EXECUTIVE COMPENSATION AND RETENTION AGREEMENT
Exhibit
10.13
EXECUTIVE
COMPENSATION AND
RETENTION
AGREEMENT
THIS
EXECUTIVE COMPENSATION AND RETENTION AGREEMENT (“Agreement”), by and between
COIL TUBING TECHNOLOGY HOLDINGS, INC., a Nevada corporation, (referred to herein
as the “Company”), and ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ (referred to herein as “▇▇▇▇▇”) (collectively
“the
Parties”) is
effective on the 1st day of
June 2009 (the “Effective
Date”).
In
consideration of the mutual covenants set forth herein, the Company and ▇▇▇▇▇
hereby agree as follows:
1. APPOINTMENT. The
Company hereby agrees to appoint and retain ▇▇▇▇▇ as its President and Chief
Executive Officer, and ▇▇▇▇▇ agrees to serve the Company, in the capacities
described herein during the Period of Appointment (as defined in Section 2 of
this Agreement), in accordance with the terms and conditions of this
Agreement.
2. PERIOD
OF APPOINTMENT. The term “Period of Appointment” shall mean the period which
commences on the Effective Date and, unless earlier terminated pursuant to
Section 6, ends on December 31, 2011; provided, however, that the Period of
Appointment may be extended as provided herein. On January 1 of each
year that ▇▇▇▇▇ is employed by the Company, the period of appointment will be
extended for an additional year. Each extension shall
occur automatically unless ▇▇▇▇▇ provides the Company in writing that he will
not be exercising the extension by December 1 of each year prior to the relevant
January 1. For example, the Period of Appointment will
automatically extend to December 31, 2012 unless ▇▇▇▇▇ provides notice that he
will not be exercising the extension for 2012 on or before December 1,
2009. As a result, unless ▇▇▇▇▇ provides notice otherwise, there will
be at least two (2) years remaining on the Period of Appointment at all
times.
3. DUTIES
DURING THE PERIOD OF APPOINTMENT.
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a.
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DUTIES.
During the Period of Appointment, ▇▇▇▇▇ shall be employed by the Company
and serve as its “President and Chief Executive Officer.” In
such capacities, ▇▇▇▇▇ will perform such services as are customary for a
president and chief executive officer. Nothing herein is
intended to restrict the duties of ▇▇▇▇▇ or limit him from serving in such
other executive officer positions as the Board of Directors deems
appropriate.
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b.
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SCOPE.
During the Period of Appointment, and excluding any periods of vacation
and sick leave to which the office of President is entitled, ▇▇▇▇▇ shall
devote full time and attention to the affairs of the
Company.
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4. COMPENSATION
AND OTHER PAYMENTS.
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a.
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ANNUAL
SALARY. Annual salary shall be set at $132,000.00 per annum payable in
regular installments but in no event less often than
monthly.
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b.
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ANNUAL
INCREASES. ▇▇▇▇▇’▇ annual salary will be increased in an amount
to be determined by the Board of the Company or a Committee of the Board
of the Company, but in no event shall such increases be in an amount less
than ten percent (10%).
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c.
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BONUSES. ▇▇▇▇▇
may participate in any and all bonus plans established by the Board or a
Committee of the Board.
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5. OTHER
BENEFITS.
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a.
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INCENTIVE
& RETENTION SHARES.
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i.
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RETENTION
SHARES. The Company will issue to ▇▇▇▇▇ seven-hundred
fifty-thousand (750,000) shares of its common stock contemporaneously with
▇▇▇▇▇ entering into this Agreement.
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ii.
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INCENTIVE
SHARES. At the end of the initial Period of Appointment and the
end of each subsequent year or, at ▇▇▇▇▇’▇ option, within thirty (30) days
thereafter, the Company will issue to ▇▇▇▇▇ the number of shares necessary
to provide to ▇▇▇▇▇ five percent (5%) of the issued and outstanding common
stock of the Company (excluding any shares of common stock issuable to
other executives of the Company as a result of incentive share clauses of
such executives’ employment agreements). As a result, on
December 31, 2009 and each year thereafter during the Period of
Appointment, subject to the Termination Provision of Section six (6) or,
at ▇▇▇▇▇’▇ option, within 30 days after such year end, the Company will
issue ▇▇▇▇▇ shares of common stock equal to five percent (5%) of the then
total issued and outstanding common stock of the Company (excluding any
shares of common stock issuable to other executives of the Company as a
result of incentive share clauses of such executives’ employment
agreements). Such shares will be subject to any and all restrictions
appropriate or necessary to comply with state or federal registration
requirements.
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b.
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REGULAR
REIMBURSED BUSINESS EXPENSES. The Company shall promptly reimburse ▇▇▇▇▇
for all expenses and disbursements reasonably incurred by ▇▇▇▇▇ in the
performance of his duties hereunder during the Period of
Appointment.
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c.
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BENEFIT
PLANS. ▇▇▇▇▇ and his eligible family members shall be entitled
to participate immediately (except for any Company plan which includes or
requires a waiting period, in which event ▇▇▇▇▇ shall be entitled to
participate as soon as he is eligible under the terms of such plan), on
terms no less favorable to ▇▇▇▇▇ than the terms offered to other
employees, in any group and/or executive life, hospitalization or
disability insurance plan, health program, vacation policy, pension,
profit sharing, ESOP, 401(k) and similar benefit plans (qualified,
non-qualified and supplemental) or other fringe benefits that may be
offered by the Company as approved by the Board of Directors from time to
time.
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d.
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HEALTH
INSURANCE. The Company shall provide ▇▇▇▇▇ and his wife, health
insurance for the time periods set forth in Section 6,
below.
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e.
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PERQUISITES.
The Company shall provide ▇▇▇▇▇ at least such perquisites as are commonly
provided to other executives of the Company and are commiserate with his
Appointment.
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6. TERMINATION.
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a.
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GENERAL. ▇▇▇▇▇’▇
employment hereunder shall commence on the Effective Date and continue
until the end of the term specified in section two (2) above, except that
the employment of ▇▇▇▇▇ hereunder shall terminate prior to such time in
accordance with the following:
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i.
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DEATH
OR DISABILITY. Upon ▇▇▇▇▇’▇ death during the term of his
employment hereunder or, at the option of the Company, in the event of
▇▇▇▇▇’▇ disability, upon thirty (30) days notice to
▇▇▇▇▇.
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ii.
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FOR
CAUSE. For “Cause” immediately upon written notice by the
Company to ▇▇▇▇▇. A termination for Cause shall
mean:
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(1)
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the
commission of an intentional act of dishonesty, fraud, misrepresentation,
misappropriation, or embezzlement by ▇▇▇▇▇ which has a material
detrimental impact on the Company;
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(2)
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▇▇▇▇▇’▇
unauthorized use or disclosure of any Confidential Information or trade
secrets of the Company which has a material detrimental impact on the
Company;
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(3)
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a
significant violation by ▇▇▇▇▇ of a law or regulation applicable to the
Company’s business, which has a material detrimental impact on the Company
and which the Board of the Company reasonably determines does or is
reasonably likely to cause material injury to the
Company;
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(4)
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▇▇▇▇▇’▇
indictment of, or conviction of, or plea of nolo contendere or
guilty to a felony or any other crime which involves moral
turpitude;
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(5)
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▇▇▇▇▇’▇
continued failure, in the reasonable discretion of the Board, to perform
the principal duties, functions and responsibilities of his position
(other than any such failure resulting from ▇▇▇▇▇’▇ disability) or to
follow the directives of the Board after written notice from the Company
identifying the deficiencies in performance and a reasonable cure period
of not less than thirty (30) days of any breach capable of cure; gross
negligence or willful misconduct in the performance of ▇▇▇▇▇’▇ duties;
or
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(6)
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a
material and willful breach of ▇▇▇▇▇’▇ fiduciary duties to the
Company.
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iii.
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WITHOUT
CAUSE. Without Cause upon thirty (30) days written notice by
the Board of Directors to ▇▇▇▇▇ or upon ▇▇▇▇▇ to the Board of
Directors. If ▇▇▇▇▇ terminates the Agreement for any reason, he
shall have no liability to the Company or its subsidiaries or affiliates
as a result thereof.
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iv.
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CONSTRUCTIVE
TERMINATION. Upon ▇▇▇▇▇’▇ Constructive
Termination. Constructive Termination of ▇▇▇▇▇’▇ employment
with the Company will be deemed to have occurred if ▇▇▇▇▇ terminates his
employment with the Company within six (6) months following the date on
which:
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(1)
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the
Company demotes ▇▇▇▇▇ to a lesser position, either in title or
responsibility;
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(2)
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the
Company decreases ▇▇▇▇▇’▇ pay below the highest level in effect at any
time during ▇▇▇▇▇’▇ employment with the Company or reduces ▇▇▇▇▇’▇
benefits below the levels in effect during ▇▇▇▇▇’▇ employment with the
Company (other than as a result of any amendment or termination of any
group or other executive benefit plan, which amendment or termination is
applicable to all executives of the Company or any inadvertent reduction
in benefits that Company cures within thirty (30) days after receiving
written notice of such reduction);
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(3)
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the
Company requires ▇▇▇▇▇ to relocate to a principal place of business more
than fifty (50) miles from the principal place of business occupied by
Company as of the date hereof (the “Company Location”) or requires ▇▇▇▇▇
to relocate to a principal place of business, other than the Company
Location, more than fifty (50) miles from ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇▇▇;
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(4)
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the
Company is subject to a Change in Control, unless ▇▇▇▇▇ accepts an
appointment or employment with a successor to the Company;
or
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(5)
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the
Company breaches any material term of this Agreement which is not cured by
the Company within ten (10) days after receiving written notice of such
breach.
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b.
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OBLIGATIONS
OF THE COMPANY UPON TERMINATION. The following provisions
describe the obligations of the Company to ▇▇▇▇▇ under this Agreement upon
termination of his Appointment. However, except as explicitly
provided in this Agreement, nothing in this Agreement shall limit or
otherwise adversely affect any rights which ▇▇▇▇▇ may have under
applicable law, under any other agreement with the Company, or under any
compensation or benefit plan, program, policy or practice of the
Company.
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i.
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TERMINATION
BY THE COMPANY FOR CAUSE OR RESIGNATION WITHOUT CAUSE. In the
event this Agreement terminates by reason of the Company’s termination of
▇▇▇▇▇’▇ Appointment as President and Chief Executive Officer of the
Company for Cause or because of ▇▇▇▇▇’▇ resignation Without Cause, the
Company shall:
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(1)
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Pay
to ▇▇▇▇▇ within ten (10) days any amount of Compensation (as enumerated in
section four (4) above) earned but not yet paid;
and
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(2)
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Provide
▇▇▇▇▇’▇ health insurance as obligated in section 5(d) above, until the end
of the then current calendar month.
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ii.
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TERMINATION
BY THE COMPANY WITHOUT CAUSE, OR CONSTRUCTIVE TERMINATION. In
the event this Agreement terminates by reason of the Company’s termination
of ▇▇▇▇▇’▇ Appointment as President and Chief Executive Officer of the
Company Without Cause or ▇▇▇▇▇ is Constructively Terminated, the Company
shall:
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(1)
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Pay
to ▇▇▇▇▇ in a lump sum within ten (10) days the remaining amount of
Compensation provided for in section four (4) above through the end of the
Period of Appointment including any minimum annual increases and bonuses
and an additional one hundred thousand dollars
($100,000);
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(2)
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Provide
▇▇▇▇▇’▇ health insurance as obligated in section 5(d) above;
and
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(3)
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Issue
to ▇▇▇▇▇ the Incentive Shares provided for in section five (5) above at
the end of any years which remain of the Period of Appointment (or at
▇▇▇▇▇’▇ election, within thirty (30) days thereafter) the appropriate
number of shares for such period.
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iii.
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TERMINATION
BY DEATH OR DISABILITY OR ▇▇▇▇▇’▇ RESIGNATION FOR CAUSE. In the
event this Agreement terminates by reason of ▇▇▇▇▇’▇ Death or Disability
or because of ▇▇▇▇▇’▇ resignation For Cause, the Company
shall:
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(1)
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Pay
to ▇▇▇▇▇ or his estate the remaining amount of Compensation provided for
in section four (4) above through the end of the Period of
Appointment;
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(2)
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Provide
▇▇▇▇▇’▇ health insurance as obligated in section 5(d) above until the end
of the Period of Appointment; and
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(3)
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Issue
to ▇▇▇▇▇ the Incentive Shares provided for in section five (5) above at
the end of any years which remain of the Period of Appointment (or at
▇▇▇▇▇’▇ election, within thirty (30) days thereafter) the appropriate
number of shares for each year.
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c.
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MITIGATION. In
no event shall ▇▇▇▇▇ be obligated to seek another appointment or
employment or take any other action by way of mitigation of the amounts
payable to ▇▇▇▇▇ under any of the provisions of this
Agreement. Any severance benefits payable to ▇▇▇▇▇ shall not be
subject to reduction for any compensation received from another
appointment or employment.
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d.
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CHANGE
OF CONTROL. For purposes of this Agreement, Change of Control
shall be deemed to have occurred (i) if more than 33% of the voting shares
of the Company are acquired by a third party in a plan of reorganization,
merger and/or consolidation or (ii) if majority voting control of the
Company is acquired by any person other than ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and/or
▇▇▇▇▇. For purposes of this Agreement, Change in Control does
not include the stock distribution as is provided for and described in the
Registration Statement the Company has on file with the Securities and
Exchange Commission (and amendments thereto) as of the Effective Date of
this Agreement.
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7. INDEMNIFICATION. To
the extent practical, the Company shall maintain, for the benefit of ▇▇▇▇▇ and
other executives directors and/or officers liability insurance. In
addition, ▇▇▇▇▇ shall be indemnified by the Company against liability as an
officer and President and Chief Executive Officer of the Company and any
subsidiary or affiliate of the Company to the maximum extent permitted by
applicable law. ▇▇▇▇▇’▇ rights under this Section shall continue so
long as he may be subject to such liability, whether or not this Agreement may
have terminated.
8. CONFIDENTIAL
INFORMATION.
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a.
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ACKNOWLEDGMENT
OF PROPRIETARY INTEREST. ▇▇▇▇▇ agrees that all Confidential
Information learned by him during his employment with the Company, whether
developed by ▇▇▇▇▇ or in conjunction with others or otherwise, is and
shall remain the exclusive property of the Company. ▇▇▇▇▇'▇
employment shall be considered “work for hire” for all
purposes.
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b.
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CONFIDENTIAL
INFORMATION DEFINED. “Confidential Information” means all
confidential and proprietary information of the Company, to the extent
such property is the property of the Company and not the property of ▇▇▇▇▇
or another, and that is not otherwise publicly
available. “Confidential Information” does not include the
“Inventions” referenced in section eight (8). Without limiting
the foregoing, Confidential Information includes the
following:
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i.
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Information
derived from reports, investigations, experiments, research and work in
progress,
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ii.
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Methods
of operation,
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iii.
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Marketing
data,
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iv.
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Proprietary
computer programs and codes,
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v.
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Drawings
designs, plans and proposals,
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vi.
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Marketing
and sales programs,
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vii.
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Client
lists,
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viii.
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Historical
financial information and financial
projections,
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ix.
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Pricing
formulae and policies,
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x.
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All
other concepts, ideas, materials and information prepared or performed for
or by the Company, and
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xi.
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All
information related to the business, products, purchases or sales of the
Company and any of its suppliers and
customers.
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c.
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COVENANT
NOT TO DIVULGE CONFIDENTIAL INFORMATION. The Company is
entitled to prevent the disclosure of Confidential
Information. The Company agrees to and will provide
Confidential Information to ▇▇▇▇▇ at the inception of his employment and
▇▇▇▇▇ acknowledges and agrees that, during the course of his employment he
will be exposed to, have access to, and gain knowledge of Confidential
Information. As a portion of the consideration for the
employment of ▇▇▇▇▇ and for the compensation being paid to him hereunder
and thereafter to hold in strict confidence and not to disclose or allow
to be disclosed or made available to any person, firm or corporation,
other than to his professional advisors (who have the obligation to
maintain the confidentiality of such information) and to persons engaged
by the Company to further the business of the Company, and not to use
except in the pursuit of the business of the Company, the Confidential
Information, without the prior written consent of the
Company.
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d.
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RETURN
OF MATERIALS. In the event of any termination or cessation of
his employment with the Company for any reason, or request by the Company
at anytime, ▇▇▇▇▇ shall promptly deliver to the Company all documents,
data and other information derived from or otherwise pertaining to
Confidential Information. ▇▇▇▇▇ shall not take or retain any
documents or other information, or any reproduction or excerpt thereof,
containing or pertaining to any Confidential
Information.
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9. GENERAL
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a.
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NOTICES. All
notices and other communications hereunder shall be in writing or by
written telecommunication, and shall be deemed to have been duly given
upon delivery if delivered personally or via written telecommunication, or
five days after mailing if mailed by certified mail, return receipt
requested or by written telecommunication, to the relevant address set
forth below, or to such other address as either of the parties shall have
furnished to the other in writing in accordance
herewith:
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a.
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If to the Company, addressed
to:
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If to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ addressed
to:
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▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇
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▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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▇▇▇▇
▇▇▇▇▇, ▇▇
▇▇▇▇▇
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Notice
and communications shall be effective when actually received by the
addressee.
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b.
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WITHHOLDING. All
payments required to be made to ▇▇▇▇▇ by the Company under this Agreement
shall be subject to withholding, at the time payments are actually made to
▇▇▇▇▇ and received by him, of such amounts, if any, relating to
federal, state and local taxes as may required by
law.
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c.
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TAXES. In
the event that the aggregate of all payments or benefits made or provided
to, or that may be made or provided to, ▇▇▇▇▇ under this Agreement and
under all other plans, programs and arrangements of the Company (the
“Aggregate Payment”) are determined to constitute a “parachute payment” or
some other category of payment which results in special tax treatment,
▇▇▇▇▇ and the Company shall cooperate with each other in connection with
any proceeding or claim relating to the existence or amount of liability
for the payment, and all expenses incurred by ▇▇▇▇▇ in connection
therewith shall be paid by the Company promptly upon notice of demand from
▇▇▇▇▇.
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d.
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REIMBURSEMENT
OF LEGAL EXPENSES. In the event that ▇▇▇▇▇ is successful,
whether in mediation, arbitration or litigation, in pursuing any claim or
dispute involving ▇▇▇▇▇’▇ Appointment with the Company, including any
claim or dispute relating to (a) this Agreement, (b) termination of
▇▇▇▇▇’▇ Appointment with the Company or (c) the failure or refusal of the
Company to perform fully in accordance with the terms hereof, the Company
shall promptly reimburse ▇▇▇▇▇ for all costs and expenses (including,
without limitation, attorneys’ fees) relating solely, or allocable, to
such successful claim.
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e.
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LAW
GOVERNING. This Agreement shall be governed under the laws of
the State of Texas.
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f.
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SEVERABILITY. If
any provision hereof is held invalid or unenforceable by a court of
competent jurisdiction, such invalidity shall not affect the validity or
operation of any other provision and such invalid provision shall be
deemed to be severed from the
Agreement.
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g.
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WAIVERS. No
delay or omission by either party in exercising any right, power or
privilege hereunder shall impair such right, power or privilege, nor shall
any single or partial exercise such right, power or privilege preclude any
further exercise thereof or the exercise of any other right, power or
privilege.
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h.
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COUNTERPARTS. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, and all of which together shall constitute one and the
same document.
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i.
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CAPTIONS. The
captions in this Agreement are for convenience of reference only and shall
not limit or otherwise affect any of the terms of provisions
hereof.
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j.
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REFERENCE
TO AGREEMENT. Use of the words “herein, “hereof,” “hereto,”
“hereunder” and the like in this Agreement refer to this Agreement only as
a whole and not to any particular section or subsection of this Agreement,
unless otherwise noted.
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k.
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SUCCESSORS. This
Agreement shall be binding on and shall inure to the benefit of the
parties hereto, their heirs, administrators, successors, and
assigns.
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l.
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ASSIGNABILITY. This
Agreement and the rights and obligations thereunder may not be assigned by
any act of either party or by operation of law without the prior written
consent of each party. However, the Company may fulfill its
obligation to compensate ▇▇▇▇▇ through one or more of its wholly owned
subsidiaries.
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m.
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GENDER
AND NUMBER. The masculine gender shall be deemed to denote the
feminine or neuter genders, the singular to denote the plural, and the
plural to denote the singular, where the context so
permits.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement this 16th
day of June, 2009.
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▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
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By:
/s/ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
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By:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
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▇▇▇▇▇
▇▇▇▇▇▇▇▇, President and Chief Executive Officer
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▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, individually
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