COMPENSATION AGREEMENT
THIS AGREEMENT (this "AGREEMENT"), dated as of the 25th day of January
1999, by and between Triad Compressor, Inc., a Nevada corporation (the
"COMPANY"), and Xxxx X. Xxxxx ("EXECUTIVE").
WHEREAS, the Company believes that Executive has unique experience and
skills that would significantly benefit the Company in the management of the
affairs of the Company; and
WHEREAS, the Company acknowledges and recognizes the value of
Executive's services and deems it necessary and desirable to retain Executive's
services for a period of three years; and
WHEREAS, both Executive and the Company desire to embody the terms and
conditions of Executive's compensation in a written agreement which will
supersede all prior agreements of compensation, whether written or oral.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements herein contained, the parties hereto agree as follows:
1. EMPLOYMENT TERM. The Company agrees to, and does hereby employ
Executive to serve as Vice President and Secretary of the Company and to perform
the services as hereinafter set forth for a period of three years commencing
January 25, 1999 and ending December 31, 2001.
2. SERVICES OF EXECUTIVE. Executive agrees to devote such of his
business time (exclusive of four weeks of vacation in each calendar year) to the
business and affairs of the Company, and to use his best efforts to promote the
interests of the Company, and to carry out such duties and perform such services
as may be delegated to Executive from time to time by the board of directors of
the Company. The Company acknowledges and agrees that Executive will continue to
serve as an officer and director of any subsidiary of the Company and its
affiliates, and nothing in this Agreement shall prohibit Executive from being
directly or indirectly engaged in the oil and gas business or any other business
in any capacity with any other corporation, partnership, venture or other
entity.
3. COMPENSATION.
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(a) In payment for the services set forth in paragraph 2 above, the
Company shall pay to Executive during the term hereof at a rate of
$400 per day during the term of this Agreement. Executive shall
present reports, at least quarterly, detailing the work done on behalf
of the company to which he is entitled compensation. Executive shall
also be entitled to participate in any Company plan for the benefit of
any or all of its employees, including any deferred compensation plan
(such as pension, profit-sharing or thrift plan), or group hospital,
disability or life insurance plan, in accordance with the terms of
such plan.
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(b) Rate of compensation of Executive may be increased annually each year
during the term of this Agreement by an amount determined by the board
of directors of the Company.
(c) In the event that Compensation is not received by Executive when
payable pursuant to this Agreement, Executive may elect at any time
after January 1, 2000 to accept shares of common stock of the Company
in payment of accrued unpaid Base Salary at a rate of $0.25 per share
for 1999 Compensation. For the years 2000 and 2001, the Compensation
if paid in common stock, shall be converted at 50% of the volume
weighted monthly average trading value of the Company's common stock.
The number of shares of Common Stock of the Company issuable to
Executive hereunder as well as the amount of accrued unpaid Base
Salary to be paid by issuance of such shares shall be subject to
adjustment to reflect any stock split, stock dividend,
recapitalization, merger consolidation, reorganization, combination or
exchange of shares or other similar event. In no event shall Executive
be obligated to accept shares of common stock of the Company in
payment of Base Salary.
4. EXPENSES. The Company will arrange for the payment of reasonable
expenses incurred by Executive in furtherance of or in connection with the
business of the Company, including, but not limited to, all traveling expenses
and all entertainment expenses (whether incurred at Executive's residence, while
traveling, or otherwise). If any such expenses are paid in the first instance by
Executive, the Company will arrange for his reimbursement therefor. The Company
recognizes that, in the performance of his duties, Executive may be required to
entertain various persons and representatives of organizations with whom the
Company has or would like to have business relationships. The Company will
arrange for the reimbursement of Executive upon presentation of expense vouchers
for any reasonable such expenses which are adaptable to the usual accounting
procedures established by the Company.
5. PHYSICAL EXAM. Executive agrees to take a physical examination
at the Company's expense each year during the term of this Agreement.
6. TERMINATION OF EMPLOYMENT. Executive's employment with the
Company may be terminated prior to the expiration of the term hereof as follows:
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(a) The board of directors of the Company may terminate Executive's
employment if (i) the board of directors of the Company notifies
Executive in writing that Executive is in breach or violation of
this Agreement, such written notice to set forth in detail the
exact nature of such breach or violation, (ii) Executive
willfully fails or refuses to take such actions as may be
reasonably required by the board of directors of the Company to
cure any breach or violation by Executive of this Agreement and
(iii) such failure or refusal shall continue for or is not
corrected within 30 days after warning from the board of
directors of the Company in such regard is given to Executive. In
addition, the board of directors of the Company may for good
cause terminate Executive's employment under this Agreement
without advance notice. Termination shall not affect any of the
Company's other rights and remedies. For the purpose of this
Agreement, good cause shall be deemed to mean only the following:
(i) should Executive for reasons other than illness or injury
absent himself from his duties without the consent of the
board of directors for more than 20 consecutive days;
(ii) should Executive be convicted of a crime punishable by
imprisonment;
(iii)should Executive commit gross negligence or willful
misconduct in the performance of his duties hereunder, or
otherwise fail to comply with the terms and conditions of
this Agreement; or
(iv) should Executive willfully engage in misconduct that is
materially injurious to the Company, or any affiliate of the
Company, monetarily or otherwise.
(b) Executive's employment with the Company shall terminate upon
Executive's death and Executive's estate or designated
beneficiaries shall be entitled to the amount as provided
pursuant to paragraph 6 above and any insurance benefits provided
pursuant to paragraph 7 above.
(c) Executive may elect to terminate this Agreement upon 90 days
prior written notice thereof to the board of directors. For the
purpose of this Agreement, "constructive termination" by the
Company shall be deemed to mean the resignation by Executive of
his position with the Company as a result of Executive's good
faith belief that the board of directors of the Company has
acted, or proposes to act contrary to Executive's objection, in a
manner that (i) is illegal, (ii) constitutes a breach of
fiduciary duty or (iii) is contrary to advice of counsel to the
Company. A constructive termination shall be deemed to be a
termination by the Company of Executive's employment without
cause.
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(d) In the event that the board of directors elects to terminate this
Agreement pursuant to paragraph 10(a) above, the Company shall
have no further obligation to compensate Executive or provide any
benefits hereunder effective upon the date of termination unless
Executive shall in good faith dispute such termination and submit
such dispute to arbitration pursuant to paragraph (e) below.
(e) In the event that Executive contests any termination under
paragraph 10(a) above by written notice to the board of directors
setting forth in detail Executive's reasons for objection to such
termination, such matter may be submitted by Executive to
arbitration by an arbitration panel comprised of three members of
the American Association of Arbitrators, one of whom is selected
by Executive, one of whom is selected by the board of directors
and one of whom is selected by the arbitrators selected by the
Executive and the board of directors. The validity of Executive's
termination shall be decided by a majority of the votes of the
arbitrators and their written decision shall be nonappealable.
Any such arbitration shall take place in Dallas, Texas. Costs
will be borne by the party against whom the decision is rendered.
7. DISCLOSURE OF INFORMATION. Executive hereby acknowledges that he
will have access to certain trade secrets and confidential information of the
Company and of affiliates of the Company and that such information constitutes
valuable, special and unique property of the Company and such affiliates.
Executive shall not, during or after the term of his employment hereunder,
disclose any such trade secrets or confidential information to any person or
entity for any reason or purpose whatsoever except to the extent that such
information becomes publicly disclosed (other than as a result of a breach of
this Agreement by Executive) or to the extent required by law. Executive further
agrees that unless otherwise agreed by the board of directors of the Company,
any intellectual property developed by Executive in the course of his employment
with the Company shall be developed on behalf of, and for the ownership of, the
Company.
8. ACTIONS OF BOARD; AFFILIATES. For the purpose of this Agreement, all
actions or consents required or permitted to be taken or given by the board of
directors of the Company with respect to this Agreement shall be to refer to an
action or consent approved by a majority of the board of directors of the
Company other than Executive and including at least two directors who are not
employees of the Company.
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9. CONSOLIDATION OR MERGER. Other than a transaction with affiliates of
the Company not resulting in a change of control of the Company, in the event of
any consolidation or merger of the Company into or with another corporation,
partnership or other entity, or the sale of all or substantially all of the
assets of the Company during the term of this Agreement or any renewal thereof,
Executive may, in his sole and absolute discretion, elect to (i) terminate this
Agreement without fault, or (ii) continue his employment pursuant to the terms
hereof in which case such corporation, partnership or other entity shall assume
this Agreement and become obligated to perform all of the terms and conditions
hereof, and Executive's obligations hereunder shall continue in favor of such
corporation, partnership or other entity.
10. NOTICE. Any consent, notice, warning or other communication
("Notice") to be given hereunder shall be in writing and shall be deemed to have
been properly given when mailed by first class U.S. Mail, when sent by prepaid
telegram, or when delivered in person, addressed or delivered in each case to
the address set forth across from each party's signature below, or to such other
address as either of the parties shall designate to the other in the manner
provided for giving notice.
11. NATURE OF AGREEMENT. No right, title, interest or benefit hereunder
shall ever be liable for or charged with any of the torts or obligations of
Executive or of any person claiming under Executive, or subject to seizure by
any creditor of Executive or any person claiming under Executive. Neither
Executive nor any person claiming under Executive shall have the power to
anticipate or dispose of any right, title, interest or benefit hereunder in any
manner until the same shall have been actually distributed to him free and clear
of the terms of this Agreement.
12. BINDING EFFECT. Subject to the provisions of paragraph 13 above,
this Agreement shall be binding upon and inure to the benefit of any successor
to the Company and all persons lawfully claiming under Executive. This Agreement
cannot be assigned by Executive.
13. ENTIRE AGREEMENT. The parties hereto agree that this document
contains the entire understanding and agreement between them with respect to the
matters set forth herein and cannot be amended, modified or supplemented in any
respect except by an agreement in writing signed by the party against whom
enforcement of any amendment, modification or supplement is sought.
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14. WAIVER. The failure of either party to insist, in any one or more
instances, upon performance of any of the terms or conditions of this Agreement
shall not be construed as a waiver or a relinquishment of any right granted
hereunder or of the future performance of any such term, covenant or condition,
but the obligations of either party with respect thereto shall continue in full
force and effect.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its executive officer duly authorized, and Executive has executed
this Agreement, all effective as of the date first above written.
Address: TRIAD COMPRESSOR, INC.
By:__________________________
Name:________________________
------------------------------------ Title:_______________________
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Address: EXECUTIVE
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------------------------------------ Xxxx X. Xxxxx
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