EXECUTIVE EMPLOYMENT
AGREEMENT
This Amended and Restated Executive Employment
Agreement (the “Agreement”), dated August 5, 2009,
is between Allis-Chalmers Energy Inc. and Victor M. Perez. Certain
capitalized terms used herein are defined in Section 1
below.
A. Executive is employed by the Company
pursuant to an Employment Agreement dated April 3, 2007,
effective August 3, 2007, which terminates August 3,
2010;
B. Executive is employed as Chief Financial
Officer and is an integral member of its management team and
Company considers the maintenance of a sound management team,
including Executive, essential to protecting and enhancing its best
interests and those of its stockholders; and
C. The parties wish to amend the Agreement
to extend the term of employment for Executive for an additional
year.
NOW, THEREFORE, in consideration of
Executive’s past and future employment with Company and other
good and valuable consideration, the parties agree as
follows:
Section 1. Definitions . As used in this Agreement, the following terms
will have the following meanings:
(a) Agreement refers to the Amended and
Restated Executive Employment Agreement represented by this
document.
(b)
Cause has the meaning ascribed to it in
Section 7(a)(ii).
(c) Change
In Control means:
(i) The acquisition after the date hereof
by any individual, entity or group, or a Person (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) other
than an Excluded Person, of ownership of more than 50% of either:
(i) the then outstanding shares of Common Stock
(“Outstanding Common Stock”); or (ii) the combined
voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors
(“Outstanding Voting Securities”);
(ii) Individuals who, as of the date
hereof, constitute the Board of Directors of the Company
(“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, as a member of the Incumbent Board, any such individual
whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the
Securities Exchange Act of 1934) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board;
(iii) Approval by the stockholders of the
Company of a reorganization, merger or consolidation, in each case,
unless, following such reorganization, merger or consolidation,
(i) more than 50% of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Common Stock and Outstanding
Voting Securities immediately prior to such reorganization, merger
or consolidation, in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger or
consolidation of the Outstanding Common Stock and Outstanding
Voting Securities, as the case may be, or at least a majority of
the members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the initial
agreement providing for such reorganization, merger or
consolidation; or
(iv) Approval by the stockholders of the
Company of (i) a complete liquidation or dissolution of the
Company or (ii) the sale or other disposition of all or
substantially all of the assets of the Company, other than to a
corporation, with respect to which following such sale or other
disposition, (1) more than 50% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election for
directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Common
Stock and Outstanding Voting Securities immediately prior to such
sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other
disposition, of the Outstanding Common Stock and Outstanding Voting
Securities, as the case may be; or (2) at least a majority of
the members of the board of directors of such corporation were
members of the Incumbent Board at the time of the execution of the
initial agreement or action of the Board providing for such sale or
other disposition of assets of the Company.
(d) Code
means the Internal Revenue Code of 1986, as amended.
(e) Company means Allis-Chalmers Energy
Inc.
(f)
Confidential Information has the meaning ascribed to it in
Section 9(b).
(g) Constructively Terminated with
respect to an Executive’s employment with Company will be
deemed to have occurred if Executive terminates his employment
within six months following the date on which Company:
(i) demotes Executive to a lesser position,
either in title or responsibility, than the highest position held
by Executive with Company at any time during Executive’s
employment with Company after the date hereof unless the Company
reverses such demotion within 30 days after receiving written
notice of such demotion from Executive;
(ii) decreases Executive’s salary
below the highest level in effect at any time during
Executive’s employment with Company or reduces
Executive’s benefits and perquisites below the highest levels
in effect at any time during Executive’s employment with
Company (other than as a result of any amendment or termination of
any Executive or group or other executive benefit plan, which
amendment or termination is applicable to all executives of Company
or any reduction in benefits that Company cures within 30 days
after receiving written notice of such reduction from
Executive);
(iii) requires Executive to relocate to a
principal place of business more than 50 miles from the principal
place of business occupied by Company on the date hereof, unless
the Company reverses such relocation within 30 days after
receiving written notice of Executive’s intention to
terminate his employment in reliance on this Section;
(iv) is subject to a Change In Control,
unless Executive accepts employment with a successor to Company;
or
(v) breaches any other material term of
this Agreement which is not cured by Company within 30 days
after receiving notice of such breach from Executive.
(h)
Designated Industry has the meaning ascribed to it in
Section 10(a)(i)(1).
(i)
Determination has the meaning ascribed to such term in
Section 1313(a) of the Code.
(j) Disability with respect to Executive
shall be deemed to exist if he meets the definition of disability
under the terms of the Company’s current long-term disability
policy (or any replacement long-term disability policy). Any
refusal by Executive to submit to a reasonable medical examination
to determine whether Executive is so disabled shall be deemed
conclusively to constitute evidence of Executive’s
disability.
(k)
Executive refers to Victor M. Perez.
(l) Excluded Person means any Person who
beneficially owns more than 10% of the outstanding shares of the
Company’s Common Stock at any time prior to the date
hereof.
(m) Company refers collectively to the
Company and its subsidiaries and other affiliates.
(n) Incentive Plan means the
Allis-Chalmers Energy Inc. 2006 Incentive Plan, as amended from
time to time.
(o)
Inventions has the meaning ascribed to it in
Section 8(a).
(p)
Salary has the meaning ascribed to it in
Section 5(a).
(q)
Separation Payment Period has the meaning ascribed to it in
Section 7(b)(ii).
(r)
Separation Payments has the meaning ascribed to it in
Section 7(b)(ii).
Section 2. Employment . Company hereby employs Executive, and
Executive hereby accepts employment by Company, upon the terms and
subject to the conditions hereinafter set forth.
Section 3. Duties . Executive shall be employed as the Chief
Financial Officer of the Company. Executive agrees to devote
substantially all of his business time as is necessary to perform
his duties attendant to his executive position with Company.
Executive shall be allowed to engage in other activities as an
investor as well as participate in activities of charitable
organizations of his choice so long as they do not materially
interfere with his duties for Company.
Section 4. Term .
The term of employment of Executive hereunder shall end on
August 3, 2011.
Section 5. Compensation and Benefits
. In consideration for the services
of Executive hereunder, Company shall compensate Executive as
follows (except as set forth herein, Executive acknowledges payment
in full of all amounts due to him for services rendered prior to
the date hereof):
(a) Salary . Company shall pay Executive,
semi-monthly in arrears with its normal payroll procedures, a
salary which is equivalent to an annual rate of $286,000 (the
“Salary”). The Salary may not be decreased at any time
during the term of Executive’s employment hereunder and shall
be reviewed no less than annually by Company. Any increase in the
Salary shall be in the sole discretion of the Compensation
Committee of the Board of Directors of the Company.
(b) Management Incentive Bonus .
Executive shall be entitled to receive a bonus equal to a maximum
of 50% of his Salary based upon the achievement of certain goals.
Such bonus shall be paid annually within 30 days after the
completion of the Company’s audited financial statements for
each year. Executive shall also be eligible to receive from Company
such annual management incentive bonuses as may be provided in
management incentive bonus plans adopted from time to time by
Company.
(c)
Intentionally deleted.
(d) Intentionally deleted.
(e) Vacation . Executive shall be
entitled to four (4) weeks paid vacation per year. Unless
otherwise approved by the Compensation Committee of the Board of
Directors of the Company, a maximum of ten days accrued vacation
not taken in any calendar year shall be carried forward and may be
used in the next subsequent calendar year. Executive shall schedule
his paid vacation to be taken at times which are reasonably and
mutually convenient to both Company and Executive.
(f) Insurance Benefits . Company shall
provide accident, health, dental, disability and life insurance for
Executive under the group accident, health, dental, disability and
life insurance plans as may be maintained by Company for its
full-time, salaried Executives from time to time.
(g) Office Space and Expenses . Company
shall provide a
|
