Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”), dated as of July 18, 2014 (the
“Execution Date”), between Integrated Drilling Equipment Holdings Corp., a
Delaware corporation (the “Company”), and James Terry (the “Executive”)
(collectively, the “Parties” and each, a “Party”) sets forth the terms and
conditions of the Executive’s employment to be effective on July 21, 2014, or
such other date as the Executive and the Company may mutually agree (the
Executive’s “Start Date”). Each capitalized term utilized herein is defined in
Section 26 to the extent not otherwise defined when such term first appears
herein.

 

RECITALS

 

The Company desires to employ the Executive, and the Executive desires to be
employed by the Company, on the terms and conditions set forth herein.

 

NOW, THEREFORE, the Parties agree as follows:

 

1.          Employment. (a) During the Employment Term, the Executive will serve
as the Chief Executive Officer of the Company. The Executive will also serve as
an officer or employee of any other member of the Company Group, as may be
requested from time to time by the Supervisor on the terms and conditions set
forth herein, and without any additional compensation.

 

(b)          The employment relationship between the Company and the Executive
will be governed by the applicable general employment policies and practices of
the Company Group, including those relating to ethics and business conduct,
confidential information, expense reimbursement and avoidance of conflicts
(together, the “Company Policies”), except that when any express term of this
Agreement is in conflict with the Company Policies, such term of this Agreement
will control.

 

2.          Term. Subject to Section 8, the Executive’s employment will be for
an initial term of three years commencing upon the Start Date (the “Initial
Employment Term”). On the last day of the Initial Employment Term and annually
thereafter,, the Employment Term will be automatically extended by one
additional year (each, a “Renewal Term”), unless, not less than 30 days prior to
the end of the Initial Employment Term or any Renewal Term, either the Executive
or the Company has given the other written notice of nonrenewal. Without
limiting the generality or effect of the foregoing, the Executive will, if
applicable, provide the Company with written notice of the Executive’s intent to
terminate employment with the Company at least 30 days prior to the effective
date of such termination.

 

3.          Position and Duties of the Executive. (a) The Executive will report
to the Supervisor, and have duties, responsibilities and authorities
commensurate with the Executive’s title and position, and such duties,
responsibilities and authority as may be assigned to the Executive from time to
time by the Supervisor.

 

 

 

  

(b)          During the Employment Term, the Executive will devote the
Executive’s reasonable best efforts, attention and energies during normal
working time to the business(es) of the Company Group and the performance of any
of the Executive’s duties as set forth herein.

 

(c)          So long as such activities do not involve a breach of this
Agreement and do not interfere with the performance of the Executive’s duties
hereunder, the Executive may participate in any governmental, educational,
charitable or other community affairs during the Employment Term and, subject to
the prior approval of the Supervisor in the Supervisor’s discretion which shall
not be unreasonably withheld, delayed or conditioned, serve as a member of the
governing board of any such organization. The Executive may retain all fees and
other compensation from any such service, and the Company will not reduce the
Executive’s compensation by the amount of such fees. Notwithstanding anything
herein to the contrary, the Executive may not accept any position during the
Employment Term with a for-profit enterprise without the prior written approval
of the Supervisor in the Supervisor’s discretion which shall not be unreasonably
withheld, delayed or conditioned.

 

4.          Compensation. (a) Base Salary. During the Employment Term, the
Company will pay to the Executive a base salary per annum equal to $360,000,
which will be reviewed annually, but may not be decreased, except in the event
of a reduction in salaries of Company executives generally (as in effect from
time to time, the “Base Salary”). The Base Salary will be payable at the times
and in the manner consistent with the Company’s policies regarding compensation
of the Company’s executives generally, but in no event less frequently than
monthly.

 

(b)          Annual Bonus. For the 2014 calendar year, the Executive will be
entitled to a guaranteed bonus of $65,000, provided Executive remains employed
by the Company through the applicable bonus payment date, such date to be not
later than March 15, 2015. Beginning with the 2015 calendar year, the Executive
will be eligible to receive an annual cash incentive bonus in accordance with,
and subject to, the terms and conditions of the Company’s applicable annual cash
incentive bonus program (the “Annual Bonus”). The Executive’s target Annual
Bonus will be equal to 50% of the Executive’s Base Salary (the “Target Bonus”),
subject to the achievement of applicable performance objectives to be mutually
agreed upon by the Supervisor and the Executive within the first ninety days of
the applicable calendar year, and provided the Executive remains employed by the
Company through the applicable bonus payment date. In addition, subject to the
achievement of a higher set of applicable performance objectives (the “Stretch
Targets to be mutually agreed upon by the Supervisor and the Executive within
the first ninety days of the applicable calendar year, the Executive will be
eligible to receive a supplemental cash bonus in an amount up to 50% of the
Executive’s Base Salary (the “Supplemental Bonus”), provided the Executive
remains employed by the Company through the applicable bonus payment date. In no
event will any Target Bonus or Supplemental Bonus be paid later than March 15 of
the calendar year following the calendar year upon which the achievement of the
performance objectives is based.

 

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(c)          Equity. Subject to the discretion of the Supervisor and/or the
Compensation Committee, as applicable, the Executive will be eligible to be
awarded an option to purchase 250,000 shares of Company’s common stock, with an
exercise price per share equal to the fair market value per share of Company’s
common stock on the date of grant, as determined pursuant to the terms of the
applicable equity incentive plan (the “Option”). The Option will be subject to
such terms and conditions set forth in the applicable equity incentive plan and
as determined by the Supervisor and/or the Compensation Committee in its sole
discretion, including, but not limited to, the applicable performance and/or
service vesting criteria. Such terms and conditions shall be set forth in the
applicable equity incentive plan and the agreement governing the grant of the
Option. Notwithstanding the foregoing, the Option will vest and become
exercisable in full upon a Change in Control.

 

5.          Benefits. (a) Employee Plans. During the Employment Term, subject to
the terms and conditions of the applicable plans, the Executive will be eligible
to participate in the Company-sponsored group health, major medical, dental,
vision, life insurance, 401(k) and other employee welfare benefit plans (the
“Employee Plans”). The Executive acknowledges that the Company reserves the
right to amend or terminate any Employee Plan(s) at any time in its discretion,
subject to the terms of such Employee Plan(s) and applicable law.

 

(b)          Vacation. During the Employment Term, the Executive will be
eligible to participate in the Company’s vacation, holiday and sick, personal
and other leave policies as are provided under the Company’s policies applicable
to executives generally. The Executive will be eligible for four weeks of paid
vacation during each full year during the Employment Term, and the Executive
will be eligible for a pro-rata number of weeks of paid vacation for the period
commencing on the Start Date and ending on December 31, 2014.

 

6.          Expenses. From and after the Closing, the Company will pay or
reimburse the Executive for reasonable and necessary business expenses incurred
by the Executive during the Employment Term in connection with the Executive’s
duties on behalf of the Company Group in accordance with the Company’s travel
and expense policy, as it may be amended from time to time, or any successor
policy applicable to executives of the Company, following submission by the
Executive of reimbursement expense forms in a form consistent with such expense
policies. Payments will be made within thirty (30) days following submission of
the forms described in the preceding sentence.

 

7.          Termination. (a) Termination by the Company for Cause or Resignation
by the Executive Without Good Reason. If, during the Employment Term, the
Executive’s employment is terminated by the Company for Cause or the Executive
resigns without Good Reason, the Executive will not be eligible to receive Base
Salary, to receive an Annual Bonus or to participate in any Employee Plans with
respect to future periods after the date of such termination or resignation,
except for the right to receive (i) accrued but unpaid Base Salary through the
date of termination of employment, to be paid in accordance with the Company’s
normal payroll practice; (ii) any accrued unused vacation time, to be paid in
accordance with the Company’s normal payroll practice; (iii) any unreimbursed
business expenses incurred by the Executive prior to the date of termination, to
be paid in accordance with the provisions of Section 6; and (iv) all
compensation and benefits payable to the Executive under the terms of the
Employee Plans in which the Executive participated prior to the date of
termination of employment, in accordance with the terms of such Employee Plans
(together, the “Accrued Compensation and Benefits”).

 

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(b)          Termination by the Company Without Cause or Resignation by the
Executive for Good Reason. If, during the Employment Term, the Executive’s
employment is terminated by the Company without Cause or the Executive
terminates employment for Good Reason (in each case other than due to the
Executive’s death or Disability), the Executive will be entitled to receive from
the Company, in full satisfaction of the Executive’s rights and any benefits the
Executive is entitled to under this Agreement, any other employment arrangement
with the Company Group or otherwise, the following, subject to Section 8(e):

 

(i)          The Accrued Compensation and Benefits;

 

(ii)         A lump sum cash payment equal to one times the Executive’s annual
rate of Base Salary, payable within ten days following the Executive’s
termination date;

 

(iii)        A lump sum cash payment equal to one times the executive’s Target
Bonus, payable on the 60th day following the Executive’s termination date;

 

(iv)        A lump sum cash payment, payable within ten days following the
Executive’s termination date , in an amount equal to the product of (A) 12,
multiplied by (B) the employer portion of the monthly cost of maintaining health
benefits for the Executive (and the Executive’s spouse and eligible dependents)
as of the date of termination of employment under a group health plan of the
Company for purposes of the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”), excluding any short-term or long-term disability
insurance benefits;

 

(v)         Notwithstanding the terms of any equity agreement, on the 60th day
following the date of termination of employment, all of the Executive’s
outstanding time-vested equity awards will fully vest and become
non-forfeitable, with (A) any such outstanding time-vested stock options and
stock appreciation rights becoming fully exercisable, subject to any applicable
performance conditions (and with all such stock options and stock appreciation
rights remaining exercisable until the date of expiration of the original term
of such award); and (B) the time-based restriction period on any such restricted
stock and any such restricted stock units held by the Executive lapsing and any
other time-vesting requirements or conditions with respect to the foregoing or
other such time-vested equity-based awards held by the Executive lapsing and
being disregarded, subject to any applicable performance conditions, and all
equity awards accelerated pursuant to this paragraph will be settled in
accordance with the terms of the applicable equity incentive plan and/or the
applicable award agreement (all acceleration pursuant to this paragraph,
together, the “Equity Acceleration”).

 

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(c)          Termination by Death. If the Executive dies during the Employment
Term, the Executive’s employment will terminate and the Executive’s beneficiary
or, if none, the Executive’s estate, will be entitled to receive from the
Company the Accrued Compensation and Benefits.

 

(d)          Termination by Disability. If the Executive becomes Disabled during
the Employment Term, the Executive’s employment will terminate and the Executive
will be entitled to receive from the Company the Accrued Compensation and
Benefits.

 

(e)          Release Requirement. Any obligation of the Company to make any
payment pursuant to Section 8(b) (other than (i) the payment of Accrued
Compensation and Benefits, (ii) any payment determined by reference to Base
Salary (the payments in Sections 8(b)(ii)), and (iii) any payment determined by
reference to COBRA (the payments in Sections 8(b)(iv)) is conditioned upon the
Executive first executing and delivering to the Company an effective and
enforceable release, substantially in the form attached hereto as Exhibit A,
within 59 days after the date of termination of employment, with all periods for
revocation therein having expired.

 

(f)          Forfeiture. Notwithstanding anything in this Agreement to the
contrary, any right of the Executive to receive termination payments and
benefits hereunder will be forfeited if the Executive breaches Section 8, 9 or
11; provided that, before invoking this paragraph, the Company will provide the
Executive 30 days to respond to such assertion and, to the extent curable, a
right to cure such breach within such time.

 

8.          Duty of Loyalty. During the course, and as a result, of the
Executive’s employment with the Company, the Executive will have access to
Confidential Information; the opportunity to gain close knowledge of, and
possible influence over, customers, suppliers, independent contractors and
employees of the Company Group; possess in some measure the goodwill of the
Company Group; and come to possess an intimate knowledge of the business of the
Company Group, including all of its policies, methods, personnel and operations.

 

(a)          Confidentiality. (i) The Executive acknowledges that, in the course
of the Executive’s employment, the Executive will become familiar with the trade
secrets, confidential information and other proprietary information concerning
the Company Group, including projects, promotions, marketing plans and
strategies, business plans or practices, business operations, employees,
employment pay information and data, research and development, intellectual
property, trademarks, customer lists, pricing information, production and cost
data, compensation and fee information, accounting and financing data, and
methods of design, distribution, marketing, service or procurement, regardless
of whether such information has been reduced to documentary form, which the
Company and/or an Affiliate treats as confidential or proprietary (collectively,
the “Confidential Information”).

 

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(ii)         The Executive acknowledges and agrees that any and all Confidential
Information will be received and held by the Executive in a confidential
capacity. The Executive will not, during the Employment Term and/or at any time
thereafter, in any manner, whether directly or indirectly, knowingly use for the
Executive’s own benefit or the benefit of any other Person, or disclose,
divulge, render or offer, any Confidential Information, except on behalf of the
Company in the course of the proper performance of the Executive’s duties
hereunder or unless compelled by applicable law or court order.

 

(b)          Non-Competition. (i) The Executive acknowledges that (A) the
Executive’s services are of special, unique and extraordinary value to the
Company Group and (B) the Company Group’s ability to accomplish its purposes and
to successfully compete in the marketplace depends substantially on the skills
and expertise of the Executive. The Executive acknowledges and agrees that the
Company Group would be irreparably damaged if the Executive were to not devote
the Executive’s reasonable best efforts, attention and energies during normal
working time to the business(es) of the Company Group during the Employment
Term, or were to provide services to any business (whether a corporation or a
division of a corporation or similar business unit) which competes with any
member of the Company Group.

 

(ii)         The Executive agrees that, during the Employment Term, and for a
period of 12 months after the date of termination of employment (together, the
“Restricted Period”), the Executive will not conduct, engage or participate, in
any country or territory in which the Company Group conducts business, in (A)
the sale, distribution, repair, refurbishment, manufacture, assembly, production
or design of Rig Parts or (B) any other business conducted or carried on by
Company Group during the twelve 12 month period prior to the date of termination
of employment (the activities in (A) and (B), together, the “Company Business”).
For purposes of this Agreement, “Rig Parts” shall mean oil and gas rig parts,
components or systems including, without limitation, (x) complete drilling rig
packages and (y) any other component part designed, engineered, manufactured,
produced or fabricated by Company Group prior to the date of termination of
employment.

 

(c)          Non-Solicitation. The Executive agrees that, during the Restricted
Period, the Executive will not:

 

(i)          hire, solicit, encourage or otherwise induce any employee,
consultant or independent contractor of any member of the Company Group, who
provided services to any member of the Company Group within the preceding six
months, to terminate his or her employment or other contractual relationship
with any member of the Company Group; or

 

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(ii)         induce or attempt to induce any Person which is a supplier,
distributor, customer or otherwise a contracting party of any member of the
Company Group at any time during the applicable Restricted Period, to terminate
or modify any written or oral agreement or understanding with any member of the
Company Group.

 

(d)          Company Property. All notes, lists, records, files, documents and
other papers and other like items (and all copies, extracts and summaries
thereof), advertising, sales, manufacturers’ and other materials or articles or
information, including data processing reports, computer programs, software,
customer information and records, business records, price lists or information,
samples, or any other materials or data of any kind furnished to the Executive
by the Company Group or developed, made or compiled by the Executive on behalf
of the Company Group or at the Company Group’s direction or for the Company
Group’s use or otherwise in connection with the Executive’s employment
hereunder, are and will remain the sole property of the Company Group, including
in each case all copies thereof in any medium, including computer tapes and
other forms of information storage, but excluding materials relating directly to
the terms and conditions of the Executive’s employment and the Executive’s
performance as an employee of the Company Group (the “Company Property”). If any
member of the Company Group requests the return of any Company Property at any
time during or at or after the date of termination of employment, the Executive
will deliver all such Company Property, including all copies of the same, to the
Company as soon as practicable. The provisions of this paragraph apply during
and after the period when the Executive is an employee of the Company Group and
will be in addition to (and not a limitation of) any legally applicable
protections of the Company Group’s interest in Confidential Information, trade
secrets and the like.

 

(e)          Non-Disparagement. At no time during or after the Employment Term
will the Executive utter, issue or circulate publicly any false or disparaging
statements or remarks about any member of the Company Group and/or any of their
respective businesses, or any of their respective officers, employees,
directors, agents or representatives. The members of the Company’s Board of
Directors and the executive officers of the Company will not, following the end
of the Employment Term, make any formal statements directed solely at the
Executive that disparage the Executive; provided, however, that the Company’s
Board of Directors and the executive officers of the Company may make such
statements as are necessary to comply with any applicable law, regulatory
guidance or ruling.

 

(f)          The Executive's obligation of confidentiality will survive,
regardless of any other breach of this Agreement or any other agreement, by any
Party, until and unless such Confidential Information has become, through no
fault of the Executive, generally known to the public. For purposes of this
paragraph, “generally known” means known throughout the domestic U.S. industry
or the appropriate foreign country’s or countries’ industry. In the event that
the Executive is required by law, regulation, or court order to disclose any of
the Confidential Information, the Executive will promptly notify the Company
prior to making any such disclosure to facilitate the Company Group seeking a
protective order or other appropriate remedy from the proper authority at its
sole cost and expense.

 

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(g)          The Executive’s obligations under this Section 8 are in addition
to, and not in limitation of, all other obligations of confidentiality under the
Company Group’s policies and applicable law and regulatory guidance.

 

(h)          The Executive acknowledges that a violation of the foregoing
provisions of this Section 8 would cause irreparable harm to the Company Group,
and that the Company Group’s remedy at law for any such violation would be
inadequate. In recognition of the foregoing, in addition to any other relief
afforded by law or this Agreement, including damages sustained by a breach of
this Agreement and any forfeitures under Section 7(f), and without the necessity
or proof of actual damages or the posting of a bond, the Company Group will have
the right to enforce this Agreement by specific equitable remedies, which will
include temporary and permanent injunctions, it being the understanding of the
Parties that damages, the forfeitures described above and injunctions will all
be proper modes of relief and are not to be considered as alternative remedies.

 

(i)          If a court at any time determines that any restriction or
limitation in this Section 8 is unreasonable or unenforceable, it will be deemed
amended so as to provide the maximum protection to the Company Group and be
deemed reasonable and enforceable by the court.

 

9.          Developments. (a) The Executive will make full and prompt disclosure
to the Company Group of all inventions, improvements, discoveries, methods,
developments, software, mask works and works of authorship, whether patentable
or copyrightable or not, (i) which relate to the business(es) of the Company
Group and have heretofore been created, made, conceived or reduced to practice
by the Executive or under the Executive’s direction or jointly with others, and
not assigned to prior employers, or (ii) which have utility in or relate to the
Company Group’s business(es) and are created, made, conceived or reduced to
practice by the Executive or under the Executive’s direction or jointly with
others during the Executive’s employment with the Company Group, whether or not
during normal working hours or on the premises of the Company Group (all of the
foregoing of which are collectively referred to in this Agreement as
“Developments”).

 

(b)          The Executive agrees to assign and hereby assigns to the Company
Group (or any Person designated by the Company Group) all of the Executive’s
rights, title and interest worldwide in and to all Developments and all related
patents, patent applications, copyrights and copyright applications, and any
other applications for registration of a proprietary right. This paragraph will
not apply to Developments that the Executive developed entirely on the
Executive’s own time without using the Company Group’s equipment, supplies,
facilities or Confidential Information and that does not, at the time of
conception or reduction to practice, have utility in or relate to the Company
Group’s business(es), or actual or demonstrably anticipated research or
development. To the extent this Agreement is construed in accordance with the
laws of any jurisdiction which precludes a requirement in an employee agreement
to assign certain classes of inventions made by an employee, this paragraph will
be interpreted not to apply to any invention which a court rules or the Company
agrees falls within such classes but will be interpreted to apply thereto to the
maximum extent legally permissible.

 

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(c)          The Executive will cooperate fully with the Company Group, both
during and after the Executive’s employment with the Company Group, with respect
to the procurement, maintenance and enforcement of copyrights, patents and other
intellectual property rights (both in the United States and other countries)
relating to Developments. The Executive will not be required to incur or pay any
costs or expenses in connection with the rendering of such cooperation. The
Executive will sign all papers, including copyright applications, patent
applications, declarations, oaths, formal assignments, assignments of priority
rights, and powers of attorney, and do all things that the Company Group may
deem necessary or desirable in order to protect its rights and interests in any
Development. If any member of the Company Group is unable, after reasonable
effort, to secure the Executive’s signature on any such papers, any executive
officer of the Company is expressly authorized to execute any such papers as the
Executive’s agent and attorney-in-fact, coupled with interest, and the Executive
hereby irrevocably designates and appoints each executive officer of the Company
as the Executive’s agent and attorney-in-fact to execute any such papers on the
Executive’s behalf and to take any and all other actions as the Company Group
may deem necessary or desirable in order to protect its rights and interests in
any Development, under the conditions described in this sentence.

 

10.         Remedies. The Executive and the Company acknowledge that the
covenants contained in Sections 8 and 9 are reasonable under the circumstances.
Accordingly, if, in the opinion of any court of competent jurisdiction, any such
covenant is not reasonable in any respect, such court will have the right, power
and authority to sever or modify any provision or provisions of such covenants
as to the court will appear not reasonable and to enforce the remainder of the
covenants as so amended. The Executive further acknowledges that the remedy at
law available to the Company Group for breach of any of the Executive’s
obligations under Sections 8 and 9 would be inadequate and that damages flowing
from such a breach may not readily be susceptible to being measured in monetary
terms. Accordingly, in addition to any other rights or remedies that the Company
Group may have at law, in equity or under this Agreement, upon proof of the
Executive’s violation of any such provision of this Agreement, the Company Group
will be entitled to immediate injunctive relief and may obtain a temporary order
restraining any threatened or further breach, without the necessity of proof of
actual damage or the posting of any bond.

 

11.         Continued Availability and Cooperation. (a) Following termination of
the Executive’s employment, the Executive will reasonably cooperate with the
Company Group and with the Company Group members’ counsel in connection with any
present or future actual or threatened litigation, administrative proceeding or
investigation involving any member of the Company Group that relates to events,
occurrences or conduct occurring (or claimed to have occurred) during the period
of the Executive’s employment by the Company Group. Cooperation will include:

 

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(i)          Being reasonably available for interviews and discussions with the
Company Group members’ counsel, as well as for depositions and trial testimony;

 

(ii)         If depositions or trial testimony are to occur, being reasonably
available and cooperating in the preparation therefor, as and to the extent that
the Company Group or any Company Group member’s counsel reasonably requests;

 

(iii)        Refraining from impeding in any way the Company Group’s prosecution
or defense of such litigation or administrative proceeding; and

 

(iv)        Reasonably cooperating fully in the development and presentation of
the Company Group’s prosecution or defense of such litigation or administrative
proceeding.

 

(b)          The Company will reimburse the Executive for reasonable travel,
lodging, telephone and similar expenses, as well as reasonable attorneys’ fees
(if independent legal counsel is authorized in advance in writing by the
Company), incurred in connection with any such cooperation, consultation and
advice rendered under this Agreement after the Executive’s termination of
employment. However, the Executive will not be entitled to any separate
compensation for any matter referred to in this Section 11.

 

12.         Dispute Resolution. (a) In the event that the Parties are unable to
resolve any controversy or claim arising out of or in connection with this
Agreement or breach thereof, any Party may refer the dispute to binding
arbitration, which, except as expressly provided hereafter, will be the
exclusive forum for resolving such claims. Such arbitration will be administered
by the American Arbitration Association (the “AAA”) and governed by Texas law.
The arbitration will be conducted by a single arbitrator selected by the
Executive and the Company according to the rules of the AAA. In the event that
the Parties fail to agree on the selection of the arbitrator within 30 days
after either the Executive’s or the Company’s request for arbitration, the
arbitrator will be chosen by the AAA. The arbitration proceeding will commence
on a mutually agreeable date within 90 days after the request for arbitration.
The forum for arbitration will be agreed on by the Parties or, in the absence of
any agreement, will be in a venue located in Houston, Texas.

 

(b)          The Parties agree that the arbitrator will have the authority to
award costs and attorneys’ fees in any arbitration hereunder.

 

(c)          The arbitrator will have no power or authority to make awards or
orders granting relief that would not be available to a Party in a court of law.
The arbitrator’s award is limited by and must comply with this Agreement and
applicable federal, state and local laws. The decision of the arbitrator will be
final and binding on the Parties.

 

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(d)          Notwithstanding the foregoing, no claim or controversy for
injunctive or equitable relief contemplated by or allowed under applicable law
pursuant to Sections 8 and 9 will be subject to arbitration under this Section
12, but will instead be subject to determination as provided in Section 17.

 

13.         Other Agreements, Entire Agreement, Etc. No agreements or
representations or warranties, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by any Party which are not
expressly set forth in this Agreement. This Agreement contains the entire
agreement of the Parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings relating to the subject
matter hereof. Nothing herein will be deemed to provide the Executive a right to
remain an officer or employee of any member of the Company Group.

 

14.         Withholding of Taxes. The Company will have the right to withhold
from any amount payable hereunder any federal, state, city, local or other taxes
in order for the Company Group to satisfy any withholding tax obligation it may
have under any applicable law, regulation or ruling.

 

15.         Successors and Binding Agreement. (a) The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company expressly to assume and agree to perform this Agreement in
the same manner and to the same extent the Company would be required to perform
if no such succession had taken place. This Agreement will be binding upon and
inure to the benefit of the Company and any successor to the Company, including
any Person acquiring directly or indirectly all or substantially all of the
business or assets of the Company whether by purchase, merger, consolidation,
reorganization or otherwise (and such successor will thereafter be deemed “the
Company” for purposes of this Agreement), but will not otherwise be assignable
or delegable by the Company, except that the Company may assign this Agreement,
or may assign its rights and delegate its duties hereunder, to any Person who
acquires all of the voting stock, or all of the assets, of the Company (or to
any parent entity thereof).

 

(b)          This Agreement will inure to the benefit of and be enforceable by
the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees and legatees. If the Executive dies while any
amount would still be payable to the Executive hereunder (other than amounts
which, by their terms, terminate upon the death of the Executive) if the
Executive had continued to live, all such amounts, unless otherwise provided
herein, will be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of the Executive's estate.

 

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(c)          This Agreement is personal in nature and neither the Company nor
the Executive may, without the consent of the other, assign or delegate this
Agreement or any rights or obligations hereunder, except as expressly provided
in Sections 15(a) and 15(b). Without limiting the generality or effect of the
foregoing, the Executive’s right to receive payments hereunder will not be
assignable, transferable or delegable, whether by pledge, creation of a security
interest, or otherwise, other than by a transfer by the Executive’s will or by
the laws of descent and distribution and, in the event of any attempted
assignment or transfer contrary to this paragraph, the Company will have no
liability to pay any amount so attempted to be assigned, transferred or
delegated.

 

16.         Notices. Any notice, demand, claim or other communication under this
Agreement will be in writing and will be deemed to have been given (a) on
delivery if delivered personally; (b) on the date on which delivery thereof is
guaranteed by the carrier if delivered by a national courier guaranteeing
delivery within a fixed number of days of sending; or (c) on the date of
transmission (if sent by electronic mail, fax or other electronic means) thereof
if delivery is confirmed, but, in each case, only if addressed to the Parties in
the following manner at the following addresses (or at the other address as a
Party may specify by notice to the other) to the Company, to the attention of
the General Counsel at its principal executive offices, and to the Executive, at
the Executive’s principal residence as set forth in the employment records of
the Company.

 

Company:

 

Integrated Drilling Equipment Holdings Corp.
25311 I-45 North, Woodpark Business Center, Building 6
Spring, TX 77380
Fax (281) 465-9440

 

Executive:

 

James Terry
1329 Bomar Street
Houston, TX 77006

 

17.         Governing Law and Choice of Forum. (a) This Agreement will be
construed and enforced according to the laws of the State of Texas, other than
the choice of law provisions thereof.

 

(b)          To the extent not otherwise provided for by Section 12, the Parties
consent to the exclusive jurisdiction of all state and federal courts located in
Houston, Texas, as well as to the jurisdiction of all courts of which an appeal
may be taken from such courts, for the purpose of any suit, action or other
proceeding arising out of, or in connection with, this Agreement or that
otherwise arise out of the employment relationship. Each Party hereby expressly
waives (i) any and all rights to bring any suit, action or other proceeding in
or before any court or tribunal other than the courts described above, and
covenants that it will not seek in any manner to resolve any dispute other than
as set forth in this paragraph, and (ii) any and all objections either may have
to venue, including the inconvenience of such forum, in any of such courts. In
addition, each Party consents to the service of process by personal service or
any manner in which notices may be delivered hereunder in accordance with this
Agreement.

 

12

 

 

 

18.         Validity/Severability. The Parties agree that (a) the provisions of
this Agreement will be severable in the event that for any reason whatsoever any
of the provisions hereof are invalid, void or otherwise unenforceable, (b) any
such invalid, void or otherwise unenforceable provisions will be replaced by
other provisions which are as similar as possible in terms to such invalid, void
or otherwise unenforceable provisions but are valid and enforceable, and (c) the
remaining provisions will remain valid and enforceable to the fullest extent
permitted by applicable law.

 

19.         Survival. The obligations of the Company and the Executive under
this Agreement which by their nature may require either partial or total
performance after the expiration or termination of the Employment Term or this
Agreement (including those under Sections 8, 9, 10, and 11) will survive any
termination or expiration of this Agreement.

 

20.         Subsequent Employment. During the Restricted Period, if the
Executive is offered employment or the opportunity to enter into a business
activity that could violate the non-compete language in this Agreement, whether
as owner, investor, executive, manager, employee, independent consultant,
contractor, advisor or otherwise, the Executive will inform the offeror of the
existence of Sections 8 and 9 of this Agreement and provide the offeror a copy
thereof. The Executive authorizes the Company to provide a copy of the relevant
provisions of this Agreement to any of the Persons described in this paragraph
and to make such Persons aware of the Executive’s obligations under this
Agreement.

 

21.         Excise Tax. (a) Notwithstanding any other provisions in this
Agreement, in the event that any payment or benefit received or to be received
by the Executive (including any payment or benefit received in connection with a
change in control of the Company or the termination of the Executive’s
employment, whether pursuant to the terms of this Agreement or any other plan,
program, arrangement or agreement) (all such payments and benefits, together,
the “Total Payments”) would be subject (in whole or part), to any excise tax
imposed under Section 4999 of the Code, or any successor provision thereto (the
“Excise Tax”), then, after taking into account any reduction in the Total
Payments provided by reason of Section 280G of the Code in such other plan,
program, arrangement or agreement, the Company will reduce the Total Payments to
the extent necessary so that no portion of the Total Payments is subject to the
Excise Tax (but in no event to less than zero); provided, however, that the
Total Payments will only be reduced if (i) the net amount of such Total
Payments, as so reduced (and after subtracting the net amount of federal, state,
municipal and local income taxes on such reduced Total Payments and after taking
into account the phase out of itemized deductions and personal exemptions
attributable to such reduced Total Payments), is greater than or equal to (ii)
the net amount of such Total Payments without such reduction (but after
subtracting the net amount of federal, state, municipal and local income taxes
on such Total Payments and the amount of Excise Tax to which the Executive would
be subject in respect of such unreduced Total Payments and after taking into
account the phase out of itemized deductions and personal exemptions
attributable to such unreduced Total Payments).

 

13

 

 

 

(b)          In the case of a reduction in the Total Payments, the Total
Payments will be reduced in the following order: (i) payments that are payable
in cash that are valued at full value under Treasury Regulation Section
1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that
are payable last reduced first; (ii) payments and benefits due in respect of any
equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A
24(a), with the highest values reduced first (as such values are determined
under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii)
payments that are payable in cash that are valued at less than full value under
Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last
reduced first, will next be reduced; (iv) payments and benefits due in respect
of any equity valued at less than full value under Treasury Regulation Section
1.280G-1, Q&A 24, with the highest values reduced first (as such values are
determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be
reduced; and (v) all other non-cash benefits not otherwise described in clauses
(ii) or (iv) will be next reduced pro-rata. Any reductions made pursuant to each
of clauses (i)-(v) above will be made in the following manner: first, a pro-rata
reduction of cash payment and payments and benefits due in respect of any equity
not subject to Section 409A, and second, a pro-rata reduction of cash payments
and payments and benefits due in respect of any equity subject to Section 409A
as deferred compensation.

 

(c)          For purposes of determining whether and the extent to which the
Total Payments will be subject to the Excise Tax: (i) no portion of the Total
Payments the receipt or enjoyment of which the Executive shall have waived at
such time and in such manner as not to constitute a “payment” within the meaning
of Section 280G(b) of the Code will be taken into account; (ii) no portion of
the Total Payments will be taken into account which, in the opinion of tax
counsel (“Tax Counsel”) reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the change in control, the
Company’s independent auditor (the “Auditor”), does not constitute a “parachute
payment” within the meaning of Section 280G(b)(2) of the Code (including by
reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax,
no portion of such Total Payments will be taken into account which, in the
opinion of Tax Counsel, constitutes reasonable compensation for services
actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in
excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code)
that is allocable to such reasonable compensation; and (iii) the value of any
non-cash benefit or any deferred payment or benefit included in the Total
Payments will be determined by the Auditor in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.

 

14

 

 

(d)          At the time that payments are made under this Agreement, the
Company will provide the Executive with a written statement setting forth the
manner in which such payments were calculated and the basis for such
calculations, including any opinions or other advice the Company received from
Tax Counsel, the Auditor, or other advisors or consultants (and any such
opinions or advice which are in writing will be attached to the statement). If
the Executive objects to the Company’s calculations, the Company will pay to the
Executive such portion of the Total Payments (up to 100% thereof) as the
Executive determines is necessary to result in the proper application of this
Section 21. All determinations required by this Section 21 (or requested by
either the Executive or the Company in connection with this Section 21) will be
at the expense of the Company. The fact that the Executive’s right to payments
or benefits may be reduced by reason of the limitations contained in this
Section 21 will not of itself limit or otherwise affect any other rights of the
Executive under this Agreement.

 

22.         Compliance with Section 409A. (a) The severance payments under this
Agreement are intended, where possible, to comply with the “short term deferral
exception” and/or the “involuntary separation pay exception” to Section 409A of
the Code. Accordingly, the provisions of this Agreement shall be applied,
construed and administered so that those payments qualify for one or both of
those exceptions, to the maximum extent allowable. However, to the extent any
payment or benefit to which the Executive becomes entitled under this Agreement
is deemed to constitute an item of deferred compensation subject to the
requirements of Section 409A of the Code, the provisions of this Agreement shall
be applied, construed and administered in order to comply with the provisions of
Section 409A of the Code, along with the rules, regulations and guidance
promulgated thereunder by the Department of the Treasury or the Internal Revenue
Service (collectively, “Section 409A”) so as not to subject the Executive to the
payment of the additional tax, interest or penalty which may be imposed under
Section 409A. In furtherance thereof, to the extent that any provision of this
Agreement would result in the Executive being subject to payment of additional
tax, interest or penalty under Section 409A, the Parties agree to amend this
Agreement if permitted under Section 409A in a manner which does not impose any
additional taxes, interest or penalties on Executive in order to bring this
Agreement into compliance with Section 409A, without materially changing the
economic value of the arrangements under this Agreement to any Party, and
thereafter the Parties will interpret its provisions in a manner that complies
with Section 409A. Notwithstanding the foregoing, no particular tax result for
the Executive with respect to any income recognized by the Executive in
connection with this Agreement is guaranteed.

 

(b)          Notwithstanding any provisions of this Agreement to the contrary,
if the Executive is a “specified employee” (within the meaning of Section 409A
and determined pursuant to any policies adopted by the Company consistent with
Section 409A), at the time of the Executive’s “Separation From Service” (within
the meaning of Section 409A) and if any portion of the payments or benefits to
be received by the Executive upon Separation From Service would be considered
deferred compensation under Section 409A and cannot be paid or provided to the
Executive without the Executive incurring taxes, interest or penalties under
Section 409A, amounts that would otherwise be payable pursuant to this Agreement
and benefits that would otherwise be provided pursuant to this Agreement, in
each case, during the six-month period immediately following the Executive’s
Separation From Service will instead be paid or made available on the earlier of
(i) the first business day of the seventh month following the date of
Executive’s Separation From Service or (ii) the Executive’s death.

 

15

 

 

 

(c)          With respect to any amount of expenses eligible for reimbursement
or the provision of any in-kind benefits under this Agreement, to the extent
such payment or benefit would be considered deferred compensation under Section
409A or is required to be included in the Executive’s gross income for federal
income tax purposes, such expenses (including expenses associated with in-kind
benefits) will be reimbursed by the Executive no later than December 31st of the
year following the year in which the Executive incurs the related expenses. In
no event will the reimbursements or in-kind benefits to be provided by the
Company in one taxable year affect the amount of reimbursements or in-kind
benefits to be provided in any other taxable year, nor will the Executive’s
right to reimbursement or in-kind benefits be subject to liquidation or exchange
for another benefit.

 

(d)          Each payment under this Agreement is intended to be a “separate
payment” and not one of a series of payments for purposes of Section 409A.

 

(e)          A termination of employment will not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any
amounts or benefits subject to Section 409A upon or following a termination of
employment unless such termination is also a Separation From Service, and
notwithstanding anything contained herein to the contrary, the date on which
such Separation From Service takes place will be the date of termination of
employment.

 

(f)          Notwithstanding anything to the contrary set forth in this
Agreement, if any payment under this Agreement subject to execution of a release
is subject to the requirements of Section 409A, in no event will the timing of
the execution of the release, directly or indirectly, result in Executive
designating the calendar year of payment, and if a payment that is subject to
execution of a release could be made in more than one taxable year, payment will
be made in the later taxable year.

 

23.         Amendment; Waiver. (a) This Agreement may be amended and any
provision of this Agreement may be waived, provided that any such amendment or
waiver will be binding upon a Party only if such amendment or waiver is set
forth in a writing executed by such Party. No course of dealing between the
Parties will be deemed effective to modify, amend or discharge any part of this
Agreement or any rights or obligations of any Party under or by reason of this
Agreement.

 

(b)          No delay or failure in exercising any right, power or remedy
hereunder will affect or operate as a waiver thereof; nor will any single or
partial exercise thereof or any abandonment or discontinuance of steps to
enforce such a right, power or remedy preclude any further exercise thereof or
of any other right, power or remedy.

 

16

 

 

24.         Counterparts. This Agreement may be executed in multiple
counterparts (any one of which need not contain the signatures of more than one
Party), each of which will be deemed to be an original but all of which taken
together will constitute one and the same agreement. This Agreement, and any
amendments hereto, to the extent signed and delivered by means of a facsimile
machine or other electronic transmission, will be treated in all manner and
respects as an original agreement and will be considered to have the same
binding legal effects as if it were the original signed version thereof
delivered in person. At the request of any Party, the Parties will re-execute
original forms thereof and deliver them to the requesting Party. No Party will
raise the use of a facsimile machine or other electronic means to deliver a
signature or the fact that any signature was transmitted or communicated through
the use of facsimile machine or other electronic means as a defense to the
formation of a contract and each Party forever waives any such defense.

 

25.         Headings; Interpretation. (a) The descriptive headings herein are
inserted for convenience of reference only and are not intended to be a
substantive part of or to affect the meaning or interpretation of this
Agreement.

 

(b)          Reference to any agreement, document, or instrument means such
agreement, document, or instrument as amended or otherwise modified from time to
time in accordance with the terms thereof, and if applicable hereof. Unless
otherwise indicated, any reference to a “Section” means a Section of this
Agreement.

 

(c)          In the event an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the Parties,
and no presumption or burden of proof will arise favoring or disfavoring any
Party by virtue of the authorship of any of the provisions of this Agreement.

 

(d)          The word “including” (in its various forms) means including without
limitation. All references in this Agreement to “days” refer to “calendar days”
unless otherwise specified.

 

26.         Defined Terms. In addition to the terms defined elsewhere herein,
the following terms will have the following meanings when used herein with
initial capital letters:

 

(a)          “Affiliate” means, as to any Person, any other Person that directly
or indirectly controls, or is controlled by, or is under common control with,
such Person. For this purpose, “control” (including, with its correlative
meanings, “controlled by” and “under common control with”) will mean the
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies of a Person, whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise. Unless otherwise indicated, an Affiliate refers to an Affiliate of
the Company.

 

(b)          “Cause” means:

 

(i)          Any act or omission constituting a material breach by the Executive
of any provisions of this Agreement;

 

17

 

 

(ii)         The willful failure by the Executive to perform the Executive’s
duties hereunder (other than any such failure resulting from the Executive’s
Disability), after demand for performance is delivered by the Company that
identifies in reasonable detail the manner in which the Company believes the
Executive has not performed the Executive’s duties, if, within 30 days of such
demand, the Executive fails to cure any such failure that is capable of being
cured;

 

(iii)        Any misconduct by the Executive that is materially injurious to any
member of the Company Group, financial or otherwise, or any act of
misappropriation, fraud including with respect to any member of the Company
Group’s accounting and financial statements, embezzlement or conversion by the
Executive of the property of any member of the Company Group;

 

(iv)        The conviction (or plea of no contest) of the Executive for any
felony;

 

(v)         The Executive’s gross negligence, gross neglect of duties or gross
insubordination;

 

(vi)        The Executive’s commission of any violation of any antifraud
provision of federal or state securities laws;

 

(vii)       The Executive’s alcohol or prescription or other drug abuse
substantially affecting work performance for a period of at least thirty (30)
days; or

 

(viii)      The Executive’s material violation of the Company Policies or this
Agreement.

 

(c)          “Change in Control” means the occurrence of a “change in control
event” (within the meaning of Section 409A) with respect to the Company.

 

(d)          “Change in Control Period” means the period commencing on the date
a Change in Control occurs and ending on the second anniversary of such date.

 

(e)          “Code” means the Internal Revenue Code of 1986, as amended.

 

(f)          “Company Group” means the Company and its subsidiaries.

 

(g)          “Compensation Committee” means the Compensation Committee of the
Supervisor.

 

(h)          “Disability” or “Disabled” means:

 

(i)          The Executive’s incapacity due to physical or mental illness to
substantially perform the Executive’s duties and the essential functions of the
Executive’s position, with or without reasonable accommodation, on a full-time
basis for 6 months; and

 

(ii)         The Executive becomes eligible to receive benefits under the
Company’s applicable long-term disability plan.

 

18

 

 

 

except that, if the Executive does not agree with a determination to terminate
the Executive’s employment because of Disability, the question of the
Executive’s Disability will be subject to the certification of a qualified
medical doctor reasonably agreed upon by the Company and the Executive. The
costs of such qualified medical doctor will be paid by the Company.

 

(i)          “Employment Term” means the Initial Employment Term and any Renewal
Term(s), provided that the Employment Term shall end upon the termination of
Executive’s employment for any reason prior to the scheduled expiration of the
Employment Term.

 

(j)          “Good Reason” means, without the Executive’s consent:

 

(i)          A material diminution in the Executive’s Base Salary or Target
Bonus, other than a general reduction in Base Salary and/or Target Bonus that
affects all similarly situated Company executives in substantially the same
proportions;

 

(ii)         A material diminution or material adverse change in the Executive’s
authority, duties, or responsibilities, and/or corporate role as set forth in
this Agreement (other than temporarily while the Executive is physically or
mentally incapacitated or as required by applicable law);

 

(iii)        A relocation of the Executive's principal place of employment by
more than 50 miles from the Executive’s principal place of employment as of the
Start Date; or

 

(iv)        Any material breach by the Company of this Agreement.

 

provided, however, that the foregoing conditions will constitute Good Reason
only if (A) the Executive provides written notice to the Company within 90 days
of the initial existence of the condition(s) constituting Good Reason and (B)
the Company fails to cure such condition(s) within 30 days after receipt from
the Executive of such notice; and provided further, that Good Reason will cease
to exist with respect to a condition one year following the initial existence of
such condition.

 

(k)          “Person” means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture or an unincorporated organization.

 

(l)          “Supervisor” means the Company’s Board of Directors or any
applicable designee thereof.

 

27.         Certain Costs. Each Party will pay and be fully responsible for its
own costs and expenses (including costs of professional advisors) in connection
with the negotiation, execution, interpretation and enforcement of this
Agreement. Notwithstanding the foregoing, the Company will reimburse the
Executive for reasonable legal fees incurred on or prior to the Execution Date
in connection with the Executive’s negotiation and execution of this Agreement,
up to a maximum of $4,000.00.

 

19

 

 

 

28.         Clawback Provisions. Notwithstanding any other provisions in this
Agreement to the contrary, any incentive-based compensation, or any other
compensation, paid to the Executive pursuant to this Agreement or any other
agreement or arrangement with any member of the Company Group, which is subject
to recovery under any law, government regulation or stock exchange listing
requirement, will be subject to such deductions and clawback as may be required
to be made pursuant to such law, government regulation or stock exchange listing
requirement (or any policy adopted by any member of the Company Group pursuant
to any such law, government regulation or stock exchange listing requirement).

 

29.         Acknowledgements. The Executive acknowledges and agrees that (i) the
Executive has read this Agreement carefully and in its entirety, (ii) the
Executive understands the terms and conditions contained herein, (iii) the
Executive has had the opportunity to review this Agreement with legal counsel of
the Executive’s own choosing and has not relied on any statements made by the
Company or its legal counsel as to the meaning of any term or condition
contained herein or in deciding whether to enter into this Agreement, and (iv)
the Executive is entering into this Agreement knowingly and voluntarily. The
Executive acknowledges and agrees that each member of the Company Group is an
intended third party beneficiary of this Agreement and, as such, will be
entitled to all of the benefits, and will be permitted to enforce its rights,
under this Agreement as if such third party were an original party hereto. As an
inducement to enter into this Agreement, the Executive represents and warrants
as follows: (A) the Executive is not a party to any other agreement or
obligation for personal services; (B) there exist no impediments or restraints,
contractual or otherwise on the Executive’s power, right or ability to enter
into this Agreement and to perform the Executive’s duties and obligations
hereunder; and (C) the performance of the Executive's obligations under this
Agreement do not and will not violate or conflict with any agreement relating to
confidentiality, non-competition or exclusive employment to which the Executive
is or was subject.

 

30.         Resignations. Following the termination of the Executive’s
employment for any reason, if and to the extent requested by the Supervisor, the
Executive agrees to resign from the Supervisor, all fiduciary positions
(including as trustee or director of Supervisor) and all other offices and
positions the Executive holds with the Company Group; provided, however, that if
the Executive refuses to tender the Executive’s resignation after the Supervisor
has made such request, then the Supervisor will be empowered to tender the
Executive’s resignation from such offices and positions.

 

[Remainder of Page Intentionally Left Blank]

 

20

 

 

 

IN WITNESS WHEREOF, this Agreement is duly executed as of the Execution Date.

 

  Integrated Drilling Equipment Holdings Corp.       By:  /s/ Michael Dion      
Name: N. Michael Dion   Title:   VP and CFO       James Terry, Executive      
/s/ James Terry

 

21

 

  

Exhibit A

 

WAIVER AND RELEASE OF CLAIMS Agreement

 

James Terry (“Employee”) hereby acknowledges that Integrated Drilling Equipment
Holdings Corp. (“Employer”) is offering Employee certain payments in connection
with Employee’s termination of employment pursuant to the employment agreement
entered into between Employer and Employee, as amended (the “Employment
Agreement”), in exchange for Employee’s promises in this Waiver and Release of
Claims Agreement (this “Agreement”).

 

Severance Payments

 

1.          Employee agrees that Employee will be entitled to receive the
applicable severance payments under the Employment Agreement (the “Severance
Payments”) only if Employee accepts and does not revoke this Agreement, which
requires Employee to release both known and unknown claims.

 

2.          Employee agrees that the Severance Payments tendered under the
Employment Agreement constitute fair and adequate consideration for the
execution of this Agreement. Employee further agrees that Employee has been
fully compensated for all wages and fringe benefits, including, but not limited
to, paid and unpaid leave, due and owing, and that the Severance Payments are in
addition to payments and benefits to which Employee is otherwise entitled.

 

Claims That Are Being Released

 

3.          Employee agrees that this Agreement constitutes a full and final
release by Employee and Employee’s descendants, dependents, heirs, executors,
administrators, assigns, and successors, of any and all claims, charges, and
complaints, whether known or unknown, that Employee has or may have to date
against Employer and any of its parents, subsidiaries, or affiliated entities
and their respective officers, directors, shareholders, partners, joint
venturers, employees, consultants, insurers, agents, predecessors, successors,
and assigns, arising out of or related to Employee’s employment or the
termination thereof, or otherwise based upon acts or events that occurred on or
before the date on which Employee signs this Agreement. To the fullest extent
allowed by law, Employee hereby waives and releases any and all such claims,
charges, and complaints in return for the Severance Payments. This release of
claims is intended to be as broad as the law allows, and includes, but is not
limited to, rights arising out of alleged violations of any contracts, express
or implied, any covenant of good faith or fair dealing, express or implied, any
tort or common law claims, any legal restrictions on Employer’s right to
terminate employees, and any claims under any federal, state, municipal, local,
or other governmental statute, regulation, or ordinance, including, without
limitation:

 

22

 

 

(a)claims of discrimination, harassment, or retaliation under equal employment
laws such as Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, the Age Discrimination in Employment Act, the Older Workers
Benefit Protection Act, the Rehabilitation Act of 1973, and any and all other
federal, state, municipal, local, or foreign equal opportunity laws;

 

(b)if applicable, claims of wrongful termination of employment; statutory,
regulatory, and common law “whistleblower” claims, and claims for wrongful
termination in violation of public policy;

 

(c)claims arising under the Employee Retirement Income Security Act of 1974,
except for any claims relating to vested benefits under Employer’s employee
benefit plans;

 

(d)claims of violation of wage and hour laws, including, but not limited to,
claims for overtime pay, meal and rest period violations, and recordkeeping
violations; and

 

(e)claims of violation of federal, state, municipal, local, or foreign laws
concerning leaves of absence, such as the Family and Medical Leave Act. [Other
applicable provisions to be included based upon Employee’s place of employment.]

 

4.          If Employee has worked or is working in California, Employee
expressly agrees to waive the protection of Section 1542 of the California Civil
Code, which provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR

 

Claims That Are Not Being Released

 

5.          This release does not include any claims that may not be released as
a matter of law, and this release does not waive claims or rights that arise
after Employee signs this Agreement. Further, this release will not prevent
Employee from doing any of the following:

 

(a)obtaining unemployment compensation, state disability insurance, or workers’
compensation benefits from the appropriate agency of the state in which Employee
lives and works, provided Employee satisfies the legal requirements for such
benefits (nothing in this Agreement, however, guarantees or otherwise
constitutes a representation of any kind that Employee is entitled to such
benefits);

 

(b)asserting any right that is created or preserved by this Agreement, such as
Employee’s right to receive the Severance Benefits;

 

23

 

 

 

(c)filing a charge, giving testimony or participating in any investigation
conducted by the Equal Employment Opportunity Commission (the “EEOC”) or any
duly authorized agency of the United States or any state (however, Employee is
hereby waiving the right to any personal monetary recovery or other personal
relief should the EEOC (or any similarly authorized agency) pursue any class or
individual charges in part or entirely on Employee’s behalf); or

 

(d)challenging or seeking determination in good faith of the validity of this
waiver under the Age Discrimination in Employment Act (nor does this release
impose any condition precedent, penalties, or costs for doing so, unless
specifically authorized by federal law).

 

Additional Employee Covenants

 

6.          To the extent applicable, Employee confirms and agrees to Employee’s
continuing obligations under the Employment Agreement, including, without
limitation, following termination of Employee’s employment with Employer. This
includes, without limitation, Employee’s continuing obligations under Sections
8-11 of the Employment Agreement.

 

Voluntary Agreement And Effective Date

 

7.          Employee understands and acknowledges that, by signing this
Agreement, Employee is agreeing to all of the provisions stated in this
Agreement, and has read and understood each provision.

 

8.          The parties understand and agree that:

 

(a)Employee will have a period of 21 calendar days in which to decide whether or
not to sign this Agreement, and an additional period of seven calendar days
after signing in which to revoke this Agreement. If Employee signs this
Agreement before the end of such 21-day period, Employee certifies and agrees
that the decision is knowing and voluntary and is not induced by Employer
through (i) fraud, misrepresentation, or a threat to withdraw or alter the offer
before the end of such 21-day period or (ii) an offer to provide different terms
in exchange for signing this Agreement before the end of such 21-day period.

 

(b)In order to exercise this revocation right, Employee must deliver written
notice of revocation to [INSERT COMPANY CONTACT on or before the seventh
calendar day after Employee executes this Agreement. Employee understands that,
upon delivery of such notice, this Agreement will terminate and become null and
void.

 

(c)The terms of this Agreement will not take effect or become binding, and
Employee will not become entitled to receive the Severance Payments, until that
seven-day period has lapsed without revocation by Employee. If Employee elects
not to sign this Agreement or revokes it within seven calendar days of signing,
Employee will not receive the Severance Payments.

 

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(d)All amounts payable hereunder will be paid in accordance with the applicable
terms of the Employment Agreement.

 

Governing Law

 

9.          This Agreement will be governed by the substantive laws of the State
of Texas, without regard to conflicts of law, and by federal law where
applicable.

 

10.         If any part of this Agreement is held to be invalid or
unenforceable, the remaining provisions of this Agreement will not be affected
in any way.

 

Consultation With Attorney

 

11.         Employee is hereby encouraged and advised to confer with an attorney
regarding this Agreement. By signing this Agreement, Employee acknowledges that
Employee has consulted, or had an opportunity to consult with, an attorney or a
representative of Employee’s choosing, if any, and that Employee is not relying
on any advice from Employer or its agents or attorneys in executing this
Agreement.

 

12.         This Agreement was provided to Employee for consideration on [INSERT
DATE THIS AGREEMENT PROVIDED TO EMPLOYEE].

 

13.         

 

PLEASE READ THIS AGREEMENT CAREFULLY; IT CONTAINS A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.

 

Employee certifies that Employee has read this Agreement and fully and
completely understands and comprehends its meaning, purpose, and effect.
Employee further states and confirms that Employee has signed this Agreement
knowingly and voluntarily and of Employee’s own free will, and not as a result
of any threat, intimidation or coercion on the part of Employer or its
representatives or agents.

 

    EMPLOYEE       Date:              

 

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