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EXHIBIT 10.24
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into
by and between Bayard Drilling Technologies, Inc., a Delaware corporation (the
"Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇ III, a resident of Oklahoma City, Oklahoma (the
"Executive"), effective as of July 16, 1997.
1. Introduction. The Company desires to retain the
Executive as its Vice President - Chief Financial Officer, and the Executive
desires to be employed by the Company in this position. To this end, the
Executive and the Company believe that an agreement is necessary and
appropriate to outline the employment relationship that will exist between the
Company and the Executive. Therefore, the Company and the Executive intend by
this Agreement to specify the terms and conditions of the Executive's
employment relationship with the Company.
2. Employment. The Company hereby employs the Executive
and the Executive hereby accepts employment with the Company upon the terms and
subject to the conditions set forth herein.
3. Duties and Responsibilities.
(a) Subject to the power of the Board to elect and remove
officers, the Executive shall serve the Company as its Vice President - Chief
Financial Officer and shall perform, faithfully and diligently, the services
and functions relating to such offices or otherwise reasonably incident to such
offices as may be designated from time to time by the Board.
(b) The Executive shall, during the term of this
Agreement (or any extension thereof), devote such of his time, attention,
energies and business efforts to his duties as an executive of the Company as
are reasonably necessary to carry out the duties specified in Section 3(a).
The Executive shall not, during the term of this Agreement (or any extension
thereof), engage in any other business activity (regardless of whether such
business activity is pursued for gain, profit or other pecuniary advantage) if
such business activity would impair the Executive's ability to carry out his
duties hereunder. This Section 3(b), however, shall not be construed to
prevent the Executive from (i) investing his personal assets as a passive
investor in such form or manner as will not contravene the best interests of
the Company, (ii) participating in various charitable efforts, or (iii) serving
as a director or member of a committee of any charitable or civic organization;
provided, however, Executive will not serve as a director or member of any
committee of an operating company unless such position has previously been
approved in writing by the Board.
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4. Compensation and Other Employee Benefits. As
compensation for his services under the terms of this Agreement:
(a) The Executive shall be paid an annual salary of not
less than $105,000, payable in accordance with the then current payroll
policies of the Company. Such annual salary is herein referred to as the "Base
Salary." The Base Salary shall be reviewed annually by the Board and shall be
subject to adjustment in the sole discretion of the Board based upon a review
of the performance and accomplishments of the Executive.
(b) If the Company's earnings before deducting interest,
taxes and depreciation during any full quarterly period (commencing with the
first quarter of 1997) equal or exceed the greater of (i) $1,500,000, or (ii)
five percent (5%) of the sum of the Company's stockholders' equity and
long-term debt (averaged on a daily basis throughout such quarterly period),
then the Executive shall be eligible to receive a quarterly bonus award of
$5,000 (each, a "Quarterly Bonus"). Each earned Quarterly Bonus, if any, is
payable within 15 business days after the Company's unaudited financial
statements for such quarterly period become available.
(c) The Executive will be granted non-transferrable
options to purchase 25,000 shares of common stock of the Company, par value
$.01 per share (the "Common Stock"). The exercise price for the initial grant
of options will be $20.00 per share of Common Stock. The options will be
granted under the Company's existing stock option and stock award plan (the
"Stock Plan"), which plan will require that the Executive enter into an option
agreement (the "Option Agreement). The Option Agreement will provide, among
things, that the options, when granted, will vest in equal amounts on the
first, second, third, fourth and fifth anniversary of grant, subject to
continued employment by the Executive. The Option Agreement will restrict the
transfer of shares of Common Stock issuable under the options. The Executive
agrees to become a party to the Company's Amended and Restated Stockholders and
Voting Agreement, dated as of May 1, 1997, and as subsequently amended, by and
among the Company's stockholders and the Company (as amended, the "Stockholders
Agreement"), and the Common Stock issuable upon exercise of the options will be
subject to the terms and conditions of the Stockholders' Agreement.
(d) Subject to the right of the Company to amend or
terminate any employee and/or group or executive benefit plan, the Executive
shall be entitled to receive the following employee benefits:
(i) The Executive shall have the right to
participate in all current or future employee and/or group welfare
benefit plans of the Company that are available to its exempt salaried
employees generally (including, without limitation, disability,
accident, medical, life insurance and hospitalization plans) at the
same level and on the same basis as other officers of the Company
participate.
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(ii) The Executive shall have the right to
participate in all future executive benefit plans of the Company,
including, without limitation, any pension or retirement plan that may
hereafter be established, all in accordance with the Company's regular
practices with respect to its officers.
(iii) The Executive shall be entitled to
reimbursement from the Company for reasonable out- of-pocket business
expenses incurred by him in the course of the performance of his
duties during the term of this Agreement, subject to receipt of
appropriate supporting documentation.
(iv) The Executive shall be entitled to such
vacation, holidays and other paid or unpaid leaves of absence as are
consistent with the Company's normal policies or as are otherwise
approved by the Board.
5. Term.
(a) Subject to the earlier termination pursuant to the
provisions of Section 7, the term of this Agreement shall commence on July 16,
1997 and shall end on June 30, 1999. The term of this Agreement is referred to
herein as the "Employment Term."
(b) The term of this Agreement may be extended for
additional one year periods by mutual consent of the Executive and the Board,
acting on behalf of the Company.
6. Competition and Confidentiality.
(a) If during the Employment Term (or any extension
thereof), (i) the employment of the Executive is terminated pursuant to Section
7(a) or (ii) the Executive voluntarily terminates his employment pursuant to
Section 7(d), then for two years from the date of such termination or
nonrenewal, as the case may be, the Executive shall not, without the prior
written consent of the Board (which consent shall not be unreasonably
withheld), with respect to the States of Oklahoma, Texas, New Mexico and
Louisiana and any other state in which the Company owns, leases or operates
assets at the time of termination or nonrenewal:
(i) accept employment or render service to any person,
firm or corporation that is engaged in a business directly competitive
with the business then engaged in by the Company or any of its
affiliated companies in such states; or
(ii) directly or indirectly enter into or in any manner
take part in or lend his name, counsel or assistance to any venture,
enterprise, business or endeavor, either as proprietor, principal,
investor, partner, director, officer, employee, consultant, advisor,
agent, independent contractor, or in any other capacity whatsoever,
for any purpose that would be competitive with the business of the
Company or any of its affiliated companies in such states; or
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(iii) directly or indirectly solicit, sell, call upon or
otherwise contact any customer of the Company or any of its affiliated
companies or any person who has been in contact with the Company or
such affiliated company with respect to the Company's or such
affiliate's business, for the purpose of selling or providing the same
or similar products or services provided or offered by the Company or
its affiliate to such customers or prospective customers; or
(iv) directly or indirectly solicit, entice, persuade or
induce any individual who presently is, or at any time during such
period shall be, an employee of the Company or any of its affiliated
companies or any of their respective successors, to terminate or
refrain from renewing or extending his or her employment with the
Company, any of its affiliated companies or any of their successors,
or to be employed by or enter into a contractual relationship with the
Executive or any other individual, person or entity, and Executive
shall not approach any employee for any such purpose or authorize or
knowingly cooperate with the taking of any action by any other
individual, person or entity.
(b) It is the desire and intent of each of the parties
that the provisions of Section 6(a) shall be enforced to the fullest extent
permissible under the laws and public policies applied in the State of
Oklahoma. Accordingly, if any particular portion of Section 6(a) shall be
adjudicated to be invalid or unenforceable, Section 6(a) shall be deemed
amended to (i) reform the particular portion to provide for such maximum
restrictions as will be valid and enforceable, or if that is not possible, then
(ii) delete the portion adjudicated to be invalid or unenforceable.
(c) During and after the Employment Term, the Executive
will not divulge or appropriate for his own use or for the use of others
(except during the Employment Term as required to fulfill the Executive's
duties hereunder) any secret or confidential information or secret or
confidential knowledge pertaining to the business of the Company obtained by
the Executive in any way while he was employed by the Company. The Executive
shall hold in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or any of
its affiliated companies, and their respective businesses, which shall have
been obtained by the Executive during the Executive's employment by the Company
or any of its affiliated companies, unless such information, knowledge or data
is or becomes public knowledge (other than by acts of the Executive or
representatives of the Executive in violation of this Agreement). After
termination of the Executive's employment with the Company, the Executive shall
not, without the prior written consent of the Company or as may otherwise be
required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.
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(d) The Executive acknowledges that Sections 6(a) and (c)
are expressly for the benefit of the Company, that the Company would be
irreparably injured by a violation of Section 6(a) or (c), and that the Company
would have no adequate remedy at law in the event of such violation.
Therefore, the Executive acknowledges and agrees that injunctive relief,
specific performance or any other appropriate equitable remedy (without any
bond or other security being required) are appropriate remedies to enforce
compliance by the Company with Sections 6(a) and (c).
7. Termination of Employment.
(a) For Due Cause. The Company may terminate the
Executive's employment for "Due Cause" (as hereinafter defined) at any time and
without prior notice, in which event this Agreement shall terminate and the
Executive shall be entitled to receive (i) his Base Salary on a pro rata basis
to the date of termination, and (ii) a cash payment equal to the amount of any
earned but unpaid Quarterly Bonus in respect of any quarterly period ended
prior to the quarter in which such termination occurs. In the event of such
termination for Due Cause, all other rights and benefits the Executive may have
under the employee and/or group or executive benefit plans and programs of the
Company, generally, shall be determined in accordance with the terms and
conditions of such plans and programs. The term "Due Cause" shall mean (i)
habitual neglect of the Executive's duties or failure by the Executive to
perform or observe any obligation of employment that is not remedied within 30
days after written notice thereof from the Board, (ii) any material breach of
this Agreement, or (iii) the conviction of or a plea of guilty or nolo
contendere by the Executive to a felony or misdemeanor involving fraud,
embezzlement, theft or dishonesty or other criminal conduct.
(b) Due To Death. In the event of the death of the
Executive, this Agreement shall terminate on the date of death and the estate
of the Executive shall be entitled to (i) the Executive's Base Salary through
the date of death, and (ii) a cash payment equal to the amount of any earned
but unpaid Quarterly Bonus in respect of the quarterly period ended prior to
the quarter in which his death occurs. In the event of termination due to
death, all other rights and benefits the Executive (or his estate) may have
under the employee and/or group or executive benefit plans and programs of the
Company, generally, shall be determined in accordance with the terms and
conditions of such plans and programs.
(c) Disability. In the event the Executive suffers a
"Disability" (as hereafter defined), the Company may terminate the Executive's
employment, in which event this Agreement shall terminate on "the date on which
the Disability occurs" (as hereafter defined) and the Executive shall be
entitled to (i) his Base Salary through the date on which the Disability
occurs, and (ii) a cash payment equal to the amount of any earned but unpaid
Quarterly Bonus in respect of the quarterly period ended prior to the quarter
in which the Disability occurs. In the event of such termination due to a
Disability, all other rights and benefits the Executive may have under the
employee and/or group or executive benefit plans and programs of the Company,
generally,
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shall continue to the extent permissible in accordance with the terms and
conditions of such plans and programs for a period of one year from the date on
which the Disability occurs. For purposes of this Agreement, "Disability"
shall mean the inability or incapacity of the Employee for three months to
perform the essential functions of the job or position with the Company
described in Section 3, even with reasonable accommodation, and "the date on
which the Disability occurs" shall mean the first day following such three
month period. Such inability or incapacity shall be documented to the
reasonable satisfaction of the Board by appropriate correspondence from
physicians who are reasonably satisfactory to the Board.
(d) Voluntary Termination. The Executive may voluntarily
terminate his employment under this Agreement at any time by providing at least
60 days' prior written notice to the Company. In such event, the Executive
shall be entitled to receive (i) his Base Salary on a pro rata basis to the
date of termination, and (ii) a cash payment equal to the amount of any earned
but unpaid Quarterly Bonus in respect of the quarterly period ended prior to
the quarter in which the termination occurs. All other rights and benefits the
Executive may have under the employee and/or group or executive benefit plans
and programs of the Company, generally, shall be determined in accordance with
the terms and conditions of such plans and programs.
(e) Other Termination. If the Company terminates the
employment of the Executive for any reason (other than pursuant to Sections
7(a), (c) or (f) hereof or if the Company elects not to renew this Agreement),
then the Executive shall be entitled to receive (i) his Base Salary until
termination of this Agreement pursuant to Section 5, payable at such times as
and in accordance with the Company's payroll practices, and (ii) a cash payment
equal to the amount of any earned but unpaid Quarterly Bonus in respect of the
quarterly period ended prior to the quarter in which the termination occurs.
All other rights and benefits the Executive may have under employee and/or
group or executive benefit plans and programs of the Company, generally, shall
continue to the extent permissible in accordance with the terms and conditions
of such plans and programs until termination of this Agreement pursuant to
Section 5.
(f) Change of Control. If in the event of and as a
result of a Change of Control (as defined in Section 8), the Executive is
terminated without Due Cause or the Executive voluntarily elects to terminate
this Agreement and his employment for any reason, then the Executive shall be
entitled to receive (i) his Base Salary until termination of this Agreement
pursuant to Section 5, payable at such times as and in accordance with the
Company's payroll practices, and (ii) a cash payment equal to the amount of any
earned but unpaid Quarterly Bonus in respect of the quarterly period ended
prior to the quarter in which the termination occurs. All other rights and
benefits the Executive may have under employee and/or group or executive
benefit plans and programs of the Company, generally, shall continue to the
extent permissible in accordance with the terms and conditions of such plans
and programs until termination of this Agreement pursuant to Section 5.
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8. Definition of Change of Control. The term "Change of
Control" means the occurrence of one or more of the following events:
(a) In the event that the Company becomes subject to
reporting under the Securities Exchange Act of 1934, as amended (the
"Securities Act"), a change in control of a nature that would be required to be
reported in a response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Act, or any successor regulation of similar
import, whether or not the Company is then subject to such reporting
requirement;
(b) As a result of a transaction or series of
transactions, securities of the Company representing less than 50% of the
combined voting power of the Company's then outstanding securities are owned,
directly or indirectly, by Persons who were shareholders of the Company
immediately prior to such transaction or transactions;
(c) A transfer of all or substantially all of the
Company's assets to any Person other than an affiliate of the Company.
"Person" shall have the same meaning as that term is given in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended,
whether or not the Company is then subject to the Securities Act.
9. Indemnification. The Company will indemnify the
Executive as provided for in the Company's Certificate of Incorporation or
Bylaws for officers of the Company.
10. Preservation of Business; Fiduciary Responsibility.
The Executive shall use his best efforts to preserve the business and
organization of the Company, to keep available to the Company the services of
present employees and to preserve the business relations of the Company with
suppliers, distributors, customers and others. The Executive shall not commit
any act, or in any way assist others to commit any act, that would injure the
Company. So long as the Executive is employed by the Company, the Executive
shall observe and fulfill proper standards of fiduciary responsibility
attendant upon his service and office.
11. Notices. All notices, requests, demands and other
communications given under or by reason of this Agreement shall be in writing
and shall be deemed given when delivered in person, or when confirmed if
delivered by telecopy or when mailed, by certified mail (return receipt
requested), postage prepaid, addressed as follows (or to such other address as
a party may specify by notice pursuant to this Section 11):
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(a) To the Company:
Bayard Drilling Technologies, Inc.
Suite 400E, Lakepoint Towers
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Attn: Board of Directors
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) To the Executive:
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12. Controlling Law and Performability. The execution,
validity, interpretation and performance of this Agreement shall be governed by
and construed in accordance with the laws of the State of Oklahoma, excluding
conflicts of laws principles.
13. Arbitration. The Company and the Executive desire to
resolve certain disputes, controversies and claims arising out of this
Agreement without litigation. Accordingly, except in the case of a suit,
action or proceeding to compel either party to comply with the dispute
resolution procedures set forth in this Section 13, the parties agree that any
dispute or controversy arising under or in connection with this Agreement shall
be settled by arbitration in Oklahoma City, Oklahoma. In the proceeding, the
Executive shall select one arbitrator, the Company shall select one arbitrator
and the two arbitrators so selected shall select a third arbitrator. The
decision of a majority of the arbitrators shall be binding on the Executive and
the Company. Should one party fail to select an arbitrator within five days
after notice of the appointment of an arbitrator by the other party or should
the two arbitrators selected by the Executive and the Company fail to select an
arbitrator within ten days after the date of the appointment of the last of
such two arbitrators, any person sitting as a Judge of the United States
District Court for the Federal District of Oklahoma in which the City of
Oklahoma City is then situated, upon application of the Executive or the
Company, shall appoint an arbitrator to fill such space with the same force and
effect as though such arbitrator had been appointed in accordance with the
first sentence of this Section 13. Any arbitration proceeding pursuant to this
Section 13 shall be conducted in accordance with the rules of the American
Arbitration Association. Judgment may be entered on the arbitrators' award in
any court having jurisdiction.
14. Additional Instruments. The Executive and the
Company shall execute and deliver any and all additional instruments and
agreements that may be necessary or proper to carry out the purposes of this
Agreement.
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15. Entire Agreement and Amendments. This Agreement
(together with the Stock Plan, the Option Agreement and the Restricted Stock
Agreement, upon the effectiveness thereof) contains the entire agreement of the
Executive and the Company relating to the matters contained herein and
supersedes all prior agreements and understandings, oral or written, between
the Executive and the Company with respect to the subject matter hereof. This
Agreement may be changed only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
16. Separability. If any provision of this Agreement is
rendered or declared illegal or unenforceable by reason of any existing or
subsequently enacted legislation or by the decision of any arbitrator or by
decree of a court of last resort, the Executive and the Company shall promptly
meet and negotiate substitute provisions for those rendered or declared illegal
or unenforceable to preserve the original intent of this Agreement to the
extent legally possible, but all other provisions of this Agreement shall
remain in full force and effect.
17. Assignments. This Agreement shall inure to the
benefit of and be binding upon the Company and its successors and assigns. The
rights and obligations of the Executive under this Agreement are personal to
the Executive, and no such rights, benefits or obligations shall be subject to
voluntary or involuntary alienation, assignment or transfer. This Agreement
shall be binding upon the Executive and his heirs, executors, administrators,
legal representatives and assigns.
18. Execution. This Agreement may be executed in
multiple counterparts each of which shall be deemed an original and all of
which shall constitute one and the same instrument.
19. Waiver of Breach. The waiver by either party to this
Agreement of a breach of any provision of the Agreement by the other party
shall not operate or be construed as a waiver by such party of any subsequent
breach by such other party.
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IN WITNESS WHEREOF, the Executive and the Company have
executed this Agreement effective as of the date first above written.
"COMPANY"
BAYARD DRILLING TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
President
"EXECUTIVE"
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ III
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