Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into effective as to the
date signed below between Xxxxxxx Drilling Corporation a Nevada corporation
(the "Company"), and Xxx Xxxxxx (the "Executive").
RECITALS
WHEREAS, Xxxxxxx Drilling Corporation ("is engaged in the business of
providing petroleum drilling services, (the Company's Business); and
WHEREAS, Executive possess substantial knowledge and experience with
respect to the Company's Business; and
WHEREAS, the Company desires to employ the Executive to have the
benefits of his expertise and knowledge. The Executive, in turn, desires
Employment with the Company. The parties, therefore, enter into this Agreement
to establish the terms and conditions of the Executive's Employment with the
Company.
In consideration of the mutual covenants and representations contained
in this Agreement, the Company and the Executive agree as follows:
1. Employment of Executive; Duties. The Company agrees to employ the
Executive and the Executive agrees to be employed by the
Company, as Chief Financial Officer, for the period specified in
Section 3 (the "Employment Period"), subject to the terms and conditions
of this Agreement. During the Employment Period, the Executive shall
have such duties and responsibilities generally consistent with his
position and such other duties not inconsistent with his title and
position and as may be assigned to him by the Company, which may include
providing similar services for each of the Company's subsidiaries,
parents or affiliates. In connection therewith, Executive shall devote
his best efforts, experience and judgment to fully discharge his duties
and responsibilities under this Employment Agreement and as reasonably
contemplated hereby, and shall act in conformity with the written and
oral policies of the Company and within the limits, budgets, business
plans and instructions as set by its Board of Directors. Executive shall
be subject to the authority of the Company's Board of Directors and duly
appointed officers.
2. Place of Employment and Travel. Executive acknowledges that the
Company's offices and headquarters are currently located in Houston,
Xxxxxx County, Texas, and shall be the initial site of Executives
Employment.
3. Employment Period. The Employment Period shall begin on the date of
execution of this Agreement and shall continue for one (1) year
thereafter.
4. Base Salary. During the Employment Period, the Company shall pay the
Executive for said services rendered hereunder, payable as follows:
Executive shall receive $2,500 cash compensation each month and 22,500,
restricted common stock shares each reporting quarter of employment. A
total of 7,500 restricted common stock shares shall accrue each month of
employment. The Company's quarterly reporting periods are February 28,
May 31, August 31, and November 30. The stock granted in the Agreement
shall be restricted common stock shares issued pursuant to rule 144 and
shall vest upon the date the stock is granted to Executive. The cash
compensation and vesting shares of restricted common stock are
collectively referred to as Executive's "Base Salary". The base salary
shall be payable in equal periodic installments which are not less
frequent than the periodic installments in effect for salaries of other
executives of the Company. The base salary shall be subject to review
annually by the Board of Directors ("Board") (or a committee appointed
by the Board) for upward adjustments based on the policies of the
Company and tie Executive's contributions to the business of the
Company.
5. Benefits. In addition to and except for the matters governed by this
Agreement, the Executive shall be entitled to: (i) employee benefits and
perquisites, including but not limited to pension plans, deferred
compensation plans, stock options, annual bonus plans, long term
incentive plans, group life insurance, disability, sickness and accident
insurance and health benefits under such plans and programs as maybe
provided by the Company to other executives of the Company from time to
time; and (ii) paid vacation as well as holidays, leave of absence and
leave for illness and temporary disability in accordance with the
policies of the Company.
6. Non-Disclosure; Non-Competition. As a condition to the Employment
arrangement, Executive agrees to execute and comply with the terms and
conditions of the "Employee Non-Disclosure and Non-Competition
Agreement" attached hereto as Exhibit 1.
7. Termination.
a. Termination by the Company.
i. The Company, by action of its Board, may terminate the
Executive's Employment under this Agreement without Cause
(as defined in herein below) at any time by giving notice
thereof to the Executive at least sixty (60) days before the
effective date of such termination. The Employment Period
shall terminate as of the date of such termination of
Employment.
ii. The Company, by action of its Board, may terminate the
Executive's Employment under this Agreement for Cause at any
time by notifying the Executive of such termination. For all
purposes of this Agreement, the Employment Period shall end
as of the date of such termination of Employment. "Cause"
means the Executive's: (i) persistent and repeated refusal,
failure or neglect to perform the material duties of his
Employment under this Agreement, provided that such Cause
shall be deemed to occur only after the Company gave notice
thereof to the Executive specifying in reasonable detail the
conduct constituting Cause, and the Executive failed to cure
and correct his conduct within thirty (30) days after such
notice; (ii) committing any act of fraud or embezzlement,
provided that such Cause shall be deemed to occur only after
the Company gave notice thereof to the Executive specifying
in reasonable detail the instances of such conduct, and the
Executive had the opportunity to be heard at a meeting of
the Board; (iii) breach of the Employee Non-Disclosure and
Non-Competition Agreement or of such other subsequent
agreements entered into during the Employment Period that
results in a detriment to the Company; (iv) conviction of a
felony (including pleading guilty to a felony); or (v)
habitual abuse of alcohol or drugs.
b. Termination by the Executive. The Executive may terminate this
Agreement at any time, for any reason or for no reason at ail, by
giving notice thereof to the Company at least ninety (90) days
before the effective date of such termination. The Employment
Period shall terminate as of the date of such termination of
Employment.
x. Xxxxxxxxx Benefits.
i. If the Executive's Employment under this Agreement is
terminated before the end of the Employment Period by the
Company without Cause or by the Executive for Good Reason
(as defined in herein below), the Company shall continue to
pay to the Executive his unpaid cash compensation through
the time of termination and for a period extending sixty
days thereafter. Additionally, the Executive shall be
entitled to his share of the vested stock options through
the date of termination and for a period extending sixty
days thereafter.
ii. If the Executive's Employment under this Agreement is
terminated by the Company for Cause, by the Executive
without Good Reason or if the Executive dies or becomes
totally disabled (as defined in herein below), the Company
shall only pay the Executive a lump sum cash payment within
thirty (30) days of the date of such termination, equal to
the sum of: (i) Executive's unpaid Base Salary earned to the
termination date; (ii) his share of the vested stock through
the date of termination which shall be paid to him or his
estate at such time as the next payment is made to the other
participants of the any stock option plan.
iii. "Good Reason" means: any material failure by the Company to
pay or provide the compensation and benefits under this
Agreement; provided that, in each such event, the Executive
shall give the Company notice thereof which shall specify in
reasonable detail the circumstances constituting Good
Reason, and there shall be no Good Reason with respect to
any such circumstances cured by the Company within thirty
(30) days after such notice.
iv. If the Executive is entitled to receive payments or other
benefits under this Agreement upon the termination of his
Employment with the Company, the Executive hereby
irrevocably waives the right to receive any payments or
other benefits under any other severance or similar plan
maintained by the Company ("Other Severance Plan").
d. Termination by Death or Disability. This Agreement shall terminate
automatically upon the Executive's death. If the Company
determines in good faith that the Executive has a "total
disability" (within the meaning of such term or of a similar term
as defined in the Company's long-term disability plan as in effect
from time to time), the Company may terminate his Employment under
this Agreement by notifying the Executive thereof at least thirty
(30) days before the effective date of such termination.
8. Representation by Executive. Executive represents and warrants to the
Company that his Employment hereunder will not conflict with or result
in a violation or breach of, or constitute a default under any contract,
agreement or understanding to which he is or was a party.
9. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if
sent by registered or certified mail to the Executive at the last
address he has filed in writing with the Company or, in the case of the
Company, to the Company's principal executive offices.
10. Withholding Taxes. The Company shall have the right, but not the duty,
to the extent permitted by law, to withhold from any payment of any kind
due to the Executive under this Agreement to satisfy the tax withholding
obligations of the Company under applicable law.
11. Validity; Complete Agreement. The validity and enforceability of any
provision hereof shall in no way affect the validity or enforceability
of any other provision hereof. This Agreement sets forth the entire
understanding and embodies the entire Agreement of the parties with
respect to the subject matter covered hereby and supersedes all prior or
contemporaneous oral or written agreements, understandings,
arrangements, negotiations or communications, among the parties hereto.
12. Amendment. This Agreement shall not be modified or amended except by
written agreement of the parties hereto.
13. Choice of Law; Jurisdiction and Venue. This Agreement shall be governed
by and construed in accordance with the law of the State of Texas. The
Parties consent to the exclusive jurisdiction of the Texas courts. Venue
for any action brought hereunder shall be exclusively in the State of
Texas, County of Xxxxxx.
14. Counterpart. This Agreement may be executed in any number of
counterparts, all of which shall be considered one and the same
agreement.
15. Delay; Partial Exercise. No failure or delay by any party in exercising
any right, power or privilege under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
16. Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the Company and its successors and assigns. The Company
shall have the right to assign this Agreement to any of its respective
subsidiaries, parents or affiliates. The rights and obligations of
Executive under this Agreement are personal to him and no such right or
obligation shall be subject to voluntary or involuntary alienation,
assignment, or transfer.
Mandatory Arbitration. DISPUTES REGARDING THE EXECUTIVE'S EMPLOYMENT BY THE
COMPANY, INCLUDING, WITHOUT LIMITATION, ANY DISPUTE UNDER THIS AGREEMENT WHICH
CANNOT BE RESOLVED BY NEGOTIATIONS BETWEEN THE COMPANY AND THE EXECUTIVE SHALL
BE SUBMITTED TO, AND SOLELY DETERMINED BY, FINAL AND BINDING ARBITRATION
CONDUCTED UNDER THE RULES OF ARBITRATION OF THE STATE OF TEXAS APPLICABLE TO
EMPLOYMENT DISPUTES, AND THE PARTIES AGREE TO BE BOUND BY THE FINAL AWARD OF
THE ARBITRATOR IN ANY SUCH PROCEEDING. THE ARBITRATOR SHALL APPLY THE LAWS OF
THE STATE OF TEXAS WITH RESPECT TO THE INTERPRETATION OR ENFORCEMENT OF ANY
MATTER RELATING TO THIS AGREEMENT. ARBITRATION MAY BE HELD IN TEXAS, OR SUCH
OTHER PLACE AS THE PARTIES HERETO MAY MUTUALLY AGREE, AND SHALL BE CONDUCTED
BY A QUALIFIED ARITRATOR APPOINTED UNDER THE LAWS OF THE STATE OF TEXAS.
JUDGMENT UPON THE AWARD BY THE ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
Executive Witness
By:/s/ Xxx Xxxxxx /s/ Xxxxxxx Xxxx
Xxx Xxxxxx, Executive
Date: 6-21-06
Xxxxxxx Drilling Corporation Witness
By:/s/ Xxxx Xxxxxxx III /s/ Xxxxxxx Xxxx
Xxxx X. Xxxxxxx III, Director
Date: 6-21-06
Exhibit 1
EMPLOYEE NON-DISCLOSURE AND
NON-COMPETITION AGREEMENT
The Undersigned Xxx Xxxxxx, for and in consideration of his Employment
with Xxxxxxx Drilling Corporation, plus other good and valuable consideration,
the receipt and sufficiently of which is hereby acknowledge, intending to be
legally bound by the terms and conditions of this Agreement, hereby agrees as
follows:
1. Respective Persons or Entities Covered. Undersigned acknowledges
that, as an employee of Xxxxxxx Drilling Corporation, he will possibly also be
working with subsidiaries, parents and affiliated entities of Xxxxxxx Drilling
Corporation that shall hereinafter be referred to herein as the "Companies."
2. Confidentiality. Employee, covenants and agrees that he will not, at
any time either during the term of this Agreement of thereafter, for a period
of one year after the receipt by Employee of the last disclosure of
proprietary information, reveal (or permit to be revealed where such is within
its control) to a third party or use for his own benefit, without prior
written consent of the Companies, any information pertaining to the business
of the Companies, or any of the Companies' respective businesses including but
not limited to information relating to research results, drilling techniques,
drilling rates and pricing, geological well information derived from the
Company's drilling operations, suppliers, employees, customer list, customers'
financial condition, procedures, tests, know-how, production, distribution,
work and organizational methods, experimental results or trade secrets.
3. Non-competition. During the term of this Agreement and for a period
of one year thereafter. Employee agrees that, except as contemplated by this
Agreement, he shall not without the prior written consent of the Companies,
either individually or with others, directly or indirectly, as an employee,
representative, partner, principal, agent, independent contractor, consultant,
stockholder, or in any other capacity, participate in, engage in or have a
financial interest in any activity, business or entity relating to or involved
in the development, testing or marketing of products, services, systems or
processes related to the Companies' respective businesses, except as provided
in Schedule B.
Employee acknowledges that the claim for or the payment of any damages
for breach of the provisions contained in this paragraph 3 shall not preclude
the Companies from seeking injunctive or such other forms of relief as may be
obtained in a court of law or equity. Employee, acknowledges that he will be
fully able to earn an adequate livelihood for himself and his dependents if
the provisions of this paragraph 3 shall be specifically enforced against him.
In the event that any court of competent jurisdiction shall determine that any
term, covenant, or condition of this paragraph 3 is void or unenforceable,
such court shall have the powers and authority to modify this paragraph 3 in
accordance with the original intent of the parties so as to make such term,
covenant or condition and the remainder of this Agreement valid and binding
upon the parties hereto.
4. Non-solicitation. During the term of this Agreement and for a period
of one year thereafter. Employee agrees that he shall not, without the prior
written consent of the Companies, either individually or with others, directly
or indirectly solicit or hire any of the Companies' employees or key employees
of the Companies' customers for Employment with a person or entity involved in
marketing products or services competitive with any of the Companies'
respective businesses. Key employees include supervisory personnel,
executives, personnel in charge of any department, section or subdivision, and
project managers (or directors) and senior personnel on any individual project
or projects. Employee further agrees that all customers of the Companies, and
all prospective customers from whom Employee may have solicited business while
engaged as an employee by the Companies hereunder, shall be solely the
customers of the Companies. Employee therefore agrees that he will not, for a
period of one year immediately following the termination of this Agreement,
either directly or indirectly, solicit business, as to products or services
competitive with those of the Companies respective businesses, from any of the
Companies" customers with whom Employee has had contact within one year prior
the termination of this Agreement.
The term "Employee" shall, for purposes of paragraphs 1 through 4
includes Employee along with any of Employee's Affiliates, Associates, or
entities of which he is a Beneficial Owner. The term "Affiliate" shall means a
person controlling, controlled by or under common control with Employee and
the term "control" (including the terms "controlling," "controlled by," and
"under common control with") means the power to direct or cause the direction
of the management and policies of a person or entity, whether through the
ownership of voting securities, by contract or otherwise. The term
"Associate," shall mean a relationship with: i) any corporation, or
organization (other than the Companies) of which Employee or any of his
Affiliates or Associates is a director, officer or partner, ii) any
corporation, or organization (other than the Companies) of which Employee or
any of Employee's Affiliates or Associates, directly or indirectly, are the
beneficial owner of five percent (5%) or more of any class of equity
securities; iii) any trust or other estate in which Employee or any of his
Affiliates or Associates have a substantial beneficial interest or with
respect to which Employee or any of his Affiliates or Associates serve as a
trustee or in any other fiduciary capacity; or iv) Employee's spouse, or any
blood relative of Employee, or any blood relative of Employee's spouse, who
resides in the same home as Employee, or who is an officer or director, or
partner of any Affiliate or Associate of Employee. The term "beneficial
ownership" shall mean interests which Employee or his or Affiliates or
Associates may possess which are substantially equivalent to those of
ownership and are enjoyed by reason of any contract, understanding,
relationship, agreement or other arrangement, whether or not such are set
forth in a legally binding contract or document.
IN WITNESS WHEREOF, the Undersigned Xxx Xxxxxx, intending to be legally
bound, hereby executes and delivers this Agreement this 21st day of June,
2006.
/s/ Xxx Xxxxxx
Xxx Xxxxxx, Executive
Witness
/s/ Xxxxxxx Xxxx
CERTIFICATE OF ORIGINALITY
As a condition of Employment with Xxxxxxx Drilling Corporation, or any
of its subsidiaries (collectively the "Company"), I acknowledge and agree that
all work performed by me during this engagement is owned completely and
exclusively by the Company. I hereby assign all rights resulting from work
performed by me for the Company, relating to the Company's then present
business worldwide, and fully and completely enable the Company its
successors, assigns and nominees to secure and enjoy the full benefits and
advantages thereof.
I recognize that all my relationship with the Company is based upon a
high degree of trust and confidence and that I xxxx be involved with
confidential information of the Company. I will, to the best of my ability,
protect any and all confidential information relating to the Company's
products, services, clients, customers and business operations.
Upon termination of my Employment with the Company, I will promptly
deliver to the Company, all property and confidential materials of the Company
that may be in my possession or under my control.
IN WITNESS WHEREOF, the Undersigned Xxx Xxxxxx, intending to be legally
bound, hereby executes and delivers this Agreement this 21st day of June,
2006.
/s/ Xxx Xxxxxx
Xxx Xxxxxx, Executive
Witness
/s/ Xxxxxxx Xxxx
