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EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement is made and entered into between
Boots & Xxxxx International Well Control, Inc., a Delaware corporation, having
a place of business at 000 Xxxx Xxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx, 00000
(the "Company") and X. X. Xxxxxxx, an individual resident of Houston, Texas
(the "Executive").
WHEREAS, the Company is a global-response well control service company
that specializes in oil field emergencies, including blowouts and well fires;
and
WHEREAS, the Company is desirous of making appropriate long-term
arrangements for the management of its business affairs; and
WHEREAS, the Company is desirous of retaining the Executive to serve
as its Chairman of the Board and Chief Executive Officer on the conditions set
forth herein for the entire term of this Agreement, and
WHEREAS, in such capacity, the Executive will have access to all of
the business methods and confidential information relating to the Company and
its business activities including, but not limited to, its operational and
financial matters, its contemplated acquisition and business development plans,
its personnel training and development programs and its industry relationships.
NOW THEREFORE, in consideration of the promises and of the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. EXECUTIVE REPRESENTATIONS AND WARRANTIES. The Executive represents
and warrants to the Company that he is free to accept employment hereunder and
that he has no prior or other obligations or commitments of any kind to anyone
that would in any way hinder or interfere with his acceptance of, or the full,
uninhibited and faithful performance of this Agreement, or the exercise of his
best efforts as an executive officer of the Company.
2. EMPLOYMENT AND DUTIES. The Company shall employ the Executive as
its Chief Executive Officer, or in such other comparable executive capacity as
the Board of Directors of the Company shall specify from time to time, and the
Executive shall be employed by and will work for the Company at Company's
executive offices in Houston, Texas. As Chief Executive Officer, the Executive
shall report directly to the Board of Directors, and be responsible for the
entire management activities of the Company. The duties of the Executive shall
include, but not be limited to, directing day to day operations, business
planning, development and implementation of appropriate policies, practices,
and procedures. The Executive's responsibilities shall include all of the
duties and responsibilities of the Chief Executive Officer as described in the
By-laws of the Company, as the same may be amended from time to time. In
addition, the Executive shall, from time to time, perform such other functions
and duties in connection with the business of the Company as the Board of
Directors may entrust or delegate to him.
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3. CONDUCT OF EXECUTIVE. During the entire Term of this Agreement, the
Executive 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. During
the entire Term of this Agreement, the Executive shall agree to serve as a
member of the Company's Board of Directors if elected to such position by the
shareholders of the Company. In furtherance of the foregoing:
(a) The Executive represents that his employment by the Company will
not conflict with any obligations which he has to any other person,
firm or entity. The Executive specifically represents that he has
not brought to the Company (during the period before the signing of
this Agreement) and he will not bring to the Company any materials
or documents of a former or present employer, or any confidential
information or property of any other person, firm or entity.
(b) The Executive shall not, without disclosure to and approval of the
Board of Directors of the Company, directly or indirectly, assist
or have an active interest in (whether as a principal, stockholder,
lender, employee, officer, director, partner, venturer, consultant
or otherwise) in any person, firm, partnership, association,
corporation or business organization, entity or enterprise that
competes with or is engaged in a business which is substantially
similar to the business of the Company except that ownership of not
more than 5% of the outstanding securities of any class of any
publicly-held corporation shall not be deemed a violation of this
sub-paragraph 3(b).
(c) The Executive shall promptly disclose to the directors of the
Company, in accordance with the Company's policies, full
information concerning any interests, direct or indirect, he holds
(whether as a principal, stockholder, lender, Executive, director,
officer, partner, venturer, consultant or otherwise) in any
business which, as reasonably known to the Executive purchases or
provides services or products to, the Company or any of its
subsidiaries, provided that the Executive need not disclose any
such interest resulting from ownership of not more than 5% of the
outstanding securities of any class of any publicly-held
corporation.
(d) The Executive shall not disclose to any person or entity (other
than to the Company's Board of Directors or to others as required,
in his judgment, in the due performance of his duties under this
Agreement) any confidential or secret information with respect to
the business or affairs of the Company, or any of its subsidiaries
or affiliates.
Nothing in this Agreement shall be deemed to preclude the Executive
from participating in other business opportunities if and to the extent that (i)
such business opportunities are not directly competitive with or similar to the
business of the Company, (ii) the Executive's activities with respect to such
opportunities do not have a material adverse effect on the performance of the
Executive's duties hereunder, and (iii) the Executive's activities with respect
to such opportunity have been fully disclosed in writing to the Company's Board
of Directors.
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4. CONDITIONS OF EMPLOYMENT.
(a) Term of Employment. Unless terminated earlier in accordance with
the provisions of this Agreement, the Executive will be employed by
the Company for a period commencing on April 1, 1999 and
terminating on March 31, 2004 (the "Term"). Thereafter, this
Agreement shall be renewable on such reasonable terms and for such
periods as may be negotiated between the Executive and the Company.
(b) Place of Employment. The Executive shall occupy offices at the
Company's headquarters in Houston, Texas, which will be maintained
for his use by the Company at the Company's expense. The Executive
shall not be required during the Term of this Agreement to relocate
from Houston, Texas to any other business location maintained by
the Company although the Executive expressly agrees that regular
travel shall be necessary as part of his duties.
(c) Ownership of Company Records and Reports. The Executive shall not,
except in the performance of his duties hereunder, at any time or
in any manner make or cause to be made any copies, pictures,
duplicates, facsimiles, or other reproductions or recordings or any
abstracts or summaries of any reports, studies, memoranda,
correspondence, manuals, records, plans or other written or
otherwise recorded materials of any kind whatever belonging to or
in the possession of the Company, or of any subsidiary or affiliate
of the Company, including but not limited to materials describing
or in any way relating to the Company's business activities
including, but not limited to, its proprietary techniques and
technologies, its operational and financial matters, its
contemplated acquisition and development plans, its personnel
training and development programs and its industry relationships.
The Executive shall have no right, title or interest in any such
material, and the Executive agrees that, except in the performance
of his duties hereunder, he will not, without the prior written
consent of the Company remove any such material from any premises
of the Company, or any subsidiary or affiliate of the Company, and
immediately upon the termination of his employment for any reason
whatsoever Executive shall return to the Company all such material
in his possession.
(d) Company's Trade Secrets. Without the prior written consent of the
Company, the Executive shall not at any time (whether during or
after his employment with the Company) use for his own benefit or
purposes or for the benefit or purposes of any other person, firm,
partnership, association, corporation or business organization,
entity or enterprise, or disclose in any manner to any person,
firm, partnership association, corporation or business
organization, entity or enterprise, except in the performance of
his duties hereunder, any trade secrets, or any information data,
know-how or knowledge constituting trade secrets belonging to, or
relating to the affairs of the Company, or any subsidiary, former
subsidiary, or affiliate of the Company.
(e) Inventions, Copyrights. Trademarks. The Executive shall promptly
disclose to the Company (and to no one else) all improvements,
discoveries, ideas and inventions that may be of significance to
the Company, or any subsidiary or affiliate of the Company, made or
conceived alone or in conjunction with others (whether or not
patentable, whether or not made or conceived at the request of or
upon the suggestion of the Company or any subsidiary or affiliate
of the Company during or out of his
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usual hours of work or in or about the premises of the Company or
elsewhere) while in the employ of the Company or of any subsidiary
or affiliate of the Company, or made or conceived within one year
after the termination of his employment by the Company or of any
subsidiary or affiliate of the Company if resulting from, suggested
by or relating to such employment. All such improvements,
discoveries, ideas and inventions shall be the sole and exclusive
property of the Company and are hereby assigned to the Company. At
the request of the Company and at its cost, the Executive shall
assist the Company, or any person or persons from time to time
designated by it, to obtain the copyright, trademark and/or grant
of patents in the United States and/or in such other country or
countries as may be designated by the Company, covering such
improvements, discoveries, ideas and inventions and shall in
connection therewith and in connection with the defense of any
patents execute such applications, statements or other documents,
furnish such information and data and take all such other action
(including, but not limited to, the giving of testimony) as the
Company may from time to time reasonably request.
(f) Continuation of Employment After Initial Term. A continuation of
Executive's employment with the Company after the initial Term
hereof shall be deemed to be an extension of this Agreement on a
month-to-month basis, subject to termination by either party on
thirty (30) days advance written notice, except that no bonus shall
be paid during said continued period unless agreed upon in writing
between the parties.
5. COMPENSATION. The Company shall compensate the Executive for all
services to be rendered by him during the Term as follows:
(a) The Executive shall receive a Salary of $300,000 per year during
the period commencing on April 1, 1999 and terminating on March 31,
2004. The Executive's Salary shall be reviewed on an annual basis
and the amount of such Salary shall be subject to renegotiation on
the basis of the performance of the Executive and the performance
of the Company.
(b) The Executive shall participate in the Company's Executive Bonus
Pool and any other additional executive compensation plans adopted
by the shareholders of the Company; provided, however, that the
discretionary authority to determine the level of the Executive's
participation therein and the terms and conditions of such
participation shall remain vested in the Company's 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) The Executive shall participate in the Company's standard employee
benefit programs, including but not limited to the Company's
medical/hospitalization insurance and group life insurance, as in
effect from time to time. Further, Executive shall be entitled to a
company paid policy of life insurance, payable to his designated
beneficiary, in an amount of not less than $1,500,000.
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(d) The Executive shall receive an automobile allowance of $1,500 per
month from which the Executive shall be required to provide a
suitable automobile and all ordinary and necessary fuel,
maintenance and insurance, provided, however, that the Company
will pay any extraordinary operating expenses for business use of
the automobile.
(e) During the Term of this Agreement, the Company will reimburse the
Executive for all reasonable business expenses incurred by him on
behalf of the Company in the performance of his duties hereunder
upon presentation of vouchers, receipts or other evidence of such
expenses in accordance with the policies of the Company.
(f) The Executive shall be entitled to reimbursement for the costs
associated with membership in one golf country club, including
monthly dues and expenses associated with business entertainment
at such club.
Notwithstanding any other provision of this Agreement, it is
agreed that the Executive shall be entitled to receive such
incentive bonuses, stock options and other benefits as may be
granted by the board of directors from time to time.
6. RESTRICTED STOCK OPTION. Simultaneously with the execution of this
Agreement, the Executive shall be entitled to receive and the Company shall
issue to the Executive an Option to purchase shares of the Company's authorized
and previously unissued $0.00001 par value common stock (the "Option Shares"),
as set forth on the attached Schedule "A", which shall, upon issuance, be
subject to all of the following terms and conditions:
(a) The Option Shares are issued to the Executive for the sole purpose
of providing the Executive with a tangible incentive to put forth
maximum efforts for the success of the Company and its business in
the future. Therefore, in the event that the Executive's
employment with the Company is terminated for any reason prior to
any anniversary of the date of this Agreement, then all Option
Shares that have not previously vested in the Executive pursuant
to sub-paragraphs (b) through (d) hereof shall be immediately
forfeit without further action by the Company or the Executive.
(b) Absolute and unrestricted ownership of the Option Shares shall
vest in the Executive over the 5 year period commencing on the
date of this Agreement, at the rate of twenty percent (20%) of the
Option Shares per year. The foregoing vesting shall not occur
until an anniversary date of this Agreement, provided, however,
consideration shall be given to partial periods in the event that
the Executive's employment with the Company is terminated for any
reason, other than for cause, prior to any anniversary of the date
of this Agreement.
(c) Notwithstanding the provisions of subparagraphs (a) and (b)
absolute and unrestricted ownership of all unvested Option Shares
shall vest in the Executive immediately prior to the consummation
of (i) any merger, consolidation or similar business combination
transaction where the Company is not the surviving entity, (ii)
any sale of all or substantially all of the Company's assets where
the proceeds are intended for distribution to the stockholders, or
(iii) any other transaction or series of transactions
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whereby any person, entity or group acting in concert acquires
direct or indirect ownership of more than 10% of the Company's
outstanding voting securities.
7. TERMINATION OF EMPLOYMENT.
(a) This Agreement and the compensation payable to Executive hereunder
shall terminate and cease to accrue forthwith upon Executive's
death.
(b) The Executive's employment under the terms of this Agreement may
be terminated, at the option of the Company by notice to the
Executive, (i) for any reason, or for no reason, at the end of the
initial Term of this Agreement, (ii) as a result of disability of
the Executive as provided in subparagraph (c) below, or (iii) for
cause as defined in subparagraph (d) below.
(c) As used herein, "disability" shall mean such physical or mental
disability or incapacity of the Executive which, in the good faith
determination of the Board of Directors of the Company, has
prevented the Executive from performing substantially all of the
duties hereunder during any period of six (6) consecutive months.
Subject only to existing Federal, State or local law, if the
Executive suffers a disability, the Company shall have the right
to terminate this Employment Agreement by giving notice at any
time after the expiration of such three-month period and this
Employment Agreement shall terminate upon the Company giving such
notice. Such termination shall not, however, affect any rights of
the Executive under the Company's Executive benefit plans as
constituted on the date of such termination.
(d) As used herein, "cause" shall mean (i) any material failure by
Executive to observe or perform his Agreements herein contained,
(ii) any fraudulent or dishonest conduct in the performance of the
Executive's duties and functions, (iii) any gross negligence or
willful breach of the Executive's obligations under this
Agreement, or (iv) any intentional disregard of the policies and
instructions established by the Board of Directors of the Company.
(e) Upon termination of this Agreement by the Company for cause prior
to the end of the initial term, except for termination based upon
an intentional act on the part of Executive including, by way of
example, the refusal to perform work when the Executive is
physically and mentally able to do so or engaging in competition
with the Company, the Executive shall receive as a complete and
total settlement of all of claims of every type and nature against
the Company, its officers and Executives, immediately upon
termination a lump sum payment equal to 24 month's base annual
salary (said sum shall hereinafter be referred to as "Liquidated
Damages"). If Executive is terminated by reason of an intentional
act on his behalf, Executive shall be due no compensation other
than accrued base salary owing up to the time of termination.
8. SPECIFIC PERFORMANCE. If any portion of this Agreement is found by
a court of competent jurisdiction to be too broad to permit enforcement of such
restriction to its full extent, then such restriction shall be enforced to the
maximum extent permitted by law, and the
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Executive hereby consents and agrees that such scope may be judicially modified
accordingly in any proceeding brought to enforce such restriction. All
provisions of this Agreement are severable, and the unenforceability or
invalidity of any single provision hereof shall not affect any remaining
provision. The Executive acknowledges and agrees that the Company's remedy at
law for any breach of any of his obligations hereunder would be inadequate, and
agrees and consents that temporary and permanent injunctive relief may be
granted in any proceeding that may be brought to enforce any provision of this
Agreement without the necessity of proof of actual damage and without any bond
or other security being required. Such remedies shall not be exclusive and shall
be in addition to any other remedy which the Company may have.
9. MISCELLANEOUS.
(a) The failure of a party to insist on any occasion upon strict
adherence to any Term of this Agreement shall not be considered to
be a waiver or deprive that party of the right thereafter to insist
upon strict adherence to that Term or any other Term of this
Agreement. Any waiver must be in writing.
(b) All notices and other communications under this Agreement shall be
in writing and shall be delivered personally or mailed by
registered mail, return receipt requested, and shall be deemed
given when so delivered or mailed, to a party at such address as a
party may, from time to time, designate in writing to the other
party.
(c) Notwithstanding the termination of the Executive's employment
hereunder, the provisions of Paragraphs 6 and 9 shall survive such
termination.
(d) This Agreement shall be assigned to and inure to the benefit of,
and be binding upon, any successor to substantially all of the
assets and business of the Company as a going concern, whether by
merger, consolidation, liquidation or sale of substantially all of
the assets of the Company or otherwise.
(e) This Agreement constitutes the entire Agreement between the parties
regarding the above matters, and each party acknowledges that there
are no other written or verbal Agreements or understandings
relating to such subject matter between the Executive and the
Company or between the Executive and any other individuals or
entities other than those set forth herein. No amendment to this
Agreement shall be effective unless it is in writing and signed by
both the parties hereto.
(f) This Agreement shall be construed according to the laws of the
State of Texas pertaining to Agreements formed and to be performed
wholly within the State of Texas. In the event action be brought to
enforce any provisions of this Agreement, the prevailing party
shall be entitled to reasonable attorney's fees as fixed by the
court. The Executive represents and warrants that he has reviewed
this Agreement in detail with his legal and other advisors, as he
considers appropriate, and that he fully understands the
consequences to him of its provisions. The Executive is relying on
his own judgment and the judgment of his advisors with respect to
this Agreement and he understands that the Company is making no
representations to him concerning taxes or any other matters
respecting this Agreement.
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(g) Any dispute between the parties to this Agreement shall be
determined and settled by binding arbitration in Houston, Texas
under the rules of the American Arbitration Association. Judgment
on any award rendered by the arbitrators may be entered in any
court having jurisdiction over the party adversely by such award.
(h) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original for all purposes hereof.
IN WITNESS WHEREOF, the parties hereto have set their hands on this
1st day of April, 1999.
BOOTS & XXXXX INTERNATIONAL. X. X. XXXXXXX
WELL CONTROL, INC
By: /s/ [ILLEGIBLE] /s/ X. X. XXXXXXX
------------------------------------ -------------------------------
For the Board of Directors
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SCHEDULE A TO
EXECUTIVE EMPLOYMENT AGREEMENT
XXXXX X. XXXXXXX
Restricted Stock Option:
# SHARES EXERCISE PRICE
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750,000 $1.55
