Document:

ex10-6.htm

Exhibit 10.6

 

AT-WILL EMPLOYMENT, NON-COMPETITION,

CONFIDENTIAL INFORMATION, INVENTION ASSIGNMENT

AND ARBITRATION AGREEMENT

As a condition of my employment with Coil Tubing Technology, Inc., a Nevada corporation, and/or any of its subsidiaries, affiliates, partners, successors or assigns (together the “Company”), and in consideration of my employment with the Company, ten dollars ($10) and other good and valuable consideration, which I confirm receipt of, and my receipt of the compensation now and hereafter paid to me by the Company, I (the “Employee”) agree to the following:

 

1. At-Will Employment.

 

I understand and acknowledge that while my employment with the Company is subject to the Executive Employment Agreement between myself and the Company, such employment can be terminated by the Company at any time (subject to the Executive Employment Agreement) and therefore, such employment is for an unspecified duration and constitutes "at-will" employment.  I also understand that any representation to the contrary is unauthorized and not valid unless obtained in writing and signed by an authorized corporate representative of the Company.  I acknowledge that this employment relationship may be terminated at
any time, with or without good cause or for any or no cause, at the option either of the Company or myself, with or without notice, subject to the terms and conditions of the Executive Employment Agreement.

 

2. Non-competition.  As a condition to, and in consideration of, the Company’s entering into the Executive Employment Agreement, and giving Employee access to certain confidential and proprietary information, which Employee recognizes is valuable to the Company and, therefore, its protection and maintenance constitutes a legitimate interest to be protected by the provisions of this Section 2 as applied to Employee and other employees similarly situated to Employee, Employee acknowledges and hereby agrees as follows:

 

A. that Employee is and will be engaged in the business of the Company;

 

B. that during the period of Employee’s employment under the Executive Employment Agreement, Employee will, become familiar with the Company’s trade secrets and with other proprietary and confidential information concerning the Company;

 

C.  that the obligations of this Agreement are directly related to the employment and are necessary to protect the Company’s legitimate business interests; and that the Company’s need for the covenants set forth in this Agreement are based on the following:  (i) the substantial time, money and effort expended and to be expended by the Company in developing technical designs, technology, processes, materials, equipment, marketing plans and similar confidential information; (ii) the fact that Employee will be personally entrusted with the Company’s confidential and proprietary
information; (iii) the fact that, after having access to the Company’s technology and other confidential information, Employee could become a competitor of the Company; and (iv) the highly competitive nature of the Company’s industry, including the premium that competitors of the Company place on acquiring proprietary and competitive information; and

 

  

  

  

D. that for a period commencing on the Effective Date (as defined in the Executive Employment Agreement) and ending twelve (12) months following termination of Employee’s employment (subject to the provisions of the Executive Employment Agreement), Employee will not, directly or indirectly, serve as employee, agent, consultant, stockholder, director, co-partner or in any other individual or representative capacity,
own, operate, manage, control, engage in, invest in or participate in any manner in, act as consultant or advisor to, render services for (alone or in association with any person, firm, corporation or entity), or otherwise assist any person or entity that directly or indirectly engages or proposes to engage in (i) the same, or a substantially similar, type of business as that in which the Company engages; or (ii) the business of distribution or sale of (A) products and services distributed, sold or license by the Company at the time of termination; or (B) products and services proposed at the time of termination to be distributed, sold or licensed by the Company, anywhere within any of the counties within Texas which are encompassed by and/or which any part of would lie within the area
created by drawing a line from the northern most point of McLennan County, Texas, directly east to the Texas/Louisiana border, following the Texas border south to the southernmost tip of Texas, and from the straight line created by drawing a line from the southernmost tip of Texas directly to the southwestern tip of Webb County, Texas and from the northern most tip of Tom Green County, Texas and from the northernmost tip of Tom Green County to the northernmost tip of McLennan County  (collectively, the “Territory”); provided, however

 

E. that nothing contained herein shall be construed to prevent Employee from investing in the stock or securities of any competing corporation listed on any recognized national securities exchange or traded in the over the counter market in the United States, but only if (i) such investment is of a totally passive nature and does not involve Employee devoting time to the management or operations of such corporation and Employee is not otherwise involved in the business of such corporation; and if (ii) Employee and his associates (as such term is defined in Regulation 14(A) promulgated under the Securities
Exchange Act of 1934, as amended, as in effect on the Effective Date), collectively, do not own, directly or indirectly, more than an aggregate of two percent (2%) of the outstanding stock or securities of such corporation.

 

F. The Employee acknowledges that the foregoing restrictions, as well as the duration and the territorial scope thereof as set above, are under all of the circumstances reasonable and necessary for the protection of the Company and its business.

 

3. Confidential Information.

 

A. Company Information.  I agree at all times during the term of my employment and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm or corporation without written authorization of the Board of Directors of the Company, any Confidential Information of the Company, except under a non-disclosure agreement duly authorized and executed by the Company.  I understand that
“Confidential Information” means any non-public information that relates to the actual or anticipated business or research and development of the Company, technical data, trade secrets or know-how, including, but not limited to, research, product plans or other information regarding the Company’s products or services and markets therefor, customer lists and customers (including, but not limited to, customers of the Company on whom I called or with whom I became acquainted during the term of my employment), software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances or other business information.  I further understand that Confidential Information does not include any of the
foregoing items which have become publicly known and made generally available through no wrongful act of mine or of others who were under confidentiality obligations as to the item or items involved or improvements or new versions thereof.

 

  

  

  

B. Former Employer Information.  I agree that I will not, during my employment with the Company, improperly use or disclose any proprietary information or trade secrets of any former or concurrent employer or other person or entity and that I will not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity.

 

C. Third Party Information.  I recognize that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  I agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the
Company consistent with the Company’s agreement with such third party.

 

4. Inventions.

 

A. Inventions Retained and Licensed.  I have attached hereto, as Exhibit A, a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to my employment with the Company (collectively referred to as “Prior Inventions”), which are being purchased by the Company pursuant to an Intellectual Property
Purchase Agreement dated on or around the date hereof, which relate to the Company’s business, products or research and development, and which are not assigned to the Company hereunder, but are subject to the Intellectual Property Purchase Agreement.  If in the course of my employment with the Company, I incorporate into a Company product, process or service a Prior Invention owned by me or in which I have an interest, I hereby grant to the Company a nonexclusive, royalty-free, fully paid-up, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Invention as part of or in connection with such product, process or service, and to practice any method related thereto.

 

B. Assignment of Inventions.  I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or
reduce to practice, or cause to be conceived or developed or reduced to practice, during the entire period of time I am in the employ of the Company (whether before or after the execution of this Agreement) (collectively referred to as “Inventions”).  I further acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company (whether before or after the execution of this Agreement) and which are protectible by copyright are “works made for hire,” as that term is defined in the United States Copyright Act.  Employee understands that this means that the Company
will have the right to undertake any of the actions set forth in section 106 of the United States Copyright Act (17 U.S.C. § 106) with respect to such copyrightable works prepared by Employee within the scope of Employee’s employment.  Employee understands that this includes, without limitation, the right to sell, license, use, reproduce and have reproduced, create derivative works of, distribute, display, transmit and otherwise commercially exploit such copyrightable works by all means without further compensating the Employee.  I understand and agree that the decision whether or not to commercialize or market any invention developed by me solely or jointly with others is within the Company’s sole discretion and for the Company’s sole benefit and that no royalty will be due to me as a result of the Company’s efforts to commercialize or
market any such invention.

 

  

  

  

C. Assignment of Other Rights.  In addition to the foregoing assignment of Inventions to the Company, Employee hereby irrevocably transfers and assigns to the Company: (i) all worldwide patents, patent applications, copyrights, mask works, trade secrets and other intellectual property rights in any Assigned Inventions; and (ii) any and all “Moral Rights” (as defined below) that Employee may have in or with respect to any
Inventions.  Employee also hereby forever waives and agrees never to assert any and all Moral Rights Employee may have in or with respect to any Inventions, even after termination of Employee’s work on behalf of the Company.  “Moral Rights” means any rights to claim authorship of any Inventions, to object to or prevent the modification of any Inventions, or to withdraw from circulation or control the publication or distribution of any Inventions, and any similar right, existing under judicial or statutory law of any country in the world, or under any treaty, regardless of whether or not such right is denominated or generally referred to as a “moral right”.

 

D. Inventions Assigned to the United States.  I agree to assign to the United States government all my right, title, and interest in and to any and all Inventions whenever such full title is required to be in the United States by a contract between the Company and the United States or any of its agencies.

 

E. Maintenance of Records.  I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my employment with the Company.  The records will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company.  The records will be available to and remain the sole property of the Company at all times.

 

F. Patent and Copyright Registrations.  I agree to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall
deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.  I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement.  If the Company is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint
the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by me.

 

  

  

  

5. Conflicting Employment.  I agree that, during the term of my employment with the Company, I will not engage in any other employment, occupation or consulting directly related to the business in which the Company is now involved or becomes involved during the term of my employment, nor will I engage in any other activities that conflict with my obligations to the Company.

 

6. Returning Company Documents.  I agree that, at the time of leaving the employ of the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by me pursuant to my employment with the Company or otherwise belonging to the Company, its successors
or assigns, including, without limitation, those records maintained pursuant to Section 4.E.  In the event of the termination of my employment, I agree to sign and deliver the “Termination Certification” attached hereto as Exhibit B.

 

7. Notification of New Employer.  In the event that I leave the employ of the Company, I hereby grant consent to notification by the Company to my new employer about my rights and obligations under this Agreement.

 

8. Solicitation of Employees.  I agree that for a period of twelve (12) months immediately following the termination of my relationship with the Company for any reason, whether with or without cause, I will not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees to leave their employment or the Company’s customers to remove or reduce their business with the Company, or take away such employees or customers, or attempt to solicit, induce, recruit, encourage or take away
employees or customers of the Company, either for myself or for any other person or entity.

 

9. Conflict of Interest Guidelines.  I agree to diligently adhere to the Conflict of Interest Guidelines attached as Exhibit C hereto.

 

  

  

  

10. Representations.  I agree to execute any proper oath or verify any proper document required to carry out the terms of this Agreement.  I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company.  I hereby represent and warrant that I have not entered into, and I will not enter into, any oral or written agreement in conflict herewith.

 

11. Arbitration and Equitable Relief.

 

A. Arbitration.  In consideration of my employment with the Company, its promise to arbitrate all employment-related disputes and my receipt of the compensation, pay raises and other benefits paid to me by the Company, at present and in the future, I agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, stockholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from my employment with the Company or
the termination of my employment with the Company, including any breach of this Agreement, will be subject to binding arbitration, to the fullest extent permitted by law.  Disputes which I agree to arbitrate, and thereby agree to waive any right to a trial by jury, include any statutory claims under state or federal law, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, claims of harassment, discrimination or wrongful termination and any statutory claims. I further understand that this agreement to arbitrate also applies to any disputes that the Company may have with me.

 

B. Procedure.  I agree that any arbitration will be administered by the American Arbitration Association (“AAA”) and that the neutral arbitrator will be selected in a manner consistent with its national rules for the resolution of employment disputes. I agree that the arbitrator will have the power to decide any motions brought by any party to the arbitration, including motions for summary judgment and/or adjudication and motions to dismiss and
demurrers, prior to any arbitration hearing.  I also agree that the arbitrator will have the power to award any remedies, including attorneys' fees and costs, available under applicable law.  I understand the Company will pay for any administrative or hearing fees charged by the arbitrator or AAA except that I will pay the first $200.00 of any filing fees associated with any arbitration I initiate. I agree that the arbitrator will administer and conduct any arbitration in a manner consistent with AAA's national rules, to the extent that the AAA's national rules for the resolution of employment disputes do not conflict with applicable law.  I agree that the decision of the arbitrator will be in writing.

 

C. Remedy.  Except as provided by law and this Agreement, arbitration will be the sole, exclusive and final remedy for any dispute between me and the Company.  Accordingly, except as provided for by law and this Agreement, neither I nor the Company will be permitted to pursue court action regarding claims that are subject to arbitration.  Notwithstanding, the arbitrator will not have the authority to disregard or refuse to enforce any lawful Company policy, and the arbitrator will not order or require the Company to
adopt a policy not otherwise required by law which the Company has not adopted.

 

  

  

  

D. Availability of Injunctive Relief.  In addition to any right under applicable law that the Company or I may have to petition a court of competent jurisdiction for provisional relief, I agree that any party may also petition the arbitrator for provisional injunctive relief where either party alleges or claims a violation of the employment, confidential information, invention assignment agreement between me and the Company or any other agreement regarding trade secrets, confidential information, or non-solicitation.  I
understand that any breach or threatened breach of such an agreement will cause irreparable injury and that money damages will not provide an adequate remedy therefor and both parties hereby consent to the issuance of an injunction.  In the event either party seeks injunctive relief, the prevailing party will be entitled to recover reasonable costs and attorneys' fees.

 

E. Administrative Relief.  I understand that this Agreement does not prohibit me from pursuing an administrative claim with a local, state or federal administrative body.  This Agreement does, however, preclude me from pursuing court action regarding any such claim.

 

F. Voluntary Nature of Agreement.  I acknowledge and agree that I am executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else.  I further acknowledge and agree that I have carefully read this Agreement and that I have asked any questions needed for me to understand the terms, consequences and binding effect of this Agreement and fully understand it, including that I AM WAIVING MY RIGHT TO A JURY
TRIAL.  Finally, I agree that I have been provided an opportunity to seek the advice of an attorney of my choice before signing this Agreement.

 

12. General Provisions.

 

A. Governing Law, Consent to Personal Jurisdiction.  This Agreement will be governed by the laws of the State of Texas.  I hereby expressly consent to the personal jurisdiction of the state and federal courts located in Texas for any lawsuit filed there against me by the Company arising from or relating to this Agreement.

 

B. Entire Agreement.  This Agreement, along with the Executive Employment Agreement and Intellectual Property Purchase Agreement, sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and supersedes all prior discussions or representations between us including, but not limited to, any representations made during my interview(s) or relocation negotiations, whether written or oral.  No modification of or amendment to this Agreement, nor any waiver of any rights under
this Agreement, will be effective unless in writing signed by an authorized officer of the Company (other than me) and me.  Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.  This Agreement prevails and supersedes in the event there is any inconsistency between this Agreement and any other offer letter, unless the offer letter expressly provides otherwise.

 

C. Severability.  If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

 

  

  

  

D. Successors and Assigns.  This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

 

	
Date:  11/30/10

	

/s/ Jerry Swinford

	 	Signature
	  	
Jerry Swinford

	  	
Name of Employee (typed or printed)

 

 

 

 

 

 

 

 

  

  

  

EXHIBIT A

 

LIST OF PRIOR INVENTIONS

 

AND ORIGINAL WORKS OF AUTHORSHIP

 

	

 

Title

	

 

Date

	

 

Identifying Number

or Brief Description

	  	  	  
	● Subterranean Rotation Inducing Device and Method	No. 5584342	$250,000
	 	 	 
	● Jet Motor For Providng Rotation In A Downhole Tool	
US Patent #7686102

Singaport Patent # 146369

	$300,000
	 	 	 
	● Rotation Tool	No. 11/884,614	$200,000
	 	 	 
	● Drilling Jar	No. 12/437,525	$250,000
	 	 	 
	● Jet Hammer	No. 12/480,680	$200,000 
	 	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  

                        No inventions or improvements

 

                        Additional Sheets Attached

 

Signature of Employee:  By: /s/ Jerry Swinford                                                                                      

 

Print Name of Employee: Jerry Swinford

 

Date: November 30, 2010                                                                                               

 

  

  

  

EXHIBIT B

 

TERMINATION CERTIFICATION

 

This is to certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items belonging to Coil Tubing Technology, Inc., a Nevada corporation, and/or its subsidiary, affiliate, partner, successor or assigns (together, the “Company”).

 

I further certify that I have complied with all the terms of the Company’s At Will Employment, Non-Competition, Confidential Information, Invention Assignment And Arbitration Agreement  signed by me, including the reporting of any inventions and original works of authorship (as defined therein), conceived or made by me (solely or jointly with others) covered by that agreement.

 

I further agree that, in compliance with the At-Will Employment, Non-Competition, Confidential Information, Invention Assignment, and Arbitration Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business plans, financial information or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants or licensees.

 

I agree that for a period of twelve (12) months immediately following the termination of my relationship with the Company for any reason, whether with or without cause, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees to leave their employment or customers to remove or reduce their business with, or take away such employees or customers, or attempt to solicit, induce, recruit, encourage or take away employees or customers of the Company, either for myself or for any other person or entity.

 

	
Date:                                                      

	                                                     
	  	
(Employee’s Signature)

 

	  	
Jerry Swinford

	  	
(Type/Print Employee’s Name)

  

  

  

EXHIBIT C

 

 

CONFLICT OF INTEREST GUIDELINES

 

It is the policy of Coil Tubing Technology, Inc., a Nevada corporation (the “Company”) to conduct its affairs in strict compliance with the letter and spirit of the law and to adhere to the highest principles of business ethics.  Accordingly, all officers, employees and independent contractors must avoid activities which are in conflict, or give the appearance of being in conflict, with these principles and with the interests of the Company.  The following are potentially compromising situations which must be avoided.  Any exceptions must be reported to an authorized officer of the Company
(other than me) and written approval for continuation must be obtained.

 

1. Revealing confidential information to outsiders or misusing confidential information.  Unauthorized divulging of information is a violation of this policy whether or not for personal gain and whether or not harm to the Company is intended.  (The At Will Employment, Non-Competition, Confidential Information, Invention Assignment And Arbitration Agreement  elaborates on this principle and is binding).

 

2. Accepting or offering substantial gifts, excessive entertainment, favors or payments which may be deemed to constitute undue influence or otherwise be improper or embarrassing to the Company.

 

3. Participating in civic or professional organizations that might involve divulging confidential information of the Company.

 

4. Initiating or approving personnel actions affecting reward or punishment of employees or applicants where there is a family relationship or is or appears to be a personal or social involvement.

 

5. Initiating or approving any form of personal or social harassment of employees.

 

6. Investing or holding outside directorship in suppliers, customers, or competing companies, including financial speculations, where such investment or directorship might influence in any manner a decision or course of action of the Company.

 

7. Borrowing from or lending to employees, customers or suppliers.

 

8. Acquiring real estate of interest to the Company.

 

9. Improperly using or disclosing to the Company any proprietary information or trade secrets of any former or concurrent employer or other person or entity with whom obligations of confidentiality exist.

 

10. Unlawfully discussing prices, costs, customers, sales or markets with competing companies or their employees.

 

  

  

  

11. Making any unlawful agreement with distributors with respect to prices.

 

12. Improperly using or authorizing the use of any inventions which are the subject of patent claims of any other person or entity.

 

13. Engaging in any conduct which is not in the best interest of the Company.

 

Each officer, employee and independent contractor must take every necessary action to ensure compliance with these guidelines and to bring problem areas to the attention of higher management for review.  Violations of this conflict of interest policy may result in discharge without warning.ex10-7.htm

Exhibit 10.7

 

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) entered into on November 18, 2010 (the “Execution Date”), and effective as of November 1, 2010 (the "Effective Date"), is entered into by and between Coil Tubing Technology, Inc., a Nevada corporation (the "Company"), and Jason Swinford (the
"Officer").  The Company and Officer are referred to collectively herein as the "Parties."

In consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1. Employment. The Company hereby employs Officer as the Chief Operating Officer. Officer hereby accepts such employment and agrees to perform those duties and undertake those responsibilities as are customarily performed by others holding similar positions in similar businesses and Officer shall perform all other duties and activities that are assigned to Officer by the Board of Directors of the Company.

2. Full Time Best Efforts. Officer shall devote substantially all of Officer's full professional time and attention to the performance of Officer's obligations under this Agreement, and will at all times faithfully, industriously and to the best of Officer's ability, experience and talent, perform all of Officer's obligations hereunder. Officer may have other business investments that, from time to time, require portions of Officer's time, provided that such activities do not interfere or conflict and are consistent with Officer's duties hereunder
and are not detrimental to the Company's business interests.

3. Term of Employment. The term of Officer's employment shall commence on the Effective Date and, unless terminated earlier pursuant to the provisions of this Agreement, shall continue for five years (the "Initial Term"). Upon the expiration of the Initial Term, Officer's employment by the Company under the terms of this Agreement shall automatically be renewed for successive one (1) year increments unless either party is gives written notice of their intent to not
renew this Agreement not less than 60 days prior to the anniversary date on which this Agreement would otherwise terminate. The term of this Agreement as provided in this Section 3 is referred to herein as the "Term."

4. Compensation. Salary. Until termination of Officer's employment hereunder, unless otherwise provided herein, the Company shall pay Officer an annual base salary of not less than $132,000, less applicable withholdings, payable in equal monthly (or other more frequent periodic) installments at the usual times as payment of compensation to the Company's senior Officers. A review of Officer's performance shall be held on an annual basis commencing in January of 2011, and in each January thereafter until the termination of this Agreement.

(a) Bonus. A sign-on bonus in the amount of $10,000 shall be paid to Officer promptly upon the Parties’ execution of this Agreement.  Additionally, a performance bonus (the “Bonus”) shall be paid, in addition to the Officer's base salary, at the end of each calendar year during the Term (and payable in a lump sum, promptly after the calculation of such Bonus is completed by the Company) in the event the Company has positive earnings before interest, taxes, depreciation and amortization (minus
extraordinary items including stock buybacks, acquisitions and other extraordinary items as determined in the reasonable discretion of the Board of Directors of the Company, and legal fees associated with such items) (“EBITDA”) for the prior calendar year ended December 31 (the “Prior Year”).  The Bonus due to Officer shall based on a percentage of the Officer’s annual base salary for the Prior Year (the “Prior Year’s Salary”, provided that if the annual base salary has changed during such Prior Year, the Prior Year’s Salary shall equal the Officer’s annual base salary
at the end of such Prior Year), as provided below.  If EBITDA for the Prior Year is:

  

  

  

	 	
i.  

	
less than $2,000,000, no Bonus shall be due;

	 	
ii.  

	
between $2,000,000 and $3,000,000, the Bonus shall be equal to 20% of the Prior Year’s Salary;

	 	
iii.  

	
between $3,000,000 and $4,000,000, the Bonus shall be equal to 30% of the Prior Year’s Salary;

	 	
iv.  

	
between $4,000,000 and $5,000,000, the Bonus shall be equal to 40% of the Prior Year’s Salary;

	 	
v.  

	
between $5,000,000 and $6,000,000, the Bonus shall be equal to 50% of the Prior Year’s Salary;

	 	
vi.  

	
between $6,000,000 and $7,000,000 the Bonus shall be equal to 75% of the Prior Year’s Salary; or

	 	
vii.  

	
$7,000,000 or more, the Bonus shall be equal to 100% of the Prior Year’s Salary.

In the event of the termination of employment prior to the end of a calendar year, Officer shall be entitled to a Bonus that is prorated through the end of the last full quarter in which the Officer worked for his last year of employment, based on the EBITDA of the Company calculated as of the end of such quarter, with the dollar amounts set forth above in (i) through (vii) adjusted pro rata with the number of full quarters that had elapsed as of such termination date.  Officer has the right to receive any Bonus in stock or cash or a combination thereof, at the option of Officer.

(b) In addition to the Bonus, Officer may be granted bonuses in cash or stock from time to time at the discretion of the Board of Directors or a Committee thereof.

  

  

  

(c) Officer shall be granted an option (the “Option”) with the following terms and conditions:

	 	
i.  

	
The Officer shall be granted an option to purchase 2,000,000 shares of the Company’s common stock upon the Parties’ entry into this Agreement (the “Initial Option”), which Initial Option shall have such terms and conditions as described below, except that one-fourth of the Initial Option (i.e., options to purchase 500,000 shares of common stock) shall vest to the Officer upon the Execution Date, with options to purchase the remaining amount of the Initial Option vesting to the Officer at the rate of one-fourth of such Initial Option per year, over the three years following the Execution Date, on the first, second and third
anniversaries of the Execution Date, provided that the Officer is still employed by the Company on such anniversary date(s).

	 	
ii.  

	
The Option shall have an initial exercise price (the “Option Price”), equal to the mean between the highest and lowest quoted selling prices of the Company’s common stock on the pinksheets trading market or Over-The-Counter Bulletin Board (which ever is applicable) on the last day that the Company’s common stock trades prior to the end of such calendar year (provided that the Initial Option shall have an Option Price equal to the mean between the highest and lowest quoted selling prices of the Company’s common stock on the pinksheets trading market on the Execution Date, provided that if the Company’s common
stock does not trade on such Execution Date, the Initial Option, Option Price shall equal the mean between the highest and lowest sales on the nearest date before and the nearest date after the Execution Date) subject to adjustment for stock splits and recapitalizations as provided in the Option.

	 	
iii.  

	
The Option shall be exercisable by Officer at any time until the tenth anniversary of their grant, provided that termination of the Option shall be subject to the termination provisions of the Company’s 2010 Stock Incentive Plan (the “Plan”), and all Options shall provide for a cashless exercise provision.

	 	
iv.  

	
The Option shall be evidenced by an Option Agreement in such form as approved by the Company’s Board of Directors, and with terms and conditions consistent with the Plan.

(d) The Company shall provide Officer, his wife, and his children, whether or not he remains employed by the Company, health insurance until the end of the Term.

  

  

  

5. Benefits. Officer shall be entitled to participate in the Company's applicable benefit plans, including but not limited to any group medical and/or dental plan; group life, disability or other insurance; and any Stock Option/Stock Issuance Plan, as such plans are generally available from time to time to Officers and employees of the Company, Officer will be entitled to three (3) weeks of paid vacation per year, earned in accordance with the Company's vacation policy.

6. Expenses. Officer is authorized to incur expenses in reasonable amounts for promoting the business of the Company, including expenses for entertainment, travel and similar items. Officer shall obtain and shall provide on a monthly basis to the Company receipts sufficient in detail to satisfy the information requirements of §274 of the Internal Revenue Code of 1986, as amended. The Company shall reimburse Officer for all reasonable expenses within 10 days of the receipt of each such reimbursable expense as defined herein. The reimbursable or
direct expenses shall be the following unless the Company otherwise agrees to additional expenses.

(a) The Company will provide an automobile allowance in the amount of $900 per month and shall pay for its operating expenses to the extent permitted under the rules and regulations of the IRS.

(b) Travel  and  entertainment expenses  on  behalf of the Company will be reimbursed by the Company.

7. At Will Employment, Non-Competition, Confidential Information, Invention Assignment And Arbitration Agreement. As a condition of Officer's employment and as consideration to Company for entering into this Agreement with Officer, Officer and the Company will enter into the At Will Employment, Non-Competition, Confidential Information, Invention Assignment And Arbitration Agreement (the “At Will Agreement”) dated as of the Effective Date, a copy of
which is attached hereto as Exhibit 1. The At Will Agreement is a part of this Agreement and is hereby incorporated herein by reference. The terms of Sections 2 and 8 of the At Will Agreement shall survive the termination of Officer's employment by the Company under this Agreement for any reason for a period of the lesser of the time period set forth in such Executive Officer Confidentiality, Non-Competition and Invention Assignment Agreement or 1 year, provided that Officer’s requirements to keep the Company’s Confidential Information (as defined in such At Will Agreement) confidential as provided in such agreement and such provisions other than Sections 2 and 8 thereof, shall survive such termination (the “Ongoing
Requirements”).  Officer’s requirement to be bound by the terms of this Section 7 and Sections 2 and 8 of the At Will Agreement, shall automatically terminate in the event Officer’s employment has previously been terminated, and the Company is more than fifteen (15) days late in paying Officer any consideration due to Officer in connection with the terms and conditions of this Agreement; or any other agreement or document whatsoever.

8. Termination for Cause. If Officer's employment by the Company is terminated for Cause, Officer shall be paid the compensation provided for above in Section 4, including the Bonus as provided therein, through the date of termination within ten (10) days of such termination, and thereafter the Company shall have no further compensation, benefit or payment obligations to Officer under this Agreement, other than the continuing requirement to pay Officer’s health insurance as provided above and all unvested Options
shall terminate and be forfeited by Officer.

  

  

  

9. "Cause". For purposes of this Agreement, "Cause" shall mean the occurrence of any one of the following events, which continues uncured after ten (10) days written notice thereof has been provided by the Company to Officer:

(a) Officer's material breach of any provision of this Agreement or of the At Will Agreement  of even date herewith, entered into by and between the Company and Officer, which breach is not cured within ten days after the Company provides Officer with written notice of the nature and existence of such material breach;

(b) Officer's willful refusal to obey written directions of Officer's supervisor of the Company (so long as such directions do not involve illegal or immoral or otherwise improper acts), which refusal continues for a period of five business days after notice to Officer by the Company, and which notice references such refusal and this Section 9.

(c) Officer's failure to perform Officer's duties and responsibilities with diligence and in accordance with the productivity and quality requirements of the Company, which failure continues for a period of ten business days after written notice to Officer by the Company of Officer's failure to perform; provided, however, that if Officer has been provided written notice pursuant to this Section 9 on two separate occasions during the Term, any subsequent failure by Officer to perform Officer's duties and responsibilities in accordance with the Company's requirements shall constitute Cause and the Company shall
not be required to provide any written notice or opportunity for Officer to correct Officer's performance prior to a termination of Officer's employment by the Company;

(d) Officer's repeated refusal to comply with Company’s written policies or requirements which are adopted by the Board of Directors from time to time and which apply to Officer's responsibilities;

(e) Officer's action, or failure to act, in violation of any provision of the Company's standard Officer guidelines, including but not limited to any policy concerning sexual harassment, substance abuse, as such policies may be in effect from time to time, if such violation of the Company's policy would generally result in the termination of employment of a Company Officer;

(f) Fraud or dishonesty by Officer, in the good faith opinion of the Board of Directors of the Company; or

  

  

  

(g) If Officer is convicted or admits to the commission of a criminal offense or act of moral turpitude that constitutes a felony in the jurisdiction in which the offense is committed.

10. Termination for Good Reason. In the event of termination of Officer's employment by the Company for Good Reason, the Company shall continue to pay Officer Officer's base salary, less applicable withholdings and the Bonus, for the remainder of the then applicable Term of this Agreement in installments at the usual times for the payment of the Company's senior Officers (and the Company shall continue to pay and provide all other benefits or compensation payable to Officer hereunder through the then applicable Term), and any ownership Options of
Officer that are subject to vesting shall immediately and automatically become fully vested without any further action by Officer and Officer shall also be paid in a lump sum, within ten (10) days of such termination an additional $100,000, which the Parties agree is not a penalty, but which is a good faith estimate of the expenses that Officer will incur as result of the termination of this Agreement for Good Reason and thereafter the Company shall have no further compensation, benefit or payment obligations to Officer under this Agreement, other than the continuing requirement to pay Officer’s health insurance as provided above.

11. "Good Reason." Officer shall have the right, upon written notice to the Company, at any time during the Term to terminate Officer's employment hereunder if any one or more of the following events shall have occurred, which event shall have remained uncured by the Company for a period of thirty days following written notice thereof from Officer (any such termination being referred to herein as a termination for "Good Reason"):

(a) The Company shall materially diminish the responsibilities, authority, status or job duties or other benefits of Officer under this Agreement (other than in connection with Officer's unavailability by reason of disability or breach by Officer of this Agreement or otherwise);

(b) Officer shall die during the Term;

(c) Officer shall become disabled to perform his normal and customary job duties for a period of time at least as long as the then remaining Term of this Agreement as substantiated by a medical doctor or other health care professional then caring for Officer;

(d) The Company shall materially breach any of its obligations under this Agreement (or exhibits thereto); or

(e) Upon Officer’s Constructive Termination. “Constructive Termination” of Officer’s employment with the Company will be deemed to have occurred if Officer terminates his employment with the Company within six (6) months following the date on which:

  

  

  

	 	
i.  

	
the Company demotes Officer to a lesser position, either in title or responsibility;

 

	 	
ii.  

	
the Company decreases Officer’s pay below the highest level in effect at any time during Officer’s employment with the Company under this Agreement or reduces Officer’s benefits below the levels in effect during Officer’s employment with the Company  under this Agreement (other than as a result of any amendment or termination of any group or other executive benefit plan, which amendment or termination is applicable to all executives of the Company or any inadvertent reduction in benefits that Company cures within thirty (30) days after receiving written notice of such reduction);

	 	
iii.  

	
the Company requires Officer to relocate to a principal place of business more than fifty (50) miles from the principal place of business occupied by the Company as of the date hereof; or

	 	
iv.  

	
the Company breaches any material term of this Agreement which is not cured by the Company within ten (10) days after receiving written notice of such breach.

12. Effect of a Change in Control. Upon termination of Officer's employment within six months of the occurrence of any Change in Control, the Company shall pay to Officer the entire amount of cash compensation provided for in Section 4 and Section 4(a) that is payable during the remainder of the Term as well as any payments required pursuant to Section 13(c), below. Such amount shall be payable in a lump sum cash payment that shall be made to Officer within thirty (30) days of the effective date of the Change in Control. In addition, any ownership
options of Officer shall immediately vest and become non-forfeitable.

13. "Change in Control." A "Change in Control" for purposes of this Agreement shall mean any of the following events:

(a) any person (as that term is used in Rule 13d-5 under the Securities Exchange Act of 1934, as amended) or group (as that term is used in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended) who is not, as of the Effective Date, the beneficial owner of securities of the Company representing 25% or more of the combined voting power of the Company's then outstanding securi­ties becomes the beneficial owner of securities of the Company representing 25% or more of the combined voting power of the Company's then outstanding securities;

(b) the shareholders of the Company approve a merger or consolidation of the Company with any other company, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 75% of the combined voting power of the voting securities of the Compa­ny or such surviving entity outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person who did not own more than 50% of the combined voting power of the Company's securities acquires no more than 50% of the combined voting power of the Company's then outstanding securities; or

  

  

  

(c) the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the safe or disposition by the Company of all or substantially all the Company's assets.

14. Termination "Without Cause." If Officer's employment is terminated "Without Cause" (as defined herein) by the Company, the Company shall continue to pay Officer's base salary and all other benefits to which Officer may be entitled, including but not limited to the Bonus, prior to such termination, less applicable
withholdings, for the remainder of the then applicable Term of this Agreement, in installments at the usual times for the payment of the Company's Officers (in addition to all other benefits or compensation payable to Officer hereunder up to the date of the termination) and any Options of Officer that are subject to vesting shall immediately and automatically become fully vested.

15. "Without Cause." The Company shall be entitled to terminate Officer's employment at any time without cause. "Without Cause" shall mean, for purposes of this Agreement, for any reason that is not "Cause" or "Good Reason", or as the result of a
"Change in Control" as defined herein.

16. Facilities and Expenses. The Company shall make available to Officer such facilities, and equipment as are suitable and appropriate to assist Officer to meet her obligations to the Company in or in close proximity to, Spring, Texas. These amounts shall be paid directly by the Company. The Company shall promptly reimburse Officer for all reasonable expenses, as set forth in Section 6, incurred in the performance of Officer's duties hereunder, including expenses for entertainment, travel, and management seminars, subject to Officer satisfying the
Company's reasonable requirements with respect to the approval, reporting and documentation of such expenses.

17. Miscellaneous.

(a) All payments made to or for the benefit of Officer under this Agreement shall be subject to withholdings for federal, state and local taxes, PICA, and other withholdings required by applicable law.

(b) For purposes of this Agreement, notices, approvals and other communications provided for herein shall be in writing and shall be deemed to have been duly given when delivered in person, by facsimile transmission, by express courier, or by first class United States Mail, postage prepaid, return receipt requested. Notices to the Company shall be sent to the attention of the current President and Chief Executive Officer of the Company at its legally registered address in Texas as shall be provided in writing to Officer in accordance with this section. Notices to Officer shall be addressed to Officer's most
recent address as set forth in the personnel records of the Company. Notices shall be effective upon receipt. Either party shall be entitled to change the address at which notice is to be given by providing notice to the other party of such change in the manner provided herein.

  

  

  

(c) This Agreement, together with the At Will Agreement attached hereto as Exhibit 1 sets forth the entire agreement of the parties with respect to the subject matter hereof, and supersedes all prior agreements, whether written or oral. Only a writing signed by both parties hereto may amend this Agreement.

(d) Officer may not assign this Agreement, but the Company may assign any or all of its rights under this Agreement to any affiliate or subsidiary company of the Company, so long as the Company remains liable for the performance by that affiliate or subsidiary of the payment obligations of the Company hereunder. Except as provided in the preceding sentence, this Agreement shall be binding upon, and inure to the benefit of, the parties and their respective personal representatives, successors and assigns.

(e) No provision of this Agreement shall be altered, amended, revoked or waived except by an instrument in writing signed by the Party sought to be charged with such amendment, revocation or waiver.

(f) No waiver of any provision of this Agreement shall be valid unless it is in writing and signed by the party against whom it is charged.

(g) The invalidity or unenforceability of any provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed as if such invalid or unenforceable provision were omitted.

(h) This Agreement shall be governed by and construed in accordance with the laws of the State of Texas (without resort to the conflict of law principles thereof).

(i) This Agreement may be executed in several counterparts, each of which is an original.  It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.  A copy of this Agreement signed by one Party and faxed or scanned and emailed to another Party (as a PDF or similar image file) shall be deemed to have been executed and delivered by the signing Party as though an original.  A photocopy or PDF of this Agreement shall be effective as an original for all purposes.

  

  

  

IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement on the Execution Date, to be effective as of the Effective Date.

“COMPANY”

COIL TUBING TECHNOLOGY, INC.

By: /s/ Jerry Swinford

Jerry Swinford, President

 

“OFFICER”

JASON SWINFORD

By: /s/ Jason Swinford

Jason Swinford

 

Acknowledged and Agreed to by:

“POHLMANN”

HERBERT C. POHLMANN

By: /s/ Herbert C. Pohlmann

Herbert C. Pohlmann

  

  

  

EXHIBIT 1

At Will Employment, Confidential Information,

Invention Assignment And Arbitration Agreement

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