Exhibit 10.7
EMPLOYMENT CONTRACT
THIS EMPLOYMENT CONTRACT ("Agreement") is made and entered into as of the
1st day of January, 1999, by and between NATURAL GAS SERVICES GROUP, INC., a
Colorado corporation, whose address is 0000 Xxxxx Xxxxxx Xxxx 0000, Xxxxxxx,
Xxxxx 00000, hereinafter referred to in this Agreement as the "Employer", and
XXXX X. WAIT, whose address is 109 Seco, Xxxxxxxx, Xxxxx 00000, hereinafter
referred to in this Agreement as the "Employee."
ARTICLE I
TERM OF EMPLOYMENT
Section 1.1 The Employer employs the Employee, and the Employee accepts
employment with the Employer, for the three-year period from September 16, 1999,
through September 15, 2002, 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 II
DUTIES OF EMPLOYEE
BASIC DUTIES
Section 2.1 The Employee is hired as Treasurer and Chief Accounting
Officer 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.
ARTICLE III
COMPENSATION OF EMPLOYEE
BASIC SALARY
Section 3.1 The Employee shall receive a salary as established from time
to time by the Directors, but in no event shall the annual salary be less than
Sixty Five Thousand Dollars ($65,000.00), paid biweekly, effective as of
September 16, 1999. If the Employee voluntarily terminates employment prior to
September 15, 2002 or is terminated pursuant to Article 5 prior to September 15,
2002, or if the Employee's employment is terminated by either party at any time
after September 15, 2002, 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
Section 3.2 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 financial income statements of the Employer prepared in
accordance with generally accepted accounting procedures. Provided, however,
that such incentive bonus shall not be greater than 150% of the gross salary
during the contract year. Such incentive bonus shall be determined for each
annual period commencing as of January 1 and ending as of December 31 (the
"Contract Year"), with payment to the Employee to be made within ninety (90)
days following the end of each annual period. The incentive bonus shall be
calculated as follows:
Two percent (2%) of the consolidated Net Pre-Tax Profits of Natural Gas
Services Group, Inc. as determined by year-end audited Financial Statements,
Vacation and Sick Pay.
VACATION AND SICK PAY
Section 3.3 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.
HOLIDAYS
Section 3.4 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/or any other day designated as a holiday by the Employer.
OTHER BENEFITS
Section 3.5 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. The Employer agrees that during the term of employment,
the dependents of the Employee shall be afforded the opportunity to participate
in any hospitalization, medical, or dental service plans in which the Employee
is enrolled. The Employer shall bear the cost of such dependent participation.
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Article IV
PROPERTY RIGHTS OF THE PARTIES
INVENTIONS AND PATENTS
Section 4.1 The Employee agrees that he 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
Section 4.2 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 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 EMPLOYER
Section 4.3 In the course of performing duties under this Agreement, the
Employee will be handling financial, accounting, statistical and personnel
information concerning employees and 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 V
TERMINATION OF EMPLOYMENT
TERMINATION BY EMPLOYER FOR CAUSE
Section 5.1 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;
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(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
Section 5.2 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;
(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 ninety (90) days, unless waived by
the Employer.
Section 5.3 If the Employee is terminated by the Employer pursuant to
Section 5.02 hereof, the Employer shall pay the Employee, within ten days
following such termination, severance pay equal to six (6) months of Employee's
salary as provided under Section 3.01 hereof. If the Employee is terminated by
the Employer prior to September 15, 2002, other than to either Section 5.01 or
5.02 hereof, the Employer shall continue to pay 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
September 15, 2002, 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 VI
REIMBURSEMENT OF EXPENSES
INCURRED BY EMPLOYEE
BUSINESS EXPENSES
Section 6.1 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:
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(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; and
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.
(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 or an officer designated by
the board of directors of the Employer.
ARTICLE VII
EMPLOYEE'S OBLIGATIONS
OTHER THAN TO PERFORM SERVICES
NON-PIRACY AND NON-COMPETITION BY EMPLOYEE
Section 7.1 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 product or equipment of the nature leased
or 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 the Employer 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,
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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.
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
Section 7.2 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
Section 7.3 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;
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(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; and
(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. Sections 15.50 and 15.51
(Xxxxxx 1990).
EXCLUSIONS FROM NON-COMPETITION PROVISION
Section 7.4 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
Section 7.5 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 VIII
GENERAL PROVISIONS
NOTICES
Section 8.1 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.
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ENTIRETY OF AGREEMENT
Section 8.2 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.
PARTIAL INVALIDITY
Section 8.3 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
Section 8.4 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
Section 8.5 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
Section 8.6 The captions contained in this Agreement are for convenient
reference only and do not affect the meaning of any term or provision.
BINDING EFFECT
Section 8.7 This Agreement shall be binding upon the parties hereto and
upon their successors, heirs, executors and assigns.
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EXECUTED in multiple originals as of the date first written above.
EMPLOYER:
NATURAL GAS SERVICES GROUP, INC.
By: /s/ Xxxxxxx Xxxxxxx
----------------------------
Xxxxxxx Xxxxxxx, Chairman
EMPLOYEE:
/s/ Xxxx X. Wait
--------------------------------
Xxxx X. Wait
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AMENDMENT
This instrument is an amendment to that certain Employment Agreement
entered into as of the 1st day of January, 1999, by and between Natural Gas
Services Group, Inc., a Colorado corporation, ("Employer") and Xxxx Wait
("Employee").
The subject Employment Agreement is amended as follows:
ARTICLE 3 of the subject Employment Agreement is hereby deleted in its entirety
and the following ARTICLE 3 is adopted as of July 1, 2000. All other terms in
the Employment Agreement remain as written.
ARTICLE 3
COMPENSATION OF EMPLOYEE
BASIC SALARY
3.01. The Employee shall receive a salary as established from time to time
by the Directors, but in no event shall the annual salary be less than Eighty
Two Thousand Dollars ($82,000), paid biweekly, effective as of July 1, 2000. If
the Employee voluntarily terminates employment prior to December 31, 2001 or is
terminated pursuant to Article 5 prior to December 31, 2001, or if the Employees
employment is terminated by either party at any time after December 31, 2001,
the Employee's salary shall be prorated and paid only to the date of termination
of employment.
INCENTIVE BONUS
3.02. Within ninety (90) days of the close of business for each fiscal
year, the directors shall review the financial results of the Company and
determine an amount, if any, to be allocated for bonus payment to designated
employees. The allocation shall be in the sole discretion of the directors. If
an allocation is made, the directors shall establish two bonus pools to be
designated "Bonus Pool A" and "Bonus Pool B." The directors shall determine the
amount of funds that will be allocated to each pool. The allocated funds shall
be distributed to participating employees that are designated by the directors
or have contractual rights to participate. The distribution shall be as follows:
POOL A:
Funds from this pool shall be distributed to each participant based on the
percentage that the participating employee's base salary received during
the preceding fiscal year represents to the total base salaries of all
participating employees.
Example:
Participant's base salary = $10,000 Total of all participants'
base salaries = $100,000 Participant shall receive:
($10,000) $100,000 = 10% X "Bonus Pool A"
POOL B:
Funds from this pool shall be distributed based on an evaluation process
for each participating employee. The directors shall establish the review
and evaluation process. The funds in "Bonus Pool B" shall be distributed
based on the evaluation score of each participant. Non-participating
directors and/or non-participating officers shall develop and implement
the plan and approve the distribution.
The Employee that is a party to this agreement shall participate in both
pools.
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, unless agreed to and approved by the Employer. Such approval shall be
in writing and signed by an officer designated by the directors.
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/or any other day designated as a holiday 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 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. The Employer agrees that during the term of employment, the dependents
of the Employee shall be afforded the opportunity to participate in any
hospitalization, medical or dental service plans in which the Employee is
enrolled. The Employer shall bear the cost of such dependent participation.
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EXECUTED in multiple originals this 1st day of January 2001, and effective
as of July 1, 2000.
EMPLOYER: EMPLOYEE:
NATURAL GAS SERVICES GROUP INC. /s/ Xxxx X. Wait
----------------------------
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------
Xxxxxxx Xxxxxxx, Chairman
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