EMPLOYMENT AGREEMENT
This
Employment Agreement (this "Agreement")
is
made and entered into as of April 1, 2006
(the
"Effective
Date"),
by
and between BOOTS & XXXXX SERVICES (the "Company")
and
XXXXXX X. XXXXXXX ("Employee").
The
Company hereby employs Employee and Employee accepts such employment on the
following
terms and conditions:
1.
Termination
of Consulting Agreement. The
Company and Employee hereby agree that the Consulting Agreement, dated August
16, 2002 by and between Boots & Xxxxx International
Well Control, Inc. (the "Parent
Company"
of
Company) and Oak Hollow Consulting,
L.L.C. (of which Employee is the principal) and any other services agreement,
whether
written or other (the "Consulting
Agreement"),
if
not previously terminated or expired, are
hereby effectively terminated.
2.
Term. Employee
shall be employed by the Company for a period of two (2) years from
the
Effective Date hereof (the "Employment
Term").
The
Employment Term and this Agreement
shall be automatically renewed for successive additional two (2) year terms
unless notice
of
termination is given in writing by either party to the other party at least
three (3) months
prior to the expiration of the initial term or any such renewal
term.
3.
Duties. Employee
shall initially hold the title of Executive Vice President (EVP) and
shall
perform such services as are appropriate for such position as established by
the
Board of
Directors and as the CEO of the Company may from time to time direct. As EVP,
Employee shall report directly to the CEO of the Company. The duties of Employee
shall include, but not be
limited to, corporate development and coordination of products and services
from
all business units.
During the Employment Term, Employee will not be required to permanently
relocate without his agreement; however Employee understands that regular travel
will be an essential part
of
his duties.
4.
Conduct
of Employee. During
the Employment Term, Employee shall devote his full
business time, effort, skill and attention to the affairs of the Company and
its
subsidiaries, will
use
his best efforts to promote the interests of the Company, and will discharge
his
responsibilities
in a diligent and faithful manner, consistent with sound business
practices.
Nothing
in this Agreement shall be deemed to preclude the Employee from participating
in other business, charitable or community opportunities if and to the extent
that (i) such business opportunities are not competitive with or similar to
the
business of the Company, (ii) the Employee's activities with respect to such
opportunities do not have a material adverse effect
on
the performance of the Employee's duties hereunder, (iii) the Employee's
activities pose
no
conflict of interest as to the Employee's responsibilities to the Company,
and
(iv) the Employee's
activities with respect to such opportunity have been fully disclosed in writing
to the Company's
President.
5.
Compensation. In
consideration of the work and other services that Employee performs
for the Company hereunder, the Company shall pay Employee the
following:
(a) Base
Salary. During
the Employment Term, the Company shall pay Employee a gross annual base salary
of not less than $220,000 (the "Base
Salary"),
payable semi-monthly
in accordance with the Company's normal payroll policies, subject to withholding
for
federal income tax, social security, state and local taxes, if any, and any
other sums that the Company may be legally required to withhold. The Base Salary
shall be reviewed on an annual basis
by
the Compensation Committee of the Board of Directors with the recommendation
of
the CEO
and
the amount of such Base Salary shall be subject to increase on the basis of
the
performance
of the Employee and the performance of the Company.
(b) Bonus. Employee
shall participate in the Company's employee incentive compensation
program and any other additional executive compensation plans adopted from
time
to
time by the Board of Directors or a compensation committee appointed by the
Board of Directors, and the Board of Directors or the compensation committee,
as
the case may be, shall have
the
authority to adjust such participation upward or downward from time to time
in
its sole discretion.
(c) Incentive
Stock Plan. From
time to time, at the direction of the Board of Directors
of the Parent Company, or its compensation committee, Employee shall be eligible
to receive
options to purchase shares of the Parent Company's Common Stock. Within 60
days
after
the
Effective Date, the Parent Company shall issue to Employee 120,000 options
to
purchase
the Parent Company's common stock at market value (determined as of the last
closing price
prior to the date of issue of the options). This grant shall be vested in annual
increments over
three years and the options shall have a term of six years.
(d) Retirement
Plan. Employee
shall be eligible to participate in any retirement
or similar plans as may be adopted from time to time by the
Company.
(e) Medical,
Life and Disability Insurance. Employee
will be permitted to participate
in the Company's life, health and dental insurance programs. Employee
acknowledges
that the Company may seek to secure a policy of Key Man life insurance on the
life of Employee, with death benefits payable to the Company. Employee agrees
to
cooperate with
the
Company in securing the same.
(f) Other
Benefits. During
the Employment Term, Employee shall be entitled to participate in all employee
benefit plans or to receive any incentive bonuses, stock options or other
benefits as may from time to time be made available to the executives or general
employees
of the Company, in the sole election of the Board of Directors.
6.
Vacation
and Sick Leave. Employee
shall be entitled to take 4 weeks of paid vacation
during each year of his employment hereunder. Such vacation shall be taken
at
such time, or times, as shall not be disruptive to the business of the Company.
Scheduling shall be accomplished with the CEO. Employee shall be entitled to
paid sick leave in accordance with Company
policies and procedures.
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7.
Expenses. The
Company shall reimburse Employee for all reasonable expenses and
disbursements incurred by Employee, and approved by the President or his
designee, in the performance
of his duties hereunder, including expenses for entertainment and travel, as
are
consistent
with the policies and procedures of the Company and Internal Revenue Service
regulations.
Travel and other expenses from Employee's home to the Company's office are
not
included.
The Company shall furnish Employee with a cellular telephone at the expense
of
the Company.
8.
Confidential
Information. Employee
acknowledges that in the course of employment
by the Company, Employee will receive certain trade secrets and confidential
information
belonging to the Company which the Company desires to protect as confidential.
For
the
purposes of this Agreement, the term "confidential information" shall mean
information of
any
nature and in any form which at the time is not generally known to those persons
engaged in business similar to that conducted by the Company. Employee agrees
that such information is confidential
and that he will not reveal such information to anyone other than officers,
directors, Employees
or authorized agents of the Company. Upon termination of employment, for any
reason,
Employee shall surrender all papers, documents and other property of the
Company.
9.
Information,
Ideas, Concepts, Improvements, Discoveries, Inventions, etc. Employee
agrees that during the Employment Term he will promptly disclose, in writing,
all information,
ideas, concepts, improvements, discoveries and inventions, whether patentable
or
not,
and
whether or not reduced to practice, which are conceived, developed, made or
acquired by
the
Employee, either individually, or jointly with others, and which relate to
the
business, products
or services of the Company, or any of its subsidiaries or affiliates,
irrespective of whether
such information, idea, concept, improvement, discovery or invention was
conceived, developed,
discovered or acquired by Employee on the job, or elsewhere (collectively,
the
"Inventions").
The
Company and Employee have agreed as follows regarding the
Inventions:
(a) All
inventions are, and shall be, the property of the Company. In this context,
all drawings, memoranda, notes, records, files, correspondence, manuals, models,
specifications,
computer programs, maps and all other writings, or materials of any time
embodying
any such Inventions are and shall be the sole and exclusive property of the
Company.
(b) Employee
hereby specifically sells, assigns and transfers to the Company all
of
his worldwide right, title and interest in and to all such Inventions, and
any
United States or foreign
applications for patents, inventor's certificates or other industrial rights
that may be filed thereon,
including divisions, continuations, continuations-in-part, reissues and/or
extensions thereof, and applications for registration of any names and marks
included therewith. Both during
the Employment Term and thereafter, Employee shall assist the Company and its
nominees
at all times in the protection of such Inventions, both in the United States
and
all foreign
countries, including but not limited to, the execution of all lawful oaths
and
all assignment
documents, not inconsistent with this Agreement, requested by the Company,
or
its nominee
in connection with the preparation, prosecution, issuance or enforcement of
any
applications
for United States or foreign letters patent, including divisions, continuations,
continuations-in-part,
reissue, and/or extensions thereof, and any application for the registration
of
names
and marks included therewith.
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(c) Moreover,
if during the Employment Term, Employee creates any original work
of
authorship which is the subject matter of copyright relating to the Company's
business, products,
or services, whether such work is created solely by Employee or jointly with
others, the Company
shall be deemed the author of such work if the work is prepared by Employee
in
the scope of his employment; or, if the work is not prepared by Employee within
the scope of his employment,
but is specifically ordered by the Company as a contribution to a collective
work, as
a part
of a motion picture or other audiovisual work, as a translation, as a
supplementary work, as
a
compilation or as an instructional text, then the work shall be considered
to be
a work made for
hire
and the Company shall be the author of the work. In the event such work is
neither prepared
by the Employee within the scope of his employment or is not a work specially
ordered and
deemed to be a work made for hire, then Employee hereby agrees to assign, and
by
these presents,
does assign, to the Company an undivided one-half interest in and to all of
Employee's worldwide right, title and interest in and to the work and all rights
or copyright therein, including but
not
limited to, the execution of all formal assignment documents requested by the
Company or its nominee, not inconsistent with this Agreement, and the execution
of all lawful oaths and applications
for registration of copyright in the United States and foreign
countries.
10. Agreement
Not to Solicit.
During
the Employment Term and for a period of one (1) year after the termination
of
employment hereunder (the "Termination
Date"),
regardless of how
terminated, Employee will not, solely, jointly, or as a partner, member,
contractor, Employee
or agent of any partnership or as an officer, director, Employee, agent,
contractor, stockholder
or investor in any other entity or in any other capacity, directly or
indirectly:
(a) induce,
or attempt to induce, any person or party who, on the Termination Date,
is
employed by or affiliated with the Company or at any time during the term of
this covenant
is, or may be, or becomes an employee of or affiliated with the Company, to
terminate his,
her
or its employment or affiliation with the Company;
(b) induce,
or attempt to induce, any person, business or entity which is or becomes
a
customer or supplier of the Company, or which otherwise is a contracting party
with the
Company, as of the Termination Date, or at any time during the term hereof,
to
terminate any written or oral agreement or understanding with the Company,
or to
interfere in any manner with any relationship between the Company and such
customer or supplier; or
(c) employ
or
otherwise engage in any capacity any person who at the Termination
Date or at any time during the period two (2) years prior thereto was employed,
or otherwise
engaged, in any capacity by the Company and who, by reason thereof is or is
reasonably
likely to be in possession of any confidential information.
Employee
acknowledges and agrees that the provisions of this paragraph 10 constitute
a
material, mutually
bargained for portion of the consideration to be delivered under this Agreement
and failure
to comply with this paragraph 10 shall be deemed a breach of this
Agreement.
11. Termination
by the Company.
Notwithstanding the provisions of paragraph 2, the Company
may terminate the employment of Employee under this Agreement if any of the
following
occur:
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(a) the
death
of Employee;
(b) the
Employee becomes, in the good faith opinion of the Board of Directors
of
the
Company, physically or mentally disabled, for a period of more than six (6)
consecutive months,
to the extent he is unable to perform his duties hereunder;
(c) for
any
reason, or for no reason, at the end of the initial two (2) year term
of
this
Agreement or any renewal thereof; or
(d) for
"Cause", which for purposes of this Agreement shall mean Employee (i)
has
engaged in gross negligence or willful misconduct in the performance of the
duties required
of him hereunder, (ii) has willfully refused without proper legal reason to
perform the duties
and responsibilities required of him hereunder (provided, however, that no
act
or failure to act
pursuant to subsections (i) and (ii) above shall be deemed "willful" if due
primarily to an error
in
judgment or negligence or if made in good faith with reasonable belief that
such
act is in the
best
interest of the Company), (iii) has materially breached any material provision
of this Agreement
(and such breach remains unconnected 30 days following Employee's receipt of
written
notice of the breach from the Company), or (iv) the Employee commits, is
arrested or officially
charged with any felony, or any crime involving moral turpitude, which, in
the
good faith
opinion of the Company, would impair Employee's ability to perform his duties
hereunder or
would
impair the business reputation of the Company or Employee misappropriates any
funds or
property of the Company.
12. Termination
by Employee. Notwithstanding
the provisions of paragraph 2, Employee
may terminate his employment under this Agreement if any of the following
occur:
(a) in
connection with or based upon (i) a material breach by the Company of
any
material provision of this Agreement, (ii) a substantial and material reduction
in the nature or scope
of
Employee's duties or responsibilities, (iii) a permanent re-location of Employee
without his
approval to an office outside of Xxxxxx County, Texas, or (iv) the assignment
to
Employee of duties
and responsibilities that are materially inconsistent with his position;
provided,
however,
that
prior to Employee's termination of employment under this paragraph 12(a),
Employee must give
written notice to the Company of any such breach, reduction or assignment and
such breach, reduction
or assignment must remain uncorrected for 30 days following such written notice;
or
(b) at
any
time, for any other reason whatsoever, in the sole discretion of Employee.
13. Termination
and Compensation.
(a) Termination
by the Company and Compensation.
In the event that the Company
elects to terminate Employee's employment prior to the expiration of a two
(2)
year initial
term, or renewal term, of this Agreement for any reason other than termination
for Cause as
expressly provided for in Paragraph 11(d), or if the Company chooses not to
renew this Agreement
at the expiration of any term hereunder, then, and in that event, the Company
shall pay
to
Employee, on the Termination Date, the following sole compensation: (i) a lump
sum payment
equal to one (1) year's gross annual salary, (ii) any earned bonus at the time
of termination,
(iii) shall continue the payment of premiums for hospitalization and major
medical
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insurance
for the lesser period of either twelve (12) months or the date on which Employee
secures full time employment that affords equivalent medical coverage, and
(iv)
half of all unvested
options held by Employee, if any, shall become fully vested, notwithstanding
anything to
the
contrary contained in the individual Option Agreement(s). In the event of a
termination for
Cause
pursuant to paragraph 11(d), this Agreement shall be wholly terminated and
Employee shall
not
be entitled to any further compensation or any other benefits provided for
herein, and shall
not
be entitled to severance pay. However, any of the provisions of this Agreement
relating to
activities and conduct after the termination of the employment relationship
between the Company
and Employee shall remain in full force and effect and enforceable.
(b) Termination
by Employee and Compensation.
In the
event that Employee elects
to
terminate his employment pursuant to paragraph 12(a), then, and in that event,
the Company
shall pay to Employee, on the Termination Date, the following compensation:
(i)
a lump
sum
payment equal to one (1) year's gross annual salary, (ii) any earned bonus
for
the year in
which
termination occurs, (iii) and shall continue the payment of premiums for
hospitalization and
major
medical insurance for the lesser period of either twelve (12) months or the
date
on which
Employee secures full time employment that affords equivalent medical coverage.
In the event
that Employee elects to terminate his employment pursuant to paragraph 12(b),
this Agreement
shall be wholly terminated and Employee shall not be entitled to any further
compensation
or any other benefits provided for herein, and shall not be entitled to
severance pay.
However, any of the provisions of this Agreement relating to activities and
conduct after the
termination of the employment relationship between the Company and Employee
shall remain
in
full force and effect and enforceable.
(c) Termination,
Other Provisions.
In the
event that a change in control event occurs
and the Employee is terminated by the Company for any reason other than for
cause pursuant
to Section 11(d) within one year following such change in control, then all
unvested options
held by Employee shall be immediately fully vested. Change in control event
shall be defined
to be any one of the following:
(1) any
"person" (as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), other
than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any affiliate or entity already owning
beneficial ownership of 35% or more of the combined voting power
of
the Company's then outstanding securities) acquires "beneficial ownership"
(within the meaning of Rule 13d-3 under the Exchange Act) of securities of
the
Company representing 35% or more of the combined voting
power of the Company's then outstanding securities; provided, however, that
if
the Company engages in a merger or consolidation in which
the
Company or surviving entity in such merger or consolidation becomes
a
subsidiary of another entity, then references to the Company's then
outstanding securities shall be deemed to refer to the outstanding securities
of such parent entity;
(2) a
change
in the composition of the Board, as a result of which fewer
than a majority of the directors are Incumbent Directors.
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"Incumbent
Directors" shall mean directors who either (i) are directors of the
Company as of the Effective Date, or (ii) are elected, or nominated for
election,
to the Board with the affirmative votes of at least two-thirds of the
Incumbent Directors at the time of such election or nomination, but Incumbent
Director shall not include an individual whose election or nomination occurs
as
a result of either (1) an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or (2) an actual or threatened solicitation
of proxies or consents by or on behalf of a person other than the
Board
of Directors of the Company;
(3) the
consummation of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity
(or if the surviving entity is or shall become a subsidiary of another
entity,
then such parent entity)) more than 50% of the combined voting power
of
the voting securities of the Company (or such surviving entity or parent
entity, as the case may be) outstanding immediately after such merger
or
consolidation;
(4) the
stockholders of the Company approve a plan of complete liquidation
of the Company; or
(5) the
sale
or disposition (other than a pledge or similar encumbrance) by
the
Company of all or substantially all of the assets of the Company other
than to a subsidiary or subsidiaries of the Company.
14. No
Duty to Mitigate Losses. Employee
shall have no duty to find new employment
following the termination of his employment under circumstances which require
the Company
to pay any amount to Employee pursuant to paragraph 13. Any salary or
remuneration received
by Employee from a third party for the providing of personal services (whether
by employment
or by functioning as an independent contractor) following the termination of
his
employment
with the Company shall not reduce the Company's obligation to make a payment
to
Employee (or the amount of such payment) pursuant to the terms of paragraph
13.
15. Notices. All
notices or other communications pursuant to this Agreement may be given
by
personal delivery, or by certified mail, addressed to the home office of the
Company or to
the
last known address of Employee. Notices given by personal delivery shall be
deemed given
at
the time of delivery, and notices sent by certified mail shall be deemed given
when deposited
with the U.S. Postal Service.
16. Entirety
of Agreement Amendment. This
Agreement contains the entire understanding
of the parties and all of the covenants and agreements between the parties
with
respect
to Employee's employment. No amendment to this Agreement shall be effective
unless it
is in
writing and signed by both the parties hereto.
-7-
17. Governing
Law. This
Agreement shall be construed and enforced in accordance with,
and
be governed by, the laws of the State of Texas.
18. Waiver. The
failure of either party to enforce any rights hereunder shall not be
deemed
to
be a waiver of such rights, unless such waiver is an express written waiver
which has been
signed by the waiving party. Waiver of one breach shall not be deemed a waiver
of any other
breach of the same or any other provision hereof.
19. Assignment. This
Agreement shall not be assignable by Employee. Subject to Section
12(b) hereof, in the event of a future disposition of the properties and
business of the Company
by merger, consolidation, sale of assets, or otherwise, then the Company may
assign this
Agreement and all of its rights and obligations to the acquiring or surviving
entity; provided, that any such entity shall assume all of the obligations
of
the Company hereunder.
20. Counterparts. This
Agreement may be executed in any number of counterparts, each
of
which shall be deemed to be an original for all purposes hereof.
21. Arbitration. Any
dispute, controversy or claim arising out of or relating to this Agreement
and Employee's job duties shall be submitted to and finally settled by binding
arbitration
to be held in Houston, Texas, in accordance with the rules of the American
Arbitration
Association in effect on the Effective Date, and judgment upon the award
rendered by
the
arbitrator(s) may be entered in any court having jurisdiction thereof. All
agreements contemplated
herein to be entered into to which the parties hereto are parties shall contain
provisions
which provide that all claims, actions or disputes pursuant to, or related
to,
such agreements
shall be submitted to binding arbitration. In any proceeding to enforce the
provisions hereof,
the prevailing party shall be entitled to recover reasonable expenses incurred
by him, including
reasonable attorneys' fees.
This
Agreement is entered into as of the Effective Date.
| "COMPANY" | ||
| BOOTS & XXXXX SERVICES | ||
|
By:
|
/s/
Xxxxx Xxxxxxxxxx
|
|
|
Xxxxx
Xxxxxxxxxx, CEO
|
||
| "EMPLOYEE" | ||
| /s/ Xxxxxx X. Xxxxxxx | ||
| Xxxxxx X. Xxxxxxx | ||
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