EXHIBIT 10.1
EMPLOYMENT AGREEMENT
DATED JANUARY 1, 2006
BY AND BETWEEN
BLACK WARRIOR WIRELINE CORP.
AND
XXXXXX XXXXXX XXXXXXX
This Employment Agreement (the "Agreement") by and between Black
Warrior Wireline Corp., a Delaware corporation (the "Company"), and XXXXXX
XXXXXX XXXXXXX (the "Executive") is effective the 1st day of January, 2006 (the
"Effective Date"),.
The Company offers this Agreement because it desires to employ the
Executive as its Executive Vice President of Operations and Finance. Executive
executes this Agreement because he is desires to confirm his employment by the
Company in those capacities and because he wishes to confirm certain commitments
made by the Company.
Accordingly, in consideration of the promises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. EMPLOYMENT
The Company hereby agrees to employ the Executive as its
Executive Vice President, and the Executive hereby agrees to accept such
employment, on the terms and conditions set forth herein.
2. TERM
The term of employment (the "Term") shall shall begin on the
Effective Date and shall end on the date immediately prior to the third
anniversary of the Effective Date; provided, that, on such date and each
following anniversary of such date thereafter, the Term shall be extended for
one additional year unless, at least 30 days prior to such date or such
anniversary of such date, as applicable, the Company or Executive shall have
given notice not to extend the Term. This Agreement shall be subject to early
termination at the option of the Employee in the event of any of the following
events:
a. Upon a "Change of Control" of the Company, which for purposes
of this Agreement shall mean any of the following occurring after the Effective
Date: (i) any person or group of persons (within the meaning of the Securities
Exchange Act of 1934,) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934,) of 20% or more of the issued and
outstanding shares of capital stock of Company having the right to vote for the
election of directors of Company under ordinary circumstances; (ii) more than
25% of the assets of the Company are sold in a transaction or series of related
transactions; (iii) the Company shall merge with any other person or firm; (iv)
during any period of 12 consecutive calendar months, individuals who at the
beginning of such period constituted the board of directors of Company (together
with any new directors whose election by the board of directors of Company or
whose nomination for election by the Stockholders of Company was approved by a
vote of at least two-thirds of the directors then still in office who either
were directors at the beginning of such period or whose election or nomination
for election was previously so approved cease) for any reason other than death
or disability to constitute a majority of the directors then in office;
provided, however, that any of the foregoing items (i) through (iv) which occur
as a result of the public offering currently in progress shall not constitute a
Change of Control.
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EMPLOYMENT AGREEMENT PAGE 2
b. Should the Executive not be re-elected to the board of
directors of the Company at any shareholders' meeting, or should the Executive
be required to resign pursuant to the Bylaws of the Company.
c. Should Xxxxxxx X. Xxxxxxx not be re-elected to the board of
directors of the Company at any shareholders' meeting, or should Xx. Xxxxxxx be
required to resign pursuant to the Bylaws of the Company.
3. POSITION AND DUTIES
The Executive shall serve as Executive Vice President, and a
director of the Company, and shall have such responsibilities and authority
consistent with those positions as may, from time to time, be assigned to the
Executive by the CEO. The Executive shall report to the CEO. The Executive shall
devote substantially all his working time and efforts to the business and
affairs of the Company. At the inception of this contract the job
responsibilities shall include business development, capital markets, commercial
and investment banking relationships, finance, accounting, operations and other
corporate duties as needed. Subject to Sections 7 and 8, Executive may serve as
a director of other companies so long as his service is not injurious to the
Company, does not present Executive with a conflict of interest and is approved
by the board of directors or the appropriate committee of the board of
directors.
4. PLACE OF PERFORMANCE
Executive shall be based at an office of the Company in the
Houston, Texas area; provided however that the Executive shall be expected to
travel extensively on business for the Company.
5. COMPENSATION AND RELATED MATTERS
a. Salary. During the period of the Executive's employment
hereunder, the Company shall pay to the Executive a base salary at a rate of not
less that $300,000 per annum in equal monthly or other installments in
accordance with the Company's customary payroll practices. The CEO and
Compensation Committee of the board of directors of the Company shall annually
review Executive's performance and the Salary, and in light of such review may
additionally increase (but not decrease) the Salary.
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EMPLOYMENT AGREEMENT PAGE 3
b. Bonus. Should the Company achieve, during any calendar quarter
beginning with first quarter of 2006 (January 1 through March 31, 2006) a 20%
EBITDA margin, defined as the ratio of EBITDA to total sales, the Executive
shall be paid a bonus of 1/2% of the Company's EBITDA during such quarter. Such
bonus shall be payable within ten (10) days after filing of the Company's form
10-Q for the quarter (or 10-K for the quarter(s) ended December 31). The bonus
described herein will initially be capped at $200,000 per year, but can be
increased at the discretion of the CEO and board of directors. The Bonus is to
be paid to Executive every quarter until Executive's employment is terminated.
c. Expenses. The Company shall reimburse Executive for all normal,
usual and necessary expenses incurred by Executive in furtherance of the
business and affairs of the Company upon receipt by the Company of appropriate
receipts, vouchers or other proof of the Executive's expenditures and otherwise
in accordance with such expense reimbursement policy as may, from time to time,
be adopted by the board of directors of the Company.
d. Other Benefits. The Company shall maintain in full force and
effect, and the Executive shall be entitled to participate in, all of its
employee benefit plans and arrangements in effect on the date hereof or plans or
arrangements providing the Executive with at least equivalent benefits
thereunder (including, without limitation, each pension and retirement plan and
arrangement, supplemental pension and retirement plan and agreement, stock
option plan, life insurance and health and accident plan and arrangement,
medical insurance plan, disability plan, survivor income plan, relocation plan
and vacation plan). In addition, the Company shall provide the Executive a car
allowance in accordance with the Company's car allow policy with regard to its
senior executives. The Company shall not make any changes in such plans or
arrangements which would adversely affect the Executive's rights or benefits
thereunder, unless such change occurs pursuant to a program applicable to all
executives of the Company and does not result in a proportionately greater
reduction in the rights of or benefits to the Executive as compared with any
other executive of the Company. The Executive shall be entitled to participate
in or receive benefits under any employee benefit plan or arrangement made
available by the Company in the future to its executives and key management
employees, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements. Nothing paid to the
Executive under any plan or arrangement presently in effect or made available in
the future shall be deemed to be in lieu of the salary payable to the Executive
pursuant to paragraph (a) of this Section.
e. Vacation. The Executive shall be entitled to four (4) weeks
vacation, in accordance with the Company's existing policies. The Executive
shall also be entitled to all paid holidays given by the Company to its
executives.
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EMPLOYMENT AGREEMENT PAGE 4
f. Services Furnished. The Company shall furnish the Executive
with office space, stenographic assistance and such other facilities and
services as shall be suitable to the Executive's position and adequate for the
performance of his duties as set forth in Section 3 hereof.
g. Options. The Executive will be granted, pursuant to documents
to be executed by the Company and the Executive at the time of the grant,
options to purchase 150,000 shares of common stock in the company at a strike
price of $7.50, taking into account the impact of the reverse-stock split which
took effect on December 27, 2005. The terms and conditions relating to the
options shall be established in the grant document, provided, however, that
one-third of such options shall vest on the first, second and third
anniversaries of the Effective Date and that all such options shall vest
immediately, and be exercisable immediately, upon a Change of Control. The
Executive acknowledges that this Agreement is not a grant of options and a grant
may only be made pursuant to further documents executed by both the Executive
and the Company.
h. Signing Bonus. Executive shall be paid a signing bonus of
$50,000 in a single lump sum payment immediately upon execution of Agreement by
all parties.
6. OFFICES
The Executive agrees to serve without additional compensation, if
elected or appointed thereto, as a Director of any of the Company's subsidiaries
and in one or more executive offices of any of the Company's subsidiaries,
provided that the Executive is indemnified for serving in any and all such
capacities on a basis no less favorable than is currently provided by Article
VII of the Company's Bylaws. Executive agrees that, upon termination of his
employment with the Company for any reason whatsoever, he will resign from all
positions as an Executive Officer and Director of the Company and all of its
subsidiaries.
7. CONFIDENTIAL INFORMATION
Executive covenants and agrees that he will not (except as
required in the course of his employment), while in the employment of the
Company or thereafter, communicate or divulge to, or use for the benefit of
himself, or any other person, firm, association or corporation, without the
consent of the Company, any information concerning any inventions, discoveries,
improvements, processes, formulas, apparatus, technology, expertise,
technological know-how, equipment, methods, trade secrets, research, secret
data, costs or uses or purchasers of the Company's products or services, or
other confidential matters possessed, owned, or used by the Company that may be
communicated to, acquired by, or learned of by the Executive in the course of,
or as result of, his employment with the Company. All records, files, memoranda,
reports, price lists, customer lists, drawings, plans, sketches, documents,
equipment, and the like, relating to the business of the Company, which the
Executive shall use or prepare or come into contact with, shall remain the sole
property of the Company.
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EMPLOYMENT AGREEMENT PAGE 5
8. COMPETITION
a. During the period of the Executive's employment by the Company,
Executive will not (i) engage in; (ii) have any interest in any person, firm, or
corporation that engages in; or (iii) perform any services for any person, firm,
or corporation that engages in competition with the Company, or any of its
subsidiaries in the development, research relating to, manufacture, processing,
marketing, distribution, or sale of any products or services that were the
subject of activities of the Company, or any of its subsidiaries, at any time
during the period of his employment by the Company, in any area in which such
business shall be carried on.
b. Notwithstanding any provision of this Section 8 to the
contrary, Executive may own no more than three percent (3%) of the total shares
of all classes of stock outstanding of any corporation having securities
registered with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934.
c. Executive represents that his experience and capabilities are
such that the provision of this Section 8 will not prevent him from earning a
livelihood.
9. TERMINATION
Notwithstanding any provision of this Agreement to the contrary,
Executive's employment shall terminate upon his death, and the Company at any
time may terminate his employment by giving him written notice of such
termination (i) for cause, as hereinafter defined; (ii) if Executive shall
violate any of the provisions of Sections 7 or 8 hereof; or (iii) if Executive
shall become physically or mentally incapacitated and by reason thereof unable
to perform his duties hereunder for a period of ninety (90) consecutive days.
During any period prior to termination that Executive fails to perform his
duties as described under clause (iii) of this Section 9, Executive shall
continue to receive his Salary at the rate in effect at the beginning of the
period as well as all other payments and benefits set forth in Section 5,
reduced by any payments made to Executive during such period under the
disability benefit plans of the Company then in effect or under the Social
Security disability insurance program. For the purpose of this clause (i) of
this Section 9, "for cause" shall mean any of the following events: (x)
conviction in a court of law of any crime or offense involving money or other
property of the Company, or any of its subsidiaries, or any felony, or (y)
violation of specific written directions of the board of directors of the
Company, provided, however, no discharge shall be deemed "for cause" under this
clause (y) unless Executive shall have first received written notice from the
board of directors of the Company advising of the acts or omissions that
constitute such violation, and such violation continues uncured for a period of
thirty (30) days after Executive shall have received such notice.
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EMPLOYMENT AGREEMENT PAGE 6
10. CHANGE OF CONTROL OR TERMINATION FOR GOOD REASON.
In the event a Change of Control, the Company shall execute a
termination of this Agreement and pay to the Executive the sum of three times
the total Salary and Bonus paid to the Executive during the twelve (12) months
preceding such Change of Control; provided, however, that if a Change of Control
occurs on or before December 31, 2006, the Company shall pay to the Executive
the amount of $1,500,000, which amount is comprised of three times Executive's
maximum annual Salary and Bonus for the 2006 calendar year.
11. SUCCESSORS; BINDING AGREEMENT
a. In the event a Change of Control shall have occurred before the
expiration of the term of this Agreement,
(i) the Company shall not, directly or indirectly, consolidate
with, merge into or sell or otherwise transfer its assets as an
entirety or substantially as an entirety to, any person, or permit
any person to consolidate with or merge into the Company, unless
immediately after such consolidation, merger, sale or transfer,
the successor shall have expressly assumed and agreed to perform
in writing any of the Company's remaining obligations under this
Agreement; and
(ii) not fewer than ten (10) days before the consummation of any
consolidation of the Company with, merger by the Company into, or
sale or other transfer by the Company of its assets as an entirety
or substantially as an entirety to, any person, the Company shall
give the Employee notice of that proposed transaction.
b. This Agreement shall be binding upon and shall inure to the
benefit of the Company and its successors and assigns.
c. Subject to the provisions of Section 11.a., this Agreement and
all rights of the Executive hereunder, shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts would still be payable to him hereunder
if he had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the Executive's
devisee, legatee, or other designee, or, if there be no such designee, to the
Executive's estate.
12. NOTICE
For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed as follows:
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EMPLOYMENT AGREEMENT PAGE 7
If to the Executive:
Xxxxxx Xxxxxx XxXxxxx
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
If to the Company:
Black Warrior Wireline Corp.
Attention: CEO/Controller
000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
13. INDEMNIFICATION.
The Company shall indemnify Executive to the fullest extent
permitted by the laws of the Company's state of incorporation in effect at that
time, or certificate of incorporation and by-laws of the Company, whichever
affords the greater protection to Executive. Executive will be entitled to any
insurance policies the Company may elect to maintain generally for the benefit
of its directors or officers against all costs, charges and expenses incurred in
connection with any action, suit or proceeding to which he may be made a party
by reason of being an director or officer of the Company.
14. MISCELLANEOUS
No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agree to in writing
signed by the parties hereto. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
expressed or implied, with respect to the subject matter hereof have been made
by either party which are not set forth expressly in this Agreement.
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EMPLOYMENT AGREEMENT PAGE 8
15. VALIDITY
The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
16. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which together will
constitute one and the same instrument.
17. ARBITRATION
Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration, pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitration shall be before a single arbitrator in Houston, Texas. Judgment may
be entered on the arbitrator's award in any court having jurisdiction. The
expense of such arbitration shall be borne by the Company.
18. CONTROLLING LAW
This Agreement shall be governed by and construed in accordance
with the laws of the State of Mississippi.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
January 1, 2006.
BLACK WARRIOR WIRELINE CORP.
By: /s/Xxxxxxx X Xxxxxxx
------------------------------
Its President and CEO
/s/Xxxxxx Xxxxxx XxXxxxx
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Xxxxxx Xxxxxx XxXxxxx
