AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.22
AMENDED
AND RESTATED
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(“Agreement”) is made and entered into effective as of January 1, 1999 (the
“Effective Date”), by and between LUFKIN
INDUSTRIES, INC.,
a
Texas corporation (the “Company”), and XXXXXXX
X. XXXXX
of
Lufkin, Texas (the “Executive”).
WHEREAS,
the
Company wishes to continue the employment of the Executive as president and
Chief Executive Officer of the Company, under the terms and conditions set
forth
herein;
WHEREAS,
the
Executive wishes to continue his employment under those terms and conditions;
and
WHEREAS,
the
Company and the Executive (the “Parties”) previously entered into an Employment
Agreement dated as of January 1, 1995 and they desire to amend and restate
said
Employment Agreement as provided herein;
NOW,
THEREFORE,
in
consideration of the premises and mutual covenants contained herein, and
for
other consideration mutually acknowledged, the Parties agree as
follows:
1. Employment.
The
Company hereby agrees to continue to employ the Executive, and the Executive
hereby agrees to continue his employment with the Company, for the term set
forth in Section 2 below, in the positions and with the duties and
responsibilities set forth in Section 3 below, at an office location in Lufkin,
Texas or such other location as the Parties may mutually agree, and upon
such
other terms and conditions as are hereinafter stated.
2. Terms.
Subject
to renewal as hereinafter provided in this Section 2, the amended term of
the
Executive’s employment with the Company (the “Term”) shall commence on the
Effective Date and shall continue through the third annual anniversary of
the
Effective Date, unless sooner terminated in accordance with the terms and
provisions hereinafter set forth. The Term shall be automatically renewed
and
extended for a period of twelve (12) months commencing on the first annual
anniversary of the Effective Date and on each successive annual anniversary
thereafter unless the Company shall give the Executive written notice, at
least
sixty (60) days prior to the first annual anniversary (or, if previously
renewed
and extended, at least sixty (60) days prior to any succeeding annual
anniversary) of the Effective Date of this Agreement, of the Company’s desire
not to renew this Agreement. The Executive shall, unless requested otherwise
by
the Company, remain in the employ of the Company during the entirety of the
remaining Term.
3. Position
and Duties.
|
(a)
|
During
the Term, the Executive shall serve as President and Chief Executive
Officer of the Company reporting directly to the Board of Directors
of the
Company. During the Term, the Company shall cause the Executive
to be
nominated for election as the Chairman of the Board of Directors
of the
Company and shall use its reasonable best efforts to secure such
election.
|
|
|
(b)
|
While
employed hereunder, the Executive shall devote his full business
time and
attention to the operations and activities of the Company, and
shall not
be employed by, consult with or otherwise render services to, any
other
business, except with the consent of the Board of Directors of
the
Company. The foregoing notwithstanding, the Parties recognize and
agree
that the Executive may engage in passive personal investments and
other
business, industry, civic and charitable activities that do not
conflict
with the business and affairs of the Company or interfere with
the
Executive’s performance of his duties
hereunder.
|
4. Compensation
and Benefits.
|
(a)
|
Salary.
The Company shall pay the Executive a base salary (“Salary”) at an annual
rate of $360,000 (the “Base Rate”). Salary shall be payable in accordance
with the Company’s payroll practices. The Compensation Committee of the
Board of Directors of the Company (the “Committee”) shall review with the
Executive the Salary during February of each year in the Term,
and may
adjust such Salary in its sole discretion, provided that such Salary
shall
never be at an annual rate less than the Base Rate.
|
||
|
(b)
|
Bonus.
The Executive will have an opportunity to receive a bonus with
respect to
each year during the Term; provided, however, that the maximum
annual
bonus opportunity for each such year shall not be less than one
hundred
percent (100%) of the Executive’s Salary for the bonus year. The level or
levels of the annual bonus for each year during the Term and the
criteria
for entitlement to such level or levels shall be reasonable and
reflective
of industry norms as shall be determined in good faith by the Company
with
the advice and counsel of competent compensation consultants of
the
Company’s choosing who shall currently review such data as may be
available with respect to bonuses that are made available to similarly
situated executives of companies that are in the same industry
and are
approximately the same size (based on sales) as the Company. The
bonus for
any bonus year during the Term shall be paid at the time bonuses
for such
year are generally paid under the Company’s bonus program and shall be in
the form of a lump sum cash payment.
|
||
|
(c)
|
Stock
Options.
On the date of the first regular meeting of the Committee which
occurs
each calendar year during the Term, the Company shall grant the
Executive
a ten- year stock option under the Company’s 1990 Stock Option Plan or any
successor or other plan maintained by the Company (“Stock Plan”). With
respect to any Stock Plan under which the Executive is granted
options to
purchase shares of the Company’s common stock reserved thereunder at any
time when such stock is publicly traded (i) on a national securities
exchange on which such stock is listed or (ii) over the counter
on an
established market, prior to such time as options granted under
the Stock
Plan to the Executive are first exercisable, the Company shall
register
the interests in the Stock Plan and the shares of the Company’s common
stock reserved thereunder under all applicable securities laws.
On the
date of the first regular meeting of the Committee in 1999, 2000,
2001 and
any subsequent year during the Term, the Company shall grant the
Executive
an additional ten-year option under the Company’s Stock Plan (or any
successor plan) to purchase a number of shares of the Company’s common
stock not less than that number (rounded up to the next full number)
which
is equal to the Executive’s Base Rate on such grant date multiplied by 2.5
which product shall be divided by the fair market value of a share
of
common stock (as defined in the Stock Plan) on such date. Each
option
granted hereunder shall provide that it shall not terminate prior
to the
expiration of its ten-year term unless the Company terminates the
Executive’s employment for Cause and no less than one-third of the
Company’s common stock subject to the option shall be cumulatively
exercisable on the date of the grant and on each of the succeeding
two
anniversaries so that after the second anniversary of the grant
date of
the option the Executive (or his representative or estate, as applicable)
may exercise any unexercised portion of such option throughout
the
remainder of the option’s ten-year term. Subject to the preceding
provisions of this Section 4(c), the form and other terms and conditions
of such options shall be substantially as set forth in Exhibit
A, “Lufkin
Industries, Inc. Stock Option Agreement” attached to and forming a part of
this Agreement.
|
||
|
(d)
|
Employee
Benefit Programs.
During the Term, the Executive shall be entitled to participate
in all
employee benefit programs of the Company as in effect from time
to time
and in which the Company’s senior executives are eligible to participate,
provided that, with respect to all plans other than plans subject
to
nondiscrimination rules under Section 79, 105(h), 125, 129 or 401(a)
of
the Internal Revenue Code of 1986, as amended (the “Code”), any minimum
service requirement shall be waived. In addition, the Company shall
continue to maintain a nonqualified supplemental executive retirement
plan
(the “SERP”) in which the Executive shall continue to participate
effective from and after the Effective Date and for the remainder
of the
Term, including any extensions thereof, with terms substantially
the same
as those set forth in the Lufkin Industries, Inc. Supplemental
Retirement
Plan attached hereto as Exhibit B.
|
||
|
(e)
|
Other
Benefits.
During his employment hereunder, the Executive shall be afforded
each and
every one of the following benefits as incidences of his
employment:
|
||
|
(i)
|
Company
automobile - the Company will provide to the Executive for his
personal
and business use a top-of-the-line automobile, and shall provide,
or
reimburse the Executive for, maintenance and insurance (liability
and
collision coverage insuring both the Company and the Executive
and
covering both business and personal use) for such automobile. Such
automobile shall be owned or leased by the Company, and, if requested
by
the Executive, shall be replaced not less frequently than three
(3) years
after the date the automobile was provided to the Executive by
the
Company.
|
||
|
(ii)
|
Business
and entertainment expenses - the Company will reimburse the Executive
for,
or pay on behalf of the Executive, reasonable and appropriate expenses
incurred by the Executive for business related purposes, including
dues
and fees to industry and professional organizations, costs of
entertainment and business development, and costs reasonably incurred
as a
result of the Executive’s wife accompanying the Executive on business
travel.
|
||
|
(iii)
|
Club
memberships - in addition to the other business and entertainment
expenses
reimbursable pursuant to item (ii) above, the Company shall pay
membership
fees, dues and assessments for (a) one country club located in
Angelina
County, Texas, to be selected by the Executive, (b) one luncheon
club
located in Houston, Texas, to be selected by the Executive, and
(c) such
other luncheon or country club memberships as the Board of Directors
of
the Company may deem to be justified by business usage.
|
||
|
(iv)
|
|||
|
(v)
|
Life
insurance - the Company will provide, or cause to be provided,
to the
Executive, at no cost to the Executive, term life insurance coverage
equal
to twice the Executive’s Salary. Proceeds of such insurance shall be
payable to a beneficiary to be designated in writing by the
Executive.
|
||
|
(vi)
|
Tax
preparation expenses - the Company will reimburse the Executive
for
expenses incurred by him in connection with the preparation of
his federal
income tax return up to a maximum of $3,000 per
year.
|
||
5. Termination
of Employment.
The
Executive’s employment is subject to termination during the Term only as
provided in this Section 5.
5.1 Death
or Disability.
If
the
Executive’s employment is terminated due to his death or total disability, as
determined under the Company’s applicable long-term disability plan,
then:
|
(i)
|
The
Executive (or his estate) shall be entitled to receive salary and
benefit
coverages for a period of six months from and after the date of
termination of employment; and
|
||
|
(ii)
|
The
Executive (or his estate) shall be entitled to a bonus payment
for the
year in which termination occurs equal to the bonus amount paid
or payable
by the Company to the Executive for the immediately preceding bonus
year
prorated to reflect the actual number of full weeks worked during
the year
in which the Executive’s employment terminates; and
|
||
|
(iii)
|
The
Executive (or his estate) shall be entitled to the pension provided
under
the SERP as described in Section 4(d)
above.
|
5.2 Termination
by the Company without Cause.
The
Company may terminate the Executive’s employment at any time without Cause as
such term is defined in Section 5.3 below, in which case:
|
(i)
|
The
Executive shall be paid a lump sum cash payment, payable within
30 days of
his termination of employment, equal to the total Salary which
would have
been paid to him under this Agreement for the remainder of the
Term, based
on a Salary rate equal to the greater of (A) the rate in effect
on the
Effective Date, or (B) the rate in effect on termination of his
employment; and
|
||
|
(ii)
|
The
Executive shall be entitled to a lump sum payment, payable within
30 days
of his termination of employment, equal to the amount of annual
bonuses
which would have been paid to him under this Agreement for the
remainder
of the Term based upon the bonus rate per annum that is equal to
the bonus
paid or payable by the Company to the Executive for the immediately
preceding bonus year; and
|
||
|
(iii)
|
The
Executive shall be entitled to the pension provided under the SERF
as
described in Section 4(d) above;
|
||
|
(iv)
|
Benefits
(as described in Sections 4(d), other than the pension provided
under the
SERF that are payable upon termination of employment, and 4(e)
above)
shall continue to be provided to the Executive by the Company during
the
period of Salary continuation described in item (i) above as if
the
Executive’s employment had continued for the remainder of the Term;
provided, however, that to the extent any such benefit cannot be
continued
as a matter of law during the remaining period of the Term because
the
Executive is no longer employed by the Company, the Company shall
pay the
Executive an amount equal to the economic value of such benefit
at the
same rate or level and at the same time as such benefit was provided
or
available at the time the benefit was required as a matter of law
to be
discontinued because the Executive ceased to be employed by the
Company
and; provided, further, that any such benefit shall be discontinued,
if
earlier, on the date that the Executive becomes entitled to coverage
for a
substantially equivalent rate or level of a comparable benefit
as a result
of his employment by a successor
employer.
|
5.3 Termination
by the Company for Cause.
If
the
Company terminates the Executive’s employment for Cause, as defined in this
Agreement, the Executive shall be entitled only to Salary, and any benefits,
accrued as of the effective date of termination. Any other benefits shall
be
determined under applicable plans, programs or other coverages of the Company.
For purposes of this Agreement, the term “Cause” shall mean:
|
(i)
|
the
Executive’s conviction for, or plea of nolo contendere to, a felony;
or
|
||
|
(ii)
|
the
commission by the Executive of an act involving fraud or intentional
dishonesty, which act is intended to result in substantial personal
enrichment of the Executive at the expense of the Company or any
of its
subsidiaries; or
|
||
|
(iii)
|
the
Executive’s material breach of any material provision of this Agreement
which remains uncorrected for 30 days after written notice and
an
opportunity to correct; or
|
||
|
(iv)
|
the
Executive’s knowing and willful misconduct in the performance of his
duties, which continues for 30 days after written notice from the
Company
and which results in material injury to the reputation, business
or
operation of the Company or any of its
subsidiaries.
|
The
existence of “Cause” shall be determined by an affirmative vote of not less than
two- thirds of the members of the Board of Directors of the Company. If the
requisite affirmative vote by two thirds of the members of the Board of
Directors of the Company is not obtained, any termination of the Executive’s
employment by the Company shall be deemed to be a termination by the Company
without Cause.
5.4 Voluntary
Termination by the Executive Without Good Reason.
The
Executive may terminate his employment at any time without Good Reason (as
such
term is defined in Section 5.5 below) on 30 days written notice, in which
case
the Executive shall be entitled only to his Salary earned through the effective
date of termination and any benefits accrued as of the effective date of
termination as determined under applicable plans, programs or other coverages
of
the Company.
5.5 Termination
of the Executive for Good Reason.
In
the
event the Executive’s employment by the Company is terminated by the Executive
for Good Reason, as defined in this Section 5.5, such termination shall be
deemed to be a termination by the Company of the Executive’s employment without
Cause, as such term is defined in Section 5.3 above, in which case the Executive
shall be entitled to the benefits described in Section 5.2 of this Agreement.
For purposes of this Agreement, the term “Good Reason” shall mean any one of the
following shall have occurred and shall not been corrected within thirty
days
following written notice by the Executive to the Company:
|
(i)
|
the
assignment to the Executive of any duties inconsistent in any respect
with
the Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated
by
Section 3 of this Agreement, or any other action by the Company;
or any
affiliate which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and
which is
remedied by the Company promptly after receipt of written notice
thereof
given by the Executive; or
|
||
|
(ii)
|
any
failure by the Company to comply with any of the provisions of
Section 3
of this Agreement, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith which is remedied by the Company
promptly after receipt of written notice thereof given by the Executive;
or
|
||
|
(iii)
|
the
Company’s requiring the Executive to be based at any office or location
other than that described in Section 1 hereof, except for travel
reasonably required in the performance of the Executive’s
responsibilities; or
|
||
|
(iv)
|
any
purported termination by the Company of the Executive’s employment
otherwise than as expressly permitted by this
Agreement.
|
For
purposes of this Section 5.5, any good faith determination of “Good Reason” made
by the Executive shall be final and binding upon the Parties, unless, within
thirty days following the Executive’s providing written notice to the Company
under the first sentence of this Section 5.5, not less than two-thirds of
the
members of the Board of Directors of the Company affirmatively votes not
to
confirm the Executive’s determination that such termination is for Good Reason.
If two-thirds of the members of the Board of Directors of the Company
affirmatively vote not to confirm the Executive’s determination that such
termination is for Good Reason, any termination by the Executive of his
employment by the Company shall be deemed to be a termination by the Executive
without Good Reason.
6. Non-Competition.
During
the term of his employment hereunder, and, for the period extending to the
first
anniversary of his termination of employment for any reason other than
termination of the Executive’s employment by the Company without Cause or
termination of the Executive’s employment by the Executive for Good Reason (the
“No-Compete Period”), the Executive shall not, directly or indirectly, manage,
control, participate in, consult with, render services to, or in any manner
engage in any pumping unit or gear manufacturing business (the “Subject
Businesses”) with (any such action to be referred to as an “Association” with)
any person, corporation, partnership, trust or other business organization
(any
such person or entity to be referred to as a “Person”) if such business is
directly competitive with the Subject Businesses of the Company; provided,
however, that the foregoing shall not restrict the Executive from having
an
Association with a Person that is engaged in the Subject Businesses so long
as
the Executive is not personally involved in a material respect in the Subject
Businesses of such Person, it being understood that an indirect supervisory
role
of a Subject Business and other businesses of such Person shall not constitute
involvement in a material respect. If any court having jurisdiction determines
that the provisions of this Section 6 are not enforceable to the fullest
extent,
because of the provisions as to the time period, the geographical area or
the
scope of activity covered, the Parties agree that such court may narrow any
such
provision as the court deems necessary to enforceability, and this Section
6
shall be enforced as so narrowed.
The
Executive acknowledges that monetary damages would not constitute an adequate
remedy for the Company in the event of a breach of this Section 6, and he
therefore agrees that the Company shall be entitled to injunctive or other
equitable relief for the enforcement hereof. However, in no event shall an
asserted violation of the provisions of this Section 6 constitute a basis
for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.
7. Confidential
Information.
The
Executive shall not, at any time, except in good faith in the performance
of his
duties for the Company, divulge any trade secrets or other proprietary or
confidential information concerning the accounts, business or affairs of
the
Company, which shall have been obtained by the Executive during the Executive’s
employment by the Company and which shall not be or become public knowledge
other than by acts of the Executive in violation of this Agreement (except
such
information as is required by law or legal process to be divulged, in which
case
he shall give the Company prompt notice of such required disclosure and use
his
reasonable best efforts, in cooperation with the Company, to defend against
any
such required disclosure). However, in no event shall an asserted violation
of
the provisions of this Section 7 constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this
Agreement.
8. Indemnification.
8.1 If
at any
time the Executive is a party or is 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 he
is or
was a director, officer, employee or agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit
plan or
other enterprise, the Company shall indemnify the Executive and hold him
harmless against reasonable expenses (including attorneys’ fees), judgments,
fines, penalties, amounts paid in settlement and other liabilities actually
and
reasonably incurred by him in connection with such action, suit or proceeding
to
the full extent permitted by law.
8.2 Expenses
(including attorneys’ fees) incurred by the Executive 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 the Company at reasonable intervals in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking
by
the Executive to repay such amounts if it shall ultimately be determined
that he
is not entitled to be indemnified.
8.3 All
claims for indemnification under this Agreement shall be asserted and resolved
as is set forth below in this Section 8.3.
|
(a)
|
The
Executive (i) shall promptly notify the Company of any third-party
claim
or claims asserted against him (“Third Party Claim”) that could give rise
to a right of indemnification under this Agreement and (ii) shall
transmit
to the Company a written notice (“Claim Notice”) describing in reasonable
detail the nature of the Third Party Claim, a copy of all papers
served
with respect to such claim (if any), and the basis of his request
for
indemnification under this Agreement.
|
|
|
(b)
|
Within
30 days after receipt of any Claim Notice (“Election Period”), the Company
shall notify the Executive (i) whether the Company disputes its
potential
liability to the Executive under this Section 8 with respect to
such Third
Party Claim and (ii) whether the Company desires, at its sole cost
and
expense, to defend the Executive against such Third Party Claim
by any
appropriate proceedings, which proceedings shall be prosecuted
diligently
by the Company to a final conclusion or settled at the discretion
of the
Company in accordance with this Subsection 8.3(b). The Company
shall have
full control of such defense and proceedings, including any compromise
or
settlement thereof. The Executive is hereby authorized, at the
Company’s
sole cost and expense (but only if he is actually entitled to
indemnification hereunder or if the Company assumes the defense
with
respect to the Third Party Claim), to file, during the Election
Period,
any motion, answer or other pleadings which he shall deem necessary
or
appropriate to protect his interests or those of the Company and
not
prejudicial to the Company. If requested by the Company, the Executive
agrees, at the Company’s sole cost and expense, to cooperate with the
Company and its counsel in contesting any Third Party Claim that
the
Company elects to contest, including without limitation, through
the
making of any related counterclaim against the person asserting
the Third
Party Claim or any cross-complaint against any person. The Executive
may
participate in but not control, any defense or settlement of any
Third
Party Claim controlled by the Company pursuant to this Section
8.3 and the
Company shall bear his costs and expenses with respect to such
participation.
|
|
|
(c)
|
If
the Company fails to notify the Executive within the Election Period
that
the Company elects to defend the Executive pursuant to Subsection
8.3(b),
or if the Company elects to defend the Executive pursuant to Subsection
8.3(b) but fails to diligently and promptly prosecute or settle
the Third
Party Claim, then the Executive shall have the right to defend,
at the
sole cost and expense of the Company, the Third Party Claim. The
Executive
shall have full control of such defense and proceedings; provided,
however, that the Executive may not enter into, without the Company’s
consent, which shall not be unreasonably withheld, any compromise
or
settlement of such Third Party Claim. Notwithstanding the foregoing,
if
the Company has delivered a written notice to the Executive to
the effect
that the Company disputes its potential liability to the Executive
under
this Section 8, and if such dispute is resolved in favor of the
Company by
final, nonappealable order of a court of competent jurisdiction,
the
Company shall not be required to bear the costs and expenses of
the
Executive’s defense pursuant to this Section 8 or of the Company’s
participation therein at the Executive’s request, and the Executive shall
reimburse the Company promptly in full for all costs and expenses
of such
litigation. The Company may participate in, but not control, any
defense
or settlement controlled by the Executive pursuant to this Section
8.3(c),
and the Company shall bear its own costs and expenses with respect
to such
participation.
|
|
|
(d)
|
The
indemnification provided by this Section 8 shall apply whether
or not the
negligence of a party is alleged or
proved.
|
9. Withholding.
Anything
to the contrary notwithstanding, all payments required to be made by the
Company
hereunder to the Executive, his spouse, his estate or beneficiaries, shall
be
subject to withholding of such amounts relating to taxes as the Company may
reasonably determine it should withhold pursuant to any applicable law or
regulation. In lieu of withholding such amounts in whole or in part, the
Company
may, in its sole discretion, accept other provisions for payment of taxes
as
required by law, provided it is satisfied that all requirements of law affecting
its responsibilities to withhold such taxes have been satisfied.
10. Assignability;
Binding Nature.
This
Agreement is binding upon, and shall inure to the benefit of; the Parties
hereto
and their respective successors, heirs, administrators, executors and assigns.
No rights or obligations of the Executive under this Agreement may be assigned
or transferred by the Executive except that (i) his rights to compensation
and
benefits hereunder, which rights shall remain subject to the limitations
of this
Agreement, may be transferred by will or operation of law, and (ii) his rights
under employee benefit plans or programs as referred to in Section 4, above,
may
be assigned or transferred in accordance with such plans or programs. No
rights
or obligations of the Company under this Agreement may be assigned or
transferred except that such rights or obligations may be assigned or
transferred by operation of law in the event of a merger or consolidation
in
which the Company is not the continuing entity, or the sale or liquidation
of
all or substantially all of the assets of the Company, provided that the
assignee or transferee is the successor to all or substantially all of the
assets of the Company and such assignee or transferee assumes the liabilities,
obligations and duties of the Company, as contained in this Agreement, either
contractually or as a matter of law.
11. Effect
of Agreement.
This
Agreement contains the entire agreement between the Parties concerning the
subject matter hereof and supersedes all prior agreements, understandings,
discussions, negotiations, and undertakings, whether written or oral, between
the Parties with respect thereto. However, the Parties acknowledge having
entered into a Severance Agreement as of January 16, 1993 (the “Severance
Agreement”), and it is understood that such Severance Agreement is independent
of this Agreement. In the event of a Change in Control of the Company, as
defined in the Severance Agreement, then, notwithstanding any other provision
hereof; this Agreement shall terminate and be superseded by the Severance
Agreement.
12. Amendments
and Waivers.
This
Agreement may not be modified or amended except by a writing signed by both
Parties. A Party may waive compliance by the other Party with any term or
provision of this Agreement, or any part thereof; provided that the term
or
provision, or part thereof; is for the benefit of the waiving Party. Any
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.
13. Mediation
and Legal Actions.
If
a
dispute arises out of or related to this Agreement or its breach arid if
the
dispute cannot be settled through direct discussions, then the Company and
the
Executive agree first to endeavor to settle the dispute in an amicable manner
by
mediation, under the applicable provisions of Sec. 154.001 et seq. Texas
Civil
Practices & Remedies Code, as supplemented by the mediation rules of the
American Arbitration Association, before having recourse to any other proceeding
or forum. If any Party to this Agreement brings legal action to enforce the
terms of this Agreement against another Party to this Agreement, except as
may
otherwise be ordered by the court or other forum, each such Party shall be
liable for his or its own expenses incurred in such legal action including
costs
of court or other forum and the fees and expenses of counsel.
14. Notices.
Any
notice given hereunder shall be in writing and shall be deemed given when
delivered personally or by courier, or five days after being mailed, certified
or registered mail, duly addressed to the Party concerned at the address
indicated below or at such other address as such Party may subsequently
provide:
|
To
the Company:
|
Lufkin
Industries, Inc.
000
Xxxxx Xxxxxx
Xxxxxx,
Xxxxx 00000
Attn:
Secretary
|
|
|
with
a copy to:
|
________________
Xxxxxxx
Xxxxx, LLP
________________
________________
|
|
|
To
the Executive:
|
Xx.
Xxxxxxx X. Xxxxx
0000
Xxxxxxxx Xxxxxx
Xxxxxx,
Xxxxx 00000
|
15. Severability.
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.
16. Survivorship.
The
respective rights and obligations of the Parties hereunder shall survive
any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.
17. References.
In
the
event of the Executive’s death or a judicial determination of his incompetence,
reference in this Agreement to the Executive shall be deemed, where appropriate,
to refer to his legal representative or, where appropriate, to his beneficiary
or beneficiaries.
18. Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH
THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS
OF LAW.
19. Legal
Fees.
The
Company promptly shall reimburse the Executive for all of his reasonable
legal
fees and expenses incurred in connection with the negotiation and documentation
of this Agreement.
20. Mitigation.
In
no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive
under
any of the provisions of this Agreement.
21. Headings.
The
headings of paragraphs contained in this Agreement are for convenience only
and
shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement.
22. Counterparts.
This
Agreement may be executed in one or more counterparts.
IN
WITNESS WHEREOF,
the
Parties have executed this Agreement effective for all purposes as the date
first written above.
|
LUFKIN
INDUSTRIES, INC.
|
||
|
By:
|
/s/
X. X. Xxxxx, Xx.
|
|
|
Name:
|
X.
X. Xxxxx, Xx
|
|
|
Title:
|
Secretary/Treasurer
|
|
|
EXECUTIVE
|
||
|
By:
|
/s/
Xxxxxxx X. Xxxxx
|
|
|
Name:
|
Xxxxxxx
X. Xxxxx
|
|
|
Title:
|
President/Chief
Executive Officer
|
|
