SEPARATION AND RELEASE
AGREEMENT
This Separation
and Release Agreement (“Agreement”) is entered into as
of the 11 day of February, 2009, by and between William M.
Austin (“Executive”) and Key Energy Shared Services,
LLC and Key Energy Services, Inc. (collectively referred to as the
“Company”).
WHEREAS, Executive
and the Company entered into an Amended and Restated Employment
Agreement effective December 31, 2007 (“Employment
Agreement”);
WHEREAS, on
December 31, 2007 and contemporaneous with the execution of
the Employment Agreement, Key Energy Services, Inc. executed and
delivered to Executive a Guaranty in favor of Executive
(“Guaranty”), as an inducement to Executive to enter
into the Employment Agreement;
WHEREAS, Executive
has provided notice to the Company of his decision to terminate his
employment with the Company other than for Good Reason, as that
term is defined in the Employment Agreement, effective
February 6, 2009 (“Separation Date”);
WHEREAS, the
Company has accepted Executive’s decision to terminate his
employment with the Company other than for Good Reason, on the
Separation Date; and
WHEREAS,
concurrent with Executive’s termination of employment with
the Company, Executive has also resigned his positions as President
of Key Energy Shared Services, LLC and Senior Vice President and
Chief Financial Officer of Key Energy Services, Inc.
NOW, THEREFORE, in
consideration of the mutual promises and agreements herein
contained, the parties agree as follows:
1.
TERMINATION OF EMPLOYMENT RELATIONSHIP : Executive
acknowledges that his employment with the Company will end on the
Separation Date based on his decision to terminate his employment
other than for Good Reason, as defined in the Employment Agreement.
Any benefits to which Executive is entitled under the Employment
Agreement, the Guaranty, the 1997 Incentive Plan, the 2006 Phantom
Share Plan, and the 2007 Incentive Plan will be determined and paid
or granted to Executive based on the terms of the Employment
Agreement, the Guaranty and any respective Equity Incentive
Agreements and respective Incentive Plans.
2.
SEPARATION BENEFITS : The Company will provide
Executive with the following consideration (collectively referred
to as “Separation Benefits”):
A. The
Company agrees to waive a portion of Section 7(a) of the Employment
Agreement, such that Executive may serve in an interim (defined as
less than 120 days) managerial capacity with or be engaged to
provide restructuring advice for any “Competitive
Business” in the “Competitive Market Area”, as
those terms are
defined in the
Employment Agreement, during the twelve months following the
Separation Date; and
B. No later
than March 15, 2009, the Company will pay Executive the target
bonus, as described in Section 2(b) of the Employment Agreement,
for the second half of fiscal year ended December 31, 2008, in
such amount to be determined by the Company.
Executive agrees
that the consideration the Company has agreed to provide includes
amounts in addition to anything of value to which Executive is
already entitled pursuant to his Employment Agreement, the
Guaranty, and any Equity Incentive Agreements. The Company will
apply standard tax and other applicable withholdings to payments
made to Executive.
3.
RELEASE : For and in consideration of the Separation
Benefits, on behalf of Executive, his heirs, dependents, successors
and assigns, Executive hereby irrevocably and unconditionally
RELEASES, WAIVES, AND FOREVER DISCHARGES the Company and its
partners, parents, subsidiaries, affiliates, and related companies
and any predecessors thereto, and its and their present and former
agents, employees, officers, directors, owners, stockholders,
attorneys, insurers, plan fiduciaries, successors and assigns,
whether in their individual or official capacities (collectively,
the “Key Parties”), from and against any and all
claims, demands, actions, causes of action, costs, fees, and all
liability whatsoever, whether known or unknown, fixed or
contingent, which Executive has, had, or may have against the Key
Parties, or any of them, relating to or arising out of his
employment or separation from employment with the Company, and any
other events or transactions involving the Company, up to and
including the date of Executive’s execution of this
Agreement. This Agreement includes, but is not limited to
(a) any statutory claims under the Americans with Disabilities
Act of 1990, the Family and Medical Leave Act of 1993, the Civil
Rights Acts of 1870, 1964 and 1991, 42 U.S.C. § 1981, the Age
Discrimination in Employment Act, the Older Workers’ Benefit
Protection Act, Chapter 21 et. seq. of the Texas Labor
Code, the Employee Retirement Income Security Act, the Sarbanes
Oxley Act, or arising from any federal, state, or local statute,
ordinance or regulation; (b) any common law, tort or contract
claims; (c) any claims for compensation, payments,
reimbursements of expenses, issuance of options, restricted stock,
stock or other securities of the Company (or any exercise, issuance
or sale of such securities), severance, or benefits, other than as
described herein, (d) any claims, matters, or actions related
in any way to Executive’s employment and separation with the
Company; and (e) any claims for fees, costs, and disbursements of
any kind, including attorneys’ fees. Executive represents and
warrants that he has not filed or lodged, and has no outstanding
claims, including any lawsuits or administrative proceedings,
against the Company. This Agreement does not apply to any claims or
rights that may arise after the date that Executive signs this
Agreement, to vested rights under Executive’s employee
benefit plans as applicable, or to claims that the controlling law
clearly states may not be released by settlement. Nothing in this
Agreement generally prevents Executive from filing a charge or
complaint with or from participating in an investigation or
proceeding conducted by the Equal Employment Opportunity Commission
(EEOC), National Labor Relations Board (NLRB), or any other
federal, state, or local agency charged with the enforcement of any
employment laws. Despite
2
this, by
signing this Agreement, Executive is waiving his right to monetary
recovery based on claims asserted in such a charge or
complaint.
4.
NON-ADMISSION : Executive understands and agrees that
this Agreement shall not in any way be construed as an admission by
the Key Parties of any unlawful or wrongful acts whatsoever against
Executive or any other person, and the Key Parties specifically
disclaim any liability to or wrongful acts against Executive or any
other person.
5.
CONFIDENTIALITY : Executive agrees to keep this
Agreement, its terms, and the terms of the Separation
Ben
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