EXHIBIT 10.14
EMPLOYMENT CONTRACT
THIS EMPLOYMENT CONTRACT, ("Agreement") is made and entered into as of the
1st day of December, 1997, by and between UNITED OILFIELD SERVICES, INC., a
Texas Corporation, whose address is 000 Xxxxx Xxxxx Xxxxxxxx, Xxxxx 000, XX-000,
Corpus Christi, Texas 78477, hereinafter referred to in this Agreement as the
"Employer," and XXXXX X. XXXXXX, whose address is 000 Xxxxxx Xxxx 00, Xxxxxxxx,
Xxxxx 00000, hereinafter referred to in this Agreement as "the Employee."
ARTICLE 1.
TERM OF EMPLOYMENT
1.01. The Employer employs the Employee, and the Employee accepts
employment with the Employer, for the three-year period from December 1, 1997,
through November 30, 2000, and thereafter until terminated by either party upon
ninety (90) days' advance written notice to the other party (herein referred to
as the "term of employment"). However, the term of employment may be terminated
earlier as provided in Article 5.
ARTICLE 2.
DUTIES OF EMPLOYEE
BASIC DUTIES
2.01. The Employee is hired as the President of the Employer. The Employee
shall perform all services, acts, or things necessary and advisable to manage
and conduct the business of the Employer, subject to the policies set by the
board of directors from time-to-time.
The Employee agrees to devote substantially all of his entire productive
time, ability and attention to the business of the Employer during the term of
employment. The services of the Employee shall be performed at such locations
and at such times as shall be directed by the board of directors from
time-to-time. The Employee shall to the best of his ability make every effort to
promote the business of the Employer and assist in the collection of all sums
due from customers of the Employer.
EMPLOYER TO PROVIDE AUTOMOBILE OR AUTOMOBILE ALLOWANCE
2.02. The Employer agrees to provide the Employee use of a properly
registered automobile selected by the Employer for all of the Employee's
transportation needs required for the performance of the Employee's duties under
this Agreement. The Employer shall also reimburse the Employee for all
reasonable and necessary gasoline, oil and automobile maintenance expenses
incurred by the Employee in the performance of his duties under this Agreement.
ARTICLE 3.
COMPENSATION OF EMPLOYEE
BASIC SALARY
3.01. The Employee shall receive an annual salary of one-hundred-twenty
thousand dollars ($120,000.00) during the term of employment, payable biweekly.
If the Employee voluntarily terminates employment prior to November 30, 2000 or
is terminated pursuant to Article 5 prior to November 30, 2000, or if the
Employee's employment is terminated by either party at any time after November
30, 2000, the Employee's salary and his incentive bonus (as provided under
Section 3.02 hereof) shall be prorated and paid only to the date of termination
of employment.
INCENTIVE BONUS
3.02. The Employee shall receive an annual incentive bonus during the term
of employment equal to a percentage of the net pre-tax profits of the Employer
as shown by audited financial income statements of the Employer prepared in
accordance with generally accepted accounting procedures. Such incentive bonus
shall be determined for each annual period commencing as of December 1 and
ending as of November 30 (the "Contract Year"), with payment to the Employee to
be made on or before the ninetieth (90th) day following the end of each such
annual period. The incentive bonus shall be determined based upon the following
formula:
ANNUAL NET PRE-TAX PROFITS CUMULATIVE PERCENTAGE BONUS
-------------------------- ---------------------------
$500,000 or less 5% of actual amount
over $500,000 plus 7-1/2% on amount over $500,000
(For example, if the Employer's net pre-tax profit for the period from December
1, 1997 through November 30, 1998 is $600,000, then the Employee shall receive
5% of $500,000 or $25,000, plus 7-1/2% of $100,000 or $7,500, for a total
incentive bonus of $32,500 for such year.)
VACATION AND SICK PAY
3.03. After the completion of six (6) months of service in the employ of
the Employer, the Employee shall be entitled to an annual paid vacation of
fifteen (15) business days with full pay. Such vacation shall be taken at any
time selected by the Employee and approved by the Employer. In addition, the
Employee shall be entitled to six (6) days per year as sick leave with pay.
Neither vacation time nor sick leave may be accumulated, and if not used during
the year in which it is granted, it shall be deemed to have been waived by the
Employee.
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HOLIDAYS
3.04. The Employee shall be entitled to a holiday with full pay on New
Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
Christmas Day, and any other day designated by the Employer.
OTHER BENEFITS
3.05. All base compensation provided for in this Agreement shall be
exclusive of any benefits which the board of directors of the Employer may
elect, in its sole and complete discretion, after the date hereof to make
available to the Employee under any bonus plan, profit sharing trust, pension
plan, deferred compensation plan, hospitalization plan, medical or dental
service plans, health insurance plan, or any other employee benefit plan that
may be in effect at any time or from time-to-time during the term of employment
hereof. The Employer agrees that during the term of employment the Employee
shall be afforded the opportunity to participate in any such plan which is
generally available to other employees of the Employer other than any bonus plan
or other plan measured by the income or performance of the Employer.
Participating in any such plans shall be consistent with the Employee's rate of
basic compensation to the extent that compensation is a determinant with respect
to coverage or participation under any such plan; provided, however, that the
Employee's participation shall not be limited by reason of income or basic
compensation if such limitations are not necessary to obtain tax deductions or
are not required by law.
ARTICLE 4.
PROPERTY RIGHTS OF THE PARTIES
INVENTIONS AND PATENTS
4.01. The Employee agrees that he (she) will promptly and completely
inform and disclose to the Employer all inventions, designs, improvements and
discoveries that the Employee may have during the term of employment that
pertain or relate to the business of the Employer or to any experimental work
carried on by the Employer, whether conceived by the Employee alone or with
others and whether or not conceived during regular working hours. All such
inventions, designs, improvements and discoveries shall be the exclusive
property of the Employer. The Employee shall assist the Employer in obtaining
patents on all such inventions, designs, improvements and discoveries deemed
patentable by the Employer.
TRADE SECRETS OF EMPLOYER
4.02. During the term of employment under this Agreement, the Employee
will have access to and become familiar with various trade secrets. The term
"trade secrets" means devices, secret inventions, processes and compilations of
information, records and specifications, that are owned by the Employer and that
are regularly used in the operation of the business of the Employer. The
Employee shall not disclose any trade secrets of the Employer during or at any
time after the term of this Agreement, except as required in the course of his
employment
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under this Agreement. All files, records, documents, drawings, specifications,
equipment and similar items relating to the business of the Employer, whether or
not prepared by the Employee, shall remain the exclusive property of the
Employer and shall not be removed under any circumstances from the premises
where the work of the Employer is being carried on, unless prior written consent
of the Employer has been obtained.
CONFIDENTIAL DATA OF CUSTOMERS OF EMPLOYER
4.03. In the course of performing duties under this Agreement, the
Employee will be handling financial, accounting, statistical and personnel
information concerning customers of the Employer. All such information is
confidential and shall not be disclosed, directly or indirectly, to any person
other than agents of the Employer, either during the term of this Agreement or
any time after such term.
ARTICLE 5.
TERMINATION OF EMPLOYMENT
TERMINATION BY EMPLOYER FOR CAUSE
5.01. The Employer may at its option terminate this Agreement at any time
by giving written notice of termination to the Employee without prejudice to any
other remedy to which the Employer may be entitled either at law, in equity, or
under this Agreement, if the Employee:
(a) Willfully breaches or habitually neglects the duties that the
Employee is required to perform under the terms of this
Agreement;
(b) Willfully violates reasonable and substantial rules governing
employee performance;
(c) Refuses to obey reasonable orders in a manner that amounts to
insubordination;
(d) Commits clearly dishonest acts toward the Employer; or
(e) Engages in acts of disruption or violence such as unprovoked
fighting.
TERMINATION ON GROUNDS OTHER THAN FOR CAUSE
5.02. This Agreement shall terminate immediately on the occurrence of any
one of the following events:
(a) The occurrence of circumstances that make it impossible or
impracticable for the business of the Employer to be continued;
(b) The death of the Employee;
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(c) The loss by the Employee of legal capacity; or
(d) The continued incapacity on the part of the Employee to perform his
duties for a continuous period of one hundred eighty (180) days,
unless waived by the Employer.
COMPENSATION UPON TERMINATION
5.03. If the Employee is terminated by the Employer pursuant to either
Section 5.01 or 5.02 hereof, the Employer shall pay the Employee, within ten
(10) days following such termination, severance pay equal to six (6) months of
the Employee's salary, as provided under Section 3.01 hereof. If the Employee is
terminated by the Employer prior to November 30, 2000 other than pursuant to
either Section 5.01 or 5.02 hereof, the Employer shall pay the Employee, within
ten (10) days following such termination, the salary of the Employee, as
provided under Section 3.01 hereof (less all usual deductions for withholding
taxes, FICA, etc.) for the period from and after the date of termination through
November 30, 2000, and the Employee shall be entitled to no further compensation
of any nature, other than unpaid salary and incentive bonus which accrued prior
to the date of termination.
ARTICLE 6.
REIMBURSEMENT OF EXPENSES INCURRED BY EMPLOYEE
BUSINESS EXPENSES
6.01. The Employee is authorized to incur reasonable business expenses in
the performance of the Employee's duties under this Agreement and in promoting
the business of the Employer, including expenditures for entertainment and
travel. The Employer will reimburse the Employee on a monthly basis for all such
business expenses, provided that the Employee presents to the Employer:
(a) An account book or statement of expense or diary in which the
Employee recorded at or near the time each expenditure was made:
(i) The amount of the expenditure;
(ii) The time, place and type of entertainment and travel or other
expense;
(iii) The business reason for the expenditure and the nature of the
business benefit derived or expected to be derived as a result
of the expenditure;
(iv) The name and any other pertinent information concerning each
person who was entertained, sufficient to comply with Internal
Revenue Service Guidelines as revised from time-to-time;
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(b) Documentary evidence, such as receipts or paid bills, that states
sufficient information to establish the amount, date, place and
essential character of the expenditure, for each expenditure.
No expenditures will be reimbursed pursuant to this Section unless the expense
is verified and approved by the board of directors of Employer.
ARTICLE 7.
EMPLOYEE'S OBLIGATIONS OTHER THAN TO PERFORM SERVICES
NON-PIRACY AND NON-COMPETITION BY EMPLOYEE
7.01. The Employee covenants and agrees that during the term of employment
and for a period of one (1) year (provided, however, that such one (1) year
period of time may be extended to include any period of violation hereof and/or
any period of time may be extended to enforce this covenant) following any
termination of his employment with the Employer, the Employee shall not,
directly or indirectly, within the Employer's sales area, either as principal,
agent, manager, employee, owner, partner (general or limited), stockholder,
director or officer of a corporation, member of an association or otherwise,
solicit the rendering of any services of the nature performed by the Employer as
of the date of termination of Employee's employment with the Employer or sell or
offer to sell any wellhead equipment or other equipment of the nature sold by
the Employer as of the date of termination of the Employee's employment with the
Employer.
For purposes of this Article 7, the term "Conflicting Organization" shall
mean any person or organization which is engaged in or about to become engaged
in, research on or development, marketing, rendering or selling of a
"Conflicting Service" within a one hundred fifty (150) mile radius of each
location in which United has an office or place of business as of the date of
termination of this Agreement. The term "Conflicting Service" shall mean any
service or process of any person or organization other than the Employer, in
existence or under development, which is substantially similar to, resembles or
competes directly with any service, or process rendered by the Employer at the
time of the termination of the Employee's employment hereunder. The Employee
covenants and agrees that during the Employee's employment with the Employer and
for a period of one (1) year (provided, however, that such one (1) year period
may be extended to include any period of violation hereof and/or any period of
time required to enforce this covenant) following any termination of his
employment with the Employer, the Employee shall not engage in the following
activities:
(a) render services, directly or indirectly, to any Conflicting
Organization in connection with the marketing, rendering or selling
of a Conflicting Service; or
(b) render services to or own or participate in the ownership of,
finance or participate in the financing of, manage, operate, join or
control, directly or indirectly, any Conflicting Organization.
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The Employee acknowledges that this Section 7.01 constitutes an
independent covenant and shall be operative regardless of the reasons for
termination of his employment and shall not be affected by performance or
non-performance of any provision of this Agreement by the Employer.
REMEDIES
7.02. It is agreed between the parties hereto that the Employer would be
irreparably damaged by reason of any violation of the provisions of Section 7.01
hereof, and that any remedy at law for a breach of such provisions would be
inadequate. Therefore, in addition to other remedies or relief that may be
available at law to the Employer, the Employer shall be entitled to seek and
obtain injunctive or other equitable relief (including, but not limited to, a
temporary restraining order, a temporary injunction or a permanent injunction)
against Employee, his agents, assigns, or successors for a breach or threatened
breach of such provisions and without the necessity of providing actual monetary
loss. It is expressly understood between the parties that this injunctive or
other equitable relief shall not be the Employer's exclusive remedy for any
breach of this Agreement and the Employer shall be entitled to seek any other
relief or remedy which it may have by contract, statute, law or otherwise for
any breach hereof.
REASONABLENESS OF NON-PIRACY COVENANT AND COVENANT NOT TO COMPETE
7.03. The Employee warrants and represents that:
(a) he is familiar with non-piracy covenants and convents not to
compete;
(b) he has discussed the provisions of the non-piracy covenant and the
covenant not to compete contained herein with his attorney (or has
had the opportunity to discuss such covenants with his attorney and
has elected not to do so) and has concluded that such provisions
(including, without limitation, the right to equitable relief and
the length of time provided for herein) are fair, reasonable and
just under the circumstances;
(c) he is fully aware of the obligations, limitations and liabilities
included in the non-piracy covenant and the covenant not to compete
contained in this Agreement;
(d) the duration of this non-piracy covenant and covenant not to compete
has been agreed upon as a reasonable restriction, giving
consideration to the following factors: (1) The Employee and the
Employer reasonably anticipate that this Agreement, although
terminable in accordance with Article 5 hereof or otherwise, may
continue in effect for sufficient duration to allow the Employee to
attain superior bargaining strength and an ability for unfair
competition with respect to the customers covered hereby; and (2)
the duration of the non-piracy covenant and covenant not to compete
is a reasonably necessary period to allow the Employer to restore
its position of equivalent bargaining strength and fair competition
with respect to those customers covered hereby;
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(e) the failure of the non-piracy covenant to delineate a geographical
territory covered hereby does not constitute an unlimited
geographical limitation, that the non-piracy covenant imposes no
geographical restriction at all, and that the non-piracy
restrictions in the Agreement apply only to customers, and not to
territory.
It is the express intention of the Employee and the Employer to comply with the
provisions of TEX. BUS. & COMM. CODE XXX. xx.xx. 15.50 and 15.51 (Xxxxxx 1990).
EXCLUSIONS FROM NON-COMPETITION PROVISION
7.04. The obligation of the Employee not to compete with the Employer, set
forth in Section 7.01 of this Agreement, shall not prohibit the Employee from
being a member of professional or social organizations or from owning or
purchasing any corporate securities of a Conflicting Organization that are
regularly traded on a recognized stock exchange or over-the-counter market,
provided that the Employee's ownership interest therein does not exceed one
percent (1%) of all issued and outstanding shares of any class of corporate
security thereof.
INDEMNIFICATION
7.05. The Employee shall indemnify and hold harmless Employer from all
liability from loss, damage, or injury to persons or property resulting from the
willful misconduct of the Employee committed in the scope of the Employee's
employment.
ARTICLE 8.
GENERAL PROVISIONS
NOTICES
8.01. Any notices required to be given under this Agreement by either
party to the other may be effected either by personal delivery in writing or by
mail, registered or certified, postage prepaid with return receipt requested.
Mailed notices shall be addressed to the parties at the addresses appearing in
the introductory paragraph of this Agreement. Each party may change that party's
address by written notice in accordance with this paragraph. Notices delivered
personally shall be deemed effective as of actual receipt. Mailed notices shall
be deemed effective as of two (2) days after posting with the United States Mail
Service.
ENTIRETY OF AGREEMENT
8.02. This Agreement supersedes all previous agreements between the
Employee and the Employer, and contains the entire understanding between the
parties with respect to the subject matter specified in this Agreement. Each
party to this Agreement acknowledges that no other agreement, statement, or
promise not contained in this Agreement shall be valid or binding. Any
modification of this Agreement will be effective only if it is in writing signed
by the party to be charged.
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PARTIAL INVALIDITY
8.03. If any provision in this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remaining provisions
shall nevertheless continue in full force without being impaired or invalidated
in any way.
LAW GOVERNING AGREEMENT
8.04. It is the intent of the parties that this Agreement be governed by
and construed in accordance with the laws of the State of Texas.
WAIVER
8.05. The failure of either the Employer or the Employee to insist in one
or more instances upon performance of any of the terms or conditions of this
Agreement shall not be construed as a waiver of future performance required by
such term or condition, and the obligations of either party with respect to the
term or condition shall continue in effect as if no forbearance had occurred. No
covenant or condition of this Agreement may be waived except by the written
consent of the waiving party.
CAPTIONS
8.06. The captions contained in this Agreement are for convenient
reference only and do not affect the meaning of any term or provision.
BINDING EFFECT
8.07. This Agreement shall be binding upon the parties hereto and upon
their successors, heirs, executors and assigns.
TERMINATION OF EXISTING EMPLOYMENT AGREEMENT
8.08. The Employer and the Employee acknowledge that this Agreement shall
supersede and replace in its entirety that certain Employment Agreement dated
May 31, 1994, by and between the Employer and the Employee (the "Original
Agreement"). Upon the execution and delivery of this Agreement, the Original
Agreement shall be deemed to have terminated and shall thereafter have no
further force or effect.
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EXECUTED in multiple originals as of the date first written above.
EMPLOYER:
UNITED OILFIELD SERVICES, INC.
By:/s/XXXXXXX XXXXXXX
Xxxxxxx Xxxxxxx,
Chairman of the Board
EMPLOYEE:
/s/ XXXXX X. XXXXXX
XXXXX X. XXXXXX
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