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     (c) ***Long-Term Incentives***. Executive shall be eligible to receive grants of long-termincentives, such as stock options, stock appreciation rights, restricted stock, rights to acquirestock or other securities of the Company or cash, all as commensurate with his position, and to theextent permitted by and in accordance with the terms of the Company’s long-term incentive plan orplans as in effect from time to time.3. **Duties and Responsibilities of Executive**. Executive shall have responsibilities, dutiesand authorities reasonably accorded to, expected of, and consistent with Executive’s position as________________. During the Employment Period, Executive shall devote his full business time andattention to the Company’s business and shall promote its success and shall perform the duties andresponsibilities assigned to him by the Reporting Authority from time to time to the best of hisability and with reasonable diligence, with the primary duties and responsibilities as of the dateof this Agreement as set forth in Section 1 of Appendix B of the Agreement. ThisSection 3 shall not be construed as preventing Executive from (a) serving on advisorycommittees or boards with the written permission of the Reporting Authority, such permission not tobe unreasonably withheld or delayed; (b) engaging in reasonable volunteer services for charitable,educational or civic organizations; or (c) managing his personal investments in a form or mannerthat will not require Executive’s services in the operation of the entities in which suchinvestments are made. In any event, no such activity shall conflict with Executive’s loyalties andduties to the Company or his ability to fulfill his duties and responsibilities hereunder.Executive shall at all times endeavor to in good faith comply with laws applicable to Executive’sactions on behalf of the Company and its Affiliates.4. **Term of Employment****.**Executive’s initial term of employment with the Company under theAgreement shall be for the period from the Effective Date through ______________ (**the “Initial Termof Employment”**). Thereafter, the Initial Term of Employment shall be automatically extendedrepetitively for an additional one-year period commencing on _____________, and each anniversarythereof, unless notice is given by either the Company or Executive to the other Party at least 90days prior to the end of the Initial Term of Employment, or any one-year extension thereof, asapplicable, that the term of employment will not be renewed. The Initial Term of Employment andany extension of the Initial Term of Employment hereunder shall each be referred to herein as a“**Term of Employment**.” The Term of Employment shall also be extended upon a Change in Control asprovided in Section 7, but shall not thereafter be extended under this Section 4.The Term of Employment shall automatically end in the event of the death or Disability ofExecutive. The Company and Executive shall each have the right to give Notice of Termination(pursuant to Section 8) at will, with or without cause, at any time, subject however to theterms and conditions of the Agreement regarding the rights and duties of the Parties upontermination of employment. The period from the Effective Date through the earlier of the date ofExecutive’s termination of employment for whatever reason or the end of the Term of Employmentshall be referred to herein as the “**Employment Period**.”5. **Benefits**. Subject to the terms and conditions of the Agreement, Executive shall beentitled to the following:
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     (a) ***Ongoing Benefits***. During the Employment Period, Executive shall be entitled to thefollowing:          (1) ***Reimbursement of Expenses***. The Company shall pay or reimburse Executive for allreasonable travel, entertainment and other expenses paid or incurred by Executive in theperformance of his duties hereunder. The Company shall also provide Executive with suitable officespace, including staff support.          (2) ***Other Employee Benefits***. Executive shall be eligible to participate in any pension,retirement, 401(k), and profit-sharing, non-qualified deferred compensation and other groupretirement plans or programs of the Company, to the same extent as available to Senior Officersunder the terms of such plans or programs. Executive shall also be entitled to participate in anymedical, dental, life, accident, disability and other group insurance plans or programs of theCompany, to the same extent as available to Senior Officers under the terms of such plans orprograms.          (3) ***Paid Time Off***. Executive shall be entitled to the number of hours of paid time off eachyear that is accorded under the Company’s paid time policy for other employees of the Company ofthe same level, but not less than 200 hours of paid time off annually.     (b) ***Payments Upon Termination***. Upon termination of employment during the Term of Employmentand without requirement of execution of a Waiver and Release, Executive shall be entitled to thefollowing minimum payments, in addition to any other payments or benefits he is entitled to receiveunder the terms of the Agreement and any employee benefit plan or program;          (1) his accrued but unpaid Base Salary through his Termination Date;          (2) his unpaid vacation pay for that year which has accrued through his Termination Date; and          (3) reimbursement of business expenses in accordance with the Company’s normal procedures.Any such salary and accrued vacation pay shall be paid to Executive in a cash lump sum within fivebusiness days following the Termination Date.
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6. **Severance Benefits Upon Certain Terminations Prior to a Change in Control**. Except inthe event of termination of Executive’s employment (i) due to Executive’s death or Disability, (ii)due to Executive’s voluntary resignation or termination, in either case without Good Reason, (iii)by the Company for Cause, or (iv) after a Change in Control under the circumstances and within thetime limits provided in Section 7, and subject to the Waiver and Release requirementdescribed in Section 6(d) and the forfeiture provision in Section 16, Executive’sright to compensation and benefits for periods after the Termination Date shall be determined inaccordance with this Section 6, as follows:     (a) ***Cash Payments***. In the event that during the Term of Employment, (i) Executive’semployment is terminated by the Company for any reason other than Cause, or (ii) Executiveterminates his own employment hereunder for Good Reason, then in either such event under clause (i)or (ii), the following cash payments shall be provided to Executive or, in the event of his deathbefore receiving such benefits, to his Designated Beneficiary following his death:          (1) the Company shall pay to Executive as additional compensation (the “Additional Payment”),an amount which is equal to “Total Cash” (defined below) multiplied by ____ (the “SeveranceMultiplier”). “Total Cash” means the greater of (x) or (y), where (x) equals the greater ofExecutive’s Base Salary as in effect on the date Notice of Termination is given or on the dateimmediately prior to his Termination Date plus Executive’s current annual incentive target bonus;and (y) equals the sum of Executive’s highest Base Salary paid and highest annual incentive bonusearned with respect to any of the three calendar years immediately preceding the year containingthe Termination Date. For clauses (x) and (y) of this definition: (a) the calculation of theannual bonus of Executive shall include a calendar year during which Executive was employed by theCompany and a participant in a bonus or incentive cash compensation plan even if Executive did notearn any bonus or incentive cash compensation for that calendar year and (b) the “target bonus” forExecutive for the calendar year of the Company in which the Termination Date occurs shall be theamount identified in Section 2(b) as the “target”, subject to adjustment as provided inSection 2(b); the Additional Payment shall be paid to Executive in a cash lump sum paymenton the 60th day following the Termination Date, but only if the Waiver and Release has been timelyexecuted and returned and the revocation period has expired;          (2) a portion of his annual incentive bonus equal to the annual incentive bonus as provided inSection 2(b) based on actual performance, multiplied by a fraction, the numerator of whichequals the number of days from the commencement of the year in which such termination occursthrough the Termination Date, and the denominator of which equals 365; any such annual incentivebonus shall be paid in a cash lump sum on the normal bonus payment date for Senior Officers whoseemployment has continued, and in no event later than the end of the year following the year inwhich the Termination Date occurs, but only if the Waiver and Release has been timely executed andreturned and the revocation period has expired;
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          (3) if his Termination Date occurs after the end of the Company’s fiscal year and prior to thepayment of his annual incentive bonus for such year, the same annual incentive bonus to which hewould have been entitled had his employment continued through the normal bonus payment date, ifany; such annual incentive bonus shall be paid in a cash lump sum on the normal bonus payment datefor Senior Officers whose employment has continued, and in no event later than the end of the yearin which the Termination Date occurs, but only if the Waiver and Release has been timely executedand returned and the revocation period has expired; and          (4) his Base Salary for the period commencing on the day after his Termination Date and endingon the last day of the month in which the Termination Date occurs; any such amount shall be paid toExecutive in a cash lump sum payment on the 60th day following the Termination Date, but only ifthe Waiver and Release has been timely executed and returned and the revocation period has expired.     (b) ***Health and Dental Coverage.***          (1) The Company shall provide to Executive and his covered dependents, if any, coverage as ineffect for Executive on the date immediately prior to the Termination Date under the Company’sgroup health plan and group dental plan for a period of 24 months following the Termination Date;provided, however, Executive and his covered dependents, if any, shall not be required to pay anyportion of the premium cost to retain such coverages except that the cost of such coverages will beimputed as income and reported as wages to Executive in the event that Company maintains aself-funded group health plan and/or group dental plan and such Company-provided coverage wouldotherwise be discriminatory within the meaning of Code Section 105(h). In all other respectsExecutive shall be treated the same as other participants under the terms of such plans.          (2) Thereafter, Executive and his covered dependents, if any, shall be entitled to electcontinuation coverage under such plans pursuant to COBRA and the Company’s procedures for COBRAadministration (“**COBRA Coverage**”). In the event that COBRA coverage is elected, (i) the COBRA timeperiod shall not be reduced by the post-termination continuation coverage provided pursuant toSection 6(b)(1) and (ii) Executive (and his covered dependents, if any) must pay the fullCOBRA premium rates as effective during the COBRA Coverage period. (In the event Executive doesnot satisfy the Waiver and Release requirement, he and his covered dependents, if any, shall beentitled to only COBRA Coverage after his Termination Date.)          (3) In the event of any change to the group health plan or group dental plan following theTermination Date, Executive shall be treated consistently with Senior Officers of the Company (orits successor) with respect to the terms and conditions of coverage and other substantiveprovisions of the plan; provided, however, no participant contributions shall be required fromExecutive (and his covered dependents, if any) unless COBRA Coverage is in effect. Notwithstandingthe foregoing provisions of this Section 6(b)(3), the coverage of Executive (and hisdependents, if any) under such health and/or dental plans maintained by the Company shall terminatein the event that
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Executive becomes employed by another for-profit employer which maintains a group health planor plans for its employees providing group health coverage or group dental coverage, as applicable;provided, however, any COBRA Coverage shall not be terminated unless and until permitted underCOBRA. For purposes of the preceding sentence, (i) the coverage of Executive (and his dependents,if any) under the health and/or dental plans maintained by the Company shall not terminate duringthe 24-month period until Executive becomes eligible to participate in such group health and groupdental coverage of another for-profit employer and (ii) personal coverage obtained by Executiveother than through employment or coverage available by reason of Executive’s performance ofservices as an independent contractor shall not be considered.          (4) The Company-provided coverage and the COBRA Coverage above shall be provided in a mannerthat is intended to either comply with Code Section 409A or satisfy an exception to Code Section409A, and therefore not be treated as an arrangement providing for nonqualified deferredcompensation that is subject to taxation under Code Section 409A, as determined by the Company inits discretion, including (1) providing such benefits on a nontaxable basis to Executive, (2)providing for the reimbursement of covered expenses incurred during the time period during whichExecutive would be entitled to continuation coverage under a group health plan of the Company inaccordance with Code Section 4980B (*i.e.*, COBRA Coverage), (3) providing that such benefitsconstitute the reimbursement or provision of in-kind benefits payable at a specified time orpursuant to a fixed schedule as permitted under Code Section 409A and the authoritative guidancethereunder, and/or (4) such other manner as determined by the Company in compliance with CodeSection 409A.     (c) ***No Benefits***. In the event that (i) Executive voluntarily resigns or otherwise voluntarilyterminates his own employment at any time, in either case without Good Reason, (ii) his employmentis terminated by the Company for Cause, or (iii) his employment is terminated due to his death orDisability, then the Company shall have no obligation to provide any severance benefits underSection 6(a) or Section 6(b)(1). In any such event, Executive and his covereddependents, if any, shall be entitled to only COBRA Coverage after his Termination Date.     (d) ***Waiver and Release***. Notwithstanding any provision of the Agreement to the contrary, inorder to receive the severance benefits payable under any of Section 6(a)Section6(b)(1), or Section 7, as applicable, Executive must first execute an appropriatewaiver and release agreement (substantially in the form attached hereto as Appendix B) (the “Waiverand Release”) whereby Executive agrees to release and waive, in return for such severance benefits,any claims that he may have against the Company including, without limitation for unlawfuldiscrimination (including, without limitation, any claims for discrimination under any federal orstate statute or regulation); provided, however, such Waiver and Release shall not release anyclaim or cause of action by or on behalf of Executive for any payment or vested benefit that is dueunder either the Agreement or any employee benefit plan or program of the Company until fully paidprior to the receipt thereof. Executive shall have 21 days after receipt of the Waiver and Releaseto consider and timely execute and return it to the Company. After return, Executive shall have anadditional seven days in which he can revoke the Waiver and Release; thereafter, the
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Waiver and Release shall be irrevocable. The Company shall provide the Waiver and Release toExecutive no later than five days after his Termination Date. If the Waiver and Release is nottimely executed and returned, or it is revoked within the seven-day revocation period, no benefitsshall be paid under any of Section 6(a), Section 6(b)(1), Section 7, orSection 42.     (e) ***No Duplication***. The severance payments provided under the Agreement shall supersede andreplace any severance payments under any severance pay plan that the Company or any Affiliatemaintains for employees generally. Notwithstanding the preceding sentence, in the event that aseverance payment under the Agreement would constitute a change in the form or timing of paymentunder Code Section 409A of any severance benefit otherwise payable to Executive under any otherplan or other arrangement, then the portion of the severance payment payable under the Agreementthat is equal to the amount payable under such other severance arrangement shall be paid in theform, and at the time, applicable under such other severance arrangement and, in such event, anyexcess severance payment as determined under the Agreement shall be paid in the time and form asspecified in the Agreement.7. **Severance Benefits Upon Certain Terminations Following a Change in Control****.**Except inthe event of termination of Executive’s employment (i) due to Executive’s death or Disability, (ii)due to Executive’s voluntary resignation or termination, in either case without Good Reason, (iii)by the Company for Cause, or (iv) prior to a Change in Control under the circumstances and withinthe time limits provided in Section 6, and subject to the Waiver and Release requirementdescribed in Section 6(d) and the forfeiture provision in Section 16, Executive’sright to compensation and benefits for periods after the Termination Date and after a Change inControl shall be determined in accordance with this Section 7, as follows:     (a) The provisions of this Section 7 shall not apply unless (a) there shall have beena Change in Control during the Term of Employment, and (b) Executive’s employment with the Companyshall have been terminated for any reason other than Cause by the Company within two years afterthe date of such Change in Control, or Executive shall have terminated his employment from theCompany for Good Reason within two years after the date of such Change in Control. Upon theoccurrence of a Change in Control, the Term of Employment shall automatically be extended so thatit expires on the second anniversary of the Change in Control.     (b) If the Company terminates Executive’s employment with the Company for any reason otherthan Cause, or if Executive terminates his employment with the Company for Good Reason prior to thesecond anniversary of a Change in Control, then Executive’s severance benefits shall be determinedin accordance with the provisions of Section 6, after taking into account the modificationsin this Section 7, as follows:          (1) the Severance Multiplier for purposes of determining the amount of the Additional Paymentunder Section 6(a)(1) shall be _____; such Additional Payment shall be paid to Executive ina lump sum cash payment on the 60th day
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following the Termination Date, but only if the Waiver and Release has been timely executedand returned and the revocation period has expired;          (2) a portion of his annual incentive bonus equal to the annual incentive bonus as provided inSection 2(b) based on actual performance, multiplied by a fraction, the numerator of whichequals the number of days from the commencement of the year in which such termination occursthrough the Termination Date, and the denominator of which equals 365; any such annual incentivebonus shall be paid in a cash lump sum on the normal bonus payment date for Senior Officers whoseemployment has continued, and in no event later than the end of the year following the year inwhich the Termination Date occurs, but only if the Waiver and Release has been timely executed andreturned and the revocation period has expired;          (3) if his Termination Date occurs after the end of the Company’s fiscal year and prior to thepayment of his annual incentive bonus for such year, the same annual incentive bonus to which hewould have been entitled had his employment continued through the normal bonus payment date, ifany; such annual incentive bonus shall be paid in a cash lump sum on the normal bonus payment datefor Senior Officers whose employment has continued, and in no event later than the end of the yearin which the Termination Date occurs, but only if the Waiver and Release has been timely executedand returned and the revocation period has expired;          (4) his Base Salary for the period commencing on the day after his Termination Date and endingon the last day of the month in which the Termination Date occurs; any such amount shall be paid toExecutive in a lump sum cash payment on the 60th day following the Termination Date, but only ifthe Waiver and Release has been timely executed and returned and the revocation period has expired;          (5) group health and dental benefits under Section 6(b)(1) shall be provided for 36months from the Termination Date, provided Executive complies with the otherwise applicablerequirements of Section 6 (such benefits described in this Section 7(b)(5) hereinreferred to as “**Continuation Coverage**”);          (6) the Continuation Coverage shall be provided in a manner that is intended to either complywith Code Section 409A or satisfy an exception to Code Section 409A, and therefore not treated asan arrangement providing for nonqualified deferred compensation that is subject to taxation underCode Section 409A, as determined by the Company in its discretion, including (1) providing suchbenefits on a nontaxable basis to Executive, (2) in the case of group health and dental benefits,providing for the reimbursement of covered expenses incurred during the time period during whichExecutive would be entitled to continuation coverage under a group health plan of the Company inaccordance with Code Section 4980B (*i.e.*, COBRA coverage), (3) providing that such benefitsconstitute the reimbursement or provision of in-kind benefits payable at a specified time orpursuant to a fixed schedule as permitted under Code Section 409A and the authoritative guidancethereunder, and/or (4) such other manner as determined by the Company in compliance with CodeSection 409A;
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          (7) In determining whether Executive has Good Reason to terminate his employment with theCompany following a Change in Control, there shall also be treated as events of Good Reason:               (A) the events described in clause D of the definition of Good Reason without regard towhether such changes apply to Senior Officers on the same basis;               (B) the taking of any action by the Company which would adversely affect Executive’sparticipation in or materially reduce his benefits under or deprive Executive of any materialfringe benefit enjoyed by him at the time of a Change in Control, or the failure by the Company toprovide Executive with the number of hours of paid time off to which he was entitled in accordancewith the Company policies in effect at the time of a Change in Control;               (C) any loss of significant authority, power or control over that exercised by Executiveimmediately prior to the Change in Control (including a change in superior to whom Executivereports);               (D) if the Company becomes a division, a wholly or majority-owned subsidiary or other similarcaptive entity of another person or entity or combination thereof (*i.e*. of a “parent”); and ifExecutive is not placed in the identical or equivalent position within the parent person or entity,then such occurrence will be deemed to be an assignment of duties materially inconsistent withExecutive’s position as described above thereby constituting Good Reason; and               (E) any failure by the Company to continue in effect any plan or arrangement to receivesecurities of the Company (including any plan or arrangement to receive and exercise stock options,stock appreciation rights, restricted stock or grants thereof or to acquire stock or othersecurities of the Company) in which Executive is participating at the time of a Change in Control(unless substitute plans or arrangements are implemented and continued providing Executive withsubstantially similar benefits with respect to the Company’s successor after a Change in Control)(hereinafter referred to as “**Securities Plans**”) or the taking of any action by the Company whichwould adversely affect Executive’s participation in or materially reduce his benefits under anysuch Securities Plan.     (c) ***Expenses***. The Company shall pay to Executive all reasonable legal fees and expensesincurred by him as a result of the termination of his employment after a Change in Control otherthan by the Company for Cause or by reason of death incurred in contesting or disputing any suchtermination or in seeking to obtain or enforce any right or benefit provided by Section 7of the Agreement, provided Executive establishes that his termination was covered by the provisionsof this Section 7. Such reimbursements or payments shall be made upon Executive’ssubstantiation of such legal expenses; provided, however, that in no event shall reimbursement bemade later than the end of the year following the year in which Executive incurs the expenses.
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     (d) ***No Benefits***. In the event that (i) Executive voluntarily resigns or otherwise voluntarilyterminates his own employment at any time, in either case without Good Reason, (ii) his employmentis terminated by the Company for Cause or (iii) his employment is terminated due to his death orDisability, then the Company shall have no obligation to provide any severance benefits underSection 7. In any such event, Executive and his covered dependents, if any, shall beentitled to only COBRA Coverage after his Termination Date.     (e) ***Legal Fees and Dispute Resolution.***In the event that following a Change in Control theemployment of Executive is terminated for Cause for a reason set out in Section 39, the Companywill advance reasonable legal fees to Executive in the event Executive contests such terminationfor Cause. Notwithstanding the provisions of Section 28 otherwise requiring arbitration, Executivemay at his election contest whether Cause exists by means of litigation but only in courts withinHouston, Harris County, Texas. No legal fees are to be advanced to cover the costs of Executive’spresentation of the matter to the Board as described in Section 39. Executive shall prepare awritten estimate of legal fees expected to be incurred in the following 90 days and submit same tothe Company; such estimated amount shall be paid by the Company to Executive within 10 days ofreceipt of the written estimate. At the end of the 90 days, and each 90 days thereafter, Executiveshall prepare and submit a subsequent written estimate and copies of paid invoices for legalservices rendered during such 90-day period; such subsequent estimate shall include an offset inthe event estimated fees for the preceding 90-day period exceeded actual fees incurred. TheCompany agrees to pay such subsequent estimates within 10 days of receipt of same. Within 10 daysof resolution of the matter, Executive will submit an appropriate accounting of actual andestimated expenses and refund to the Company any amount by which the estimated fees exceeded theactual fees incurred. Unless the Executive substantially prevails in the matter, Executive willreimburse the Company for all amounts advanced hereunder within 10 days of resolution of thematter.     (f) ***Potential Reduction in Payments.***Notwithstanding any other provision of the Agreement tothe contrary, if any Payment would be subject to the Excise Tax, then the Payment shall be either(1) delivered in full pursuant to the terms of this Agreement or(2) reduced in accordance with this Section 7(f) to the extent necessary toavoid the Excise Tax,based on which of (1) or (2) would result in the greater Net After-Tax Receipt to Executive.For purposes of this Section 7(f):“Payment” means any payment, distribution, or other benefit to or for the benefit ofExecutive, whether paid or payable or distributed or distributable pursuant to
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the terms of this Agreement or otherwise that constitutes a “parachute payment” within themeaning of Section 280G of the Code;“Excise Tax” means the excise imposed by Section 4999 of the Code or any similar orsuccessor provision thereto; and“Net After-Tax Receipt” means the present value (as determined in accordance with Section280G of the Code) of the payments net of all applicable federal, state and local income,employment, and other applicable taxes and the Excise Tax.If Payments are reduced, the reduction shall be accomplished first by reducing cash Payments underthis Agreement, in the order in which such cash Payments otherwise would be paid and then byforfeiting any equity-based awards that vest as a result of the Change in Control, starting withthe most recently granted equity-based awards, to the extent necessary to accomplish suchreduction.All determinations under this Section 7(f) shall be made by the Company’s independent accountantsor compensation consultants (the “Third Party”) and all such determinations shall be conclusive,final and binding on the parties hereto. The Company and Executive shall furnish to the ThirdParty such information and documents as the Third Party may reasonably request in order to make adetermination under this Section 7(f). The Company shall bear all reasonable fees and costs of theThird Party with respect to determinations under or contemplated by this Section 7(f).8. **Notice of Termination**. Any termination by the Company or Executive of his employmentfrom the Company shall be communicated by Notice of Termination to the other Party hereto. Forpurposes of the Agreement, the term “**Notice of Termination**” means a written notice which indicatesthe specific termination provision of the Agreement relied upon and sets forth in reasonable detailthe facts and circumstances claimed to provide a basis for termination of Executive’s employmentunder the provision so indicated.9. **Mitigation**. Executive shall not be required to mitigate the amount of any paymentprovided for under the Agreement by seeking other employment or in any other manner.10. **Confidential Information**.     (a) ***Access to Confidential Information and Specialized Training***. In connection with hisemployment and continuing on an ongoing basis during employment, the Company agrees to giveExecutive access to Confidential Information (as defined below) (including, without limitation,Confidential Information of the Company’s Affiliates and subsidiaries), which Executive did nothave access to or knowledge of before Executive’s employment with the Company. Executiveacknowledges and agrees that, as between the Parties, all Confidential Information is and shallremain the exclusive property of the Company and that all Confidential Information is confidentialand a valuable, special and unique asset of the Company that gives the Company an advantage overits actual and potential, current and future competitors. Executive further
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acknowledges and agrees that Executive shall preserve and protect all Confidential Informationfrom unauthorized disclosure or unauthorized use, that certain Confidential Information mayconstitute “trade secrets” under applicable laws, and that unauthorized disclosure or unauthorizeduse of the Company’s Confidential Information would irreparably injure the Company.The Company agrees to provide Executive with initial and ongoing Specialized Training, whichExecutive does not have access to or knowledge of before the execution of the Agreement, and theCompany agrees to continue providing such Specialized Training on an ongoing basis duringemployment. “**Specialized Training**” includes the training the Company provides to Executive that isunique to its business and enhances Executive’s ability to perform his job duties effectively,which includes, without limitation, orientation training; sales methods/techniques training;operation methods training; and computer and systems training.     (b) ***Agreement Not to Use or Disclose Confidential Information***. Both during the term ofExecutive’s employment and after the termination of Executive’s employment for any reason(including wrongful termination), Executive shall hold all Confidential Information in strictconfidence, and shall not use any Confidential Information except for the benefit of the Company,in accordance with the duties assigned to Executive. Executive shall not, at any time (eitherduring or after the term of Executive’s employment), disclose any Confidential Information to anyperson or entity (except other employees of the Company who have a need to know the information inconnection with the performance of their employment duties), without the prior written consent ofthe Board, or permit any other person in the Executive’s immediate family (which shall mean thespouse and children of the Executive) to do so; provided, however, Executive may make suchdisclosures to third parties where the disclosure is made during the Employment Period to thirdparties who have executed confidentiality agreements acceptable to the Company. Executive shalltake reasonable precautions to protect the physical security of all documents and other materialcontaining Confidential Information (regardless of the medium on which the Confidential Informationis stored). The Agreement applies to all Confidential Information, whether now known or later tobecome known to Executive.     (c) ***Agreement to Refrain from Derogatory Statements***. Executive shall refrain, both during theemployment relationship and after the employment relationship terminates, from publishing any oralor written statements about the Company or any of its Affiliates’ directors, officers, employees,agents, investors or representatives that are untruthful and harmful to the business interest orreputation of the Company or any of its Affiliates; or that disclose private or confidentialinformation about the Company or any of its Affiliates’ business affairs, directors, officers,employees, agents, investors or representatives; or that constitute an intrusion into the seclusionor private lives of the Company’s or any of its Affiliates’ directors, officers, employees, agents,investors or representatives; or that give rise to negative publicity about the private lives ofsuch directors, officers, employees, agents, investors or representatives; or that place suchdirectors, officers, employees, agents, investors or representatives in a false light before thepublic; or that constitute a misappropriation of the name or likeness of such directors,
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officers, employees, agents, investors or representatives. A violation or threatenedviolation of this prohibition may be enjoined. This Section does not apply to communications withregulatory authorities or other communications protected or required by law.     (d) ***Definition of Confidential Information***. As used in the Agreement, the term “**ConfidentialInformation**” shall mean any information or material known to or used by or for the Company or anAffiliate (whether or not owned or developed by the Company or an Affiliate and whether or notdeveloped by Executive) that is not generally known to any person not employed by or acting as adirector or consultant to the Company or its Affiliates. Confidential Information includes, but isnot limited to, the following: all trade secrets of the Company or an Affiliate; all non-publicinformation that the Company or an Affiliate has marked as confidential or has otherwise describedto Executive (either in writing or orally) as confidential; all non-public information concerningthe Company’s or Affiliate’s products, services, prospective products or services, research,product designs, prices, discounts, costs, marketing plans, marketing techniques, market studies,test data, customers, customer lists and records, suppliers and contracts; all business records andplans; all personnel files; all financial information of or concerning the Company or an Affiliate;all information relating to the Company’s operating system software, application software, softwareand system methodology, hardware platforms, technical information, inventions, computer programsand listings, source codes, object codes, copyrights and other intellectual property; all technicalspecifications; any proprietary information belonging to the Company or an Affiliate; all computerhardware or software manuals of the Company or an Affiliate; all Company or Affiliate training orinstruction manuals; and all Company or Affiliate data and all computer system passwords and usercodes.11. **Duty to Return Company Documents and Property**. Upon the termination of Executive’semployment with the Company, for any reason whatsoever, Executive shall immediately return anddeliver to the Company any and all papers, books, records, documents, memoranda and manuals,e-mail, electronic or magnetic recordings or data, including all copies thereof, belonging to theCompany, relating to its business or containing Confidential Information, in Executive’spossession, whether prepared by Executive or others. If at any time after the Employment Period,Executive determines that he has any Confidential Information in his possession or control,Executive shall immediately return to the Company all such Confidential Information in hispossession or control, including all copies and portions thereof.12. **Employee Developments**.     (a) ***Assignment of Employee Developments***. Executive hereby assigns to the Company, withoutadditional compensation, all right, title and interest Executive has in and to any EmployeeDevelopments. If copyright protection is available for any Employee Development, such EmployeeDevelopment will be considered a “work for hire” as that term is defined under copyright law andwill be the exclusive property of the Company.
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     (b) ***Executive Duties***. During and after Executive’s employment with the Company, Executiveshall, without additional compensation: (i) promptly disclose to the Company any EmployeeDevelopment, specifically identifying any inventions, improvements or other portions of theEmployee Development that are potential patentable or susceptible to protection as a trade secret;(ii) execute and deliver any and all applications, assignments, documents, and other instrumentsthat the Company shall deem necessary to protect the right, title and interest of the Company orits designee in or to any Employee Development; (iii) reasonably cooperate and assist in providinginformation for making and completing regulatory and other filings in connection with any EmployeeDevelopment; (iv) reasonably cooperate and assist in providing information for or participating inany action, threatened action, or considered action relating to any Employee Development; and (v)take any and all other actions as the Company may otherwise require with respect to any EmployeeDevelopment.     (c) ***Third Party Obligations***. Executive acknowledges that the Company from time to time mayhave agreements with other persons or entities which impose obligations or restrictions on theCompany regarding development-related work made during the course of work thereunder or regardingthe confidential nature of such work. Executive agrees to be bound by all such obligations andrestrictions and to take all action necessary to discharge the obligations of the Company.     (d) ***Definition of Employee Developments***. As used in this Agreement, the term “**EmployeeDevelopments**” shall mean all inventions, ideas, and discoveries (whether patentable or not),designs, products, processes, procedures, methods, developments, formulae, techniques, analyses,drawings, notes, documents, information, materials, and improvements, including, but not limitedto, computer programs and related documentation, and all intellectual property rights therein,made, conceived, developed, or prepared, in whole or in part, by Executive during the course ofemployment with the Company, alone or with others, whether or not during work hours or on Company’spremises, which are (i) within the scope of business operations of Company, or a reasonable orcontemplated expansion thereof, (ii) related to any Company or Affiliate work or project, present,past or contemplated, (iii) created with the aid of Company’s materials, equipment, facilities orpersonnel, or (iv) based upon information to which Executive has access as a result of or inconnection with his employment with Company. Executive recognizes that all ideas, inventions, anddiscoveries of the type described in this Section 12(d), conceived or made by Executivealone or with others within one year after termination of employment (voluntary or otherwise), arelikely to have been conceived in significant part either while employed by the Company or as adirect result of knowledge Executive had of proprietary information or Confidential Information.Accordingly, Executive agrees that such ideas, inventions or discoveries shall be presumed to havebeen conceived during his employment with the Company, unless and until the contrary is clearlyestablished by Executive, and shall be treated as Employee Developments hereunder.13. **Non-Solicitation Restriction**. To protect the Confidential Information, and in theevent of Executive’s termination of employment for any reason whatsoever, whether by Executive orthe Company, it is necessary to enter into the following restrictive
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covenants, which are ancillary to the enforceable promises between the Company and Executive inSections 10 through 12 of the Agreement. Executive hereby covenants and agrees that hewill not, directly or indirectly, either individually or as a principal, partner, agent,consultant, contractor, employee, or as a director or officer of any corporation or association, orin any other manner or capacity whatsoever, except on behalf of the Company or an Affiliate,solicit business, or attempt to solicit business, in products or services competitive with anyproducts or services sold (or offered for sale) by the Company or any Affiliate, from the Company’sor Affiliate’s customers or prospective customer, or those individuals or entities with whom theCompany or Affiliate did business during the Employment Period, including, without limitation, theCompany’s or Affiliate’s prospective or potential customers. Subject to Section 17, theprohibition set forth in this Section 13 shall remain in effect for a period of one yearfrom the Termination Date for whatever reason.14. **Non-Competition Restriction**. Executive hereby covenants and agrees that during hisemployment with the Company or any of its Affiliates, and for a period of one year following theTermination Date, Executive will not, without the prior written consent of the Board, participatein any capacity in which Executive would perform any duties similar to those performed while at theCompany or an Affiliate, directly or indirectly (whether as proprietor, stockholder, director,partner, employee, agent, independent contractor, consultant, trustee, beneficiary, or in any othercapacity), with any Competitor; provided, however, Executive shall not be deemed to beparticipating with a Competitor solely by virtue of his ownership of not more than one percent (1%)of any class of stock or other securities which are publicly traded on a national securitiesexchange or in a recognized over-the-counter market. For purposes of this Agreement, “Competitor”means an individual, partnership, firm, corporation or other business organization or entity thatmaterially competes with a significant business owned or operated by the Company or one of itsAffiliates as of Executive’s Termination Date, the names of which shall be made available toExecutive upon Executive’s Termination Date and upon reasonable request. In no event shall theCompetitors include more than 10 entities. As of the date of this Agreement, the definition of aCompetitor includes the following entities: Allis-Chalmers, Basic Energy Services, Inc., PrecisionDrilling, Helmerich & Payne, Inc., Nabors Industries, Ltd., Pioneer Drilling Co., HerculesOffshore, Inc., Key Energy Services, Inc., Tetra Technologies, Inc. and Weatherford International,Inc.15. **Non-Recruitment Restriction**. Executive agrees that during his employment with theCompany or any of its Affiliates, and for a period of one year from the Termination Date forwhatever reason, Executive will not, either directly or indirectly, or by acting in concert withothers, solicit or influence any employee of the Company or any Affiliate to terminate or reducehis or her employment with the Company or any Affiliate. In the event any such employee shall takesuch action after communicating with Executive at a time when Executive is no longer employed bythe Company, a presumption of recruitment shall apply unless Executive conclusively demonstrates tothe contrary.
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16. **Forfeiture of Severance Payment**. A “**Forfeiture Event**” for purposes of the Agreementwill occur if (a) Executive violates any of the covenants or restrictions contained in Sections13 through 15, or (b) the Company learns of facts within two years following Executive’sTermination Date that, if had been known by the Reporting Authority as of the Termination Date,would have resulted in the termination of Executive’s employment hereunder for Cause. In the eventof a Forfeiture Event, within 30 days of being notified by the Company in writing of the ForfeitureEvent, Executive shall pay to the Company the full the amount of the severance payment received byExecutive pursuant to Section 6(a)(1), or such lesser amount as shall be determined to bethe maximum reasonable and enforceable amount by a court or arbitrator. The provisions of thisSection 16 are in addition to any forfeiture provisions of other Company plans, programs oragreements applicable to the Executive. Executive specifically recognizes and affirms that thisSection 16 is a material part of the Agreement without which the Company would not haveentered into the Agreement. Executive further covenants and agrees that should all or any part orapplication of this Section 16 be held or found invalid or unenforceable for any reasonwhatsoever by a court of competent jurisdiction or arbitrator in an action between Executive andthe Company, then Executive shall promptly pay to the Company the amount of the severance paymentreceived by Executive pursuant to Section 6(a)(1), or such lesser amount as shall bedetermined to be the maximum reasonable and enforceable amount by a court or arbitrator, asapplicable.17. **Tolling**. If Executive violates any of the restrictions contained in Sections 10through 16, the restrictive period will be suspended and will not run in favor of Executivefrom the time of the commencement of any violation until the time when Executive cures theviolation to the Company’s reasonable satisfaction.18. **Reformation**. If a court or arbitrator concludes that any time period or the geographicarea specified in any restrictive covenant in Sections 10 through 16 is unenforceable, thenthe time period will be reduced by the number of months, or the geographic area will be reduced bythe elimination of the overbroad portion, or both, so that the restrictions shall be enforced inthe geographic area and for the time to the full extent permitted by law.19. **Conflicts of Interest****.**In keeping with his fiduciary duties to the Company, Executivehereby agrees that he shall not become involved in a conflict of interest, or upon discoverythereof, allow such a conflict to continue at any time during the Employment Period. Moreover,Executive agrees that he shall immediately disclose to the Reporting Authority any known factswhich might involve a conflict of interest of which the Reporting Authority is not aware.Executive and the Company recognize and acknowledge that it is not possible to provide anexhaustive list of actions or interests which may constitute a “conflict of interest.” Moreover,the Company and Executive recognize there are many borderline situations. In some instances, fulldisclosure of facts by Executive to the Reporting Authority may be all that is necessary to enablethe Company to protect its interests. In others, if no improper motivation appears to exist andthe Company’s interests have not demonstrably suffered, prompt elimination of the outside interestmay suffice. In egregious and
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material instances it may be necessary for the Company to terminate Executive’s employment forCause; provided, however, Executive cannot be terminated for Cause hereunder unless the Companyfirst provides Executive with notice and a reasonable opportunity to cure such conflict of interestpursuant to the same procedures as set forth in clause (E) of the definition of Cause.Executive hereby agrees that any interest in, connection with, or benefit from any outsideactivities, particularly commercial activities, which interest could adversely affect the Companyor any Affiliate, involves a possible conflict of interest. Circumstances in which a conflict ofinterest on the part of Executive would or might arise, and which should be reported to theReporting Authority, include, but are not limited to, any of the following:     (a) Ownership of more than a *de minimis*interest in any lender, supplier, contractor, customeror other entity with which Company or any Affiliate does business;     (b) Intentional misuse of information, property or facilities to which Executive has access ina manner which is demonstrably and materially injurious to the interests of the Company or anyAffiliate, including its business, reputation or goodwill; or     (c) Materially trading in products or services connected with products or services designed ormarketed by or for the Company or any Affiliate.20. **Remedies**. Executive acknowledges that the restrictions contained in Sections 10through 19, in view of the nature of the Company’s business, are reasonable and necessary toprotect the Company’s legitimate business interests, and that any violation of the Agreement wouldresult in irreparable injury to the Company. In the event of a breach or a threatened breach byExecutive of any provision of Sections 10 through 19, the Company shall be entitled to atemporary restraining order and injunctive relief restraining Executive from the commission of anybreach, and to recover the Company’s attorneys’ fees, costs and expenses related to the breach orthreatened breach. Nothing contained in the Agreement shall be construed as prohibiting theCompany from pursuing any other remedies available to it for any such breach or threatened breach,including, without limitation, the recovery of money damages, attorneys’ fees, and costs. Thesecovenants and disclosures shall each be construed as independent of any other provisions in theAgreement, and the existence of any claim or cause of action by Executive against the Company,whether predicated on the Agreement or otherwise, shall not constitute a defense to the enforcementby the Company of such covenants and agreements.21. **Withholdings: Right of Offset**. The Company may withhold and deduct from any benefitsand payments made or to be made pursuant to the Agreement (a) all federal, state, local and othertaxes as may be required pursuant to any law or governmental regulation or ruling, (b) all othernormal employee deductions made with respect to the Company’s employees generally, and (c) anyadvances made to Executive and owed to the Company.
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22. **Nonalienation**. The right to receive payments under the Agreement shall not be subjectin any manner to anticipation, alienation, sale, transfer, assignment, pledge or encumbrance byExecutive, his dependents or beneficiaries, or to any other person who is or may become entitled toreceive such payments hereunder. The right to receive payments hereunder shall not be subject toor liable for the debts, contracts, liabilities, engagements or torts of any person who is or maybecome entitled to receive such payments, nor may the same be subject to attachment or seizure byany creditor of such person under any circumstances, and any such attempted attachment or seizureshall be void and of no force and effect.23. **Incompetent or Minor Payees**. Should the Reporting Authority determine, in itsdiscretion, that any person to whom any payment is payable under the Agreement has been determinedto be legally incompetent or is a minor, any payment due hereunder, notwithstanding any otherprovision of the Agreement to the contrary, may be made in any one or more of the following ways:(a) directly to such minor or person; (b) to the legal guardian or other duly appointed personalrepresentative of the person or estate of such minor or person; or (c) to such adult or adults ashave, in the good faith knowledge of the Reporting Authority, assumed custody and support of suchminor or person; and any payment so made shall constitute full and complete discharge of anyliability under the Agreement in respect to the amount paid.24. **Indemnification**. THE COMPANY SHALL, TO THE FULL EXTENT PERMITTED BY LAW, INDEMNIFY ANDHOLD HARMLESS EXECUTIVE FROM AND AGAINST ANY AND ALL LIABILITY, COSTS AND DAMAGES ARISING FROM HISSERVICE AS AN EMPLOYEE, OFFICER OR DIRECTOR OF THE COMPANY OR ITS AFFILIATES, SPECIFICALLYINCLUDING LIABILITY, COSTS AND DAMAGES THAT ARISE IN WHOLE OR IN PART FROM ANY NEGLIGENCE ORALLEGED NEGLIGENCE OF EXECUTIVE, EXCEPT, HOWEVER, TO THE EXTENT THAT ANY SUCH LIABILITY, COST ORDAMAGE RESULTED FROM AN ACT OR OMISSION BY EXECUTIVE THAT CONSTITUTES GROSS NEGLIGENCE OR WILLFULMISCONDUCT ON HIS PART. Executive shall also be provided directors’ and officers’ liabilityinsurance and any contractual indemnification provided to Senior Officers at any given time. To thefull extent permitted by Delaware law, the Company shall retain counsel to defend Executive, orshall advance legal fees and expenses to Executive for counsel selected by Executive, in connectionwith any litigation or proceeding related to his service as an employee, officer and director ofthe Company or any Affiliate within 20 days after receipt by the Company of a written request forsuch advance. Such request shall include an itemized list of the costs and expenses and anundertaking by Executive to repay the amount of such advance if it shall ultimately be determinedthat he is not entitled to be indemnified against such costs and expenses. This Section 24shall be in addition to, and shall not limit in any way, the rights of Executive to any otherindemnification from the Company, as a matter of law, contract or otherwise.25. **Severability**. It is the desire of the parties hereto that the Agreement be enforced tothe maximum extent permitted by law, and should any provision contained herein be heldunenforceable by a court of competent jurisdiction or arbitrator (pursuant to
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Section 28), the parties hereby agree and consent that such provision shall be reformed to create avalid and enforceable provision to the maximum extent permitted by law; provided, however, if suchprovision cannot be reformed, it shall be deemed ineffective and deleted herefrom without affectingany other provision of the Agreement. The Agreement should be construed by limiting and reducingit only to the minimum extent necessary to be enforceable under then applicable law.26. **Title and Headings; Construction**. Titles and headings to Sections hereof are for thepurpose of reference only and shall in no way limit, define or otherwise affect the provisionshereof. The words “herein”, “hereof”, “hereunder” and other compounds of the word “here” shallrefer to the entire Agreement and not to any particular provision hereof. The masculine gender isintended to include the feminine gender.27. **Choice of Law**. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, THE AGREEMENT SHALLBE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TOTHE PRINCIPLES OF CONFLICTS OF LAW.28. **Arbitration**. Subject to Section 20, any dispute or other controversy otherthan as provided in Section 7(e) (hereafter a “**Dispute**”) arising under or in connectionwith the Agreement, whether in contract, in tort, statutory or otherwise, shall be finally andsolely resolved by binding arbitration in Harris County, Texas, administered by the AmericanArbitration Association (the “**AAA**”) in accordance with the Commercial Dispute Resolution Rules ofthe AAA, this Section 28 and, to the maximum extent applicable, the Federal ArbitrationAct. Such arbitration shall be conducted by a single arbitrator (the “**Arbitrator**”). If the partiescannot agree on the choice of an Arbitrator within 30 days after the Dispute has been filed withthe AAA, then the Arbitrator shall be selected pursuant to the Employment Dispute Resolution Rulesof the AAA. The Arbitrator may proceed to an award notwithstanding the failure of any party toparticipate in such proceedings. The prevailing party in the arbitration proceeding may be entitledto an award of reasonable attorneys’ fees incurred in connection with the arbitration in suchamount, if any, as determined by the Arbitrator in his discretion. The costs of the arbitrationshall be borne equally by the parties unless otherwise determined by the Arbitrator in hisdiscretion.To the maximum extent practicable, an arbitration proceeding hereunder shall be concluded within180 days of the filing of the Dispute with the AAA. The Arbitrator may allow discovery in itsdiscretion but shall be mindful of the Parties’ goal of settling disputes in the most efficientmanner possible. The Arbitrator shall be empowered to impose sanctions and to take such otheractions as the Arbitrator deems necessary to the same extent a judge could impose sanctions or takesuch other actions pursuant to the Federal Rules of Civil Procedure and applicable law. Each partyagrees to keep all Disputes and arbitration proceedings strictly confidential except for disclosureof information required by applicable law which cannot be waived.The award of the Arbitrator shall be (a) the sole and exclusive remedy of the parties, and (b)final and binding on the parties hereto except for any appeals provided by the Federal
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Arbitration Act. Only the district courts of Texas shall have jurisdiction to enter a judgmentupon any award rendered by the Arbitrator, and the parties hereby consent to the personaljurisdiction of such courts and waive any objection that such forum is inconvenient. ThisSection 28 shall not preclude (i) the parties at any time from agreeing to pursuenon-binding mediation of the Dispute prior to arbitration hereunder or (ii) the Company frompursuing the remedies available under Section 20 in any court of competent jurisdiction.29. **Binding Effect: Third Party Beneficiaries**. The Agreement shall be binding upon andinure to the benefit of the parties hereto, and to their respective heirs, executors,beneficiaries, personal representatives, successors and permitted assigns hereunder, but otherwisethe Agreement shall not be for the benefit of any third parties.30. **Entire Agreement; Amendment and Termination**. The Agreement contains the entireagreement of the parties with respect to Executive’s employment and the other matters coveredherein; moreover, the Agreement supersedes all prior and contemporaneous agreements andunderstandings, oral or written, between the Parties hereto concerning the subject matter hereof.Notwithstanding the foregoing, any indemnity agreement between the Company and Executive as of theEffective Date shall continue in effect until otherwise amended or superseded. The Agreement maybe amended, waived or terminated only by a written instrument that is identified as an amendment ortermination hereto and that is executed on behalf of both Parties.31. **Survival of Certain Provisions**. Wherever appropriate to the intention of the Parties,the respective rights and obligations of the Parties hereunder, including but not limited to therights and obligations set out in Sections 2, 5 through 7, 10 through 20, 24, 27, 28 and34, shall survive any termination or expiration of the Agreement.32. **Waiver of Breach**. No waiver by either Party hereto of a breach of any provision of theAgreement by any other Party, or of compliance with any condition or provision of the Agreement tobe performed by such other Party, will operate or be construed as a waiver of any subsequent breachby such other Party or any similar or dissimilar provision or condition at the same or anysubsequent time. The failure of either Party hereto to take any action by reason of any breachwill not deprive such Party of the right to take action at any time while such breach continues.33. **Successors and Assigns**. The Agreement shall be binding upon and inure to the benefitof the Company and its Affiliates, and its and their successors, and upon any person or entityacquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantiallyall of the business and/or assets of the Company or its successor. The Company shall require anysuccessor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all orsubstantially all of the business or assets of the Company to expressly assume and agree to performthe Agreement in the same manner and to the same extent that the Company would be required toperform it if no such succession had taken place; provided, however, no such assumption shallrelieve the Company of its obligations hereunder.
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The Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legalrepresentative, executors, administrators, successors, and heirs. In the event of the death ofExecutive while any amount is payable hereunder including, without limitation, pursuant toSections 2, 5, 6, and 7, all such amounts, unless otherwise specifically provided herein,shall be paid in accordance with the terms of the Agreement to the beneficiary designated byExecutive in a writing delivered to the Company, or if none, to Executive’s surviving spouse ifany, or if not, then to the personal representative of Executive’s estate.34. **Notices**. Each notice or other communication required or permitted under the Agreementshall be in writing and transmitted, delivered, or sent by personal delivery, prepaid courier ormessenger service (whether overnight or same-day), or prepaid certified United States mail (withreturn receipt requested), addressed (in any case) to the other Party at the address for that Partyset forth below that Party’s signature on the Agreement, or at such other address as the recipienthas designated by Notice to the other Party. Either party may change the address for notice bynotifying the other party of such change in accordance with this Section 34.Each notice or communication so transmitted, delivered, or sent (a) in person, by courier ormessenger service, or by certified United States mail shall be deemed given, received, andeffective on the date delivered to or refused by the intended recipient (with the return receipt,or the equivalent record of the courier or messenger, being deemed conclusive evidence of deliveryor refusal), or (b) by telecopy or facsimile shall be deemed given, received, and effective on thedate of actual receipt (with the confirmation of transmission being deemed conclusive evidence ofreceipt, except where the intended recipient has promptly notified the other Party that thetransmission is illegible). Nevertheless, if the date of delivery or transmission is not a businessday, or if the delivery or transmission is after 5:00 p.m. on a business day, the notice or othercommunication shall be deemed given, received, and effective on the next business day.35. **Executive Acknowledgment**. Executive acknowledges that (a) he is knowledgeable andsophisticated as to business matters, including the subject matter of the Agreement, (b) he hasread the Agreement and understands its terms and conditions, (c) he has had ample opportunity todiscuss the Agreement with his legal counsel prior to execution, and (d) no strict rules ofconstruction shall apply for or against the drafter or any other Party. Executive represents thathe is free to enter into the Agreement including, without limitation, that he is not subject to anycovenant not to compete that would conflict with his duties under the Agreement.36. **Intention to Comply with Code Section 409A**. The Agreement is intended to comply withCode Section 409A. Executive acknowledges that if any provision of the Agreement (or of any awardof compensation or benefits) would cause Executive to incur any additional tax or interest underCode Section 409A and accompanying Treasury regulations and other authoritative guidance, suchadditional tax and interest shall solely be his responsibility.
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Pursuant to Code Section 409A, any reimbursement of expenses made under the Agreement (includingreimbursement of health and dental expenses under Sections 5 through 7, shall only be madefor eligible expenses incurred during the Term of Employment, and no reimbursement of any expenseshall be made by the Company after December 31st of the year following the calendar year in whichthe expense was incurred. The amount eligible for reimbursement under the Agreement during ataxable year may not affect expenses eligible for reimbursement in any other taxable year, and theright to reimbursement under the Agreement is not subject to liquidation or exchange for anotherbenefit.For purposes of Code Section 409A, each payment under this Agreement shall be deemed to be aseparate payment. Except as permitted under Code Section 409A, any deferred compensation (withinthe meaning of Code Section 409A) payable to Executive under the Agreement may not be reduced by,or offset against, any amount owing by Executive to the Company or any of its Affiliates.37. **Six Month Delay**. Notwithstanding any provision in the Agreement to the contrary, ifthe payment of any benefit herein would be subject to additional taxes and interest under CodeSection 409A because the timing of such payment is not delayed as provided in Code Section 409A fora “**specified employee**” (within the meaning of Code Section 409A), then if Executive is a “specifiedemployee,” any such payment that Executive would otherwise be entitled to receive during the firstsix months following the Termination Date shall be accumulated and paid or provided, as applicable,within 10 days after the date that is six months following the Termination Date, or such earlierdate upon which such amount can be paid or provided under Code Section 409A without being subjectto such additional taxes and interest such as, for example, upon the death of Executive.38. **Counterparts**. The Agreement may be executed in any number of counterparts, each ofwhich when so executed and delivered shall be an original, but all such counterparts shall togetherconstitute one and the same instrument. Each counterpart may consist of a copy hereof containingmultiple signature pages, each signed by one party hereto, but together signed by both parties.39. **United States Foreign Corrupt Practices Act and Other Laws.** Executive represents thathe has at all times complied with, and agrees that he shall at all times comply with, in allmaterial respects with all laws applicable to Executive’s actions on behalf of the Company,including specifically, without limitation, the United States Foreign Corrupt Practices Act,generally codified in 15 U.S.C. 78 (the “**FCPA**”), as the FCPA may hereafter be amended, and/or itssuccessor statutes. If (i) Executive pleads guilty to or *nolo contendere*or admits civil orcriminal liability under the FCPA, or (ii) if a court finds that Executive has personal civil orcriminal liability under the FCPA, or (iii) if the Board reasonably determines, after providingExecutive, or his representative, an opportunity to present information regarding the matter to theBoard, that Executive took an action or failed to take an action resulting, or that couldreasonably be expected to result, in the Company or any of its subsidiaries having civil orcriminal liability under the FCPA, and that Executive had knowledge that such activities would giverise to such
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FCPA liability or knowledge of facts from which Executive should have reasonably inferred thatactivities giving rise to such FCPA liability had occurred or were likely to occur, such action orfinding shall constitute “Cause” for termination under this Agreement if the Board determines byresolution that the actions or inactions by Executive in violation of the FCPA were not taken ingood faith or were not in compliance with all policies of the Company applicable at the time of theaction or inaction by Executive.40. **No Previous Restrictive Agreements**. Executive represents that, except as disclosed inwriting to the Company, he is not bound by the terms of any agreement with any previous employer orother party to (a) refrain from using or disclosing any trade secret or confidential or proprietaryinformation in the course of Executive’s employment by the Company or (b) refrain from competing,directly or indirectly, with the business of such previous employer or any other party. Executivefurther represents that his performance of all the terms of the Agreement and his work duties forthe Company does not, and will not, breach any agreement to keep in confidence proprietaryinformation, knowledge or data acquired by Executive in confidence or in trust prior to Executive’semployment with the Company, and Executive will not disclose to the Company or induce the Companyto use any confidential or proprietary information or material belonging to any previous employeror others.IN WITNESS WHEREOF, Executive has hereunto set his hand and Company has caused the Agreement to beexecuted in its name and on its behalf by its duly authorized officer, to be effective as of theEffective Date.     **EXECUTIVE**:       Signature:           [INSERT NAME]            Date:              *Address for Notices:*                       **PARKER DRILLING COMPANY:**            By:           [INSERT OFFICER OF COMPANY]    [INSERT OFFICER’S TITLE]  
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     Date:              *Address for Notices*:  Parker Drilling Company