EXHIBIT 10.9
EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into effective on the 1st day of February,
2000 (the "Effective Date"), by and between TETRA Technologies, Inc., a Delaware
corporation with its principal office at 00000 X-00 Xxxxx, 0xx Xxxxx, Xxx
Xxxxxxxxx, Xxxxx (the "Company"), and Xxxxx X. XxXxxxx (the "Executive").
W I T N E S S E T H:
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WHEREAS, the Company wishes to secure the services of Executive subject to
the contractual terms and conditions set forth herein and Executive is willing
to enter into this Agreement upon the terms and conditions set forth herein; and
WHEREAS, the Company and the Executive mutually desire that this Agreement
supercede the Employment Agreement, dated April 1, 1996, between them (the
"Previous Employment Agreement"):
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, the parties hereto agree as follows:
1. EMPLOYMENT. During Executive's Term of Employment (as hereinafter
defined), the Company shall employ Executive, and Executive shall serve, in such
capacity(ies) as may be determined from time to time by the Board of Directors
of the Company.
2. TERM OF EMPLOYMENT. Executive's "Term of Employment" as used herein,
shall be from the Effective Date through December 31, 2001 unless earlier
terminated pursuant to the provisions of this Agreement.
3. COMPENSATION. The Company shall pay or cause to be paid to Executive
during his Term of Employment $24,000 per month, which includes $20,833.33 per
month as compensation for services rendered in the past and $3,166.67 per month
as compensation for services under this Agreement (collectively, the "Base
Salary"), payable in accordance with the Company's normal payroll practices.
4. DUTIES AND RESPONSIBILITIES OF EXECUTIVE. During the Term of
Employment, Executive shall devote his services full time to the business of the
Company and perform the duties and responsibilities assigned to him by the Board
of Directors from time to time in writing to the best of his ability and with
reasonable diligence. Executive will not participate in any planning, operation
or management of any activity competitive with the Company's interest and will
not otherwise engage in any activity potentially in conflict with the interest
of the Company except as authorized in writing by the Board; provided, however,
that the Company hereby agrees that Executive may continue to serve in his
capacity as Chairman of the Board of Directors of TGC Industries, Inc.
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("TGC") and of its subsidiary Tidelands Geophysical Company, Inc. ("Tidelands")
indefinitely. This paragraph 4 shall not be construed as preventing Executive
from engaging in reasonable volunteer services for charitable, educational or
civic organizations provided that such activity is not competitive with the
Company's interest, or from owning stock in public corporations. Executive
affirms that he is not subject to any agreement, written or oral, with TGC,
Tidelands or any other entity that would conflict with or otherwise interfere
with Executive's ability to carry out his obligations under this Agreement.
5. TERMINATION OF EMPLOYMENT.
a. TERMINATION BY THE COMPANY WITHOUT CAUSE. If Executive's services
hereunder shall be terminated by the Company prior to any "Change of Control"
for any reason other than "Cause" (as such terms are hereinafter defined),
Executive shall be entitled to receive, and the Company shall be obligated to
pay, his Base Salary as in effect on termination of employment for the remainder
of the Term of Employment, as if there had been no termination. The Company
shall have no other obligation to Executive following any termination by the
Company without Cause, and Executive shall no longer participate in any benefit
plans or programs sponsored by the Company except to the extent provided under
the terms of such plans or programs.
b. TERMINATION BY THE COMPANY FOR CAUSE OR SUBSTANTIAL CAUSE.
(i) The Company may terminate Executive's employment for Cause or
Substantial Cause. In such event, all payments of compensation under this
Agreement shall cease forthwith and Executive shall thereafter be entitled
to only that Base Salary then being paid to him that is earned through the
date Executive is terminated for Cause or Substantial Cause.
(ii) Termination shall be for "Cause" only if termination occurs
prior to a "Change of Control" (as hereinafter defined) and is based on
(i) a material act or acts of dishonesty on the part of Executive that
adversely affects the Company, (ii) a material breach by Executive during
the Term of Employment of the provisions of paragraphs 4, 8 or 9, or (iii)
the continuing and material failure of Executive to fulfill his
obligations under this Agreement.
(iii) Termination shall be for "Substantial Cause" only if
termination occurs on or after the date of a Change of Control and because
(a) the Executive is convicted of a felony involving moral turpitude; (b)
the Executive commits a willful serious act of fraud, misappropriation or
embezzlement intending to enrich himself at the expense of the Company or
any affiliated entity; or (c) the Executive, in carrying out his duties
and responsibilities under this Agreement, is guilty of willful misconduct
or gross neglect that results in material harm to the Company or any
affiliated entity, unless such conduct was reasonably believed by the
Executive in good faith to be in the best interests of the Company. In
each case, the existence of Substantial Cause must be confirmed by written
notice signed by a majority of the Board prior to any termination
therefor.
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c. TERMINATION SUBSEQUENT TO CHANGE OF CONTROL.
(i) If a Change of Control of the Company shall occur and at any
time on or after that date the Executive shall elect to terminate his
employment hereunder for "Good Reason" (as hereinafter defined) or
Executive's employment is terminated by the Company without Substantial
Cause, then the Executive shall be entitled to receive, and the Company
shall be obligated to pay, the Base Salary then being paid to him until
the stated expiration date of the Term of Employment in effect at the date
of termination. The Company shall have no other obligation to Executive
following any termination on or after a Change of Control by the Executive
for Good Reason or by the Company without Substantial Cause, and Executive
shall no longer participate in any benefit plans or programs sponsored by
the Company except to the extent provided under the terms of such plans or
programs.
(ii) A "Change of Control" shall be deemed to have occurred on the
first day following April 1, 2000 upon which any person or group of
persons or entity or group of entities acquires either (i) direct or
indirect voting power sufficient to elect a majority of the directors of
the Company or (ii) stock or assets of some or all of the Company's
business or operating units or affiliates comprising 60% or more of the
total assets of the Company and its affiliates on a consolidated basis (as
shown on the Company's financial statements for the immediately preceding
fiscal year).
(iii) A termination of employment is for "Good Reason" if such
termination of employment occurs on or after the date of a Change of
Control and follows either
(a) a significant diminution in the duties and
responsibilities of the Executive immediately prior to the date of
the Change of Control or the assignment to the Executive of any
duties materially inconsistent with the Executive's duties
immediately prior to the Change of Control or a substantial change
in the Executive's reporting responsibilities as in effect
immediately prior to the Change of Control, without the Executive's
express written consent; or any removal of the Executive from or any
failure to re-elect the Executive to any office of the Company held
by the Executive immediately prior to the Change of Control, except
in connection with promotions to higher office;
(b) a reduction in the Executive's Base Salary from that in
effect immediately prior to the Change of Control;
(c) the failure of the Company substantially to provide and
continue for the Executive the same or substantially comparable
fringe benefits as provided immediately prior to the Change of
Control;
(d) the Company's requiring the Executive to be based anywhere
other than in or within 50 miles of the Executive's principal place
of
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employment at the time of the Change of Control, except for required
travel on the Company's business to an extent substantially
consistent with the Executive's prior business travel obligations
or, in the event the Executive consents to relocation, the failure
of the Company to pay (or reimburse the Executive for) all
reasonable moving expenses incurred by the Executive relating to a
change in the Executive's principal residence in connection with
such relocation, and to indemnify the Executive against any loss
realized in the sale of the Executive's principal residence in
connection with any such change of residence; or
(e) the failure of the Company to obtain the assumption of
this Agreement by any successor as contemplated by Section 14 below.
d. OTHER TERMINATION. If Executive's services hereunder shall be
terminated during the Term of Employment due to death, disability, retirement or
resignation other than for Good Reason after the date of a Change of Control,
$3,166.67 per month of his Base Salary shall cease being owed hereunder as of
the end of the month in which such event occurs (although the Company shall
continue to pay $20,833.33 per month to Executive or his estate through December
31, 2001); and upon such termination Executive shall no longer participate in
any benefit plans or programs sponsored by the Company except to the extent
provided under the terms of such plans and programs.
e. EFFECT OF TERMINATION. Notwithstanding any other provision of
this Agreement to the contrary, Executive agrees that he will resign his
position as a member of the Board upon his termination of employment for any
reason.
6. REIMBURSEMENT OF EXPENSES. During Executive's Term of Employment, the
Company shall pay or reimburse Executive for all reasonable travel,
entertainment and other expenses paid or incurred by Executive in performing his
obligations hereunder. In addition, the Company shall, during Executive's Term
of Employment up to and including June 30, 2000, pay or reimburse Executive for
all reasonable club dues in accordance with a reasonable and customary program
established by the Board for such purpose.
7. OTHER BENEFITS. During the Term of Employment, Executive shall be
entitled to participate and shall be included in any pension, profit-sharing,
deferred compensation, or similar plan or program of the Company established by
the Company, to the extent that he is eligible under the provisions of each such
plan or program. Executive shall also be entitled to participate in any group
insurance, hospitalization, medical, health and accident, life, dental,
disability or similar plan or program established by the Company, to the extent
that he is eligible under the provisions of each such plan or program. Executive
shall be eligible for vacation and sick leave in accordance with standard
Company policies. Executive agrees that the plans and programs described under
this Section 7 do not include any bonus programs or stock option plans, such as
the TETRA Technologies, Inc. 1990 Stock Option Plan, as amended.
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8. COVENANT AGAINST COMPETITION
a. RESTRICTIVE COVENANT. Executive agrees that during the Restricted
Period (as hereinafter defined), he will not in any manner, directly or
indirectly, invest in, own, engage in or be employed by or render services or
advice to any business or enterprise engaging in the Competitive Activities (as
hereinafter defined) within the United States or within one hundred miles of any
international location where the Company or any of its affiliates is operating.
Competitive Activities shall mean (i) researching, developing, manufacturing,
providing or marketing products or services of a nature (as hereinafter defined
for purposes of this Section 8) researched, developed, manufactured, provided or
marketed by the Company or any affiliated entity; (ii) hiring, attempting to
hire, or assisting any other person or entity in hiring or attempting to hire
any person employed by the Company or any affiliated entity; or (iii)
soliciting, in competition with the Company or any affiliated entity, the
business of any customer of the Company or any affiliated entity on behalf of
whom the Company or any affiliated entity provided products or services at any
time during the Executive's Term of Employment hereunder. As used in this
Section 8, a product or service shall be deemed to be "of a nature" researched,
developed, manufactured, provided or marketed by the Company or any affiliated
entity if it is of the same or similar nature as a product or service of the
Company or any affiliated entity or is an adaptation, improvement or development
thereof. The Restricted Period is the period beginning as of the date of this
Agreement and ending three years after the end of the last month for which
Executive shall have been scheduled to receive any compensation in the form of
Base Salary under this Agreement; provided, however, that in the event of a
Change of Control, the Restricted Period shall end after the last month for
which Executive shall have been scheduled to receive any compensation in the
form of Base Salary under this Agreement. Ownership of stock in public
corporations shall not be in violation of this provision.
b. COVENANT NOT TO SOLICIT. The Executive shall not, directly or
indirectly, during the Restricted Period, (a) take any action to solicit or
divert any business or customers (or potential customers) away from the Company
or any of its affiliates, (b) induce customers, potential customers, suppliers,
agents or other persons under contract or otherwise associated or doing business
with the Company or its affiliates to terminate, reduce or alter any such
association or business with or from the Company or its affiliates and/or (c)
induce any person in the employment of the Company or its affiliates or any
consultant to the Company or its affiliates to (i) terminate such employment, or
consulting arrangement, (ii) accept employment, or enter into any consulting
arrangement, with anyone other than the Company or its affiliates, and/or (iii)
interfere with the customers, suppliers, or clients of the Company or its
affiliates in any manner or the business of the Company or its affiliates in any
manner. For purposes of this Section 8.B, a "potential customer" shall mean a
person or entity that the Company or its affiliates, as of the date the
Executive's employment terminates, is actively soliciting for or in respect of
any current, actively pending or contemplated business.
c. REASONABLENESS OF RESTRICTIONS. Executive acknowledges that he
has carefully read and considered the provisions of paragraphs 8.A and 8.B and
agrees that the restrictions set forth in such paragraphs including, but not
limited to, the time period of restriction, the geographical
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areas of restriction, and the scope of activity of restriction are fair and
reasonable and are reasonably required for the protection of the interests of
the Company, and that the Company has legitimate business interests deserving to
be protected. Notwithstanding the foregoing, in the event that any of the
provisions of paragraphs 8.A or 8.B shall be held to be invalid or
unenforceable, the remaining provisions thereof, together with any modification
thereof made by a court of competent jurisdiction, shall nevertheless continue
to be valid and enforceable as though the invalid or unenforceable parts had not
been included therein. Without limiting the foregoing, in the event that any
provision of paragraph 8.A or 8.B relating to time period or area of restriction
shall be declared by a court of competent jurisdiction to exceed the maximum
time period or area such court deems reasonable and enforceable, said time
period or area of restriction shall be deemed to become and thereafter be the
maximum time period or area which such court deems reasonable and enforceable.
9. INFORMATION AND INVENTIONS.
a. CONFIDENTIAL INFORMATION. Executive agrees that he will not,
except as permitted by the Company in writing, in any manner, at any time during
the Term of Employment or thereafter, directly or indirectly, whether to the
detriment of the Company or the benefit of Executive or any third party or
otherwise, disclose or use any confidential information except in the good faith
performance of his duties under this Agreement. In addition, Executive agrees
that he will not create any derivative work or other product based upon or
resulting from any confidential information except in the good faith performance
of his duties under this Agreement. Executive further agrees that during the
Restricted Period, he will not undertake any owner, consultant or employment
role competitive or in conflict with any interest of the Company wherein the
complete unhampered fulfillment of the duties of that employment would
inherently or inevitably cause him to reveal, to base judgments upon or to use
any such Company confidential information or trade secrets. As used in this
Agreement, the term "confidential information" means any and all information
disclosed to Executive or known by or acquired by Executive as a consequence of
or through his employment by an employer or which was acquired during his
employment with an employer which is not known to the general public or in the
industry in which the Company is engaged, about the Company's products,
customers, processes, financial condition, computer programs, formulas, patents,
techniques, improvements or know-how and services, and including, without
limitation, information relating to research, development, inventions,
manufacturing, merchandising and selling. 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, upon Executive's
termination of employment, or if the Board so requests at any time, Executive
shall promptly return to the Company all Confidential Information in Executive's
possession, whether in writing, on computer disks or other media, without
retaining any copies, extracts or other reproductions thereof.
b. INVENTIONS. Executive agrees to disclose promptly, completely and
in writing to the Company and thereafter to assign and to bind his heirs,
executors and administrators to assign to the Company or its designee,
successor, assignee or legal representative, any and all inventions, processes,
diagrams, methods, apparatuses or improvements (all of which are hereinafter
collectively called "Inventions") whatsoever, discovered, conceived or
developed, either individually or jointly
PAGE 6
with others, during the course of Executive's employment with the Company
(including all Inventions based wholly or in part upon ideas conceived during
Executive's employment with the Company), or using the Company's time, data,
facilities and/or materials, provided the subject matter is one within a field
of interest of Company. Executive's obligations under this Section apply without
regard to whether the idea for such Invention or solution to a problem occurs to
Executive on the job, at home or elsewhere. Executive further agrees that such
Inventions are the sole property of the Company, whether or not any patent
application is ever filed therefor. Executive agrees that he will cooperate
fully in assisting the Company in filing any patent, copyright or associated
trademark application with regard to any such Invention, if the Company elects
to file such application, including signing written assignments of the
Executive's rights to such Inventions.
10. INJUNCTIVE RELIEF. Executive acknowledges and agrees that the Company
will be irreparably harmed and will have no adequate remedy at law if Executive
breaches or threatens to breach any of the provisions of paragraph 8 or
paragraph 9 of this Agreement. Executive agrees that the Company shall be
entitled to injunctive and other equitable relief to prevent any breach or
threatened breach of paragraph 8 or paragraph 9. Executive agrees that the
Company shall also be entitled to specific performance of each of the terms of
such paragraphs in addition to any other legal or equitable remedies that the
Company may have. Executive further agrees that, in any equity proceeding
relating to the enforcement of the terms of paragraph 8 or paragraph 9, he shall
waive and he agrees not to raise the defense that the Company has an adequate
remedy at law.
11. 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 11):
if to the Company:
TETRA Technologies, Inc.
c/o Chairman of the Board of Directors
00000 X-00 Xxxxx
0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxx 00000
if to the Executive:
Xxxxx X. XxXxxxx
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
12. ASSISTANCE WITH LITIGATION. For a period of two years after the end of
the last period for which Executive shall have received any compensation under
this Agreement and for as long
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thereafter as any litigation instituted within such period continues, Executive
shall furnish such information and proper assistance as may be reasonably
necessary in connection with any litigation in which the Company is then or may
become involved. The Company agrees to reimburse Executive for all expenses
reasonably incurred in furnishing such assistance.
13. INCOME TAX WITHHOLDING AND OTHER TAX CONSIDERATIONS.
a. WITHHOLDING. The Company may withhold from any compensation or
benefits payable under this Agreement all federal, state, city or other taxes
that shall be required pursuant to any law or governmental regulation or ruling.
b. CERTAIN OTHER PAYMENTS. If the Executive is liable for the
payment of any excise tax (the "Basic Excise Tax") because of Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code"), or any successor or
similar provision, with respect to any payments or benefits received or to be
received from the Company or any successor to the Company, whether provided
under this Agreement or otherwise, the Company shall pay the Executive an amount
(the "Special Reimbursement") which, after payment by the Executive (or on the
Executive's behalf) of any federal, state and local taxes, including, without
limitation, any further excise tax under such Section 4999 of the Code, on, with
respect to or resulting from the Special Reimbursement, equals the net amount of
the Basic Excise Tax.
14. CONSOLIDATION, MERGER, OR SALE OF ASSETS. Nothing in this Agreement
shall preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation
which assumes this Agreement and all obligations and undertakings of the Company
hereunder; provided, that no such action shall diminish Executive's rights. Upon
such a consolidation, merger, or transfer of assets in assumption of the
Company, the term the "Company" as used herein, shall mean such other
corporation, respectively.
15. GENERAL PROVISIONS.
a. ASSIGNABILITY; ATTACHMENT AND EFFECT. Neither this Agreement nor
any right or interest hereunder shall be assignable by Executive, or his legal
representatives without the prior written consent of the Company. Except as
required by law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge, hypothecation, execution, attachment, levy, or similar process
or assignment by operation of law, and any attempt, voluntary or involuntary, to
effect such action shall be null, void and of no effect. This Agreement shall be
binding upon and inure to the benefit of the Company, its successors and
assigns.
b. WAIVER, SEVERABILITY AND AMENDMENT OF AGREEMENT. This Agreement
may not be modified or amended except by an instrument in writing signed by the
parties hereto. No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be an estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver
PAGE 8
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived. If, for any reason, any provision of this Agreement is held
invalid, such invalidity shall not affect any other provision of this Agreement
not held so invalid, and each such other provision shall to the full extent
consistent with law continue in full force and effect. If any provision of this
Agreement shall be held invalid in part, such invalidity shall in no way affect
the rest of such provision not held so invalid, and the rest of such provision,
together with all provisions of this Agreement, shall to the full extent
consistent with law continue in full force and effect. Unless otherwise
provided, if this Agreement or any portion thereof conflicts with any law or
regulation governing the activities of the Company, the Agreement or appropriate
portion thereof shall be deemed invalid and of no force or effect.
c. SUBMISSION TO ARBITRATION. Any controversy or claim arising out
of or relating to this contract or its alleged breach or any matters arising,
either directly or indirectly, out of Executive's employment relationship with
the Company shall be settled by binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association ("AAA"),
and any judgment on the award rendered by the arbitrator may be entered by any
court having jurisdiction thereof. 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 Commercial Arbitration Rules
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. Demand for arbitration must be made within one year after the accrual
of the claim on which the demand is based. If the claiming party fails to demand
arbitration within one year, the claim shall be deemed to be waived and shall be
barred from either arbitration or litigation.
d. HEADINGS; GOVERNING LAW. The headings of paragraphs herein are
included solely for convenience and reference and shall not control the meaning
or interpretation of any of the provisions of this Agreement. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
e. PREVIOUS EMPLOYMENT AGREEMENT. The Company and Executive hereby
agree that the Previous Employment Agreement is superceded by this Agreement in
its entirety, and that none of the provisions of article 5 of the Previous
Employment Agreement regarding termination shall be given any effect. The
Company and the Executive hereby represent to each other that they are not aware
of any defaults under the Previous Employment Agreement.
PAGE 9
IN WITNESS THEREOF, the Company has caused this Agreement to be executed
by its officer thereunto duly authorized, and Executive has signed this
Agreement, all as of the day first above written.
TETRA Technologies, Inc.
By: /s/ XXXXXXXX X. XXXXXX
-------------------------------
Xxxxxxxx X. Xxxxxx,
Chief Operating Officer
/s/ XXXXX X. XxXXXXX
--------------------------------
Xxxxx X. XxXxxxx, Executive
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