Exhibit
10.85


 


EMPLOYMENT CONTRACT


 


	
  THE STATE OF TEXAS

  	
  )(

  	
   

  
	
   

  	
  )(

  	
  KNOW ALL MEN BY THESE
  PRESENTS:

  
	
  COUNTY OF MIDLAND

  	
  )(

  	
   

  



 


This Employment
Contract (“Agreement”) is made and entered into by and between CAP ROCK ENERGY
CORPORATION and WILLIAM WEST on this 30th day of December 2003, and the initial
term of this Agreement and all other terms and provisions herein, are effective
beginning as of January 1, 2003 This Agreement modifies, amends and supercedes
the Agreement previously executed by and between the Parties to this Agreement.


 


By this Agreement, Cap
Rock Energy Corporation, referred to in this Agreement as “Company”, acting by
and through its President and Chief Executive Officer, David W. Pruitt, or his
successor, hereinafter referred to as “Pruitt” employs William West, referred
to in this Agreement as “West”, and whose principal place of employment is
Midland, Midland County, Texas, who accepts employment on the following terms
and conditions:


 


ARTICLE 1


 


TERMS
OF EMPLOYMENT


 


By this Agreement, the
Company, acting by and through Pruitt, employs West and West accepts employment
with the Company for an initial term of one (1) year.  Unless a written notice to terminate this Agreement is executed
and properly delivered by either party at least ninety days prior to an
anniversary date of the execution of this Agreement, this Agreement shall
annually and automatically be renewed for an additional term of one (1)
year.  This Agreement may, however, be
terminated earlier, as provided in Article 4, below.


 


ARTICLE 2


 


EMPLOYMENT
COMPENSATION & BENEFITS


 


2.01                        As
compensation for all services rendered under this Agreement, West shall be paid
by Company a salary of $185,000.00 per year, or any greater amount of
compensation including bonuses and deferred compensation authorized by the wage
and salary plan or board policies authorized by the Company, together with an
annual salary adjustment in an amount at least equal to any approved across the
board salary adjustments for all employees.


 


2.02                        West
shall receive fifteen (15) days of vacation (annual leave), available
immediately upon his employment pursuant to this Agreement, and the same sick
leave and all other benefits as are accorded regular full-time employees of the
Company including provisions governing accrual and payment thereof on early
retirement or other methods of employment as set forth in the Company’s
employee policies.


 


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2.03                        Subject
to the above paragraph 2.02, all provisions of the Company’s rules and regulations
relating to annual leave (vacation), sick leave, early retirement, insurance,
savings, deferred compensation, bonuses, pension program contributions,
holiday, stock options as available and appropriate for his responsibility and
experience and other fringe benefits and working conditions as they now exist
or hereafter may be amended, shall apply to West as they would to other
employees of the Company. 
Notwithstanding the foregoing however, West may, at his option, elect to
be covered under or participate in the Company’s employee benefit plans  as though he were hired prior to May 1,
2002,.except that West shall not be entitled to receive health and dental
insurance benefits after his employment with the Company terminates as are
currently available to employees hired prior to May 1, 2002 pursuant to Board
Policy 123.


 


2.04                        Because
West’s duties will from time to time require him to work outside of, and in
addition to, the Company’s established normal workweek, work days and work
hours, West shall be allowed to take compensatory time off.


 


2.05                        Company
will reimburse West for professional dues and continuing education
requirements.


 


2.06                        Company
will pay West’s reasonable expenses to include living expenses while living in
Midland on a temporary basis prior to moving his family between January 1,
2004 and July 31, 2004 or such later date as the Parties agree.  The Company further agrees to pay West’s
moving expenses as follows:


Out of pocket costs of
moving household contents and automobiles (at least two bids submitted), pets
and family members,


In the case where West’s
current home is sold prior to the purchase of a replacement home, temporary
housing and storage if necessary,


In the case where West’s
current home is not sold prior to the purchase of a replacement home, out of
pocket costs equal to the higher of the two homes actual payments (debt service
and escrow) for a period not to exceed six months.


 


ARTICLE 3


 


COVENANT
TO PERFORM


 


3.01                        West
agrees and covenants to perform his work and services diligently and use his
best efforts to faithfully comply with all of the assignments duly made to him
on behalf of the Company by Pruitt.


 


 3.02                     West agrees to execute and honor
and abide by the Company’s “Employee Pledge and Proprietary Rights and Information
Agreement” which all other employees of the Company have executed and agreed
to, a copy of which is attached hereto as Exhibit “A”.


 


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ARTICLE 4


 


TERM
AND TERMINATION


 


4.01                        The
Company shall employ West pursuant to this Agreement for the one (1) year term
beginning with the effective date set forth above, yearly renewable subject to
and following a satisfactory evaluation employee appraisal report on West by
Pruitt for successive one year terms.  However,
if during such employment, West fails or refuses to perform the work and
services assigned to him on behalf of the Company by Pruitt, or should he
become derelict in so performing, or become unable to perform, or otherwise
become in substantial breach of this Agreement all as may be determined by
Pruitt in his sole discretion or otherwise so act as to give the Company cause,
this Agreement shall, at Pruitt’s sole option, cease and terminate and any
of  West’s rights hereunder not already
finally vested shall cease on or at such time as Pruitt shall notify West in
writing.  The term “cause” shall include
the following:


 


1.                                       Knowingly,
willfully and substantially, during the term of this Agreement, neglects the
duties that West is required to perform under the terms of this Agreement.


 


2.                                       Knowingly,
willfully and substantially, during the term of this Agreement, commits clearly
dishonest acts toward the Company with the intent to injure or damage the
Company.


 


3.                                       Insubordination
or failing to follow the directives of the President/CEO in connection normal
assigned job related duties.


 


4.                                       An
unsatisfactory evaluation by Pruitt of West on the annual employee appraisal,


 


4.02                        If
West’s employment terminates for any reason other than as provided for in paragraph
4.01, 4.03, 4.04, 4.05 or 4.06, the Company shall pay West a lump sum cash
settlement equal to the total salary then in effect for one (1) year, plus such
amounts, if any, are at the time of his termination of employment, payable for
accrued but untaken vacation and sick leave, compensatory time, bonuses and
other compensation authorized by the Board of Directors or Pruitt.


 


4.03                        Notwithstanding
paragraphs 4.01 and 4.02, this Agreement and West’s employment hereunder may be
terminated at such time and upon such terms and conditions as the parties may
mutually agree.


 


4.04                        Notwithstanding
the provisions of paragraphs 4.01, 4.02, and 4.03 above, West’s employment
hereunder shall terminate under any of the following conditions:


 


a.                                       Death.             West’s employment
under this Agreement shall terminate automatically upon his death.  In such event, West’s Base Salary shall
continue to be paid to his designated beneficiary for the remaining term of
this Agreement.


 


b.                                      Total
Disability.           The
Company shall have the right to terminate this Agreement if West becomes
Totally Disabled.  For purposes of this
Agreement, “Totally Disabled” means that West is not working and is currently
unable to perform the substantial and material duties of his position hereunder
as a result of sickness, accident or bodily injury for a period of three
months.  Prior to a determination that
West is Totally Disabled, but after West has exhausted all sick leave and
vacation benefits provided by the Company, West shall continue to receive his
Base Salary, offset by any disability benefits he may be eligible to receive,
for the remaining term of this Agreement.


 


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4.05                        Notwithstanding
any other provisions in this Agreement, if (i) West remains employed until the
date that is three (3) months after the date of a Change in Control (the
“Retention Date”), or (ii) West’s employment is terminated after or in
anticipation of a Change in Control (or the execution of a definitive agreement
providing for actions which, if completed, would constitute a Change in
Control) and before the Retention Date (A) by the Company without Good Cause or
(B) by West for Good Reason, then, in addition to any other amounts payable
pursuant to this Agreement, the Company shall pay West a lump sum cash payment
within thirty (30) days of termination equal to six (6) times the sum of West’s
annual Base Salary and the greater of (x) the highest bonus awarded to West in
a prior year or (y) 50% of West’s annual Base Salary.


 


For purposes of this
Agreement “Change in Control” means: (i) a reorganization or merger of the
Company with or into any other company which will result in the Company’s
stockholders immediately prior to such transaction not holding, as a result of
such transaction, at least 50% of the voting power of the surviving or
continuing entity or the entity controlling the surviving or continuing entity;
(ii) a sale of all or substantially all of the assets of the Company to an
entity in which the Company’s stockholders immediately prior to such sale will
not hold following such sale at least 50% of the voting power of such
purchasing entity; (iii) a transaction or series of related transactions which
result in more than 50% of the voting power of the Company being “beneficially
owned” by a single “person” (quoted terms having their respective meanings
under Sections 13(d) and 14(d) under the Securities Exchange Act of 1934, as
amended); (iv) a change in the majority of the Board not approved by at least
two-thirds of the Company’s directors in office prior to such change or (v) the
adoption of any plan of liquidation providing for the distribution of all or
substantially all of the Company’s assets.


 


For purposes of this
Agreement, after a Change in Control, “Good Reason” shall mean the occurrence
of any one of the following circumstances without West’s consent:


 


(1)                                  a
material reduction in West’s salary or benefits excluding the substitution of
substantially equivalent compensation and benefits;


 


(2)                                  a
material diminution of West’s duties, authority or responsibilities as in
effect immediately prior to such diminution;


 


(3)                                  the
relocation of West’s primary work location to a location more than 50 miles
from West’s primary work location as of the date of this Agreement; or


 


(4)                                  the
failure of a successor to assume and perform under this Agreement


 


4.06                        West’s
place of employment pursuant to this Agreement shall be at the corporate
offices in Midland, Texas, unless Pruitt shall direct otherwise.  In that event, at West’s option, he may
refuse to move, terminate this Agreement and receive payment for the remainder
of his contract term as set forth in paragraph 4.02 above.


 


4.07                        In the
event West is eligible to receive a lump sum payment pursuant to this Agreement
and such lump sum payment would cause West to be subject to an excise tax in
excess of normal income taxes on such lump sum, then and in that event, the
lump sum payment shall be increased (grossed up) in an amount sufficient to pay
such excise tax.


 


 


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ARTICLE 5


 


TRADE
SECRETS AND CONFIDENTIAL INFORMATION


 


5.01                        During
the term of West’s employment, the Company will provide West access to, so he
may become familiar with, various trade secrets and other confidential or
proprietary information of the Company, train his in the use of same, and
provide associates a working environment in which he can contribute toward
enhancing same and upgrading his general knowledge.  Trade secrets, proprietary information and confidential information
encompass, without limitation, anything which is owned by the Company and is
regularly used in the operation of the business of the Company to obtain a
competitive advantage over the Company’s competitors who do not know, have
access to, or utilize such information or trade secrets.  Proprietary information further includes,
but is not limited to, records, files, documents, bulletins, publications,
manuals, financial data and information concerning and the identity of
customers, prospects and suppliers. 
Trade secrets further include, but are not limited to, specifications,
software programs, both the source code and the object code, documentation,
flow charts, diagrams, schematics, data, data bases, and business and
production methods and techniques.


 


5.02                        West
acknowledges that such training and the use of the trade secrets and
confidential or proprietary information will enable him to perform his job and
enhance his compensation.  West
recognizes and acknowledges that the trade secrets and other confidential or
proprietary information of the Company are valuable, special and unique and
that the protection thereof is of critical importance to the Company in
maintaining its competitive position. 
West, therefore, covenants and agrees that, except as required by his
employment hereunder or with the express prior written consent of the Company,
he shall not, during the term of his employment by the Company or at anytime
thereafter, either directly or indirectly, make independent use of, publish or
otherwise disclose any of the aforesaid trade secrets or other confidential or
proprietary information of the Company (whether acquired, learned, obtained or
developed by him alone or in conjunction with others) to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever
or allow any other person , firm, corporation, association or other entity to
make use of, publish or disclose any of the aforesaid trade secrets or other
confidential or proprietary information. 
West agrees not to use, steal, or appropriate such items or versions
thereof, whether copies or reconstructed from memory or otherwise, in any
manner.  West further recognizes and
acknowledges that in order to enable Company to perform services for its
customers and engage in Company’s business, information may be furnished to the
Company confidential information and that the goodwill afforded to Company
depends upon, among other things, Company and its employees keeping such
services and information confidential. 
West therefore agrees that he shall keep all such information of the
Company and any of its affiliates and subsidiaries completely and absolutely
confidential.  This agreement not to
disclose confidential information shall survive after the term of West’s employment
pursuant to this Agreement.  Therefore,
West shall be bound by his agreement herein not to disclose confidential
information of the Company and its affiliates or subsidiaries both during his
employment with the Company and after his employment with the Company is
terminated.  A violation by West of this
Article shall be a material violation of this Agreement and will justify
legal and/or equitable relief.  West
recognizes that if he breaches this agreement and discloses confidential
information or trade secrets of the Company or any of its affiliates or
subsidiaries, the Company will suffer substantial, irreparable and continuing
injuries, damages and costs attendant thereto. 
Further, recognizing that money damages may not provide adequate relief,
West agrees that, in the event that he breaches or threatens to breach this
Agreement, the Company shall be entitled to a preliminary or permanent
injunction in order to prevent the continuation of such harm and, as liquidated
damages, West shall forfeit all payments made pursuant to this Agreement from
the date the Agreement was breached and any payments that are or may be due
pursuant to this Agreement, as well as any rights or benefits, including health
insurance benefits.


 


 


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5.03                        West
and the Company acknowledge and agree that the fact that the Parties have
entered into this Agreement and the terms of this Agreement are
confidential.  Neither of the Parties
may therefore disclose the terms of this Agreement to others, except as
necessary with regard to the filing of income taxes and other necessary
documents or as required by law, or pursuant to a subpoena or court order,
unless such disclosure has been approved by the other Party’s written
permission.


 


ARTICLE 6


 


NON-COMPETITION
AGREEMENT


 


West agrees that upon his
termination of employment from the Company, for a period of two (2) years, he
will not engage or participate, directly or indirectly, in competition with the
Company or any of its affiliates or subsidiaries without the prior written
consent of the Company which consent shall not be unreasonably withheld.  This Agreement shall prohibit West from,
among other things, attempts to serve or assist others in serving the Company’s
present or potential customers.  West
further agrees that he will never at any time after executing this Agreement,
assist any person or entity in buying, merging with or acquiring the Company
unless the Company consents in writing.


 


ARTICLE 7


 


PROHIBITIONS


 


7.01                        West shall not, at any time
during or after the term of this Agreement, make derogatory, false, or
misleading oral or written comments to any person or entity regarding the
Company, its management, officers, directors, employees or agents.  West agrees generally to speak favorably of
the Company and his employment with the Company.


 


7.02                        West agrees that neither he,
nor any member of his immediate family, shall run for or serve as a Director of
the Company for a period of five (5) years after West’s employment with the Company
is terminated.


 


7.03                        The
Company and West recognize and agree that the damages to the Company for
violation of Articles 5,6 and 7 may be difficult, if not impossible to
ascertain, and therefore the Parties hereby agree that in the event West
breaches these Articles 5, 6, and 7, the Company shall be entitled to
liquidated damages for such breach which shall be forfeiture and reimbursement
by West of all amounts paid to West from the time of the breach, received by
West from Company pursuant to this Agreement from the time of the breach, or
any amounts which West is entitled to receive pursuant to this Agreement, and
all rights and benefits, including health insurance benefits and stock which
West may be entitled to receive pursuant to this Agreement.


 


 


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ARTICLE 8


 


SUPERSESSION
AND EFFECTIVENESS


 


8.01                        This
Agreement supersedes any other agreement or understanding, written or oral,
between the parties with respect to the matters covered hereunder, and it contains
the entire understanding of the parties and all of the covenants and agreements
between them with respect to West’s employment.


 


8.02                        This
Agreement shall bind and be for the benefit of the parties to the agreement, as
well as their respective successors, heirs and assigns, it being understood,
however that this Agreement may be assigned only with the written consent of
both parties.


 


8.03                        The
existence and effectiveness of this Agreement between the parties hereto does
not preclude or otherwise interfere with employment of West by subsidiary
corporations of Cap Rock Energy Corporation, or by any corporation organized by
the Company’s Board of Directors for the benefit of the Company, or the receipt
of compensation by West from any such corporations.


 


8.04                        This
Agreement shall become binding upon the parties from and as of the date of the
execution.


 


ARTICLE 9


 


GOVERNING
LAW


 


This Agreement has been
executed in the State of Texas and shall be governed by and construed in all
respects in accordance with the laws of the State of Texas.


 


ARTICLE 10


 


ARBITRATION


 


 All disputes, claims and matters in question
arising under, with respect to or out of this Agreement or the relationship
between the parties created by this agreement, whether sounding in contract,
tort or otherwise, which cannot be resolved between the Parties, shall be
resolved by binding arbitration pursuant to the Federal Arbitration Act.  The arbitration shall be administered by the
American Arbitration Association (“AAA”) in Dallas, Texas in accordance with
the Commercial Arbitration Rules of the AAA. 
There shall be three arbitrators. 
Each party shall designate an arbitrator, who need not be neutral,
within 30 days of receiving notification of the filing with the AAA of a demand
for arbitration.  The two arbitrators so
designated shall elect a third arbitrator. 
If either party fails to designate an arbitrator within the time
specified or the two parties’ arbitrators fail to designate a third arbitrator
within 30 days of their appointments, the third arbitrator shall be appointed
by the AAA.  The decision or award of a
majority of the arbitrators shall be final and binding upon the parties.  Any arbitral award may be entered as a
judgment or order in any court of competent jurisdiction.  It is expressly agreed that the arbitrators
shall have no authority to award punitive or exemplary damages, the parties
hereby waiving their right, if any, to recover punitive or exemplary damages,
either in arbitration or in litigation.


 


IN WITNESS
WHEREOF, the parties have executed this Agreement in counterpart on or as of
the 30th day of December, 2003.


 


	
   

  	
  CAP ROCK ENERGY
  CORPORATION

  
	
   

  	
   

  
	
  /s/ Will West

  	
   

  	
  /s/ David W. Pruitt

  	
   

  
	
  Will West

  	
  David W. Pruitt,
  President/CEO

  
				



 


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