EMPLOYMENT AGREEMENT
Exhibit 10.1
THIS EMPLOYMENT AGREEMENT (the “Agreement”), is made and entered into on December 29, 2006 but
effective as of December 31, 2006 (the “Effective Date”), by and between BASIC ENERGY SERVICES,
INC., a Delaware corporation (hereafter “Company”), and XXXXXXX X. XXXXXXX (hereafter “Executive”),
an individual and resident of Texas. The Company and Executive may sometimes hereafter be referred
to singularly as a “Party” or collectively as the “Parties.”
W I T N E S S E T H:
WHEREAS, the Company desires to continue to secure the employment services of Executive
subject to the terms and conditions hereafter set forth; and
WHEREAS, the Executive is willing to enter into this Agreement upon the terms and conditions
hereafter set forth;
NOW, THEREFORE, in consideration of Executive’s employment with the Company, and the premises
and mutual covenants contained herein, the Parties hereto agree as follows.
1. Employment. During the Employment Period (as defined in Section 4 hereto), the Company
shall employ Executive, and Executive shall serve as, President and Chief Executive Officer (“CEO”)
of the Company and as a member of the Board of Directors of the Company (the “Board”). Executive’s
principal place of employment shall be at the main corporate offices of the Company in Midland,
Texas.
2. Compensation.
(a) Salary. The Company shall pay to Executive during the Employment Period a base
salary of $400,000 per year, as adjusted pursuant to the subsequent provisions of this
paragraph (the “Base Salary”). The Base Salary shall be payable in accordance with the
Company’s normal payroll schedule and procedures for its executives. The Base Salary shall
be subject to at least annual review and may be increased (but not decreased without
Executive’s express consent) by the Compensation Committee (the “Compensation Committee”) of
the Board at any time. Nothing contained herein shall preclude the payment of any other
compensation to Executive at any time.
(b) Bonus. In addition to the Base Salary in Section 2(a), for each annual period
commencing on the Effective Date until the last day of the Employment Period (as defined in
Section 4) (each such annual period being referred to as a “Bonus Period”), Executive shall
be entitled to a bonus equal to a percentage of Executive’s Base Salary paid during each
such one (1) year-period referred to herein as the “Bonus”); provided, however, Executive
shall be entitled to the Bonus only if Executive has met the performance criteria set by the
Compensation Committee for the applicable period. In the event that the Employment Period
ends before the end of the Bonus Period, Executive shall be entitled to a pro rata portion
of the Bonus for that year (based on the number of days in which he was employed during the
year divided by 365) as determined based on
- 1 -
satisfaction of the performance criteria for that period on a pro rata basis, unless
Executive was terminated for Cause (as defined in Section 6(d)) or terminated his employment
as a Voluntary Termination (as defined in Section 6(d)), in which event he shall not be
entitled to any Bonus for that year. Executive acknowledges that the amount and performance
criteria for Executive’s Bonus to be earned for each Bonus Period shall be set by the
Compensation Committee or the Board of Directors of the Company, and Executive shall have
the opportunity to meet with and discuss such criteria with the Compensation Committee prior
to the finalization of such criteria. Upon completion of the criteria for the applicable
Bonus Period, such criteria shall be communicated to Executive in writing. If Executive
successfully meets the performance criteria established by the Compensation Committee,
Employer shall pay Executive the earned Bonus amount within 30 days after receipt of the
Company’s audited financial reports for the calendar year in which the Bonus is calculated;
provided, in the event of a termination due to death, Disability (as defined in Section
6(d)) or Retirement (as defined in Section 6(d)) of Executive, or Good Reason (as defined in
Section 6(d)) by Executive, any pro rata portion shall be paid as soon as reasonably
practical to Executive or Executive’s spouse or legal representative based upon Executive’s
and the Company’s performance through the month immediately preceding such death,
Disability, Retirement or Good Reason termination. Notwithstanding the foregoing, for each
such one-year period, the minimum Bonus that Executive shall receive for completion of any
of the performance criteria for that period shall be $50,000. In all matters related to the
determination of the earned Bonus (including the determination of a pro rata amount), the
good faith determination of the Compensation Committee shall be deemed conclusive.
(c) Stock Options. Executive shall be eligible from time to time to receive grants of
stock options and other long-term equity incentive compensation, as commensurate with his
executive and/or director position, under the terms of the Company’s equity compensation
plans.
3. Duties and Responsibilities of Executive. During the Employment Period, Executive shall
devote his services full-time to the business of the Company and perform the duties and
responsibilities assigned to him under the Company’s Bylaws or by the Board, or as a member of the
Board, to the best of his ability and with reasonable diligence. In determining Executive’s duties
and responsibilities, the Board shall not assign duties and responsibilities to Executive that are
inappropriate for his position as CEO. This Section 3 shall not be construed as preventing
Executive from (a) engaging in reasonable volunteer services for charitable, educational or civic
organizations, or (b) investing his assets in such a manner that will not require a material amount
of his time or services in the operations of the businesses in which such investments are made;
provided, however, no such other activity shall conflict with Executive’s loyalties and duties to
the Company. Executive shall at all times use his best efforts to in good faith comply with United
States laws applicable to Executive’s actions on behalf of the Company and its Affiliates (as
defined in Section 6(d)). Executive understands and agrees that he may be required to travel from
time to time for purposes of the Company’s business.
4. Term of Employment. Executive’s initial term of employment with the Company under this
Agreement shall be for the period from the Effective Date through December 31, 2009 (the “Initial
Term of Employment”). Thereafter, the employment period
- 2 -
hereunder shall be automatically extended repetitively for an additional one (1) year period
on January 1, 2010, and each one-year anniversary thereof, unless Notice of Termination (pursuant
to Section 7) is given by either the Company or Executive to the other Party at least 90 days prior
to the end of the Initial Term of Employment, or any one-year extension thereof, as applicable,
that the Agreement will not be renewed for a successive one-year period after the end of the
current period. The Company and Executive shall each have the right to give Notice of Termination
at will, with or without cause, at any time subject, however, to the terms and conditions of this
Agreement regarding the rights and duties of the Parties upon termination of employment. The
Initial Term of Employment, and any one-year extension of employment hereunder, shall each be
referred to herein as a “Term of Employment.” The period from the Effective Date through the date
of Executive’s termination of employment for whatever reason shall be referred to herein as the
“Employment Period.”
5. Benefits. Subject to the terms and conditions of this Agreement, during the Employment
Period, Executive shall be entitled to all of the following:
(a) Reimbursement of Business Expenses. The Company shall pay or reimburse Executive
for all reasonable travel, entertainment and other expenses paid or incurred by Executive in
the performance of his duties hereunder in accordance with the Company’s policies in effect
from time to time. The Company shall also provide Executive with suitable office space,
including staff support, and paid parking. In addition, subject to prior approval of the
Compensation Committee, the Company shall pay the membership fees and dues for Executive to
be a member of a luncheon club as appropriate for his position.
(b) Other Employee Benefits. Executive shall be entitled to participate in, and shall
participate in coverage under, any employee benefits plans or programs of the Company to the
same extent as available to any other employees of the Company under the terms of such plans
or programs.
Company also agrees to purchase and maintain a long-term disability insurance policy covering
Executive from a reputable insurance carrier reasonably satisfactory to Executive. This policy
must provide income replacement benefits at least equal to 60% of his Base Salary commencing no
later than 90 days from the date of Executive’s disability thereunder and continuing, subject to
the policy’s terms, at least until he attains age 65. The Company shall pay all premiums on such
policy.
(c) Paid Time Off Days and Holidays. Executive shall be entitled to accrue paid time
off (“PTO”) days in each calendar year determined in accordance with the Company’s PTO
policy or plans for employees of the Company as in effect from time to time. Executive
shall also be entitled to all paid holidays and personal days given by the Company to any of
its other employees.
6. Rights and Payments upon Termination. The Executive’s right to compensation and benefits
for periods after the date on which his employment with the Company terminates for whatever reason
(the “Termination Date”), shall be determined in accordance with this Section 6 as follows:
- 3 -
(a) Minimum Payments. Executive shall be entitled to the following minimum payments
under this Section 6(a), in addition to any other payments or benefits to which he is
entitled to receive under the terms of any employee benefit plan or program or Section 6(b)
or Section 8.
(1) his accrued but unpaid salary through his Termination Date;
(2) his unused PTO days which have accrued through his Termination Date; and
(3) reimbursement of his reasonable business expenses that were incurred but
unpaid as of his Termination Date.
Such salary and accrued PTO days shall be paid to Executive within 15 days following the
Termination Date in a cash lump sum less applicable withholdings. Business expenses shall be
reimbursed in accordance with the Company’s normal procedures.
(b) Severance Payments. In the event that during the Term of Employment (i)
Executive’s employment is terminated by the Company for any reason except due to a
termination by the Company for Cause (as defined in Section 6(d)), or (ii) Executive
terminates his own employment hereunder for Good Reason or Retirement (as such terms are
defined in Section 6(d)), the following severance benefits shall be provided to Executive
or, in the event of his death before receiving all such benefits, to his Designated
Beneficiary (as defined in Section 6(d)) following his death:
(1) The Company shall pay to Executive as additional compensation (the
“Additional Payment”), an amount which is equal to “Total Cash” (defined below).
“Total Cash” means three (3.0) times the sum of (A) Executive’s annual Base Salary
(as in effect immediately prior to his Termination Date) plus (B) Executive’s
current annual incentive target Bonus (Section 2(b)) for the full year in which the
termination of employment occurred; provided, in the event of a Change in Control
and a termination of Executive by the Company without Cause, by Executive for Good
Reason or for Retirement, in any case within the six (6) months preceding or the 12
months following a Change in Control, “Total Cash” shall be calculated as three (3)
times the sum of (A) Executive’s annual Base Salary (as in effect immediately prior
to his Termination Date) plus (B) the higher of (x) Executive’s current annual
incentive target Bonus (Section 2(b)) for the full year in which the termination of
employment occurred or (y) the highest annual incentive Bonus received by Executive
with respect to any of the last three completed fiscal years. The Company shall
make the Additional Payment to Executive in a cash lump sum not later than 60
calendar days following the Termination Date and, if applicable with respect to a
Change in Control that occurs within six (6) months after a Termination Date, the
Company shall make a payment equal to the positive difference, if any, of the
Additional Payment due under this Section 6(b) applicable to the Change in Control
less the Additional Payment previously made pursuant to this Section 6(b) prior to
the Change in Control.
- 4 -
(2) Following the Executive’s Termination Date, the Company shall provide
continued group health coverage (including payment of premiums and any applicable
federal and state withholding taxes based on the premiums paid) to the Executive and
his covered spouse and dependents under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”), provided the Executive makes timely election
of such coverage. Company shall continue to provide such COBRA coverage at no cost
to the Executive until the Executive becomes eligible for group health coverage
under another employer’s plan with comparable benefits or for 18 months, whichever
is less. Upon his acceptance of employment with another employer, Executive will be
obligated to notify the Company of such acceptance of employment and to provide to
the Company a copy of the summary plan description of the new employer’s group
health plan and a schedule showing the required employee contributions for
participation in the plan. In the event of any change to the provisions of the
Company’s group health plan following the Executive’s Termination Date, Executive
and his spouse and dependents, as applicable, shall be treated consistently with the
then-current officers of the Company (or its successor) with respect to the terms
and conditions of coverage and other substantive provisions of the plan. Executive
and his spouse hereby agree to acquire and maintain any and all coverage that either
or both of them are entitled to at any time during their lives under the Medicare
program or any similar program of the United States or any agency thereof
(hereinafter referred to as “Medicare”). The coverage described in the immediately
preceding sentence includes, without limitation, parts A and B of Medicare and any
additional parts of Medicare available to them at any time. Executive and his
spouse further agree to pay any required premiums for Medicare coverage from their
personal funds.
In the event that (i) Executive voluntarily resigns or otherwise voluntarily terminates his
own employment, except for Good Reason (as defined in Section 6(d)) or Retirement (as defined in
Section 6(d)), or (ii) Executive’s employment is terminated by the Company for Cause (as defined in
Section 6(d)), then in either such event, the Company shall have no obligation to provide the
severance benefits described in paragraphs (1) and (2) (above) of this Section 6(b), except to
offer COBRA coverage (as required by applicable law). Executive shall still be entitled to the
minimum benefits provided under Section 6(a). The severance payments provided under this Agreement
shall supersede and replace any severance payments under any severance pay plan that the Company or
any Affiliate maintains for employees generally.
(c) Notwithstanding any provision of this Agreement to the contrary, in order to
receive the severance benefits payable under either Section 6(b) or Section 8, as
applicable, the Executive must first execute an appropriate release agreement (on a form
provided by the Company) whereby the Executive agrees to release and waive, in return for
such severance benefits, any claims that he may have against the Company including, without
limitation, for unlawful discrimination (such as Title VII of the Civil Rights Act);
provided, however, such release agreement shall not release any claim by Executive for any
payment or benefit that is due under either this Agreement or any employee benefit plan
until fully paid.
- 5 -
(d) Definitions.
(1) “Affiliate” means any entity in which the Company has a 50% or greater
capital, profits or voting interest.
(2) “Cause” means any of the following:
(A) the Executive’s conviction by a court of competent jurisdiction as
to which no further appeal can be taken of a crime involving moral turpitude
or a felony or entering the plea of nolo contendere or settlement agreement
to such crime by the Executive; provided, any conviction, plea or settlement
for a crime other than a crime involving moral turpitude by the Executive
must also reasonably be expected to have a material adverse effect on the
business (including public share price) or reputation of the Company or any
Affiliate;
(B) the commission by the Executive of a material act of fraud upon the
Company or any Affiliate;
(C) the material misappropriation of funds or property of the Company
or any Affiliate by the Executive;
(D) the knowing engagement by the Executive, without the written
approval of the Board or Compensation Committee in any material activity
which directly competes with the business of the Company or any Affiliate,
or which the Board or the Compensation Committee determines in good faith
would directly result in a material injury to the business or reputation of
the Company or any Affiliate; or
(E) (i) the material breach by Executive of any material provision of
this Agreement, or (ii) the willful, material and repeated nonperformance of
Executive’s duties to the Company or any Affiliate (other than by reason of
Executive’s illness or incapacity), but only under clause (E) (i) or (E)
(ii) after written notice from the Board or Compensation Committee of such
material breach or nonperformance (which notice specifically identifies the
manner and sets forth specific facts, circumstances and examples in which
the Board or Compensation Committee believes that Executive has breached the
Agreement or not substantially performed his duties) and his continued
willful failure to cure such breach or nonperformance within the time period
set by the Board or Compensation Committee but in no event less than thirty
(30) business day after his receipt of such notice; and, for purposes of
this clause (E), no act or failure to act on Executive’s part shall be
deemed “willful” unless it is done or omitted by Executive without his
reasonable belief that such action or omission was in the best interest of
the Company. Assuming disclosure of the pertinent facts, any action or
omission by Executive after consultation with, and in accordance with the
advice of, legal counsel
- 6 -
reasonably acceptable to the Company shall be deemed to have been taken
in good faith and to not be willful under this Agreement.
(4) “Change in Control” of the Company means the occurrence of any one of the
following events:
(A) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) (a “Person”)) of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of 50% or more of
either (i) the then outstanding shares of common stock of the Company (the
“Outstanding Company Stock”) or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, the following acquisitions shall not constitute a Change
in Control; (i) any acquisition directly from the Company or any subsidiary
thereof (a “Subsidiary”), (ii) any acquisition by the Company or any
Subsidiary, or by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Subsidiary, (iii) any acquisition by any
corporation pursuant to a reorganization, merger, consolidation or similar
business combination involving the Company (a “Merger”) which for purposes
of this definition of Change in Control, shall be subject to paragraph (b)
(below) or (iv) the current ownership or any subsequent acquisitions of
Outstanding Company Stock by Credit Suisse First Boston and any of its
Affiliates, including without limitation any of the “DLJ Parties” (as
defined under the Amended and Restated Stockholders’ Agreement dated as of
October 3, 2003, by and among the Company and the other stockholders of the
Company party thereto) and their Affiliates; or
(B) Approval by the shareholders of the Company of a Merger, unless
immediately following such Merger, substantially all of the holders of the
Outstanding Company Voting Securities immediately prior to Merger
beneficially own, directly or indirectly, more than 50% of the common stock
of the corporation resulting from such Merger (or its parent corporation) in
substantially the same proportions as their ownership of Outstanding Company
Voting Securities immediately prior to such Merger; or
(C) The sale or other disposition of all or substantially all of the
assets of the Company, unless immediately following such sale or other
disposition, substantially all of the holders of the Outstanding Company
Voting Securities immediately prior to the consummation of such sale or
other disposition beneficially own, directly or indirectly, more than 50% of
the common stock of the corporation acquiring such assets in substantially
the same proportions as their ownership of Outstanding
- 7 -
Company Voting Securities immediately prior to the consummation of such
sale or disposition.
(5) “Code” means the Internal Revenue Code of 1986, as amended, or its
successor. References herein to any Section of the Code shall include any successor
provisions of the Code.
(6) “Disability” shall mean that Executive is entitled to receive long-term
disability (“LTD”) income benefits under the LTD plan or policy maintained by the
Company that covers Executive. If, for any reason, Executive is not covered under
such LTD plan or policy, then “Disability” shall mean a “permanent and total
disability” as defined in Section 22(e)(3) of the Code and Treasury regulations
thereunder. Evidence of such Disability shall be certified by a physician
acceptable to both the Company and Executive. In the event that the Parties are not
able to agree on the choice of a physician, each shall select one physician who, in
turn, shall select a third physician to render such certification. All costs
relating to the determination of whether Executive has incurred a Disability shall
be paid by the Company. Executive agrees to submit to any examinations that are
reasonably required by the attending physician or other healthcare service providers
to determine whether he has a Disability.
(7) “Designated Beneficiary” means the Executive’s surviving spouse, if any.
If there is no such surviving spouse at the time of Executive’s death, then the
Designated Beneficiary hereunder shall be Executive’s estate.
(8) “Good Reason” means the occurrence of any of the following events, except
in connection with termination of the Executive’s employment for Cause or
Disability, without Executive’s express written consent:
(A) A reduction in Executive’s Base Salary or Bonus opportunity
pursuant to Section 2(a) or (b);
(B) A relocation of more than fifty (50) miles of Executive’s
principal office with the Company or its successor;
(C) A substantial and adverse change in the Executive’s duties,
control, authority, status or position, or the assignment to the Executive
of duties or responsibilities which are materially inconsistent with such
status or position, or a material reduction in the duties and
responsibilities previously exercised by the Executive, or a loss of title,
loss of office, loss of significant authority, power or control, or any
removal of Executive from, or any failure to reappoint or reelect him to,
such positions, except in connection with the termination of his employment
by the Company for Cause (as described in Section 6(d));
(D) The Company or its successor fails to continue in effect any
pension plan, life insurance plan, health-and-accident plan, retirement
plan, disability plan, stock option plan, deferred compensation plan or
- 8 -
executive incentive compensation plan under which Executive was
receiving material benefits (or plans providing Executive with substantially
similar benefits), or the taking of any action by the Company or its
successor that would materially and adversely affect Executive’s
participation in or materially reduce his benefits under any such plan,
unless any such adverse change to any such plan applies on the same terms to
all of the then-current senior officers of the Company (other than with
respect to the disability plan as expressly required pursuant to Section
5(b));
(E) Any material breach by the Company or its successor of any other
material provision of this Agreement; or
(F) Any failure by the Company to obtain an assumption of this
Agreement by its successor in interest pursuant to Section 35.
Notwithstanding the foregoing definition of “Good Reason”, the Executive cannot
terminate his employment hereunder for Good Reason unless he (i) first notifies the Board or
Compensation Committee in writing of the event (or events) which the Executive believes
constitutes a Good Reason event under subparagraphs (A), (B), (C), (D) or (E) (above) within
120 days from the date of such event, and (ii) provides the Company with at least 30 days to
cure, correct or mitigate the Good Reason event so that it either (1) does not constitute a
Good Reason event hereunder or (2) Executive agrees, in writing, that after any such
modification or accommodation made by the Company that such event shall not constitute a
Good Reason event hereunder.
(9) “Retirement” means the termination of Executive’s employment for normal
retirement at or after attaining age 60 provided that, on the date of his
retirement, Executive has accrued at least five years of active service with the
Company.
(10) “Voluntary Termination” means the termination of Executive’s employment by
Executive other than for Good Reason, Retirement, death or Disability.
7. Notice of Termination. Any termination of employment under this Agreement by the Company
or the Executive shall be communicated by Notice of Termination to the other Party hereto. For
purposes of this Agreement, the term “Notice of Termination” means a written notice which indicates
the specific termination provision of this Agreement relied upon and sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated.
8. Severance Benefits Following Nonrenewal of Agreement. In the event that (i) this Agreement
is not renewed by the Company (pursuant to Section 4) for any reason other than for Cause (as
defined in Section 6(d)) and (ii) Executive has not entered into a new employment agreement with
the Company on or before the expiration of the Term of Employment hereunder due to nonrenewal by
the Company, then Executive shall be entitled to the same severance
- 9 -
benefits (hereafter, the “Nonrenewal Severance Benefits”), in all respects, as the benefits
described in Section 6(b), including the Change in Control benefits in the event the non-renewal of
this Agreement and termination of employment under this Agreement occurs within the six (6) months
preceding or the 12 months following a Change in Control, provided that he first enters into a
release agreement pursuant to Section 6(c).
9. No Mitigation. Subject to Section 6(b)(2), Executive shall not be required to mitigate the
amount of any payment provided for under this Agreement by seeking other employment or in any other
manner.
10. Change in Control: Requirement of Tax Bonus Payment in Certain Circumstances.
(a) In the event that Executive is deemed to have received an “excess parachute payment” (as
defined in Section 280G(b) of the Code) which is subject to the excise taxes (the “Excise Taxes”)
imposed by Section 4999 of the Code in respect of any payment pursuant to this Agreement, or any
other agreement, plan, instrument or obligation, in whatever form, the Company shall make the Tax
Bonus Payment (defined below) to Executive notwithstanding any contrary provision in this
Agreement, or any other agreement, plan, instrument or obligation.
(b) The term “Tax Bonus Payment” means a cash payment in an amount equal to the sum of (i) all
Excise Taxes payable by Executive, plus (ii) all additional Excise Taxes and federal or state
income taxes to the extent such taxes are imposed in respect of the Tax Bonus Payment, such that
Executive shall be in the same after-tax position and shall have received the same benefits that he
would have received if the Excise Taxes had not been imposed. For purposes of calculating any
income taxes attributable to the Tax Bonus Payment, Executive shall be deemed for all purposes to
be paying income taxes at the highest marginal federal income tax rate, taking into account any
applicable surtaxes and other generally applicable taxes which have the effect of increasing the
marginal federal income tax rate, if applicable, at the highest marginal state income tax rate, to
which the Tax Bonus Payment and Executive are subject. The following is an example of the
calculation of the Tax Bonus Payment:
Assume that the Excise Tax rate is 20%, the highest federal marginal income tax rate is 40%
and Executive is not subject to state income taxes. Further assume that Executive has
received an excess parachute payment in the amount of $200,000, on which $40,000 ($200,000)
× 20%) in Excise Taxes are due. The amount of the required Tax Bonus Payment is thus
computed to be $100,000, i.e., the Tax Bonus Payment of $100,000, less additional Excise
Taxes on the Tax Bonus Payment of $20,000 (i.e., 20% × $100,000) and less income taxes on
the Tax Bonus Payment of $40,000 (i.e., 40% × $100,000), yields the net of $40,000, which is
the amount of the Excise Taxes owed by Executive in respect of the original excess parachute
payment.
(c) Executive agrees to reasonably cooperate with the Company to minimize the amount of the
excess parachute payments, including, without limitation, assisting the Company in establishing
that some or all of the payments received by Executive that are “contingent on a change,” as
described in Section 280G(b)(2)(A)(i) of the Code, are reasonable compensation for personal
services actually rendered by Executive before the date of such change or to be
- 10 -
rendered by Executive on or after the date of such change. In the event that the Company is
able to establish that the amount of the excess parachute payment is less than originally
anticipated by Executive, Executive shall refund to the Company any excess Tax Bonus Payment to the
extent not required to pay Excise Taxes or income taxes (including those incurred in respect of
receipt of the Tax Bonus Payment). Notwithstanding the foregoing, Executive shall not be required
to take any action which his attorney or tax advisor advises him in writing (i) is improper or (ii)
exposes Executive to personal liability. Executive may require the Company to deliver to Executive
an indemnification agreement, in form and substance reasonably satisfactory to him, as a condition
to taking any action required by this paragraph.
(d) The Company shall make any Tax Bonus Payment required to be made under this Section 10 in
a cash lump sum after the date on which Executive received or is deemed to have received any such
excess parachute payment. Any Tax Bonus Payment which is not paid by the Company within 30 days of
receipt of Executive’s written demand therefor shall thereafter be deemed delinquent, and the
Company shall pay to Executive immediately upon demand interest at the rate of 10% per annum from
the date such payment becomes delinquent to the date of payment of such delinquent sum with
interest.
(e) In the event that there is any change to the Code which results in the recodification of
Section 280G or Section 4999 of the Code, or in the event that either such section of the Code is
amended, replaced or supplemented by other provisions of the Code of similar import (“Successor
Provisions”), then this Agreement shall be applied and enforced with respect to such new Code
provisions in a manner consistent with the intent of the parties as expressed herein, which is to
assure that Employee is in the same after-tax position and has received the same benefits that he
would have been in and received if any taxes imposed by Section 4999 (or any Successor Provisions)
had not been imposed.
(f) All determinations required to be made under this Section 10 including, without
limitation, whether and when a Tax Bonus Payment is required, and the amount of such Tax Bonus
Payment and the assumptions to be utilized in arriving at such determinations, unless otherwise
expressly set forth in this Agreement, shall be made within 30 days from the Change in Control Date
by the independent tax consultant(s) selected by the Company and reasonably acceptable to Executive
(“Tax Consultant”). The Tax Consultant must be a qualified tax attorney or certified public
accountant. All fees and expenses of the Tax Consultant shall be paid in full by the Company. Any
Excise Taxes as determined pursuant to this Section 10 shall be paid by the Company to the Internal
Revenue Service (or any other appropriate taxing authority) on Executive’s behalf within five (5)
business days after receipt by the Company and Executive of the Tax Consultant’s final
determination.
(g) If the Tax Consultant determines that there is substantial authority (within the meaning
of Section 6662 of the Code) that no Excise Taxes are payable by Executive, the Tax Consultant
shall furnish Executive with a written opinion that failure to disclose or report the Excise Taxes
on Executive’s federal income tax return will not constitute a substantial understatement of tax or
be reasonably likely to result in the imposition of a negligence or any other penalty.
- 11 -
(h) The Company shall indemnify and hold harmless the Executive, on an after-tax basis, from
any costs, expenses, penalties, fines, interest or other liabilities (“Losses”) incurred by
Executive with respect to the exercise by the Company of any of its rights under this Section 10,
including, without limitation, any Losses related to the Company’s decision to contest a claim of
any imputed income to Executive. The Company shall pay all fees and expenses incurred under this
Section 10, and shall promptly reimburse Executive for the reasonable expenses incurred by
Executive in connection with any actions taken by the Company or required to be taken by Executive
hereunder. Any payments owing to Executive and not made within 30 days of delivery to the Company
of evidence of Executive’s entitlement thereto shall be paid to Executive together with interest
computed at the rate of 10% per annum.
11. Secret and Confidential Information.
(a) Access to Secret and Confidential Information. Prior to the date of this Agreement
the Company has given to Executive in his capacity as an officer and director, and after the
Effective Date and on an ongoing basis the Company will give to Executive, access to Secret
and Confidential Information (including, without limitation, Secret and Confidential
Information of the Company’s Affiliates and subsidiaries) (collectively, “Secret and
Confidential Information”), which the Executive did not have access to or knowledge before
given by, or acquired in connection with work on behalf of, the Company. Secret and
Confidential Information includes, without limitation: all of the Company’s technical and
business information, whether patentable or not, which is of a confidential, trade secret or
proprietary character, and which is either developed by the Executive alone, with others or
by others; lists of customers; identity of customers; identity of prospective customers;
contract terms; bidding information and strategies; pricing methods or information; computer
software; computer software methods and documentation; hardware; the Company or its
Affiliates or subsidiaries’ methods of operation; the procedures, forms and techniques used
in servicing accounts; and other information or documents that the Company requires to be
maintained in confidence for the Company’s continued business success.
(b) Access to Specialized Training. As of the Effective date and on an ongoing basis,
the Company agrees to provide Executive with initial and ongoing Specialized Training, which
the Executive does not have access to or knowledge of before the execution of this
Agreement. “Specialized Training” includes the training the Company provides to its
Executives that is unique to its business and enhances Executive’s ability to perform
Executive’s job duties effectively.
(c) Agreement Not to Use or Disclose Secret and Confidential Information Specialized
Training. In exchange for the Company’s promises to provide Executive with Specialized
Training and Secret and Confidential Information, Executive shall not during the period of
Executive’s employment with the Company or at any time thereafter, disclose to anyone,
including, without limitation, any person, firm, corporation, or other entity, or publish,
or use for any purpose, any Specialized Training and Secret and Confidential Information,
except as properly required in the ordinary course of the Company’s business or as directed
and authorized by the Company.
- 12 -
(d) Agreement to Refrain from Defamatory Statements. Executive shall refrain, both
during the employment relationship and after the employment relationship terminates, from
publishing any oral or written statements about the Company or any of its Affiliates’
directors, officers, employees, agents, investors or representatives that are slanderous,
libelous, or defamatory; or that disclose private or confidential information about the
Company or any of its Affiliates’ business affairs, directors, officers, employees, agents
investors or representatives; or that constitute an intrusion into the seclusion or private
lives of the Company or any of its Affiliates’ directors, officers, employees, agents,
investors or representatives; or that give rise to unreasonable publicity about the private
lives of such directors, officers, employees, agents, investors or representatives; or that
place such directors, officers, employees, agents, investors or representatives in a false
light before the public; or that constitute a misappropriation of the name or likeness of
such directors, officers, employees, agents, investors or representatives. A violation or
threatened violation of this prohibition may be enjoined.
12. Duty to Return Company Documents and Property. Upon the termination of Executive’s
employment with the Company for any reason, Executive shall immediately return and deliver to the
Company any and all papers, books, records, documents, memoranda and manuals, e-mail, electronic or
magnetic recordings or data, including all copies thereof, belonging to the Company or relating to
its business, in Executive’s possession, whether prepared by Executive or others. If at any time
after the Employment Period, Executive determines that he has any Secret and Confidential
Information in his possession or control, Executive shall immediately return to the Company all
such Secret and Confidential Information in his possession or control, including all copies and
portions thereof.
13. Best Efforts and Disclosure. Executive agrees that, while he is employed with the
Company, he shall devote his full business time and attention to the Company’s business and shall
use his best efforts to promote its success. Further, Executive shall promptly disclose to the
Company all ideas, inventions, computer programs, and discoveries, whether or not patentable or
copyrightable, which he may conceive or make, alone or with others, during the Employment Period,
whether or not during working hours, and which directly or indirectly:
(a) relate to matters within the scope, field, duties or responsibility of Executive’s
employment with the Company; or
(b) are based on any knowledge of the actual or anticipated business or interest of the
Company; or
(c) are aided by the use of time, materials, facilities or information of the Company.
Executive assigns to the Company, without further compensation, any and all rights, titles and
interest in all such ideas, inventions, computer programs and discoveries in all countries of the
world. Executive recognizes that all ideas, inventions, computer programs and discoveries of the
type described above, conceived or made by Executive alone or with others within six (6) months
after termination of employment (voluntary or otherwise), are likely to have been conceived in
significant part either while employed by the Company or as a direct result of
- 13 -
knowledge Executive had of proprietary information. Accordingly, Executive agrees that such
ideas, inventions or discoveries shall be presumed to have been conceived during his employment
with the Company, unless and until the contrary is clearly established by the Executive.
14. Inventions and Other Works. Any and all writings, computer software, inventions,
improvements, processes, procedures and/or techniques which Executive may make, conceive, discover,
or develop, either solely or jointly with any other person or persons, at any time during the
Employment Period, whether at the request or upon the suggestion of the Company or otherwise, which
relate to or are useful in connection with any business now or hereafter carried on or contemplated
by the Company, including developments or expansions of its present fields of operations, shall be
the sole and exclusive property of the Company. Executive agrees to take any and all actions
necessary or appropriate so that the Company can prepare and present applications for copyright or
Letters Patent therefor, and can secure such copyright or Letters Patent wherever possible, as well
as reissue renewals, and extensions thereof, and can obtain the record title to such copyright or
patents. Executive shall not be entitled to any additional or special compensation or
reimbursement regarding any such writings, computer software, inventions, improvements, processes,
procedures and techniques. Executive acknowledges that the Company from time to time may have
agreements with other persons or entities which impose obligations or restrictions on the Company
regarding inventions made during the course of work thereunder or regarding the confidential nature
of such work. Executive agrees to be bound by all such obligations and restrictions and to take
all action necessary to discourage the obligations of the Company.
15. Non-Solicitation Restriction. To protect the Company’s Secret and Confidential
Information, and in the event of Executive’s termination of employment for whatever reason, whether
by Executive or the Company, it is necessary to enter into the following restrictive covenant,
which is ancillary to the enforceable promises between the Company and Executive in Sections 11
through 14 of this Agreement. Executive hereby covenants and agrees that he will not, directly or
indirectly, either individually or as a principal, partner, agent, consultant, contractor,
employee, or as a director or officer of any entity, or in any other manner or capacity whatsoever,
except on behalf on behalf of the Company, solicit business, or attempt to solicit business, in
products or services competitive with any products or services sold (or offered for sale) by the
Company or any Affiliate, from the Company’s or Affiliate’s customers or prospective customers, or
those individuals or entities with whom the Company or Affiliate did any business during the
two-year period ending on the Termination Date. Subject to Section 18, the prohibitions set forth
in this Section 15 shall remain in effect (i) for a period of two (2) years following the
Termination Date for Retirement or any other reason other than (A) by the Executive for Good Reason
or (B) by the Company other than for Cause, or (ii) for a period of six (6) months following the
Termination Date for a termination (A) by the Executive for Good Reason or (B) by the Company for a
reason other than Cause unless such termination is within 12 months following a Change of Control
(in which case the foregoing restrictions shall not apply).
16. Non-Competition Restrictions.
- 14 -
(a) Executive hereby agrees that in order to protect the Company’s Secret and Confidential
Information, it is necessary to enter into the following restrictive covenant, which is ancillary
to the enforceable promise between the Company and Executive in Sections 11 through 15 of this
Agreement. Executive hereby covenants and agrees that for the Employment Period, and (i) for a
period of two (2) years following the Termination Date for Retirement or any other reason other
than (A) by the Executive for Good Reason or (B) by the Company other than for Cause, or (ii) for a
period of six (6) months following the Termination Date for a termination (A) by the Executive for
Good Reason or (B) by the Company for a reason other than Cause unless such termination is within
12 months following a Change of Control (in which case the following restrictions shall not apply),
Executive will not, directly or indirectly for Executive or for others (as a principal, agent,
owner, employee, consultant or otherwise), in any county in the United States, or in any province
in Canada, or otherwise within one hundred fifty (150) miles of where the Company or any of its
subsidiaries or affiliates are conducting any business as of the date of termination of Executive’s
employment relationship or have conducted any business 12 months prior to the date of such
termination (the “Territory”), including, but not limited to, the business of operating oil and gas
pulling units or workover rigs, of completing or servicing, maintaining, or repairing oil and gas
xxxxx, removing, transporting, or disposing of liquid waste as produced therefrom, or of pressure
pumping, rental and fishing tools or contract drilling:
(1) engage in any business competitive with the business conducted by the Company or
its affiliates or subsidiaries;
(2) render advice or services to, or otherwise assist, any other person,
association, or entity who is engaged, directly or indirectly, in any business
competitive with the business conducted by the Company or its affiliates or
subsidiaries;
(3) solicit business, or attempt to solicit business within the Territory, in
products or services competitive with any products or services sold (or offered for
sale) by the Company or any Affiliate, from the Company’s or Affiliate’s customers
or prospective customers, or those individuals or entities with whom the Company or
Affiliate did any business during the two-year period ending on the Termination
Date; or
(4) testify as an expert witness in matters related to the Company’s business for an
adverse party to the Company in litigation; provided, that nothing contained herein
shall interfere with Executive’s duty to testify as a witness if required by law
; provided, however, the foregoing and this Section shall not prohibit or be construed to prohibit
Executive from owning less than 2% of any class of stock or other securities which are publicly
traded on a national securities exchange or in a recognized over-the-counter market even if such
entity or its Affiliates are engaged in competition with the Company or a subsidiary of the
Company.
(b) Executive understands that the foregoing restrictions may limit Executive’s ability to
engage in certain businesses during the periods provided for above, but acknowledges that
- 15 -
Executive will receive sufficiently high remuneration and other benefits under this Agreement
to justify such restriction. Executive acknowledges that money damages may not be a sufficient
remedy for any breach of this Section 16 by Executive, and the Company shall be entitled to enforce
the provisions of this Section 16 by terminating any payments then owing to Executive under this
Agreement and/or to seek specific performance and injunctive relief as remedies for such breach.
Such remedies shall not be deemed the exclusive remedies for a breach of this Section 16, but shall
be in addition to all remedies available at law or in equity to the Company, including, without
limitation, the recovery of damages from Executive and Executive’s agents involved in such breach.
Executive further agrees to waive any requirement for the Company’s securing or posting of any bond
in connection with such remedies.
(c) It is expressly understood and agreed that the Company and Executive consider the
restrictions contained in this Section 16 to be reasonable and necessary to protect the proprietary
information of the Company. Nevertheless, if any of the aforesaid restrictions are found by a
court having jurisdiction to be unreasonable, or overly broad as to geographic area or time, or
otherwise unenforceable, the parties intend for the restrictions therein set forth to be modified
by such courts so as to be reasonable and enforceable and, as so modified by the court, to be fully
enforced.
(d) The covenants in this Section 16 are severable and separate, and the unenforceability of
any specific covenant shall not affect the provisions of any other covenant. Moreover, in the
event any court having jurisdiction shall determine that the scope, time or territorial
restrictions set forth are unreasonable, then it is the intention of the parties that such
restrictions be enforced to the fullest extent which the court deems reasonable, and the Agreement
shall thereby be reformed.
(e) All of the covenants in this Section 16 shall be construed as an agreement independent of
any other provision in this Agreement, and the existence of any claim or cause of action of
Executive against the Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of such covenants. It is specifically
agreed that the period following termination of Executive’s employment, during which the agreements
and covenants of Executive made herein shall be effective, shall be computed by excluding from such
computation any time during which Executive is in material violation of any provision of this
Section 16.
17. No-Recruitment Restriction. Executive agrees that during the Employment Period, and for a
period of two (2) years from his Termination Date for whatever reason, Executive will not, either
directly or indirectly, or by acting in concert with others, solicit or influence or seek to
solicit or influence, any employee of the Company or any Affiliate to terminate, reduce or
otherwise adversely affect his or her employment with the Company or any Affiliate.
18. Tolling. If Executive violates any of the restrictions contained in Sections 11 through
17 of this Agreement, the restrictive period will be suspended and will not run in favor of
Executive from the time of the commencement of any violation until the time when the Executive
cures the violation to the Company’s reasonable satisfaction.
- 16 -
19. Reformation. If a court or arbitrator concludes that any time period or the geographic
area specified in any restrictive covenant in Sections 11 through 17 of this Agreement is
unenforceable, then the time period will be reduced by the number of months, or the geographic area
will be reduced by the elimination of such unenforceable portion, or both, so that the restrictions
may be enforced in the geographic area and for the time to the full extent permitted by law.
20. No Previous Restrictive Agreements. Executive represents that, except as disclosed in
writing to the company, he is not bound by the terms of any agreement with any previous employer or
other party to (a) refrain from using or disclosing any trade secret or confidential or proprietary
information in the course of Executive’s employment by the Company or (b) refrain from competing,
directly or indirectly, with the business of such previous employer or any other party. Executive
further represents that his performance of all the terms of this Agreement and his work duties for
the Company does not, and will not, breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by Executive in confidence or in trust prior to Executive’s
employment with the Company, and Executive will not disclose to the Company or induce the Company
to use any confidential or proprietary information or material belonging to any previous employer
or others.
21. Conflicts of Interest. In keeping with his fiduciary duties to Company, Executive hereby
agrees that he shall not become involved in a conflict of interest, or upon discovery thereof allow
such a conflict to continue at any time during the Employment Period In this respect, Executive
agrees to fully comply with the conflict of interest agreement entered into by Executive in his
capacity as of an officer or director of the Company. In the instance of a material violation of
the conflict of interest agreement to which Executive is a party, it may be necessary for Board to
terminate Executive’s employment for Cause ( as defined in Section 6(d)); provided, however,
Executive cannot be terminated for Cause hereunder unless the Board first provides Executive with
notice and an opportunity to cure such conflict of interest pursuant to the same procedures as set
forth in clause (E) of the definition of “Cause” in Section 6(d)(2).
22. Remedies. Executive acknowledges that the restrictions contained Sections 11 through 21
of this Agreement, in view of the nature of the Company’s business, are reasonable and necessary to
protect the Company’s legitimate business interests, and that any violation of this Agreement would
result in irreparable injury to the Company. In the event of a breach or a threatened breach by
Executive of any provision of Sections 11 through 21 of this Agreement, the Company shall be
entitled to a temporary restraining order and injunctive relief restraining Executive from the
commission of any breach, and to recover the Company’s attorneys’ fees, costs and expenses related
to the breach or threatened breach. Nothing contained in this Agreement shall be construed as
prohibiting the Company from pursuing any other remedies available to it for any such breach or
threatened breach, including, without limitation, the recovery of money damages, attorneys’ fees,
and costs. These covenants and disclosures shall each be construed as independent of any other
provisions in this Agreement, and the existence of any claim or cause of action by Executive
against the Company, whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants and agreements.
- 17 -
23. Withholdings: Right of Offset. The Company may withhold and deduct from any benefits and
payments made or to be made pursuant to this Agreement (a) all federal, state, local and other
taxes may be required pursuant to any law or governmental regulation or ruling, (b) all other
normal employee deductions made with respect to Company’s employees generally, and (c) any advances
made to Executive and owed to Company
24. Nonalienation. The right to receive payments under this Agreement shall not be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge or encumbrances by
Executive, his dependents, or beneficiaries, or to any other person who is or may become entitled
to receive such payments hereunder. The right to receive payments hereunder shall not be subject
to or liable for the debts, contracts, liabilities, engagements or torts of any person who is or
may become entitled to receive such payments, nor may the same be subject to attachment or seizure
by any creditor of such person under any circumstances, and any such attempted attachment or
seizure shall be void and of no force and effect.
25. Incompetent or Minor Payees. Should the Board or the Compensation Committee determine, in
its discretion, that any person to whom any payment is payable under this Agreement has been
determined to be legally incompetent or is a minor, any payment due hereunder, notwithstanding any
other provision of this Agreement to the contrary, may be made in any one or more of the following
ways: (a) directly to such minor or person; (b) to the legal guardian or other duly appointed
personal representative of this person or estate of such minor or person; or (c) to such adult or
adults as have, in the good faith knowledge of the Board or the Compensation Committee, assumed
custody and support of such minor or person; and any payment so made shall constitute full and
complete discharge of any liability under this Agreement in respect to the amount paid.
26. Indemnification. The Company has entered into, or will enter into, the Indemnification
Agreement with the Executive in substantially the same form as attached hereto as Exhibit A. To
the extent such Indemnification Agreement has already been executed by the Company and Executive,
such agreement shall remain in full force and effect and not be superseded by this Agreement.
27. Severability. It is the desire of the parties hereto that this Agreement be enforced to
the maximum extent permitted by law, and should any provision contained herein be held
unenforceable by a court of competent jurisdiction or arbitrator (pursuant to Section 30), the
parties hereby agree and consent that such provision shall be reformed to create a valid and
enforceable provision to the maximum extent permitted by law; provided, however, if such provision
cannot be reformed, it shall be deemed ineffective and deleted herefrom without affecting any other
provision of this Agreement. This Agreement should be construed by limiting and reducing it only
to the minimum extent necessary to be enforceable under then applicable law.
28. Title and Headings; Construction. Titles and headings to Sections hereof are for the
purpose of reference only and shall in no way limit, define or otherwise affect the provisions
hereof. The words “herein”, “hereof”, “hereunder” and other compounds of the word “here” shall
refer to the entire Agreement and not to any particular provision hereof.
- 18 -
29. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
30. Arbitration.
(a) Subject to Section 22, any dispute or other controversy (hereafter a “Dispute”) arising
under or in connection with this Agreement, whether in contract, in tort, statutory or otherwise,
shall be finally and solely resolved by binding arbitration in the City of Midland, Texas,
administered by the American Arbitration Association (the “AAA”) in accordance with the Employment
Dispute Resolution Rules of the AAA as effective on the Effective Date, this Section 30 and, to the
maximum extent applicable, the Federal Arbitration Act. Such arbitration shall be conducted by a
single arbitrator (the “Arbitrator”). If the parties cannot agree on the choice of an Arbitrator
within 30 days after the Dispute has been filed with the AAA, then the Arbitrator shall be selected
pursuant to the Employment Dispute Resolution Rules of the AAA. The Arbitrator may proceed to an
award notwithstanding the failure of any party to participate in such proceedings. The prevailing
party in the arbitration proceeding may be entitled to an award of reasonable attorneys’ fees
incurred in connection with the arbitration in such amount, if any, as determined by the Arbitrator
in his discretion. The costs of the arbitration shall be borne equally by the parties unless
otherwise determined by the Arbitrator in the award.
(b) To the maximum extent practicable, an arbitration proceeding hereunder shall be concluded
within 180 days of the filing of the Dispute with the AAA. The Arbitrator shall be empowered to
impose sanctions and to take such other actions as the Arbitrator deems necessary to the same
extent a judge could impose sanctions or take such other actions pursuant to the Federal Rules of
Civil Procedure and applicable law. Each party agrees to keep all Disputes and arbitration
proceedings strictly confidential except for disclosure of information required by applicable law
which cannot be waived.
(c) The award of the Arbitrator shall be (i) the sole and exclusive remedy of the parties, and
(ii) final and binding on the parties hereto except for any appeals provided by the Federal
Arbitration Act. Only the district courts of Texas shall have jurisdiction to enter a judgment
upon any award rendered by the Arbitrator, and the parties hereby consent to the personal
jurisdiction of such courts and waive any objection that such forum is inconvenient. This Section
30 shall not preclude (A) the parties at any time from agreeing to pursue non-binding mediation of
the Dispute prior to arbitration hereunder or (B) the Company from pursuing the remedies available
under Section 22 in any court of competent jurisdiction.
31. Binding Effect: Third Party Beneficiaries. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, and to their respective heirs, executors,
beneficiaries, personal representatives, successors and permitted assigns hereunder, but otherwise
this Agreement shall not be for the benefit of any third parties.
32. Entire Agreement; Amendment and Termination. This Agreement contains the entire agreement
of the Parties hereto with respect to the matters covered herein; moreover, this Agreement
supersedes all prior and contemporaneous agreements and understandings, oral or written, between
the Parties concerning the subject matter hereof. This Agreement may be
- 19 -
amended, waived or terminated only by a written instrument that is identified as an amendment
or termination hereto and that is executed on behalf of both Parties.
33. Survival of Certain Provisions. Wherever appropriate to the intention of the Parties, the
respective rights and obligations of the Parties hereunder shall survive any termination or
expiration of this Agreement.
34. Waiver of Breach. No waiver of either Party hereto of a breach of any provision of this
Agreement by any other Party, or of compliance with any condition or provision of this Agreement to
be performed by such other Party, will operate or be construed as a waiver of any subsequent breach
by such other Party or any similar or dissimilar provision or condition at the same or any
subsequent time. The failure of either Party hereto to take any action by reason of any breach
will not deprive such Party of the right to take action at any time while such breach continues.
35. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of
the Company and its Affiliates (and its and their successors), as well as upon any person or
entity, acquiring, whether by merger, consolidation, purchase of assets, dissolution or otherwise,
all or substantially all of the capital stock, business and/or assets of the Company (or its
successor) regardless of whether the Company is the surviving or resulting corporation. The
Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, dissolution or otherwise) to all or substantially all of the capital stock, business
or assets of the Company to expressly assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no such succession had
occurred; provided, however, no such assumption shall relieve the Company of its duties or
obligations hereunder unless otherwise agreed, in writing, by Executive.
This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or
legal representative, executors, administrators, successors, and heirs. In the event of the death
of Executive while any amount is payable hereunder including, without limitation, pursuant to
Sections 2, 5, 6 and 8, all such amounts shall be paid to the Designated Beneficiary (as defined in
Section 6(d)).
36. Notices. Any notice provided for in this Agreement shall be in writing and shall be
deemed to have been duly received (a) when delivered in person, (b) on the first business day after
it is sent by air express overnight courier services, or (c) on the third 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:
| (1) | If to Company, addressed to: |
Basic Energy Services, Inc.
Attn: Chairman of the Board
X.X. Xxx 00000
Xxxxxxx, Xxxxx 00000
Attn: Chairman of the Board
X.X. Xxx 00000
Xxxxxxx, Xxxxx 00000
- 20 -
| (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 36.
37. Executive Acknowledgment. Executive acknowledges that (a) he is knowledgeable and
sophisticated as to business matters, including the subject matter of this Agreement, (b) he has
read this Agreement and understands its terms and conditions, (c) he has had ample opportunity to
discuss this Agreement with his legal counsel prior to execution, and (d) no strict rules of
construction shall apply for or against the drafter or any other Party. Executive represents that
he is free to enter into this Agreement including, without limitation, that he is not subject to
any covenant not to compete that would conflict with his duties under this Agreement.
38. Termination of Prior Employment Agreement/Survivor of Other Agreements. After this
Agreement is effective and enforceable upon execution by the Parties hereto, that certain
Employment Agreement between the same Parties, made and entered into as of March 1, 2004, as
amended to date, shall terminate and be superseded in all respects by this Agreement. Subject to
Section 32, all other agreements or arrangements between the Executive and Company as in effect on
the Effective Date hereof shall remain in full force and effect to the extent not in conflict with
the terms and provisions of this Agreement.
39. 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. Each counterpart may consist of a copy hereof containing
multiple signature pages, each signed by one party hereto, but together signed by both parties.
[Signature page follows.]
- 21 -
IN WITNESS WHEREOF, Executive has hereunto set his hand and Company has caused this Agreement
to be executed in its name and on its behalf by its duly authorized officer, to be effective as of
the Effective Date.
| EXECUTIVE: | ||||||
| Signature: | /s/ Xxxxxxx X. Xxxxxxx
|
|||||
| Name: | Xxxxxxx X. Xxxxxxx | |||||
| Date: | 12/28/2006 | |||||
| Address for Notices: | ||||||
| 0000 Xxxxxxxx Xxxxx | ||||||
| Xxxxxxx, Xxxxx 00000 | ||||||
| COMPANY: | ||||||
| By: | /s/ Xxxx Xxxxxx
|
|||||
| Its: | Senior VP, CFO & Treasurer | |||||
| Name: | Xxxx Xxxxxx | |||||
| Date: | 12/28/2006 | |||||
- 22 -
