EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of March 17, 1996, between DI
INDUSTRIES, INC., a Texas corporation (the "Company"), and XXXX X. XXX (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 March 17, 1997, and
expiring at the end of the day on March 16, 1998 (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 - Human Resources of the Company and shall also 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 to the Executive an
annual salary at a rate of not less than one hundred thirty thousand dollars
($130,000) 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 a 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 five-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 March 16, 1998, and then again on each
subsequent anniversary of the date of grant until the fifth anniversary, at
which time the options shall be vested in full.
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.
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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 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
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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, 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
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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 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 of 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
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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 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 for 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 a 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
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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 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 - Human Resources 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
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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 for such
termination with 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 purposes 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 delivering 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 decision 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
advancement 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.
6.8 The right to indemnification or reimbursement or
advancement of expenses shall be interpreted on the basis of the applicable law
in effect at the time of the occurrence of the event or events giving rise to
the applicable Proceeding.
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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: President
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:
Xxxx X. Xxx
00000 Xxxxxxxx Xxxxxx Xxxx
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/ XXXX X. XXX
Xxxx X. Xxx
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