This Retirement
Agreement (this “ Agreement ”) is entered into
effective as of May 15, 2009 (the “ Effective
Date ”) by and between Complete Production Services,
Inc., a Delaware corporation (the “ Company ”),
and Robert L. Weisgarber (“ Executive
”).
WHEREAS,
Executive has been a valued employee of the Company and is
presently serving as Vice President, Corporate Controller, Chief
Accounting Officer and Treasurer of the Company; and
WHEREAS,
Executive is retiring from the Company and is resigning from his
positions with the Company and each of its subsidiaries and other
affiliates; and
WHEREAS,
the Company and Executive are parties to that certain
Indemnification Agreement, dated effective September 29, 2005
(the “ Indemnification Agreement ”), and that
certain Amended and Restated Executive Agreement, effective as of
December 31, 2008 (the “ Executive Agreement
”); and
WHEREAS ,
the Company and Executive desire to provide for the terms and
conditions of Executive’s retirement and cooperation and
transition services following retirement and the termination of the
Executive Agreement.
NOW,
THEREFORE , in consideration of Executive’s past and
future employment as an executive officer with the Company and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and Executive agree
as follows:
1.
Retirement; Termination of Executive Agreement.
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A.
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Executive agrees to continue in
employment with the Company until July 1, 2009 (the “
Retirement Date ”).
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B.
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Executive hereby resigns as Vice
President, Corporate Controller, Chief Accounting Officer and
Treasurer of the Company and as an employee of the Company, and
from all other positions held as an employee, officer, or director
of the Company or any subsidiary of the Company and from membership
on all committees relating to the Company or any subsidiary of the
Company, effective as of the Retirement Date.
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C.
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The
Executive Agreement, and any and all of the rights, obligations and
liabilities of the Company and Executive under the Executive
Agreement, are hereby terminated and cancelled, effective as of the
Effective Date, and the Executive Agreement shall be null and void
and of no further force and effect as of the Effective
Date.
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2.
Post-Retirement Cooperation and Transition Services.
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A.
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Executive agrees to cooperate and
provide certain transition services to the Company during the
period commencing on the Retirement Date and ending on
December 31, 2009 (the “ Transition Period
”). Executive shall render such cooperation and transition
services personally and as an independent contractor to the Company
and, on and after the Retirement Date, Executive shall not be an
employee of the Company or any subsidiary or affiliate of the
Company. Executive shall render such cooperation and transition
consulting services (the “ Transition Services
”) on such matters as are reasonably requested by the Chief
Executive Officer of the Company, including, without limitation,
the transition of Executive’s former responsibilities as Vice
President, Corporate Controller, Chief Accounting Officer and
Treasurer to his successor, including with respect to his
successor’s preparation of the Company’s filings with
the Securities and Exchange Commission and any other accounting or
other services that the Chief Executive Officer may reasonably
request from time to time. In performing the Transition Services,
Executive shall not act in an executive officer or officer capacity
and shall not have any of the powers or authority of an executive
officer or officer of the Company or any of its subsidiaries or
affiliates.
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B.
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Executive shall render the
Transition Services at the current principal place of business of
the Company in Houston, Texas, or at such other location as is
mutually agreeable to the Company and Executive. Executive shall
render the Transition Services in such manner, and at such times
during normal business hours, as are reasonably determined by the
Chief Executive Officer of the Company, provided , that,
during the Transition Period, Executive shall not be required to,
and shall not, render Transition Services greater than twenty
percent (20%) of the average level of services performed by
Executive during the 36-month period immediately preceding the
Retirement Date (or the full period of services to the Company and
its subsidiaries if Executive has been providing services to the
Company and its subsidiaries less than 36 months), as
determined under Treasury
Regulation Section 1.409A-1(h)(1)(ii). The Chief
Executive Officer or other officer of the Company shall communicate
to Executive from time to time the matters on which Executive shall
consult, and the locations at which and the times during which
Executive shall render the Transition Services.
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C.
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During the Transition Period, the
Company shall pay Executive up to a total of six (6) monthly
consulting fee payments, in the amount of $2,500 per month, on the
1 st day of each calendar month, payable
in arrears for each month of Transition Services provided by
Executive (the “Consulting Fee”). The first Consulting
Fee payment shall be on August 1, 2009. Executive shall
receive no additional consideration for the Transition Services,
other than the Consulting Fee payable under this
Agreement.
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D.
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Executive’s obligation to
perform the Transition Services for the Company as described herein
shall terminate on the last day of the Transition Period
and
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Executive shall have no further
obligation to render Transition Services to the Company after the
last day of the Transition Period.
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A.
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Subject to Executive’s
satisfaction of the covenants in Sections 1, 2, 13 and 14, and
subject to Section 13D, the Company shall pay a retirement
benefit (the “ Retirement Benefit ”) to
Executive in the amount of $392,636. 1 The Retirement Benefit shall be paid
to Executive (or, in the event of Executive’s death, to
Executive’s estate) in a lump sum cash payment on such date
determined by the Company during the thirty (30) day period
commencing on January 1, 2010.
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B.
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Executive’s retirement and
resignation shall constitute a “separation from
service,” as defined in Treasury
Regulation Section 1.409A-1(h), as of the Retirement
Date.
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C.
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In
the event that, as of the date of Executive’s
“separation from service,” as defined in Treasury
Regulation Section 1.409A-1(h), Executive shall be a
“specified employee,” as defined in Treasury
Regulation Section 1.409A-1(i), to the extent that the
Retirement Benefit is subject to, and not exempt from,
Section 409A of the Internal Revenue Code of 1986, as amended
(the “ Code ”), and the Treasury Regulations
promulgated thereunder, such amount shall be paid not earlier than
six months after the date of Executive’s “separation
from service,” as required in accordance with Section
409A(a)(2)(B)(i) of the Code and Treasury
Regulation Section 1.409A-3(i)(2).
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A.
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Subject to Section 13D,
notwithstanding any provisions to the contrary in any of the Equity
Plans (as defined below), (1) all outstanding unvested stock
options of Executive granted under the Equity Plans as of the
Effective Date shall be and become fully vested and exercisable as
to all shares of stock covered thereby, and (2) all
outstanding shares of restricted stock of Executive granted under
the Equity Plans as of the Effective Date shall be and become 100%
vested and all restrictions thereon shall lapse, in each case as of
the Retirement Date.
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B.
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Subject to Section 13D, for all
outstanding options granted by the Company under the Equity Plans
to Executive after November 13, 2006, Executive (or in the
event of his death, his estate) shall be entitled to exercise his
vested options until July 1, 2010, representing an extension to
twelve (12) months following the Retirement Date.
Notwithstanding the provisions of this Section 4B, no option
may be exercised at any time past the term of such option. The
exercise period for all outstanding options granted by the Company
under the Equity Plans to Executive on or before November 13,
2006 shall not be so extended and such exercise
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The Retirement
Benefit shall equal the sum of (i) twelve (12) times
Executive’s current monthly base salary in effect as of the
Effective Date, (ii) the Executive’s historical bonus
equal to $188,036 (Mr. Weisgarber’s bonus for 2008), and
(iii) Executive’s annual car allowance.
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period shall expire three months
after the Retirement Date as specified in the option agreement for
such options.
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C.
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Exhibit A
attached hereto sets
forth (1) all outstanding stock options of Executive granted
under the Equity Plans as of the Effective Date and (2) all of
the outstanding shares of restricted stock of Executive granted
under the Equity Plans as of the Effective Date.
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D.
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For
purposes of this Section 4, “ Equity Plans
” shall mean the Company’s stock equity plans,
incentive plans, equity participation plans, or other similar
plans, and any stock option agreements or other equity award
agreements used in connection therewith.
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5. Vacation
Benefits; Expense Reimbursements
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A.
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On
the Retirement Date, Executive shall be entitled to receive payment
of Executive’s accrued unused vacation benefits under the
Company’s vacation benefits policy. As of the Effective Date,
Executive had seven (7) days of accrued, unused vacation
benefits under the Company’s vacation policy.
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B.
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Executive shall be entitled to
receive reimbursement for all properly documented business expenses
incurred by Executive prior to the Retirement Date. Executive
agrees to submit proper documentation to the Company of all such
expenses no later than ten (10) days after the Retirement
Date. The Company shall provide reimbursement within thirty
(30) days of receipt of Executive’s properly documented
business expenses in accordance with the Company’s business
expense reimbursement policies and in all event such reimbursements
shall be made in compliance with Treasury
Regulation Section 1.409A-3(i)(1)(iv).
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6.
Mitigation . Executive
shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or
otherwise nor shall the amount of any payment or benefit provided
for in this Agreement be reduced by any compensation earned or
benefit received by Executive as the result of employment by
another employer or self-employment, by retirement benefits, by
offset against any amount claimed to be owed by Executive to the
Company or otherwise.
7. Successor
Agreement . The Company
will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to
expressly assume this Agreement and agree to perform this Agreement
in the same manner and to the same extent that the Company would be
required to perform if no succession had taken place. All
references herein to the Company shall include the successor
entity.
8.
Indemnity; Directors and Officers Liability
Insurance.
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A.
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The
Indemnification Agreement shall remain in full force and effect,
subject to the terms and conditions thereof.
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B.
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In
any situation where under applicable law the Company has the power
to indemnify, advance expenses to and defend Executive in respect
of any judgements, fines, settlements, loss, cost or expense
(including attorneys fees) of any nature related to or arising out
of Executive’s activities as an agent, employee, officer or
director of the Company, including any Transition Services
performed by Executive during the Transition Period in accordance
with the terms of this Agreement, or in any other capacity on
behalf of or at the request of the Company, then the Company shall
promptly on written request, indemnify Executive, advance expenses
(including attorney’s fees) to Executive and defend Executive
to the fullest extent permitted by applicable law, including but
not limited to making such findings and determinations and taking
any and all such actions as the Company may, under applicable law,
be permitted to have the discretion to take so as to effectuate
such indemnification, advancement or defense. Such agreement by the
Company shall not be deemed to impair any other obligation of the
Company respecting Executive’s indemnification or defense
otherwise arising out of this or any other agreement or promise of
the Company under any statute.
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C.
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As
of the Effective Date, the Compensation Committee (the “
Compensation Committee ”) of the Board of the
Directors of the Company has approved that retired directors and
executive officers are eligible to receive directors’ and
officers’ liability insurance upon retirement from the
Company, with the applicable premiums for such insurance to be paid
by the Company. Under the current directors’ and
officers’ liability insurance policy, Executive would be
eligible to elect a six-year run-off policy, which shall cover
Executive in his capacity as an officer of the Company. Subject to
the terms and conditions of the current policy, the current policy
covers claims for wrongful acts, errors and omissions that are
alleged to have been committed while Executive was an officer of
the Company and for which Executive is not subsequently indemnified
by the Company. The terms and conditions of the current policy are
subject to change or discontinuance, in the sole and absolute
discretion of the Compensation Committee.
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D.
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Such indemnification and liability
insurance shall be provided in a manner that complies with the
exemption under Treasury
Regulation Section 1.409A-1(b)(10).
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9.
Notice . For the purpose
of this Agreement, notices and all other communications provided
for in this Agreement shall be in writing and delivered by United
States certified or registered mail (return receipt requested,
postage prepaid) or by courier guaranteeing overnight delivery or
by hand delivery (with signed receipt required), addressed to the
respective addresses set forth below, and such notice or
communication shall be deemed to have been duly given two days
after deposit in the mail, one day after deposit with such
overnight carrier or upon delivery with hand delivery. The
addresses set forth below may be changed by a writing in accordance
herewith.
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Executive:
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Complete
Production Services, Inc.
11700 Katy Freeway, Suite 300
Houston, Texas 77079
Attn: Chief Executive Officer
with a copy to General Counsel
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Robert L.
Weisgarber
206 Venice Street
Sugarland, Texas 77478
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10. Dispute
Resolution . If any
dispute arises out of this Agreement, the “complaining
party” shall give the “other party” written
notice of such dispute. The other party shall have ten
(10) business days to resolve the dispute to the complaining
party’s satisfaction. If the dispute is not resolved by the
end of such period, the complaining party may by written notice
(the “ Notice ”) demand arbitration of the
dispute as set out below, and each party hereto expressly agrees to
submit to, and be bound by, such arbitration.
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A.
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The
Company will, within ten (10) business days of the Notice,
appoint a single arbitrator. The arbitrator will set the rules and
timing of the arbitration, but will generally follow the rules of
the American Arbitration Association and this Agreement where same
are applicable and shall provide for written fact
findings.
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B.
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The
arbitration hearing will in no event take place more than ninety
(90) days after the appointment of the arbitrator.
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C.
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The
arbitration will take place in Houston, Texas unless otherwise
unanimously agreed to by the parties.
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D.
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The
results of the arbitration and the decision of the arbitrators will
be final and binding on the parties and each party agrees and
acknowledges that these results shall be enforceable in a court of
law.
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11.
Governing Law . This
Agreement will be governed by and construed in accordance with the
internal substantive laws, and not the choice of law rules, of the
State of Texas.
12.
Section 409A of the Code . This Agreement shall be interpreted in
accordance with the applicable requirements o
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