CONSULTING EMPLOYMENT AGREEMENT
THIS CONSULTING EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and
entered into as of the 1st day of January, 2000, by and between FINTUBE
TECHNOLOGIES, INC., an Oklahoma corporation, with its principal place of
business located at 00000 X. Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000
(the "COMPANY"), Xxxxx X. Xxxx, an individual residing at 0000 Xxxx 00xx
Xxxxxx, Xxxxx, Xxxxxxxx 00000 (the "EMPLOYEE"), and LONE STAR TECHNOLOGIES,
INC., a Delaware corporation with its principal place of business located at
00000 X. Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 (the "GUARANTOR").
RECITALS
A. The Company has acquired substantially all of the assets of
Fintube Limited Partnership, and has determined that it is in the best
interest of the Company for the Company to employ the Employee to render
advice to the Company for the term of this Agreement.
B. The Employee has considerable knowledge and experience relating
to the business of the Company, as a result of the Employees past service as
the founder and the Chief Executive Officer of Fintube Limited Partnership,
the predecessor of the Company.
C. The Employee is willing to be employed by the Company to render
advice to the Company, pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises set forth herein, and of other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agrees
as follows:
1. EMPLOYMENT. For the term of this Agreement, the Company
hereby employs the Employee and agrees to pay to or for
the benefit of the Employee, the consideration set forth
herein for the Employee's services hereunder. For the
term of this Agreement, the Employee hereby accepts his
employment by the Company for the consideration to be
paid by the Company hereunder.
2. ACTIVITIES OF EMPLOYEE. For the term of this Agreement,
the Employee agrees to provide services to the Company
with regard to the Company's business and operations, as
mutually agreed by the Employee and the Company, at
mutually acceptable times, in Tulsa, Oklahoma or at any
other mutually satisfactory location.
The Employee shall advise the Company in connection with the
maintenance and furtherance of satisfactory relationships
between the Company and its existing and prospective customers
and others having business relationships with the Company, and
in connection with representing the Company to trade groups
and other organizations generally. In addition, Employee will
lead the development of major Company expansion strategies for
international markets, including but not limited to Mexico and
South America. Employee will assist in the preparation and
evaluation of the Company's annual business and capital plan.
Employee will also support the enhancement of the Company's
customer, supplier and other industry relationships to expand
markets and increase profitability. Employee will participate
in the formulation of management development plans and key
employee evaluations. Employee shall contribute to technology
development and product enhancements for all product segments.
Employee will assist Guarantor with corporate and investor
relations, as needed.
3. REPRESENTATIONS. WARRANTIES AND COVENANTS OF EMPLOYEE.
The Employee represents and warrants that he has not
committed to any employment or consulting duties, and
will not, for the term of this Agreement, assume any
such duties which would interfere with his provision of
services to the Company hereunder.
4. OFFICE/SECRETARIAL ASSISTANCE. For the term of this Agreement,
the Company will pay the expense of the Employee's current
office space and secretarial assistance in Tulsa, Oklahoma, to
allow the Employee to provide the services required hereunder.
5. CONSIDERATION. The Company shall pay to the Employee,
for the Employee's services hereunder, the following
amounts:
a) BASE CONSIDERATION. The Company shall pay to the
Employee, commencing on January 1, 2000, and
continuing on the 15th and the last day of each
month thereafter until December 31, 2002, the
amount of ELEVEN THOUSAND FOUR HUNDRED AND
SEVENTEEN DOLLARS ($11,417) on the 15th and the
last day of each month, as the Employee's "BASE
CONSIDERATION"; and
b) BONUS CONSIDERATION. The Company shall pay an
annual bonus to the Employee, in an amount to be
determined by the Company in accordance with the
bonus accrual and terms of the Fintube Limited
Partnership bonus Agreement for the year ending
December 31, l 999. For each calendar year
thereafter for the term of this Agreement, the
Company shall pay an annual bonus to the Employee
at the Company's sole discretion (collectively,
Employee's "BONUS CONSIDERATION").
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6. TERM. The term of this Agreement shall commence as of
the date first set forth above, and shall continue
until December 31, 2002, at which time this Agreement
shall terminate, unless sooner terminated, or extended
by the mutual Agreement of the parties hereto;
provided, however, the termination of this Agreement
shall not terminate, diminish or otherwise affect the
obligations of the Employee to the Company set forth in
paragraphs 16, 17 and 18 of this Agreement.
7. INSURANCE AND EXPENSES.
a) During the term of this Agreement, the Company, at
its sole cost and expense, shall pay for and keep
in full force and effect group hospitalization,
basic health, disability, dental and major medical
insurance that covers Employee and his wife. This
insurance shall provide the Employee and his wife
the coverage and benefits provided to all other
employees of the Company; and
b) During the term of this Agreement, the Company, at
its sole cost and expense, shall pay for and keep
in full force and effect, existing life insurance
policies or life insurance policies providing
substantially equivalent benefits and having
substantially equivalent terms, on the life of
Consultant, with the beneficiary of said policies
being any person designated by Consultant; and
c) During the term of this Agreement, the Company
shall pay or promptly reimburse Employee for all
travel, entertainment, telephone, office and other
expenses paid or incurred by Employee in
connection with the performance of his services
under this Agreement, upon presentation of expense
statements, vouchers, or other evidence of expense
to the Company.
8. STOCK OPTIONS. In consideration of Employee's agreements set
forth in paragraphs 16, 17 and 18, Guarantor agrees to award
to the Employee on the date hereof, the option to purchase
30,000 shares of the common stock of the Guarantor, pursuant
to Guarantor's 1985 Long Term Incentive Plan.
9. 401-K PARTICIPATION. For the term of this Agreement,
the Employee shall be entitled to participate in the
Company's 401-K Plan.
10. REPRESENTATIONS. WARRANTIES. AND COVENANTS OF THE
COMPANY/GUARANTOR. The Company and the Guarantor hereby
represent and warrant that each entity has full power and
legal right and authority to execute, deliver, and perform
this Agreement, and that the officer executing this Agreement
on behalf of each entity has the full power and authority to
do so.
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11. INDEMNIFICATION OF EMPLOYEE. The Company and the
Guarantor agree to pay for and provide to the Employee
indemnity insurance that will indemnify and hold
Employee harmless from any claims against Employee, on
the same terms and conditions that benefit the officers
and directors of the Guarantor. Such indemnity
insurance will protect the Employee in the capacities
in which he serves the Company and/or the Guarantor.
12. TERMINATION.
a) DEATH. In the event of death of Employee during the
term of this Agreement, Employee's employment
hereunder shall immediately terminate, and neither
the Company, the estate, nor any other legal
representative of Employee shall have any further
rights or obligations under this Agreement;
b) DISABILITY. If Employee becomes incapacitated by
reason of sickness, accident or other physical or
mental disability and is unable to perform the
essential functions of his position on a permanent
basis, after taking into consideration reasonable
accommodations, the services of Employee may be
terminated by the Company upon thirty (30) days
prior written notice to Employee, and neither the
Employee nor the Company shall have any further
rights or obligations under this Agreement, except
as provided in paragraphs 16, 17 and 18, which
provisions shall survive such termination;
c) DUE CAUSE. The services of Employee may be
terminated by the Company at any time during the
term of this Agreement for Due Cause (as defined
below). In the event of such termination, the
Company shall pay to the Employee the Base
Consideration and benefits identified in
paragraphs 4, 5, 7, and 11 accrued to the date of
such termination. Upon such payment by the
Company, neither the Employee nor the Company
shall have any further rights or obligations under
this Agreement, except as provided in paragraphs
16, 17 and 18, which provisions shall survive such
termination. For the purpose of this Agreement,
"DUE CAUSE" shall relate solely to the activities
of Employee identified in paragraph 2 herein above
and shall mean: (i) willful failure to carry out a
specific directive of the Board of Directors or
the Chairman of the Board of the Company that
continues for twenty (20) days after the Employee
receives written notice of such directive; (ii)
indictment of Employee for a felony; (iii) any
failure of Employee to perform substantially his
duties under this Agreement, which failure is not
cured within thirty (30) days after written notice
from the Board of Directors or the Chairman of the
Board of the Company specifying the nonperformance
and the requisite remedial action required of
Employee; (iv) commission of any act intentionally
against the interests of the Company which causes it
material injury; or (v) commission of any material
act of fraud or dishonesty.
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d) OTHER TERMINATION BY THE COMPANY. The Company may
terminate Employee's services prior to the
expiration of the term of this Agreement for
whatever reason it deems appropriate, or for no
reason; provided, however, that in the event that
such termination is not pursuant to paragraphs
12(a), 12(b) or 12(c), the Company shall continue
to pay to Employee (or his estate or other legal
representative in the case of the death of
Employee subsequent to such termination), all of
the unpaid Consideration provided for in paragraph
5 of this Agreement, and the benefits identified
in paragraphs 7 and 11 of this Agreement through
the end of the term of this Agreement; and
e) RIGHTS TO BENEFITS. Upon the termination of
Employee's services under any provision contained
in this paragraph 12, the rights and benefits of
the Employee, his estate or other legal
representative under any employee benefit plans or
programs of the Company, if any, and Guarantor's
1985 Long-Term Incentive Plan will be determined
in accordance with the terms and provisions of
such plans and programs.
13. OTHER ACTIVITIES. The Company hereby acknowledges and agrees
that during the term of this Agreement, the Employee may
engage directly or indirectly in other businesses and ventures
that would not conflict with his rendering services to the
Company hereunder or the terms of paragraphs 16, 17 or 18 of
this Agreement.
14. SCOPE OF AUTHORITY. It is specifically agreed that the
Employee shall have no authority to speak for, make
agreements on behalf of, or otherwise bind the Company.
15. PAYMENT OF TAXES. Payment of compensation to the
Employee shall be subject to all applicable federal and
state withholding and payroll taxes.
16. COVENANT AGAINST COMPETITION. Employees agrees that, for a
period from the date hereof until the date which is two years
after the date on which this Agreement terminates, he will
not, directly or indirectly, engage in any of the following
actions:
a) Either as employee, employer, consultant, agent,
principal, partner, shareholder, corporate officer
or director of any corporation, partnership or
other entity, or in any other capacity, engage or
participate in any business or activity that is in
competition in any manner whatsoever with the
business of the Company (including its
subsidiaries) as conducted at any time during the
term of this Agreement (the "Restricted Business")
anywhere in North America The Restricted Business
shall be the business of designing, manufacturing,
processing, engineering and selling welded finned
tubes, economizers, boilertubes, extended surface
inside diameter tubing, and other products
specifically marketed by the Company (including
its subsidiaries)
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for use in heat recovery applications, steel coil
slitting and storage, rolling steel rod to strip
(oscillate wound products), and selling and
licensing machinery and echnology related to the
foregoing. However, nothing in this subsection
(a) shall preclude Employee from holding less than
5% of the outstanding capital stock of any
corporation required to file periodic reports with
the Securities and Exchange Commission under Section
13 or 15(d) of the Securities Exchange Act of
1934, as amended, the securities of which are
listed on any securities exchange, quoted on the
National Association of Securities Dealers
Automated Quotation System or traded in the over-
the-counter market.
b) Whether for Employee's own account or for the
account of any other individual, partnership,
firm, corporation or other business organization,
solicit, endeavor to entice away from the Company
(or any of its affiliates), or otherwise interfere
with the Company's relationship (or that of any of
its affiliates) with any person who is employed by
or otherwise engaged to perform services for the
Company (or any of its affiliates) (including, but
not limited to, any independent sales
representatives or organizations), or solicit or
transact business with any person, partnership,
firm, corporation or other business organization
that has purchased products from the Company
(including its subsidiaries) during the term of
this Agreement.
If the scope of the restrictions in this Section are
determined by a court of competent jurisdiction to be too
broad to permit enforcement of such restrictions to their full
extent, then such restrictions shall be construed or rewritten
(blue-lined) so as to be enforceable to the maximum extent
permitted by law, and Employee hereby consents, to the extent
he may lawfully do so, to the judicial modification of the
scope of such restrictions in any proceeding brought to
enforce them.
17. ASSIGNMENT OF INVENTIONS. All rights to discoveries,
inventions, improvements, designs, work product and
innovations (including without limitation all data and
records pertaining thereto) that relate to the Company
and its affiliates, whether or not specifically within
Employee's duties or responsibilities and whether or
not patentable, copyrightable or reduced to writing,
that Employee may discover, invent, create or originate
during the term of his employment hereunder, either
alone or with others and whether or not during working
hours or by the use of the facilities of the Company or
its affiliates ("Inventions"), shall be the exclusive
property of the Company and its affiliates. Employee
shall promptly disclose all Inventions to the Company,
shall execute at the request of the Company any
assignments or other documents the Company may deem
necessary to protect or perfect its rights therein, and
shall assist the Company and its affiliates, at the
Company's expense, in obtaining, defending and
enforcing the rights of the Company and its affiliates
therein. Employee hereby appoints each of the Company
and any of its affiliates as
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his attorney-in-fact to execute on his behalf any
assignments or other documents deemed necessary by the
Company and any of its affiliates to protect or perfect
its rights to any Inventions.
18. COVENANT OF CONFIDENTIALITY.
a) DEFINITIONS. For the purpose of this Agreement:
i) "CONFIDENTIAL INFORMATION" means any and all
discoveries, ideas, facts, inventions, or
any other information relating to the
operation of the Company's business, of
whatever type and in whatever form,
including but not limited to documents,
reports, plans, proposals, marketing plans,
sales plans, customer lists, or materials
that come into the Employee's possession,
and any other discoveries, ideas, business
plans, or facts relating to any of the
foregoing, whether developed by the Employee
or by others; and
ii) "TRADE SECRETS" means any and all
Confidentiality Information that has
economic value, actual or potential, because
it is not generally known to persons who
could obtain economic value from its
disclosure or use, about which the Company
has undertaken reasonable efforts to
maintain its secrecy (whether or not
divulged by the Employee or other employees
or agents of the Company) and which has not
previously been publicly released by duty
authorized representatives of the Company.
b) DISCLOSURE. The Employee agrees that any and all
Confidential Information and Trade Secrets
received or developed by the Employee, or
disclosed to the Employee, are to be used only for
the purposes for which they are provided. The
Employee also agrees that from the date of this
Agreement to a date that is two (2) years after
the date that this Agreement is terminated, the
Employee shall not, directly or indirectly, except
as required by the normal business of the Company,
or as expressly authorized in writing by the board
of directors of the Company, take the following
actions, to wit:
i) disclose, publish or make available any
Confidential Information or Trade Secrets,
other than to an employee, officer or
director of the Company who, in the
reasonable exercise of the Employee's
judgment, needs to know such Confidential
Information or Trade Secrets in order to
perform his or her duties to the Company;
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ii) sell, transfer or otherwise use or exploit
Confidential Information or Trade Secrets
for any purpose other than those for which
they were provided; and
iii) permit the sale, transfer, use or
exploitation of any Confidential Information
or Trade Secrets by any third parties,
including other employees of the Company who
do not need to use or possess such
Confidential Information or Trade Secrets to
perform their duties to the Company.
c) PROPRIETARY RIGHTS. The Employee will regard and
preserve as confidential all Trade Secrets and
Confidential Information pertaining to the
Company, that have been obtained by the Employee.
The Employee understands that the Company is the sole
owner of any and all proprietary rights in the
Confidential Information and Trade Secrets,
including, but not limited to, the right to use,
sell, license or transfer the Confidential
Information or Trade Secrets, and the right to make
changes in them and the uses thereof as the company
may from time to time determine. The Employee agrees
to assign to the Company, without further
consideration, all of his right, title, and interest
(throughout the United States and in all foreign
countries) free and clear of all liens and
encumbrances, in and to all Confidential Information
and Trade Secrets, which shall be the sole property
of the Company, whether or not patentable. Upon the
termination of this Agreement for any reason, the
Employee agrees to immediately return all
Confidential Information and Trade Secrets
information to the Company.
19. REASONABLENESS OF COVENANTS. The Company and the Employee
acknowledge and agree that the covenants and agreements
contained in this Agreement are reasonable in their geographic
scope, duration and content, and neither the Employee nor the
Company shall raise any issue of reasonableness of the
geographic scope, duration or content of such covenants, in
any proceeding to enforce such covenants or agreements.
20. ASSIGNMENT. The obligations under this Agreement may not be
assigned by any party hereto without the prior written consent
to all of the other parties.
21. GUARANTY. It is understood and acknowledged that the Guarantor
is the direct or indirect parent of the Company and has a
significant interest in ensuring that the Guarantor and the
Company receive the advise of Employee during the term of this
Agreement. As an inducement to the Employee to enter into this
Agreement, the Guarantor has agreed to guarantee, and does
hereby absolutely and unconditionally guarantee, the full and
prompt performance of all of the covenants, agreements, and
obligations of the Company under this Agreement.
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22. NOTICES. All notices and other communications hereunder or in
connection herewith shall be deemed to have been duly given if
they are in writing and delivered personally or sent by
registered or certified mail, return receipt requested and
first class postage prepared to the addresses shown above,
unless notice of a change of address is given by one party to
the other parties hereto pursuant to the provisions of this
paragraph 22.
23. GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of Oklahoma.
24. ELECTION TO BECOME CONSULTANT. If Employee gives the Company
60 days prior notice that he wants to change his status from
an employee of the Company to a consultant to the Company, the
Company and Employee will amend this Agreement in the
appropriate manner to reflect that change in status.
25. MISCELLANEOUS.
a) This Agreement shall constitute the only Agreement
between the Company and Employee relating to the
subject matter hereof, and no representations,
promises, understandings, or agreements, oral or
otherwise, not herein contained shall be of any force
or effect;
b) No modification or waiver of any provision of this
Agreement shall be valid unless it is in writing
and signed by the party against whom it is sought
to be enforced. No waiver at any time of any
provision of this Agreement shall be deemed a
waiver of any other provision of this Agreement at
that time or a waiver of that or any other
provision at any other time; and
c) The captions and headings contained herein are
solely for convenience and reference and do not
constitute a part of this Agreement.
WITNESS WHEREOF, the parties have duly executed this Agreement
effective as of the day and year first above written.
"COMPANY"
FINTUBE TECHNOLOGIES, INC.,
an Oklahoma corporation
By: /s/ Rhys J. Best
-----------------------------------
Rhys J. Best, President
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"EMPLOYEE"
/s/ Xxxxx X. Xxxx
---------------------------------------
Xxxxx X. Xxxx
"GUARANTOR"
LONE STAR TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Rhys J. Best
----------------------------------------
Rhys J. Best, Chairman of the Board
Chief Executive Officer and
President
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