AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
THIS AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (“
Agreement ”) is made effective as of December
31, 2008 (the “ Restatement Date ”), by
and between Complete Production Services, Inc., a Delaware
corporation (“ Company ”), and Joseph C.
Winkler (“ Executive ”).
WHEREAS,
Complete Energy Services, Inc., as predecessor in interest to
Company, and Executive are parties to that certain Employment
Agreement entered into on June 20, 2005 (the “
Effective Date ”), as amended by Company and
Executive on March 21, 2007 (as amended, the “
Original Agreement ”), which sets forth certain
terms of employment and provision for certain severance
payments.
WHEREAS,
Company and Executive desire to amend and restate the Original
Agreement to delete any provisions that are no longer applicable
and to restate in one document the terms of the Original
Agreement.
WHEREAS ,
Company and Executive further desire to amend and restate the
Original Agreement to conform the Original Agreement to the
requirements of Section 409A of the Internal Revenue Code of
1986, as amended (“Section 409A”), and the
Treasury Regulations and Internal Revenue Service guidance issued
thereunder;
WHEREAS ,
the Compensation Committee of the Board of Directors of Company has
authorized this amendment and restatement of the Original
Agreement; and
NOW ,
THEREFORE, this Agreement shall govern the employment
relationship between the parties from and after the Restatement
Date and supersedes and negates all previous agreements made
between the parties, including the Original Agreement, whether
written or oral relating to the Executive’s employment
relationship with Company. The Original Agreement governs the
relationship between the parties prior to the Restatement
Date.
NOW ,
THEREFORE , for and in consideration of the mutual promises,
covenants and obligations contained herein, Company and Executive
agree as follows:
For purposes of
this Agreement, the following capitalized words shall have the
meanings indicated below:
1.1
“Board” shall mean the Board of Directors of
Company.
(a) Executive’s
conviction of a felony involving moral turpitude, dishonesty or a
breach of trust as regards Company or any of its
affiliates;
(b) Executive’s
commission of any act of theft, fraud, embezzlement or
misappropriation against Company or any of its affiliates that is
materially injurious to any such entity regardless of whether a
criminal conviction is obtained;
(c) Executive’s
willful and continued failure to devote substantially all of his
business time to Company’s business affairs (excluding
failures due to illness, incapacity, vacations, incidental civic
activities, incidental personal time) which failure is not remedied
within a reasonable time after written demand is delivered by
Company, which demand specifically identifies the manner in which
Company believes that Executive has failed to devote substantially
all of his business time to Company’s business
affairs;
(d) Executive’s
unauthorized disclosure of confidential information of Company or
any of its affiliates that is materially injurious to any such
entity; or
(e) Executive’s
knowing or willful material violation of federal or state
securities laws, as determined in good faith by the
Board.
For purposes of
this definition, no act, or failure to act, on Executive’s
part shall be deemed “willful” unless done, or omitted
to be done, by Executive not in good faith and without reasonable
belief that Executive’s action or omission was in the best
interest of Company.
1.3
“Change of Control” shall mean:
(i)
any person or group of persons, other than SCF IV, L.P., a Delaware
limited partnership (“ SCF VI ”) and its
affiliates, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Securities Exchange Act of
1934, but excluding beneficial ownership arising solely as a result
of a person being a party to a stockholder agreement or similar
arrangement that is entered into prior to an underwritten initial
public offering of Company), directly or indirectly, of securities
in Company representing 20% or more of the combined voting power of
Company’s outstanding securities;
(ii)
a change in the majority of the membership of the Board occurs
without approval by two-thirds of the directors who are Continuing
Directors. For these purposes, “ Continuing
Directors ” are persons who (A) were members of
the Board on the Restatement Date, (B) are new directors whose
election was approved by two-thirds of the members of the Board who
were directors on the Restatement Date (“ Approved
Directors ”), or (C) are new directors whose
election was approved by two-thirds of the members of the Board who
were directors on the Restatement Date or are subsequently Approved
Directors;
(iii)
Company is merged, consolidated or combined with another
corporation or entity, including without limitation, a reverse or
forward triangular merger, and Company’s stockholders prior
to such transaction own less than 55% of the outstanding voting
securities of the surviving or resulting corporation or entity
after the transaction;
(iv)
a tender offer or exchange offer is made and consummated by a
person or group of persons other than Company, SCF IV or their
respective affiliates for the ownership of 20% or more of
Company’s voting securities; or
(v)
there is a disposition, transfer, sale or exchange of all or
substantially all of Company’s assets, or stockholder
approval of a plan of liquidation or dissolution of
Company;
provided , that for purposes of this definition, the term
“substantially all” in paragraph (v) shall mean
eighty-five percent (85%) or more, and a transaction or event
described in paragraph (i), (ii), (iii), (iv) or
(v) shall constitute a “Change of Control” only if
such transaction or event constitutes a “change in control
event,” as defined in Treasury
Regulation Section 1.409A-3(i)(5), with respect to
Executive.
1.4
“Change of Control Payout Period” shall mean a period
of three years commencing on the Date of Termination, which
termination is covered by Section 7.3 hereof.
1.5
“Code” shall mean the Internal Revenue Code of 1986, as
amended.
1.6
“Date of Termination” shall mean the date specified in
the Notice of Termination relating to termination of
Executive’s employment with Company; provided that such date
shall not be less than twenty (20) days nor more than
forty-five (45) days following: (i) the date specified by
Company in the notice of discharge of Executive’s employment
without Cause, or (ii) the date specified by the Executive in
the notice of Executive’s resignation for Good
Reason.
1.7
“Good Reason” shall mean any of the following without
Executive’s prior consent:
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(a) any
of the following which results in the terms of Executive’s
employment having been detrimentally and materially affected:
failure to re-elect or appoint Executive to any corporate office or
directorship he occupies on or after the Restatement Date (other
than in connection with a divestiture of the relevant entity) or a
material reduction in Executive’s authority, duties or
responsibilities (including status, offices, titles and reporting
requirements) or if Executive is assigned duties or
responsibilities inconsistent in any material respect from those of
Executive immediately prior to such assignment;
(b) a
material reduction in the aggregate economic value of
Executive’s compensation (including base pay, bonuses and
intermediate and long-term incentives), benefits and perquisites
(determined by considering Executive’s bonus opportunity as
opposed to actual bonus payments and determined without regard to
non-recurring or special bonus or equity compensation awards) from
that in effect prior to any such reduction;
(c) Company
fails to obtain a written agreement satisfactory to Executive from
any successor or assigns of Company to assume and perform this
Agreement as provided in Sections 12.1 and 12.11 hereof;
or
(d) Company
requires Executive to be based at any office located more than 50
miles from Company’s current offices.
For purposes of
determining under Section 1.7(a) whether the terms of
Executive’s employment have been detrimentally and materially
affected by an action or inaction that occurs during the Protective
Period, such determination shall be made by Executive in good faith
and, if Company disagrees with any such determination by Executive,
then the dispute will be limited to whether Executive has satisfied
his duty to make such determination in good faith. The standard
described in the preceding sentence shall not apply to any
determination under Section 1.7(a) regarding whether the terms
of Executive’s employment have been detrimentally and
materially affected by an action or inaction that occurs other than
during the Protective Period.
1.8
“Involuntary Termination” shall mean the
Executive’s Separation from Service by reason of a
termination of employment by Company other than a termination
described in Section 3.2(a) or (b).
1.9
“Notice of Termination” shall mean a written notice
delivered to the other party indicating the specific termination
provision in this Agreement relied upon for termination of
Executive’s employment and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so
indicated.
1.10
“Protective Period” shall mean the period that
commences six months prior to and ends two years following the
effective date of a Change of Control.
1.11
“Section 409A Payments” shall have the meaning
given to such term in Section 9.7 hereof.
1.12
“Separation from Service” with respect to Executive
shall mean a “separation from service” as defined in
Treasury Regulation Section 1.409A-1(h), with respect to
Company, and the service recipient that includes
Company.
1.13
“Severance Payout Period” shall mean a period of two
years commencing on the Date of Termination, which termination is
covered by Section 7.2 hereof.
1.14
“Specified Employee” shall be determined in accordance
with Section 409A(a)(2)(B)(i) of the Code and Treasury
Regulation Section 1.409A-1(i). For these purposes,
Executive’s compensation shall be determined under Treasury
Regulation Section 1.415(c)-2(a) and applied as if
Company were not using any safe harbor provided in Treasury
Regulation Section 1.415(c)-2(d), were not using any of
the elective special timing rules provided in Treasury
Regulation Section 1.415(c)-2(e), and were not using any
of the elective special rules provided in Treasury
Regulation Section 1.415(c)-2(g).
1.15
“Termination Base Salary” shall mean Executive’s
annual base salary at the rate in effect at the time the Notice of
Termination is given or (i) for purposes of a termination
based on Good Reason under Section
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1.7(b), if a
greater amount, Executive’s annual base salary at the rate in
effect immediately prior to any reduction that occurred without
Executive’s consent prior to such termination, or (ii) for
purposes of a termination that is covered by Section 7.3
hereof, if a greater amount, Executive’s annual base salary
at the rate in effect immediately prior to the Change of
Control.
1.16
“Termination Bonus” shall mean the greater of
(i) 100% of the Termination Base Salary, or (ii) the
highest annual bonus earned during any of the three full fiscal
years preceding the Date of Termination.
1.17
“Voluntary Termination for Good Reason” shall mean the
Executive’s Separation from Service by reason of
Executive’s resignation from employment with Company for Good
Reason.
ARTICLE II
EMPLOYMENT AND DUTIES
2.1
Positions . Company shall employ Executive in the
position of Chief Executive Officer of Company or in such other
position or positions as the parties mutually may agree. Executive
shall report to the Board. Company shall use reasonable efforts to
cause Executive to continue to be nominated to serve on the Board
as a full member thereof. It is the intention of the parties that
Executive will be elected to and will serve on the Board while
serving hereunder as Chief Executive Officer of Company.
2.2 Duties
and Services . Executive agrees to serve in the positions
referred to in Section 2.1 hereof and to perform diligently
and to the best of his abilities the duties and services
appertaining to such offices, as well as such additional duties and
services appropriate to such offices which the parties mutually may
agree upon from time to time. Executive’s employment shall
also be subject to the policies maintained and established by
Company that are of general applicability to Company’s
employees, as such policies may be amended from time to
time.
2.3 Other
Interests . Executive agrees, during the period of his
employment by Company, to devote substantially all of his business
time, energy and best efforts to the business and affairs of
Company and its subsidiaries. Notwithstanding the foregoing, the
parties acknowledge and agree that Executive may (a) engage in
and manage his passive personal investments, and (b) engage in
charitable and civic activities; provided, however, that the
activities described in clauses (a) and (b) shall be
permitted so long as such activities do not conflict with the
business and affairs of Company or interfere with Executive’s
performance of his duties hereunder.
2.4 Duty of
Loyalty . Executive acknowledges and agrees that Executive
owes a fiduciary duty of loyalty, fidelity and allegiance to act in
the best interests of Company and to do no act that would injure
the business, interests, or reputation of Company or any of its
affiliates. In keeping with these duties, Executive shall make full
disclosure to Company of all business opportunities pertaining to
Company’s business and shall not appropriate for
Executive’s own benefit business opportunities concerning the
subject matter of the fiduciary relationship.
ARTICLE III
TERM AND TERMINATION OF EMPLOYMENT
3.1
Term . This Agreement shall be for an initial term that
continues in effect through the third anniversary of the Effective
Date. The term of this Agreement shall automatically be extended
for one or more additional terms of one (1) year, as of each
anniversary date of the Effective Date that occurs while this
Agreement is in effect. The term of Agreement, however, may be
terminated by written notice of termination of this Agreement
provided to Executive, and in the event any such termination notice
is delivered to Executive then, notwithstanding the preceding
sentence concerning automatic renewals, the term of this Agreement
shall be deemed terminated effective as of December 31 of the
third full calendar year following the date on which such notice of
termination of the Agreement is delivered to Executive.
3.2
Company’s Right to Terminate . Notwithstanding the
provisions of Section 3.1, Company may terminate
Executive’s employment under this Agreement at any time for
any of the following reasons by providing Executive with a Notice
of Termination:
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(a) upon
(i) Executive becoming incapacitated by accident, sickness or
other circumstance which renders him mentally or physically
incapable of performing the duties and services required of him
hereunder on a full-time basis for a period of at least 120
consecutive days or for a period of 180 days during any
12-month period or (ii) Executive’s death;
(c) for
any other reason whatsoever or for no reason at all, in the sole
discretion of Company.
3.3
Executive’s Right to Terminate . Notwithstanding
the provisions of Section 3.1, Executive shall have the right
to terminate his employment under this Agreement for any of the
following reasons by providing Company with a Notice of
Termination:
(a) within
180 days of and in connection with or based upon Good Reason;
or
(b) at
any time for any other reason whatsoever, in the sole discretion of
Executive.
3.4 Deemed
Resignations . Unless otherwise agreed to in writing by
Company and Executive prior to the termination of Executive’s
employment, any termination of Executive’s employment shall
constitute an automatic resignation of Executive as an officer of
Company and each affiliate of Company, and an automatic resignation
of Executive from the Board (if applicable) and from the board of
directors of any affiliate of Company and from the board of
directors or similar governing body of any corporation, limited
liability company or other entity in which Company or any affiliate
holds an equity interest and with respect to which board or similar
governing body Executive serves as Company’s or such
affiliate’s designee or other representative.
ARTICLE IV
COMPENSATION AND BENEFITS
4.1 Base
Salary . During the term of this Agreement, Executive shall
receive a minimum annual base salary of $552,000, which is the
annual base salary of Executive as of the Restatement Date.
Executive’s annual base salary shall be reviewed annually by
the Board (or a committee thereof) and, in the sole discretion of
the Board (or a committee thereof), such annual base salary may be
increased (but not decreased) effective as of any date determined
by the Board. Executive’s base salary shall be paid in equal
installments in accordance with Company’s standard policy
regarding payment of compensation to executives but no less
frequently than monthly.
4.2
Bonuses . Executive shall receive annual bonuses based
on performance criteria determined in the discretion of the Board,
after reasonable consultation with Executive (it being understood
that the parties agree that Executive will be entitled to an annual
bonus of not less than 100% of his annual base salary at the rate
then in effect, assuming that Company satisfies the target(s) under
the performance criteria established by the Board for such
bonus).
4.3 Other
Perquisites . During his employment hereunder,
(a) Company shall provide Executive with an automobile
allowance in the amount of $800 per month and (b) Executive
and, to the extent applicable, Executive’s spouse, dependents
and beneficiaries, shall be allowed to participate in all benefit
plans and programs of Company, including improvements or
modifications of the same, which are now, or may hereafter be,
available to similarly situated executives. Company shall not,
however, by reason of this Section 4.3, be obligated to
institute, maintain, or refrain from changing, amending, or
discontinuing, any such benefit plan or program, so long as such
changes are similarly applicable to similar situated executives
generally.
ARTICLE V
PROTECTION OF INFORMATION
5.1
Disclosure to and Property of Company . For purposes of
this Article V, any reference to “Company” shall
include Complete Production Services, Inc., Complete Energy
Services, Inc., Integrated Production Services, Inc. and I.E.
Miller Services, Inc. and any reference to “employment”
or similar terms shall
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include a
director and/or consulting relationship. All information, trade
secrets, designs, ideas, concepts, improvements, product
developments, discoveries and inventions, whether patentable or
not, that are conceived, made, developed or acquired by Executive,
individually or in conjunction with others, during the period of
Executive’s employment by Company (whether during business
hours or otherwise and whether on Company’s premises or
otherwise) that relate to Company’s or any of its
affiliates’ business, trade secrets, products or services
(including, without limitation, all such information relating to
corporate opportunities, product specification, compositions,
manufacturing and distribution methods and processes, research,
financial and sales data, pricing terms, evaluations, opinions,
interpretations, acquisition prospects, the identity of customers
or their requirements, the identity of key contacts within the
customer’s organizations or within the organization of
acquisition prospects, or exploration, production, marketing and
merchandising techniques, prospective names and marks) and all
writings or materials of any type embodying any of such
information, ideas, concepts, improvements, discoveries, inventions
and other similar forms of expression (collectively, “
Confidential Information ”) shall be disclosed
to Company, and are and shall be the sole and exclusive property of
Company or its affiliates. Moreover, all documents, videotapes,
written presentations, brochures, drawings, memoranda, notes,
records, files, correspondence, manuals, models, specifications,
computer programs, E-mail, voice mail, electronic databases, maps,
drawings, architectural renditions, models and all other writings
or materials of any type embodying any of such information, ideas,
concepts, improvements, discoveries, inventions and other similar
forms of expression (collectively, “ Work
Product ”) are and shall be the sole and exclusive
property of Company (or its affiliates). Executive agrees to
perform all actions reasonably requested by Company or its
affiliates to establish and confirm such exclusive ownership. Upon
termination of Executive’s employment by Company, for any
reason, Executive promptly shall deliver such Confidential
Information and Work Product, and all copies thereof, to Company.
Notwithstanding the preceding provisions of this Section 5.1,
the terms “ Confidential Information ”
and “ Work Product ” do not, however,
include (a) any information that, at the time of disclosure by
Company, is available to the public other than as a result of any
act of Executive and (b) any information that Executive
possessed prior to the Effective Date.
5.2
Disclosure to Executive . Company will disclose to
Executive, or place Executive in a position to have access to or
develop, Confidential Information and Work Product of Company (or
its affiliates); and/or will entrust Executive with business
opportunities of Company (or its affiliates); and/or will place
Executive in a position to develop business good will on behalf of
Company (or its affiliates).
5.3 No
Unauthorized Use or Disclosure . Executive agrees to
preserve and protect the confidentiality of all Confidential
Information and Work Product of Company and its affiliates.
Executive agrees that he will not, at any time during or after the
termination of Executive’s employment with Company, make any
unauthorized disclosure of, and shall prevent the removal from
Company premises of, Confidential Information or Work Product of
Company or its affiliates, or make any use thereof, except, in each
case, in the carrying out of Executive’s responsibilities
hereunder. Executive shall use commercially reasonable efforts to
cause all persons or entities to whom any Confidential Information
shall be disclosed by him hereunder to observe the terms and
conditions set forth herein as though each such person or entity
was bound hereby. Executive shall have no obligation hereunder to
keep confidential any Confidential Information if and to the extent
disclosure thereof is specifically required by law; provided,
however, that in the event disclosure is required by applicable
law, Executive shall provide Company with prompt notice of such
requirement prior to making any such disclosure, so that Company
may seek an appropriate protective order. At the request of Company
at any time, Executive agrees to deliver to Company all
Confidential Information that he may possess or control. Executive
agrees that all Confidential Information of Company (whether now or
hereafter existing) conceived, discovered or made by him during the
period of Executive’s employment by Company exclusively
belongs to Company (and not to Executive), and Executive will
promptly disclose such Confidential Information to Company and
perform all actions reasonably requested by Company to establish
and confirm such exclusive ownership. Affiliates of Company shall
be third party beneficiaries of Executive’s obligations under
this Article V. As a result of Executive’s employment by
Company, Executive may also from time to time have access to, or
knowledge of, Confidential Information or Work Product of third
parties, such as customers, suppliers, partners, joint venturers,
and the like, of Company and its affiliates. Executive also agrees
to preserve and protect the confidentiality of such third party
Confidential Information and Work Product to the same extent, and
on the same basis, as Company’s Confidential Information and
Work Product.
5.4
Ownership by Company . If, during Executive’s
employment by Company, Executive creates any work of authorship
fixed in any tangible medium of expression that is the subject
matter of copyright (such as videotapes, written presentations, or
acquisitions, computer programs, E-mail, voice mail, electronic
databases,
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drawings, maps,
architectural renditions, models, manuals, brochures, or the like)
relating to Company’s business, products, or services,
whether such work is created solely by Executive or jointly with
others (whether during business hours or otherwise and whether on
Company’s premises or otherwise), including any Work Product,
Company shall be deemed the author of such work if the work is
prepared by Executive in the scope of Executive’s employment;
or, if the work is not prepared by Executive within the scope of
Executive’s employment but is specially ordered by Company as
a contribution to a collective work, as a part of a motion picture
or other audiovisual work, as a translation, as a supplementary
work, as a compilation, or as an instructional text, then the work
shall be considered to be work made for hire and Company shall be
the author of the work. If such work is neither prepared by
Executive within the scope of Executive’s employment nor a
work specially ordered that is deemed to be a work made for hire,
then Executive hereby agrees to assign, and by these presents does
assign, to Company all of Executive’s worldwide right, title,
and interest in and to such work and all rights of copyright
therein.
5.5
Assistance by Executive . During the period of
Executive’s employment by Company, Executive shall assist
Company and its nominee, at any time, in the protection of
Company’s or its affiliates’ worldwide right, title and
interest in and to Confidential Information and Work Product and
the execution of all formal assignment documents requested by
Company or its nominee and the execution of all lawful oaths and
applications for patents and registration of copyright in the
United States and foreign countries. After Executive’s
employment with Company terminates, at the request from time to
time and expense of Company or its affiliates, Executive shall
reasonably assist Company and its nominee, at reasonable times and
for reasonable periods and for reasonable compensation, in the
protection of Company’s or its affiliates’ worldwide
right, title and interest in and to Confidential Information and
Work Product and the execution of all formal assignment documents
requested by Company or its nominee and the execution of all lawful
oaths and applications for patents and registration of copyright in
the United States and foreign countries.
5.6
Remedies . Executive acknowledges that money damages
would not be sufficient remedy for any breach of this
Article V by Executive, and Company or its affiliates shall be
entitled to enforce the provisions of this Article V by
terminating payments then owing to Executive under this Agreement
or otherwise and to specific performance and injunctive relief as
remedies for such breach or any threatened breach. Such remedies
shall not be deemed the exclusive remedies for a breach of this
Article V but shall be in addition to all remedies available
at law or in equity, including the recovery of damages from
Executive and his agents.
ARTICLE VI
STATEMENTS CONCERNING COMPANY AND EXECUTIVE
6.1
Statements by Executive . Executive shall refrain, both
during and after the termination of the employment relationship,
from publishing any oral or written statements about Company, any
of its affiliates or any of Company’s or such
affiliates’ directors, officers, employees, consultants,
agents or representatives that (a) are slanderous, libelous or
defamatory, (b) disclose private information about or
Confidential Information of Company, any of its affiliates or any
of Company’s or any such affiliates’ business affairs,
directors, officers, employees, consultants, agents or
representatives, or (c) place Company, any of its affiliates,
or any of Company’s or any such affiliates’ directors,
officers, employees, consultants, agents or representatives in a
false light before the public. A violation or threatened violation
of this prohibition may be enjoined by the courts. The rights
afforded Company and its affiliates under this provision are in
addition to any and all rights and remedies otherwise afforded by
law.
6.2
Statements by Company . Company shall refrain, both
during and after the termination of the employment relationship,
from publishing any oral or written statements about Executive, any
of his affiliates or any of such affiliates’ directors,
officers, employees, consultants, agents or representatives that
(a) are slanderous, libelous or defamatory, (b) disclose
private information about or confidential information of Executive,
any of his affiliates or any of such affiliates’ business
affairs, directors, officers, employees, consultants, agents or
representatives, or (c) place Executive, any of his
affiliates, or any of such affiliates’ directors, officers,
employees, consultants, agents or representatives in a false light
before the public. A violation or threatened violation of this
prohibition may be enjoined by the courts. The rights afforded
Executive and his affiliates under this provision are in addition
to any and all rights and remedies otherwise afforded by
law.
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ARTICLE VII
EFFECT OF TERMINATION OF EMPLOYMENT ON COMPENSATION
7.1 Certain
Terminations . If Executive has a Separation from Service
hereunder for any reason except those described in
Sections 7.2 and 7.3 hereof, then all compensation and all
benefits to Executive hereunder shall continue to be provided until
the date of such termination of employment and such compensation
and benefits shall terminate contemporaneously with such
termination of employment.
7.2 By
Company Without Cause or by Executive for Good Reason Prior to Age
63 and Other Than During the Protective Period . Except as
provided in Section 7.3 hereof, if, prior to Executive’s
attainment of age 63 and prior to the expiration of the term
provided in Section 3.1 hereof, Executive has either a
Voluntary Termination for Good Reason or a Separation from Service
due to Company’s termination of Executive’s employment
hereunder, then, upon such termination, regardless of the reason
therefor, all compensation and benefits to Executive hereunder
shall terminate contemporaneously with the termination of such
employment; provided, however , th
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