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EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT (this "AGREEMENT") is made and
entered into to be effective April 1, 1998 (the "EFFECTIVE DATE"), by and
between Xxxxxx Production Services, Inc. (together with its successors, the
"COMPANY") and P. Xxxx Xxxxx (the "EXECUTIVE").
WHEREAS, the Executive is an individual residing in Boerne, Texas; and
WHEREAS, the Company is a Texas business corporation engaged in the
well-servicing business with its principal place of business in San Antonio,
Texas; and
WHEREAS, the Executive has considerable experience, expertise and
training in management related to the types of services offered by the Company;
and
WHEREAS, the Company desires and intends to employ the Executive as
Chief Financial Officer of the Company pursuant to the terms and conditions set
forth in this Agreement; and
WHEREAS, both the Company and the Executive have read and understood
the terms and provisions set forth in this Agreement, and have been afforded a
reasonable opportunity to review this Agreement with their respective legal
counsel.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth in this Agreement, the Executive and the Company agree as follows:
1. RESPONSIBILITIES:
a. The Executive acknowledges and agrees that he shall be
employed as Chief Financial Officer of the Company. The Executive covenants
and agrees that he will faithfully devote his best efforts and such portion of
his time, attention and skill to the business of the Company as is necessary to
perform his obligations under this Agreement.
b. The Executive acknowledges and agrees that he has a fiduciary
duty of loyalty to the Company, and that he will not engage in any activity
which will or could in any way, harm the business, business interests or
reputation of the Company.
c. The Executive acknowledges and agrees that he will not
directly or indirectly engage in competition with the Company at any time
during the existence of the employment relationship between the Company and the
Executive, and the Executive will not on his own behalf, or as another's agent,
employee, partner, shareholder or otherwise, engage in any of the same or
similar duties and/or responsibilities required by the Executive's position
with the Company, other than as an employee of the Company pursuant to this
Agreement.
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d. The Executive acknowledges and agrees that all information
concerning the Company's products, techniques, equipment, pricing, business
projections, business plans and strategies, marketing plans, sales techniques,
customer contacts, customer needs and prospective customers is highly sensitive
and confidential, and has been obtained only through significant effort and
expense to the Company; and that, as a result, the Executive must agree to
treat this information as highly confidential trade secret information at all
times during the existence of the employment relationship between the Company
and the Executive, and after the termination of the employment relationship.
2. COMPENSATION: During his employment pursuant to this Agreement, the
Company agrees to provide the Executive the following compensation:
a. BASE SALARY: From the Effective Date until changed as
provided in this Section, the Company agrees to pay the Executive an annual
salary of $120,000 during the first year of employment with the Company under
this Agreement, payable in at least equal monthly installments in accordance
with the Company's ordinary payroll policies and procedures for executive
compensation. Such salary shall increase to an annual rate of $140,000 on
April 1, 1999. Such salary shall be subject to withholding for the prescribed
federal income tax, social security and other items as required by law and for
other items consistent with the Company's policy with respect to health
insurance and other benefit plans for similarly situated employees. The
above-described annual salary as in effect from time to time hereunder is
referred to herein as the "BASE SALARY."
b. BUSINESS EXPENSES: The Company shall reimburse all reasonable
travel and entertainment expenses incurred by the Executive in connection with
the performance of his duties pursuant to this Agreement. The Executive shall
provide the Company with a written monthly accounting of his expenses on a form
acceptable to the Company and satisfying any applicable federal income tax
reporting or record keeping requirements, within a reasonable time following
the end of each month.
c. DISCRETIONARY INCENTIVE BONUS: In the discretion of the Board
of Directors of the Company, and without implying any obligation on the Company
ever to award a bonus to the Executive, the Executive may from time to time be
awarded an annual cash bonus during the term of his employment under this
Agreement. If the Company has an executive bonus plan in effect (as any such
plan may be amended from time to time), the annual bonus to the Executive
referenced in the preceding sentence shall be in general accordance with such
plan and with the Executive's status and position with the Company; provided,
however, all such bonuses are entirely discretionary with the Board of
Directors. If and to the extent a bonus is ever considered for the Executive,
it is expected that any such bonus will be based not only on the Executive's
individual performance and his relative position, service tenure and
responsibilities with the Company, but also on the performance and
profitability of the entire business of the Company.
d. EMPLOYEE BENEFITS: The Executive acknowledges and agrees that
certain employee benefits will be provided to the Executive incident to his
employment as Chief Financial Officer of the Company. During the term of this
Agreement, the Executive shall be entitled to receive
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such benefits as are made available to other personnel of the Company in
comparable positions, with comparable duties and responsibilities. Any
benefits substantially in excess of those granted other salaried employees of
the Company shall be the subject of prior approval of the Board of Directors.
Additionally, for purposes of determining eligibility, funding or vesting with
respect to any other benefits, the Executive's prior service with the Company
and any predecessor of the Company shall be deemed to be service with the
Company.
3. DURATION: The duration of this Agreement shall be defined and
determined as follows:
a. INITIAL TERM: This Agreement shall continue in full force and
effect for two (2) years commencing on the Effective Date and expiring on March
31, 2000 (the "EXPIRATION DATE"), unless terminated prior to the Expiration
Date in accordance with Section 3(c).
b. RENEWAL: This Agreement is not subject to an automatic
renewal on the Expiration Date and is renewable only if both parties mutually
agree in writing.
c. TERMINATION: This Agreement may be terminated by the Company
as follows:
(1) DEATH: In the event of the Executive's death, this
Agreement shall terminate immediately, without notice, on the date of the
Executive's death; provided, however, that the Company shall pay the
Executive's estate the Base Salary that the Executive would have earned for a
period of ninety (90) days following the date of death and a prorated amount of
the discretionary incentive bonus, if any, paid to the Executive for the prior
contract year pursuant to Section 2(c), in the time and manner in which the
Executive would have been paid such compensation. In addition, the Executive's
designated beneficiaries shall be entitled to receive any life insurance
benefits provided to the Executive in accordance with the applicable plan
documents and/or insurance policies governing such benefits.
(2) DISABILITY: In the event the Executive becomes
physically or mentally disabled, as that term is defined by 29 CFR Section
1630.2(g)(1), and is unable to perform the essential functions of his position,
with reasonable accommodation, for a period of one hundred eighty (180)
consecutive days, this Agreement shall terminate immediately, without notice.
(3) GOOD CAUSE:
(a) This Agreement may be terminated by providing
the Executive with thirty (30) days written notice that the Company is
terminating the Agreement for Good Cause, as defined herein ("NOTICE OF
TERMINATION FOR GOOD CAUSE") at any time during his employment. In the event
that Good Cause exists for terminating this Agreement, the Company may elect to
provide the Executive with thirty (30) days pay in lieu of notice, in addition
to any other amounts due under this Agreement.
(b) For purposes of this Agreement, "GOOD CAUSE"
shall be defined as follows:
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i) Any act or omission constituting fraud
under the law of the State of Texas; or
ii) Conviction of, or a plea of nolo
contendere to, a felony or any
misdemeanor involving moral turpitude;
or
iii) Embezzlement or theft of Company
property or funds; or
iv) The material breach of any provision of
this Agreement; or continued gross
neglect of his duties under this
Agreement; or unauthorized competition
with the Company during his employment
pursuant to this Agreement; or
unauthorized use of Confidential
Information (as defined in Section 9);
which is materially detrimental to the
Company; or
v) Engagement in gross misconduct in the
course and scope of his employment with
the Company, including, without
limitation, dishonesty, unlawful
harassment, abuse of alcohol or
controlled substances, or fighting.
(c) In the event the Company believes Good Cause
exists for terminating this Agreement pursuant to this Section, the Company
shall be required to give the Executive written notice of the acts or omissions
constituting Good Cause ("CAUSE NOTICE"), and no Notice of Termination for Good
Cause shall be communicated by the Company unless and until the Executive fails
to cure such acts or omissions within fifteen (15) days after receipt of the
Cause Notice.
(d) In the event the Company communicates Notice
of Termination for Good Cause pursuant to this Section, the Executive shall
have the right to a hearing before the Compensation Committee of the Board of
Directors within fifteen (15) days after the date such Notice is received, to
contest the alleged Good Cause for the Notice of Termination. In the event
that the Compensation Committee of the Board of Directors affirms the Good
Cause for termination, the Executive shall have the right to give an
Arbitration Notice under Section 10(a) prior to the effective date of
termination of this Agreement; provided, however, that in the event that the
Executive communicates an Arbitration Notice, the Company shall have the right
to discontinue any payments required under this Agreement (subject to the
payment of such amounts into an interest bearing account in accordance with
Section 10(b)) and suspend the Executive from performing any duties under this
Agreement pending the outcome of the arbitration proceeding.
(4) WITHOUT GOOD CAUSE:
(a) This Agreement shall terminate by the Company
providing thirty (30) days written notice to the Executive that the Company is
terminating the Agreement Without Good Cause, as defined herein ("NOTICE OF
TERMINATION WITHOUT GOOD CAUSE"), at any time
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during his employment; provided, however, that the Company shall be required to
pay severance pay in accordance with the severance provisions in Section 5.
(b) Any termination of this Agreement which is
not for Good Cause, as defined above, or which does not result from the death
or disability of the Executive, shall be deemed to be a termination "WITHOUT
GOOD CAUSE." Furthermore, in the event that the Company communicates a Notice
of Termination for Good Cause, and the arbitrators pursuant to Section 10
determine that no Good Cause exists or existed for the Notice of Termination
that was originally communicated, then such Notice of Termination shall be
deemed to have been a communication of a Notice of Termination Without Good
Cause, as appropriate, for all purposes under this Agreement.
(5) RESIGNATION: The Executive shall be entitled to
terminate this Agreement by providing the Company with a written notice of
resignation at least thirty (30) days prior to his intended resignation date,
subject to the following provisions:
(a) RESIGNATION FOR GOOD REASON: The Executive
shall have the right to resign for any Good Reason, as defined herein, and such
resignation shall be deemed to be a termination by the Company Without Good
Cause except as set forth in Section 5(c) with respect to a resignation by the
Executive with Good Reason during the two-year period following a Change of
Control. For purposes of this Section, the term "GOOD REASON" shall be defined
as:
i) The Company's failure in any material
respect to perform any provision of
this Agreement; or
ii) Any material changes in the duties and
responsibilities of the Executive under
this Agreement without the written
consent of the Executive; or
iii) The hiring or promotion by the Company
of another executive employee to a
position of equal or greater
responsibility for the management of
the Company without the written consent
of the Executive; or
iv) The Company's directing the Executive
to work at a location other than San
Antonio, Texas.
(b) RESIGNATION WITHOUT GOOD REASON: Any
resignation by the Executive for any reason other than Good Reason, as defined
above, shall be deemed to be a resignation "WITHOUT GOOD REASON." In the event
of a resignation Without Good Reason, the Change in Control provisions in
Section 4 and the severance provisions in Section 5 shall be inapplicable.
4. CHANGE OF CONTROL: The parties acknowledge that the Executive has
agreed to assume the position of Chief Financial Officer to enter into this
Agreement based upon his confidence in
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the current shareholders of the Company and the support of the Board of
Directors for the development of a new strategy for the Company. Accordingly,
if the Company should undergo a Change of Control, as defined in this Section,
the parties agree as follows:
a. DEFINITIONS: For purposes of this Agreement, a "CHANGE OF
CONTROL" shall be deemed to exist in the event that any of the following
occurs:
(1) a change in the ownership of the capital stock of the
Company where a corporation, person or group acting in concert (a "PERSON") as
described in Section 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), holds or acquires, directly or indirectly,
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of a number of shares of capital stock of the Company which
constitutes 40% or more (or, 30% or more in the event the Company is subject to
the reporting requirements of Sections 12 or 15(d) under the Exchange Act) of
the combined voting power of the Company's then outstanding capital stock then
entitled to vote generally in the election of directors; or
(2) the persons who were members of the Board of
Directors immediately prior to a tender offer, exchange offer, contested
election or any combination of the foregoing, cease to constitute a majority of
the Board of Directors of the Company; or
(3) a dissolution of the Company, or the adoption by the
Company of a plan of liquidation, or the adoption by the Company of a merger,
consolidation or reorganization involving the Company in which the Company is
not the surviving entity, or a sale of all or substantially all of the assets
of the Company (for purposes of this Agreement, a sale of all or substantially
all of the assets of the Company shall be deemed to occur if any Person
acquires, or during the 12-month period ending on the date of the most recent
acquisition by such Person, has acquired gross assets of the Company that have
an aggregate fair market value equal to 50% or more of the fair market value of
all of the gross assets of the Company immediately prior to such acquisition or
acquisitions); or
(4) a tender offer or exchange offer is made by any
Person which, if successfully completed, would result in such Person
beneficially owning (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) either 50% or more of the Company's outstanding shares of Common
Stock or shares of capital stock having 50% or more of the combined voting
power of the Company's then outstanding capital stock (other than an offer made
by the Company), and sufficient shares are acquired under the offer to cause
such Person to own 30% or more of the voting power; or
(5) a change in control is reported or is required to be
reported by the Company in response to either Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act or Item 1 of Form 8-K
promulgated under the Exchange Act, which change in control has not been
approved by a majority of the Board of Directors then in office who were
directors at the beginning of the two-year period ending on the date the
reported change in control occurred; or
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(6) during any period of two consecutive years,
individuals who, at the beginning of such period constituted the entire Board
of Directors of the Company, cease for any reason (other than death) to
constitute a majority of the directors, unless the election, or the nomination
for election, by the Company's shareholders, of each new director was approved
by a vote of at least a majority of the directors then still in office who were
directors at the beginning of the period.
For purposes of Section 4(a)(1) above, if a Person were the beneficial owner of
30% or more or 40% or more, as applicable, of the combined voting power of the
Company's then outstanding securities as of the Effective Date and such Person
thereafter accumulates more than 5% of additional voting power, a Change of
Control of the Company shall be deemed to have occurred, notwithstanding
anything in this Agreement to the contrary. A Change of Control shall include
any other transactions or series of related transactions occurring which have
substantially the same effect as the transactions specified in any of the
preceding clauses of Section 4(a)(1) through (6). However, a Change of Control
shall not be deemed to occur if a Person becomes the beneficial owner of the
applicable percentage or more (as referenced above) of the combined voting
power of the Company's then outstanding securities solely by reason of the
Company's redemption or repurchase of securities; but further acquisitions by
such Person that cause such Person to be the beneficial owner of the applicable
percentage or more (as referenced above) of the combined voting power of the
Company's then outstanding securities shall be deemed a Change of Control.
b. VESTING OF STOCK OPTIONS: In the event of a Change of
Control, as defined in this Section, all stock options then held by the
Executive for the purchase of equity securities of the Company shall
immediately become vested, effective on the date of the Change of Control.
5. SEVERANCE: Upon termination, the Executive shall be entitled to the
following:
a. Other than as provided in Section 5(b), if the Company
terminates this Agreement Without Good Cause as that term is defined in Section
3(c)(4)(b) of this Agreement, the Company agrees to pay to the Executive a lump
sum cash payment equal to the sum of: (i) twelve (12) months' salary of the
Executive's then current, annualized Base Salary, less statutory payroll
deductions; (ii) all benefits which accrued prior to the termination of the
Agreement; and (iii) a prorated amount of any incentive compensation paid to
the Executive during the most recent fiscal year which ended prior to the
termination of the Agreement, as described in Sections 5(a)(1) and (2) below.
In addition, the Company shall provide that level of health, dental, vision,
disability, and life insurance benefits comparable to the benefits enjoyed by
the Executive immediately prior to the termination of this Agreement, if any,
for a period of twelve (12) months after termination.
(1) If the termination date occurs after the incentive
compensation is paid to the Executive for the prior fiscal year, the Executive
shall receive a prorated amount of incentive compensation for the period from
the end of the prior fiscal year to the date of termination, based upon the
incentive compensation paid out to the Executive for the prior fiscal year. By
way of example only, if this Agreement is terminated pursuant to this Section
on August 1, 1999, and the Executive has already received his incentive
compensation for the fiscal year April 1, 1998
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through March 31, 1999, the Executive shall receive 4/12 (or 1/3) of the
incentive compensation he received for the fiscal year April 1, 1998 through
March 31, 1999 upon termination.
(2) If the termination date occurs before the incentive
compensation is paid to the Executive for the prior fiscal year, the Executive
shall receive his entire incentive compensation for the prior fiscal year, plus
a prorated amount of incentive compensation for the period from the end of the
prior fiscal year to the date of termination, based upon the incentive
compensation paid out to the Executive for the prior fiscal year. By way of
example only, if this Agreement is terminated pursuant to this Section on
August 1, 1999, and the Executive has not received his incentive compensation
for the fiscal year April 1, 1998 through March 31, 1999, the Executive shall
receive his entire incentive compensation for the fiscal year April 1, 1998
through March 31, 1999, plus an additional 4/12 (or 1/3) of such incentive
compensation upon termination.
b. If this Agreement is terminated within twelve (12) months
after the date of a Change of Control as that term is defined in Section 4(a)
by the Company communicating a Notice of Termination Without Good Cause, the
Company agrees to pay the Executive a lump sum cash payment equal to the sum
of: (i) eighteen (18) months' salary of the Executive's then current,
annualized Base Salary, less statutory payroll deductions; (ii) all benefits
which accrued prior to the termination of the Agreement; and (iii) a prorated
amount of any incentive compensation paid to the Executive during the most
recent fiscal year which ended prior to the termination of the Agreement, as
determined in accordance with the provisions of Sections 5(a)(1) and 5(a)(2)
above. In addition, the Company shall provide that level of health, dental,
vision, disability, and life insurance benefits comparable to the benefits
enjoyed by the Executive immediately prior to the termination of this
Agreement, if any, for a period of eighteen (18) months after termination.
c. If the Executive terminates this Agreement for Good Reason as
that term is defined in Section 3(c)(5)(a) of this Agreement within twenty-four
(24) months after a Change of Control, the Company agrees to pay to the
Executive a lump sum cash payment equal to the sum of: (i) twelve (12) months'
salary of the Executive's then current, annualized Base Salary, less statutory
payroll deductions; (ii) all benefits which accrued prior to the termination of
the Agreement; and (iii) a prorated amount of any incentive compensation paid
to the Executive during the most recent fiscal year which ended prior to the
termination of the Agreement, as determined in accordance with the provisions
of Sections 5(a)(1) and 5(a)(2) above. In addition, the Company shall provide
that level of health, dental, vision, disability, and life insurance benefits
comparable to the benefits enjoyed by the Executive immediately prior to the
termination of this Agreement, if any, for a period of twelve (12) months after
termination.
d. If the Company terminates this Agreement for Good Cause as
that term is defined in Section 3(c)(3)(b) of this Agreement, the Executive
shall not be entitled to receive any additional salary, benefits or incentive
compensation beyond those earned or accrued as of the effective date of the
termination.
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e. Any termination of the Executive's employment shall not
release either the Company or the Executive from its or his respective
obligations to the date of termination nor from the provisions of Sections 8
and 9 hereof.
f. In the event this Agreement is terminated by the Company (i)
Without Good Cause; (ii) upon the death or disability of the Executive as those
terms are defined in Sections 3(c)(1) and (2) of this Agreement; or (iii) by
the Executive for Good Reason, all stock options then held by the Executive for
the purchase of equity securities of the Company shall immediately become
vested upon the effective date of the termination.
g. The severance payments described above shall not be payable
under this Section in any of the following circumstances:
(1) In the event that this Agreement is terminated as a
result of the death or disability of the Executive, as provided in Sections
3(c)(1) and (2);
(2) In the event that this Agreement is terminated
pursuant to a Notice of Termination for Good Cause communicated by the Company,
as provided in Section 3(c)(3)(a), and (i) such termination is affirmed by the
arbitrators after an arbitration proceeding under Section 10 or (ii) such
termination is uncontested by the Executive; or
(3) In the event that the Executive communicates notice
of resignation Without Good Reason as defined in Section 3(c)(5)(b).
h. The Company and the Executive acknowledge and agree that the
severance payments required under this Section are intended to be exclusive and
to supersede any severance pay plans or policies adopted by the Company and
that the Executive shall not be entitled to any additional severance
compensation under any other severance plan or policy adopted by the Company.
6. STOCK OPTIONS: In the sole discretion of the Board of Directors of
the Company, and without implying any obligation on the Company, the Company
may grant the Executive options to purchase from the Company shares of the
Company's common stock (the "OPTION STOCK") during the terms of his employment
under this Agreement. The Executive shall be considered for the grant of
options under any option grant program the Company may have in effect from time
to time, consistent with the terms of any such program and with the Executive's
status and position with the Company; provided, however, the grant of any
option to purchase stock shall be entirely discretionary with the Board of
Directors. If and to the extent the Company ever considers granting the
Executive an option to purchase Option Stock, such grant will be based not only
on the Executive's individual performance and his relative position, service
tenure and responsibilities with the Company, but also on the performance and
profitability of the entire Company.
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a. STATUS OF THE EXECUTIVE: The Executive shall not be
considered a shareholder of the Company with respect to any shares of Option
Stock, except to the extent that the shares of Option Stock have been purchased
by and issued to the Executive.
b. EXERCISE OF OPTIONS: The Executive shall have the right to
exercise any option to purchase part of the Option Stock granted to him by the
Company after such option has vested in accordance with the vesting provisions
set forth in the option agreement, if any, reflecting the grant of options by
the Company.
7. SUCCESSORS AND ASSIGNS: The parties acknowledge and agree that this
Agreement may not be assigned by either party without the written consent of
the other party. In the event of a Change of Control as defined in Section
4(a), the Company's obligations under this Agreement shall be assumed by the
Person that survives such transaction, or by the Person purchasing assets
constituting such Change of Control. In the event of the Executive's death,
this Agreement shall be enforceable by the Executive's estate, executors or
legal representatives, but only to the extent that such persons may collect any
compensation (including through the exercise of stock options) due to the
Executive under this Agreement.
8. INDEMNIFICATION: During and after the employment of the Executive
pursuant to this Agreement, the Company shall indemnify the Executive against
all judgments, penalties, fines, assessments, losses, amounts paid in
settlement and reasonable expenses (including, but not limited to, attorneys'
fees) for which the Executive may become liable as a result of his performance
of his duties and responsibilities pursuant to this Agreement, to the fullest
extent permissible under the laws of the State of Texas. This provision shall
be in addition to any other provisions of the Company's Articles of
Incorporation, Bylaws or Indemnification Agreements providing for
indemnification to the Executive.
9. NON-COMPETITION AND NON-DISCLOSURE: The Company and the Executive
agree as follows:
a. During and after his employment by the Company, the Executive
agrees that he shall not directly or indirectly disclose any Confidential
Information, as defined in this Section, unless such disclosure is: (i) to an
employee of the Company or its subsidiaries; or (ii) to a person to whom
disclosure is reasonably necessary or appropriate in connection with the
performance of his duties as an executive of the Company; or (iii) authorized
in writing by the Board of Directors; or (iv) required by any court or
administrative agency.
b. In the event that this Agreement is terminated for any reason,
the Executive agrees that he shall promptly return all records, files,
documents, materials and copies relating to the business of the Company or its
subsidiaries which came into the possession of the Executive during his
employment pursuant to this Agreement.
c. For purposes of this Agreement, the term "CONFIDENTIAL
INFORMATION" shall be defined as any information relating to the business of
the Company or its subsidiaries which is not generally available to the public
and which the Company takes affirmative steps to maintain as
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confidential. The term shall not include any information that the Executive
was aware of prior to the date of initial employment by the Company,
information that is a matter of any public record, information contained in any
document filed or submitted to any governmental entity, any information that is
common knowledge in any industry in which the Company does business, any
information that has previously been made available to persons who are not
employees of the Company or any information that is known to the Company's
competitors.
d. In the event that the Executive's employment with the Company
is terminated for any reason except by the Company for Good Cause without a
Change of Control, the Executive covenants and agrees not to compete with the
Company by engaging in the business of providing: (i) workover rig services,
including completion of new xxxxx, maintenance and recompletion of existing
xxxxx (including horizontal recompletions) and plugging and abandonment of
xxxxx at the end of their useful lives; (ii) liquid services, including vacuum
truck services, frac tank rental and salt water injection; and/or (iii)
production services, including well test analysis, pipe testing, slickline
wireline services and fishing and rental tool services, for the period of time
by which the Executive's severance payment, if any, is measured. The geographic
scope of this non-compete provision shall be the state of Texas, the state of
Louisiana, and the parts of California which lie south of a line drawn from San
Xxxx Obispo (California), through Bakersfield (California), through Ridgecrest
(California) and ending with Las Vegas (Nevada).
In the event that the Executive's employment with the Company is
terminated by the Company for Good Cause without a Change of Control, the
Executive covenants and agrees not to compete with the Company by engaging in
the business of providing: (i) workover rig services, including completion of
new xxxxx, maintenance and recompletion of existing xxxxx (including horizontal
recompletions) and plugging and abandonment of xxxxx at the end of their useful
lives; (ii) liquid services, including vacuum truck services, frac tank rental
and salt water injection; and/or (iii) production services, including well test
analysis, pipe testing, slickline wireline services and fishing and rental tool
services, for a period of one (1) year from the date of termination. The
geographic scope of this non-compete provision shall be the state of Texas, the
state of Louisiana, and the parts of California which lie south of a line drawn
from San Xxxx Obispo (California), through Bakersfield (California), through
Ridgecrest (California) and ending with Las Vegas (Nevada).
In the event that the Executive's employment with the Company is
terminated for any reason after a Change of Control, the Executive shall not be
subject to any obligation not to compete with the Company after his termination
of employment with the Company.
e. In the event that the Executive violates any of the
non-competition or non-disclosure provisions set forth in this Agreement, the
Executive acknowledges and agrees that the Company will suffer immediate and
irreparable harm which cannot accurately be calculated in monetary damages.
Consequently, the Executive agrees that the Company shall be entitled to
immediate injunctive relief, either by temporary or permanent injunction, to
prevent any such violations. The Executive agrees that this relief shall be in
addition to any other legal or equitable relief to which the Company would be
legally entitled under Texas law.
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10. ARBITRATION: The Company and the Executive agree as follows:
a. Any claim or controversy arising out of or relating to this
Agreement, or any breach of this Agreement, shall be settled by final and
binding arbitration in the city of San Antonio, Texas in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in effect
on the date the claim or controversy arises. The Executive and the Company
agree that either party must request arbitration of any claim or controversy
within sixty (60) days of the date the claim or controversy first arises, by
giving written notice of the party's request for arbitration ("ARBITRATION
NOTICE"). Failure to effectively communicate the Arbitration Notice within the
time limitation set forth in this Section shall constitute a waiver of the
claim or controversy.
b. In the event that any dispute arising under this Agreement
concerns any payment required to be made under any provision of this Agreement,
either party agrees to deposit the amount of the disputed payment in an
interest bearing account with a financial institution acceptable to the other
party within five (5) days after either party effectively communicates its
Arbitration Notice. In the event that any dispute arising under this Agreement
concerns the amount of any payment required to be made under any provision of
this Agreement, either party agrees to pay the undisputed portion of the
payment to the other party and deposit the disputed portion of the payment in
an interest bearing account with a financial institution acceptable to the
other party within five (5) days after either party effectively communicates
its Arbitration Notice.
c. All claims or controversies subject to arbitration under this
Agreement shall be submitted to an arbitration hearing within thirty (30) days
after the Arbitration Notice is communicated. All claims or controversies
shall be resolved by a panel of three (3) arbitrators selected in accordance
with the applicable Commercial Arbitration Rules. Either party may request
that the arbitration proceeding be stenographically recorded by a Certified
Shorthand Reporter. The arbitrators shall issue a written decision with
respect to all claims or controversies submitted under this Section within
thirty (30) days after the completion of the arbitration hearing. The parties
are entitled to be represented by legal counsel at any arbitration hearing and
each party shall be responsible for its own attorneys' fees. The Company shall
be responsible for paying for all expenses in the event of any arbitration
under this Section.
d. The parties agree that this Section may be specifically
enforced by either party, and submission to arbitration compelled, by any court
of competent jurisdiction. The parties further acknowledge and agree that the
decision of the arbitrators may be specifically enforced by either party in any
court of competent jurisdiction.
11. RULES OF CONSTRUCTION: The following provisions shall govern the
interpretation and enforcement of this Agreement:
a. SEVERABILITY: The parties acknowledge and agree that each
provision of this Agreement shall be enforceable independently of every other
provision. Furthermore, the parties acknowledge and agree that, in the event
any provision of this Agreement is determined to be
Executive Employment Agreement
P. Xxxx Xxxxx - Page 12
13
unenforceable for any reason, the remaining covenants and/or provisions will
remain effective, binding and enforceable.
b. WAIVER: The parties acknowledge and agree that the failure of
either party to enforce any provision of this Agreement shall not constitute a
waiver of that particular provision, or of any other provisions, of this
Agreement.
c. CHOICE OF LAW/VENUE: The parties acknowledge and agree that
except as specifically provided otherwise in this Agreement, the law of Texas
will govern the validity, interpretation and effect of this Agreement and any
other dispute relating to, or arising out of, the employment relationship
between the Company and the Executive. Proper venue for any litigation or
arbitration concerning this Agreement shall be in San Antonio, Texas.
d. MODIFICATION: The parties acknowledge and agree that this
Agreement constitutes the complete and entire agreement between the parties;
that the parties have executed this Agreement based upon the express terms and
provisions set forth herein; that the parties have not relied on any
representations, oral or written, which are not set forth in this Agreement;
that no previous agreement, either oral or written, shall have any effect on
the terms or provisions of this Agreement; and that all previous agreements,
either oral or written, are expressly superseded and revoked by this Agreement.
In addition, the parties acknowledge and agree that the provisions of this
Agreement may not be modified by any subsequent agreement unless the modifying
agreement (i) is in writing, (ii) contains an express provision referencing
this Agreement, (iii) is signed by the Executive, and (iv) is approved by the
Board of Directors.
e. EXECUTION: The parties agree that this Agreement may be
executed in multiple counterparts, each of which shall be deemed an original
for all purposes.
f. HEADINGS: The parties agree that the subject headings set
forth at the beginning of each Section in this Agreement are provided for ease
of reference only, and shall not be utilized for any purpose in connection with
the construction, interpretation or enforcement of this Agreement.
g. SURVIVAL: Upon termination of this Agreement, all of the
rights and obligations of the parties pursuant to this Agreement shall
terminate, except that those provisions of this Agreement which expressly
provide for enforceability after termination shall continue in full force
effect in accordance with the terms hereof.
12. LEGAL CONSULTATION: The parties acknowledge and agree that both
parties have been accorded a reasonable opportunity to review this Agreement
with legal counsel prior to executing the Agreement.
13. NOTICES: The parties acknowledge and agree that any and all notices
required to be delivered under the terms of this Agreement shall be forwarded
by personal delivery or certified U.S. mail. Notices shall be deemed to be
communicated and effective on the day of receipt. Such notices shall be
addressed to each party as follows:
Executive Employment Agreement
P. Xxxx Xxxxx - Page 13
14
P. Xxxx Xxxxx
000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Xxxxxx Production Services, Inc.
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
With a copy to:
X. Xxxxxxx Xxxx, Esq.
Jenkens & Xxxxxxxxx,
A Professional Corporation
2200 One American Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Any party hereto may change its or his address for the purpose of receiving
notices and other communications as herein provided by a written notice given
in the manner aforesaid to the other party or parties hereto.
EXECUTED to be effective as of the Effective Date set forth above.
/s/ P. XXXX XXXXX
-----------------------------------
P. Xxxx Xxxxx
XXXXXX PRODUCTION SERVICES, INC.
By: /s/ XXXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------
Title: Chairman, President & CEO
-----------------------------
Executive Employment Agreement
P. Xxxx Xxxxx - Page 14
