EMPLOYMENT AGREEMENT
Exhibit 10.2
Execution Copy
THIS EMPLOYMENT AGREEMENT (“Agreement”) is made by and between Complete Energy Services, Inc.,
a Delaware corporation (“Complete”), and Xxxxxx X. Xxxxxxx (“Executive”).
W I T N E S S E T H:
WHEREAS, Complete desires to employ Executive on the terms and conditions, and for the
consideration, hereinafter set forth and Executive desires to be employed by Complete on such terms
and conditions and for such consideration;
WHEREAS, Complete desires to enter into a combination either by merger, share exchange,
consolidation, asset sale or other similar business combination (the “Combination”) with either one
or both of Integrated Production Services, Inc., a Delaware corporation (“IPS”), and I.E. Xxxxxx
Services, Inc., a Delaware corporation (“I.E. Xxxxxx”), pursuant to which Complete, IPS and/or I.E.
Xxxxxx will be combined so that immediately following the Combination one of such entities (the
“Parent”) will own, directly or indirectly, substantially all of the equity securities of one or
both of the other entities;
WHEREAS, upon consummation of the Combination, Executive and Complete desire that Executive be
employed by the Parent on the terms and conditions, and for the consideration, hereinafter set
forth;
NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations
contained herein, Complete and Executive agree as follows:
ARTICLE
I
DEFINITIONS
DEFINITIONS
For purposes of this Agreement, the following capitalized words shall have the meanings
indicated below:
1.1 “Average Annual Bonus” shall mean an amount equal to 100% of Termination Base Salary.
1.2 “Board” shall mean the Board of Directors of Company.
1.3 “Cause” shall mean:
(a) Executive’s conviction of a felony involving moral turpitude, dishonesty or a
breach of trust as regards Company or any of its affiliates;
(b) Executive’s commission of any act of theft, fraud, embezzlement or misappropriation
against Company or any of its affiliates that is materially injurious to any such entity
regardless of whether a criminal conviction is obtained;
(c) Executive’s willful and continued failure to devote substantially all of his
business time to Company’s business affairs (excluding failures due to illness, incapacity,
vacations, incidental civic activities, incidental personal time and the performance of
consulting services for IPS and I.E. Xxxxxx) which failure is not remedied within a
reasonable time after written demand is delivered by Company, which demand specifically
identifies the manner in which Company believes that Executive has failed to devote
substantially all of his business time to Company’s business affairs;
(d) Executive’s unauthorized disclosure of confidential information of Company or any
of its affiliates that is materially injurious to any such entity; or
(e) Executive’s knowing or willful material violation of federal or state securities
laws, as determined in good faith by the Board.
For purposes of this definition, no act, or failure to act, on Executive’s part shall be deemed
“willful” unless done, or omitted to be done, by Executive not in good faith and without reasonable
belief that Executive’s action or omission was in the best interest of Company.
1.4 “Change of Control” shall mean:
(a) for the period preceding the effective date of the Combination, any transaction or
event pursuant to which SCF IV, L.P., a Delaware limited partnership (“SCF IV”), together
with its affiliates cease to collectively own, directly or indirectly, 50% or more of the
combined voting power of Company’s outstanding securities; and
(b) on and after the effective date of the Combination, the occurrence of any of the
following:
(i) any person or group of persons (other than SCF IV and its affiliates) is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, but excluding beneficial ownership arising solely as a result
of a person being a party to a stockholder agreement or similar arrangement that is
entered into prior to an underwritten initial public offering of Company), directly
or indirectly, of securities in Company representing 20% or more of the combined
voting power of Company’s outstanding securities;
(ii) a change in the majority of the membership of the Board occurs without
approval by two-thirds of the directors who are Continuing Directors. For these
purposes, “Continuing Directors” are persons who (A) were members of the Board on
the Effective Date, (B) are new directors whose election was approved by two-thirds
of the members of the Board who were directors on the Effective Date (“Approved
Directors”), or (C) are new directors whose election was approved by two-thirds of
the members of the Board who were directors on the Effective Date or are
subsequently Approved Directors;
(iii) Company is merged, consolidated or combined with another corporation or
entity, including without limitation, a reverse or forward triangular merger, and
Company’s stockholders prior to such transaction own less than 55%
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of the outstanding voting securities of the surviving or resulting corporation
or entity after the transaction;
(iv) a tender offer or exchange offer is made and consummated by a person or
group of persons other than Company, SCF IV or their respective affiliates for the
ownership of 20% or more of Company’s voting securities; or
(v) there is a disposition, transfer, sale or exchange of all or substantially
all of Company’s assets, or stockholder approval of a plan of liquidation or
dissolution of Company.
Notwithstanding the preceding provisions of this Section, (x) the Combination or a change in the
composition of the Board in connection with the Combination shall not constitute a Change of
Control and (y) the members of the Board on the effective date of the Combination shall all be
deemed to be Continuing Directors and Approved Directors as of such date.
1.5 “Change of Control Payout Period” shall mean a period of three years commencing on the Date
of Termination, which termination is covered by Section 7.3 hereof.
1.6 “Company” shall mean (a) for the period preceding the effective date of the Combination,
Complete, and (b) on and after the effective date of the Combination, the Parent.
1.7 “Date of Termination” shall mean the date specified in the Notice of Termination relating
to termination of Executive’s employment with Company; provided that such date shall not be less
than 20 days nor more than 45 days following: (i) involuntary termination, not for Cause, pursuant
to Section 7.2 or Section 7.3 hereof, or (ii) the date within the Protective Period that Executive
voluntarily terminates his employment for Good Reason so governed by Section 7.3 hereof.
1.8 “EBITDA” shall mean (a) for the period preceding the effective date of the Combination, the
collective earnings of Complete, IPS, I.E. Xxxxxx and their respective subsidiaries (after the
accrual of employee bonuses but before any nonrecurring, one-time gains or losses) before interest,
taxes, depreciation and amortization, calculated consistent with past practices and based on
audited financial statements, and (b) from and after the effective date of the Combination, the
consolidated earnings of Company and its subsidiaries (after the accrual of employee bonuses but
before any nonrecurring, one-time gains or losses) before interest, taxes, depreciation and
amortization, calculated consistent with past practices and based on audited financial statements.
1.9 “Good Reason” shall mean any of the following without Executive’s prior consent:
(a) any of the following which results in the terms of Executive’s employment having
been detrimentally and materially affected: failure to re-elect or appoint Executive to any
corporate office or directorship he occupies on or after the Effective Date (other than in
connection with a divestiture of the relevant entity) or a material reduction in Executive’s
authority, duties or responsibilities (including status, offices, titles and reporting
requirements) or if Executive is assigned duties or responsibilities inconsistent
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in any material respect from those of Executive immediately prior to such assignment
(for the avoidance of doubt and without limiting the generality of the foregoing, it is
understood and agreed that, if the Combination is consummated, any failure to re-elect or
appoint Executive to the positions of President, Chief Executive Officer and as a member of
the Board of Directors of Parent shall constitute “Good Reason”);
(b) a material reduction in the aggregate economic value of Executive’s compensation
(including base pay, bonuses and intermediate and long-term incentives), benefits and
perquisites (determined by considering Executive’s bonus opportunity as opposed to actual
bonus payments and determined without regard to non-recurring or special bonus or equity
compensation awards) from that in effect prior to any such reduction;
(c) Company fails to obtain a written agreement satisfactory to Executive from any
successor or assigns of Company to assume and perform this Agreement as provided in Sections
11.1 and 11.11 hereof; or
(d) Company requires Executive to be based at any office located more than 50 miles
from Company’s current offices.
For purposes of determining under Section 1.9(a) whether the terms of Executive’s employment have
been detrimentally and materially affected by an action or inaction that occurs during the
Protective Period, such determination shall be made by Executive in good faith and, if Company
disagrees with any such determination by Executive, then the dispute will be limited to whether
Executive has satisfied his duty to make such determination in good faith. The standard described
in the preceding sentence shall not apply to any determination under Section 1.9(a) regarding
whether the terms of Executive’s employment have been detrimentally and materially affected by an
action or inaction that occurs other than during the Protective Period.
1.10 “Notice of Termination” shall mean a written notice delivered to the other party
indicating the specific termination provision in this Agreement relied upon for termination of
Executive’s employment and shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive’s employment under the provision so indicated.
1.11 “Protective Period” shall mean a period of two years commencing on the effective date of a
Change of Control.
1.12 “Severance Payout Period” shall mean a period of two years commencing on the Date of
Termination, which termination is covered by Section 7.2 hereof.
1.13 “Termination Base Salary” shall mean Executive’s annual base salary at the rate in effect
at the time the Notice of Termination is given or (i) for purposes of a termination based on Good
Reason under Section 1.9(b), if a greater amount, Executive’s annual base salary at the rate in
effect immediately prior to any reduction that occurred without Executive’s consent prior to such
termination, or (ii) for purposes of a termination that is covered by Section 7.3 hereof, if a
greater amount, Executive’s annual base salary at the rate in effect immediately prior to the
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Change of Control. For purposes of this Section 1.13, Executive’s annual base salary shall be
determined without regard to the last sentence of Section 4.1 hereof.
ARTICLE
II
EMPLOYMENT AND DUTIES
EMPLOYMENT AND DUTIES
2.1 Employment; Effective Date. Company agrees to employ Executive, and Executive
agrees to be employed by Company, beginning as of June 20, 2005 (the “Effective Date”) and
continuing for the period of time set forth in Article III of this Agreement, subject to the terms
and conditions of this Agreement.
2.2 Positions. From and after the Effective Date, Company shall employ Executive in
the position of President and Chief Executive Officer of Company or in such other position or
positions as the parties mutually may agree. Executive shall report to the Board. On the
Effective Date, Company shall cause Executive to be elected to serve on the Board as a full member
thereof, and thereafter Company shall use reasonable efforts to continue to cause Executive to be
nominated to serve on the Board. It is the intention of the parties that Executive will be elected
to and will serve on the Board while serving hereunder as President and Chief Executive Officer of
Company.
2.3 Duties and Services. Executive agrees to serve in the positions referred to in
Section 2.2 hereof and to perform diligently and to the best of his abilities the duties and
services appertaining to such offices, as well as such additional duties and services appropriate
to such offices which the parties mutually may agree upon from time to time. Executive’s
employment shall also be subject to the policies maintained and established by Company that are of
general applicability to Company’s employees, as such policies may be amended from time to time.
2.4 Other Interests. Executive agrees, during the period of his employment by Company,
to devote substantially all of his business time, energy and best efforts to the business and
affairs of Company and its subsidiaries. Notwithstanding the foregoing, the parties acknowledge
and agree that Executive may (a) serve as a director and perform services as a consultant for IPS
and I.E. Xxxxxx, (b) engage in and manage his passive personal investments, and (c) engage in
charitable and civic activities; provided, however, that the activities described in clauses (b)
and (c) shall be permitted so long as such activities do not conflict with the business and affairs
of Company or interfere with Executive’s performance of his duties hereunder.
2.5 Duty of Loyalty. Executive acknowledges and agrees that Executive owes a fiduciary
duty of loyalty, fidelity and allegiance to act in the best interests of Company and to do no act
that would injure the business, interests, or reputation of Company or any of its affiliates. In
keeping with these duties, Executive shall make full disclosure to Company of all business
opportunities pertaining to Company’s business and shall not appropriate for Executive’s own
benefit business opportunities concerning the subject matter of the fiduciary relationship.
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ARTICLE
III
TERM AND TERMINATION OF EMPLOYMENT
TERM AND TERMINATION OF EMPLOYMENT
3.1 Term. Unless sooner terminated pursuant to other provisions hereof, Company agrees
to employ Executive for the period beginning on the Effective Date and ending on the third
anniversary of the Effective Date; provided, however, that beginning with the second anniversary of
the Effective Date, said term of employment shall be extended automatically for an additional
successive one-year period as of each anniversary date of the Effective Date that occurs while this
Agreement is in effect; and provided further, however, that if, at any time prior to the date that
is 45 days before any such anniversary date of the Effective Date, either party shall provide the
other with a Notice of Termination stating that no such automatic extension shall occur, then
Executive’s employment shall terminate on the last day of the one-year period beginning on the
anniversary date of the Effective Date that next occurs after such notice is provided.
3.2 Company’s Right to Terminate. Notwithstanding the provisions of Section 3.1,
Company may terminate Executive’s employment under this Agreement at any time for any of the
following reasons by providing Executive with a Notice of Termination:
(a) upon (i) Executive becoming incapacitated by accident, sickness or other
circumstance which renders him mentally or physically incapable of performing the duties and
services required of him hereunder on a full-time basis for a period of at least 120
consecutive days or for a period of 180 days during any 12-month period or (ii) Executive’s
death;
(b) for Cause; or
(c) for any other reason whatsoever or for no reason at all, in the sole discretion of
Company.
Notwithstanding the foregoing, Company shall not have the right to terminate Executive’s employment
under this Agreement prior to the date that is six months after the Effective Date for any reason
other than Cause.
3.3 Executive’s Right to Terminate. Notwithstanding the provisions of Section 3.1,
Executive shall have the right to terminate his employment under this Agreement for any of the
following reasons by providing Company with a Notice of Termination:
(a) within 180 days of and in connection with or based upon Good Reason; or
(b) at any time for any other reason whatsoever, in the sole discretion of Executive.
3.4 Deemed Resignations. Unless otherwise agreed to in writing by Company and
Executive prior to the termination of Executive’s employment, any termination of Executive’s
employment shall constitute an automatic resignation of Executive as an officer of Company and each
affiliate of Company, and an automatic resignation of Executive from the Board (if applicable) and
from the board of directors of IPS, I.E. Xxxxxx, any affiliate of Company and
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from the board of directors or similar governing body of any corporation, limited liability
company or other entity in which Company or any affiliate holds an equity interest and with respect
to which board or similar governing body Executive serves as Company’s or such affiliate’s designee
or other representative.
ARTICLE
IV
COMPENSATION AND BENEFITS
COMPENSATION AND BENEFITS
4.1 Base Salary. During the term of this Agreement, Executive shall receive a minimum
annual base salary of $400,000. Executive’s annual base salary shall be reviewed annually by the
Board (or a committee thereof) and, in the sole discretion of the Board (or a committee thereof),
such annual base salary may be increased (but not decreased) effective as of any date determined by
the Board. Executive’s base salary shall be paid in equal installments in accordance with
Company’s standard policy regarding payment of compensation to executives but no less frequently
than monthly. For the period preceding the Combination, Executive agrees that his annual base
salary received from Company shall be reduced by the amount, if any, of the consulting fees paid in
cash to Executive by IPS and I.E. Xxxxxx.
4.2 Bonuses. Executive shall receive annual bonuses based on performance criteria
determined in the discretion of the Board, after reasonable consultation with Executive (it being
understood that the parties agree that Executive will be entitled to an annual bonus of not less
than 100% of his annual base salary at the rate then in effect, assuming that Company satisfies the
target(s) under the performance criteria established by the Board for such bonus). Notwithstanding
the foregoing, Executive shall be eligible for a bonus for the period beginning on the Effective
Date and ending on December 31, 2005 (the “2005 Bonus”) based on EBITDA achieved during the
calendar year ending on December 31, 2005. The 2005 Bonus, if any, shall be payable to Executive
within 30 days after the completion of Company’s year-end audit for the calendar year ending on
December 31, 2005. The 2005 Bonus, if any, shall be an amount equal to A multiplied by B, where:
A equals a fraction, the numerator of which is the number of days during the period beginning on
the Effective Date and ending on December 31, 2005, and the denominator of which is 365; and B
equals an amount determined in accordance with the following schedule:
EBITDA For Calendar Year | ||||
Ending on December 31, 2005 | ||||
(in $ millions) | Amount | |||
EBITDA less than $127.8
|
$ | 0 | ||
EBITDA equal to $127.8
|
$ | 200,000 | ||
EBITDA greater than $127.8 but less than
$156.2
|
An amount equal to sum of $200,000 plus the product of (x) the excess of EBITDA over $127.8 million multiplied by (y) .0140845 | |||
EBITDA greater than or equal to $156.2
|
$ | 600,000 |
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Notwithstanding the foregoing, the EBITDA targets set forth in the schedule above may be adjusted
by the Board based on any substantial acquisitions or divestitures, or significant increases or
decreases in capital expenditures, that occur after the Effective Date.
4.3 Other Perquisites. During his employment hereunder, (a) Company shall provide
Executive with an automobile allowance in the amount of $800 per month and (b) Executive and, to
the extent applicable, Executive’s spouse, dependents and beneficiaries, shall be allowed to
participate in all benefit plans and programs of Company, including improvements or modifications
of the same, which are now, or may hereafter be, available to similarly situated executives.
Company shall not, however, by reason of this Section 4.3, be obligated to institute, maintain, or
refrain from changing, amending, or discontinuing, any such benefit plan or program, so long as
such changes are similarly applicable to similar situated executives generally.
ARTICLE
V
PROTECTION OF INFORMATION
PROTECTION OF INFORMATION
5.1 Disclosure to and Property of Company. For purposes of this Article V, the term
“Company” shall include Complete, IPS and I.E. Xxxxxx, and any reference to “employment” or similar
terms shall include a director and/or consulting relationship. All information, trade secrets,
designs, ideas, concepts, improvements, product developments, discoveries and inventions, whether
patentable or not, that are conceived, made, developed or acquired by Executive, individually or in
conjunction with others, during the period of Executive’s employment by Company (whether during
business hours or otherwise and whether on Company’s premises or otherwise) that relate to
Company’s or any of its affiliates’ business, trade secrets, products or services (including,
without limitation, all such information relating to corporate opportunities, product
specification, compositions, manufacturing and distribution methods and processes, research,
financial and sales data, pricing terms, evaluations, opinions, interpretations, acquisition
prospects, the identity of customers or their requirements, the identity of key contacts within the
customer’s organizations or within the organization of acquisition prospects, or exploration,
production, marketing and merchandising techniques, prospective names and marks) and all writings
or materials of any type embodying any of such information, ideas, concepts, improvements,
discoveries, inventions and other similar forms of expression (collectively, “Confidential
Information”) shall be disclosed to Company, and are and shall be the sole and exclusive property
of Company or its affiliates. Moreover, all documents, videotapes, written presentations,
brochures, drawings, memoranda, notes, records, files, correspondence, manuals, models,
specifications, computer programs, E-mail, voice mail, electronic databases, maps, drawings,
architectural renditions, models and all other writings or materials of any type embodying any of
such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of
expression (collectively, “Work Product”) are and shall be the sole and exclusive property of
Company (or its affiliates). Executive agrees to perform all actions reasonably requested by
Company or its affiliates to establish and confirm such exclusive ownership. Upon termination of
Executive’s employment by Company, for any reason, Executive promptly shall deliver such
Confidential Information and Work Product, and all copies thereof, to Company. Notwithstanding the
preceding provisions of this Section 5.1, the terms “Confidential Information” and “Work Product”
do not, however, include (a) any
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information that, at the time of disclosure by Company, is available to the public other than
as a result of any act of Executive and (b) any information that Executive possessed prior to the
Effective Date.
5.2 Disclosure to Executive. Company will disclose to Executive, or place Executive in
a position to have access to or develop, Confidential Information and Work Product of Company (or
its affiliates); and/or will entrust Executive with business opportunities of Company (or its
affiliates); and/or will place Executive in a position to develop business good will on behalf of
Company (or its affiliates).
5.3 No Unauthorized Use or Disclosure. Executive agrees to preserve and protect the
confidentiality of all Confidential Information and Work Product of Company and its affiliates.
Executive agrees that he will not, at any time during or after the termination of Executive’s
employment with Company, make any unauthorized disclosure of, and shall prevent the removal from
Company premises of, Confidential Information or Work Product of Company or its affiliates, or make
any use thereof, except, in each case, in the carrying out of Executive’s responsibilities
hereunder. Executive shall use commercially reasonable efforts to cause all persons or entities to
whom any Confidential Information shall be disclosed by him hereunder to observe the terms and
conditions set forth herein as though each such person or entity was bound hereby. Executive shall
have no obligation hereunder to keep confidential any Confidential Information if and to the extent
disclosure thereof is specifically required by law; provided, however, that in the event disclosure
is required by applicable law, Executive shall provide Company with prompt notice of such
requirement prior to making any such disclosure, so that Company may seek an appropriate protective
order. At the request of Company at any time, Executive agrees to deliver to Company all
Confidential Information that he may possess or control. Executive agrees that all Confidential
Information of Company (whether now or hereafter existing) conceived, discovered or made by him
during the period of Executive’s employment by Company exclusively belongs to Company (and not to
Executive), and Executive will promptly disclose such Confidential Information to Company and
perform all actions reasonably requested by Company to establish and confirm such exclusive
ownership. Affiliates of Company shall be third party beneficiaries of Executive’s obligations
under this Article V. As a result of Executive’s employment by Company, Executive may also from
time to time have access to, or knowledge of, Confidential Information or Work Product of third
parties, such as customers, suppliers, partners, joint venturers, and the like, of Company and its
affiliates. Executive also agrees to preserve and protect the confidentiality of such third party
Confidential Information and Work Product to the same extent, and on the same basis, as Company’s
Confidential Information and Work Product.
5.4 Ownership by Company. If, during Executive’s employment by Company, Executive
creates any work of authorship fixed in any tangible medium of expression that is the subject
matter of copyright (such as videotapes, written presentations, or acquisitions, computer programs,
E-mail, voice mail, electronic databases, drawings, maps, architectural renditions, models,
manuals, brochures, or the like) relating to Company’s business, products, or services, whether
such work is created solely by Executive or jointly with others (whether during business hours or
otherwise and whether on Company’s premises or otherwise), including any Work Product, Company
shall be deemed the author of such work if the work is prepared by Executive in the scope of
Executive’s employment; or, if the work is not prepared by Executive within the
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scope of Executive’s employment but is specially ordered by Company as a contribution to a
collective work, as a part of a motion picture or other audiovisual work, as a translation, as a
supplementary work, as a compilation, or as an instructional text, then the work shall be
considered to be work made for hire and Company shall be the author of the work. If such work is
neither prepared by Executive within the scope of Executive’s employment nor a work specially
ordered that is deemed to be a work made for hire, then Executive hereby agrees to assign, and by
these presents does assign, to Company all of Executive’s worldwide right, title, and interest in
and to such work and all rights of copyright therein.
5.5 Assistance by Executive. During the period of Executive’s employment by Company,
Executive shall assist Company and its nominee, at any time, in the protection of Company’s or its
affiliates’ worldwide right, title and interest in and to Confidential Information and Work Product
and the execution of all formal assignment documents requested by Company or its nominee and the
execution of all lawful oaths and applications for patents and registration of copyright in the
United States and foreign countries. After Executive’s employment with Company terminates, at the
request from time to time and expense of Company or its affiliates, Executive shall reasonably
assist Company and its nominee, at reasonable times and for reasonable periods and for reasonable
compensation, in the protection of Company’s or its affiliates’ worldwide right, title and interest
in and to Confidential Information and Work Product and the execution of all formal assignment
documents requested by Company or its nominee and the execution of all lawful oaths and
applications for patents and registration of copyright in the United States and foreign countries.
5.6 Remedies. Executive acknowledges that money damages would not be sufficient remedy
for any breach of this Article V by Executive, and Company or its affiliates shall be entitled to
enforce the provisions of this Article V by terminating payments then owing to Executive under this
Agreement or otherwise and to specific performance and injunctive relief as remedies for such
breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a
breach of this Article V but shall be in addition to all remedies available at law or in equity,
including the recovery of damages from Executive and his agents. Executive specifically agrees
that (a) the provisions of this Article V are also for the benefit of IPS and I.E. Xxxxxx and (b)
IPS and I.E. Xxxxxx are third party beneficiaries of Executive’s obligations under this Article V.
ARTICLE
VI
STATEMENTS CONCERNING COMPANY AND EXECUTIVE
STATEMENTS CONCERNING COMPANY AND EXECUTIVE
6.1 Statements by Executive. Executive shall refrain, both during and after the
termination of the employment relationship, from publishing any oral or written statements about
Company, any of its affiliates or any of Company’s or such affiliates’ directors, officers,
employees, consultants, agents or representatives that (a) are slanderous, libelous or defamatory,
(b) disclose private information about or Confidential Information of Company, any of its
affiliates or any of Company’s or any such affiliates’ business affairs, directors, officers,
employees, consultants, agents or representatives, or (c) place Company, any of its affiliates, or
any of Company’s or any such affiliates’ directors, officers, employees, consultants, agents or
representatives in a false light before the public. A violation or threatened violation of this
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prohibition may be enjoined by the courts. The rights afforded Company and its affiliates
under this provision are in addition to any and all rights and remedies otherwise afforded by law.
6.2 Statements by Company. Company shall refrain, both during and after the
termination of the employment relationship, from publishing any oral or written statements about
Executive, any of his affiliates or any of such affiliates’ directors, officers, employees,
consultants, agents or representatives that (a) are slanderous, libelous or defamatory, (b)
disclose private information about or confidential information of Executive, any of his affiliates
or any of such affiliates’ business affairs, directors, officers, employees, consultants, agents or
representatives, or (c) place Executive, any of his affiliates, or any of such affiliates’
directors, officers, employees, consultants, agents or representatives in a false light before the
public. A violation or threatened violation of this prohibition may be enjoined by the courts.
The rights afforded Executive and his affiliates under this provision are in addition to any and
all rights and remedies otherwise afforded by law.
ARTICLE
VII
EFFECT OF TERMINATION OF EMPLOYMENT ON COMPENSATION
EFFECT OF TERMINATION OF EMPLOYMENT ON COMPENSATION
7.1 By Expiration and Certain Other Terminations. If Executive’s employment hereunder
shall terminate upon the expiration of the term provided in Section 3.1 hereof because either party
has provided to the other party a Notice of Termination pursuant to Section 3.1 hereof, or if
Executive’s employment hereunder shall terminate for any reason except those described in Sections
7.2 and 7.3 hereof, then all compensation and all benefits to Executive hereunder shall continue to
be provided until the date of such termination of employment and such compensation and benefits
shall terminate contemporaneously with such termination of employment.
7.2 By Company Without Cause or by Executive for Good Reason Prior to Age 63 and Other Than
During the Protective Period. Subject to Section 7.3 hereof, if, prior to Executive’s
attainment of age 63 and prior to the expiration of the term provided in Section 3.1 hereof, either
Executive voluntarily terminates employment with Company for Good Reason or Executive’s employment
hereunder shall be terminated by Company, then, upon such termination, regardless of the reason
therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously
with the termination of such employment; provided, however, that if any such termination shall be
by Executive for Good Reason or by Company for any reason other than those encompassed by Sections
3.2(a) or 3.2(b) hereof (and such termination does not occur within the Protective Period), then
Executive shall receive the following compensation and benefits from Company:
(a) Company shall pay to Executive when otherwise due Executive’s Termination Base
Salary through the Date of Termination.
(b) Company shall pay to Executive a bonus for the year in which the Date of
Termination occurred in an amount determined in good faith by the Board in accordance with
the performance criteria established pursuant to Section 4.2 hereof and based on Company’s
performance relative to such criteria for such year through the Date of Termination and
pro-rated through and including the Date of Termination (based on the
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ratio of the number of days Executive was employed by Company during such year to 365),
payable in a lump-sum within 30 days following such Date of Termination.
(c) Effective as of the Date of Termination, Company shall pay to Executive an amount
equal to two times the sum of the Termination Base Salary and the Average Annual Bonus,
payable in a lump-sum within 30 days following such Date of Termination.
(d) All restricted shares, restricted stock units, performance shares and performance
units (including those under any stock match program) of Executive shall be and become 100%
vested and all restrictions thereon shall lapse as of the Date of Termination and Company
shall promptly deliver such shares to Executive.
(e) Notwithstanding any provisions to the contrary in any of Company’s stock option
plans or option agreements thereunder, on the Date of Termination all outstanding unvested
stock options, if any, granted to Executive under any of Company’s stock option plans (or
options substituted therefor covering the stock of a successor corporation) shall be and
become fully vested and exercisable as to all shares of stock covered thereby as of the Date
of Termination.
(f) Company shall provide Executive with the additional benefits described in Section
7.4 hereof.
7.3 By Company Without Cause or by Executive for Good Reason During the Protective
Period. In the event that, within the Protective Period and prior to the expiration of the
term provided in Section 3.1 hereof, either Executive voluntarily terminates employment with
Company for Good Reason or Company terminates Executive’s employment for any reason other than
those encompassed by Sections 3.2(a) or 3.2(b) hereof, then, in lieu of the compensation and
benefits described in Section 7.2 hereof, Executive shall receive the following compensation and
benefits from Company:
(a) Company shall pay to Executive when otherwise due Executive’s Termination Base
Salary through the Date of Termination.
(b) Company shall pay to Executive a bonus for the year in which the Date of
Termination occurred in an amount determined in good faith by the Board in accordance with
the performance criteria established pursuant to Section 4.2 hereof and based on Company’s
performance relative to such criteria for such year through the Date of Termination and
pro-rated through and including the Date of Termination (based on the ratio of the number of
days Executive was employed by Company during such year to 365), payable in a lump-sum
within 30 days following such Date of Termination.
(c) Effective as of the Date of Termination, Company shall pay to Executive an amount
equal to three times the sum of the Termination Base Salary and the Average Annual Bonus,
payable in a lump-sum within 30 days following such Date of Termination.
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(d) All restricted shares, restricted stock units, performance shares and performance
units (including those under any stock match program) of Executive shall be and become 100%
vested and all restrictions thereon shall lapse as of the Date of Termination and Company
shall promptly deliver such shares to Executive.
(e) Executive shall become and be fully vested in Executive’s accrued benefits under
all qualified pension, nonqualified pension, profit sharing, 401(k), deferred compensation
and supplemental plans maintained by Company for Executive’s benefit, except to that the
extent the acceleration of vesting of such benefits would violate any applicable law or
require Company to accelerate the vesting of the accrued benefits of all participants in
such plan or plans, in which case Company shall pay Executive a lump sum payment, within 30
days following the Date of Termination, in an amount equal to the present value of such
unvested accrued benefits. In addition, if such a lump sum payment is payable, Company
shall make an additional gross-up payment to Executive in an amount such that the net amount
of the lump sum payment and such additional gross-up payment retained by Executive, after
the calculation and deduction of all federal, state and local income tax and employment tax
(including any interest or penalties imposed with respect to such taxes) on such lump sum
payment and additional gross-up payment, and taking into account any lost or reduced tax
deductions on account of such gross-up payment, shall be equal to such lump sum payment.
(f) Notwithstanding any provisions to the contrary in any of Company’s stock option
plans or option agreements thereunder, on the Date of Termination all outstanding unvested
stock options, if any, granted to Executive under any of Company’s stock option plans (or
options substituted therefor covering the stock of a successor corporation) shall be and
become fully vested and exercisable as to all shares of stock covered thereby as of the Date
of Termination.
(g) Executive (or in the event of his death, his estate) shall be entitled to exercise
his respective grants of vested stock options until 12 months following the Date of
Termination; provided, however, that if Company’s common stock is publicly traded as of the
Date of Termination and if any such option is not in the money on the Date of Termination
(i.e., the exercise price per share under such option exceeds the fair market value per
share of Company’s common stock on the Date of Termination), then the 12-month exercise
period referred to above shall not commence for such option until the last day of a
30-trading day period following the Date of Termination during which the average closing
market price of a share of Company’s common stock is at least equal to the exercise price
per share under such option. Notwithstanding the provisions of this Section 7.3(g), no
option may be exercised at any time past the term of such option.
(h) Company shall provide Executive with the additional benefits described in Section
7.4 hereof.
7.4 Additional Benefits.
(a) Throughout the term of the Severance Payout Period for a termination of Executive’s
employment covered by Section 7.2 hereof, or throughout the term of the
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Change of Control Payout Period for a termination of Executive’s employment covered by
Section 7.3 hereof, Company shall continue to provide Executive and Executive’s eligible
family members, based on the cost sharing arrangement between Executive and Company on the
Date of Termination, with medical and dental health benefits and disability coverage and
benefits at least equal to those which would have been provided to Executive if Executive’s
employment had not been terminated or, if more favorable to Executive, as in effect
generally at any time during such Severance Payout Period or Change of Control Payout
Period, as applicable. Notwithstanding the foregoing, if Executive becomes re-employed and
is eligible to receive medical, dental and disability benefits under another employer’s
plans, Company’s obligations under this Section 7.4 shall be reduced to the extent
comparable benefits are actually received by Executive during the Severance Payout Period or
Change of Control Payout Period, as applicable, and any such benefits actually received by
Executive shall be promptly reported by Executive to Company. In the event Executive is
ineligible under the terms of Company’s benefit plans or programs to continue to be so
covered, Company shall provide Executive with substantially equivalent coverage through
other sources or will provide Executive with a lump sum payment in such amount that, after
all taxes on that amount, shall be equal to the cost to Executive of providing Executive
such benefit coverage. The lump sum shall be determined on a present value basis using the
interest rate provided in Section 1274(b)(2)(B) of the Internal Revenue Code of 1986, as
amended (the “Code”), on the Date of Termination. In addition, if such a lump sum payment
is payable, Company shall make an additional gross-up payment to Executive in an amount such
that the net amount of the lump sum payment and such additional gross-up payment retained by
Executive, after the calculation and deduction of all federal, state and local income tax
and employment tax (including any interest or penalties imposed with respect to such taxes)
on such lump sum payment and additional gross-up payment, and taking into account any lost
or reduced tax deductions on account of such gross-up payment, shall be equal to such lump
sum payment.
(b) Throughout the term of the Severance Payout Period or Change of Control Payout
Period, as applicable, Executive shall be entitled to receive outplacement services, payable
by Company, with an aggregate cost not to exceed 15% of Executive’s Termination Base Salary,
with an executive outplacement service firm reasonably acceptable to Company and Executive.
(c) Throughout the Severance Payout Period or Change of Control Payout Period, as
applicable, Company shall continue to pay to Executive a monthly car allowance payable on a
regular payroll basis based on the amount of such allowance as in effect as of the Date of
Termination.
7.5 No Duty to Mitigate Losses. Executive shall have no duty to find new employment
following the termination of his employment under circumstances which require Company to pay any
amount to Executive pursuant to this Article VII. Any salary or remuneration received by Executive
from a third party for the provision of personal services (whether by employment or by functioning
as an independent contractor) following the termination of his employment under circumstances
pursuant to which Sections 7.2 or 7.3 and
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7.4 apply shall not reduce Company’s obligation to make a payment to Executive (or the amount
of such payment) pursuant to the terms of any such Section.
7.6 Liquidated Damages. In light of the difficulties in estimating the damages for an
early termination of this Agreement, Company and Executive hereby agree that the payments, if any,
to be received by Executive pursuant to Sections 7.2 or 7.3 and 7.4 shall be received by Executive
as liquidated damages.
ARTICLE
VIII
NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT
8.1 Definitions. As used in this Article VIII, the following terms shall have the
following meanings:
“Business” means (a) during the period of Executive’s employment by Company, the services
provided by Company, IPS, I.E. Xxxxxx and their respective subsidiaries during such period and
other services that are functionally equivalent to the foregoing, and (b) during the portion of the
Prohibited Period that begins on the termination of Executive’s employment with Company, the
services provided by Company, IPS, I.E. Xxxxxx and their respective subsidiaries at the time of
such termination of employment and other services that are functionally equivalent to the
foregoing.
“Competing Business” means any business, individual, partnership, firm, corporation or other
entity which wholly or in any significant part engages in any business competing with the Business
in the Restricted Area. In no event will Company, IPS, I.E. Xxxxxx or any of their respective
subsidiaries be deemed a Competing Business.
“Governmental Authority” means any governmental, quasi-governmental, state, county, city or
other political subdivision of the United States or any other country, or any agency, court or
instrumentality, foreign or domestic, or statutory or regulatory body thereof.
“Legal Requirement” means any law, statute, code, ordinance, order, rule, regulation,
judgment, decree, injunction, franchise, permit, certificate, license, authorization, or other
directional requirement (including, without limitation, any of the foregoing that relates to
environmental standards or controls, energy regulations and occupational, safety and health
standards or controls including those arising under environmental laws) of any Governmental
Authority.
“Prohibited Period” means the period during which Executive is employed by Company hereunder
and a period of 18 months thereafter. Notwithstanding the foregoing, the Prohibited Period shall
immediately terminate (a) on the date of Executive’s termination of employment with Company if such
termination is for the reason encompassed in Section 3.2(a)(i) hereof or (b) on the date Company
breaches its obligations under either Section 7.2 or 7.3 hereof (if and as applicable) (it being
understood and agreed, however, that Executive shall continue to be entitled to receive all
consideration required to be paid under Section 7.2 or 7.3 hereof (if and as applicable)).
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“Restricted Area” means the State of Texas and any other geographical area in which Company,
IPS, I.E. Xxxxxx or any of their respective subsidiaries engage in the Business during the period
during which Executive is employed hereunder.
8.2 Non-Competition; Non-Solicitation. Executive and Company agree to the
non-competition and non-solicitation provisions of this Article VIII (i) as part of the
consideration for the compensation and benefits to be paid to Executive hereunder, (ii) to protect
the trade secrets and confidential information of Company or its affiliates disclosed or entrusted
to Executive by Company or its affiliates or created or developed by Executive for Company or its
affiliates, the business goodwill of Company or its affiliates developed through the efforts of
Executive and/or the business opportunities disclosed or entrusted to Executive by Company or its
affiliates and (iii) as an additional incentive for Company to enter into this Agreement.
(a) Subject to the exceptions set forth in section 8.2(b) below, Executive expressly
covenants and agrees that during the Prohibited Period, (i) he will refrain from carrying on
or engaging in, directly or indirectly, any Competing Business in the Restricted Area and
(ii) he will not, and he will cause his affiliates not to, directly or indirectly, own,
manage, operate, join, become an employee of, control or participate in or be connected with
or loan money to, sell or lease equipment to or sell or lease real property to any business,
individual, partnership, firm, corporation or other entity which engages in a Competing
Business in the Restricted Area.
(b) Notwithstanding the restrictions contained in Section 8.2(a), Executive or any of
his affiliates may own an aggregate of not more than 2.5% of the outstanding stock of any
class of any corporation engaged in a Competing Business, if such stock is listed on a
national securities exchange or regularly traded in the over-the-counter market by a member
of a national securities exchange, without violating the provisions of Section 8.2(a),
provided that neither Executive nor any of his affiliates has the power, directly or
indirectly, to control or direct the management or affairs of any such corporation and is
not involved in the management of such corporation.
(c) Executive further expressly covenants and agrees that during the Prohibited Period,
he will not, and he will cause his affiliates not to (i) engage or employ, or solicit or
contact with a view to the engagement or employment of, any person who is an officer or
employee of Company, IPS, I.E. Xxxxxx or any of their respective affiliates or (ii) canvass,
solicit, approach or entice away or cause to be canvassed, solicited, approached or enticed
away from Company, IPS, I.E. Xxxxxx or any of their respective subsidiaries any person who
or which is a customer of any of such entities during the period during which Executive is
employed by Company. Notwithstanding the foregoing, the restrictions of clause (i) of this
Section 8.2(c) shall not apply with respect to (A) an officer or employee whose employment
has been involuntarily terminated by his or her employer (other than for cause), (B) an
officer or employee who has voluntarily terminated employment with Company, IPS, I.E. Xxxxxx
and their respective affiliates and who has not been employed by any of such entities for at
least one year, (C) an employee who is paid on an hourly basis, or (D) an officer or
employee who responds to a general solicitation that is not specifically directed at
officers and employees of Company, IPS, I.E. Xxxxxx or any of their respective affiliates.
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8.3 Relief. Executive and Company agree and acknowledge that the limitations as to
time, geographical area and scope of activity to be restrained as set forth in Section 8.2 hereof
are reasonable and do not impose any greater restraint than is necessary to protect the legitimate
business interests of Company. Executive and Company also acknowledge that money damages would not
be sufficient remedy for any breach of this Article VIII by Executive, and Company or its
affiliates shall be entitled to enforce the provisions of this Article VIII by terminating payments
then owing to Executive under this Agreement or otherwise and to specific performance and
injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be
deemed the exclusive remedies for a breach of this Article VIII but shall be in addition to all
remedies available at law or in equity, including the recovery of damages from Executive and his
agents.
8.4 Reasonableness; Enforcement. Executive hereby represents to Company that he has
read and understands, and agrees to be bound by, the terms of this Article VIII. Executive
acknowledges that the geographic scope and duration of the covenants contained in this Article VIII
are the result of arm’s-length bargaining and are fair and reasonable in light of (a) the nature
and wide geographic scope of the operations of the Business, (b) Executive’s level of control over
and contact with the Business in all jurisdictions in which it is conducted, (c) the fact that the
Business is conducted throughout the Restricted Area and (d) the amount of compensation that
Executive is receiving in connection with the performance of his duties hereunder. It is the
desire and intent of the parties that the provisions of this Article VIII be enforced to the
fullest extent permitted under applicable Legal Requirements, whether now or hereafter in effect
and therefore, to the extent permitted by applicable Legal Requirements, Executive and Company
hereby waive any provision of applicable Legal Requirements that would render any provision of this
Article VIII invalid or unenforceable.
8.5 References to IPS and I.E. Xxxxxx. Notwithstanding the preceding provisions of
this Article VIII, (a) Executive’s obligations under this Article VIII with respect to IPS (and
references to IPS in the terms “Business,” “Competing Business” and “Restricted Area” in Section
8.1 hereof) for the period preceding the Combination shall apply only if, at the relevant time,
Executive is providing services to IPS as a director and/or consultant, (b) Executive’s obligations
under this Article VIII with respect to I.E. Xxxxxx (and references to I.E. Xxxxxx in the terms
“Business,” “Competing Business” and “Restricted Area” in Section 8.1 hereof) for the period
preceding the Combination shall apply only if, at the relevant time, Executive is providing
services to I.E. Xxxxxx as a director and/or consultant, (c) Executive’s obligations under this
Article VIII with respect to IPS (and references to IPS in the terms “Business,” “Competing
Business” and “Restricted Area” in Section 8.1 hereof) from and after the Combination shall apply
only if IPS was included in the Combination or if, at the relevant time, Executive is providing
services to IPS as a director and/or consultant, and (d) Executive’s obligations under this Article
VIII with respect to I.E. Xxxxxx (and references to I.E. Xxxxxx in the terms “Business,” “Competing
Business” and “Restricted Area” in Section 8.1 hereof) from and after the Combination shall apply
only if I.E. Xxxxxx was included in the Combination or if, at the relevant time, Executive is
providing services to I.E. Xxxxxx as a director and/or consultant. For purposes of the preceding
sentence, the phrase “at the relevant time” shall mean (i) with respect to the portion of the
Prohibited Period preceding the date of the termination of Executive’s employment with Company, the
period during which Executive is employed by Company, and (ii) with respect to the portion of the
Prohibited Period that begins on the date of termination of
17
Executive’s employment with Company, the date of such termination of employment. Subject to
the foregoing, Executive specifically agrees that (A) the provisions of this Article VIII are also
for the benefit of IPS and I.E. Xxxxxx and (B) IPS and I.E. Xxxxxx are third party beneficiaries of
Executive’s obligations under this Article VIII.
8.6 Reformation. Company and Executive agree that the foregoing restrictions are
reasonable under the circumstances and that any breach of the covenants contained in this Article
VIII would cause irreparable injury to Company. Executive understands that the foregoing
restrictions may limit Executive’s ability to engage in certain businesses anywhere in the United
States during the Prohibited Period, but acknowledges that Executive will receive sufficiently high
remuneration and other benefits from Company to justify such restriction. Further, Executive
acknowledges that his skills are such that he can be gainfully employed in non-competitive
employment, and that the agreement not to compete will in no way prevent him from earning a living.
Nevertheless, if any of the aforesaid restrictions are found by a court of competent jurisdiction
to be unreasonable, or overly broad as to geographic area or time, or otherwise unenforceable, the
parties intend for the restrictions herein set forth to be modified by the court making such
determination so as to be reasonable and enforceable and, as so modified, to be fully enforced. By
agreeing to this contractual modification prospectively at this time, Company and Executive intend
to make this provision enforceable under the law or laws of all applicable States so that the
entire agreement not to compete and this Agreement as prospectively modified shall remain in full
force and effect and shall not be rendered void or illegal. Such modification shall not affect the
payments made to Executive under this Agreement.
ARTICLE
IX
EXCISE TAXES AND GROSS-UP PAYMENTS
EXCISE TAXES AND GROSS-UP PAYMENTS
9.1 Excise Taxes and Gross-up Payments. Notwithstanding anything to the contrary in
this Agreement, in the event that any payment, distribution or provision of a benefit by Company to
or for the benefit of Executive, whether paid or payable, distributed or distributable or provided
or to be provided pursuant to the terms of this Agreement or otherwise (a “Payment”), would be
subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest or penalties, are
hereinafter collectively referred to as the “Excise Tax”), Company shall pay to Executive an
additional payment (a “Gross-up Payment”) in an amount such that after payment by Executive of all
taxes (including any interest or penalties imposed with respect to such taxes), including any
Excise Tax imposed on any Gross-up Payment, Executive retains an amount of the Gross-up Payment
equal to the Excise Tax imposed upon the Payments. Company and Executive shall make an initial
determination as to whether a Gross-up Payment is required and the amount of any such Gross-up
Payment. Executive shall notify Company in writing of any claim by the Internal Revenue Service
which, if successful, would require Company to make a Gross-up Payment (or a Gross-up Payment in
excess of that, if any, initially determined by Company and Executive) within five days of the
receipt of such claim. Company shall notify Executive in writing at least five days prior to the
due date of any response required with respect to such claim if it plans to contest the claim. If
Company decides to contest such claim, Executive shall cooperate fully with Company in such action;
provided, however, Company shall bear and pay directly or indirectly all costs and expenses
(including additional interest and
18
penalties) incurred in connection with such action and shall indemnify and hold Executive
harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of Company’s action. If, as a result of Company’s action
with respect to a claim, Executive receives a refund of any amount paid by Company with respect to
such claim, Executive shall promptly pay such refund to Company. If Company fails to timely notify
Executive whether it will contest such claim or Company determines not to contest such claim, then
Company shall immediately pay to Executive the portion of such claim, if any, which it has not
previously paid to Executive.
ARTICLE
X
DISPUTE RESOLUTION
DISPUTE RESOLUTION
10.1 Dispute Resolution. If any dispute arises out of this Agreement, the “complaining
party” shall give the “other party” written notice of such dispute. The other party shall have 10
business days to resolve the dispute to the complaining party’s satisfaction. If the dispute is
not resolved by the end of such period, the complaining party may by written notice (the “Notice”)
demand arbitration of the dispute as set out below, and each party hereto expressly agrees to
submit to, and be bound by, such arbitration.
(a) Each party will, within 10 business days of the Notice, nominate an arbitrator.
Each nominated arbitrator must be someone experienced in dispute resolution and of good
character without moral turpitude and not within the employ or direct or indirect influence
of the nominating party. The two nominated arbitrators will, within 10 business days of
nomination, agree upon a third arbitrator. If the two appointed arbitrators cannot agree on
a third arbitrator within such period, the parties may seek such an appointment through any
permitted court proceeding or by the American Arbitration Association (“AAA”). The three
arbitrators will set the rules and timing of the arbitration, but will generally follow the
rules of the AAA and this Agreement where same are applicable and shall provide for written
fact findings.
(b) The arbitration hearing will in no event take place more than 90 days after the
appointment of the third arbitrator.
(c) The arbitration will take place in Houston, Texas unless otherwise unanimously
agreed to by the parties.
(d) The results of the arbitration and the decision of the arbitrators will be final
and binding on the parties and each party agrees and acknowledges that these results shall
be enforceable in a court of law.
ARTICLE
XI
MISCELLANEOUS
MISCELLANEOUS
11.1 Successor Agreement. Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of Company to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that Company would be required to perform if no succession had
taken place. Failure of the successor to so assume shall constitute a breach of this
19
Agreement and entitle Executive to the benefits hereunder as if triggered by a termination not
for Cause.
11.2 Notices. For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly given (a) when
received if delivered personally or by courier, (b) on the date receipt is acknowledged if
delivered by certified mail, postage prepaid, return receipt requested or (c) one day after
transmission if sent by facsimile transmission with confirmation of transmission, as follows:
If to Executive, addressed to:
|
Xxxxxx X. Xxxxxxx | |
000 Xxxxxxxx | ||
Xxxxxxx, Xxxxx 00000 | ||
Facsimile: | ||
If to Company, addressed to:
|
Complete Energy Services, Inc. | |
000 Xxxxxx, Xxxxx 0000 | ||
Xxxxxxx, Xxxxx 00000 | ||
Attention: Xxxxxx X. Xxxxx | ||
Facsimile: (000) 000-0000 |
or to such other address as either party may furnish to the other in writing in accordance
herewith, except that notices or changes of address shall be effective only upon receipt.
11.3 Applicable Law; Submission to Jurisdiction.
(a) This Agreement is entered into under, and shall be governed for all purposes by,
the laws of the State of Texas, without regard to conflicts of laws principles thereof.
(b) With respect to any claim or dispute related to or arising under this Agreement,
the parties hereto hereby consent to the exclusive jurisdiction, forum and venue of the
state and federal courts located in the State of Texas.
11.4 No Waiver. No failure by either party hereto at any time to give notice of any
breach by the other party of, or to require compliance with, any condition or provision of this
Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time.
11.5 Severability. If a court of competent jurisdiction determines that any provision
of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that
provision shall not affect the validity or enforceability of any other provision of this Agreement,
and all other provisions shall remain in full force and effect.
11.6 Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together will constitute one and the same
Agreement.
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11.7 Withholding of Taxes and Other Executive Deductions. Company may withhold from any
benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as
may be required pursuant to any law or governmental regulation or ruling and all other normal
Executive deductions made with respect to Company’s employees generally.
11.8 Headings. The Section headings have been inserted for purposes of convenience and
shall not be used for interpretive purposes.
11.9 Gender and Plurals. Wherever the context so requires, the masculine gender
includes the feminine or neuter, and the singular number includes the plural and conversely.
11.10 Affiliate. As used in this Agreement, the term “affiliate” as used with respect
to a particular person or entity shall mean any other person or entity which owns or controls, is
owned or controlled by, or is under common ownership or control with, such particular person or
entity.
11.11 Assignment. This Agreement and the rights hereunder are personal in nature and
may not be assigned by Company or Executive without the prior written consent of the other;
provided, however, that effective as of the effective date of the Combination, Complete shall
assign this Agreement to the Parent and shall cause the Parent to assume in writing the rights and
obligations of the Company under this Agreement. Executive hereby consents to the assignment of
this Agreement by Complete to the Parent effective as of the effective date of the Combination. In
addition, any payment owed to Executive hereunder after the date of Executive’s death shall be paid
to his estate. Subject to the preceding provisions of this Section, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns.
11.12 Term. Termination of this Agreement shall not affect any right or obligation of
any party which is accrued or vested prior to such termination. Without limiting the scope of the
preceding sentence, the provisions of Articles V, VI and VIII shall survive any termination of the
employment relationship and/or of this Agreement.
11.13 Entire Agreement. Except as provided in any signed written agreement
contemporaneously or hereafter executed by Company and Executive, this Agreement constitutes the
entire agreement of the parties with regard to the subject matter hereof, and contains all the
covenants, promises, representations, warranties and agreements between the parties with respect to
employment of Executive by Company. Without limiting the scope of the preceding sentence, all
understandings and agreements preceding the date of execution of this Agreement and relating to the
subject matter hereof are hereby null and void and of no further force and effect.
11.14 Modification; Waiver. Any modification to or waiver of this Agreement will be
effective only if it is in writing and signed by the party to be charged.
11.15 Actions by the Board. Any and all determinations or other actions required of the
Board hereunder that relate specifically to Executive’s employment by Company or the terms and
conditions of such employment shall be made by the members of the Board other than Executive, and
Executive shall not have any right to vote or decide upon any such matter.
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11.16 Representations and Warranties. Complete represents and warrants to Executive
that the execution, delivery and performance of this Agreement have been authorized by Complete’s
Board of Directors. Executive represents and warrants to Company that (a) he does not have any
agreements with his prior employer that will prohibit him from working for Company or fulfilling
his duties and obligations to Company pursuant to this Agreement and (b) he has complied with all
duties imposed on him with respect to his former employer, e.g., Executive does not possess any
tangible property belonging to his former employer.
[Signatures begin on next page.]
22
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the 20th day of
June, 2005, effective as of the Effective Date.
COMPLETE ENERGY SERVICES, INC. |
|||||
By: | /s/ Xxxxxx X. Xxxxx | ||||
Name: | Xxxxxx X. Xxxxx | ||||
Title: | Chairman of the Board of Directors | ||||
/s/ Xxxxxx X. Xxxxxxx | |||||
Xxxxxx X. Xxxxxxx |
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