EXHIBIT 10.16
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made effective as of
February 27, 2002 ("Effective Date") between W-H Energy Services Inc., a Texas
corporation (hereinafter called the "Company" or "W-H") and Xxxxxx X. Xxxx
("Employee").
WHEREAS, the parties hereto desire to enter into a contract to provide
for the employment of Employee by the Company;
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. The Company hereby employs the Employee and the Employee hereby
agrees to serve the Company as Vice President and Intellectual Property Counsel
or in such other capacity as may be mutually agreed. Employee agrees to devote
his full time, energy and ability to his duties hereunder, except for incidental
attention to the management of his personal investments.
2. The employment of the Employee shall continue from the Effective
Date for a period ending in four (4) years and shall be automatically renewed
for an additional four (4) year term expiring on February 27, 2010, unless the
Company notifies Employee in writing on or before December 27, 2005, of the
Company's election not to renew this Agreement, or unless Employee notifies the
Company in writing on or before December 27, 2005, of Employee's election not to
renew this Agreement.
3. The Company shall pay to the Employee during his first two years of
his employment, a salary at the annual rate of $175,000 payable in accordance
with the Company's usual payroll practices plus an automobile allowance.
Employee's annual salary shall be increased to $205,000 at the beginning of his
third year of employment. Employee's salary will also be reviewed every two
years by the W-H Compensation Committee for possible further increases based on
Employee's performance. Employee shall also be entitled to receive incentive
compensation during his term of employment as determined by the W-H Compensation
Committee, and during his first year of employment such incentive compensation
shall not be less than 50% of his base compensation for that first year. W-H
shall furnish Employee with all the fringe benefits made available by W-H to the
executive officers of W-H and its subsidiaries, recognizing that such fringe
benefits may change from time to time.
4. In the event of Employee's death or permanent disability, which
disability in the opinion of a physician selected by the Company renders him
incapable of performing the services contemplated under this Agreement, while in
the employ of the Company, in addition to the other provisions of this
Employment Agreement, the Company shall pay to Employee or the Estate of
Employee, as the case may be, the base compensation which would otherwise be
payable to Employee hereunder for a period of six (6) months after such
permanent disability or death occurs. The Employee
Page 1 of 6
is entitled to obtain a second opinion, at the Company's cost, regarding his
disability. If the physician chosen by the Employee disagrees with the Company
physician, the Parties will obtain the opinion of a physician mutually agreeable
to the first two physicians, whose opinion will decide whether the Employee is
totally disabled and unable to perform under this Employment Agreement.
5. In the event Employee voluntarily terminates his employment
hereunder, Employee shall be entitled to receive only his base salary to the
date of such termination.
6. Except as provided in paragraph 7 hereunder, in the event Employee's
employment hereunder is terminated by the Company, Employee shall be entitled to
receive his base salary only for two (2) years following the effective date of
such termination.
7. In the event of termination of Employee's employment hereunder for
cause, Employee shall be entitled to receive only his base salary to the date of
such termination. Events that shall be deemed as cause for the termination of
this Agreement by the Company shall include the following:
(a) Demonstrable dishonesty by Employee, or misappropriation of
funds or property of the Company by Employee;
(b) Demonstrable willful breach by Employee of his duties
hereunder; or
(c) Conduct on the part of Employee which would be materially
adverse to the interest of the Company.
8. Employee acknowledges that during the term of employment with the
Company, he will be made aware of certain confidential business information,
trade secrets, innovations and inventions, expertise and know-how, customer
information, client confidences, privileged information, and other non-public
information concerning the business of Company and its affiliates ("Confidential
Information"). Employee further acknowledges that, as a licensed attorney,
certain obligations of confidentiality and loyalty to Company are placed upon
him by law, including (but not limited to) applicable rules of professional
responsibility and privilege.
(a) Employee hereby agrees that, for the term of employment and
thereafter, he will maintain the confidentiality of
Confidential Information according to the nondisclosure
obligations and duties placed on Employee by law. Employee
further agrees that, for the term of employment and
thereafter, he will not make personal or non-Company use of,
any Confidential Information. These obligations of
nondisclosure shall not apply to information which: (a) is in
the public domain or is generally known or available, or
hereafter becomes part of the public domain or is generally
known or available through no violation of this Agreement; (b)
is henceforth lawfully acquired by Employee from any third
party not bound,
Page 2 of 6
to the actual knowledge of Employee, by an obligation of
confidence to the Company; (c) whose protected status as
privileged information is disclosed by the Company, or persons
acting for the Company, such that any applicable privileges
are waived; or (d) is required, pursuant to judicial action or
governmental regulations or other requirements, to be
disclosed by Employee, provided that Employee has notified
Company of such imminent disclosure and cooperates with
Company in the event that Company elects to contest and avoid
such disclosure.
(b) Upon termination or expiration of this Agreement, Employee
represents and warrants that, except with the permission of
the Company, he will return to the Company, and will not keep
in his possession, all documents, drawings, computer files or
any other information in tangible form, whether confidential
or not, concerning the business or operations of the Company
or its affiliated companies.
(c) Upon termination of this Agreement, Employee represents and
warrants that except as required by judicial, legislative or
administrative process or governmental rule or regulation, he
will refrain from making public or private comments about or
relating to Company or its employees or affiliates, where such
comments are derogatory or defamatory, or may tend to injure
in business, public or private affairs, regardless of whether
the same relate to matters of fact or to matters of personal
opinion.
9. Nothing in this Agreement shall be construed to prevent or restrain
Employee from practicing law upon termination or expiration of this Agreement
for any reason; provided, however, that Employee shall, for the term of
employment and thereafter, avoid conflicts of interest with the Company and its
affiliates according to the obligations and duties of loyalty to Company placed
upon Employee by law. Employee shall further promptly disclose to a fellow
officer of the Company any facts or circumstances which might involve or cause
an actual conflict of interest, or the appearance of one.
10. With respect to this Section 10, "Company Works" shall mean any and
all inventions, discoveries, innovations, improvements, software, designs, mask
works, works of authorship or other creations of any kind ("collectively
"Creations") conceived, identified, discovered or created by Employee during the
term of employment (whether or not "on the job" or "on Company time"), in whole
or in part, and whether alone or in collaboration with any other person(s)
inside or outside the Company, where such Creations are in any way, directly or
indirectly, related to the business of Company or any of its affiliates. Company
Works shall further include, without limitation: (1) all intangible and
intellectual property rights embodied therein; (2) all rights of privacy,
performance rights, rights of publicity, rights of attribution and integrity,
and other moral rights embodied therein or associated therewith; (3) all rights
of priority thereto; and (4) all rights to apply for statutory protection
thereof and to xxx for relief of infringement thereof.
Page 3 of 6
(a) Employee acknowledges that the conception, identification,
discovery or creation of Company Works from time to time is
within the scope of his duties of employment with the Company.
(b) Employee agrees that sole and exclusive ownership in Company
Works, insofar as Employee's entire interest is concerned,
shall vest automatically in Company from the moment of
conception, identification, discovery or creation thereof. In
order to fully perfect Company's exclusive ownership in
Company Works, Employee hereby assigns all of Employee's
right, title and interest in Company Works to Company.
Employee shall at all times assist Company, at Company's
expense, in making, executing and delivering all application
papers, assignments or instruments, and shall perform or cause
to be performed such other lawful acts, as Company may deem
necessary or desirable (1) to evidence Company's full and
exclusive title as set forth in this Section 10, and (2) to
file for, prosecute, maintain, defend and enforce patents and
other statutory rights and registrations on Company Works
throughout the world.
(c) Employee agrees that all copyrightable works included in
Company Works shall be deemed to be "Works made for hire."
(d) Employee shall immediately disclose to Company all Company
Works upon first conception, identification, discovery or
creation thereof. Such disclosure shall be on a confidential
basis according to procedures designated by Company.
(e) Employee shall not henceforth challenge, oppose or otherwise
contest the validity or good standing of any item of Company
Works, and, in the case of patents or patent applications
included in Company Works, will not (1) oppose or seek
re-examination of such patents or patent applications, or (2)
file prior art against such patents or patent applications
under the provisions Chapters 30 and 31 of Title 35, United
States Code, or under analogous laws in other jurisdictions.
11. With regard to Sections 8 through 10:
(a) Employee's obligations in Sections 8 through 10 shall be
deemed cumulative of any other related obligations between
Employee and Company that may co-exist as of the Effective
Date.
(b) If Employee breaches, or threatens to commit a breach of, any
of the provisions of Sections 8 through 10, the Company shall
have the following rights and remedies, each of which rights
and remedies shall be in addition to, and not in lieu of, any
other rights and remedies available to the Company at law or
in equity:
Page 4 of 6
(i) Specific Performance. The right and remedy to have
the provisions of Sections 8 through 10 specifically
enforced by any court having jurisdiction, and
Employee hereby consents that temporary or permanent
injunctive relief may be granted, all without the
need to post a bond or any other security or to prove
actual damage or that money damages would not provide
an adequate remedy, it being acknowledged and agreed
that any such breach or threatened breach will in all
likelihood cause immediate and irreparable injury to
the Company for which monetary damages would not
provide an adequate remedy; and
(ii) Accounting and Indemnification. The right and remedy
to require Employee (1) to account for and pay over
to the Company all compensation, profits, monies,
accruals, increments or other benefits derived or
received by Employee or any associated party deriving
such benefits as a result of any such breach of the
provisions of Sections 8 through 10; and (2) to
indemnify the Company against any other losses,
damages, costs and expenses, including actual
attorneys fees and court costs, which may be incurred
by it and which result from or arise out of or relate
to any such breach or threatened breach of the
provisions of Sections 8 through 10.
12. During the term of this Agreement, Employee shall be entitled to
reimbursement of all reasonable out-of-pocket expenses incurred on behalf of the
Company by reason of his employment.
13. The rights and benefits of Employee under this Agreement being
personal to Employee, this Agreement may not be assigned in whole or in part by
Employee without the prior written consent of Company. Company, however, may
assign this Agreement, in which case this Agreement shall be binding upon any
such assigns or successors of Company.
14. This Agreement shall be deemed to have been executed in, governed
by and construed in accordance with the laws of the State of Texas.
15. If any term, provision, covenant, or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. The provisions of Sections 6, 8 through 11,
and 13 through 15 shall survive termination or expiration of this Agreement.
16. This Agreement constitutes the entire agreement between the Company
and Employee regarding the terms and conditions of Employee's employment with
the Company from and after the date hereof. This Agreement supersedes any and
all previous oral or written communications, representations, understandings or
agreements between the Company and Employee (collectively, "Prior Agreements").
Page 5 of 6
Employee acknowledges and agrees that by executing this Agreement and in
consideration of the benefits herein, Employee hereby waives and releases any
and all claims to any severance or other benefits that Employee may have had
under the Prior Agreements, if any.
WITNESS THE EXECUTION HEREOF, effective as of the Effective Date.
W-H Energy Services, Inc. Employee:
By: /s/ XXXXXXX X. XXXXX, XX. /s/ XXXXXX X. XXXX
------------------------------- ---------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx. Name: Xxxxxx X. Xxxx, individually
Title: Chairman
Date of signature: February 27, 2002 Date of signature: February 27, 2002
Page 6 of 6
