TRANSITION AGREEMENT
EXHIBIT
10.1
THIS TRANSITION
AGREEMENT (this “Agreement”) is entered into effective as of May 5, 2009
(the “Effective Date”), by and among TETRA TECHNOLOGIES, INC., a Delaware
corporation (the “Company”) and XXXXXXXX X. XXXXXX (the
“Employee”).
1. Employment.
1.1 The Company hereby
agrees to continue to employ the Employee, and the Employee hereby agrees to
accept continued employment with the Company, upon the terms and for the period
set forth in this Agreement.
1.2 Unless sooner
terminated in accordance with the terms of this Agreement, the Employee’s term
of employment hereunder shall mean the period commencing on the Effective Date
and ending on January 5, 2012 (the “Employment
Period”).
2. Duties.
2.1 During the
Employment Period, the Employee shall serve in such positions as the Company’s
Board of Directors (the “Board”) may determine from time to time. The Employee
shall be subject to the supervision of, and shall have such authority as is
delegated to him by the Chief Executive Officer.
2.2 In addition to the
foregoing description of the Employee’s duties, during the Employment Period the
Company shall, if so recommended by the Nominating and Corporate Governance
Committee (the “Governance Committee”) of the Board, (i) nominate and
recommend the Employee for membership on the Board, and (ii) use
commercially reasonable efforts to cause the Employee to be nominated and
recommended for membership on the board of directors of Compressco Partners GP
Inc. (“Compressco GP”), the general partner of Compressco Partners, L.P.
(“Compressco Partners”), and to serve as chairman of that board of
directors. If so elected, the Employee shall, without further
compensation during the
Employment Period
and on a basis consistent with other directors after the Employment Period,
serve as a member of the Board and as a member of the board of directors of
Compressco GP.
2.3 During the
Employment Period, the Employee agrees to devote such time as reasonably
required to carry out and perform the responsibilities assigned to the Employee
hereunder. Notwithstanding the foregoing, during the Employment
Period it shall not be a violation of this Agreement for the Employee
(i) to serve on industry-related, civic or charitable boards or committees,
(ii) with the approval of the Company’s Governance Committee and the Board,
to serve on other corporate boards or committees, and (iii) to continue to
own and manage his personal investments including, without limitation, his
current oil and gas interests as described on Exhibit A
attached hereto and incorporated herein and, with the approval of the Board,
invest in, acquire and/or manage additional oil and gas interests, so long as
any activities described in clauses (i), (ii) and (iii) do not
significantly interfere with the performance of the Employee’s responsibilities
as an employee of the Company in accordance with this Agreement and, in the case
of the activities described in clause (ii), will not, in the good faith
judgment of the Board, constitute an actual or potential conflict of interest
with the business activities of the Company or its affiliated
companies. It is expressly understood and agreed that to the extent
that any such activities have been conducted by the Employee prior to the date
hereof, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the date hereof shall not
thereafter be deemed to interfere with the performance of the Employee’s
responsibilities to the Company.
2.4 In connection with
the Employee’s employment hereunder, the Employee shall be based at the
Company’s headquarters located in The Woodlands, Texas, or at any other office
which is the headquarters of the Company and is less than 50 miles from such
location, provided, however, that the Employee may be required to travel on the
business of the Company to the extent consistent with the duties and obligations
of the Employee pursuant to this Agreement. The Company acknowledges
that Employee may work remotely either from his home office or his vacation home
as he has in the past from time to time.
3.1 Base
Salary. During the Employment Period, the Employee shall
receive a monthly base salary equal to $33,333 (“Base Salary”), which shall be
paid in accordance with the Company’s standard payroll practice.
3.2 Annual
Bonus.
(a) During the
Employment Period, the Employee shall be eligible for an annual bonus (the
“Annual Bonus”) for each calendar year ending during the Employment Period
(calendar years ending December 31, 2009, 2010 and 2011) on the same basis
as other executive officers under the Company’s then current discretionary
performance-based cash bonus program (or its successor), which shall be payable
in accordance with the terms of such program. The Employee’s target
payout for the Annual Bonus will be $200,000 for the 2009 and 2010 calendar
years and $83,200 for the 2011 calendar year. Payment of the Annual
Bonus, if awarded, will be made in a lump sum cash payment in accordance with
the terms of the Company’s discretionary
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performance-based
cash bonus program (or its successor) but in no event earlier than
January 1 of, and no later than March 31 of the calendar year
immediately following the calendar year in respect of which the Annual Bonus is
awarded. Except as otherwise expressly provided in Section 5
hereof, any Annual Bonus payable under this Section 3.2 shall not be
payable unless the Employee is employed by the Company on the last day of the
period to which such Annual Bonus relates.
(b) Notwithstanding the
foregoing, in the event a Change in Control (as herein defined)
occurs on or before December 31, 2009, Employee shall be entitled to
receive the target payout for the Annual Bonus for 2009. Any payment
of the 2009 Annual Bonus pursuant to this Section 3.2(b) shall be made within 7
calendar days of the effective date of the Change in Control. The
foregoing shall only apply to a Change in Control that occurs on or before
December 31, 2009. In the event a Change in Control occurs during the
Employment Period and after December 31, 2009, the Employee’s right to receive
any Annual Bonus hereunder shall remain subject to the discretion of the Board
and satisfaction of any applicable performance criteria.
(c) For purposes of
this Agreement, a “Change in Control” shall be deemed to have occurred upon any
of the following events:
(i) any “person” (as
defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (the “Exchange
Act”), and as modified in Section 13(d) and 14(d) of the Exchange Act) other
than (A) the Company or any of its subsidiaries, (B) any employee benefit plan
of the Company or any of its subsidiaries, (C) any entity controlled by the
Company, (D) a company owned, directly or indirectly, by stockholders of the
Company in substantially the same proportions as their ownership of the Company,
or (E) an underwriter temporarily holding securities pursuant to an offering of
such securities ( a “Person”), becomes the “beneficial owner” (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing more than 50% of the shares of voting stock of the Company
then outstanding;
(ii) the consummation of
any merger, organization, business combination or consolidation of the Company
or one of its subsidiaries with or into any other company, other than a merger,
reorganization, business combination or consolidation which would result in the
holders of the voting securities of the Company outstanding immediately prior
thereto holding securities which represent immediately after such merger,
reorganization, business combination or consolidation more than 50% of the
combined voting power of the voting securities of the Company or the surviving
company or the parent of such surviving company;
(iii) the consummation of
a sale or disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition if the holders of the voting
securities of the Company outstanding immediately prior thereto hold securities
immediately thereafter which represent more than 50% of
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the combined voting
power of the voting securities of the acquiror, or parent of the acquiror, of
such assets;
(iv) the stockholders of
the Company approve a plan of complete liquidation or dissolution of the
Company; or
(v) individuals who, as
of the Effective Date, constitute the Board (the “Incumbent Board”) cease for
any reason to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the Effective Date whose
election by the Board, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an election contest with respect to the election or removal of
directors or other solicitation of proxies or consents by or on behalf of a
person other than the Board.
Notwithstanding the
foregoing, however, in any circumstance or transaction in which compensation
would be subject to the income tax under Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) if the foregoing definition of “Change in
Control” were to apply, but would not be so subject if the term “Change in
Control” were defined herein to mean a “change in control event” within the
meaning of Treasury Regulation § 1.409A-3(i)(5), then “Change in Control” shall
mean a “change in control event” within the meaning of Treasury Regulation §
1.409A-3(i)(5), but only to the extent necessary to prevent such compensation
from becoming subject to the income tax under Section 409A of the
Code
3.3 Compressco IPO
Bonus.
(a) It is contemplated
that the duties of the Employee hereunder will include assisting the Company and
Compressco GP and Compressco Partners, in completing an initial public offering
by Compressco Partners. If on or before June 30, 2010 Compressco
Partners shall complete the Compressco IPO (as herein defined), Employee shall
be entitled to a cash bonus (the “Compressco IPO Bonus”) from the Company in the
applicable amount set forth below based upon the Market Capitalization (as
herein defined) of Compressco Partners:
|
Market
Capitalization
|
Compressco
IPO Bonus
|
|
|
$0.00 to
$300,000,000
|
$250,000
|
|
|
$300,000,001
to $500,000,000
|
$500,000
|
|
|
$500,000,001
to $700,000,000
|
$700,000
|
|
|
in excess of
$700,000,000
|
$900,000
|
|
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For purposes of
this Agreement, the “Market Capitalization” of Compressco Partners shall be an
amount equal to (i) the initial public offering price of the common units
of Compressco Partners offered to the public in the Compressco IPO, multiplied
by (ii) the total number of common units of Compressco Partners which are
outstanding immediately following the exercise or expiration of the
underwriters’ overallotment option in the Compressco IPO.
(b) The Compressco IPO
Bonus, if earned, shall be payable in a lump sum cash payment at such time as
determined by the Board but in any event no later than the sooner to occur of
(i) the date which is 120 days after the consummation of the Compressco
IPO, or (ii) the date which is two and one-half months following the end of
the year in which such Compressco IPO is completed.
(c) For purposes of
this Agreement, the “Compressco IPO” shall mean the issuance by Compressco
Partners of its common units representing limited partnership interests in an
underwritten primary public offering (other than a registration statement on
Form X-0, X-0 or any similar form) pursuant to an effective registration
statement filed with the United States Securities and Exchange Commission (the
“SEC”) in accordance with the Securities Act of 1933, as amended.
3.4 Transition
Bonus.
(a) It is further
contemplated that the duties of the Employee hereunder will include assisting in
the transition of leadership to Xxxxxx X. Xxxxxxxxx, the Company’s Chief
Executive Officer, and the succession of Xx. Xxxxxxxxx into his role as Chief
Executive Officer and the succession of Xxxxx X. Xxxxxxx into his role as Senior
Vice President of the Company’s Offshore Division. Subject to the
terms hereof, the Employee shall be entitled to receive, at the discretion of
the Board and the Compensation Committee, the following lump sum cash bonus
payments (i) up to $120,000 based upon the performance of Xx. Xxxxxxxxx during
the period from May 5, 2009 until May 4, 2010 (the “First Performance Period”)
in his succession as the Chief Executive Officer (the “Xxxxxxxxx First Period
Bonus”), (ii) up to $120,000 based upon the performance of Xx. Xxxxxxxxx during
the period from May 5, 2010 until May 4, 2011 (the “Second Performance Period”)
in his succession as the Chief Executive Officer, (iii) up to $80,000 based upon
the performance of Xx. Xxxxxxx during the First Performance Period as Senior
Vice President of the Company’s Offshore Division (the “Goldman First Period
Bonus”), and (iv) up to $80,000 based upon the performance of Xx. Xxxxxxx during
the Second Performance Period as Senior Vice President of the Company’s Offshore
Division (the foregoing may be referred to individually as a “Transition Bonus”
and collectively as the “Transition Bonuses”).
(b) The Transition
Bonuses shall be evaluated and determined over the First Performance Period and
the Second Performance Period, respectively. Employee’s right to
receive all or any part of each of the Transition Bonuses shall be subject to
the complete discretion of the Board and the Compensation Committee, taking into
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consideration such
factors as they may deem relevant. The Board and the Compensation
Committee must make their determination of whether one or more Transition
Bonuses is payable for the First Performance Period between May 5, 2010 and May
15, 2010 and if one or more Transition Bonuses is determined to be payable, the
Company shall pay such Transition Bonus(es) on or before May 15,
2010. The Board and the Compensation Committee must make their
determination of whether one or more Transition Bonuses is payable for the
Second Performance Period between May 5, 2011 and May 15, 2011 and if one or
more Transition Bonuses is determined to be payable, the Company shall pay such
Transition Bonus(es) on or before May 15, 2011. Except as otherwise
expressly provided in Section 5 hereof, any Transition Bonus payable under this
Section 3.4 shall not be payable unless the Employee is employed by the Company
on the date the payment is determined.
(c) Notwithstanding the
foregoing, in the event of a Change in Control occurs on or before May 4, 2010,
then:
(i) if
Xx. Xxxxxxxxx shall remain employed by the Company immediately prior to the
effective date of the Change in Control, the Employee shall be entitled to
receive the full amount of the Xxxxxxxxx First Period Bonus, and
(ii) if
Xx. Xxxxxxx shall remain employed by the Company immediately prior to the
effective date of the Change in Control, the Employee shall be entitled to
receive the full amount of the Goldman First Period Bonus.
Any Transition
Bonus payable pursuant to this Section 3.4(c) shall be payable within seven (7)
calendar days of the effective date of the Change in Control. If Xx. Xxxxxxxxx
or Xx. Xxxxxxx are not employed by the Company immediately prior to the Change
in Control, then Employee shall have no further right to receive the applicable
Transition Bonuses.
The foregoing
provisions of this Section 3.4(c) shall only be applicable to a Change in
Control occurring on or before May 4, 2010. In the event the Change in Control
shall occur at any subsequent time during the Employment Period, the Employee’s
right to receive any Transition Bonus shall remain subject to the complete
discretion of the Board and the Compensation Committee, taking into
consideration such factors as they may deem relevant.
3.5 Employee
Benefits.
(a) Incentive, Savings and
Retirement Plans. During the Employment Period and at the
discretion of the Board, the Employee shall be entitled to participate in all
incentive, stock option, savings and retirement plans, practices, policies and
programs generally available to other executive officers of the
Company.
(b) Welfare Benefit
Plans. During the Employment Period, the Employee and/or the Employee’s
family, as the case may be, shall be eligible to participate in and shall
receive all benefits under welfare benefit plans, practices, policies and
programs
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provided by the
Company (including, without limitation, medical, prescription, dental,
disability, employee life, group life, and accidental death insurance plans and
programs) to the extent generally available to other executive officers of the
Company.
(c) Expenses. During
the Employment Period, the Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Employee in performing
the Employee’s duties and responsibilities hereunder in accordance with the
policies, practices and procedures of the Company as in effect for its executive
officers from time to time.
4.1 Death. The Employee’s
employment shall terminate automatically upon the Employee’s death during the
Employment Period.
4.2 Disability. If
the Company determines in good faith that a Disability of the Employee has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), the Company may give to the Employee written notice of its
intention to terminate the Employee’s employment. In such event, the Employee’s
employment with the Company shall terminate effective thirty (30) days after
receipt of such notice by the Employee (the “Disability Effective Date”),
provided that within the thirty (30) day period after such receipt, the Employee
shall not have returned to full-time performance of the Employee’s duties. For
purposes of this Agreement, “Disability” shall mean and be deemed to have
occurred if (i) the Employee is receiving benefits under the Company’s
long-term disability plan, or (ii) in the absence of the Employee’s receipt
of such benefits, the Employee has been unable to perform the essential
functions of his position, despite any reasonable accommodation required by law,
by reason of illness or injury for an aggregate of 180 days within any given
period of 360 consecutive days.
4.3 Termination by the
Company. The
Company may terminate the Employee’s employment during the Employment Period for
Cause. For purposes of this Agreement, “Cause” shall
mean:
(a) the willful and
continued failure of the Employee to perform substantially the Employee’s duties
and obligations hereunder (other than any such failure resulting from bodily
injury or disease or any other incapacity due to physical or mental illness),
after a written demand for substantial performance is delivered to the Employee
by the Chief Executive Officer or the Board which specifically identifies the
manner in which the Chief Executive Officer or the Board believes that the
Employee has not substantially performed the Employee’s duties;
(b) Employee’s
conviction by a court of competent jurisdiction, or entry of a plea of guilty or
nolo contendere, to a
misdemeanor involving moral turpitude or a felony;
(c) fraud, theft,
embezzlement or similar misappropriation of funds or property of the Company or
its affiliated companies; or
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(d) the willful
engaging by the Employee in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company and/or its affiliated
companies, monetarily or otherwise.
For purposes of
this provision, no act, or failure to act, on the part of the Employee shall be
considered “willful” unless it is done, or omitted to be done, by the Employee
in bad faith or without reasonable belief that the Employee’s action or omission
was in the best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or upon the
instructions of the Chief Executive Officer or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be
done, by the Employee in good faith and in the best interests of the Company and
its affiliated companies.
4.4 Termination by
Employee. The Employee may terminate his employment during the
Employment Period for (i) Good Reason, or (ii) for any other reason,
in the sole discretion of the Employee, upon 30 days’ advance written notice to
the Company.
For purposes of
this Agreement, “Good Reason” shall mean, without Employee’s written consent,
any one of the following:
(a) any failure by the
Company to comply with any of the provisions of Section 3 of this
Agreement, other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Employee;
(b) any requirement for
the Employee to be based at any office or location other than as provided in
Section 2.4;
(c) any purported
termination by the Company of the Employee’s employment otherwise than as
expressly permitted by this Agreement; or
(d) any failure by the
Company to comply with and satisfy Section 10.3 of this
Agreement.
4.5 Notice of
Termination. Any termination of the Employee’s employment hereunder by
the Company or the Employee (other than a termination pursuant to
Section 4.1) shall be communicated by a Notice of Termination to the other
party hereto. For purposes of this Agreement, a “Notice of Termination” shall
mean a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) in the case of a termination
for Disability, Cause or Good Reason, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Employee’s
employment under the provision so indicated, and (iii) specifies the Date
of Termination (as herein defined); provided, however, that notwithstanding any
provision in this Agreement to the contrary, a Notice of Termination given in
connection with a termination for Good Reason shall be given by the Employee
within a reasonable period of time, not to exceed 30 days, following the
occurrence of the event giving rise to such right of termination. The
failure by the Employee or the Company to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Disability, Cause or
Good Reason shall not waive any right of the Employee or the Company hereunder
or
8
preclude the
Employee or the Company from asserting such fact or circumstance in enforcing
the Employee’s or the Company’s rights hereunder.
4.6 Date of
Termination. For purposes of this Agreement, the “Date of
Termination” shall mean the effective date of the termination of the Employee’s
employment hereunder, which date shall be:
(a) if the Employee’s
employment is terminated as a result of the Employee’s death, the date of the
Employee’s death;
(b) if the Employee’s
employment is terminated because of the Employee’s Disability, the Disability
Effective Date;
(c) if the Employee’s
employment is terminated by the Company for Cause, or by the Employee for Good
Reason, the date on which the Notice of Termination is given, or any later date
specified therein, as the case may be;
(d) if the Employee’s
employment is terminated as a result of the expiration of the Employment Period
pursuant to Section 1.2, the date on which the Employment Period ends;
and
(e) if the Employee’s
employment is terminated for any other reason, the date specified in the Notice
of Termination, which date shall in no event be earlier than the date such
notice is given.
(a) Subject to the
provisions of Section 5.1(b) and Section 5.3 below, if, during the
Employment Period, the Employee’s Separation from Service (as defined in
Section 5.4(a) below) shall occur (1) by reason of the Employee’s
termination of the Employee’s employment hereunder for Good Reason, (2) by
reason of the Employee’s death, or (3) by reason of the Company’s
termination of the Employee’s employment hereunder as a result of the Employee’s
Disability or other than for Cause,
(i) the Company shall
continue to pay to the Employee, his estate or heirs when due under the
Company’s normal payroll practices the Employee’s Base Salary through the end of
the Employment Period;
(ii) the Company shall
pay to the Employee, his estate or heirs an amount equal to any Compressco IPO
Bonus that would have been payable to the Employee pursuant to and in accordance
with the provisions of Section 3.3 above as if the Employee’s employment
hereunder had not been terminated;
(iii) the Company shall
pay to the Employee, his estate or heirs an amount equal to any Transition Bonus
that would have been payable to the
9
Employee pursuant
to and in accordance with the provisions of Section 3.4 above be as if the
Employee’s employment hereunder had not been terminated;
(iv) the Employee or his
heirs shall continue to be eligible to participate in any welfare benefit plans
contemplated by Section 3.5 above pursuant to the terms and conditions
thereof or pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”); and
(v) to the extent not
previously paid, the Company shall timely pay to the Employee, his estate or
heirs when due (and in no event later than 30 days following the Employee’s
Separation Date) any business expenses incurred but not reimbursed through the
Separation Date, in accordance with the Company’s policies, practices and
procedures (the amount being described in this Section 5.1(a)(v) being
referred to as the “Accrued Obligations”).
(b) If at any time
after termination of the Employee’s employment during the Employment Period and
otherwise during the Noncompete Period (as herein defined) the Employee breaches
any of the provisions of Sections 7, 8, or 9 hereof and the Employee fails
to cure, if possible, such breach within thirty (30) days after the Company has
given written notice of such breach, the Company will no longer be obligated to
make the payments contemplated by this Section 5.1.
(a) If the Employee’s
Separation from Service occurs during the Employment Period by reason of the
Company’s termination of Employee’s employment hereunder for Cause, this
Agreement shall terminate without further obligations to the Employee hereunder
other than the obligation to pay the Employee’s Base Salary through the
Employee’s Separation Date and the timely payment or provision of deferred
compensation and other employee benefits if and when otherwise due.
(b) If the Employee’s
Separation from Service occurs during the Employment Period by reason of the
Employee’s voluntary termination of his employment hereunder, excluding a
termination of such employment by the Employee for Good Reason, this Agreement
shall terminate without further obligations to the Employee hereunder other than
for (i) the payment of the Employee’s Base Salary through the Employee’s
Separation Date to the extent not theretofore paid, (ii) the payment of the
Accrued Obligations (which, subject to the provisions of Section 5.3 of
this Agreement, shall be paid to the Employee in a lump sum in cash within 30
days after the Employee’s Separation Date), and (iii) the timely payment or
provision of deferred compensation and other employee benefits if and when
otherwise due.
5.3 Payment Delay for Specified
Employee. Any provision of this Agreement to the contrary
notwithstanding, if the Employee is a Specified Employee (as herein defined) on
the Employee’s Separation Date, then any payment or benefit to be paid,
transferred or provided to the Employee pursuant to the provisions of this
Agreement that would be subject to the tax imposed by Section 409A if paid,
transferred or provided at the time otherwise specified in this
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Agreement shall be
delayed and thereafter paid, transferred or provided on the first business day
that is six (6) months after the Employee’s Separation Date (or if earlier,
within thirty (30) days after the date of the Employee’s death following the
Employee’s Separation from Service) to the extent necessary for such payment or
benefit to avoid being subject to the tax imposed by Section 409A of the
Code.
5.4 Certain
Definitions.
(a) Separation from
Service. For purposes of this Agreement, “Separation from Service” shall
mean the Employee’s separation from service (within the meaning of Section 409A
of the Code and the regulations and other guidance promulgated thereunder) with
the group of employers that includes the Company and each affiliated company.
For this purpose, with respect to services as an employee, the Employee’s
Separation from Service shall occur on the date as of which the Employee and the
Company reasonably anticipate that no further services will be performed after
such date or that the level of bona fide services the Employee will perform
after such date (in any capacity, including as an employee or an independent
contractor) will permanently decrease to no more than 20% of the average level
of bona fide services performed (in any capacity, including as an employee or an
independent contractor) over the immediately preceding 36-month period (or the
full period of services to the Company if the Employee has been providing
services to the Company less than 36 months).
(b) Specified Employee.
For purposes of this Agreement, “Specified Employee” shall mean a specified
employee within the meaning of Section 409A(a)(2) of the Code and the
regulations and other guidance promulgated thereunder.
(c) Separation Date. For
purposes of this Agreement, “Separation Date” shall mean the date on which the
Employee’s Separation from Service occurs.
Employee
acknowledges that during the course of his employment with the Company since
1993 and in his services as a director of the Company since 1984, Employee has
been involved, and he will continue to be involved, in the development of the
Confidential Information (as herein defined) of the Company and its affiliated
companies, and he has had access, and will continue to have access, to
Confidential Information relating to the business and affairs of the Company and
its affiliated companies. “Confidential Information” means and
includes all confidential and/or proprietary information, trade secrets and
“know-how” and compilations of information of any kind, type or nature (tangible
and intangible, written or oral, and including information contained, stored or
transmitted through any electronic medium), whether owned by the Company or its
affiliated companies, disclosed to the Company or its affiliated companies in
confidence by third parties or licensed from any third parties, which, at any
time during Employee’s employment or service as a director of the Company, is
developed, designed or discovered or otherwise acquired or learned by Employee
and which relates to the Company or its affiliated companies, partners,
business, services, products, processes, properties or assets, customers,
clients, suppliers, vendors or markets or such third
parties. Confidential Information includes, by way of example and
without limitation, the following: all patents,
11
inventions,
processes and formulae including any proprietary information regarding existing
and proposed products and services; information regarding existing and potential
customers, employees, contractors, and the industry not generally known to the
public; strategies, books, records and documents; the names of and other
information concerning customers, investors, and business affiliates such as
contact name, service or product provided, pricing for that customer, type and
amount of products and services used, credit and financial data, and/or other
information relating to the relationship with that customer; plans and
strategies for expansion or acquisition; budgets, financial and sales data,
pricing and costing data; sources of capacity and sources of supply; contracts
benefiting or obligating the Company or its affiliated companies; bids or
proposals submitted to or by any third parties; organizational structure;
personnel information, including salaries and responsibilities of personnel;
payment amounts or rates paid to consultants or other service providers; and
other confidential or proprietary information.
7. Nondisclosure.
Employee
acknowledges and agrees that the Company and its affiliated companies have put
in place certain policies and practices to safeguard such Confidential
Information. Employee further acknowledges and agrees that such
Confidential Information constitutes a valuable, special and unique asset used
by the Company and its affiliated companies in their businesses to obtain a
competitive advantage over their competitors and was and is developed or
acquired by the Company and its affiliated companies at considerable time and
expense and is intended to be used solely for the benefit of the Company and its
affiliated companies. Employee also acknowledges and agrees that
except for the Employee’s previous agreements to maintain the confidentiality of
such Confidential Information as set forth in that certain Agreement dated
February 26, 1993 between the Company and the Employee (the “Prior
Agreement”) and the Employee’s agreements contained in this Agreement, the
Company would not impart or provide access to such Confidential Information to
Employee. Accordingly, Employee agrees that during Employee’s
lifetime, both during and after the term of Employee’s employment with the
Company, unless authorized by the Board in writing, Employee will (i) hold all
Confidential Information in strict confidence and will not, directly or
indirectly, disclose, make available, discuss, transmit, publish or use such
Confidential Information other than for the Company’s benefit and/or the benefit
of its affiliated companies and (ii) not, directly or indirectly, disclose, use,
cause, facilitate or allow any third party to use such Confidential Information
in any way, except as may be (A) authorized by the Company’s Chief
Executive Officer in writing, or (B) required by law or applicable legal
process. In the event Employee becomes legally compelled to disclose
any Confidential Information, Employee will provide the Company with prompt
written notice so that the Company may seek a protective order or other
appropriate remedy with respect to such disclosure. Employee further
acknowledges and agrees that the Company’s conduct in providing Employee with
Confidential Information in exchange for the Employee’s nondisclosure agreement
gives rise to the Company’s interest in restraining Employee from competing
against the Company as set forth in Section 8 and Section 9 hereof,
and that Employee’s agreement to those provisions is designed to enforce
Employee’s nondisclosure agreement.
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8. Noncompetition.
8.1 Employee
acknowledges and agrees that his training, work and experience with the Company
and its affiliated companies will enhance his value to competitors, and that the
nature of the Confidential Information to which Employee has access will make it
difficult, if not impossible for Employee to work for any person or entity that
competes with the business of the Company and its affiliated companies without
disclosing or utilizing the Confidential Information to which Employee has
access during the course of Employee’s employment or term as a director of the
Company. Employee further acknowledges that the Company and its
affiliated companies are principally engaged in the business as described in
Section 8.2 below and that the Company and its affiliated companies provide
products and services to customers throughout the United States of America and
in international markets. Employee further acknowledges and agrees
that the Company’s agreement to provide Employee with access to its Confidential
Information is ancillary to and contingent upon Employee’s agreement that
Employee will not, unless authorized by the Board in writing, during the term of
his employment by the Company and for a period of three years immediately
following the Employee’s Separation Date (collectively, the “Noncompete
Period”), directly or indirectly:
(a) carry on, initiate
or have any ownership interest in any business that services, manufactures or
distributes products or services similar to those of the Company or its
affiliated companies or that otherwise competes with the Company or its
affiliated companies in any geographic area or market where the Company or any
of its affiliated companies are conducting business as of the Separation Date or
have conducted business during the previous twelve (12) months, provided that
this Section 8.1(a) shall not apply to the ownership by Employee of less
than 5% of the outstanding shares of a publicly-held entity that has shares
listed for trading on a securities exchange registered with the SEC or through
the automated quotation system of a registered securities
association;
(b) become employed by,
derive benefit from or otherwise provide services for compensation (as a
consultant, agent or otherwise) or divert the Company’s business to any person
or entity that competes with the business of the Company in any geographic area
or market where the Company or any of its affiliated companies are conducting
business as of the Separation Date or have conducted business during the
previous twelve (12) months; or
(c) contact, solicit,
or divert, for the purpose of attempting to enter into a business relationship
related to the manufacture, distribution or servicing of products or services
manufactured, distributed, or provided by Company or its affiliated
companies, successors or assigns,
with any customer with whom the Company has had a contractual or business
relationship during the two-year period prior to the Separation
Date.
8.2 The Company,
together with its affiliated companies, is an oil and gas services company with
an integrated calcium chloride and brominated products manufacturing operation
that supplies feedstocks to the energy markets, as well as other markets and the
business of the Company and it affiliated companies is conducted throughout the
United States and in international markets and includes, without limitation, the
following:
13
(a) the manufacture and
marketing of clear brine fluids, additives and other associated products and
services (including without limitation filtration and wellbore cleanup
services), for the oil and gas industry for use in well drilling, completion and
workover operations, as well as the marketing of certain clear brine fluids and
dry chemical products to a variety of domestic and international markets outside
the energy industry;
(b) providing services
required for the abandonment of depleted oil and gas xxxxx and the
decommissioning of platforms, pipelines and other associated equipment and
providing electric wireline, engineering, diving, workover, and drilling
services;
(c) producing oil and
gas from properties acquired by the Company and its affiliated companies,
including conducting development and exploitation operations on its oil and gas
properties; and
(d) providing
production testing equipment, technology or services, wellhead compression
equipment, technology or services, or equipment, technology or services required
for the separation and recycling of oily residuals generated from petroleum
refining operations.
8.3 Employee
acknowledges and agrees that the scope of each of the agreements and promises
contained in this Section 8 are reasonable as
to time, area and scope of activity restrained and are necessary to protect
Company’s legitimate business interests.
8.4 Notwithstanding the
foregoing, Employee shall be permitted during the Noncompete Period to continue
to own and manage his oil and gas interests, (none of which are
located anywhere in the inland waters of or offshore in the Gulf of Mexico or in
East Baton Rouge Parish, Louisiana) and invest in, acquire and/or manage
additional oil and gas interests; provided, however, that the Employee may not,
either directly or indirectly, invest in, acquire and/or manage additional oil
and gas interests at any time during the Employment Period without the prior
approval of the Board; provided, that the foregoing limitation shall not apply
to (i) interests in oil and gas properties located anywhere other than (A) in
the inland waters of or offshore in the Gulf of Mexico or (B) in East Baton
Rouge Parish, Louisiana, or (ii) the ownership by Employee of less than 5% of
the outstanding shares of a publicly-held entity that has shares listed for
trading on a securities exchange registered with the SEC or through the
automated quotation system of a registered securities association.
9. Non-Solicitation.
During the
Noncompetition Period, the Employee will not directly or indirectly (i) induce
or attempt to induce any employee of Company or its affiliated companies,
successors, or assigns to terminate that employees’ employment with Company or
its affiliated companies, successors, or assigns; (ii) induce or attempt to
induce any consultant or independent contractor doing business with or retained
by Company or its affiliated companies, successors, or assigns to terminate
their consultancy or contractual relationship with Company or its affiliated
companies, successors, or assigns; (iii) induce or attempt to induce any
customer, supplier, vendor or any person to cease doing business with Company or
its affiliated companies, successors, or assigns;
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and/or (iv) either
on his behalf or on behalf of any person or entity that competes with the
business of the Company, employ or retain, or attempt to employ or retain, any
employee, consultant or independent contractor of the Company or its affiliated
companies, successors, or assigns.
10. Successors.
10.1 This Agreement is
personal to the Employee and shall not be assignable by the Employee. This
Agreement shall inure to the benefit of and be enforceable by the Employee’s
legal representatives.
10.2 This Agreement
shall inure to the benefit of and be binding upon the Company and its successors
and assigns.
10.3 The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly 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 taken place. As used in this Agreement,
“Company” shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
11. Miscellaneous.
11.1 Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO PRINCIPLES
OF CONFLICT OF LAWS. WITH RESPECT TO ANY SUIT, ACTION, OR OTHER
PROCEEDING ARISING FROM OR RELATING TO THIS AGREEMENT, THE COMPANY AND EMPLOYEE
HEREBY IRREVOCABLY AGREE TO THE EXCLUSIVE PERSONAL JURISDICTION AND VENUE OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS AND ANY TEXAS
STATE COURT WITHIN XXXXXXXXXX COUNTY, TEXAS.
11.2 Amendment. This
Agreement may not be amended or modified other than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
11.3 Waiver. Any
term or condition of this Agreement may be waived at any time by the party
hereto which is entitled to have the benefit thereof, but such waiver shall only
be effective if evidenced by a writing signed by such party, and a waiver on one
occasion shall not be deemed to be a waiver of the same or any other type of
breach on a future occasion. No failure or delay by a party hereto in exercising
any right or power hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right or power.
11.4 Notices. All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
15
|
If to
Employee:
|
Xxxxxxxx X. Xxxxxx |
| c/o TETRA Technologies, Inc. | |
| 00000 Xxxxxxxxxx 00 Xxxxx | |
| Xxx Xxxxxxxxx, XX 00000 | |
|
If to
Company:
|
TETRA Technologies, Inc. |
| 00000 Xxxxxxxxxx 00 Xxxxx | |
| Xxx Xxxxxxxxx, XX 00000 | |
| Attention: President | |
|
With a copy
to:
|
TETRA Technologies, Inc. |
| 00000 Xxxxxxxxxx 00 Xxxxx | |
| Xxx Xxxxxxxxx, XX 00000 | |
| Attention: General Counsel |
or to such other
address as either party shall have furnished to the other in writing in
accordance herewith. Notices and communications shall be effective when actually
received by the addressee.
11.5 Severability. Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein. The parties agree that a court of competent jurisdiction
making a determination of the invalidity or unenforceability of any term or
provision of this Agreement including, without limitation, the length of time,
type of activity, geographic area or other restrictions set forth in
Sections 6, 7, 8 or 9 of this Agreement, shall have the power to reduce the
scope, duration or area of any such term or provision, to delete specific words
or phrases from any such term or provision, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as so
modified.
11.6 Injunctive
Relief. In recognition of the fact that a breach by the
Employee of any of the provisions of Sections 6, 7, 8 or 9 of this
Agreement will cause irreparable damage to the Company and/or its affiliated
companies for which monetary damages alone will not constitute an adequate
remedy, the Company shall be entitled as a matter of right (without being
required to prove damages or furnish any bond or other security) to obtain a
restraining order, an injunction, an order of specific performance, or other
equitable or extraordinary relief from any court of competent jurisdiction
restraining any further violation of such provisions by the Employee or
requiring the Employee to perform the Employee’s obligations
hereunder. Such right to equitable or extraordinary relief shall not
be exclusive but shall be in addition to all other rights and remedies to which
the Company or any of its affiliated companies may be entitled at law or in
equity, including without limitation the right to recover monetary damages for
the breach by the Employee of any of the provisions of this
Agreement.
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11.7 Withholding
Taxes. The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
11.8 Entire
Agreement. This Agreement constitutes the entire agreement
between the parties hereto concerning the subject matter hereof and, except for
the covenants contained in the Prior Agreement which are intended to be carried
forward by the covenants contained in Sections 6, 7, 8 and 9 of this
Agreement, this Agreement shall supersede any other prior agreement or
understanding, both written and oral, between the parties with respect to such
subject matter.
11.9 Captions. The
captions herein are inserted for convenience of reference only, do not
constitute a part of this Agreement, and shall not affect in any manner the
meaning or interpretation of this Agreement.
[SIGNATURE PAGE TO
FOLLOW]
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THE
COMPANY:
TETRA TECHNOLOGIES,
INC.
By:/s/Xxxxxx X.
Xxxxxxxxx
Xxxxxx X.
Xxxxxxxxx, President and
Chief Executive
Officer
EMPLOYEE:
/s/Xxxxxxxx X.
Xxxxxx
Xxxxxxxx X.
Xxxxxx
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