any governmental agency or other person or entity to commence any
investigation or bring any action against the Executive, and (ii) the
Company, on behalf of itself and its directors, officers, and
employees, waives any remedy or recovery in any such action which may
be brought on the Company's behalf by any government agency or other
person or entity.
9. COOPERATION AND INDEMNIFICATION IN THE EVENT OF THIRD-PARTY LITIGATION
(a) In the event that any third-party (including, without limitation, any
private party or governmental entity) asserts a claim or legal cause
of action, initiates a governmental review, or initiates a legal
proceeding (civil or criminal), with respect to any events or matters
with which the Executive was formerly involved as an employee of the
Company, the Company shall indemnify the Executive to the same extent,
and subject to the same terms, conditions and limitations, as would
be applicable under the by-laws of the Company to an individual who
is a former officer of the Company; provided, however, that no
indemnification shall apply with respect to damages, costs or expenses
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(including attorney's fees) of any kind which relate to the conduct
of Executive which was outside the scope of his duties as an employee
of the Company or was in violation of law or a written policy of the
Company.
(b) In consideration for such indemnification, Executive agrees to make
himself freely available to cooperate in the defense and in the
preparation of the legal response to any such matter and, in such a
case, the Company shall reimburse the Executive for reasonable travel
costs in connection with rendering any such assistance. Executive
agrees to cooperate to the fullest extent of his abilities with
Company and, if requested by Company to do so, with any attorney,
expert or other person Company may designate, in the investigation,
defense and resolution of any threatened or asserted litigation,
claim, potential claim, or investigation initiated by or involving
the Company, including, without limitation, truthfully testifying on
behalf of Company in connection with any such investigation or
proceeding.
In payment for any such cooperation rendered by the Executive pursuant
to the immediately preceding paragraph after the Termination Date, the
Company shall pay the Executive $100.00 per hour for the reasonable
period of time, including travel time, at the request of the Company,
devoted exclusively to rendering such assistance. Such hourly fee
shall be payable for all hours actually devoted to such assistance
(including hours in transit), and will not be limited to 8 hours per
day if the hours of active assistance (and travel) exceed 8 hours in
any given day.
(c) Subject to the scope of the indemnification in paragraph "(a)" above,
in the event of a civil action commenced by a private party which
implicates the Executive in connection with his conduct during his
period of service as an employee of the Company, the Company reserves
the right and discretion to retain counsel to jointly represent the
Company and the Executive, unless and until such counsel determines
that the interests of the Company and the Executive pose a conflict
of interest for such counsel under the applicable code of
professional conduct. In the event that separate counsel is necessary
for the Executive, he may select counsel of his choice subject to the
approval of the Company which shall not be unreasonably withheld.
The Company will reimburse the reasonable attorney's fees and costs
of counsel for the Executive, and such reimbursement will be paid as
services are rendered, subject to a right of the Company to recover
the amount of such payments from the Executive in the event, and to
the extent, that a court or agency finds that the relevant actions of
the Executive were unlawful or outside the scope of his duties as an
employee.
(d) As used in this SECTION 9, the term "reasonable attorneys' fees" shall
not include any attorney time or expense for the purpose of
initiating or
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maintaining any counterclaim by the Executive against the Company or
any private party or governmental entity, unless the Company then
consents, in its sole discretion and in writing, to cover the
Executive's attorneys' fees for any such counterclaim.
(e) The provisions of this SECTION 9 shall expire six (6) years from the
Termination Date.
10. NON-COMPETITION. In consideration for the severance benefits to be
provided to the Executive pursuant to the provisions of Section 3 hereof, the
Executive hereby agrees that, for a period ending on the earlier of (a) two
(2) years from the Termination Date or (b) the date on which a Change in
Control is deemed to have taken place, (i) he shall not, directly or
indirectly, without prior written consent of the Chief Executive Officer of
the Company or the Board of Directors of the Company participate or engage
in, whether as a director, officer, employee, advisor, consultant,
stockholder, partner, joint venturer, owner or in any other capacity (other
than as an outside attorney or investment banker), any business engaged in
the business of furnishing oil field services, including drilling and well
servicing (a "Competing Enterprise"); PROVIDED, HOWEVER, that the Executive
shall not be deemed to be participating or engaging in any such business
solely by virtue of his ownership of not more than five percent of any class
of stock or other securities of an issuer which is publicly traded on a
national securities exchange or in a recognized over-the-counter market; and
(ii) he shall not, directly or indirectly solicit, raid, entice or otherwise
induce any employee of the Company or any of its Subsidiaries to be employed
by a Competing Enterprise.
11. NON-ADMISSION OF LIABILITY. This Agreement shall not constitute or
be construed as an admission by the Company or any other person or entity of
any liability to, or the validity of, any claim by the Executive. Executive
acknowledges and agrees that he has been treated in a fair and lawful manner,
and it is agreed between the parties that nothing herein is intended or shall
be construed as an admission of fault or liability by the Company or its
directors, officers, employees, agents, successors and assigns.
12. CONFIDENTIALITY. Except as may be required under compulsion of
law, Executive agrees not to disclose or discuss, other than with his legal
counsel, personal tax or financial adviser, or his spouse, any details of
this Agreement. With respect to any financial adviser (other than his tax
adviser), the Executive may disclose the compensation and benefits which may
result as a consequence of this Agreement, but Executive shall not disclose
to any such financial adviser any other sections or provisions of this
Agreement or any related matter. In the event the Executive discusses this
Agreement with any such legal counsel or advisor, or with his spouse, he will
instruct such person not to disclose or discuss the existence or any details
of this Agreement, or any related matter, with any other person, except as
may be required under compulsion of law.
In the event that the disclosure of the terms of this Agreement is
ordered in the context of a court proceeding, the party so ordered shall
notify the other party within a reasonable time prior to disclosure.
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Executive agrees that he will not disparage, harm or embarrass the
Company or its directors, officers, employees, agents or successors; provided
however, Executive shall retain the right to discuss information concerning
the duties and responsibilities of his former employment with prospective
employers; and provided further, that Executive fully retains the right to
inform his legal counsel of all matters concerning his former employment
and the termination thereof if said information is communicated as a matter
of confidential attorney-client privilege. Executive shall not make any
statements, whether regarded as true or not, which would have the effect of
causing any existing or prospective lenders, purchasers, creditors,
customers, suppliers, employees or other persons or entities to question the
financial condition, integrity, reputation, character or quality of the
Company, or its management, employees, and affiliates. Executive shall not
at any time make any voluntary statement of any kind, or make any untrue
statement while under any compulsory legal process, which is calculated to,
or which foreseeably will, damage the business or reputation of the Company
or its affiliates, or the past or present directors, officers or employees of
any of them.
13. CONFIDENTIAL INFORMATION
(a) Executive agrees that he shall not, without the express written
consent of the Chief Executive Officer or General Counsel of the
Company, directly or indirectly communicate or divulge to, or
make available to, or use of his own benefit or for the benefit
of, any competitor or any other person or entity, any of the
Company's trade secrets, proprietary data or other confidential
information (hereafter collectively referred to as "CONFIDENTIAL
INFORMATION"), which confidential information was communicated
to or otherwise learned or acquired by Executive during his
employment relationship with the Company, except that Executive
may disclose confidential information only to the extent that
disclosure is required (i) at the Company's direction or (ii) by
a court or other governmental agency of competent jurisdiction.
As long as such matters remain confidential information,
Executive shall not use such confidential information in any way
or in any capacity other than as expressly consented to by the
Chief Executive Officer or General Counsel of the Company.
(b) Such confidential information includes, but is not limited to,
personnel information, ideas, discoveries, designs, inventions,
improvements, trade secrets, know-how, manufacturing processes,
design specifications, writings and other works of authorship,
computer programs, financial information, accounting information,
marketing plans, customer lists and data, business plans or
methods and the like, that relate in any manner to the actual
or anticipated business of the Company.
(c) Executive agrees that all records, drawings, data, samples,
models, correspondence, manuals, notes, reports, notebooks,
proposals, and any other documents concerning the Company's
customers or products or other technical or business information
used by the Company and any other tangible materials or copies
or extracts of tangible materials regarding the Company's
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operations or business, received by Executive during his
employment with the Company are, and shall be, the property of
the Company exclusively. Executive agrees to immediately return
to the Company all of the material mentioned above, including
writing notes, memoranda or notes taken by Executive and all
tangible materials, including, without limitation,
correspondence, drawings, blueprints, letters, notebooks,
reports, flow-charts, computer programs and data proposals.
No copies will be made by Executive, or retained by Executive,
of any such confidential information, whether or not developed
by Executive.
(d) Executive agrees that he shall engage in no act which is
intended, or may reasonably be expected, to harm the reputation,
business, prospects, or operations of the Company.
(e) The parties agree that all work product conceived, created or
developed by Executive either solely or jointly with others in
the course or as a result of his employment with the Company is
proprietary to Company and constitutes confidential information
subject to this Agreement. The parties further agree that
Company is the sole owner of all such work product.
14. WAIVER OF AGE DISCRIMINATION CLAIMS. Executive specifically,
knowingly and voluntarily waives any and all rights and claims arising under
the Age Discrimination in Employment Act (ADEA), which claims have arisen as
of the date this Agreement is executed by Executive. Executive acknowledges
that the consideration set forth in SECTION 3 hereof includes consideration
for Executive's agreement herein to waive any and all rights and claims
arising under the ADEA.
15. SEVERABILITY. The parties acknowledge and agree that each
provision of this Agreement shall be enforceable independently of every other
provision. Should any provision of this Agreement be declared by a court of
competent jurisdiction to be unenforceable or invalid as drafted, it may and
shall be reformed or modified by a court to the form of an enforceable and
valid provision that achieves, to the greatest extent possible, the result
intended by the parties in drafting and agreeing to the unenforceable and
invalid provision. In the event that a court should decline to so reform or
modify such a provision, or determine that no enforceable and valid provision
can be created to achieve the intended result, the unenforceability and
invalidity of the remaining provisions of this Agreement shall not be
affected thereby and said unenforceable or invalid provision shall be deemed
not to be a part of this Agreement and the remaining provisions hereof shall
remain in full force and effect.
16. NO WAIVER AND HEADINGS. The parties acknowledge and agree
that the failure of either party to enforce any provision of this Agreement
shall not constitute a waiver of that provision, or of any other provision in
this Agreement. The headings of sections as used herein are intended for
reference purposes only and shall not affect the interpretation of this
Agreement.
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17. ENTIRE AGREEMENT. The parties acknowledge and agree that this
Agreement constitutes the complete and entire agreement between the parties;
that the parties have executed this Agreement based upon the express terms
and provisions set forth herein and therein; that the parties have not relied
on any representations, oral or written, which are not set forth in this
Agreement; that no previous employment, severance or other agreement, whether
oral or written, shall have any effect on the terms and provisions of this
Agreement except as expressly provided herein; and that all such previous
agreements, except as expressly provided in this Agreement, are expressly
superseded and revoked by this Agreement. The Executive hereby declares and
represents that no promise, inducement, or agreement not contained in this
Agreement has been made or offered to him, and that the terms hereof are
contractual and not a mere recital.
18. AMENDMENT. This Agreement shall not be modified by any
subsequent agreement unless the modifying agreement (a) is in writing, (b)
contains an express provision referencing this Agreement, (c) is executed by
a designated officer of the Company, and (d) is executed by Executive.
19. CONSULTATION WITH LEGAL COUNSEL. Executive acknowledges and
agrees that he has been provided a reasonable time to review this Agreement
with legal counsel and to consider the terms and provisions of this
Agreement. Both parties acknowledge and agree that they are voluntarily
entering into this Agreement, after consultation with their legal counsel if
so desired, and after full disclosure of all the facts and circumstances
surrounding the execution of this Agreement and its legal effect.
20. BINDING EFFECT: This Agreement shall inure to the benefit of
the Company (as defined in SECTION 1 hereof), and to its successors and
assigns, and to the persons released hereunder pursuant to SECTIONS 7 AND 8
hereof. This Agreement shall inure to the benefit of Executive and his
heirs, executors and personal representatives.
This Agreement is personal to Executive, and Executive may
not assign, delegate or otherwise transfer any of his rights, duties or
obligations hereunder without the written consent of the Chief Executive
Officer or General Counsel of the Company, and any attempt to do so without
such written consent shall be deemed void and of no force and effect.
21. NOTICES. Notices provided for in this Agreement shall be in
writing and shall be deemed to have been duly received (a) when delivered in
person or sent by facsimile transmission, (b) on the first business day after
it is sent by air express overnight courier service, or (c) on the fourth
business day following deposit in the United States mail, registered or
certified mail, return receipt requested, postage prepaid and addressed, to
the following address, as applicable:
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(1) If to Company, addressed to:
Key Energy Services, Inc.
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxx Xxxxxxxxx, XX 00000
Attention: General Counsel
(2) If to Executive, addressed to the address set forth below
his name on the execution page hereof;
or to such other address as either party may have furnished to the other
party in writing in accordance with this SECTION 21.
22. EXECUTIVE ACKNOWLEDGMENT/NO STRICT CONSTRUCTION. The
Executive represents to Company that he is knowledgeable and sophisticated as
to business matters, including the subject matter of this Agreement, that he
has read the Agreement and that he understands its terms and conditions. The
parties hereto agree that the language used in this Agreement shall be deemed
to be the language chosen by them to express their mutual intent, and no rule
of strict construction shall be applied against either party hereto.
Executive also represents that he is free to enter into this Agreement.
Executive acknowledges that he has had the opportunity to consult with
counsel of his choice, independent of Employer's counsel, regarding the terms
and conditions of this Agreement.
23. GOVERNING LAW. The laws of the State of Maryland, without
regard to conflicts of law provisions, shall govern the enforceability,
interpretation and legal effect of this Agreement.
24. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the
same instrument. Facsimile signatures shall be enforceable.
STATEMENT BY EXECUTIVE: THE COMPANY HAS ADVISED ME IN WRITING
TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT. I HAVE
CAREFULLY READ AND FULLY UNDERSTOOD THE PROVISIONS OF THIS AGREEMENT AND
HAVE HAD SUFFICIENT TIME AND OPPORTUNITY (NOT LESS THAN A PERIOD OF 21
DAYS) TO CONSULT WITH MY PERSONAL TAX, FINANCIAL AND LEGAL ADVISORS PRIOR
TO EXECUTING THIS AGREEMENT, AND I INTEND TO BE LEGALLY BOUND BY ITS
TERMS. I UNDERSTAND THAT I MAY REVOKE MY CONSENT TO THIS AGREEMENT WITHIN
SEVEN (7) DAYS FOLLOWING THE DATE I SIGN IT BY NOTIFYING THE COMPANY OF MY
REVOCATION; THEREAFTER, I CANNOT REVOKE THIS AGREEMENT. I UNDERSTAND THAT
MY RIGHTS UNDER THIS AGREEMENT ARE CONTINGENT ON MY SIGNATURE BELOW, AND
NOT REVOKING THIS AGREEMENT WITHIN THE 7-DAY PERMITTED REVOCATION PERIOD.
I ACKNOWLEDGE THAT THE PAYMENTS DESCRIBED IN SECTION 3 HEREOF WILL NOT BE
MADE BEFORE THE 7-DAY REVOCATION PERIOD HAS EXPIRED.
[SIGNATURE PAGE FOLLOWS]
12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
KEY ENERGY SERVICES, INC.
/s/ Xxxxxxx X. Xxxx
------------------------------------------------
Xxxxxxx X. Xxxx
Chairman of the Board, President
and Chief Executive Officer
EXECUTIVE:
/s/ Xxxxxxx X. XxXxxxxx
------------------------------------------------
Xxxxxxx X. XxXxxxxx
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000
13
EXHIBIT A
PIGGYBACK REGISTRATION RIGHTS
AND
PROCEDURES
----------------
CERTAIN DEFINED TERMS
As used herein --
"Person" shall mean any individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement with respect to the
terms of the offering of the Common Stock covered by the Registration
Statement, and by all other amendments and supplements to such Prospectus,
including posteffective amendments, and in each case including all material
incorporated by reference therein.
"Registration Statement" shall mean any registration statement of the
Company on an appropriate form under the Securities Act (other than any
registration statement with respect to equity securities filed on a Form S-4
or any other form prescribed for the same or similar purposes) and all
amendments and supplements to such registration statement, including
posteffective amendments, in each case including the prospectus contained
therein, all material incorporated by reference therein and all exhibits
thereto.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations thereunder.
"underwritten registration" or "underwritten offering" shall mean an
offering of the Common Stock pursuant to a Registration Statement in which
the Common Stock of the Company is sold to an underwriter in a firm
committment underwriting for reoffering to the public.
1. PIGGYBACK REGISTRATION. In the event the Company proposes to file a
Registration Statement with respect to its Common Stock in an underwritten
offering, it will give written notice to the Executive of the Company's
intention to do so and, upon the written request of the Executive given
within 20 days after receipt of such notice, the Company will use its best
efforts to effect the registration of the Common Stock or the Executive (the
"Piggyback Securities") which it shall have been so requested to register by
including such Piggyback Securities in the Registration Statement ("Piggyback
Registration Rights"). Piggyback Securities are to be included in the
Registration Statement on the same terms and conditions as the shares of
Common Stock of the Company otherwise being sold through underwriters under
such Registration Statement; PROVIDED, HOWEVER,
that if the managing underwriter or underwriters of any proposed underwritten
offering determines and advises the Company in writing that the inclusion in
the Registration Statement of all Piggyback Securities proposed to be
included would adversely affect the success of the proposed underwritten
offering, then the number of Piggyback Securities to be included in the
underwritten offering shall be either (i) reduced to the amount recommended
by such managing underwriter or underwriters or (ii) if recommended by such
managing underwriter or underwriters, excluded from the Registration
Statement entirely. Any Piggyback Securities not included in the Registration
Statement because of the proviso in the preceding sentence will continue to be
eligible for registration pursuant hereto until the fifth anniversary of the
date of this Agreement.
II. REGISTRATION PROCEDURES.
In connection with any "underwritten registration," the Company will
use its best efforts to effect the "underwritten offering" of the Piggyback
Securities for which registration is requested, and pursuant thereto the
Company shall:
(a) prepare and file with the SEC, as soon as practible, a
Registration Statement relating to the underwritten offering on any
appropriate form under the Securities Act, which form shall be available for
the sale of the Company's Common Stock in accordance with the intended
method or methods of distribution thereof and shall include all financial
statements and other information required by the SEC to be filed therewith,
and use its best efforts to cause such Registration Statement to become
effective;
(b) prepare and file with the SEC such amendments to the
Registration Statement as may be necessary to keep the Registration Statement
effective until the distribution of the Eligible Common Stock under the
Registration Statement is complete (which period shall not exceed 90 days
from the date the Registration Statement is declared effective); cause the
Prospectus to be supplemented by any required prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 under the Securities Act;
and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during
the applicable period pursuant to an underwritten offering;
(c) notify the Executive and the managing underwriter or
underwriters, promptly, and (if requested by any such person) confirm such
advice in writing, (i) when the Registration Statement has become effective
and when any posteffective amendment or supplements thereto become effective,
(ii) of the issuance by the SEC of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose, (iii) if between the effective date of the Registration Statement
and the closing of the sale of the securities covered thereby, the
representations and warranties of the Company contemplated by paragraph II
(j) below cease to be true and correct, (iv) of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Company's Common Stock for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (v) of the happening of
any event which makes any statement made in the Registration Statement or the
Prospectus or any document incorporated therein by reference untrue or which
requires the making
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of any changes in the Registration Statement or the Prospectus or any
document incorporated therein by reference to make the statements therein not
misleading;
(d) make reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement at the earliest
possible time;
(e) promptly prior to the filing of any document which is to be
incorporated by reference into the Registration Statement or the Prospectus
(after initial filing of the Registration Statement), provide copies of such
document to the Executive and to the managing underwriters, make the
Company's representatives available for discussion of such document and make
such changes in such document prior to the filing thereof as the Executive or
underwriters may reasonable request;
(f) upon request, furnish to each managing underwriter, without
charge, at least one signed copy of the Registration Statement and any
posteffective amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference); and furnish to the Executive,
without charge, at least one conformed copy of each Registration Statement
and any posteffective amendment thereto (without documents incorporated
therein by reference or exhibits thereto, unless requested);
(g) deliver to the Executive and each underwriter, without charge,
as many copies of the Prospectus (including each preliminary prospectus) and
any amendment or supplement thereto as such Executive or underwriter may
reasonably request; the Company consents to the use of the Prospectus or any
amendment or supplement thereto by the Executive and the underwriters, in
connection with the offering and sale of the Common Stock covered by the
Prospectus or any amendment or supplement thereto;
(h) prior to any public offering of the Company's Common Stock,
use its best efforts to register or qualify or cooperate with the Executive,
the underwriters and their respective counsel in connection with the
registration or qualification of such Common Stock for offer and sale under
the securities or blue sky laws of such jurisdictions as any seller or
underwriter reasonably requests in writing and do any and all other acts or
things necessary or advisable to enable the underwriters to consummate the
disposition in such jurisdiction of the Common Stock covered by the
Registration Statement; PROVIDED that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it is not then so
qualified; (ii) subject itself to taxation in any such jurisdiction, or (iii)
take any action which would subject it to general service of process in any
such jurisdiction where it is not then so subject;
(i) cooperate with the Executive and the managing underwriters to
facilitate the timely preparation and delivery of certificates representing
the Common Stock to be sold and not bearing any restrictive legends; and
enable such Common Stock to be in such denominations and registered in such
names as the managing underwriters may request at least two business days
prior to any sale of the Common Stock to the underwriters;
- 3 -
(j) as promptly as practicable following the occurrence of any event
contemplated by paragraph II (c) (v) above, use its best efforts to prepare a
supplement or posteffective amendment to the Registration Statement or the
related Prospectus or any document incorporated by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Common Stock, the Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(k) use its best efforts to cause all the Common Stock covered by
the Registration Statement to be listed on each securities exchange or
automated quotation system, if any, on which similar securities issued by
the Company are then listed;
(l) enter into an underwriting agreement with an underwriter or
underwriters providing for the sale of such Common Stock in an underwritten
offering which shall be customary in form, substance and scope and shall
contain customary requirements for representations, warranties, covenants and
opinions of counsel; and use its best efforts to obtain any customary
opinions of counsel or customary accountants' "cold comfort" letters referred
to in such underwriting agreement, and enter into such other customary
agreements and take all such other reasonable actions in connection therewith
to expedite or facilitate the disposition of the common stock as contemplated
by such agreements;
(m) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC.
The Company may require the Executive (i) to furnish the Company such
information regarding the distribution of the Piggyback Securities as the
Company may from time to time reasonably request in writing and (ii) to enter
into an underwriting agreement in the form contemplated by Section I(i).
The Executive agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section II (c) (v)
hereof, the Executive will forthwith discontinue the offering and disposition
of the Piggyback Securities until such Executive's receipt of the copies of
the supplemental or amended Prospectus contemplated by Section II (j) hereof,
or until it is advised in writing (the "Advice") by the Company that the use
of the Prospectus may be resumed, and has received copies of any additional
or supplemental filings which are incorporated by reference in the
Prospectus, and, if so directed by the Company, the Executive will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies then in the Executive's possession, of the Prospectus covering such
Common Stock current at the time of receipt of such notice. In the event the
Company shall give any such notice to suspend the offering and disposition of
the Common Stock, the time periods regarding the maintenance of the
applicable Registration Statement shall be extended by the number of days
during the period from and including the date of the giving of such notice
pursuant to Section II (c) (v) hereof to and including the date when the
Executive shall have received the copies of the supplemented or amended
prospectus contemplated by Section II (j) hereof or the Advice.
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EXHIBIT B
BENEFITS TO BE PROVIDED
TO THE EXECUTIVE
-------------------------
(1) Group medical and dental, life, executive life, accident and disability
insurance, all as set forth below:
a) LIFE INSURANCE - Retain coverage under policy which Company
purchased for the Executive in 1999.
b) LONG-TERM DISABILITY INSURANCE - Salary continuation benefit for
total disability. Benefit commences with ninetieth day of disability
and continues to a maximum of age sixty-five. Annual maximum benefit
shall be 60% of the Base Salary (which at date of separation was
$275,000 per year).
c) MEDICAL AND DENTAL PLAN - Comprehensive medical and dental plans are
available to the Company's senior management.
(2) An allowance of $1,000 per month to costs incurred by the Executive in
connection with the use of his automobile.
(3) Payments to Cover Short-Fall in Medical Benefits Coverage -
(i) A payment in an amount to be determined by agreement between the
Chief Executive Officer of the Company and the Executive to compensate
the Executive for medical payments from date of employment to
termination date for which the Executive did not receive reimbursement
pursuant to the Company's medical insurance coverage.
(ii) Agreement, in an amount to be determined by agreement between the
Chief Executive Officer of the Company and the Executive, to reimburse
the Executive during three (3) year period commencing on July 1, 1999
for medical payments for which the Executive does not receive
reimbursement pursuant to the Company's medical insurance coverage.
