EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of September 17, 1996, between DI
INDUSTRIES, INC., a Texas corporation (the "Company"), and XXXXXXX X. XXXXXX,
XX. (the "Executive").
The Company desires to employ the Executive and the Executive desires to
accept employment with the Company, on the terms and conditions of this
Agreement.
Accordingly, the parties agree as follows:
1. EMPLOYMENT, DUTIES AND ACCEPTANCE.
1.1 EMPLOYMENT BY THE COMPANY; DUTIES. The Company hereby agrees to
employ the Executive for a term commencing on September 17, 1996, and expiring
at the end of the day on September 16, 1997 (such date, or later date to which
this Agreement is extended in accordance with the terms hereof, the "Termination
Date"), unless earlier terminated as provided in Article 4 or unless extended as
provided herein (the "Term"). The Term shall automatically be extended on the
Termination Date and each anniversary thereof for successive one-year periods
unless either party notifies the other on or before the date 90 days prior to
the Termination Date that he or it desires to terminate the Agreement. During
the Term, the Executive shall initially serve in the capacity of Vice President
-- International Operations of the Company and shall initially serve in those
offices and directorships of subsidiary corporations or entities of the Company
to which he may from time to time be appointed or elected. During the Term, the
Executive shall devote all reasonable efforts and all of his business time and
services to the Company, subject to the direction of the Board. The Executive
shall not engage in any other business activities except for passive investments
in corporations or partnerships not engaged in the oil or gas drilling or well
servicing business.
1.2 ACCEPTANCE OF EMPLOYMENT BY THE EXECUTIVE. The Executive hereby
accepts such employment and shall render the services and perform the duties
described above.
2. COMPENSATION AND OTHER BENEFITS.
2.1 ANNUAL SALARY. The Company shall pay the Executive an annual
salary at a rate of not less than one hundred thirty five thousand dollars
($135,000) per year (the "Annual Salary"), subject to increase at the sole
discretion of the Board of Directors of the Company (the "Board"). The Annual
Salary shall be payable in accordance with the payroll policies of the Company
as from time to time in effect, but in no event less frequently than once each
month, less such deductions as shall be required to be withheld by applicable
law and regulations.
2.2 BONUSES. The Executive may receive, at the sole discretion of the
Board, an incentive bonus with respect to the fiscal years ending during the
term hereof (the "Incentive Bonus"), provided that an Incentive Bonus, payable
in respect of fiscal year, shall not exceed one-half of the Annual Salary for
such fiscal year.
2.3 GRANT OF OPTION. The Company agrees to grant the Executive,
pursuant to the terms of its existing stock option plan or new or amended stock
option plans, options to acquire one hundred fifty thousand (150,000) shares of
the Company's common stock, at an exercise price equal to the fair market value
of such stock on the date of grant. The Company agrees to use all reasonable
efforts, consistent with the foregoing, to ensure that a portion of such stock
options meets all requirements for treatment as Incentive Stock Options under
the Internal Revenue Code of 1986, as amended, and that such stock option plan
meets the requirements of Rule 16b-3, promulgated under Section 16 of the
Securities Exchange Act of 1934, as amended. Any such stock options shall vest
in five equal increments over a four-year period commencing on the date of
grant, and shall expire ten years after the date of grant. One fifth of the ISOs
shall vest on December 31, 1996, and on the first, second, third and fourth
anniversary of the date of grant.
2.4 VACATION POLICY. The Executive shall be entitled to a paid
vacation of three weeks during each year of the Term.
2.5 PARTICIPATION IN EMPLOYEE BENEFIT PLANS. The Company agrees to
permit the Executive during the Term, if and to the extent eligible, to
participate in any group life, hospitalization or disability insurance plan,
health program, pension plan, similar benefit plan or other so-called "fringe
benefits" of the Company (collectively, "Benefits") which may be available to
other senior executives of the Company on terms no less favorable to the
Executive than the terms offered to such other executives. The Company agrees to
use its best efforts to obtain immediate coverage for the Executive upon the
commencement of the Term under its existing or newly adopted medical expense and
hospitalization plan for employees without premium surcharge and without
exclusions for disclosed preexisting conditions. The Executive shall cooperate
with the Company in applying for such coverage, including submitting to a
physical exam and providing all relevant health and personal data.
2.6 GENERAL BUSINESS EXPENSES. The Company shall pay or reimburse the
Executive for all expenses reasonably and necessarily incurred by the Executive
during the Term in the performance of the Executive's services under this
Agreement. Such payment shall be made upon presentation of such documentation as
the Company customarily requires of its senior executive employees prior to
making such payments or reimbursements.
2.7 COMPANY CAR, CELLULAR TELEPHONE. The Company shall provide an
automobile, of the Executive's choice, to be used by the Executive during the
Term hereof or until his employment hereunder is terminated. The purchase price
of the automobile shall not exceed $35,000 unless increased by the Board. If
requested by the Executive, the Company will replace the automobile with a new
automobile no less frequently than every three years during the Term hereof. The
Company shall, at its expense, pay any and all expenses associated with the
operation of such company car, including but not limited to, collision and
liability insurance, maintenance and repair costs, replacement parts, tires,
fuel and oil. The Executive may use the automobile for personal purposes and, to
the extent of the value of such personal usage, the value thereof shall be
deemed to be additional compensation.
The Company shall also furnish the Executive with a cellular telephone of
his choice and the Company shall pay all charges in connection with the use
thereof, other than charges
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for calls not related to executive's duties hereunder.
3. NON-COMPETITION.
3.1 COVENANTS AGAINST COMPETITION. The Executive acknowledges that (i)
the Company is currently engaged in the business of owning, managing and
operating onshore drilling and workover rigs for its own account or for others
which are contracted or hired for the purpose of drilling and/or workover of oil
or natural gas xxxxx and from time to time acquiring working or carried
interests in oil and gas xxxxx in connection with, or incident to, such drilling
or workover activities (the "Company Business"); (ii) his work for the Company
will give him access to trade secrets of and confidential information concerning
the Company; and (iii) the agreements and covenants contained in this Agreement
are essential to protect the business and goodwill of the Company. Accordingly,
the Executive covenants and agrees as follows:
3.1.1 NON-COMPETE. The Executive shall not during the Restricted
Period (as defined below) in the United States or any other place where the
Company and its affiliates conduct operations related to the Company business,
directly or indirectly (except in the Executive's capacity as an officer of the
Company), (i) engage or participate in the Company Business; (ii) enter the
employ of, or render any other services to, any person engaged in the Company
business except as permitted hereunder; or (iii) become interested in any such
person in any capacity, including, without limitation, as an individual,
partner, shareholder, lender, officer, director, principal, agent or trustee
except as permitted hereunder; provided, however, that the Executive may own,
directly or indirectly, solely as an investment, securities of any person traded
on any national securities exchange or listed on the National Association of
Securities Dealers Automated Quotation System if the Executive is not a
controlling person of, or a member of a group which controls, such person and
the Executive does not, directly or indirectly, own 1% or more of any class of
equity securities, or securities convertible into or exercisable or exchangeable
for 1% or more of any class of equity securities, of such person. As used
herein, the "Restricted Period" shall mean a period commencing on the date
hereof and terminating upon the first to occur of (a) the date on which the
Company terminates or is deemed to terminate the Executive's employment without
Cause, (b) the date the Executive terminates or is deemed to terminate his
employment pursuant to Section 4.6 hereof, or (c) the date of termination of
this Agreement; provided, however, that if the company shall have terminated the
Executive's employment for Cause and such Cause in fact exists or if the
Executive shall have terminated his employment with the Company in breach of the
terms of this Agreement, the Restricted Period shall end twelve months following
the termination of the Executive's employment hereunder.
3.1.2 CONFIDENTIAL INFORMATION; PERSONAL RELATIONSHIPS. The
Executive acknowledges that the Company has a legitimate and continuing
proprietary interest in the protection of its confidential information and that
it has invested substantial sums and will continue to invest substantial sums to
develop, maintain and protect confidential information. The Executive agrees
that, during and after the Restricted Period, the Executive shall keep secret
and retain in strictest confidence, and shall not use for the benefit of himself
or others all confidential matters directly relating to the Company business
including, without limitation, financial information, trade secrets, customer
lists, details of client or consultant contracts, pricing policies, operational
methods, marketing plans or strategies, product development techniques or plans,
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business acquisition plans, new personnel acquisition plans, technical
processes, designs and design projects, inventions and research projects of the
Company, its affiliates, or any other entity which may hereafter become an
affiliate thereof, learned by the Executive heretofore or hereafter unless
otherwise in the public domain other than as a result of disclosure by the
Executive or unless independently obtained from third parties not under
disclosure restrictions in favor of the Company.
3.1.3 PROPERTY OF THE COMPANY. All memoranda, notes, lists, records,
engineering drawings, technical specifications and related documents and other
documents or papers (and all copies thereof) relating to the Company, including
such items stored in computer memories, microfiche or by any other means, made
or compiled by or on behalf of the Executive after the date hereof, or made
available to the Executive after the date hereof relating to the Company, its
affiliates or any entity which may hereafter become an affiliate thereof, shall
be the property of the Company, and shall be delivered to the Company promptly
upon the termination of the Executive's employment with the Company or at any
other time upon request; provided, however, that Executive's address books,
diaries, chronological correspondence files and rolodex files shall be deemed to
be property of the Executive.
3.1.4 ORIGINAL MATERIAL. The Executive agrees that any inventions,
discoveries, improvements, ideas, concepts or original works of authorship
relating directly to the Company Business, including without limitation computer
systems, programs and manufacturing techniques, whether or not protectable by
patent or copyright, that have been originated, developed or reduced to practice
by the Executive alone or jointly with others during the Executive's employment
with the Company shall be the property of and belong exclusively to the Company.
The Executive shall promptly and fully disclose to the Company the origination
or development by the Executive of any such material and shall provide the
Company with any information that it may reasonably request about such material.
3.1.5 EMPLOYEES OF THE COMPANY AND ITS AFFILIATES. During the
Restricted Period, the Executive shall not, directly or indirectly, hire or
solicit, or cause others to hire or solicit, for employment by any person other
than the Company or any affiliate or successor thereof, any employee of the
Company and its affiliates or successors or encourage any such employee to leave
his employment.
3.1.6 CUSTOMERS OF THE COMPANY. During the Restricted Period, the
Executive shall not, except by reason of and in his capacity as an officer of
the Company, directly or indirectly, request or advise a customer of the Company
or its subsidiaries to curtail or cancel such customer's business relationship
with the Company.
3.2 RIGHTS AND REMEDIES UPON BREACH. If the Executive breaches, or
threatens to commit a breach of, any of the provisions contained in Section 3.1
of this Agreement (the "Restrictive Covenants"), the Company shall have the
following rights and remedies, each of which rights and remedies shall be
independent of the others and severally enforceable, and each of which is in
addition to, and not in lieu of, any other rights and remedies available to the
Company under law or in equity:
3.2.1 SPECIFIC PERFORMANCE. The right and remedy to have the
Restrictive Covenants specifically enforced by any court of competent
jurisdiction, it being agreed
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that any breach or threatened breach of the Restrictive Covenants would cause
irreparable injury to the Company and that money damages would not provide an
adequate remedy to the Company.
3.2.2 ACCOUNTING. The right and remedy to require the Executive to
account for and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits derived or received by the Executive as
the result of any action constituting a breach of the Restrictive Covenants.
3.3 SEVERABILITY OF COVENANTS. The Executive acknowledges and agrees
that the Restrictive Covenants are reasonable and valid in duration and
geographical scope and in all other respects. If any court determines that any
of the Restrictive Covenants, or any part thereof, is invalid or unenforceable,
the remainder of the Restrictive Covenants shall not thereby be affected and
shall be given full effect without regard to the invalid portions.
3.4 BLUE-PENCILLING. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope or such provision, such court shall have the
power to reduce the duration or scope of such provision, as the case may be,
and, in its reduced form, such provision shall then be enforceable.
3.5 ENFORCEABILITY IN JURISDICTIONS. The Company and the Executive
intend to and hereby confer jurisdiction to enforce the Restrictive Covenants
upon the courts of any jurisdiction within the geographical scope of such
Restrictive Covenants. If the courts of any one or more of such jurisdictions
hold the Restrictive Covenants unenforceable by reason of the breadth of such
scope or otherwise, it is the intention of the Company that such determination
not bar or in any way affect the right of the Company to the relief provided
above in the courts of any other jurisdiction within the geographical scope of
such Restrictive Covenants, as to breaches of such Restrictive Covenants in such
other respective jurisdictions, such Restrictive Covenants as they relate to
each jurisdiction being, for this purpose, severable into diverse and
independent covenants.
4. TERMINATION.
4.1 TERMINATION UPON DEATH. If the Executive dies during the Term,
this employment Agreement shall terminate, provided, however, that in any such
event, the company shall pay to the Executive, or to his estate, any portion of
the Annual Salary that shall have been earned by the Executive prior to the
termination but not yet paid, any Benefits that have vested in the Executive at
the time of such termination as a result of his participation in any of the
Company's benefit plans shall be paid to the Executive, or to his estate or
designated beneficiary, in accordance with the provisions of such plan; and the
company shall reimburse the Executive, or his estate, for any expenses with
respect to which the Executive is entitled to reimbursement pursuant to Section
2.6 of this Agreement, and the Executive's right to indemnification, payment or
reimbursement pursuant to Section 6 of this Agreement shall not be affected by
such termination and shall continue in full force and effect, both with respect
to proceedings that are threatened, pending or completed at the date of such
termination and with respect to proceedings that are threatened, pending or
completed after that date.
4.2 TERMINATION WITH CAUSE. The Company has the right, at any time
during the Term, subject to all of the provisions hereof, exercisable by serving
notice, effective on
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or after the date of service of such notice as specified therein, to terminate
the Executive's employment under this Agreement and discharge the Executive with
Cause. If such right is exercised, the Company's obligation to the Executive
shall be limited solely to the payment of unpaid Annual Salary accrued, together
with unpaid Incentive Bonus, if any, and Benefits vested up to the effective
date specified in the Company's notice of termination. As used in this
Agreement, the term "Cause" shall mean and include (i) chronic alcoholism or
controlled substance abuse as determined by a doctor mutually acceptable to the
Company and the Executive, (ii) an act of proven fraud or dishonesty on the part
of the Executive with respect to the Company or its subsidiaries; (iii) knowing
and material failure by the Executive to comply with material applicable laws
and regulations relating to the business of the Company or its subsidiaries;
(iv) the Executive's material and continuing failure to perform (as opposed to
unsatisfactory performance) his duties hereunder or a material breach by the
Executive of this Agreement except, in each case, where such failure or breach
is caused by the illness or other similar incapacity or disability of the
Executive; or (v) conviction of a misdemeanor involving moral turpitude or a
felony. Prior to the effectiveness of termination for Cause under subclause (i),
(ii), (iii) or (iv) above, the Executive shall be given 30 days' prior notice
from the Board specifically identifying the reasons which are alleged to
constitute cause from any termination hereunder and an opportunity to be heard
by the Board in the event Executive disputes such allegations.
4.3 TERMINATION WITHOUT CAUSE. The Company has the right, at any time
during the Term, subject to all of the provisions hereof, exercisable by serving
notice, effective on or after the date of service of such notice as specified
therein, to terminate the Executive's employment under this Agreement and
discharge the Executive without Cause. If the Executive is terminated during the
Term without Cause (including any termination which is deemed to be a
constructive termination without Cause under Section 4.6 hereof), the company's
obligation to the Executive shall be limited solely to the payment, at the times
and upon the terms provided for herein, of the greater of (i) the Executive's
Annual Salary and Incentive Bonus for the number of full months remaining in the
Term of this Agreement (assuming no automatic extension of the Term) had the
Executive not been so terminated and (ii) the Executive's Annual Salary for a
period of twelve months, in each case based on the Annual Salary of the
Executive in effect on the date of termination (or, if the Company has reduced
the Executive's Annual Salary in breach of this Agreement, the Executive's
Annual Salary before such reduction) and, in the case of clause (i), the average
Incentive Bonus received by the Executive for the immediately preceding two
fiscal years, together with all unpaid Incentive Bonus and Benefits awarded or
accrued up to the date of termination. If the Executive is terminated after he
has received one Incentive Bonus but before he has received two, the Incentive
Bonus in clause (i) shall be based on the amount of that one Incentive Bonus; if
he has not yet received an Incentive Bonus, it shall be based on the maximum
Incentive bonus (i.e., one half of the Annual Salary). In the event of a
termination by the Company without Cause within 180 days after the Change of
Control (as hereinafter defined), including a constructive termination without
Cause pursuant to Section 4.6, the amounts due to the Executive pursuant to this
Section 4.3 shall be due and payable in one lump-sum payment within 60 days
after such termination. In all other cases, any amounts due to the Executive
pursuant to this Section 4.3 shall be due and payable as and when they would
have become due and payable absent such termination.
4.4 TERMINATION BY THE EXECUTIVE. Any termination of this Agreement by
the Executive during the Term, except such termination as is deemed to be a
constructive
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termination without Cause by the Company under Section 4.6 of this Agreement,
shall be deemed to be a breach of the terms of this Agreement for the purposes
of Section 3.1.1 hereof and shall entitle the Company to discontinue payment of
all Annual Salary, Incentive Bonuses and Benefits accruing from and after the
date of such termination.
4.5 TERMINATION UPON DISABILITY. If during the Term the Executive
becomes physically or mentally disabled, whether totally or partially, as
evidenced by the written statement of a competent physician licensed to practice
medicine in the United States who is mutually acceptable to the Company and the
Executive or his closest relative if he is not then able to make such a choice,
so that the Executive is unable substantially to perform his services hereunder
for (i) a period of four consecutive months, or (ii) for shorter periods
aggregating six months during any twelve-month period, the company may at any
time after the last day of the four consecutive months of disability or the day
on which the shorter periods of disability equal an aggregate of six months, by
written notice to the Executive, terminate the Executive's employment hereunder
and discontinue payments of the Annual Salary, Incentive Bonuses and Benefits
accruing from and after the date of such termination. The Executive shall be
entitled to the full compensation payable to him hereunder for periods of
disability shorter than the periods specified in clauses (i) and (ii) of the
previous sentence.
4.6 CONSTRUCTIVE TERMINATION WITHOUT CAUSE. Notwithstanding any other
provision of this Agreement, the Executive's employment under this Agreement may
be terminated during the Term by the Executive, which shall be deemed to be
constructive termination by the Company without Cause, if one of the following
events shall occur without the consent of the Executive: (i) a failure to elect
or reelect or to appoint or reappoint the Executive to the office of Vice
President -- International Operations of the Company or other material change by
the Company of the Executive's functions, duties or responsibilities which
change would reduce the ranking or level, dignity, responsibility, importance or
scope of the Executive's position with the Company from the position and
attributes thereof described in Section 1 above; (ii) the assignment or
reassignment by the Company of the Executive to another place of employment more
than 50 miles from the Executive's principal place of residence in the Houston,
Texas, metropolitan area; (iii) the liquidation, dissolution, consolidation or
merger of the Company, or transfer of all or substantially all of its assets,
other than a transaction in which a successor corporation with a net worth at
least equal to that of the Company assumes this Agreement and all obligations
and undertakings of the Company hereunder; (iv) a reduction in the Executive's
fixed salary; (v) a Change of Control as hereinafter defined; (vi) the failure
of the company to continue to provide the Executive with office space, related
facilities and secretarial assistance that are commensurate with the Executive's
responsibilities to and position with the Company; (vii) the notification by the
Company of the Company's intention not to observe or perform one or more of the
obligations of the Company under this Agreement; (viii) the failure by the
Company to indemnify, pay or reimburse the Executive at the time and under the
circumstances required by Section 6 of this Agreement; (ix) the occurrence of
any other material breach of this Agreement by the Company or any of its
subsidiaries; or (x) the delivery of notice by the Company in accordance with
Section 1.1 hereof that it desires to terminate the Agreement, but only if such
notice is given before the Term has been automatically extended three times. Any
such termination shall be made by written notice to the Company, specifying the
event relied upon for such termination and given within 60 days after such
event. Any constructive termination shall be effective 60 days after the date
the Company has been given such written notice setting forth the grounds of such
termination with
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specificity; provided, however, that Executive shall not be entitled to
terminate this Agreement in respect of any of the grounds set forth above if
within 60 days after such notice the action constituting such ground for
termination is no longer continuing. A constructive termination by the Company
without Cause shall terminate the Restrictive Period hereunder.
4.7 For the purpose hereof, a "Change of Control of the Company" shall
be deemed to have occurred if after the effective date (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Act) is or becomes the
"beneficial owner" (as defined in rule 13d-3 under the Securities Exchange Act
of 1934 (the "Act")), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding securities without the prior approval of at least a majority of the
members of the Board in office immediately prior to such person attaining such
percentage interest; (ii) there occurs a proxy contest or a consent
solicitation, or the Company is a party to a merger, consolidation, sale of
assets, plan of liquidation or other reorganization not approved by at least a
majority of the members of the Board in office, as a consequence of which
members of the Board in office immediately prior to such transaction or event
constitute less than a majority of the Board thereafter; or (iii) during any
period of two consecutive years, other than as a result of an event described in
clause (ii) of this Section 4.7, individuals who at the beginning of such period
constituted the Board (including for this purpose any new director whose
election or nomination for election by the Company's stockholders was approved
by a vote of at least a majority of the directors then still in office who were
directors at the beginning of such period) cease for any reason to constitute at
least a majority of the Board.
5. INSURANCE. The Company may, from time to time, apply for and take out,
in its own name and at its own expense, naming itself or one or more of its
affiliates as the designated beneficiary (which it may change from time to
time), policies for life, health, accident, disability or other insurance upon
the Executive in any amount or amounts that it may deem necessary or appropriate
to protect its interest. The Executive agrees to aid the Company in procuring
such insurance by submitting to medical examinations and by filling out,
executing and delivery such applications and other instruments in writing as may
reasonably be required by an insurance company or companies to which any
application or applications for insurance may be made by or for the Company.
6. INDEMNIFICATION.
6.1 The Company shall, to the extent not prohibited by law, indemnify
the Executive if he is made, or threatened to be made, a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Company to procure a judgment in its favor (hereinafter a
"Proceeding"), by reason of the fact that the Executive is or was a director or
officer of the Company, or is or was serving in any capacity at the request of
the Company for any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against judgments, fines, penalties,
excise taxes, amounts paid in settlement and costs, charges and expenses
(including attorneys' fees and disbursements) paid or incurred in connection
with any such Proceeding.
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6.2 The Company shall, from time to time, reimburse or advance to the
Executive the funds necessary for payment of expenses, including attorneys' fees
and disbursements, incurred in connection with any Proceeding in advance of the
final disposition of such Proceeding; PROVIDED, HOWEVER, that, if required by
the Texas Business Corporation Act, such expenses incurred by or on behalf of
the Executive may be paid in advance of the final disposition of a Proceeding
only upon receipt by the Company of an undertaking, by or on behalf of the
Executive, to repay any such amount so advanced if it shall ultimately be
determined by final judicial decisions from which there is no further right of
appeal that the Executive is not entitled to be indemnified for such expenses.
6.3 The right to indemnification and reimbursement or advancement of
expenses provided by, or granted pursuant to, this Article 6 shall not be deemed
exclusive of any other rights which the Executive may now or hereafter have
under any law, by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office.
6.4 The right to indemnification and reimbursement or advancement of
expenses provided by, or granted pursuant to, this Article 6 shall continue as
to the Executive after he has ceased to be a director or officer and shall inure
to the benefit of the heirs, executors and administrators of the Executive.
6.5 The Company shall purchase and maintain director and officer
liability insurance on such terms and providing such coverage as the Board
determines is appropriate, and the Executive shall be covered by such insurance
on the same basis as the other directors and executive officers of the Company.
6.6 The right to indemnification and reimbursement or advancement of
expenses provided by, or granted pursuant to, this Article 6 shall be
enforceable by the Executive in any court of competent jurisdiction. The burden
of proving that such indemnification or reimbursement or advancement of expenses
is not appropriate shall be on the Company. Neither the failure of the Company
(including its board of directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that such indemnification or reimbursement or advancement of expenses is
proper in the circumstances nor an actual determination by the Company
(including its board of directors, independent legal counsel, or its
stockholders) that the Executive is not entitled to such indemnification or
reimbursement or advancement of expenses shall constitute a defense to the
action or create a presumption that the Executive is not so entitled. The
Executive shall also be indemnified for any expenses incurred in connection with
successfully establishing his right to such indemnification or reimbursement or
advance of expenses, in whole or in part, in any such proceeding.
6.7 If the Executive serves (1) another corporation of which a
majority of the shares entitled to vote in the election of its directors is held
by the Company, or (2) any employee benefit plan of the company or any
corporation referred to in clause (1), in any capacity, then he shall be deemed
to be doing so at the request of the Company.
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6.8 The right to indemnification or reimbursement or advancement of
expenses shall be interpreted on the basis of the applicable law in the effect
at the time of the occurrence of the event or events giving rise to the
applicable Proceeding.
7. OTHER PROVISIONS.
7.1 Certain Definitions. As used in this Agreement, the following
terms have the following meanings unless the context otherwise requires:
(i) "affiliate" with respect to the Company means any other
person controlled by or under common control with the
Company but shall not include any stockholder or
director of the Company, as such.
(ii) "person" means any individual, corporation,
partnership, firm, joint Company, association,
joint-stock company, trust, unincorporated
organization, governmental or regulatory body or other
entity.
(iii) "subsidiary" means any corporation 50% or more of the
voting securities of which are owned directly or
indirectly by the Company.
7.2 NOTICES. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission or,
if mailed, on the date of actual receipt thereof, as follows:
(i) if to the Company, to:
DI Industries, Inc.
000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention:
with a copy to:
Xxxxxx & Xxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
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(ii) if to the Executive, to:
Xxxxxxx X. Xxxxxx, Xx.
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Any party may change its address for notice hereunder by notice to the other
party hereto.
7.3 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, written or oral, with respect thereto.
7.4 WAIVERS AND AMENDMENTS. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms and conditions hereof may be
waived, only by a written instrument signed by the parties or, in the case of a
waiver, by the party waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof. Nor shall any waiver on the part of any party of any such right, power
or privilege hereunder, nor any single or partial exercise of any right, power
or privilege hereunder, preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.
7.5 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas (without giving effect to the
choice of law provisions thereof) where the employment of the Executive shall be
deemed, in part, to be performed and enforcement of this Agreement or any action
taken or held with respect to this Agreement shall be taken in the courts of
appropriate jurisdiction in Houston, Texas.
7.6 ASSIGNMENT. This Agreement, and any rights and obligations
hereunder, may not be assigned by the Executive and may be assigned by the
Company (subject to Section 4.6 (iii) hereof) only to a successor by merger or
purchasers of substantially all of the assets of the Company.
7.7 COUNTERPARTs. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
7.8 HEADINGS. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
7.9 NO PRESUMPTION AGAINST INTERESt. This Agreement has been
negotiated, drafted, edited and reviewed by the respective parties, and
therefore, no provision arising directly or indirectly herefrom shall be
construed against any party as being drafted by said party.
7.10 VALIDITY CONTEST. The Company shall promptly pay any and all
legal fees and expenses incurred by the Executive from time to time as a direct
result of the Company's contesting the due execution, authorization, validity or
enforceability of this Agreement.
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7.11 BINDING AGREEMENT. This Agreement shall inure to the benefit of
and be binding upon the Company and its respective successors and assigns and
the Executive and his legal representatives.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
DI INDUSTRIES, INC.
By /s/ X.X. XXXXXXXX
Name: X. X. Xxxxxxxx
Title: President and CEO
EXECUTIVE
/s/ XXXXXXX X. XXXXXX, XX.
Xxxxxxx X. Xxxxxx, Xx.
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