Key Energy Services, Inc.
Two Tower Center, 20th Floor
East Brunswick, New Jersey
As of January 4, 1999
Mr. Michael Furow
7004 Almey Court
Midland, Texas 79707
EMPLOYMENT AGREEMENT
(this Agreement)
Dear Mike:
Key Energy Services, Inc., a Maryland corporation formerly known as Key
Energy Group, Inc. (the "Company"), with its principal offices at the
address set forth above, and you, an individual with your address set forth
above, agree as follows:
1. Employment; Term. The Company agrees to employ you, and you agree to devote
your full time and best efforts to serve as a Vice President - Central
Operations of the Company. Your employment will commence effective as of
January 4, 1999 (the "Commencement Date") and continue until the close of
business on January 3, 2002, subject to extension as provided in this
Section 1(a), unless sooner terminated in accordance with this Agreement
(the "Initial Employment Period"). On each January 4, commencing with
January 4, 2000, the term of your employment will be automatically extended
for a period of twelve (12) months unless either you or the Company gives
written notice to the other, no later than thirty (30) days prior to the
relevant January 4, that such automatic extension shall not occur. The
Initial Employment Period, together with any extensions, until termination
in accordance herewith is referred to herein as the "Employment Period".
2. Salary; Bonus; Expenses. During the Employment Period, the Company will pay
a salary to you at the annual rate of not less than One Hundred Sixty
Thousand Dollars ($160,000) per year (the ABase Salary@), payable in
substantially equal installments in accordance with the Company=s existing
payroll practices, but no less frequently than monthly. For each fiscal
year of the Company commencing after June 30, 1998, you shall be eligible
to participate in an incentive plan for the Company=s executives, key
employees and other persons involved in the business of the Company and its
subsidiaries (the AIncentive Plan@) and in the Company=s stock-based
incentive plans outstanding from time to time. Under the Incentive Plan,
you shall be eligible to earn a cash bonus, payable within ninety (90) days
after each fiscal year end, of up to fifty percent (50%) of your Base
Salary, such amount to be determined by the Board based upon the level of
achievement of certain goals to be mutually established by you and the
President of the Company (subject to Board approval). You will be
reimbursed by the Company for reasonable travel, lodging, meal and other
expenses incurred by you in connection with performing your services
hereunder in accordance with the Company=s policies from time to time in
effect. You will be entitled to a vehicle allowance of $750 per month (plus
reimbursement for fuel and excess mileage in accordance with the Company=s
expense reimbursement policies from time to time in effect).
3. Benefit Plans; Vacation; Relocation Expenses. You will be entitled during
the Employment Period to not less than fifteen (15) vacation days and such
other fringe benefits, including, without limitation, group medical and
dental, life, executive life, accident and disability insurance, retirement
plans and supplemental and excess retirement benefits as the Company may
provide from time to time for its senior management. In addition, the
Company will reimburse you for the following out-of-pocket expenses that
you incur in connection with your relocation to Oklahoma City, Oklahoma:
(i) ordinary and reasonable realtor fees and closing costs incurred in
connection with the sale of your current primary residence, (ii) ordinary
and reasonable closing costs incurred in connection with the purchase of
your new primary residence in Oklahoma City, (iii) ordinary and reasonable
costs incurred to transport your household furnishings and effects to your
new primary residence in Oklahoma City, (iv) ordinary and reasonable fees
for connecting utilities in your new primary residence in Oklahoma City,
and (v) ordinary and reasonable costs for up to thirty (30) days of
temporary housing. In addition, the Company will pay you a one-time
relocation allowance of $13,333, subject to standard withholdings and
deductions. If required and at the Company=s sole discretion, the Company
will consider providing additional financial or other assistance in
connection with selling your current primary residence.
4. Severance. In the event you are terminated (i) by the Company other than
for Cause (defined below) or (ii) automatically as a result of the
Company=s providing notice to you that automatic extension of the
Employment Period shall not occur, you will be entitled to receive
severance compensation at your Base Salary at the monthly rate in effect on
the termination date, payable in arrears, during the period expiring twelve
(12) months after the termination date, commencing at the end of the
calendar month in which the termination date occurs; provided, however,
that (A) in the event your employment should be terminated by the Company
other than for Cause within six months following a Change of Control
(defined below) or in anticipation of a Change of Control, the severance
compensation referred to above shall be paid in one lump sum on the date of
such termination, and (B) in the event your employment should be terminated
by the Company as a result of your disability, then the severance
compensation referred to above shall be reduced by the amount of any
disability insurance proceeds actually paid to you or for your benefit
during the said time period. As used in this Agreement, the term ACause@
shall mean the willful and continued failure by you to substantially
perform your duties hereunder (other than any such willful or continued
failure resulting from your incapacity due to physical or mental illness or
physical injury), or the willful engaging by you in misconduct which is
materially injurious to the Company, monetarily or otherwise, or your
conviction of a felony by a court of competent jurisdiction. As used in
this Agreement, the term AChange of Control@ shall have that meaning set
forth in the Key Energy Group, Inc. 1997 Incentive Plan.
5. Limitation on Competition. During the Employment Period, and for a period
of twelve (12) months after your termination, you shall not, directly or
indirectly, without the prior written consent 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, any business engaged in the business of furnishing oilfield
services (a ACompeting Enterprise@); provided, however, that you shall not
be deemed to be participating or engaging in any such business solely by
virtue of your ownership of not more than five percent of any class of
stock or other securities which is publicly traded on a national securities
exchange or in a recognized over-the-counter market; and, for that same
period of time, you 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.
If this Agreement correctly sets forth your understanding of the agreement
between the Company and you, please indicate your agreement hereto by
signing this Agreement in the space for that purpose below.
KEY ENERGY SERVICES, INC.
By:
Kenneth V. Huseman,
Executive Vice President
and Chief Operating Officer
ACCEPTED AND AGREED:
Michael R. Furrow