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EXHIBIT 10.6
EMPLOYMENT AGREEMENT
This Employment Agreement, including the attached Exhibit A (together,
the "Agreement"), is entered into between Sierra Well Service, Inc., a Delaware
corporation (the "Company"), and Xxxxxxx X. Xxxxx ("Employee") effective as of
March 1, 2000 (the "Effective Date").
WITNESSETH:
WHEREAS, the Company desires to employ Employee pursuant to the terms
and conditions set forth in this Agreement, and Employee desires to be employed
by the Company pursuant to such terms and conditions;
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants, and obligations contained herein, the Company and Employee agree as
follows:
ARTICLE I: EMPLOYMENT AND DUTIES
1.1 The Company agrees to employ Employee and Employee agrees to be
employed by the Company subject to the terms and conditions of this Agreement,
beginning as of the Effective Date and continuing until the date set forth on
Exhibit A (the "Term"). If Employee's employment with the Company continues
after the end of the Term, Employee shall be an "at-will" employee.
1.2 Employee shall be employed in the position set forth on Exhibit A
and shall have the normal authorities, responsibilities and duties of such
position. However, the Company may assign Employee such additional or different
duties from time to time as may be reasonably appropriate in the good faith
opinion of the Company, including duties with an affiliate. Employee shall at
all times comply with the policies and procedures of the Company as in effect
from time to time.
ARTICLE II: COMPENSATION AND BENEFITS
2.1 During the Term the Company shall pay Employee a Monthly Base
Salary as set forth on Exhibit A, which shall be paid in accordance with the
Company's standard payroll practice. Such Monthly Base Salary may be increased
from time-to-time by the Board of Directors of the Company (the "Board"), but
may not be decreased unless a similar decrease is made to the base salaries of
the officers of the Company.
2.2 Employee shall be eligible to participate in the Company's cash
bonus and employee stock option plans as may be approved from time to time by
the Board.
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2.3 The Company may withhold from any compensation, benefits, or
amounts payable to Employee all taxes as may be required pursuant to any
applicable law.
2.4 Employee shall be reimbursed by the Company for reasonable travel,
lodging, meals, customer entertainment and other expenses incurred by him in
connection with performing his duties hereunder in accordance with the Company's
policies in effect from time to time.
ARTICLE III: TERMINATION PRIOR TO EXPIRATION OF TERM AND EFFECTS OF
SUCH TERMINATION
3.1 The Company shall have the right to terminate Employee's employment
at any time prior to the expiration of the Term:
(i) for "Cause", upon the determination by the Board that
"Cause" exists for termination of Employee's
employment (a "Termination for Cause"). As used
herein, the term "Cause" means (a) Employee's gross
negligence or willful misconduct in the performance
of Employee's duties; (b) Employee has been convicted
of a felony; (c) Employee has willfully refused
without proper legal reason to perform the duties and
responsibilities required of Employee under this
Agreement; (d) Employee's material breach of any
material provision of this Agreement which remains
uncorrected for 10 business days following written
notice by the Company to Employee of such breach; or
(e) chronic alcohol abuse or illegal drug use by
Employee that is determined by the Board to
materially impair Employee's ability to perform his
duties and responsibilities hereunder;
(ii) for any reason other than Cause (an "Involuntary
Termination"); or
(iii) if Employee becomes entitled to benefits under the
Company's (or an affiliate's) long-term disability
plan or, if Employee is not covered by any such plan,
upon Employee becoming unable to perform
substantially, with reasonable accommodation,
Employee's duties as a result of a physical or mental
impairment as determined by a physician selected or
approved by the Company (a "Disability Termination").
3.2 Employee shall have the right to terminate Employee's employment at
any time prior to the expiration of the Term:
(i) for a material breach by the Company of a material
provision of this Agreement which remains uncorrected
for 10 business days following written notice of such
breach by Employee to the Company (a "Good Reason
Termination"); or
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(ii) for any other reason 30 days following written notice
to the Company, unless such notice period is waived
by the Company (a "Voluntary Termination").
3.3 Upon a Voluntary Termination, a Termination for Cause, a Disability
Termination, or a termination due to Employee's death, Employee (or Employee's
spouse or, if none, Employee's estate) shall be paid the pro rata Monthly Base
Salary earned through the date of such termination; however, Employee shall not
be entitled any future compensation or benefits which would otherwise have been
provided pursuant to this Agreement had the Term continued following such
termination of employment, including, without limitation, any bonuses, incentive
compensation, stock option or other equity based award that is not vested or
payable pursuant to its terms at the date of such termination of employment.
3.4 Upon an Involuntary Termination or a Good Reason Termination,
Employee shall be paid, as soon as reasonably practical following such
termination, a lump sum amount equal to six months' Monthly Base Salary
(however, if such termination occurs on or following a Change of Control (as
defined in the Company's 2000 Stock Incentive Plan), "18 months'" shall be
substituted for "six months'"); however, Employee shall not be entitled to
receive any severance payment pursuant to this Section 3.4 unless Employee has
executed (and not revoked) a general release of all claims Employee may have
against the Company and its affiliates relating to Employee's employment
hereunder in a form of such release reasonably acceptable to the Company.
Employee shall not be entitled to any future compensation or benefits which
would otherwise have been provided pursuant to this Agreement had the Term
continued following such termination of employment, including, without
limitation, any bonuses, incentive compensation, stock option or other equity
based award that is not vested or payable pursuant to its terms at the date of
such termination of employment.
3.5 In all cases, the compensation payable to Employee under this
Agreement upon termination of the employment relationship shall be offset
against any amounts to which Employee may otherwise be entitled under any and
all severance plans and policies of the Company or its affiliates.
3.6 Termination of the employment relationship pursuant to this
Agreement shall not terminate those obligations imposed by this Agreement which
are continuing obligations, including, without limitation, Employee's
obligations under Articles IV and V.
ARTICLE IV: OWNERSHIP AND PROTECTION OF INFORMATION; COPYRIGHTS
4.1 All information, ideas, concepts, improvements, discoveries, and
inventions, whether patentable or not, which are conceived, made, developed or
acquired by Employee, individually or in conjunction with others, during
Employee's employment by the Company which relate to the Company's business,
products or services shall be disclosed to the Company by Employee and are and
shall be the sole and exclusive property of the Company.
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4.2 Employee acknowledges that the business of the Company and its
affiliates is highly competitive and that their strategies, methods, books,
records, and documents, their technical information concerning their products,
equipment, services, and processes, procurement procedures and pricing
techniques, the names of and other information (such as credit and financial
data) concerning their customers and business affiliates, all comprise
confidential business information and trade secrets ("Confidential Information")
which are valuable, special, and unique assets which the Company or its
affiliates use in their business to obtain a competitive advantage over their
competitors. Employee further acknowledges that protection of such Confidential
Information against unauthorized disclosure and use is of critical importance to
the Company and its affiliates in maintaining their competitive position.
Employee hereby agrees that Employee will not, at any time during or after
Employee's termination of employment with the Company, make any unauthorized
disclosure of any Confidential Information, or make any use thereof, except in
the carrying out of Employee's employment responsibilities hereunder. The
affiliates of the Company shall be third party beneficiaries of Employee's
obligations under this Section. As a result of Employee's employment by the
Company, Employee may also from time to time have access to, or knowledge of,
confidential business information or trade secrets of third parties, such as
customers, suppliers, partners, joint venturers, and the like, of the Company
and its affiliates. Employee also agrees to preserve and protect the
confidentiality of such third party confidential business information and trade
secrets. Employee acknowledges that money damages would not be sufficient remedy
for any breach of this Article IV by Employee, and the Company shall be entitled
to enforce the provisions of this Article IV by terminating any payments then
owing to Employee under this Agreement and/or to specific performance and
injunctive relief as remedies for such breach or any threatened breach. Such
remedies shall not be deemed the exclusive remedies for a breach of this Article
IV, but shall be in addition to all remedies available at law or in equity to
the Company, including the recovery of damages from Employee and his or her
agents involved in such breach.
4.3 All written materials, records, and other documents made by, or
coming into the possession of, Employee during Employee's employment by the
Company which contain or disclose Confidential Information shall be and remain
the sole property of the Company and its affiliates, as the case may be. Upon
termination of Employee's employment by the Company, for any reason, Employee
promptly shall deliver the same, and all copies thereof, to the Company.
4.4 If, during Employee's employment with the Company, Employee creates
any original work of authorship fixed in any tangible medium of expression which
is the subject matter of copyright (such as videotapes, written presentations on
acquisitions, computer programs, drawings, maps, architectural renditions,
models, manuals, brochures, or the like) relating to the Company's business,
products, or services, whether such work is created solely by Employee or
jointly with others (whether during business hours or otherwise and whether on
the Company's premises or otherwise), Employee shall disclose such work to the
Company. The Company shall be deemed the author of such work if the work is
prepared by Employee within the scope of his or her employment but is specially
ordered by the Company as a contribution to a collective work, as a part of a
motion picture or other audiovisual work, as a translation, as a supplementary
work, as a compilation, or as an instructional text, then the work shall be
considered to be work made for hire and the Company
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shall be the author of the work. If such work is neither prepared by the
Employee within the scope of his or her employment nor a work specially ordered
and is deemed to be a work made for hire, then Employee hereby agrees to assign,
and by these presents does assign, to the Company all of Employee's worldwide
right, title, and interest in and to such work and all rights of copyright
therein.
ARTICLE V: NON-COMPETITION OBLIGATIONS
5.1 As part of the consideration for the compensation and benefits to
be paid to Employee hereunder, in keeping with Employee's duties as a fiduciary,
in order to protect the Company's interests in the Confidential Information that
the Company will furnish and make available to Employee in the performance of
his duties with the Company, and as an additional incentive for the Company to
enter into this Agreement, the Company and Employee agree to the non-competition
provisions of this Article V. Employee agrees that during the period of
Employee's non-competition obligations hereunder, Employee will not, directly or
indirectly for Employee or for others (as a principal, agent, owner, employee,
consultant or otherwise), in any geographic area or market where the Company or
any of its affiliated companies is conducting any business as of the date of
termination of the employment relationship or have during the previous twelve
months conducted any business (the "Territory"):
(i) engage in any business competitive with the business
conducted by the Company or its affiliates;
(ii) render advice or services to, or otherwise assist,
any other person, association, or entity who is
engaged, directly or indirectly, in any business
competitive with the business conducted by the
Company or its affiliates;
(iii) induce any employee of the Company or any of its
affiliates to terminate his or her employment with
the Company or its affiliates, or hire or assist in
the hiring of any such employee by a person,
association, or entity not affiliated with the
Company;
(iv) call upon any person or entity which is, at that
time, or which has been, within one year prior to
that time, a customer of the Company within the
Territory for the purpose of soliciting customers,
orders or contracts for any business competitive with
the Company or its affiliates within the Territory;
or
(v) testify as an expert witness in matters related to
the Company's business for an adverse party to the
Company in litigation; provided, that nothing
contained herein shall interfere with Employee's duty
to testify as a witness if required by law.
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These non-competition obligations shall apply during Employee's employment with
the Company and its affiliates and shall extend until six months after
Employee's termination of the employment with the Company and its affiliates.
Notwithstanding the foregoing, these non-competition obligations shall not apply
if Employee's employment is terminated on or following a Change of Control. In
addition, the foregoing restrictions shall not prohibit Employee from owning
less than 2% of any class of securities of any public company that is engaged in
competition with the Company or an affiliate.
5.2 Employee understands that the foregoing restrictions may limit
Employee's ability to engage in certain businesses during the period provided
for above, but acknowledges that Employee will receive sufficiently high
remuneration and other benefits under this Agreement to justify such
restriction. Employee acknowledges that money damages would not be sufficient
remedy for any breach of this Article V by Employee, and the Company shall be
entitled to enforce the provisions of this Article V by terminating any payments
then owing to Employee under this Agreement and/or to specific performance and
injunctive relief as remedies for such breach or any threatened breach. Such
remedies shall not be deemed the exclusive remedies for a breach of this Article
V, but shall be in addition to all remedies available at law or in equity to the
Company, including, without limitation, the recovery of damages from Employee
and his or her agents involved in such breach. Employee further agrees to waive
any requirement for the Company's securing or posting of any bond in connection
with such remedies.
5.3 It is expressly understood and agreed that the Company and Employee
consider the restrictions contained in this Article V to be reasonable and
necessary to protect the proprietary information of the Company. Nevertheless,
if any of the aforesaid restrictions are found by a court having jurisdiction to
be unreasonable, or overly broad as to geographic area or time, or otherwise
unenforceable, the parties intend for the restrictions therein set forth to be
modified by such courts so as to be reasonable and enforceable and, as so
modified by the court, to be fully enforced.
5.4 The covenants in this Article V are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems reasonable, and the
Agreement shall thereby be reformed.
5.5 All of the covenants in this Article V shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. It is specifically
agreed that the period of six months following termination of employment, during
which the agreements and covenants of Employee made herein shall be effective,
shall be computed by excluding from such computation any time during which
Employee is in violation of any provision of this Article V.
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ARTICLE VI: MISCELLANEOUS
6.1 For purposes of this Agreement, all notices and other
communications shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Company:
Sierra Well Service, Inc.
000 X. Xxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Corporate Secretary
If to Employee, to the address last shown on the Company's records.
Either the Company or Employee may furnish a change of address to the other in
writing in accordance herewith, except that notices of changes of address shall
be effective only upon receipt.
6.2 This Agreement shall be governed in all respects by the laws of the
State of Texas, excluding any conflict-of-law rule or principle that might refer
the construction of the Agreement to the laws of another state or country.
6.3 No failure by either party hereto at any time to give notice of any
breach by the other party of, or to require compliance with, any condition or
provision of this Agreement shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
6.4 It is a desire and intent of the parties that the terms,
provisions, covenants, and remedies contained in this Agreement shall be
enforceable to the fullest extent permitted by law. If any such term, provision,
covenant, or remedy of this Agreement or the application thereof to any person,
association, or entity or circumstances shall, to any extent, be construed to be
invalid or unenforceable in whole or in part, then such term, provision,
covenant, or remedy shall be construed in a manner so as to permit its
enforceability under the applicable law to the fullest extent permitted by law.
In any case, the remaining provisions of this Agreement or the application
thereof to any person, association, or entity or circumstances other than those
to which they have been held invalid or unenforceable, shall remain in full
force and effect.
6.5 This Agreement shall be binding upon and inure to the benefit of
the Company and any other person, association, or entity which may hereafter
acquire or succeed to all or substantially all of the business or assets of the
Company by any means whether direct or indirect, by purchase, merger,
consolidation, or otherwise. Employee's rights and obligations under Agreement
hereof are personal and such rights, benefits, and obligations of Employee shall
not be voluntarily or
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involuntarily assigned, alienated, or transferred, whether by operation of law
or otherwise, without the prior written consent of the Company.
6.6 This Agreement replaces in full all previous agreements and
discussions pertaining to the following subject matters covered herein: the
nature of Employee's employment relationship with the Company and the term and
termination of such relationship. This Agreement constitutes the entire
agreement of the parties with regard to such subject matters, and contains all
of the covenants, promises, representations, warranties, and agreements between
the parties with respect such subject matters. Each party to this Agreement
acknowledges that no representation, inducement, promise, or agreement, oral or
written, has been made by either party with respect to such subject matters,
which is not embodied herein, and that no agreement, statement, or promise
relating to the employment of Employee by the Company that is not contained in
this Agreement shall be valid or binding. Any modification of this Agreement
will be effective only if it is writing and signed by each party whose rights
hereunder are affected thereby, provided that any such modification must be
authorized or approved by the Board.
ARTICLE VII: DISPUTE RESOLUTION
7.1 Except with respect to injunctive relief as provided in Section 5.2
above, any dispute or controversy about the validity, interpretation, effect or
alleged violation of this Agreement (an "Arbitrable Dispute") must be submitted
to confidential arbitration in Midland, Texas. Arbitration shall take place
before an experienced employment arbitrator licensed to practice law in such
state and selected in accordance with the Model Employment Arbitration
Procedures of the American Arbitration Association. Arbitration shall be the
exclusive remedy of any Arbitrable Dispute. Judgement may be entered on the
arbitrator's award in any court having jurisdiction. The parties hereby agree
that the arbitrator shall be empowered to enter an equitable decree mandating
specific enforcement of the terms of this Agreement. All costs and expenses,
including attorneys' fees, shall be awarded as determined by the arbitrator.
Should any party to this Agreement pursue any Arbitrable Dispute by any method
other than arbitration, the other party shall be entitled to recover from the
party initiating the use of such method all damages, costs, expenses and
attorneys' fees incurred as a result of the use of such method. Notwithstanding
anything herein to the contrary, nothing in this Agreement shall purport to
waive or in any way limit the right of any party to seek to enforce any judgment
or decision on an Arbitrable Dispute in a court of competent jurisdiction.
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IN WITNESS WHEREOF, the Company and Employee have duly executed this
Agreement in multiple originals, effective for all purposes as of the Effective
Date.
SIERRA WELL SERVICE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: President and CEO
EMPLOYEE
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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EXHIBIT "A" TO
EMPLOYMENT AGREEMENT
BETWEEN SIERRA WELL SERVICE, INC. AND XXXXXXX X. XXXXX
Term Ending Date: February 28, 2003 or, if earlier, the date Employee's
employment is terminated for any reason
Position: Vice President
Monthly Base Salary: $8,333.34
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