EMPLOYMENT AGREEMENT
Exhibit
10.10
This
EMPLOYMENT AGREEMENT (the “Agreement”), entered into on July 27, 2006 and made
effective as of May 1, 2006 (the “Effective Date”) by and among Standard
Drilling, Inc. (referred to as “STANDARD” or the “Company”) and Xxxxxxx X.
Xxxxxx (“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 Vice President of Operations of
STANDARD, and in such other or additional capacity or capacities for the Company
or an affiliate of STANDARD as the Board of Directors of STANDARD (the “Board”)
may direct from time to time. During the term of this Agreement, as Vice
President of Operations of the Company, Executive agrees to perform
such duties as are normally incident to that position and shall perform such
other duties and responsibilities as may be prescribed from time to time by
the
board of directors of the Company.
B. Duties.
The
Executive shall devote his full business time, attention and energies to the
business of the Company and 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. Nothing contained
in
this Section 3(B) shall prevent the Executive from passively investing 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.
C. Standard
of Performance.
The
Executive will perform his duties under this Agreement with fidelity and
loyalty, to the best of his ability, experience and talent and in a manner
consistent with his fiduciary responsibilities.
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 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 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 $360,000 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 300,000 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 after the later of the date the
closing price of our common stock on any exchange on which the common stock
of
Standard Drilling,
Inc. is traded or quoted equals or exceeds $2.50 for 10 trading days or January
1, 2007. This Option shall survive the Executive’s termination date if such
termination occurs after December 31, 2006. If the Executive’s termination date
occurs prior to January 1, 2007, the Option shall be forfeited unexercised.
This
Option shall not be exercisable in any event after January 25,
2008.
D.
Car
Allowance.
As our
business will be conducted from various venues and in lieu of the provision
of
Company owned equipment, the Company will reimburse you as an expense a monthly
sum of $1,000.
E.
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.
F.
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.
G.
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.
H.
Vacation.
The
Executive shall be entitled to four 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.
The
Company may terminate the Executive’s employment hereunder without “Cause” (as
hereinafter defined) on three months written
notice by the Company. Such termination will invoke the automatic vesting of
both Stock Options and Stock Grants as listed in Article(s) 4A and 4B
herein.
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.
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 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. 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 not in accordance with section 4 (A)
above;
(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;
(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 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 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 earned or accrued at the date of termination.
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, 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: (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; (vi) the 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 (vii) 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.
C. For
purposes of this Agreement, “Effective Period” shall mean the period beginning
on the date 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 their 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 others, or otherwise make use of any Confidential
Information to or for the use or benefit of the Executive or any other person,
firm, corporation or entity, 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 necessary safeguards and precautions 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 and their affiliates 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) is generally available to the public
(other than through a breach of an obligation of confidentiality, or (ii) 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).
B. Requests
for Disclosure.
It shall
not be a breach of the obligations of Section 8(A) if Executive discloses
Confidential Information as required by judicial or administrative process
or,
in the written opinion of Executive’s counsel, by the requirements of applicable
law, but only upon satisfaction of the following conditions: (i) 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 (ii)
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, (iii) 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
(iv)
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 their 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.
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 their
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, (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,
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 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.
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).
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).
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
if
to the
Executive:
Xxxxxxx
X. Xxxxxx
0000,
Xxxxxxx Xxxxx
Xxxxxx,
Xxxxx 77379_________
___________________________
SECTION
14. No
Mitigation.
In the
event of any termination of employment by the Company without Cause, 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, in the event the Executive’s employment is terminated during the
Term by the Company without Cause or by the Executive for Good Reason, the
Company shall continue to indemnify the Executive following termination 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 of
termination with respect to Executives 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.
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.
IN
WITNESS WHEREOF,
the
undersigned have executed this Agreement as of the date first above
written.
Standard
Drilling, Inc.
By:
Xxxxxxx
X.
Xxxxxxxxx, Xx.
CEO
Xxxxxxx
X.
Xxxxxx
Executive
