EMPLOYMENT AGREEMENT
Exhibit
10.1
EMPLOYMENT AGREEMENT, dated as of March
5, 2008, by and between Best Energy Services, Inc., a Nevada company with
offices at 0000 Xxxxx Xxxxx 0000 Xxxxxxx, Xxxxx 00000 (“BES”
or the “Company”), and Xxxxx X. Xxxxxxx (the “Employee”).
RECITALS:
BES
desires that Employee serve as its Executive Vice President and Chief Financial
Officer and Employee desires to serve BES in such capacity on the terms and
conditions set forth herein;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto, intending to be legally bound, agree as
follows:
1. Engagement.
BES
hereby employs the Employee and the Employee hereby accepts such employment upon
the terms and subject to the conditions of this Agreement.
2. Term.
The term of the Employee’s engagement
under this Agreement shall commence as of March 5, 2008, and, subject to the
terms and conditions hereof, shall continue until December 31, 2009 (the
“Initial Term”). Unless at least sixty (60) days prior to the end of the Initial
Term either party shall give notice to the other of the termination of this
Agreement as of the end of the Initial Term, subsequent to the Initial
Term, Employee shall continue in the employ of the Company on a month to month basis on the terms
and conditions hereof. The period during which Employee is employed by the Company, inclusive
of the Initial Term, is referred to herein as the “Term.”
3. Duties;
Efforts.
(a) During
the Term, Executive shall diligently (i) serve as Executive Vice President and
Chief Financial Officer of the Company or in such other executive capacity as
may be assigned to him by the Board of Directors of the Company (the “Board”);
(ii) report to the Chief Executive Officer and (iii) abide by and carry out the
policies and programs of the Company as the same may exist from time to time.
For so long as the Employee is employed hereunder the Company shall nominate him
to serve as a member of the Board.
(b) The
Employee shall devote a majority of his business time, attention and energies to
the business and affairs of BES, shall use diligent efforts to advance the best
interests of BES, and shall not during the Term be engaged in any other business
activities, whether or not such business activities are pursued for gain, profit
or other pecuniary advantage, that are in conflict with the business interests
of the Company; provided, however, that, it shall not be a violation of this
Agreement for the Employee to (i) serve on civic or charitable boards or
committees, (ii) manage personal investments, or (iii) serve on the board of
directors of a corporation not in competition with BES, with the consent of the
Board, which consent shall not be unreasonably withheld.
(c) Employee
acknowledges that the performances of his duties will require substantial and
frequent travel and that Employee may be expected to travel as necessary and at
the reasonable request of the Chief Executive Officer.
4. Compensation.
(a) Base Salary. Employee’s
initial base salary (“Base Salary”) shall be $12,500 per month. The Base Salary
shall be increased to $16,000 per month as of the first month beginning after
the earlier of the date on which an S-1 or SB-2 registration statement becomes
effective in 2008 or the date on which the common shares sold in the private
placement by Hybrook Resources, Inc. in February 2008 and held by non-affiliates
can be traded without restriction. The Base Salary shall be increased by the
same or a larger percentage as the highest percentage increase of a Base Salary
for any other executive officer, whenever the Base Salary is increased for any
executive officer. Base Salaries are expected to be reviewed at least annually
by the Board. The Base Salary is payable in accordance with the Company’s
payroll practices, but no less frequently than monthly.
(b) Car
Allowance. During the Term of this Agreement, Company shall
pay Employee a non-accountable car allowance of no less than $500 per
month.
(c) Discretionary Performance
Bonus. During the Term of this Agreement, provided Employee is
then in the employ of the Company, the Board in its sole discretion shall
determine whether to award Employee a performance-based cash bonus (the
“Bonus”). Such bonus shall be in addition to and separate from the Employee’s
Base Salary and shall be no less than 50% of the highest Bonus granted to any
other executive officer.
(d) Out-of Pocket
Expenses. BES shall reimburse Employee for out-of-pocket
expenses incurred by him in the performance of his duties hereunder in
accordance with Company policy in effect from time to time.
(e) Vacation. The
Employee shall be entitled to four weeks paid vacation per annum. Such vacation
shall be taken at a time not inconvenient to BES, upon reasonable prior notice
to the Chief Executive Officer and in increments of not more than ten (10)
business days in any thirty (30) day period. The Employee shall be entitled to
an additional week paid vacation per annum beginning in the second calendar year
of the Term. The vacation days shall be exclusive of federal holidays. No
vacation time shall be paid for if not taken and unused vacation time may be
carried forward for no more than one year.
(f) Participation in Benefit Plans.
The Employee shall be entitled to participation in or receive benefits
under any pension plan, health, and accident plan or any other employee benefit
plan or arrangement made available now or in the future by BES to its employees
generally. Employee’s right to participate in any such plan may be conditioned
on such terms and conditions as the Company applies to its executive management
employees generally subject to such eligibility requirements as may be
applicable. So long as Employee and his family are insurable at standard rates,
the Company shall pay the premiums for medical coverage for Employee, his spouse
and the minor members of his family.
(g) Participation in Incentive Stock
Plans. The Employee shall be entitled to participate in any
incentive stock plans of the Company. Specifically, as of March 5, 2008, BES
grants 150,000 shares of Common Stock vesting immediately and 150,000 five-year
options with a cashless exercise option and a strike price of $0.50 per share
which options shall vest on December 31, 2008. Employee acknowledges that any
further incentive stock, warrant, or option grants to be granted to the Employee
shall be at the sole and absolute discretion of the Board and Employee shall not
be able to vote on such future grants to Employee, but that BES agrees that
Employee shall receive grants of like terms to any grants made to any other
executive officers in an amount not less than 50% of the largest grant made to
any other executive officer.
5. Termination.
(a) Resignation by
Employee. The Employee’s employment hereunder shall terminate
upon the voluntary resignation by Employee.
(b) Termination by Company. The
Employee’s employment hereunder may be terminated by the Company at any time
with or without “Cause.” “Cause” is defined as:
(i) refusal
or gross neglect to perform the Employee’s material duties under this Agreement,
other than as a result of Disability;
(ii) the
commission by Employee of a dishonest, illegal or fraudulent act, including the
confession of judgment, entry of a plea of guilty or nolo contendere or the
conviction in any court within the United States on a charge constituting a
felony or misdemeanor as to which fraud, false statements or similar acts are an
element of such crime;
(iii) in
the case of clauses (i), and (ii), above, the Employee shall receive ninety (90)
days’ advance notice that the Company intends to terminate the Employee’s
employment for Cause and specifying the actions constituting Cause, during which
period he shall have the opportunity to cure the conduct constituting
Cause;
(c) Upon Death or For
Disability. The Employee’s engagement by BES shall immediately
terminate upon his death without any further action. BES shall have the right to
terminate the Employee’s employment upon delivery of notice to the Employee as a
result of the Employee’s Disability. For purposes of this Agreement, a “Disability”
shall be deemed to have occurred:
(i) if
(A) the Employee has been unable, due to any physical or mental illness or
injury, substantially to perform his duties hereunder for at least 30
consecutive business days (exclusive of any approved leave and any vacation
permitted under Section 4(e) hereof), (B) the Company delivers a written notice
to the Employee (“Disability
Notice”) following such period stating that the Company intends to
terminate the Employee by reason of Disability but no earlier than the 90th day
following the onset of such Disability, and (C) the Employee in fact fails to
resume his full-time employment with BES, on or before the 90th day
following the onset of such Disability; or
(ii) if
the Employee is unable, due to any physical or mental illness or injury,
substantially to perform his duties hereunder for more than 120 business days in
any 360 day period.
(iii) As
a condition to continuation of the compensation provided herein during the
period of any Disability, upon request of the Company, the Employee will provide
the Company with a report from his physician attesting to the Employee’s
disability.
6. Payments Upon
Termination.
(a) Death or Disability. In the
event of the termination of the Employee’s employment as a result of his death
or Disability, BES shall:
(i) pay
to the Employee or his estate, as the case may be, the Base Salary through the
date of his termination (pro rated for any partial month) plus six months;
and
(ii) a
pro-rata portion (based upon actual number of days worked) of any Bonus which
may be due for such fiscal year pursuant to any plan then in effect, to the
extent the performance criteria for such fiscal year are met; and
(iii) reimburse
the Employee, or his estate, as the case may be, for any expenses reimburseable
pursuant to Section 4(d) (the amounts payable pursuant to the foregoing clause
(i) and this clause (iii) being hereafter referred to as the “Accrued
Obligations”).
(b) By BES for Cause or by the Employee
Voluntarily. In the event that the Employee’s engagement is
terminated by BES for Cause or by the Employee voluntarily, BES shall pay to the
Employee the Accrued Obligations within fifteen (15) days after such termination
and the Employee shall have no further entitlement to any other compensation or
benefits from the Company, except as set forth herein.
(c) By BES other than for Cause or the
Employee’s Death or Disability. In the event that BES provides notice
under Section 5(b) hereof terminating the Employee’s employment hereunder
without cause, then BES shall pay to the Employee the Accrued Obligations,
within fifteen (15) days after termination of his employment, a pro-rata portion
(based upon actual number of days worked) of any Bonus which may be due for such
fiscal year pursuant to any plan then in effect, to the extent the performance
criteria for such fiscal year are met, and as additional severance shall pay to
Employee an amount equal to his Base Salary for a period equal to six (6) months
plus one (1) month for each full year for which the Employee has been employed
by BES up to a maximum additional severance of twelve (12) months, such payment
to be made over a period of six months no less frequently than twice a month,
and pay or reimburse the Employee for a like period for continued coverage under
all welfare benefit including medical, accident, life or other disability plans
and programs in which the Employee participated immediately prior to his
termination.
(d) The
Employee acknowledges that upon the termination of his employment and payment of
the amounts due pursuant to Sections 6(a), 6(b) or 6(c), he shall not be
entitled to any payments or benefits that are not explicitly provided
herein.
(e) As
a condition to the receipt of any payments provided for in Clauses 6(a) and
6(b), Employee shall execute and deliver to the Company a general release in
such form as may be reasonably requested by the Company in favor of the Company,
its shareholders, directors, officers and employees.
7. Acknowledgments of the
Employee and BES:
(a) The
Employee represents that (i) he has the right to enter into this Agreement and
this Agreement constitutes a valid and binding obligation enforceable in
accordance with its terms (ii) the execution and delivery of this Agreement by
him, and the performance of his obligations hereunder are not in violation of,
and do not conflict with or constitute a default under any agreement by which he
is bound or any order, decree or judgment to which he is subject; and (iii) the
provisions of Section 7 and 8 will not impose a hardship, financial or
otherwise, on the Employee nor prevent him from being gainfully
employed.
(b) BES
represents that (i) it has all requisite power and authority to enter into and
perform its obligations under this Agreement, (ii) the execution and delivery of
this Agreement by BES and its performance of the transactions contemplated
herein have been duly and validly authorized by all necessary corporate action,
(iii) this Agreement is a legal, valid and binding obligation of BES and (iv)
the execution and delivery of this Agreement by BES and the performance of its
obligations hereunder are not in violation of, and do not conflict with or
constitute a default under any agreement by which BES is bound or any order,
decree or judgment to which BES is subject.
8. Notices.
Any
notice or other communications required or permitted hereunder shall be in
writing and shall be deemed effective (a) upon personal delivery, if delivered
by hand, (b) upon receipt of electronic confirmation, if sent by facsimile
transmission, (c) three (3) days after the date of deposit in the mails, if
mailed by certified or registered mail (return receipt requested), or (d) on the
next business day, if mailed by an overnight mail service to the parties at
their addresses set forth above.
Copies of
all notices to BES or the Employee under this Agreement shall be sent to its or
his address set forth above, with a copy to:
In the
case of BES:
Xx. Xxxxx
Xxx
Xxxxxxx
Xxxxxx, LLP
000 Xxxx
Xxxxxx, Xxxxx 0000 Xxxxxx, Xxxxx 00000
In the
case of Employee:
Xx. Xxxxx
X. Xxxxxxx
0000 Xxxx
Xxxxxxx, Xxxxx 000 Xxxxxxx, Xxxxx 00000
000-000-0000
Facsimile
000-000-0000
or to
such other or additional address or facsimile number as either party may from
time to time specify to the other.
9. Miscellaneous.
(a) Successors; Binding Effect; Third
Party Beneficiaries. In the event of a future disposition by BES (whether
direct or indirect, by sale of assets or stock, merger, consolidation or
otherwise) of all or substantially all of its business and/or assets, BES will,
have the right to assign this agreement to the entity which acquires all or
substantially all of its business, if that entity agrees to be bound by this
agreement.
This
Agreement is personal to the Employee and, without the prior written consent of
BES shall not be assignable by the Employee otherwise than by will or the laws
of descent and distribution with respect to the Employee’s rights, if any, to be
paid or receive benefits hereunder. This Agreement shall inure to the benefit of
and be enforceable by the Employee’s legal representatives. Except for the
foregoing, this Agreement shall not create any rights in favor of any party
other than the parties hereto or their respective successors and
assigns.
(b) Law Governing;
Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas (without
giving effect to the principles of conflicts of law). Any litigation proceeding
under this Agreement shall be confidential in nature to the fullest extent
permitted by applicable law.
(c) Severability. If
any provision of this Agreement, or any part of any of them, is hereafter
construed or adjudicated to be invalid or unenforceable, the same shall not
affect the remainder of the covenants or rights or remedies which shall be given
full effect without regard to the invalid portions. If any of the covenants set
forth herein is held to be invalid or unenforceable because of the duration of
such provision or the area covered thereby, the parties agree that the court
making such determination shall have the power to reduce the duration and/or
area of such provision and in its reduced form said provision shall then be
enforceable.
(d) Headings. The headings of
this Agreement are for convenience of reference only and shall not affect in any
manner any of the terms and conditions hereof
(e) Acts and Documents. The
parties agree to do, sign and execute all acts, deeds, documents and corporate
proceedings necessary or desirable to give full force and effect to this
Agreement.
(f) Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
agreement.
(g) Modifications and Waivers. No
term, provision or condition of this Agreement may be modified or discharged
unless such modification or discharge is agreed to in writing and signed by the
Company and Employee. No waiver by either party hereto of any breach by the
other party hereto of any term, provision or condition of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent
time.
(h) Entire Agreement. This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter herein and supersedes all prior agreements, negotiations and
discussions between the parties hereto, there being no extraneous agreements.
This Agreement may be amended only in writing executed by the parties hereto
affected by such amendment.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year first set forth above.
EMPLOYEE: /s/ Xxxxx X.
Xxxxxxx
Xxxxx X.
Xxxxxxx
COMPANY: Best
Energy Services, Inc.
By: /s/ Xxxx
Xxxxxxxxxx
Name: Xxxx
Xxxxxxxxxx
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Title : Director, Chairman – Compensation
Committee
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