EXHIBIT 10.10
EXECUTION COPY
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), made as of this 21st
day of May, 2002, by and between Xxxxxxxxxxx Xxxxx Xxxxxx (the "Executive") and
CARBO Ceramics Inc., a Delaware corporation (the "Company").
WITNESSETH
WHEREAS, subject and pursuant to the terms of an Agreement and
Plan of Merger, dated as of May 21, 2002 (the "Merger Agreement"), by and among
the Company, Pinnacle Technologies, Inc. ("Pinnacle"), and Ptechnologies
Acquisition Corporation, a direct wholly owned subsidiary of the Company
("Merger Sub"), Merger Sub will be merged with and into Pinnacle, with Pinnacle
as the surviving corporation (the "Merger");
WHEREAS, prior to the Merger, Executive was the President of
Pinnacle;
WHEREAS, effective as of the effective date of the
consummation of the Merger (the "Effective Date"), the Company wishes to employ
the Executive as President of Pinnacle and Vice President of the Company and the
Executive wishes to serve the Company in such capacities;
WHEREAS, CARBO agreed to execute the Merger Agreement in part due to
Xxxxxx'x agreement to execute this Agreement;
NOW, THEREFORE, in consideration of the conditions and
covenants set forth herein, it is agreed as follows:
1. Employment, Duties and Agreements.
(a) Effective as of, and subject to, the consummation of the
Merger, the Company hereby employs the Executive, and the Executive hereby
agrees to be employed by the Company during the Term, as President of Pinnacle
and Vice President of the Company on the terms and conditions set forth herein.
"Term" shall mean the period commencing on the Effective Date and ending on the
fifth anniversary of the Effective Date (the "Scheduled Termination Date");
provided, that the Term may be terminated prior to the Scheduled Termination
Date in accordance with Section 3 hereof. Upon the expiration of the Term on the
Scheduled Termination Date, the Executive's employment with the Company shall be
at will.
(b) The Executive shall have such responsibilities and duties
as the Chief Executive Officer of the Company or the Board of Directors of the
Company (the "Board") may from time to time reasonably determine consistent with
the Executive's positions set forth herein. In rendering his services hereunder,
the Executive shall be subject to, and shall act in accordance with, all
reasonable instructions and directions of the Board and all applicable policies
and rules thereof. The Executive shall devote the Executive's full working time
to the performance of the Executive's responsibilities and duties hereunder.
During the Term, the Executive will not, without the prior written consent of
the Board, render services, whether or not compensated, to
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any other person or entity as an employee, independent contractor, director or
otherwise; provided, however, that nothing herein shall restrict the Executive
from rendering services to not-for-profit organizations or managing the
Executive's personal investments during the Executive's non-working time.
(c) During the Term, the Executive will not engage in any
other business affiliation with respect to any entity, including, without
limitation, the establishment of a proprietorship or the participation in a
partnership or joint venture, or acquire any equity interest in any entity
(other than the Company) if (i) such engagement or ownership would interfere
with the full-time performance of his responsibilities and duties hereunder or
(ii) such entity is engaged in the current business of the Company or Pinnacle
or any affiliates thereof (the "Company Group"). The Executive represents and
warrants that, as of the Effective Date, the Executive will not be engaged in
any such business affiliation and will not own any such equity interests.
2. Compensation. During the Term, the Executive shall be
entitled to the following compensation.
(a) The Company shall pay the Executive a base salary at the
rate of $150,000 per annum, payable in accordance with the Company's normal
payroll practices ("Annual Base Salary"). The Board shall have the right to
review the Executive's performance and compensation from time to time and may,
in its sole discretion, increase his Annual Base Salary based on such factors as
the Board deems appropriate.
(b) The Executive will be eligible to receive an incentive
bonus in cash with respect to each fiscal year during the Term equal to 3% of
Pinnacle's pre-tax earnings up to $5,000,000 ("Earnings") (the "Incentive
Bonus"). Any such Incentive Bonus shall be paid to the Executive as soon as
practicable after the completion of the audited financial statements and
determination of Earnings for such fiscal year by the Board.
(c) The Executive will be eligible to participate in
applicable Company incentive compensation plans and programs (including, without
limitation, the Company's Incentive Bonus Plan and 1996 Stock Option Plan for
Key Employees, as amended (the "Option Plan")) on the same terms as apply
generally to other similarly situated executives of the Company from time to
time.
(d) The Executive shall be entitled to three (3) weeks of paid
vacation during each calendar year of the Term in accordance with the Company's
standard vacation policy and practices. The Executive shall take vacations only
at such times as are consistent with reasonable business needs of the Company.
(e) The Company shall reimburse the Executive for all
reasonable, ordinary and necessary expenses incurred by the Executive in the
performance of the Executive's duties hereunder; provided that the Executive
accounts to the Company for such expenses in a manner reasonably prescribed by
the Company.
(f) The Executive shall be eligible to participate in
applicable Company benefit plans and programs (including without limitation,
retirement, medical and life insurance) on the
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same terms as apply generally to other similarly situated executives of the
Company from time to time and shall be entitled to such perquisites as are
generally made available to other similarly situated executives of the Company
from time to time.
(g) Subject to the approval of the Compensation Committee of
the Board, as of the Effective Date, the Executive shall be granted pursuant to
the Option Plan non-qualified stock options to purchase 40,000 shares of common
stock of the Company with terms and conditions applicable generally to other
similarly situated executives of the Company.
3. Early Termination of the Term. The Term and the Executive's
employment hereunder shall terminate prior to the Scheduled Termination Date
upon written notice to the Executive by the Company or to the Company by the
Executive for any reason. In respect of any such termination, the Company shall
pay to the Executive within thirty (30) days after such termination, the
Executive's earned but unpaid Annual Base Salary, earned but unused vacation
(determined in accordance with the Company's standard vacation policy and
practices) and reimbursement for expenses incurred (in accordance with Section
2(e) hereof), all as of the date of such termination.
4. Restrictive Covenants.
(a) The Executive agrees that all information pertaining to
the prior, current or contemplated business of the Company Group, and their
officers, directors, employees, agents, shareholders and customers (excluding
(i) publicly available information (in substantially the form in which it is
publicly available) unless such information is publicly available by reason of
unauthorized disclosure by the Executive or by any person or entity of whose
intention to make such unauthorized disclosure the Executive is aware and (ii)
information of a general nature not pertaining exclusively to the Company Group
that generally would be acquired in similar employment with another company)
constitutes a valuable and confidential asset of the Company Group. Such
information includes, without limitation, information related to trade secrets,
customer lists, production techniques, and financial information of the Company
Group. The Executive agrees that he shall, during the Term and continuing
thereafter, (A) hold all such information in trust and confidence for the
Company Group, and (B) not use or disclose any such information to any person,
firm, corporation or other entity other than under court order or other legal or
regulatory requirement.
(b) During the Term and continuing for a period ending twelve
(12) months after the Executive's employment terminates for any reason
whatsoever, to the extent permitted by applicable law, the Executive agrees that
the Executive will not, directly or indirectly, (i) solicit any supplier or
client of the Company Group, or any prospective supplier or client while
Executive is employed by the Company Group (including, without limitation, in
each case, any supplier or client or any prospective supplier or client of
Pinnacle prior to the Merger) with a view to inducing such supplier or client,
or prospective supplier or client, to enter into an agreement or otherwise do
business with any Competitor with respect to (1) the production or supply of
ceramic, sand, resin-coated sand, or other proppants for use in hydraulic
fracturing of natural gas and oil xxxxx or (2) the provision of fracture
diagnostics, design and other consulting services through development and use of
its products, including, without limitation, tilt meter fracture mapping,
microseismic fracture mapping, reservoir monitoring and fracture simulation
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and design software, or attempt to induce any such supplier or client, or
prospective supplier or client, to terminate its relationship with the Company
Group or to not enter into a relationship with the Company Group, as the case
may be or (ii) offer employment to any employee of the Company Group or attempt
to induce any such employee to leave the employ of the Company Group.
(c) For purposes of this Agreement, a "Competitor" is any
corporation, firm, partnership, proprietorship or other entity which engages in
(1) the production or supply of ceramic, sand, resin-coated sand, or other
proppants for use in hydraulic fracturing of natural gas and oil xxxxx or (2)
the provision of fracture diagnostics, design and other consulting services
through development and use of its products, including, without limitation, tilt
meter fracture mapping, microseismic fracture mapping, reservoir monitoring and
fracture simulation and design software, but in any case does not include, for
this purpose, the Company Group or any service entity involved in the resale of
the Company Group's products.
(d) Prior to agreeing to, or commencing to, act as an
employee, officer, director, trustee, principal, agent or other representative
of any type of business other than as an employee of the Company Group during
the period in which the non-solicitation agreement, as described in Section
4(b), applies, the Executive shall (i) disclose such agreement in writing to the
Company and (ii) disclose to the other entity with which he proposes to act in
such capacity, or to the other principal together with whom he proposes to act
as a principal, the existence of this Agreement, including, in particular, the
non-disclosure agreement contained in Section 4(a) and the non-solicitation
agreement contained in Section 4(b).
(e) With respect to the restrictive covenants set forth in
Sections 4(a) and 4(b), the Executive acknowledges and agrees as follows.
(i) The specified duration of a restrictive covenant
shall be extended by and for the term of any period during
which the Executive is in violation of such covenant.
(ii) The restrictive covenants are in addition to any
rights the Company may have in law or at equity.
(iii) It is impossible to measure in money the
damages which will accrue to the Company Group in the event
that the Executive breaches any of the restrictive covenants.
Therefore, if the Executive breaches any restrictive covenant,
the Company Group shall be entitled to an injunction
restraining the Executive from violating such restrictive
covenants. If any member of the Company Group shall institute
any action or proceeding to enforce a restrictive covenant,
the Executive hereby waives the claim or defense that the
Company Group has an adequate remedy at law and the Executive
agrees not to assert in any such action or proceeding the
claim or defense that the Company Group has an adequate remedy
at law. The foregoing shall not prejudice the Company Group's
right to require the Executive to account for and pay over to
the Company Group, and the Executive hereby agrees to account
for and pay over, the compensation, profits, monies, accruals
or other benefits derived or received
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by the Executive as a result of any transaction constituting a
breach of the restrictive covenants.
(f) The restrictions in this Section 4 shall be in addition to
any restrictions imposed on the Executive by statute or at common law.
5. Miscellaneous.
(a) Each provision hereof is severable from this Agreement,
and if one or more provisions hereof are declared invalid the remaining
provisions shall nevertheless remain in full force and effect. If any provision
of this Agreement is so broad, in scope or duration or otherwise, as to be
unenforceable, such provision shall be interpreted to be only so broad as is
enforceable.
(b) Any notice to be given hereunder shall be given in
writing. Notice shall be deemed to be given when delivered by hand to the party
to whom notice is being given, on the first business day after transmission when
sent by facsimile transmission or on the first business day following sending by
overnight delivery via a national courier service. Notices to the Executive
should be addressed to the Executive as follows:
Xxxxxxxxxxx Xxxxx Xxxxxx
c/o Pinnacle Technologies, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000X
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Notices to the Company should be sent as follows:
CARBO Ceramics Inc.
0000 XxxXxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Secretary
Facsimile: (000) 000-0000
with copies sent to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Xxx: Xxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Either party may change the address or person to whom notices
should be sent to by notifying the other party in accordance with this Section
5(b).
(c) The failure to enforce at any time any of the provisions of
this Agreement or to require at any time performance by the other party of any
of the provisions hereof shall in no way be construed to be a waiver of such
provisions or to affect the validity of this Agreement, or
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any part hereof, or the right of either party thereafter to enforce each and
every such provision in accordance with the terms of this Agreement.
(d) This Agreement contains the entire agreement between the
parties with respect to the employment of the Executive by the Company after the
Effective Date and supersedes any and all prior understandings, agreements or
correspondence between the parties regarding such employment. It may not be
amended or extended in any respect except by a writing signed by both parties
hereto.
(e) This Agreement shall be governed by the laws of the State
of Delaware, without giving effect to the conflicts of law principles thereof
All actions and proceedings relating directly or indirectly to this Agreement
shall be commenced and litigated in any state or federal court located in
Delaware, which court shall have proper jurisdiction over such claim. The
parties to this Agreement submit that any such court shall have proper personal
jurisdiction over the parties to this Agreement, and irrevocably waive any
defense to a claim based on the lack thereof, and further waive any defense
based on the principle of forum non conveniens.
(f) This Agreement shall not be assignable by either party
hereto without the written consent of the other; provided, however, that the
Company may, without the written consent of the Executive, assign this Agreement
to (i) any entity with which the Company is merged or consolidated or to which
the Company transfers substantially all of its assets or (ii) any entity
controlling, under common control with or controlled by the Company.
(g) This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument.
(h) The headings in this Agreement are inserted for
convenience of reference only and shall not be a part of or control or affect
the meaning of any provision hereof
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be signed by its duly authorized representative and the Executive has hereunto
set his hand as of the day and year first above written.
CARBO CERAMICS INC.
By: /s/ C. XXXX XXXXXXX
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C. Xxxx Xxxxxxx
/s/ XXXXXXXXXXX XXXXX XXXXXX
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Xxxxxxxxxxx Xxxxx Xxxxxx
[Signature Page to Employment Agreement]
