March 1, 2006 Mr. Denis J. Fitzpatrick Kingwood, Texas 77345 Dear Denis:
March
1,
2006
Xx.
Xxxxx
X. Xxxxxxxxxxx
0000
Xxxxxxxx Xxxx Xxxxx
Kingwood,
Texas 77345
Dear
Xxxxx:
As
you
are aware, my associate, Mr. Xxxxx Xxxxxxxxxx, and I (the “Exchanging
Shareholders”), have entered into an agreement with CRSI Group, Inc., a
publicly-traded Florida corporation (“CRSI”), to merge our companies, Scientific
Industrial Firm DANK LLC, Central Geophysical Expedition LLC, and A-Fidan,
LLC
(collectively the “Operating Companies”), into CRSI (the “Merger”). The Merger
is expected to close on May 31, 2006 (the “Closing Date”). Prior to the Closing
Date, the Exchanging Shareholders will organize a company under the laws of
the
Netherlands (the “BV-Corp”) which, prior to the Closing Date, will own 95% of
the equity in the Operating Companies. On the Closing Date, the Exchanging
Shareholders shall receive, in direct proportion to their relative interests
in
the BV-Corp, the majority of the issued and outstanding common stock of CRSI
(the “Merger Shares”) and will become the majority shareholders of CRSI. I will
become XXXX’s Chairman and Chief Executive Officer. As soon as practicable on or
after the Closing Date, we plan to change the name of CRSI to Caspian
International Oil Corporation (“CIOC” or the “Company”).
I
have
attached a form of a letter (“Attachment A”) that details the terms of your
employment with XXXX as Executive Vice President, Chief Financial Officer,
and
Corporate Secretary. We will cause CRSI to enter into this letter agreement
with
you on the Closing Date.
We
believe that it is critical that your objectives and ours are mutually aligned
if we are to work so closely together. Therefore, in order to properly align
your objectives and future benefits with ours, the Exchanging Shareholders
and
CRSI, respectively, hereby agree to transfer to you or your designee 30,000
shares of the BV-Corp (the “Incentive Shares”) and to award you [options or
SARS] to purchase 300,000 shares of CRSI common stock (the “Incentive Options”
[“SARS”]). One-third of the Incentive Options [SARs] shall vest on each
anniversary date of the Effective Date and shall be exercisable at a price
of
$0.65 per share.
The
Incentive Shares certificate(s) will be issued and transferred as soon as
practicable, but in no event later than the Closing Date and the Incentive
Option (SARS) Agreements will be delivered to you shortly after the Closing
Date. As a result of your ownership in the BV-Corp, it is contemplated that
on
the Closing Date, you or your designee will directly receive your proportionate
interest in and distribution of the Merger Shares. In the event the parties
to
the Merger decide not to close, your legal right to the Incentive Shares and
Incentive Options [SARS] terminates and you or your designee agrees to return
the Incentive Shares certificate(s) immediately upon such termination.
If
the
foregoing is acceptable to you, please sign below. On behalf of the Exchanging
Shareholders and CRSI
Very
truly yours,
/s/
Xxxxxx Xxxxxxxxx
Xxxxxx
Xxxxxxxxx
ACCEPTED
and AGREED this
1st
day
of March, 2006
/s/
Xxxxx
Xxxxxxxxxxx
Xxxxx
X.
Xxxxxxxxxxx
ATTACHMENT
A
August
10, 2006
Xx.
Xxxxx
X. Xxxxxxxxxxx
0000
Xxxxxxxx Xxxx Xxxxx
Kingwood,
Texas 77345
Dear
Xxxxx:
This
letter will evidence our agreement (“Agreement”) in connection with your
employment by CRSI Group, Inc. (the “Company” or “CRSI”). The terms and
conditions of your employment with CRSI are outlined below:
1. Position: You
will
be employed as Executive Vice President, Chief Financial Officer and Corporate
Secretary of CRSI and all of its subsidiaries and report directly to the
principal executive officer of CRSI The term of your employment shall begin
on
the Effective Date.
2. Effective
Date: This
Agreement shall be effective on the Closing Date (the “Effective
Date”).
3. Location: Your
principal office shall be located in CRSI’s corporate office in Houston, Texas.
4. Duties
and Responsibilities:
(a) As
Executive Vice President, Chief Financial Officer and Corporate Secretary of
CRSI, you will be the Company’s principal financial and accounting officer with
responsibility for the general supervision, management, direction and control
of
all the financial, legal, and investor relations operations of CRSI and its
subsidiaries. You will also act as the Corporate Secretary of the Corporation
and all of its subsidiaries, performing those functions typically performed
by a
Corporate Secretary.
(b) During
the term of your employment under this Agreement, you shall devote your full
time and attention to execution of your duties and responsibilities hereunder.
The foregoing notwithstanding, the parties recognize and agree that you may
hold
a seat on the Board of Directors of one or more other companies, engage in
passive personal investments and in other business, industry, civic and
charitable activities that do not conflict with the business affairs of CRSI
or
interfere with your performance of your duties and responsibilities hereunder.
We also recognize and agree that during the first 120 days of your employment
you may address certain duties and obligations remaining to be performed related
to your former employer that are not expected to conflict or interfere with
the
performance of your duties and responsibilities hereunder and that, on occasion,
may require your attention.
4. Salary: Your
initial base annual salary shall be $170,000 per year (the “Base Rate”). Such
salary shall be paid in 26 equal semi-monthly periods in accordance with XXXX’s
payroll practices.
5. Incentive
Payments: You
will
from time to time be entitled to receive shares of CRSI Common Stock, SARs
and/or stock options to purchase shares of CRSI Common Stock, as well as other
incentives as may be determined by CRSI’s Board of Directors.
With
respect to any plan (“Plan”) under which you are granted shares of CRSI common
stock, SARs or options to purchase shares of CRSI common stock reserved there
under at any time when such stock is publicly traded on (i) the Pink Sheets
(ii)
a national securities exchange on which the shares are listed or (iii) over
the
counter on an established market, prior to such time as shares or options
granted to you under the Plan are first exercisable, CRSI shall register the
interests in the Plan and the shares of CRSI’s common stock reserved there under
all applicable securities laws.
7. Annual
Bonus: You
will
be entitled to annual bonuses consisting of cash, stock, options, and/or SARs
based upon your performance and CRSI’s overall achievement of its corporate
goals. The award and amount of such bonus shall be determined at the discretion
of and upon the recommendation of CRSI’s Board of Directors.
8. Benefits:
CRSI
will require and provide you with an annual physical exam and a $
500,000
Term Life Insurance Policy and will pay the standard annual premium for said
policy based on a healthy non-smoker male of your age. . In addition, CRSI
will
include you and your spouse in the Company’s medical and dental health insurance
plan which shall be established and approved by the Company’s Board of
Directors.
To the
extent you and/or your spouse cannot be directly covered by CRSI’s insurance
plan, CRSI shall pay you an equivalent amount in cash for the period you are
not
so covered. Additionally, you will be entitled to all other benefits that are
made available to senior executives of CRSI, including the right to participate
in a CRSI 401(K) Retirement Savings Plan or other similar Plan, but subject
to
any applicable eligibility requirements. You will be entitled to 3 weeks
vacation time for each year of your employment during the first five (5) years
of your employment and 4 weeks of vacation for each year thereafter. The Company
will provide you with a leased automobile, or at your option, you may elect
to
receive a car allowance of $500 per month. You will be allowed to travel
business class for all flights over four (4) hours in length. You will be
reimbursed promptly for all reasonable out of pocket expenses that you incur
in
connection with your employment.
9. Executive
Kidnapping and Medical Evacuation Program(s):
The
Company will provide Executive Kidnapping and Medical Evacuation Program(s)
under which you will be provided coverage subject to policies approved by the
Board.
10.
Term
of Employment:
The term
of your employment shall be for a period of three (3) years from the Effective
Date (the “Term”), which Term shall be automatically renewed and extended for
successive periods of one (1) year each commencing on the anniversary of the
Effective Date and on each successive one (1) year anniversary thereafter
(“Renewal Term”) unless either party gives the other notice of termination at
least one hundred twenty (120) days prior to the end of the Term or any Renewal
Term. In such event, your employment will terminate at the end of the Term
or
Renewal Term during which such notice was given. CRSI may not terminate your
employment during the Term or any Renewal Term, other than for cause. As used
herein, “cause” means (i) acts and/or omissions, or a course of conduct
that constitute gross negligence or willful neglect in the performance of your
duties and responsibilities that continue for 30 days after written notice
from
CRSI, (ii) drug abuse, (iii) final conviction of a felony, other than
traffic offenses which do not bring you or CRSI into disgrace or disrepute,
(iv)
any act of embezzlement, conversion of goods or services, or fraud with respect
to CRSI, or (v) your breach of this Agreement which continues for 30 days after
written notice from CRSI.
Should
CRSI terminate your employment for cause, no notice will be required and all
of
your non-vested shares and options will terminate immediately. Should CRSI
elect
not to renew your contract after the Term or any Renewal Term, then you shall
keep the vested portion of your restricted stock, SARs, and/or options and
the
unvested portion will expire immediately. Should you decide to resign your
position at any time during your employment, then you will keep any vested
portion of your shares, SARs, and options and the non-vested portions of your
shares, SARs, and options will terminate immediately. In each and every case,
all vested shares and options shall be non-forfeitable and shall retain their
original expiration date.
11.
Change
of Control: The
Change of Control Provision is outlined in Exhibit (A) attached hereto shall
be
applicable to you (“the Officer”) so long as you are employed by CRSI (the
“Company”).
12.
Severance
Pay: If
your
employment is terminated without cause, all unvested shares, SARs, and/or
options will vest immediately and, in addition to payment of your full salary
and payment by CRSI of medical insurance premiums through the Term or Renewal
Term, you will be entitled to one-twelfth (1/12) of the Base Rate as a severance
payment for each full or prorated year of employment. The aggregate amount
of
such payments shall be considered as “liquidated damages” and, other than a
Change of Control Payment or other separate agreement between you and CRSI,
the
Company shall have no further obligation to you.
13.
Ownership
of Information: All
documents, drawings, memoranda, notes, records, file correspondence, manuals,
models, specifications, computer programs, E-mail, voice mail, electronic
databases, maps, and all other writings or materials of any type embodying
any
information pertaining to the business of CRSI which you have developed,
utilized or had access to during your employment with CRSI, are and shall be
the
sole and exclusive property of CRSI. Upon termination of your employment by
CRSI, for any reason, you shall promptly deliver this property and all copies
to
thereof to CRSI.
14.
Non-Solicitation: During
the term of your employment and for a period of two (2) years thereafter, you
will not, directly or indirectly, solicit or contact any employee of CRSI,
with
a view to inducing or encouraging such employee to leave the employ of CRSI
for
the purpose of being hired by you, an employer affiliated with you or any
competitor of CRSI.
15.
D&O
Insurance and Indemnification:
The
Company shall purchase a Director’s and Officer’s Insurance Policy, the terms of
which shall be approved by the Board, which will provide you with Director’s and
Officer’s Insurance necessary
to protect you from any and all expenses, obligations, liabilities, actions,
suits or proceedings that may occur as the result of your employment by the
Company. In addition, if at any time, you are a party or are threatened to
be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the
fact
that you are or were a director, officer, employee or agent of CRSI and/or
any
of its affiliates, or are or were serving at the request of CRSI as a director,
officer, director, employee or agent of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, CRSI shall
indemnify you and hold you harmless against expenses (including court costs
and
reasonable attorney’s fees), judgments, fines, penalties, amounts paid in
settlement and any other liabilities actually and reasonably incurred by you
in
connection with such action, suit or proceeding to the full extent permitted
by
law. Expenses (including court costs and reasonable attorneys’ fees) incurred by
you in appearing at, participating in, or defending any threatened, pending
or
completed action, suit or proceeding whether civil, criminal, administrative
or
investigative, shall be paid by CRSI at reasonable intervals in advance of
the
final disposition of such action, suit or proceeding promptly following receipt
of your written claim that shall be filed in accordance with CRSI’s
reimbursement policy as in effect from time to time. The indemnification
provided under this Section 15 shall apply whether or not the negligence of
any
party is alleged or proved.
16.
Miscellaneous:
All
payments required to be made by CRSI hereunder shall be subject to withholding
of such amounts as CRSI may reasonably determine is should withhold pursuant
to
any applicable law or regulation. This agreement is binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors,
heirs, administrators, executors and assigns.
This
agreement contains the entire agreement between the parties concerning the
subject matter hereof and may not be amended or modified except by a writing
signed by both parties.
Should
one party waive compliance by the other party to any term or provision of this
agreement, such waiver shall be limited to the facts or circumstances giving
rise to the noncompliance and shall not be deemed either a general waiver or
modification with respect to the term or provision, or part thereof, being
waived, or as to any other term or provision of this agreement, nor shall it
be
deemed a waiver of compliance with respect to any other facts or circumstances
then or thereafter occurring. Any notice given hereunder shall be in writing
and
shall be deemed given when delivered personally or by courier, or five (5)
days
after being mailed, certified or registered mail, duly addressed to the party
concerned at the address such other party shall provide. In the event that
any
provision or portion of this agreement shall be determined to be invalid or
unenforceable for any reason, the remaining provisions or portions of this
agreement shall be unaffected thereby and shall remain in full force and effect
to the fullest extent permitted by law. The respective rights and obligations
of
the parties shall survive any termination of this agreement to the extent
necessary to preserve such rights and obligations.
17.
Applicable
Law: This
Agreement is entered into under, and shall be governed for all purposes by
the
laws of the State of Texas.
18.
Counterparts:
This
Agreement may be executed in one or more counterparts.
If
the
foregoing is acceptable to you, please sign below.
Very
truly yours,
/s/
Xxxxxx Xxxxxxxxx
Xxxxxx
Xxxxxxxxx
Chairman
of the Board
ACCEPTED
and AGREED this
10th
day
of August, 2006
/s/
Xxxxx
X. Xxxxxxxxxxx
Xxxxx
X.
Xxxxxxxxxxx
EXHIBIT
(A)
Change
In Control
If,
within three (3) months following the occurrence of a Change in Control (as
defined below), the Officer elects to terminate his employment with the Company
because he is no longer functioning in the respective capacity within the
Company or its successor(s), in which he was functioning prior to the Change
in
Control or, has had his salary or benefits reduced, or the location of his
principal office moved in excess of 60 miles from his prior office location,
then, in lieu of any severance payments hereunder, the Company shall (1) pay
to
the Officer, within 10 days after his election, a lump sum cash payment in
an
amount equal to the Change in Control Payment (as defined below), which payment
shall be considered as “liquidated damages” and (2) provide the Officer with
Change in Control Benefits (as defined below). If the Officer’s employment is
terminated prior to the date he elects to terminate but it is reasonably
demonstrated that such termination (a) was at the request of a third party
who
has taken steps reasonably calculated to effect a Change in Control or (b)
otherwise arose in connection with or in anticipation of a Change in Control,
then for all purposes of this paragraph, such termination shall be considered
to
have occurred immediately following the Change in Control and the Officer’s
election to so terminate. As used herein, the following terms shall
mean:
A
“Change in Control”
shall be
deemed to have occurred if (i) there shall be consummated (A) any consolidation
or merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company’s common stock would be
converted in whole or in part into cash, securities or other property, other
than a merger of the Company in which the holders of the Company’s common stock
immediately prior to the merger, own immediately after the merger a majority
of
the voting stock of the surviving corporation, or (B) any sale, lease, exchange
or transfer (in one transaction or a series of related transactions) of all
or
substantially all the assets of the Company, or (ii) the directors of the
Company shall approve any plan or proposal for the liquidation or dissolution
of
the Company, or (iii) any “person” (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), other than the Company or a subsidiary thereof, shall become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
of
securities of the Company representing 30% or more of the combined voting power
of the Company’s then outstanding securities ordinarily (and apart from rights
accruing in special circumstances) having the right to vote in the election
of
directors, as a result of a tender or exchange offer, open market purchases,
privately negotiated purchases or otherwise, or (iv) at any time during a period
of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company shall cease to constitute
at
least a majority thereof as a result of the election of individuals who were
not
the nominees of the Board of Directors of the Company or (v) any other event
shall occur that would be required to be reported in response to Item 6(e)
of
Schedule 14A of Regulation 14A promulgated under the Exchange Act; provided,
however that the term “Change in Control” shall not include (x) any of the
foregoing events if approved by Officer or (y) any bona-fide financing approved
by the Board of Directors.
“Change
in Control Benefits”
shall
mean continued coverage under the Company’s Director’s and Officer’s and medical
and dental health insurance plan for the Officer and the Officer’s spouse, who
were covered under such plans on the day prior to the Officer’s termination of
employment with the Company, for one year from the date of such termination
at
no cost to the Officer and his spouse (provided, however, that in the event
that
continued participation in any such Company plan is for whatever reason
impossible, the Company shall arrange upon comparable terms benefits
substantially equivalent to those that were provided under such Company plan).
“Change
in Control Payment”
shall
mean an amount equal to 1.5 times the Officer’s annual base salary in effect on
the date of termination.
