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                                                                   EXHIBIT 10.17

                              EMPLOYMENT AGREEMENT

This Employment Agreement for an Executive (the "Agreement") is made and
effective this 1 July, 2003.

BETWEEN:      STEPHEN J. SHOWS, (the Executive") an individual with his main
              address at: 2618 York Avenue, Minden, LA 71055

AND:          VALENTEC SYSTEMS, INC. (the "Company"), an entity organized and
              existing under the laws of the Delaware, with its head office
              located at: 2618 York Avenue, Minden, LA 71055

RECITALS

In consideration of the covenants and agreements herein contained and the moneys
to be paid hereunder, the Company hereby employs the Executive and the Executive
hereby agrees to perform services as an Executive of the Company, upon the
following terms and conditions:

1.    TERM

      The Company hereby employs Executive to serve as Vice President, General
      Manager and to serve in such additional or different position or positions
      as the Company may determine in its sole discretion. The term of
      employment shall continue through December 31,2006.

      The effective date of this Agreement shall be the date first set forth
      above, and it shall continue in effect until the earlier of:

      A.    The effective date of any subsequent employment agreement between
            the Company and the Executive;

      B.    The effective date of any termination of employment as provided
            elsewhere herein; or

      C.    December 31, 2006, provided, that this Employment Agreement shall
            automatically renew for successive periods of 1 year each unless
            either party gives written notice to other that it does not wish to
            automatically renew this Agreement, which written notice must be
            received by the other party no less than 60 days and no more than 90
            days prior to the expiration of the applicable term.

2.    DUTIES AND RESPONSIBILITIES

      Executive will be reporting to Robert A. Zummo, Chairman. Within the
      limitations established by the By-laws of the Company, the Executive shall
      have each and all of the duties and responsibilities of that position.

3.    LOCATION

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      The initial principal location at which Executive shall perform services
      for the Company shall be Valentec offices, 2618 York Avenue, Minden,
      Louisiana.

4.    ACCEPTANCE OF EMPLOYMENT

      Executive accepts employment with the Company upon the terms set forth
      above and agrees to devote all Executive's time, energy and ability to the
      interests of the Company, and to perform Executive's duties in an
      efficient, trustworthy and business-like manner.

5.    DEVOTION OF TIME TO EMPLOYMENT

      The Executive shall devote the Executive's best efforts and substantially
      all of the Executive's working time to performing the duties on behalf of
      the Company. The Executive shall provide services during the normal
      business hours of the Company as determined by the Company. Reasonable
      amounts of time may be allotted to personal or outside business,
      charitable and professional activities and shall not constitute a
      violation of this Agreement provided such activities do not materially
      interfere with the services required to be rendered hereunder.

6.    QUALIFICATIONS

      The Executive shall, as a condition of this Agreement, satisfy all of the
      qualification that are reasonably and in good faith established by the
      Chairman.

7.    COMPENSATION

      7.1 BASE SALARY

      Executive shall be paid a base salary ("Base Salary") at the annual rate
      of $150,000, payable in biweekly installments consistent with Company's
      payroll practices. The annual Base Salary shall be reviewed on or before 1
      July of each year, unless Executive's employment hereunder shall have been
      terminated earlier pursuant to this Agreement. In consideration of the
      services under this Agreement, Executive shall be paid the aggregate of
      basic compensation, bonus and benefits as hereinafter set forth.

      7.2 PAYMENT

      Payment of all compensation to Executive hereunder shall be made in
      accordance with the relevant Company policies in effect from time to time,
      including normal payroll practices.

      7.3 BONUS

      From time to time, the Company may pay to Executive a bonus out of net
      revenues of the Company. Payment of any bonus compensation shall be at the
      sole discretion of the Chairman.

      7.4 BENEFITS

      The Company shall provide Executive with such benefits as are provided to
      other senior management Of the Company. Benefits shall include at a
      minimum (i) paid vacation of 4 weeks per year, at such times as approved
      by the Chairman, (ii) health insurance coverage under the same terms as
      offered to other Executives of the Company, (iii) retirement and profit
      sharing programs as offered to other Executives of the Company, (iv) paid
      holidays as per the Company's policies, and (v) such other benefits and
      perquisites as are approved by the Chairman.

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The Company has the right to modify conditions of participation, terminate any
benefit, or change insurance plans and other providers of such benefits in its
sole discretion. The Executive shall be reimbursed for out of pocket expenses
that are pre-approved by the Company, subject to the Company's policies and
procedures therefore, and only for such items that are a necessary and integral
part of the Executive's job functions.

      7.5 WITHHOLDING

      All sums payable to Executive under this Agreement will be reduced by all
      federal, state, local, and other withholdings and similar taxes and
      payments required by applicable law.

8.    OTHER EMPLOYMENT BENEFITS

      8.1 BUSINESS EXPENSES

      Upon submission of itemized expense statements in the manner specified by
      the Company, Executive shall be entitled to reimbursement for reasonable
      travel and other reasonable business expenses duly incurred by Executive
      in the performance of his duties under this Agreement.

      8.2 BENEFIT PLANS

      Executive shall be entitled to participate in the Company's medical and
      dental plans, life and disability insurance plans and retirement plans
      pursuant to their terms and conditions. Executive shall be entitled to
      participate in any other benefit plan offered by the Company to its
      Executives during the term of this Agreement. Nothing in this Agreement
      shall preclude the Company or any affiliate of the Company from
      terminating or amending any Executive benefit plan or program from time to
      time.

      8.3 VACATION

      Executive shall be entitled to 4 weeks of vacation each year of full
      employment, exclusive of legal holidays, as long as the scheduling of
      Executive's vacation does not interfere with the Company's normal business
      operations.

      8.4 AUTOMOBILE

      Executive shall be provided or reimbursed for a general purpose automobile
      and operating expenses, with approval of Chairman, to be used in
      conjunction with performance of company business and for personal use.

9.    POLICIES AND PROCEDURES

      The Company shall have the authority to establish from time to time the
      policies and procedures to be followed by the Executive in performing
      services for the Company. Executive shall abide by the provisions of any
      contract entered into by the Company under which the Executive provides
      services. Executive shall comply with the terms and conditions of any and
      all contracts entered by the Company.

10.   TERMINATION OF EMPLOYMENT

      10.1 FOR CAUSE

      Notwithstanding anything herein to the contrary, the Company may terminate
      Executive's employment hereunder for cause for any one of the following
      reasons: 1) conviction of a felony, any act involving moral turpitude, or
      a misdemeanor where imprisonment is imposed, 2) commission of any act of
      theft, fraud, dishonesty, or falsification of any employment or Company
      records, 3) improper disclosure of the Company's confidential or
      proprietary information, 4) any action by the

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      Executive which has a detrimental effect on the Company's reputation or
      business, 5) Executive's failure or inability to perform any reasonable
      assigned duties after written notice from the Company of, and a reasonable
      opportunity to cure, such failure or inability, 6) any breach of this
      Agreement, which breach is not cured within [10] days following written
      notice of such breach, 7) a course of conduct amounting to gross
      incompetence, 8) chronic and unexcused absenteeism, 9) unlawful
      appropriation of a corporate opportunity, or 10) misconduct in connection
      with the performance of any of Executive's duties, including, without
      limitation, misappropriation of funds or property of the Company, securing
      or attempting to secure personally any profit in connection with any
      transaction entered into on behalf of the Company, misrepresentation to
      the Company, or any violation of law or regulations on Company premises or
      to which the Company is subject. Upon termination of Executive's
      employment with the Company for cause, the Company shall be under no
      further obligation to Executive, except to pay all accrued but unpaid base
      salary and accrued vacation to the date of termination thereof.

      10.2 WITHOUT CAUSE

      The Company may terminate Executive's employment hereunder at any time
      without cause, provided, however, that Executive shall be entitled to
      severance pay in the amount of 52 weeks of Base Salary in addition to
      accrued but unpaid Base Salary and accrued vacation, less deductions
      required by law, but if, and only if, Executive executes a valid and
      comprehensive release of any and all claims that the Executive may have
      against the Company in a form provided by the Company and Executive
      executes such form within 30 days of tender.

      10.3 RESIGNATION

      Upon termination of employment, Executive shall be deemed to have resigned
      from the Board of Directors of the Company if HE is a director.

      10.4 COOPERATION

      After notice of termination, Executive shall cooperate with the Company,
      as reasonably requested by the Company, to effect a transition of
      Executive's responsibilities and to ensure that the Company is aware of
      all matters being handled by Executive.

      10.5 COMPENSATION AFTER NOTICE OF TERMINATION

      After notice of termination has been given by either Company or Executive,
      as provided in this Article, Executive shall be entitled to receive the
      compensation provided for in this Agreement until the notice period has
      expired. It is understood that after the written notice is given by either
      Company or Executive, Executive shall continue to devote substantially all
      of the Executive's time to the Executive's normal services for the Company
      during the notice period, with sufficient time allowed, in the sole
      discretion of the Company, for Executive to seek new employment.

      10.6 CHANGE OF OWNERSHIP

      The executive, at his discretion, may choose to terminate his employment
      in the event of an ownership change or change in reporting assignment
      defined in article 2. In the event of this election, the executive will be
      entitled to full compensation for the remainder of the contract term to
      include salary, health care, life insurance benefits and vacation
      consideration. A new owner or new reporting assignment may not
      unilaterally terminate the executive, for any reason, until this agreement
      expires or the executive is compensated for the term of the agreement.

11.   DISABILITY OF EXECUTIVE

      The Company may terminate this Agreement without liability if Executive
      shall be permanently prevented from properly performing his essential
      duties hereunder with reasonable accommodation by reason of illness or
      other physical or mental incapacity for a period of more than [90]
      consecutive days. Upon such termination, Executive shall be entitled to
      all accrued but unpaid Base Salary and vacation.

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      11.1 DEFINITIONS

      For purposes of this Agreement, whenever used in this Article 14:

      "TOTAL DISABILITY" shall mean that the Executive is unable, mentally or
      physically, whether it be due to sickness, accident, age or other
      infirmity, to engage in any aspect of the Executive's normal duties as set
      forth in this Agreement.

      "PARTIAL DISABILITY" shall mean that the Executive is able to perform, to
      some extent, art behalf of the Company, the particular services in which
      the Company specializes, and which the Executive previously performed for
      the Company, but that the Executive is unable, mentally or physically, to
      devote the same amount of time to such services as was devoted prior to
      the occurrence of such sickness or accident.

      "NORMAL MONTHLY SALARY" shall mean the salary which the Executive is being
      paid by the Company per month as of the commencement date of the period of
      disability, as specified hereinabove or as determined by the Chairman
      pursuant to the terms hereof.

      11.2 TOTAL DISABILITY

      During a single period of total disability of the Executive, the Executive
      shall be entitled to receive from the Company, the Executive's normal
      monthly salary for the shorter of first three (3) months of disability or
      until any disability insurance policy available through the Executive's
      employment begins to pay benefits. If the single period of disability
      should continue beyond three (3) months, the Executive shall receive only
      such amount as the Executive shall be entitled to receive under disability
      insurance coverage on the Executive, if any.

      11.3 PARTIAL DISABILITY

      During a period of partial disability of the Executive, the Executive
      shall receive an amount of compensation computed as follows:

      That portion of the Executive's normal monthly basic compensation which
      bears the same ratio to the Executive's normal monthly basic compensation
      as the amount of time which the Executive is able to devote to the usual
      performance of services on behalf of the Company during such period bears
      to the total time the Executive devoted to performing such services
      prior to the commencement date of the single period of disability, and

      Such amount shall be calculated by multiplying the Executive's basic
      compensation by a fraction, the numerator of which shall be the percentage
      of normal services that the Executive is able to perform and the
      denominator which shall be the total services that the Executive is able
      to perform absent the partial disability.

      11.4 COMBINATION OF TOTAL AND PARTIAL DISABILITY

      If a single period of disability of the Executive consists of a
      combination of total disability and partial disability, the maximum total
      disability compensation to which the Executive shall be entitled from the
      Company under this disability provision shall not exceed an amount equal
      to one (1) times the Executive's normal monthly basic compensation.

      11.5 BROKEN PERIODS OF DISABILITY

      A period of disability may be continuous or broken. If broken into partial
      periods of disability which are separated by intervening periods of work,
      there shall be aggregated together all of such successive partial periods
      of disability except any period prior to the time when any single period
      of work extends for [6] months or longer; and such aggregated periods of
      disability shall be treated as a single period in determining the amount
      of disability compensation to which an Executive shall be entitled under
      any provision of this Section.

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      11.6 TERMINATION DUE TO DISABILITY

      If and when the period of total or partial disability of the Executive
      totals 6 months, the Executive's employment with the Company shall
      automatically terminate. Notwithstanding the foregoing, if the disabled
      Executive and the Company agree, the disabled Executive may thereafter be
      employed by the Company upon such terms as may be mutually agreeable.

      11.7 COMMENCEMENT DATE OF DISABILITY

      The commencement date of a period of disability, whether it be a
      continuous period or the aggregate of successive partial periods, shall be
      the first day on which the Executive is disabled.

      11.8 DISPUTE REGARDING EXISTENCE OF DISABILITY

      Any dispute regarding the existence, extent or continuance of the
      disability shall be resolved by the determination of a majority of three
      (3) competent physicians, one (1) of whom shall be selected by the
      Company, one (1) of whom shall be selected by the Executive and the third
      (3rd) of whom shall be selected by the other two (2) physicians so
      selected.

      11.9 DEATH OF EXECUTIVE

      In the event the Executive shall die during the term hereof, the Company
      shall pay to the Executive's surviving spouse, or if the Executive shall
      leave no surviving spouse, then to the Executive's estate, only such
      amounts as may have been earned by the Executive prior to the Executive's
      date of death, but which were unpaid at date of death.

12.   CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENTS

      Executive recognizes and acknowledges that all records with respect to
      clients, business associates, customer or referral lists, contracting
      parties and referral sources of the Company, and all personal, financial
      and business and proprietary information of the Company, its Executives,
      officers, directors and shareholders obtained by the Executive during the
      term of this Agreement and not generally known in the public (the
      "Confidential Information") are valuable, special and unique and
      proprietary assets of the Company's business. The Executive hereby agrees
      that during the term of this Agreement and following the termination of
      this Agreement, whether the termination shall be voluntary or involuntary,
      or with or without cause, or whether the termination is solely due to the
      expiration of the term of this Agreement, the Executive will not at any
      time, directly or indirectly, disclose any Confidential Information, in
      full or in part, in written or other form, to any person, firm, Company,
      association or other entity, or utilize the same for any reason or purpose
      whatsoever other than for the benefit of and pursuant to authorization
      granted by the Company. "Confidential Information" shall also include any
      information (including, but not limited to, technical or nontechnical
      data, a formula, a pattern, a compilation, a program, a device, a method,
      a technique, a drawing, a process, financial data, financial plans,
      product plans, or a list of actual or potential customers) that: (i)
      derives economic value, actual or potential, from not being generally
      known to, and not being readily ascertainable by proper means by, other
      persons who can obtain economic value from its disclosure or use; and (ii)
      is the subject of efforts that are reasonable under the circumstances to
      maintain its secrecy. In the case of Company's business, Company's Trade
      Secrets include (without limitation) information regarding names and
      addresses of any customers, sales personnel, account invoices, training
      and educational manuals, administrative manuals, prospective customer
      leads, in whatever form, whether or not computer or electronically
      accessible "on-line."

13.   EXCLUSIVE EMPLOYMENT

      During employment with the Company, Executive will not do anything to
      compete with the Company's present or contemplated business, nor will he
      or she plan or organize any competitive business activity. Executive will
      not enter into any agreement which conflicts with his duties or
      obligations to the Company. Executive will not during his employment or
      within [1] year after it ends, without the Company's express written
      consent, directly or indirectly, solicit or encourage any

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      Executive, agent, independent contractor, supplier, customer, consultant
      or any other person or company to terminate or alter a relationship with
      the Company.

14.   HIRING

      The Executive agrees that during the Executive's employment with the
      Company and for a period of [1] years following the termination of this
      Agreement, whether the termination shall be voluntary or involuntary, or
      with or without cause, or whether the termination is solely due to the
      expiration of the term of this Agreement, the Executive will not attempt
      to hire any other Executive or independent contractor of the Company or
      otherwise encourage or attempt to encourage any other Executive or
      independent contractor of the Company to leave the Company's employ.

15.   ASSIGNMENT AND TRANSFER

      Executive's rights and obligations under this Agreement shall not be
      transferable by assignment or otherwise, and any purported assignment,
      transfer or delegation thereof shall be void. This Agreement shall inure
      to the benefit of, and be binding upon and enforceable by, any purchaser
      of substantially all of Company's assets, any corporate successor to
      Company or any assignee thereof.

16.   NO INCONSISTENT OBLIGATIONS

      Executive is aware of no obligations, legal or otherwise, inconsistent
      with the terms of this Agreement or with his undertaking employment with
      the Company. Executive will not disclose to the Company, or use, or induce
      the Company to use, any proprietary information or trade secrets of
      others. Executive represents and warrants that he or she has returned all
      property and confidential information belonging to all prior employers.

17.   ATTORNEYS' FEES

      The parties hereto agree that, in the event of breach or threatened breach
      of any covenants of Executive, the damage or imminent damage to the value
      and the goodwill of the Company's business shall be inestimable, and that
      therefore any remedy at law or in damages shall be inadequate.
      Accordingly, the parties hereto agree that the Company shall be entitled
      to injunctive relief against Executive in the event of any breach or
      threatened breach of any of such provisions by Executive, in addition to
      any other relief (including damages) available to the Company under this
      Agreement or under law. The prevailing party in any action instituted
      pursuant to this Agreement shall be entitled to recover from the other
      party its reasonable attorneys' fees and other expenses incurred in such
      action.

      In the event that either party is required to engage the services of legal
      counsel to enforce the terms and conditions of this Agreement against the
      other party, regardless of whether such action results in litigation, the
      prevailing party shall be entitled to reasonable attorneys' fees, costs of
      legal assistants, and other costs from the other party, which shall
      include any fees or costs incurred at trial or in any appellate
      proceeding, and expenses and other costs, including any accounting
      expenses incurred.

18.   GOVERNING LAW

      This Agreement shall be governed by and construed in accordance with the
      laws of the State of Louisiana regard to conflict of law principles.

19.   AMENDMENT

      This Agreement may be amended only by a writing signed by Executive and by
      a duly authorized

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      representative of the Company.

20.   SEVERABILITY

      If any term, provision, covenant or condition of this Agreement, or the
      application thereof to any person, place or circumstance, shall be held to
      be invalid, unenforceable or void, the remainder of this Agreement and
      such term, provision, covenant or condition as applied to other persons,
      places and circumstances shall remain in full force and effect.

21.   CONSTRUCTION

      The headings and captions of this Agreement are provided for convenience
      only and are intended to have no effect in construing or interpreting this
      Agreement. The language in all parts of this Agreement shall be in all
      cases construed according to its fair meaning and not strictly for or
      against the Company or Executive.

22.   RIGHTS CUMULATIVE

      The rights and remedies provided by this Agreement are cumulative, and the
      exercise of any right or remedy by either party hereto (or by its
      successor), whether pursuant to this Agreement, to any other agreement, or
      to law, shall not preclude or waive its right to exercise any or all other
      rights and remedies.

23.   NONWAIVER

      No failure or neglect of either party hereto in any instance to exercise
      any right, power or privilege hereunder or under law shall constitute a
      waiver of any other right, power or privilege or of the same right, power
      or privilege in any other instance. All waivers by either party hereto
      must be contained in a written instrument signed by the party to be
      charged and, in the case of the Company, by an officer of the Company
      (other than Executive) or other person duly authorized by the Company.

24.   NOTICES

      Any and all notices or other communication provided for herein, shall be
      given by registered or certified mail, return receipt requested, in case
      of the Company to its principal office, and in the case of the Executive
      to the Executive's residence address set forth on the first page of this
      Agreement or to such other address as may be designated by the Executive.

25.   ASSISTANCE IN LITIGATION

      Executive shall, during and after termination of employment, upon
      reasonable notice, furnish such information and proper assistance to the
      Company as may reasonably be required by the Company in connection with
      any litigation in which it or any of its subsidiaries or affiliates is, or
      may become a party; provided, however, that such assistance following
      termination shall be furnished at mutually agreeable times and for
      mutually agreeable compensation.
      Arbitration

      Any controversy, claim or dispute arising out of or relating to this
      Agreement or the employment relationship, either during the existence of
      the employment relationship or afterwards, between the parties hereto,
      their assignees, their affiliates, their attorneys, or agents, shall be
      settled by arbitration in Shreveport, Louisiana. Such arbitration shall be
      conducted in accordance with the then prevailing commercial arbitration
      rules of the American Arbitration Association (but the arbitration shall
      be in front of an arbitrator, with the following exceptions if in
      conflict: (a) one arbitrator shall be chosen by Stephen Shows; (b) each
      party to the arbitration will pay Its pro rata share of the expenses and
      fees of the arbitrator(s), together with other expenses of the arbitration
      incurred or approved by

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      the arbitrators); and (c) arbitration may proceed in the absence of any
      party if written notice of the proceedings has been given to such party.
      The parties agree to abide by all decisions and awards rendered in such
      proceedings. Such decisions and awards rendered by the arbitrator shall be
      final and conclusive and may be entered in any court having jurisdiction
      thereof as a basis of judgment and of the issuance of execution for its
      collection. All such controversies, claims or disputes shall be settled in
      this manner in lieu of any action at law or equity; provided however, that
      nothing in this subsection shall be construed as precluding the Company
      from bringing an action for injunctive relief or other equitable relief or
      relief under the Confidential Information and Invention Assignment
      Agreement. The arbitrator shall not have the right to award punitive
      damages, consequential damages, lost profits or speculative damages to
      either party. The parties shall keep confidential the existence of the
      claim, controversy or disputes from third parties (other than the
      arbitrator), and the determination thereof, unless otherwise required by
      law or necessary for the business of the Company. The arbitrator(s) shall
      be required to follow applicable law.

      IF FOR ANY REASON THIS ARBITRATION CLAUSE BECOMES NOT APPLICABLE, THEN
      EACH PARTY, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY
      IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING
      HERETO IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR
      RELATING TO THIS AGREEMENT OR ANY OTHER MATTER INVOLVING THE PARTIES
      HERETO.

26.   SOLICITATION

      The Executive further agrees that during the term of this Agreement and
      following the termination of this Agreement, whether the termination shall
      be voluntary or involuntary, or with or without cause, or whether the
      termination is solely due to the expiration of the term of this Agreement,
      the Executive will not, in any manner or at any time, solicit or encourage
      any person, firm, Company or other business entity who are clients,
      business associates or referral sources of the Company to cease doing
      business with the Company or to do business with the Executive.

27.   COVENANTS INDEPENDENT

      Each restrictive covenant on the part of the Executive set forth in this
      Agreement shall be construed as a covenant independent of any other
      covenant or provisions of this Agreement or any other agreement which the
      Company and the Executive may have, fully performed and not executory, and
      the existence of any claim or cause of action by the Executive against the
      Company whether predicated upon another covenant or provision of this
      Agreement or otherwise, shall not constitute a defense to the enforcement
      by the Company of any other covenant.

28.   INJUNCTIVE AND EQUITABLE RELIEF

      Executive and Company recognize and expressly agree that the extent of
      damages to Company in the event of a breach by Executive of any
      restrictive covenant set forth herein would be impossible to ascertain,
      that the irreparable harm arising out of any breach shall be irrefutably
      presumed, and that the remedy at law for any breach will be inadequate to
      compensate the Company. Consequently, the Executive agrees that in the
      event of a breach of any such covenant, in addition to any other relief to
      which Company may be entitled, Company shall be entitled to enforce the
      covenant by injunctive or other equitable relief ordered by a court of
      competent jurisdiction.

29.   INDEMNIFICATION

      The Executive hereby agrees to indemnify and hold the Company and its
      officers, directors, shareholders and Executives harmless from and against
      any loss, claim, damage or expense, and/or all costs of prosecution or
      defense of their rights hereunder, whether in judicial proceedings,
      including appellate proceedings, or whether out of court, including
      without limiting the generality of

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      the foregoing, attorneys' fees, and all costs and expenses of litigation,
      arising from or growing out of the Executive's breach or threatened breach
      of any covenant contained herein.

30.   ACKNOWLEDGMENT

      The Executive acknowledges that when this Agreement is concluded, the
      Executive will be able to earn a living without violating the foregoing
      restrictions and that the Executive's recognition and representation of
      this fact is a material inducement to the execution of this Agreement and
      to Executive's continued relationship with the Company.

31.   SURVIVAL OF COVENANTS

      All restrictive covenants contained in this Agreement shall survive the
      termination of this Agreement.

32.   LIMITATIONS ON AUTHORITY

      Without the express written consent from the Company, the Executive shall
      have no apparent or implied authority to: (i) Pledge the credit of the
      Company or any of its other Executives; (II) Bind the Company under any
      contract, agreement, note, mortgage or otherwise; (iii) Release or
      discharge any debt due the Company unless the Company has received the
      full amount thereof; or (iv) sell, mortgage, transfer or otherwise dispose
      of any assets of the Company.

33.   REPRESENTATION AND WARRANTY OF EXECUTIVE

      The Executive acknowledges and understands that the Company has extended
      employment opportunities to Executive based upon Executive's
      representation and warranty that Executive is in good health and able to
      perform the work contemplated by this Agreement for the term hereof.

34.   INVALID PROVISION; SEVERABILITY

      The invalidity or unenforceability of a particular provision of this
      Agreement shall not affect the other provisions hereof, and the Agreement
      shall be construed in all respects as if such invalid or unenforceable
      provisions were omitted.

35.   MODIFICATION

      No change or modification of this Agreement shall be valid unless the same
      be in writing and signed by the parties hereto.

36.   ENTIRE AGREEMENT

      This Agreement contains the entire agreement and supersedes all prior
      agreements and understandings, oral or written, with respect to the
      subject matter hereof. This Agreement may be changed only by an agreement
      in writing signed by the party against whom any waiver, change, amendment,
      modification, or discharge is sought.

37.   DISPUTES

Any controversy, claim or dispute arising out of or relating to this Agreement
or the employment relationship, either during the existence of the employment
relationship or afterwards, between the parties hereto, their assignees, their
affiliates, their attorneys, or agents, shall be litigated solely in state or
federal court in Shreveport, LA. Each party (1) submits to the jurisdiction of
such court, (2) waives the defense of an inconvenient forum, (3) agrees that
valid consent to service may be made by mailing or delivery of such service to
the Secretary of State (the "Agent") or to the party at the party's last known

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address, if personal service delivery can not be easily affected, and (4)
authorizes and directs the Agent to accept such service in the event that
personal service delivery can not easily be effected.

IN WITNESS HEREOF, each party to this Agreement has caused it to be executed at
Minden, Louisiana on the data indicated below.

EXECUTIVE                                             COMPANY

/s/ Stephen J. Shows                                  /s/ Robert A. Zummo
-------------------------------------------------     --------------------------
Authorized Signature                                  Authorized Signature

Stephen J. Shows, Vice President, General Manager     Robert A. Zummo, Chairman
Print Name and Title                                  Print Name and Title

Employment Agreement                                               Page 11 of 11exv10w1

 

Exhibit 10.1

RETIREMENT AGREEMENT

     This Retirement Agreement (“Agreement”), dated as of December 14, 2005, is made and entered
into by and between Wallace C. Sparkman (“Sparkman”), an individual, and Natural Gas Services
Group, Inc. (the “Company”), a Colorado corporation, acting herein by and through its duly
authorized officers.

Recitations

     1. Sparkman serves the Company in the capacities of Chairman of the Board of Directors, as a
member of the Board of Directors of the Company and its subsidiary, Screw Compression Systems,
Inc., and as an employee of the Company.

     2. Sparkman has announced his retirement from all positions he holds with the Company and
Screw Compression Systems, Inc., effective as of December 31, 2005.

     3. In recognition of Sparkman’s many contributions to the Company’s success and growth, the
Company desires to enter into this agreement with Sparkman pursuant to which Sparkman will receive
certain benefits in connection with his retirement from the Company, all as hereinafter more fully
set forth.

Agreement

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Sparkman and the Company agree as follows:

     1. Sparkman shall receive a final regular bonus to which he is entitled under and in
accordance with the provisions of the Company’s cash bonus program available to the Company’s
officers and selected senior managers. The amount of the bonus under the cash bonus program will be
calculated and treated in accordance with the terms and conditions of such program. Such payment
shall be reduced by any deductions for federal tax withholding, social security and any other
deductions heretofore authorized by Sparkman. No benefits shall accrue to Sparkman under such cash
bonus program after December 31, 2005.

     2. In addition to the final regular bonus payment to be paid to Sparkman as provided for in
Paragraph 1 above, the Company will also make a one-time cash payment to Sparkman on or about
January 31, 2006 in the amount of Thirty Thousand and No/100 Dollars ($30,000.00), less deductions
for federal tax withholding, social security and other deductions heretofore authorized by
Sparkman. Such payment includes compensation to Sparkman for unused vacation time and automobile
allowance.

 

 

     3. Sparkman shall have the right to take, keep and retain for his sole use and enjoyment
all of his personal furniture and belongings located on the Company’s premises at 2911 S. County
Road 1260, Midland, Texas 79706.

     4. Commencing on December 31, 2005, and ending on June 30, 2006, the Company will pay for the
cost of insurance premiums for supplemental Medicare insurance covering Sparkman and his wife.

     5. Sparkman will be reimbursed for all customary and normal expenses reasonably incurred by
him on behalf of the Company through December 31, 2005, promptly upon the presentation of an
expense account with proper documentation for all such expenses.

     6. Sparkman acknowledges that in the course of his employment by the Company and performance
of services on behalf of the Company and its subsidiaries and affiliates (collectively, the
“Related Parties”) he has become privy to various business opportunities, economic and trade
secrets and relationships of the Company and the Related Parties. Therefore, in consideration of
this Agreement and the compensation to be paid to Sparkman, Sparkman hereby agrees that during the
Noncompetition Period, Sparkman will not knowingly:

     (a) (i) engage or participate in any manner, whether directly or indirectly through any
family member or as an employee, employer, consultant, agent, principal, partner, more than
one percent shareholder, officer, director, licensor, lendor, lessor or in any other
individual or representative capacity, in any business activity that relates to (A) the
business of designing, manufacturing, fabricating, selling, leasing, renting and/or
maintaining natural gas compressors, (B) the designing, manufacturing, fabricating, selling,
leasing and/or renting of natural gas flare systems, components and ignition systems, (C)
installing and servicing flare stacks and related ignition and control devices or (D) in any
other business or activity related to the natural gas compressor industry that is in
competition in any manner whatsoever with the business of the Company or the Related
Parties. The covenants and restrictions in this Section 6 pertain to the geographic areas
comprised of (x) Midland and Ector Counties, Texas, and all counties adjacent to Midland and
Ector Counties, Texas, and (y) Tulsa County, Oklahoma, and all counties adjacent to Tulsa
County, Oklahoma (all of such counties being collectively referred to herein as, the
“Noncompete Area”); provided, however, such covenants and restrictions shall not preclude
Sparkman from:

     (A) making investments in securities of oil and gas companies, oil and gas
service companies, and natural gas compressor companies which are registered on a
national stock exchange, if the aggregate amount owned by Sparkman and his
affiliates does not exceed ten percent of such company’s outstanding securities; or

     (B) maintaining his personal investments if such personal investments and
controlled affiliates do not engage in any business activity that relates to the
business of designing, manufacturing, fabricating, selling, leasing, renting and/or
maintaining natural gas
compressors, or the designing and manufacturing, fabricating, selling, leasing
and/or renting of natural gas flare systems, components and ignition systems, or the
installation and servicing of flare stacks and related ignition and control devices;
or

2

 

     (ii) actively solicit, directly or indirectly, any employee (or person who within the
preceding ninety (90) days was an employee) of the Company or any of the Related Parties or
any other person who is under contract with or employed by the Company or any of the Related
Parties, to terminate his or her employment by, or contractual relationship with, such
person or to refrain from extending or renewing the same (upon the same or new terms) or to
become employed by or to enter into contractual relations with any person other than such
person or to enter into a relationship with a competitor of the Company or any of the
Related Parties.

     (b) For purposes of this Section 6, the term “Noncompetition Period” means the period
commencing on December 31, 2005 and ending on December 31, 2006.

     (c) The invalidity or non-enforceability of this Section 6 in any respect shall not affect the
validity or enforceability of this Section 6 in any other respect or of any other provision of this
Agreement. If any provision of this Section 6 shall be held invalid or unenforceable by a court of
competent jurisdiction by reason of the geographic or business scope or the duration thereof, such
invalidity or unenforceability shall attach only to the scope or duration of such provision and
shall not affect or render invalid or unenforceable any other provision of this Agreement, and, to
the fullest extent permitted by law, this Agreement shall be construed as if the geographic or
business scope or the duration of such provision had been more narrowly drafted so as not to be
invalid or unenforceable.

     (d) Sparkman acknowledges that the Company’s remedy at law for any breach of the provisions of
this Section 6 is and will be insufficient and inadequate and that the Company shall be entitled to
equitable relief, including by way of temporary and permanent injunction, in addition to any
remedies the Company may have at law.

     (e) The representations and covenants contained in this Section 6 on the part of Sparkman will
be construed as ancillary to and independent of any other provision of this Agreement. The
provisions of this Section 6 shall continue to be binding upon Sparkman in accordance with their
terms, notwithstanding Sparkman’s retirement.

     (f) The parties to this Agreement agree that the limitations contained in this Section 6 with
respect to time, geographical area and scope of activity are reasonable. However, if any court
shall determine that the time, geographical area or scope of activity of any restriction contained
in this Section 6 is unenforceable, it is the intention of the parties that such restrictive
covenant set forth herein shall not thereby be terminated but shall be deemed amended to the extent
required to render it valid and enforceable.

3

 

     7. By his execution hereof and in further consideration for the retirement benefit payments,
Sparkman, for himself, his heirs, executors, administrators and assigns, does hereby remise,
release and forever discharge the Company, its directors, officers, employees, representatives and
agents, from any and all manner or causes of actions, suits, debts, promises, damages, judgments,
executions, claims, guaranties, warranties and demands related to or arising out of this Agreement
or Sparkman’s employment or service as an employee or Director through December 31, 2005, in law,
or in equity, which he ever had, now has or which he, his heirs, executors, administrators, assigns
or successors hereafter can, shall or may have for, upon or by reason of any matter, cause or thing
whatsoever.

     8. Sparkman agrees, in partial consideration for the above, that he will fully cooperate with
management of the Company in their efforts to manage the affairs of the Company and in the conduct
of the business of the Company, further agreeing that from and after December 31, 2005, he will
not, directly or indirectly, take any action or assist or encourage any other parties in taking any
action which may be detrimental or adverse to the best interests of the Company or its subsidiaries
or affiliated entities.

     9. A waiver by either party of a breach or violation of any provision of this Agreement shall
not operate as or be construed to be a waiver of any subsequent breach hereof.

     10. If any of the provisions of this Agreement conflict with the laws under which this
Agreement is to be construed, or if any such provision is held to be invalid by a court of
competent jurisdiction, such provision shall be deleted from this Agreement and the Agreement shall
be construed to give effect to the remaining provisions hereof.

     11. The rights and obligations of each party under this Agreement shall inure to the benefit
of and shall be binding upon the successors and assigns of the parties. Sparkman shall not assign
or alienate any of his interest in this Agreement without the prior written consent of the Company.

     12. This instrument constitutes the entire agreement and understanding of the parties with
respect to retirement benefits payable to Sparkman. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such matters and may not be changed or
terminated orally, and no change, termination or attempted waiver of any of the provisions hereof
shall be binding unless in writing and signed by the party against whom the same is sought to be
enforced.

     13. This Agreement may be executed by the Company and Sparkman in counterparts, each of which
shall be deemed an original instrument but all of which together shall constitute one and the same
instrument.

4

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	 	NATURAL GAS SERVICES GROUP, INC.
	 
	 	 	 	 
	 

	 	By:
	 	     /s/ Stephen C. Taylor
	 

	 	 	 	 
	 

	 	 	 	     Stephen C. Taylor, President and
	 

	 	 	 	     Chief Executive Officer
	 
	 	 	 	 
	 

	 	 	 	     /s/ Wallace C. Sparkman
	 

	 	 	 	 
	 

	 	 	 	     Wallace C. Sparkman

5

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