EMPLOYMENT AGREEMENT
Exhibit
10.7
This
EMPLOYMENT AGREEMENT (the "Agreement"),
entered
into on July 27, 2006 but effective as of February 14, 2006 (the "Effective
Date")
by and
among Standard Drilling, Inc. (referred to as "STANDARD"
or the
"Company")
and
Xxxxxxx X. Xxxxxxxxx, Xx. ("Executive");
W
I T N E S S E T H:
WHEREAS,
the Company desires to retain the services of the Executive, and the Executive
is willing to provide such services to the Company, all upon the terms and
conditions set forth herein;
NOW
THEREFORE, in consideration of the premises, the terms and provisions set forth
herein, the mutual benefits to be gained by the performance thereof and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION
1.
Employment.
The
Company hereby employs the Executive, and the Executive hereby accepts such
employment, all upon the terms and conditions set forth herein.
SECTION
2.
Term.
Unless
sooner terminated pursuant to Section 5 of this Agreement, the Executive shall
be employed for a term commencing on the Effective Date and ending on the third
anniversary of the Effective Date (the "Term");
provided, however, that the Term shall automatically be extended on a daily
basis for an additional day such that, at all times, the remaining Term shall
be
three years. Notwithstanding any other provision of this Agreement to the
contrary, this Agreement may be terminated by Company upon written notice,
in
which case the Agreement will terminate upon the expiration of the three-year
Term.
SECTION
3.
Duties
and Responsibilities.
A.
Capacity.
The
Executive shall serve in the capacity of Chairman and CEO of
STANDARD.
During
the term of this Agreement, as Chairman and CEO of the Company, Executive
will
have
supervisory responsibility for
all
operations of the Company and
such
duties normally
incident to that position
as the
Board of Directors of Standard
(the "Board") may reasonably prescribe.
B.
Duties.
The
Executive shall
devote such of his
business time, attention and energies to the business of the Company
as
are
reasonably necessary to perform his duties under this Agreement. Such duties
shall be performed at the headquarters of the Company in Houston, Texas and
at
such other places as the Board may reasonably require without necessitating
any
change in Executive's place of residence. The Executive shall not be engaged
in
any other business activity, whether or not pursued for gain, profit or other
pecuniary advantage, which would impair his ability to fulfill his duties to
the
Company under this Agreement, without the prior written consent of the
Board.
SECTION
4.
Compensation.
A.
Base
Salary.
The
Company shall pay the Executive a salary (the "Base
Salary")
of U.S.
$200,000 per annum. The Base Salary shall be payable no
less
often than monthly in
accordance with the general payroll practices of the Company in effect from
time
to time. The Company shall review the Base Salary then being paid to the
Executive at such times as the Company regularly reviews the compensation paid
to employees. Upon completion of such review, the Company in its sole discretion
may increase or maintain (but
not
reduce) the
Executive's
then
current Base Salary, and any increased salary shall be the "Base
Salary"
for all
purposes under this Agreement. Notwithstanding the above, the Base Salary shall
be increased to $400,000 upon the third anniversary
date from the Effective
Date
of this
Agreement.
B. Stock
Options. The
Company shall grant the Executive non-qualified options in Standard’s 2006
Option Plan to purchase 4,000,000 non-qualified options to purchase the
Company's stock at $.07 per share. Such options shall be for a term commencing
on July 27, 2006 and this Option shall be exercisable Subject to the earlier
expiration of this Option as herein provided, this Option may be exercised,
by
written notice to the Company at its principal executive office addressed to
the
attention of its Corporate Secretary (or such other officer or Executive of
the
Company as the Company may designate from time to time), at any time and from
time to time after the date of grant hereof. Any common stock so issued shall
bear a legend indicating it must be forfeited back to the company if the closing
price of our common stock on any exchange on which the common stock of Standard
Drilling, Inc. is traded or quoted fails to equal or exceed $2.50 for 10 trading
days. Prior to January 25, 2008, no legend will be required if the restriction
has been satisfied prior to the issuance of the common stock subject to the
option. This Option shall survive the Executive’s termination date. This Option
shall not be exercisable in any event after the expiration of 1.5 years from
the
date of grant hereof, January 25, 2008.
C.
Bonus.
The
Executive shall be eligible, in the sole discretion of the Board, to be
considered for a bonus following each fiscal year
ending during the Term based upon the Executive's
performance and the operating results of the Company and their affiliates during
such year in relation to performance targets established by the Board.
Determination of the bonus amount shall take into account such unusual or
nonrecurring items as the Chief Executive Officer of STANDARD and/or
the
Board deem appropriate.
D.
Benefits.
If and
to the extent that the Company maintains employee benefit plans (including,
but
not limited to, pension, profit sharing, disability, accident, medical, life
insurance and hospitalization plans), the Executive shall be entitled to
participate therein in accordance with the terms of such plans and the
Company's
regular
practices with respect to its employees. In addition, the Company promises
to
provide reasonable health and dental insurance for the Executive and his family,
including $500,000 in life insurance.
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E.
Expenses.
The
Executive shall be entitled to reimbursement from the Company for reasonable
out-of-pocket expenses incurred by him in the course of the performance of
his
duties, hereunder, including all reasonable commuting and communication costs,
upon the submission of appropriate documentation.
F.
Vacation.
The
Executive shall be entitled to five weeks
of
paid vacation per calendar year, which, if not taken, may be carried forward
to
any subsequent year, except in accordance with Company policy applicable to
the
Company's
employees generally. The Executive shall also be entitled to such holidays
and,
subject to the provisions of Section 5, other paid or unpaid leaves of absence
as are consistent with the Company's
normal
policies.
SECTION
5.
Termination
of Employment.
Notwithstanding
the provisions of Section 2, the Executive's
employment hereunder shall terminate under any of the following
conditions:
A.
Death.
The
Executive's
employment under this Agreement shall terminate automatically upon his
death.
B.
Disability.
The
Executive's employment under this Agreement shall terminate automatically upon
his Disability. For purposes of this Agreement, "Disability"
means
permanent and total disability (within the meaning of section 22(e) (3) of
the
Internal Revenue Code of 1986, as amended, or any successor provision) which
has
existed for at least 180 consecutive days.
C.
Termination
by the Company Without Cause
or by
Executive for Good Reason.
The
Company may terminate the Executive's
employment hereunder without "Cause"
(as
hereinafter defined) on three months written
notice by the Company
to the
Executive, and the Executive may terminate his employment for "Good Reason"
(as
hereinafter defined) as set forth in Section 5(E) below. Such terminations
will
cause
the
automatic vesting of any
stock
options, restricted stock and any other incentive compensation awarded to
Executive not previously vested.
D.
Termination
by the Company for Cause.
The
Executive's
employment hereunder may be terminated for Cause upon written notice by the
Company. For purposes of this Agreement, "Cause"
shall
mean (i) the willful and continued failure by the Executive to substantially
perform his obligations under this Agreement (other than such failure resulting
from his Disability) after a demand for substantial performance has been
delivered to him by the Board which specifically identifies the manner in which
the Board believes the Executive has not substantially performed such provisions
and the Executive has failed to remedy the situation three months after such
demand; (ii) the Executive's willfully engaging in conduct materially and
demonstrably injurious to the property or business of the Company, including
without limitation, fraud, misappropriation of funds or other property of the
Company, other willful misconduct, gross negligence or conviction of a felony
or
any crime of moral turpitude; or (iii) the Executive's material breach of this
Agreement which breach has not been remedied by the Executive within three
months after the receipt by the Executive of written notice from the Company
that the Executive is in material breach of this Agreement, specifying the
particulars of such breach.
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For
purposes of this Agreement, no act, or failure to act, on the part of the
Executive shall be deemed "willful"
or
engaged in "willfully"
if it
(i)
was
due
primarily to an error in judgment or negligence, but shall be deemed
"willful"
or engaged in "willfully"
only if
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that his action or omission was in the best interest of the
Company,
(ii) was
approved in advance by the Chief Executive Officer or the Board, or (iii) was
done or omitted in accordance with the terms of the applicable Company policy
then in effect.
Notwithstanding the foregoing, the Executive shall not be deemed to have been
terminated as a result of "Cause"
hereunder
unless and until there shall have been delivered to the Executive a copy of
a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the Board then in office at a meeting of the Board called and held for such
purpose (after reasonable notice to the Executive and an opportunity for the
Executive, together with his counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Executive has committed an
act
set forth above in this Section 5(D) and specifying the particulars thereof
in
detail. Nothing herein shall limit the right of the Executive or his legal
representative to contest the validity or propriety of any such
determination.
E.
Termination
by the Executive for Good Reason.
The
Executive may terminate his employment hereunder for "Good
Reason."
For
purposes of this Agreement, "Good
Reason"
for
termination shall mean any of the following (which occur without the
Executive's
prior
written consent):
(1)
a
decrease
in the Executive's
Base
Salary;
(2)
a
materially adverse diminution of the overall level of responsibilities of the
Executive;
(3)
a
material
breach by the Company of any term or provision of this Agreement;
(4)
after
a
Change of Control (as defined in Section 7(B)) and during the Effective Period
(as defined in Section 7(C)), (a) the failure of the Company to continue in
effect any benefit or compensation plan (including, but not limited to, any
bonus, incentive, retirement, supplemental executive retirement, savings, profit
sharing, pension, performance, stock option, stock purchase, deferred
compensation, life insurance, medical, dental, health, hospital, accident or
disability plans) in which the Executive is participating at the time of such
Change of Control (or plans providing to the Executive, in the aggregate,
substantially similar benefits as the benefits enjoyed by the Executive under
the benefit and compensation plans in which the Executive is participating
at
the time of such Change of Control), or (b) the taking of any action by the
Company that would adversely affect the Executive's participation in or
materially reduce the Executive's benefits under any of such plans or deprive
the Executive of any material fringe benefit enjoyed by the Executive at the
time of such Change in Control;
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(5)any
personal reason that the Compensation Committee of the Board in its discretion
determines shall constitute Good Reason.
However,
that no event or condition described in clauses (1) - (4) of this Section 5(E)
shall constitute Good Reason unless (a) the Executive gives the Company written
notice of his objection to such event or condition within 90 days after the
Executive learns of such event, (b) such event or condition is not corrected
by
the Company within 10 days of its receipt of such notice and (c) the Executive
voluntarily resigns his employment with the Company and its affiliates not
more
than 60 days following the expiration of the 10-day period described in the
foregoing clause (b).
F.
Voluntary
Termination by the Executive.
The
Executive may terminate his employment hereunder at any time for reason other
than Good Reason on 30 days
written notice to the Company.
SECTION
6.
Payments
Upon Termination.
A.
Upon
termination of the Executive's
employment hereunder, the Company shall be obligated to pay and the Executive
shall be entitled to receive, on the pay date for the pay period in which the
termination occurs, all accrued and unpaid Base Salary
and
bonus
to the
date of termination. In addition, the Executive shall be entitled to any
benefits to which he is entitled under the terms of any applicable employee
benefit plan or program or applicable law.
B.
Except
as
provided in Section 7(A), upon termination of the Executive's
employment by the Company without Cause or by the Executive due to Good Reason,
in addition to the amount set forth in Section 6(A), the Company shall be
obligated to pay, and the Executive shall be entitled to receive, (i) Base
Salary
and
bonus
for a
period of three years and (ii) continued medical and dental benefits for a
period of three years at no cost to the Executive. The Company may cease all
payments of Base Salary and bonus under this Section 6(B) in the event of a
willful breach by the Executive of the provisions of Sections 8, 9 or 10 of
this
Agreement or any inadvertent breach that continues after notice given to the
Executive by the Company. As a condition precedent to the receipt of any of
the
severance benefits hereunder the Executive hereby agrees to execute a release
of
claims against the Company and its affiliates in form and substance reasonably
satisfactory to the Company.
C.
In
the
event Executive elects to terminate employment as set forth in Section 5(F)
then
in such event any options not vested as set forth in Section 3(B) shall
terminate.
D.
Upon
any
termination or expiration of the Executive's
employment hereunder pursuant to Section 5, the Executive shall have no further
liability or obligation under or in connection with this Agreement; provided,
however, that the Executive shall continue to be subject to the provisions
of
Sections 8, 9, 10, 11 and 12 hereof (it being understood and agreed that such
provisions shall survive any termination or expiration of the
Executive's
employment hereunder for any reason). Upon any voluntary
termination
by the
Executive (other than a resignation by the Executive for Good Reason), or
expiration of Executive's
employment agreement, the Company shall have no further liability under or
in
connection with this Agreement, except to pay the portion of the
Executive's
Base
Salary and
bonus
earned or accrued at the date of termination and to provide any employee
benefits earned
or
accrued at the date of termination.
-5-
SECTION
7.
Change
of Control.
A.
In
the
event that, during the Effective Period (as hereinafter defined), the
Executive's
employment is terminated by the Company without Cause or by the Executive for
Good Reason, in lieu of the amount set forth in Section 6(B), the
Executive shall immediately become entitled to the following
benefits:
(1)
the
outstanding options to acquire shares of the Company held by the Executive
under
any share option plan and granted on or prior to the Change of Control shall
become immediately fully exercisable and shall remain exercisable for three
years after termination of employment or, if less
or
more,
their
remaining term;
(2)
a
lump-payment equal to three times: (a) the Executive's
then
current Base Salary;
(3)
a
lump-sum
payment equal to three times the highest annual bonus allowed under the
Executive Bonus Plan for the Executive during the three-year period preceding
the date of the Change of Control; and
(4)
continued
medical and dental coverage for three years from the termination date at no
cost
to the Executive.
B.
For
purposes of this Agreement, a "Change
of
Control"
shall be
deemed to have taken place upon the earliest occurrence of any of the following
at any time after August 15, 2006: (i) a tender offer is made and consummated
for the beneficial ownership of 25% or more of the outstanding voting securities
of STANDARD; (ii) STANDARD is merged or consolidated with another corporation,
and as a result of such merger or consolidation, less than 75% of the
outstanding voting securities of the surviving or resulting corporation are
beneficially owned in the aggregate by the persons or entities who were
shareholders of STANDARD immediately prior to such merger or consolidation;
(iii) STANDARD sells all or substantially all of its assets to another entity
or
person that is not a wholly owned subsidiary; (iv) during any 15-month period,
individuals who at the beginning of such period constituted the Board (including
for this purpose any new member whose election or nomination for election by
the
shareholders of STANDARD was approved by a vote of at least 2/3 of the members
then still in office and who were members at the beginning of such period)
cease
for any reason to constitute at least a majority of the Board; (v) the
Compensation Committee of the Board determines, in its sole discretion, that
a
Change of Control has occurred for purposes of this Agreement; or
(vi)
STANDARD
sells all or substantially all of its assets to another entity or person that
is
not a subsidiary or affiliate of the Company or 80%
or
more of the outstanding voting securities of the Company are acquired by any
person or entity other than STANDARD, its subsidiaries or affiliates.
-6-
C.
For
purposes of this Agreement, "Effective
Period"
shall
mean the period beginning on the date that
is
six months prior to the date of the occurrence of
a
Change of Control and ending on the earlier of the third anniversary of the
Change of Control or the expiration of the Term.
D.
To
the
extent that the acceleration of vesting or any payment, distribution or issuance
made to the Executive in the event of a Change of Control is subject to federal
income, excise or other tax at a rate above the rate ordinarily applicable
to
compensation paid in the ordinary course of business (collectively, a
"Parachute
Tax"),
whether
as a result of the provisions of Section 280G and 4999 of the Internal Revenue
Code of 1986, as amended, or any similar or analogous provisions of any statute
adopted subsequent to the date hereof, or otherwise, then the Company shall
pay
to the Executive an additional sum (the "Additional
Amount")
such
that the net amount received by the Executive, after paying any applicable
Parachute Tax and any federal or state income tax on such Additional Amount,
shall be equal to the amount that the Executive would have received if such
Parachute Tax were not applicable.
SECTION
8.
Confidential
Information and Inventions.
A.
Nondisclosure.
The
Executive hereby acknowledges that the Executive has knowledge of certain
confidential and proprietary information relating to STANDARD or their
affiliates and that it will be necessary, in connection with the performance
of
services hereunder, to provide or make available to the Executive certain
confidential and proprietary information, including, but not limited to,
business and financial information, technological information, strategies,
the
status and content of contracts with suppliers or clients, customer lists and
financial information on customers, intellectual property, trade secrets and
other information relating to the businesses, products, technology, services,
customers, methods or tactics of STANDARD or its affiliates (any such
confidential or proprietary information being hereinafter referred to as
"Confidential
Information").
The
Executive further acknowledges that the Confidential Information constitutes
valuable trade secrets of STANDARD and its affiliates and agrees that any such
Confidential Information shall remain the property of STANDARD and its
affiliates at all times during the term of this Agreement and following the
expiration or termination hereof. The Executive shall not publish, disseminate,
distribute, disclose, sell, assign, transfer, copy, remove from the premises
of
STANDARD or their affiliates, commercially exploit, make available to
persons
other than STANDARD, its employees and affiliates,
or
otherwise make use of any Confidential Information to or for the use or benefit
of the Executive or any person,
firm, corporation or entity
other
than STANDARD or its affiliates,
except
as specifically and previously authorized in writing by the Board or as required
for the due and proper performance of his duties and obligations under this
Agreement. In addition, the Executive shall employ all reasonable
and necessary
safeguards and precautions consistent
with practices customarily followed by management in
order
to ensure that unauthorized access to the Confidential Information is not
afforded to any person, firm, corporation or entity. Upon any expiration or
termination of this Agreement, or if the Board or the Company so requests at
any
time, the Executive shall promptly return to STANDARD all
Confidential Information in the Executive's
possession, whether in writing, on computer disks or other media, without
retaining any copies, extracts or other reproductions thereof. Notwithstanding
the foregoing, nothing contained in this Section 8(A) shall prevent the
publishing, dissemination, distribution, disclosure, sale, assignment, transfer,
copying, removal, commercial exploitation or other use by the Executive of
any
information that (i) was
or
is
generally available to the public (other than through a breach of an obligation
of confidentiality),
(ii)
was
within the possession of Executive prior to its being furnished to Executive
by
the Company, (iii) was or is independently developed by Executive without
reference to, or derivation from, the Confidential Information, or (iv) was
or
is
lawfully obtained by the Executive without obligation of confidentiality from
a
source other than STANDARD or its affiliates, directors, officers, employees,
agents or other representatives (provided, however, that such source is not
bound by a confidentiality agreement with STANDARD or any of its affiliates
and
is not otherwise under an obligation of secrecy or confidentiality to either
of
them).
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B.
Requests
for Disclosure.
It shall
not be a breach of the obligations of Section 8(A) if Executive discloses
Confidential Information (i)
to
other employees of the Company in the ordinary course of employment or to other
persons pursuant to a signed confidentiality agreement, or (ii) as
required by judicial or administrative process or, in the written opinion of
Executive's
counsel,
by the requirements of applicable law, but in
case of
this clause (ii) only
upon
satisfaction of the following conditions: (A)
the
Executive gives prompt written notice to the Chairman of the Board of the
existence of, and the circumstances attendant to, such request, sufficient
to
permit STANDARD or an affiliate to contest or seek to restrict the required
disclosure (B)
the
Executive consults with the Chairman of the Board as to the advisability of
taking legally available steps to resist or narrow any such request or otherwise
to eliminate the need for such disclosure, (C)
if
disclosure is required, the Executive cooperates with the Chairman of the Board
in obtaining a protective order or other reliable assurance in form and
substance satisfactory to the Chairman of the Board that confidential treatment
will be accorded to such portion of the Confidential Information as is required
to be disclosed, and (D)
that
Executive disclosed only such Confidential Information as is legally required
(or, where applicable, only such information as the written opinion of
Executive's
counsel
deems required).
C.
Confidential
Information of Others.
The
Executive shall not disclose to STANDARD or its
affiliates, or induce them to use, the proprietary information, trade secrets,
or confidential information of others.
D.
Disclosure.
Upon
each occurrence of conception, creation, and/or reduction to practice, the
Executive will promptly provide a written description of each Invention (as
hereinafter defined) to the Board or its designee.
E.
Assignment
and Ownership of Rights.
The
Executive agrees that all Inventions shall and, to the extent necessary, shall
become and remain the property of STANDARD, and their successors and assigns,
unless expressly released by STANDARD in writing. The Executive assigns, and
to
the extent such assignment is not effective, the Executive agrees to assign
all
such Inventions to STANDARD. The Executive agrees that all copyrightable works
created for STANDARD during the Executive's
employment are owned by STANDARD and, if necessary or appropriate, are works
made for hire.
F.
Obtaining
Patents.
STANDARD
shall have sole discretion to decide whether to obtain any patent or other
protection on any Invention. If STANDARD seeks any such protection, the
Executive shall have no obligation to pay any expenses of the filing or
maintenance of any such patent or other protection.
-8-
G.
Inventions.
"Inventions"
means (i)
any invention, development, improvement, or copyrightable work, (ii) created,
conceived, or reduced to practice by the Executive individually or jointly
with
others while the Executive is employed by STANDARD or its
affiliates or within a six-month period following termination of the
Executive's
employment, (iii) whether patentable or not, (iv) whether or not conceived
or
reduced to practice during regular working hours, and
(v)
that
relates to any methods, apparatus, products, or components thereof which, before
termination of the Executive's
employment, are manufactured, sold, leased, or used by STANDARD or their
affiliates or which are under development by, or which otherwise pertain to
the
business of STANDARD or their affiliates. However, "Inventions"
shall not
include any inventions, developments, improvements, or copyrightable work (i)
for which no equipment, supplies, facility, or trade secret information of
STANDARD or their affiliates were used, (ii) which the Executive developed
entirely on the Executive's
own time
(iii) which does not relate directly to the business of STANDARD or their
affiliates or to their actual or demonstrably anticipated research or
development, or (iv) which does not result from any work performed by the
Executive for STANDARD or their affiliates. The Executive represents that he
has
provided STANDARD, on or prior to the date hereof, a complete written
description of all unpatented inventions and improvements in which the Executive
has any rights that are not included in the term "Inventions",
in a
form acknowledged in writing by the Chief Executive Officer of
STANDARD.
SECTION
9.
Covenant
Not to Compete.
A.
Noncompetition.
The
Executive hereby agrees that during the "Noncompetition
Period"
(as
hereinafter defined), he will not, except as otherwise permitted under this
Agreement, in
the
Noncompetition Area directly
or indirectly (whether as an employee, consultant, shareholder or director,
or
whether acting alone or through any of his affiliates, as a member of a
partnership or a joint venture or an investor in, or a holder of securities
of,
any corporation or other entity, or otherwise), engage in any business conducted
by STANDARD or its affiliates. Notwithstanding anything to the contrary in
this
Section 9, the Executive may
(i)
continue the activities described on Exhibit A, and (ii)
passively
invest his assets in such a form or manner as will not conflict with the terms
of this Agreement and will not require services on the part of the Executive
in
the operation of the business of the companies or other enterprises in which
such investments are made. The Executive acknowledges that (i) the provisions
set forth in this Section 9 are for the benefit of STANDARD and its affiliates,
(ii) his agreement to such provisions is an express condition to his employment
by the Company and (iii) such provisions are reasonably necessary to protect
the
goodwill and other business interests of STANDARD and its affiliates. The
"Noncompetition
Period"
shall be
the period commencing on the Effective Date and ending on the second anniversary of
the
date of termination of the Executive's
employment. The "Noncompetition Area" shall mean the counties within the states
in which the Company is operating or owns oil and gas leases on the date of
Executive's termination of
employment.
-9-
B.
Reformation
of Scope.
If any
of the provisions of this Section 9 is found to be unreasonably broad,
oppressive or unenforceable in an action, suit or proceeding before any federal
or state court, such court (i) shall narrow the Noncompetition Period or the
Noncompetition Area or shall otherwise endeavor to reform the scope of such
agreements in order to ensure that the application thereof is not unreasonably
broad, oppressive or unenforceable and (ii) to the fullest extent permitted
by
law, shall enforce such agreements as so reformed.
SECTION
10. Nonsolicitation.
The
Executive shall not, directly or indirectly, during the Noncompetition Period,
(A) take any action to solicit or divert any business (or potential business)
or
customers (or potential customers) away from STANDARD or its affiliates, (B)
induce customers, potential customers, suppliers, agents or other persons under
contract or otherwise associated or doing business with STANDARD or its
affiliates to terminate, reduce or alter any such association or business with
or from STANDARD or its affiliates and/or (C) induce any person in the
employment of the Company, STANDARD or its affiliates or any consultant to
STANDARD or its affiliates to (i) terminate such employment or consulting
arrangement, (ii) accept employment, or enter into any consulting arrangement,
with anyone other than STANDARD or its affiliates (except to the extent the
consultant makes its services available to third parties on a regular basis)
and/or (iii) interfere with the customers, suppliers or clients of STANDARD
or
its affiliates in any manner or the business of STANDARD or its affiliates
in
any manner. For purposes of this Section 10, a "potential
customer"
shall
mean a person or entity that STANDARD or its affiliates, as of the date the
Executive's
employment terminates, is soliciting or is considering soliciting (or has
targeted for solicitation).
No
general advertisement shall be a violation of the provisions of this
section.
SECTION
11. Remedies.
The
Executive hereby agrees that a violation of the provisions of Section 8, 9
or 10
hereof may cause irreparable injury to STANDARD and its affiliates for which
they would have no adequate remedy at law. Accordingly, in the event of any
such
violation, STANDARD and/or its affiliates shall be entitled to preliminary
and
other injunctive relief. Any such injunctive relief shall be in addition to
any
other remedies to which STANDARD and/or its affiliates may be entitled at law
or
in equity or otherwise.
SECTION
12. Arbitration.
Any
dispute or controversy arising under or in connection with this Agreement (other
than any dispute or controversy arising from a violation or alleged violation
by
the Executive of the provisions of Section 8, 9 or 10 hereof) shall be settled
exclusively by final and binding arbitration in Houston, Texas, in accordance
with the Rules for the Resolution of Employment Disputes of the American
Arbitration Association ("AAA").
The
arbitrator shall be selected by mutual agreement of the parties, if possible.
If
the parties fail to reach agreement upon appointment of an arbitrator within
30
days following receipt by one party of the other party's
notice
of desire to arbitrate, the arbitrator shall be selected from a panel or panels
of persons submitted by the AAA. The selection process shall be that which
is
set forth in the AAA Rules for the Resolution of Employment Disputes then
prevailing, except that, if the parties fail to select an arbitrator from one
or
more panels, AAA shall not have the power to make an appointment but shall
continue to submit additional panels until an arbitrator has been selected.
This
agreement to arbitrate shall not preclude the parties from engaging in
voluntary, nonbinding settlement efforts, including, but not limited to,
mediation. In the event the arbitration is decided in whole or in part in favor
of the Executive, the Company will reimburse the Executive for his reasonable
costs and expenses of the arbitration (including reasonable
attorneys'
fees).
-10-
SECTION
13. Notices.
All
notices and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly given upon receipt) by delivery
in
person, by registered or certified mail (return receipt requested and with
postage prepaid thereon) or by facsimile transmission to the respective parties
at the following addresses (or at such other address as either party shall
have
previously furnished to the other in accordance with the terms of this Section
13):
If
to the
Company:
Standard
Drilling, Inc.
0000
X
Xxxxxx XX, Xxxxx 0000
Xxxxxxxxxx,
XX 00000
Attention:
Chairman and CEO
Facsimile:
000-000-0000
if
to the
Executive:
Xxxxxx
X.
Xxxxx
0000
Xxxx
Xxxxx Xxxxx
Xxxx,
Xxxxx 00000
SECTION
14. No
Mitigation.
In the
event of any termination of employment by the Company without Cause,
or
by
the
Executive for Good Reason,
the
Executive shall be under no obligation to seek other employment, or otherwise
engage in mitigating activity, following the date of termination, and there
shall be no offset against amounts due the Executive under this Agreement on
account of any remuneration attributable to any subsequent employment that
he
may obtain.
SECTION
15. Indemnification.
STANDARD
agree that, during
the
term hereof and following any termination of
Executive's
employment,
the
Company shall
indemnify
the Executive to
the
fullest extent permitted by applicable law consistent with the Certificate
of
Incorporation and By-Laws and the Company in effect as of the date hereof
(and as hereafter amended if such amendment shall not reduce any right Executive
may have under such provisions in effect on the date hereof) with respect to
Executive's
sole,
joint or concurrent negligence and any acts or omissions he may have committed
during the period during which he was an officer, director and/or employee
of
the Company or any of their affiliates for which he served as an officer,
director or employee at the request of the Company.
SECTION
16. Amendment;
Waiver.
The
terms and provisions of this Agreement may be modified or amended only by a
written instrument executed by each of the parties hereto, and compliance with
the terms and provisions hereof may be waived only by a written instrument
executed by each party entitled to the benefits thereof. No failure or delay
on
the part of any party in exercising any right, power or privilege granted
hereunder shall constitute a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or privilege granted
hereunder.
-11-
SECTION
17. Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter hereof and supersedes all prior written or oral agreements
or
understandings between the Executive and the Company or its affiliates relating
thereto, including, without limitation.
SECTION
18. Severability.
In the
event that any term or provision of this Agreement is found to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining terms and provisions hereof shall not be in any way affected or
impaired thereby, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained
therein.
SECTION
19. Binding
Effect; Assignment.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns (it being understood and agreed that,
except as expressly provided herein, nothing contained in this Agreement is
intended to confer upon any other person or entity any rights, benefits or
remedies of any kind or character whatsoever). The Executive may not assign
this
Agreement without the prior written consent of the Company. Except as otherwise
provided in this Agreement, the Company may assign this Agreement to any of
their affiliates or to any successor (whether by operation of law or otherwise)
to all or substantially all of their business and assets without the consent
of
the Executive, and any transfer of employment from the Company to such affiliate
or successor shall be deemed to constitute an assignment and not a termination
of employment hereunder. In the event of an assignment of this Agreement by
STANDARD
all
references herein to STANDARD or the Company shall be deemed to be references
to
the assignee.
SECTION
20. Withholding
of Taxes.
The
Executive agrees that STANDARD shall deduct, or shall cause to be deducted,
from
the amount of any benefits to be paid hereunder any taxes required to be
withheld by the federal or any state or local government.
SECTION
21. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Texas (except that no effect shall be given to any conflicts of law
principles thereof that would require the application of the laws of another
jurisdiction).
SECTION
22. Headings.
The
headings of the sections 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.
SECTION
23. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
SECTION
24. Subsidiaries
and Affiliates.
As used
herein, the term "subsidiary"
shall
mean any corporation or other business entity controlled by the corporation
in
question, and the term "affiliate"
shall
mean and include any corporation or other business entity controlling,
controlled by or under common control with the corporation in question. The
terms "controlled,"
"controlling,"
"controlled
by"
and
"under
common control with,"
as used
with respect to any person, means the possession, directly or indirectly, of
the
power to direct or cause the direction of the management and policies of such
person, whether through the ownership of voting securities or by contract or
otherwise.
-12-
IN
WITNESS WHEREOF,
the
undersigned have executed this Agreement as of the date first above
written.
|
Standard
Drilling, Inc.
|
||
|
By:
|
||
|
Xxxxxx
X. Xxxxx
|
||
|
President
|
||
| Xxxxxxx X. Xxxxxxxxx, Xx. | ||
| Executive | ||
-13-
Exhibit
A
to
dated
effective February 14, 2006
by
and between
Standard
Drilling Inc.
and
Xxxxxxx
X. Xxxxxxxxx, Xx.
|
1.
|
Calibre
Energy, Inc.
|
|
2.
|
BlackRock
Drawworks, LLC
|
|
3.
|
PBT
Capital Partners, LLC
|
|
4.
|
Particle
Drilling Technologies, Inc.
|
|
5.
|
Luck
House, LLC
|
