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EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement is made and entered into between
Boots & Xxxxx International Well Control, Inc., a Delaware corporation, having a
place of business at 000 Xxxx Xxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx, 00000
(the "Company") and Xxxxxx X. Xxxxxx, an individual resident of Houston, Texas
(the "Executive").
WHEREAS, the Company is a global-response well control service company
that specializes in oil field emergencies, including blowouts and well fires;
and
WHEREAS, the Company is desirous of making appropriate long-term
arrangements for the management of its business affairs; and
WHEREAS, the Company is desirous of retaining the Executive to serve as
its Chief Financial Officer on the conditions set forth herein for the entire
term of this Agreement, and
WHEREAS, in such capacity, the Executive will have access to all of the
business methods and confidential information relating to the Company and its
business activities including, but not limited to, its operational and financial
matters, its contemplated acquisition and business development plans, its
personnel training and development programs and its industry relationships.
NOW THEREFORE, in consideration of the promises and of the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. EXECUTIVE REPRESENTATIONS AND WARRANTIES. The Executive represents
and warrants to the Company that he is free to accept employment hereunder and
that he has no prior or other obligations or commitments of any kind to anyone
that would in any way hinder or interfere with his acceptance of, or the full,
uninhibited and faithful performance of this Agreement, or the exercise of his
best efforts as an executive officer of the Company.
2. EMPLOYMENT AND DUTIES. The Company shall employ the Executive as
its Chief Financial Officer, or in such other comparable executive capacity as
the Board of Directors of the Company shall specify from time to time, and the
Executive shall be employed by and will work for the Company at Company's
executive offices in Houston, Texas. As head of the Finance and Accounting
Department, the Executive shall report directly to the Chief Executive Officer.
And be responsible for the entire financial management activities of the
Company. The duties of the Executive shall include, but not be limited to,
business planning, financial planning, financial analysis, the development and
implementation of appropriate financial and accounting standards, policies,
practices, procedures, cost control programs and financial controls, the
development and maintenance of appropriate management information systems, the
preparation and distribution of internal and external financial reports, the
preparation and filing of domestic and international statutory reports and tax
returns, and the supervision of all external financial reporting functions. The
Executive's responsibilities shall include all of the duties and
responsibilities of the Chief Financial Officer as described in the By-laws of
the Company, as the same may be amended from time to time. In addition, the
Executive shall, from time to time, perform such other
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functions and duties in connection with the business of the Company as the
Board of Directors may entrust or delegate to him.
3. CONDUCT OF EXECUTIVE. During the entire Term of this Agreement, the
Executive shall devote his full business time, effort, skill and attention to
the affairs of the Company and its subsidiaries, will use his best efforts to
promote the interests of the Company, and will discharge his responsibilities
in a diligent and faithful manner, consistent with sound business practices.
During the entire Term of this Agreement, the Executive shall agree to serve as
a member of the Company's Board of Directors if elected to such position by the
shareholders of the Company. In furtherance of the foregoing:
(a) The Executive represents that his employment by the Company will
not conflict with any obligations which he has to any other
person, firm or entity. The Executive specifically represents that
he has not brought to the Company (during the period before the
signing of this Agreement) and he will not bring to the Company
any materials or documents of a former or present employer, or any
confidential information or property of any other person, firm or
entity.
(b) The Executive shall not, without disclosure to and approval of the
Board of Directors of the Company, directly or indirectly, assist
or have an active interest in (whether as a principal,
stockholder, lender, employee, officer, director, partner,
venturer, consultant or otherwise) in any person, firm,
partnership, association, corporation or business organization,
entity or enterprise that competes with or is engaged in a
business which is substantially similar to the business of the
Company except that ownership of not more than 5% of the
outstanding securities of any class of any publicly-held
corporation shall not be deemed a violation of this sub-paragraph
3(b).
(c) The Executive shall promptly disclose to the directors of the
Company, in accordance with the Company's policies, full
information concerning any interests, direct or indirect, he holds
(whether as a principal, stockholder, lender, Executive, director,
officer, partner, venturer, consultant or otherwise) in any
business which, as reasonably known to the Executive purchases or
provides services or products to, the Company or any of its
subsidiaries, provided that the Executive need not disclose any
such interest resulting from ownership of not more than 5% of the
outstanding securities of any class of any publicly-held
corporation.
(d) The Executive shall not disclose to any person or entity (other
than to the Company's Board of Directors or to others as required,
in his judgment, in the due performance of his duties under this
Agreement) any confidential or secret information with respect to
the business or affairs of the Company, or any of its subsidiaries
or affiliates.
Nothing in this Agreement shall be deemed to preclude the Executive
from participating in other business opportunities if and to the extent that
(i) such business opportunities are not directly competitive with or similar to
the business of the Company, (ii) the Executive's activities with respect to
such opportunities do not have a material adverse effect on the performance of
the Executive's duties hereunder, and (iii) the Executive's activities with
respect to such opportunity have been fully disclosed in writing to the
Company's Board of Directors.
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4. CONDITIONS OF EMPLOYMENT.
(a) Term of Employment. Unless terminated earlier in accordance with
the provisions of this Agreement, the Executive will be employed
by the Company for a period commencing on April 1, 1999 and
terminating on March 31, 2004 (the "Term"). Thereafter, this
Agreement shall be renewable on such reasonable terms and for such
periods as may be negotiated between the Executive and the
Company.
(b) Place of Employment. The Executive shall occupy offices at the
Company's headquarters in Houston, Texas, which will be maintained
for his use by the Company at the Company's expense. The Executive
shall not be required during the Term of this Agreement to
relocate from Houston, Texas to any other business location
maintained by the Company although the Executive expressly agrees
that regular travel shall be necessary as part of his duties.
(c) Ownership of Company Records and Reports. The Executive shall not,
except in the performance of his duties hereunder, at any time or
in any manner make or cause to be made any copies, pictures,
duplicates, facsimiles, or other reproductions or recordings or
any abstracts or summaries of any reports, studies, memoranda,
correspondence, manuals, records, plans or other written or
otherwise recorded materials of any kind whatever belonging to or
in the possession of the Company, or of any subsidiary or
affiliate of the Company, including but not limited to materials
describing or in any way relating to the Company's business
activities including, but not limited to, its proprietary
techniques and technologies, its operational and financial
matters, its contemplated acquisition and development plans, its
personnel training and development programs and its industry
relationships. The Executive shall have no right, title or
interest in any such material, and the Executive agrees that,
except in the performance of his duties hereunder, he will not,
without the prior written consent of the Company remove any such
material from any premises of the Company, or any subsidiary or
affiliate of the Company, and immediately upon the termination of
his employment for any reason whatsoever Executive shall return to
the Company all such material in his possession.
(d) Company's Trade Secrets. Without the prior written consent of the
Company, the Executive shall not at any time (whether during or
after his employment with the Company) use for his own benefit or
purposes or for the benefit or purposes of any other person, firm,
partnership, association, corporation or business organization,
entity or enterprise, or disclose in any manner to any person,
firm, partnership association, corporation or business
organization, entity or enterprise, except in the performance of
his duties hereunder, any trade secrets, or any information data,
knowhow or knowledge constituting trade secrets belonging to, or
relating to the affairs of the Company, or any subsidiary, former
subsidiary, or affiliate of the Company.
(e) Inventions, Copyrights, Trademarks. The Executive shall promptly
disclose to the Company (and to no one else) all improvements,
discoveries, ideas and inventions that may be of significance to
the Company, or any subsidiary or affiliate of the
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Company, made or conceived alone or in conjunction with others
(whether or not patentable, whether or not made or conceived at
the request of or upon the suggestion of the Company or any
subsidiary or affiliate of the Company during or out of his usual
hours of work or in or about the premises of the Company or
elsewhere) while in the employ of the Company or of any subsidiary
or affiliate of the Company, or made or conceived within one year
after the termination of his employment by the Company or of any
subsidiary or affiliate of the Company if resulting from,
suggested by or relating to such employment. All such
improvements, discoveries, ideas and inventions shall be the sole
and exclusive property of the Company and are hereby assigned to
the Company. At the request of the Company and at its cost, the
Executive shall assist the Company, or any person or persons from
time to time designated by it, to obtain the copyright, trademark
and/or grant of patents in the United States and/or in such other
country or countries as may be designated by the Company, covering
such improvements, discoveries, ideas and inventions and shall in
connection therewith and in connection with the defense of any
patents execute such applications, statements or other documents,
furnish such information and data and take all such other action
(including, but not limited to, the giving of testimony) as the
Company may from time to time reasonably request.
(f) Continuation of Employment After Initial Term. A continuation of
Executive's employment with the Company after the initial Term
hereof shall be deemed to be an extension of this Agreement on a
month-to-month basis, subject to termination by either party on
thirty (30) days advance written notice, except that no bonus
shall be paid during said continued period unless agreed upon in
writing between the parties.
5. COMPENSATION. The Company shall compensate the Executive for all
services to be rendered by him during the Term as follows:
(a) The Executive shall receive a Salary of $225,000 per year during
the period commencing on April 1, 1999 and terminating on March
31, 2004. The Executive's Salary shall be reviewed on an annual
basis and the amount of such Salary shall be subject to
renegotiation on the basis of the performance of the Executive and
the performance of the Company.
(b) The Executive shall participate in the Company's Executive Bonus
Pool and any other additional executive compensation plans adopted
by the shareholders of the Company; provided, however, that the
discretionary authority to determine the level of the Executive's
participation therein and the terms and conditions of such
participation shall remain vested in the Company's board of
directors, or a compensation committee appointed by the board of
directors, and the board of directors or the compensation
committee, as the case may be, shall have the authority to adjust
such participation upward or downward from time to time in its
sole discretion.
(c) The Executive shall participate in the Company's standard employee
benefit programs, including but not limited to the Company's
medical/hospitalization insurance and group life insurance, as in
effect from time to time. Further, Executive
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shall be entitled to a company paid policy of life insurance,
payable to his designated beneficiary, in an amount of not less
than $750,000.
(d) The Executive shall receive an automobile allowance of $1,500 per
month from which the Executive shall be required to provide a
suitable automobile and all ordinary and necessary fuel,
maintenance and insurance, provided, however, that the Company
will pay any extraordinary operating expenses for business use of
the automobile.
(e) During the Term of this Agreement, the Company will reimburse the
Executive for all reasonable business expenses incurred by him on
behalf of the Company in the performance of his duties hereunder
upon presentation of vouchers, receipts or other evidence of such
expenses in accordance with the policies of the Company.
(f) The Executive shall be entitled to reimbursement for the costs
associated with membership in one golf country club, including
monthly dues and expenses associated with business entertainment
at such club.
Notwithstanding any other provision of this Agreement, it is
agreed that the Executive shall be entitled to receive such
incentive bonuses, stock options and other benefits as may be
granted by the board of directors from time to time.
6. RESTRICTED STOCK OPTION. Simultaneously with the execution of this
Agreement, the Executive shall be entitled to receive and the Company shall
issue to the Executive an Option to purchase shares of the Company's authorized
and previously unissued $0.00001 par value common stock (the "Option Shares"),
as set forth on the attached Schedule "A", which shall, upon issuance, be
subject to all of the following terms and conditions:
(a) The Option Shares are issued to the Executive for the sole purpose
of providing the Executive with a tangible incentive to put forth
maximum efforts for the success of the Company and its business in
the future. Therefore, in the event that the Executive's
employment with the Company is terminated for any reason prior to
any anniversary of the date of this Agreement, then all Option
Shares that have not previously vested in the Executive pursuant
to sub-paragraphs (b) through (d) hereof shall be immediately
forfeit without further action by the Company or the Executive.
(b) Absolute and unrestricted ownership of the Option Shares shall
vest in the Executive over the 5 year period commencing on the
date of this Agreement, at the rate of twenty percent (20%) of the
Option Shares per year. The foregoing vesting shall not occur
until an anniversary date of this Agreement, provided, however,
consideration shall be given to partial periods in the event that
the Executive's employment with the Company is terminated for any
reason, other than for cause, prior to any anniversary of the date
of this Agreement.
(c) Notwithstanding the provisions of subparagraphs (a) and (b)
absolute and unrestricted ownership of all unvested Option Shares
shall vest in the Executive immediately prior to the consummation
of (i) any merger, consolidation or similar business combination
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transaction where the Company is not the surviving entity, (ii) any
sale of all or substantially all of the Company's assets where the
proceeds are intended for distribution to the stockholders, or
(iii) any other transaction or series of transactions whereby any
person, entity or group acting in concert acquires direct or
indirect ownership of more than 10% of the Company's outstanding
voting securities.
7. TERMINATION OF EMPLOYMENT.
(a) This Agreement and the compensation payable to Executive hereunder
shall terminate and cease to accrue forthwith upon Executive's
death.
(b) The Executive's employment under the terms of this Agreement may
be terminated, at the option of the Company by notice to the
Executive, (i) for any reason, or for no reason, at the end of the
initial Term of this Agreement, (ii) as a result of disability of
the Executive as provided in subparagraph (c) below, or (iii) for
cause as defined in subparagraph (d) below.
(c) As used herein, "disability" shall mean such physical or mental
disability or incapacity of the Executive which, in the good faith
determination of the Board of Directors of the Company, has
prevented the Executive from performing substantially all of the
duties hereunder during any period of six (6) consecutive months.
Subject only to existing Federal, State or local law, if the
Executive suffers a disability, the Company shall have the right
to terminate this Employment Agreement by giving notice at any
time after the expiration of such three-month period and this
Employment Agreement shall terminate upon the Company giving such
notice. Such termination shall not, however, affect any rights of
the Executive under the Company's Executive benefit plans as
constituted on the date of such termination.
(d) As used herein, "cause" shall mean (i) any material failure by
Executive to observe or perform his Agreements herein contained,
(ii) any fraudulent or dishonest conduct in the performance of the
Executive's duties and functions, (iii) any gross negligence or
willful breach of the Executive's obligations under this
Agreement, or (iv) any intentional disregard of the policies and
instructions established by the Board of Directors of the Company.
(e) Upon termination of this Agreement by the Company for cause prior
to the end of the initial term, except for termination based upon
an intentional act on the part of Executive including, by way of
example, the refusal to perform work when the Executive is
physically and mentally able to do so or engaging in competition
with the Company, the Executive shall receive as a complete and
total settlement of all of claims of every type and nature against
the Company, its officers and Executives, immediately upon
termination a lump sum payment equal to 24 month's base annual
salary (said sum shall hereinafter be referred to as "Liquidated
Damages"). If Executive is terminated by reason of an intentional
act on his behalf, Executive shall be due no compensation other
than accrued base salary owing up to the time of termination.
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8. SPECIFIC PERFORMANCE. If any portion of this Agreement is found by
a court of competent jurisdiction to be too broad to permit enforcement of such
restriction to its full extent, then such restriction shall be enforced to the
maximum extent permitted by law, and the Executive hereby consents and agrees
that such scope may be judicially modified accordingly in any proceeding
brought to enforce such restriction. All provisions of this Agreement are
severable, and the unenforceability or invalidity of any single provision
hereof shall not affect any remaining provision. The Executive acknowledges and
agrees that the Company's remedy at law for any breach of any of his
obligations hereunder would be inadequate, and agrees and consents that
temporary and permanent injunctive relief may be granted in any proceeding that
may be brought to enforce any provision of this Agreement without the necessity
of proof of actual damage and without any bond or other security being
required. Such remedies shall not be exclusive and shall be in addition to any
other remedy which the Company may have.
9. MISCELLANEOUS.
(a) The failure of a party to insist on any occasion upon strict
adherence to any Term of this Agreement shall not be considered to
be a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that Term or any other Term of
this Agreement. Any waiver must be in writing.
(b) All notices and other communications under this Agreement shall be
in writing and shall be delivered personally or mailed by
registered mail, return receipt requested, and shall be deemed
given when so delivered or mailed, to a party at such address as a
party may, from time to time, designate in writing to the other
party.
(c) Notwithstanding the termination of the Executive's employment
hereunder, the provisions of Paragraphs 6 and 9 shall survive such
termination.
(d) This Agreement shall be assigned to and inure to the benefit of,
and be binding upon, any successor to substantially all of the
assets and business of the Company as a going concern, whether by
merger, consolidation, liquidation or sale of substantially all of
the assets of the Company or otherwise.
(e) This Agreement constitutes the entire Agreement between the
parties regarding the above matters, and each party acknowledges
that there are no other written or verbal Agreements or
understandings relating to such subject matter between the
Executive and the Company or between the Executive and any other
individuals or entities other than those set forth herein. No
amendment to this Agreement shall be effective unless it is in
writing and signed by both the parties hereto.
(f) This Agreement shall be construed according to the laws of the
State of Texas pertaining to Agreements formed and to be performed
wholly within the State of Texas. In the event action be brought
to enforce any provisions of this Agreement, the prevailing party
shall be entitled to reasonable attorney's fees as fixed by the
court. The Executive represents and warrants that he has reviewed
this Agreement in detail with his legal and other advisors, as he
considers appropriate, and that he fully understands the
consequences to him of its provisions. The Executive is relying on
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his own judgment and the judgment of his advisors with respect to
this Agreement and he understands that the Company is making no
representations to him concerning taxes or any other matters
respecting this Agreement.
(g) Any dispute between the parties to this Agreement shall be
determined and settled by binding arbitration in Houston, Texas
under the rules of the American Arbitration Association. Judgment
on any award rendered by the arbitrators may be entered in any
court having jurisdiction over the party adversely by such award.
(h) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original for all purposes hereof.
IN WITNESS WHEREOF, the parties hereto have set their hands on this
1st day of April, 1999.
BOOTS & XXXXX INTERNATIONAL. XXXXXX X. XXXXXX
WELL CONTROL, INC
By: /s/ X. X. XXXXXXX /s/ XXXXXX X. XXXXXX
--------------------------------------- ------------------------------
X. X. Xxxxxxx, Chief Executive Officer
Approved by Compensation Committee of the Board of Directors
/s/ [ILLEGIBLE]
------------------------------------------
Signature
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SCHEDULE A TO
EXECUTIVE EMPLOYMENT AGREEMENT
XXXXXX X. XXXXXX
Restricted Stock Option:
# SHARES EXERCISE PRICE
-------- --------------
500,000 $1.55
