EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
EMPLOYMENT AGREEMENT (“Agreement”)
is made and entered into effective as of August 18, 2006 (the “Effective Date”),
by and between LUFKIN
INDUSTRIES, INC.,
a Texas
corporation (the “Company”), and Xxxxx
X. Hoes
of
Lufkin, Texas (the “Executive”).
WHEREAS,
the
Company wishes to continue the employment of the Executive as a Vice President
of the Company, under the terms and conditions set forth herein;
and
WHEREAS,
the
Executive wishes to continue his employment under those terms and conditions;
NOW,
THEREFORE,
in
consideration of the premises and mutual covenants contained herein, and
for
other consideration mutually acknowledged the Company and the Executive (the
“Parties”) agree as follows:
1.
Employment.
The
Company hereby agrees to continue to employ the Executive, and the Executive
hereby agrees to continue his employment with the Company, for the term set
forth in Section 2 below, in the positions and with the duties and
responsibilities set forth in Section 3 below, at an office location in Lufkin,
Texas or such other location as the Parties may mutually agree, and upon
such
other terms and conditions as are hereinafter stated.
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2.
Term.
Subject
to renewal and other provisions as hereinafter set forth in this Section
2, the
term of the Executive’s employment with the Company shall commence on the
Effective Date and shall continue through the second annual anniversary of
the
Effective Date (the “Initial Term”), unless sooner terminated in accordance with
the terms and provisions hereinafter set forth. The Initial Term shall be
automatically renewed and extended for a period of twelve (12) months commencing
on the first annual anniversary of the Effective Date and on each successive
annual anniversary thereafter on the same terms and conditions contained
herein
in effect as of the time of renewal (the “Extended Term”), unless either Party
shall give the other Party written notice, at least sixty (60) days prior
to the
first annual anniversary of the Effective Date of this Agreement (or, if
previously renewed and extended, at least sixty (60) days prior to any
succeeding annual anniversary), of the notifying Party’s desire not to renew
this Agreement. The non-renewal or non-extension of this Agreement by either
Party at the end of the Initial Term or any Extended Term (hereinafter, the
“Term,” unless otherwise indicated) shall not be deemed a termination by the
Company without Cause (as such term is defined below) and the Executive shall
only receive those amounts set forth in Section 5.4 in such circumstances.
The
Executive shall, unless requested otherwise by the Company, remain in the
employ
of the Company during the entirety of the remaining Term. Notwithstanding
any
other provision of this Section 2 to the contrary, in no event shall the
Term
extend beyond the Executive’s “normal retirement age” under the U.S. Social
Security Act, as amended from time to time.
3.
Position
and Duties.
(a) During
the Term, the Executive shall serve as Vice President of the Company reporting
directly to the President or Chief Operating Officer of the Company. As such,
the Executive shall have the responsibilities, duties and authority customarily
pertaining to such office and such other duties as may reasonably be assigned
to
the Executive by the President or Chief Operating Officer of the Company
and
consistent with such position.
(b) While
employed hereunder, the Executive shall devote his full business time and
attention to the operations and activities of the Company, and shall not
be
employed by, consult with or otherwise render services to, any other business,
except with the consent of the Board of Directors of the Company. The foregoing
notwithstanding, the Parties recognize and agree that the Executive may engage
in passive personal investments and other business, industry, civic and
charitable activities that do not conflict with the business and affairs
of the
Company or interfere with the Executive’s performance of his duties
hereunder.
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4.
Compensation
and Benefits.
(a) Salary.
The
Company shall pay the Executive a base salary (“Salary”) at an annual rate of
$245,000 (the “Base Rate”). Salary shall be payable in accordance with the
Company’s payroll practices. The Compensation Committee of the Board of
Directors of the Company (the “Committee”) shall review with the Executive the
Salary during February of each year in the Term, and may adjust such Salary
in
its sole discretion, provided that such Salary shall never be at an annual
rate
less than the Base Rate.
(b) Bonus.
The
Executive will have an opportunity to receive a bonus with respect to each
year
during the Term. The level or levels of the annual bonus for each year during
the Term and the criteria for entitlement to such level or levels shall be
reasonable and reflective of industry norms as shall be determined in good
faith
by the Company with the advice and counsel of competent compensation consultants
of the Company’s choosing who shall currently review such data as may be
available with respect to bonuses that are made available to similarly situated
executives of companies that are in the same industry and are approximately
the
same size (based on sales) as the Company. The bonus for any bonus year during
the Term shall be paid in the form of a lump sum cash payment on the last
day of
the bonus year to which the annual bonus relates; provided, however, if
calculation of the amount of the annual bonus is
not
administratively practicable due to events beyond the control of the Company,
such annual
bonus shall be paid during the first bonus year in which calculation is
administratively practicable.
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(c) Employee
Benefit Programs.
During
the Term, the Executive shall be entitled to participate in all employee
benefit
programs of the Company as in effect from time to time and in which the
Company’s senior executives are eligible to participate, subject to the regular
eligibility requirements with respect to each such employee benefit program,
and
such other benefits or perquisites as may be approved for the Executive by
the
Board of Directors of the Company.
(d) Other
Benefits.
During
his employment hereunder, the Executive shall be afforded each and every
one of
the following benefits as incidences of his employment:
(i) Business
and entertainment expenses - the Company will reimburse the Executive for,
or
pay on behalf of the Executive, reasonable and appropriate expenses incurred
by
the Executive for business related purposes, including dues and fees to industry
and professional organizations, costs of entertainment and business development,
and costs reasonably incurred as a result of the Executive’s wife accompanying
the Executive on business travel.
(ii)
Club
memberships - in addition to the other business and entertainment expenses
reimbursable pursuant to item (i) above, the Company shall pay membership
fees,
dues and assessments for one luncheon or country club membership as the Board
of
Directors of the Company may deem to be justified by business
usage.
(iii)
Annual
physical examination - the Company shall pay for the cost of an annual physical
examination to be conducted by a doctor or clinic of the Executive’s choosing in
Houston, Texas or in Lufkin, Texas up to a maximum of $2,000 per
year.
(iv)
Life
insurance - the Executive’s life insurance benefit coverage will be the same as
that provided to other salaried employees.
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Such
reimbursements and payments shall be paid in a lump sum in cash not later
than
the 15th day of the third month following the last day of the calendar year
in
which the reimbursable costs were incurred or the payment was initially
due.
5.
Termination
of Employment.
The
Executive’s employment is subject to termination during the Term only as
provided in this Section 5.
5.1 Death
or Disability.
If
the
Executive’s employment is terminated due to his death or total disability, as
determined under the Company’s applicable long-term disability plan, then,
subject to the subsequent provisions of this Section 5.1 and Section
23:
(i) To
the
extent permitted without contravening the requirements of applicable law,
the
Executive (or his estate) shall be entitled to receive salary and benefit
coverages for a period of six months from and after the date of termination
of
employment; and
(ii)
The
Executive (or his estate) shall be entitled to a bonus payment for the year
in
which termination occurs equal to the bonus amount paid or payable by the
Company to the Executive for the immediately preceding bonus year prorated
to
reflect the actual number of full weeks worked during the year in which the
Executive’s employment terminates.
To
the
extent that any benefit described in the immediately preceding sentence cannot
be provided without contravening the requirements of applicable law because
the
Executive ceased to be employed by the Company, the Company shall pay an
amount
hereunder equal to its cost of providing such benefit for the period described
in the immediately preceding sentence and such amount shall be payable in
accordance with the Company’s payroll procedures commencing with the first
payroll period that begins on or immediately after the Executive’s termination
of employment due to death or total disability.
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5.2 Termination
by the Company without Cause.
The
Company may terminate the Executive’s employment at any time without Cause as
such term is defined in Section 5.3 below, in which case, subject to Section
23:
(i) The
Executive shall be paid a lump sum cash payment, payable within 30 days after
his termination of employment, equal to the total Salary which would have
been
paid to him under this Agreement for the remainder of the Term, based on
a
Salary rate equal to the greater of (A) the rate in effect on the Effective
Date, or (B) the rate in effect on termination of his employment;
and
(ii)
The
Executive shall be entitled to a lump sum payment payable within 30 days
after
his termination of employment equal to the amount of annual bonuses which
would
have been paid to him under this Agreement for the remainder of the Term
based
upon the bonus rate per annum that is equal to the bonus paid or payable
by the
Company to the Executive for the immediately preceding bonus year;
and
(iii)
Benefits
(as described in Sections 4(c) and 4(d) above) shall continue to be provided
to
the Executive by the Company during the period of Salary continuation described
in item (i) above as if the Executive’s employment had continued for the
remainder of the Term; provided, however, that to the extent any such benefit
cannot be continued as a matter of law during the remaining period of the
Term
because the Executive is no longer employed by the Company or because providing
the benefit would subject the Executive to additional income taxes under
Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”), the
Company shall pay the Executive in accordance with the Company’s payroll
procedures (commencing with the first payroll period that begins on or
immediately after the termination by the Company of the Executive’s employment
without cause) an amount equal to its cost of providing such benefit at the
same
rate or level as such benefit was provided or available at the time the benefit
was required as a matter of law to be discontinued because the Executive
ceased
to be employed by the Company or because providing the benefit would subject
the
Executive to additional income taxes under Section 409A of the Code and;
provided, further, that any such benefit shall be discontinued on the date
that
the Executive becomes entitled to coverage for a substantially equivalent
rate
or level of a comparable benefit as a result of his employment by a successor
employer.
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5.3 Termination
by the Company for Cause.
If
the
Company terminates the Executive’s employment for Cause, as defined in this
Agreement, subject to Section 23, the Executive shall be entitled only to
Salary, and any benefits, accrued as of the effective date of termination.
Any
other benefits shall be determined under applicable plans, programs or other
coverages of the Company. For purposes of this Agreement, the term “Cause” shall
mean:
(i) the
Executive’s conviction for, or plea of nolo contendere to, a felony;
or
(ii)
the
commission by the Executive of an act involving fraud or intentional dishonesty,
which act is intended to result in substantial personal enrichment of the
Executive at the expense of the Company or any of its subsidiaries;
or
(iii) the
Executive’s material breach of any material provision of this Agreement which
remains uncorrected for 30 days after written notice and an opportunity to
correct; or
(iv)
the
Executive’s knowing and willful misconduct in the performance of his duties,
which continues for 30 days after written notice from the Company and which
results in material injury to the reputation, business or operation of the
Company or any of its subsidiaries.
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The
existence of “Cause” shall be determined by an affirmative vote of not less than
two-thirds of the members of the Board of Directors of the Company. If the
requisite affirmative vote by two-thirds of the members of the Board of
Directors of the Company is not obtained, any termination of the Executive’s
employment by the Company shall be deemed to be a termination by the Company
without Cause.
5.4 Voluntary
Termination by the Executive Without Good Reason.
The
Executive may terminate his employment at any time without Good Reason (as
such
term is defined in Section 5.5 below) on 30 days’ written notice, in which case,
subject to Section 23, the Executive shall be entitled only to his Salary
earned
through the effective date of termination and any benefits accrued as of
the
effective date of termination as determined under applicable plans, programs
or
other coverages of the Company.
5.5 Termination
of the Executive for Good Reason.
In
the
event the Executive’s employment by the Company is terminated by the Executive
for Good Reason, as defined in this Section 5.5, such termination shall be
deemed to be a termination by the Company of the Executive’s employment without
Cause, as such term is defined in Section 5.3 above, in which case, subject
to
Section 23, the Executive shall be entitled to the benefits described in
Section
5.2 of this Agreement. For purposes of this Agreement, the term “Good Reason”
shall mean any one of the following shall have occurred and shall not been
corrected within thirty days following written notice by the Executive to
the
Company:
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(i) the
assignment to the Executive of any duties inconsistent in any respect with
the
Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section
3 of this Agreement, or any other action by the Company, or any affiliate
which
results in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action
not
taken in bad faith and which is remedied by the Company promptly after receipt
of written notice thereof given by the Executive; or
(ii)
any
failure by the Company to comply with any of the provisions of Section 3
of this
Agreement, other than an isolated, insubstantial and inadvertent failure
not
occurring in bad faith which is remedied by the Company promptly after receipt
of written notice thereof given by the Executive; or
(iii)
the
Company’s requiring the Executive to be based at any office or location other
than that described in Section 1 hereof, except for travel reasonably required
in the performance of the Executive’s responsibilities; or
(iv)
any
purported termination by the Company of the Executive’s employment otherwise
than as expressly permitted by this Agreement.
For
purposes of this Section 5.5, any good faith determination of “Good Reason” made
by the Executive shall be final and binding upon the Parties, unless, within
thirty days following the Executive’s providing written notice to the Company
under the first sentence of this Section 5.5, not less than two-thirds of
the
members of the Board of Directors of the Company affirmatively votes not
to
confirm the Executive’s determination that such termination is for Good Reason.
If two-thirds of the members of the Board of Directors of the Company
affirmatively vote not to confirm the Executive’s determination that such
termination is for Good Reason, any termination by the Executive of his
employment by the Company shall be deemed to be a termination by the Executive
without Good Reason.
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6.
Non-Competition.
The
Executive recognizes that the Company’s willingness to enter into this Agreement
is based in material part on the Executive’s agreement to the provisions of this
paragraph 6 and that the Executive’s breach of the provisions of this paragraph
6 could materially damage the Company. Subject to the further provisions
of this
Agreement and in consideration of the Company’s agreement to provide the
Executive Confidential Information (as defined in Section 7) to which the
Executive did not have access prior to the execution of this Agreement, and
the
receipt of which is hereby acknowledged, during the term of his employment
hereunder, and, for the period extending to the first anniversary of his
termination of employment for any reason other than termination of the
Executive’s employment by the Company without Cause or termination of the
Executive’s employment by the Executive for Good Reason (the “No-Compete
Period”), the Executive shall not, directly or indirectly, manage, control,
participate in, consult with, render services to, or in any manner engage
in any
pumping unit or gear manufacturing business (the “Subject Businesses”) with (any
such action to be referred to as an “Association” with) any person, corporation,
partnership, trust or other business organization (any such person or entity
to
be referred to as a “Person”) if such business is directly competitive with the
Subject Businesses of the Company; provided, however, that the foregoing
shall
not restrict the Executive from having an Association with a Person that
is
engaged in the Subject Businesses so long as the Executive is not personally
involved in a material respect in the Subject Businesses of such Person,
it
being understood that an indirect supervisory role of a Subject Business
and
other businesses of such Person shall not constitute involvement in a material
respect. If any court having jurisdiction determines that the provisions
of this
Section 6 are not enforceable to the fullest extent, because of the provisions
as to the time period, the geographical area or the scope of activity covered,
the Parties agree that such court may narrow any such provision as the court
deems necessary to enforceability, and this Section 6 shall be enforced as
so
narrowed.
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The
Executive acknowledges that monetary damages would not constitute an adequate
remedy for the Company in the event of a breach of this Section 6, and he
therefore agrees that the Company shall be entitled to injunctive or other
equitable relief for the enforcement hereof. However, in no event shall an
asserted violation of the provisions of this Section 6 constitute a basis
for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.
7.
Confidential
Information.
(a) The
Executive acknowledges and agrees that all Confidential Information (as defined
below) of the Company is confidential and a valuable, special and unique
asset
of the Company that gives the Company an advantage over its actual and
potential, current and future competitors. The Executive further acknowledges
and agrees that the Executive owes the Company a fiduciary duty to preserve
and
protect all Confidential Information from unauthorized disclosure or
unauthorized use, that certain Confidential Information constitutes “trade
secrets” under applicable laws and that unauthorized disclosure or unauthorized
use of the Company’s Confidential Information would irreparably injure the
Company.
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(b) Both
during the term of the Executive’s employment and after the termination of the
Executive’s employment for any reason (including wrongful termination), the
Executive shall hold all Confidential Information in strict confidence, and
shall not use any Confidential Information except for the benefit of the
Company, in accordance with the duties assigned to the Executive. The Executive
shall not, at any time (either during or after the term of the Executive’s
employment), disclose any Confidential Information to any person or entity
(except other employees of the Company who have a need to know the information
in connection with the performance of their employment duties and except
such
person or persons to whom such information is required to be divulged, in
which
case the Executive shall give the Company prompt notice of such required
disclosure and use his reasonable best efforts, in cooperation with the Company,
to defend against any such required disclosure), or copy, reproduce, modify,
decompile or reverse engineer any Confidential Information, or remove any
Confidential Information from the Company’s premises, without the prior written
consent of the Board of Directors, or permit any other person to do so. The
Executive shall take reasonable precautions to protect the physical security
of
all documents and other material containing Confidential Information (regardless
of the medium on which the Confidential Information is stored). This Agreement
applies to all Confidential Information, whether now known or later to become
known to the Executive.
(c) Upon
the
termination of the Executive’s employment with the Company for any reason, and
upon request of the Company at any other time, the Executive shall promptly
surrender and deliver to the Company all documents and other written material
of
any nature containing or pertaining to any Confidential Information and shall
not retain any such document or other material. Within five days of any such
request, the Executive shall certify to the Company in writing that all such
materials have been returned.
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(d) As
used
in this Agreement, the term “Confidential Information” shall mean any
information or material known to or used by or for the Company (whether or
not
owned or developed by the Company and whether or not developed by the Executive)
that is not generally known to persons in the Subject Businesses. Confidential
Information includes, but is not limited to, the following: all trade secrets
of
the Company; all information that the Company has marked as confidential
or has
otherwise described to the Executive (either in writing or orally) as
confidential; all nonpublic information concerning the Company’s products,
services, prospective products or services, research, product designs, prices,
discounts, costs, marketing plans, marketing techniques, market studies,
test
data, customers, customer lists and records, suppliers and contracts; all
business records and plans; all personnel files; all financial information
of or
concerning the Company; all information relating to operating system software,
application software, software and system methodology, hardware platforms,
technical information, inventions, computer programs and listings, source
codes,
object codes, copyrights and other intellectual property; all technical
specifications; any proprietary information belonging to the Company; all
computer hardware or software manuals; all training or instruction manuals;
and
all data and all computer system passwords and user codes.
(e) However,
in no event shall an asserted violation of the provisions of this Section
7
constitute a basis for deferring or withholding any amounts otherwise payable
to
the Executive under this Agreement.
8.
Indemnification.
8.1 If
at any
time the Executive is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he
is or
was a director, officer, employee or agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit
plan or
other enterprise, the Company shall indemnify the Executive and hold him
harmless against reasonable expenses (including attorneys’ fees), judgments,
fines, penalties, amounts paid in settlement and other liabilities actually
and
reasonably incurred by him in connection with such action, suit or proceeding
to
the full extent permitted by law.
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8.2 Expenses
(including attorneys’ fees) incurred by the Executive in appearing at,
participating in, or defending any threatened, pending or completed action,
suit
or proceeding, whether civil, criminal, administrative or investigative,
shall
be paid by the Company at reasonable intervals in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking
by
the Executive to repay such amounts if it shall ultimately be determined
that he
is not entitled to be indemnified.
8.3 All
claims for indemnification under this Agreement shall be asserted and resolved
as is set forth below in this Section 8.3.
(a) The
Executive (i) shall promptly notify the Company of any third-party claim
or
claims asserted against him (“Third Party Claim”) that could give rise to a
right of indemnification under this Agreement and (ii) shall transmit to
the
Company a written notice (“Claim Notice”) describing in reasonable detail the
nature of the Third Party Claim, a copy of all papers served with respect
to
such claim (if any), and the basis of his request for indemnification under
this
Agreement.
(b) Within
30
days after receipt of any Claim Notice (“Election Period”), the Company shall
notify the Executive (i) whether the Company disputes its potential liability
to
the Executive under this Section 8 with respect to such Third Party Claim
and
(ii) whether the Company desires, at its sole cost and expense, to defend
the
Executive against such Third Party Claim by any appropriate proceedings,
which
proceedings shall be prosecuted diligently by the Company to a final conclusion
or settled at the discretion of the Company in accordance with this Subsection
8.3(b). The Company shall have full control of such defense and proceedings,
including any compromise or settlement thereof. The Executive is hereby
authorized, at the Company’s sole cost and expense (but only if he is actually
entitled to indemnification hereunder or if the Company assumes the defense
with
respect to the Third Party Claim), to file, during the Election Period, any
motion, answer or other pleadings which he shall deem necessary or appropriate
to protect his interests or those of the Company and not prejudicial to the
Company. If requested by the Company, the Executive agrees, at the Company’s
sole cost and expense, to cooperate with the Company and its counsel in
contesting any Third Party Claim that the Company elects to contest, including
without limitation, through the making of any related counterclaim against
the
person asserting the Third Party Claim or any cross-complaint against any
person. The Executive may participate in but not control, any defense or
settlement of any Third Party Claim controlled by the Company pursuant to
this
Section 8.3 and the Company shall bear his costs and expenses with respect
to
such participation.
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(c) If
the
Company fails to notify the Executive within the Election Period that the
Company elects to defend the Executive pursuant to Subsection 8.3(b), or
if the
Company elects to defend the Executive pursuant to Subsection 8.3(b) but
fails
to diligently and promptly prosecute or settle the Third Party Claim, then
the
Executive shall have the right to defend, at the sole cost and expense of
the
Company, the Third Party Claim. The Executive shall have full control of
such
defense and proceedings; provided, however, that the Executive may not enter
into, without the Company’s consent, which shall not be unreasonably withheld,
any compromise or settlement of such Third Party Claim. Notwithstanding the
foregoing, if the Company has delivered a written notice to the Executive
to the
effect that the Company disputes its potential liability to the Executive
under
this Section 8, and if such dispute is resolved in favor of the Company by
final, nonappealable order of a court of competent jurisdiction, the Company
shall not be required to bear the costs and expenses of the Executive’s defense
pursuant to this Section 8 or of the Company’s participation therein at the
Executive’s request, and the Executive shall reimburse the Company promptly in
full for all costs and expenses of such litigation. The Company may participate
in, but not control, any defense or settlement controlled by the Executive
pursuant to this Section 8.3(c), and the Company shall bear its own costs
and
expenses with respect to such participation.
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(d) The
indemnification provided by this Section 8 shall apply whether or not the
negligence of a party is alleged or proved.
9. Withholding.
Anything
to the contrary notwithstanding, all payments required to be made by the
Company
hereunder to the Executive, his spouse, his estate or beneficiaries, shall
be
subject to withholding of such amounts relating to taxes as the Company may
reasonably determine it should withhold pursuant to any applicable law or
regulation. In lieu of withholding such amounts in whole or in part, the
Company
may, in its sole discretion, accept other provisions for payment of taxes
as
required by law, provided it is satisfied that all requirements of law affecting
its responsibilities to withhold such taxes have been satisfied.
10. Assignability;
Binding Nature.
This
Agreement is binding upon, and shall inure to the benefit of, the Parties
hereto
and their respective successors, heirs, administrators, executors and assigns.
No rights or obligations of the Executive under this Agreement may be assigned
or transferred by the Executive except that (i) his rights to compensation
and
benefits hereunder, which rights shall remain subject to the limitations
of this
Agreement, may be transferred by will or operation of law, and (ii) his rights
under employee benefit plans or programs as referred to in Section 4, above,
may
be assigned or transferred in accordance with such plans or programs. No
rights
or obligations of the Company under this Agreement may be assigned or
transferred except that such rights or obligations may be assigned or
transferred by operation of law in the event of a merger or consolidation
in
which the Company is not the continuing entity, or the sale or liquidation
of
all or substantially all of the assets of the Company, provided that the
assignee or transferee is the successor to all or substantially all of the
assets of the Company and such assignee or transferee assumes the liabilities,
obligations and duties of the Company, as contained in this Agreement, either
contractually or as a matter of law.
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11. Effect
of Agreement.
This
Agreement contains the entire agreement between the Parties concerning the
subject matter hereof and supersedes all prior agreements, understandings,
discussions, negotiations, and undertakings, whether written or oral, between
the Parties with respect thereto.
12. Amendments
and Waivers.
This
Agreement may not be modified or amended except by a writing signed by both
Parties. A Party may waive compliance by the other Party with any term or
provision of this Agreement, or any part thereof, provided that the term
or
provision, or part thereof, is for the benefit of the waiving Party. Any
waiver
shall be limited to the facts or circumstances giving rise to the noncompliance
and shall not be deemed either a general waiver or modification with respect
to
the term or provision, or part thereof, being waived, or as to any other
term or
provision of this Agreement, nor shall it be deemed a waiver of compliance
with
respect to any other facts or circumstances then or thereafter
occurring.
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13. Arbitration.
Except
with respect to injunctive relief which may be sought by the Company or the
Executive, the Parties agree to resolve any and all claims or controversies
arising out of or relating to this Agreement, the Executive’s employment and/or
termination of employment with Company including, but not limited to, claims
for
wrongful termination of employment, and claims under the Civil Rights Act
of
1866, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities
Act, the Age Discrimination in Employment Act, the Family Medical Leave Act,
the
Xxxxxxxx-Xxxxx Act, the Equal Pay Act, Chapter 21 of the Texas Labor Code,
formerly known as the Texas Commission on Human Rights Act, the retaliatory
discharge provisions of the Texas Worker’s Compensation Act, the Texas Pay Day
Act, and any similar state law or local ordinance by binding arbitration
under
the Federal Arbitration Act, before one arbitrator in the City of Houston,
State
of Texas, in a non-administered proceeding under the American Arbitration
Association National Rules for the Resolution of Employment Disputes. The
Parties further agree that the work of the Executive involves interstate
commerce, the award rendered by the arbitrator is final and binding, and
judgment thereon may be entered in any court having jurisdiction thereof.
The
invalidity of unenforceability of any provision of this Section 13 shall
not
affect the validity or enforceability of any other provision of this Agreement
which shall remain in full force and effect. If any Party to this Agreement
brings legal action to enforce the terms of this Agreement against another
Party
to this Agreement, except as may otherwise be ordered by the court or other
forum, each such Party shall be liable for his or its own expenses incurred
in
such legal action including costs of court or other forum and the fees and
expenses of counsel.
14. Notices.
Any
notice given hereunder shall be in writing and shall be deemed given when
delivered personally or by courier, or five days after being mailed, certified
or registered mail, duly addressed to the Party concerned at the address
indicated below or at such other address as such Party may subsequently
provide:
|
To
the Company:
|
Lufkin
Industries, Inc.
|
|
|
000
Xxxxx Xxxxxx
|
||
|
Xxxxxx,
Xxxxx 00000
|
||
|
Attn:
Secretary
|
|
with
a copy to:
|
Xxxxxxx
X’Xxxxx, Esq.
|
|
|
Xxxxxxx
Xxxxx LLP
|
||
|
000
Xxxxxx, Xxxxx 0000
|
||
|
Xxxxxxx,
Xxxxx 00000
|
|
To
the Executive:
|
Xxxxx
X. Hoes
|
|
|
000
Xxxxxxx Xxx
|
||
|
Xxxxxx,
Xxxxx 00000
|
18
15. Severability.
In
the
event that any provision or portion of this Agreement shall be determined
to be
invalid or unenforceable for any reason, the remaining provisions or portions
of
this Agreement shall be unaffected thereby and shall remain in full force
and
effect to the fullest extent permitted by law.
16. Survivorship.
The
respective rights and obligations of the Parties hereunder shall survive
any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.
17. References.
In
the
event of the Executive’s death or a judicial determination of his incompetence,
reference in this Agreement to the Executive shall be deemed, where appropriate,
to refer to his legal representative or, where appropriate, to his beneficiary
or beneficiaries.
18. Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH
THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS
OF LAW.
19. Legal
Fees.
The
Company promptly shall reimburse the Executive for all of his reasonable
legal
fees and expenses incurred in connection with the negotiation and documentation
of this Agreement.
19
20. Mitigation.
In
no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive
under
any of the provisions of this Agreement.
21. Headings.
The
headings of paragraphs contained in this Agreement are for convenience only
and
shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement.
22. Counterparts.
This
Agreement may be executed in one or more counterparts.
23. Compliance
with Code Section 409A.
This
Agreement is intended to comply with the requirements of Section 409A of
the
Code and, as a result, this Agreement (i) shall automatically be amended
to the
extent necessary to incorporate any provisions required to ensure such
compliance (which the Parties hereby agree are hereby adopted, approved,
consented to, ratified and incorporated herein by reference) and (ii) shall
be
construed, interpreted and operated in a manner that will ensure such
compliance. Without limiting the scope of the preceding provisions of this
Section 23, to the extent that the Executive is a key employee (as defined
in
Section 416(i) of the Code without regard to paragraph 5 thereof) at any
time
prescribed under regulations or other regulatory guidance issued under Section
409A of the Code, no distribution or payment that is subject to Code Section
409A shall be made under this Agreement on account of the Executive’s separation
from service with the Company (at any time when the Executive is deemed under
regulations or other regulatory guidance issued under Code Section 409A to
be a
specified employee described in Code Section 409A and regulations or other
regulatory authority issued thereunder and any stock of the Company is publicly
traded on an established securities market or otherwise) before the date
that is
the first day of the month that occurs six months after the date of his
separation from service (or, if earlier, the date of death of the Executive
or
any other date permitted under regulations or other regulatory guidance issued
under Code Section 409A).
20
IN
WITNESS WHEREOF,
the
Parties have executed this Agreement effective for all purposes as the date
first written above.
|
LUFKIN
INDUSTRIES, INC.
|
||||
|
By:
|
/s/ |
Xxxxxxx
X. Xxxxx
|
||
|
Name:
|
Xxxxxxx
X. Xxxxx
|
|||
|
Title:
|
President
& CEO
|
|||
|
EXECUTIVE
|
|||
|
/s/
Xxxxx
X. Hoes
|
|||
|
Name:
|
Xxxxx
X. Hoes
|
||
|
Title:
|
Vice
President and General Manager- Oil Field
Division
|
||
21
