Exhibit 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement"), dated effective as of
January 1, 2002, by and among National-Oilwell L.P., a Delaware limited
partnership (the "Company"), National-Oilwell, Inc., a Delaware corporation
("NOI"), and Dwight W. Rettig (the "Executive").
WITNESSETH:
WHEREAS, the Board of Directors of NOI (the "Board") has previously
determined that it is in the best interests of NOI and its stockholders to
retain the Executive and to induce the employment of the Executive for the long
term benefit of NOI, its shareholders and its affiliated companies, including
the Company;
WHEREAS, the Board does not contemplate the termination of the
Executive during the term hereof and the Board and the Executive expect that the
Executive will be retained for at least the one year period contemplated herein;
and
WHEREAS, to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. EMPLOYMENT.
(a) The Company hereby agrees that the Company or an affiliated company
will continue the Executive in its employ, and the Executive hereby agrees to
remain in the employ of the Company or an affiliated company subject to the
terms and conditions of this Agreement, during the Employment Period (as defined
below). As used in this Agreement, the term "affiliated companies" shall include
any company controlled by, controlling or under common control with the Company.
(b) The "Employment Period" shall mean the period commencing on the date
hereof and ending on the first (1st) anniversary of the date hereof; provided,
however, that commencing on the date one year after the date hereof, and on each
annual anniversary of such date (such date and each annual anniversary thereof
shall be hereinafter referred to as the "Renewal Date"), unless previously
terminated, the Employment Period shall be automatically extended so as to
terminate one year after such Renewal Date, unless at least sixty (60) days
prior to the Renewal Date the Company shall give notice to the Executive that
the Contract Period shall not be so extended.
2. TERMS OF EMPLOYMENT.
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(a) Position and Duties.
(i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements,
authority, duties and responsibilities) shall be substantially similar
to that in effect as of the date hereof and (B) the Executive's
services shall be performed at the location where the Executive was
employed immediately preceding the date hereof or any office or
location less than fifty (50) miles from such location.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote the Executive's full time, skill and
attention to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the Executive
hereunder, to use the Executive's reasonable best efforts to perform
faithfully and efficiently such responsibilities. During the Employment
Period it shall not be a violation of this Agreement for the Executive
to (A) serve on corporate, civic or charitable boards or committees,
(B) deliver lectures, fulfill speaking engagements or teach at
educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance
of the Executive's responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and agreed
that to the extent that any such activities have been conducted by the
Executive prior to the date hereof, the continued conduct of such
activities (or the conduct of activities similar in nature and scope
thereto) subsequent to the date hereof shall not thereafter be deemed
to interfere with the performance of the Executive's responsibilities
to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, the Executive shall
receive an annual base salary equal to the current base salary being
received by the Executive ("Annual Base Salary"), which shall be paid
in accordance with the Company's standard payroll practice. During the
Employment Period, the Annual Base Salary shall be reviewed no more
than twelve (12) months after the last salary increase awarded to the
Executive prior to the date hereof and thereafter at least annually;
provided, however, that a salary increase shall not necessarily be
awarded as a result of such review. Any increase in Annual Base Salary
may not serve to limit or reduce any other obligation to the Executive
under this Agreement. Annual Base Salary shall not be reduced after any
increase without the express written consent of the Executive. The term
Annual Base Salary as utilized in this Agreement shall refer to Annual
Base Salary as so increased.
(ii) Annual Bonus. The Executive shall be eligible for an annual bonus
(the "Annual Bonus") for each fiscal year ending during the Employment
Period on the same basis as other executive officers under the then
current National Oilwell Incentive Plan (or such other name as may be
adopted for the plan or its successor). Each such Annual Bonus shall be
paid no later than the end of the third month of the fiscal year next
following the fiscal year for which the Annual Bonus is awarded, unless
the Executive shall elect to
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defer the receipt of such Annual Bonus pursuant to a Company sponsored
deferred compensation plan in effect.
(iii) Incentive, Savings and Retirement Plans. During the Employment
Period, the Executive shall be entitled to participate in all
incentive, stock option, savings and retirement plans, practices,
policies and programs applicable generally to the Executive's peer
executives of the Company and its affiliated companies, but in no event
shall such plans, practices, policies and programs provide the
Executive with incentive opportunities (measured with respect to both
regular and special incentive opportunities, to the extent, if any,
that such distinction is applicable), savings opportunities and
retirement benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company and
its affiliated companies for the Executive under such plans, practices,
policies and programs as in effect on the date hereof.
(iv) Welfare Benefit Plans. During the Employment Period, the Executive
and/or the Executive's family, as the case may be, shall be eligible to
participate in and shall receive all benefits under welfare benefit
plans, practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and
programs) to the extent applicable generally to the Executive's peer
executives of the Company and its affiliated companies, but in no event
shall such plans, practices, policies and programs provide the
Executive with benefits which are less favorable, in the aggregate,
than such plans, practices, policies and programs in effect for the
Executive on the date hereof.
(v) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its affiliated
companies in effect for the Executive on the date hereof.
(vi) Fringe Benefits. During the Employment Period, the Executive shall
be entitled to fringe benefits (including, without limitation,
financial planning services, payment of club dues, a car allowance or
use of an automobile and payment of related expenses, as appropriate)
in accordance with the most favorable plans, practices, programs and
policies of the Company in effect on the date hereof.
(vii) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated
companies in effect for the Executive on the date hereof.
3. TERMINATION OF EMPLOYMENT.
(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that a Disability of the Executive has occurred
during the Employment Period (pursuant to the definition of Disability set forth
below), it may give to the Executive written notice in
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accordance with Section 11(b) of this Agreement of its intention to terminate
the Executive's employment. In such event, the Executive's employment with the
Company shall terminate effective thirty (30) days after receipt of such notice
by the Executive (the "Disability Effective Date"), provided that within the
thirty (30) day period after such receipt, the Executive shall not have returned
to full-time performance of the Executive's duties. For purposes of this
Agreement, "Disability" shall mean the absence of the Executive from the
Executive's duties with the Company on a full-time basis for one hundred eighty
(180) calendar days as a result of incapacity due to mental or physical illness
which is determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the Executive's legal
representative.
(b) Cause. The Company may terminate the Executive's employment during the
Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean:
(i) the willful and continued failure of the Executive to perform
substantially the Executive's duties with the Company or one of its
affiliates (other than any such failure resulting from incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board or the Chief
Executive Officer of the Company which specifically identifies the
manner in which the Board or Chief Executive Officer believes that the
Executive has not substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the
Company. For purposes of this provision, no act, or failure to act, on
the part of the Executive shall be considered "willful" unless it is
done, or omitted to be done, by the Executive in bad faith or without
reasonable belief that the Executive's action or omission was in the
best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or
upon the instructions of the Chief Executive Officer or of a senior
officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the
Company.
(c) Good Reason. The Executive may terminate the Executive's employment
during the Employment Period for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean:
(i) the assignment to the Executive of any duties inconsistent in any
respect with the Executive's position (including status, offices,
titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2(a) of this Agreement, or
any other action by the Company which results in a diminution in such
position, authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Executive;
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(ii) any failure by the Company to comply with any of the provisions of
Section 2(b) of this Agreement, other than an isolated, insubstantial
and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given
by the Executive;
(iii) the Company's requiring the Executive to be based at any office
or location other than as provided in Section 2(a)(i)(B) hereof or the
Company's requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the
date hereof;
(iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy Section 9(c)
of this Agreement, or
(vi) notice by the Company to the Executive that the Company is not
extending or renewing this Agreement.
(d) Notice of Termination. Any termination during the Employment Period by
the Company for Cause, or by the Executive for Good Reason, shall be
communicated by Notice of Termination to the other party hereto given in
accordance with Section 11(b) of the Agreement. For purposes of this Agreement,
a "Notice of Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive's employment under the
provision so indicated and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than 30 days after the giving of such notice). The
failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" shall mean:
(i) if the Executive's employment is terminated by the Company for
Cause, or by the Executive for Good Reason, the date of receipt of the
Notice of Termination or any later date specified therein, as the case
may be;
(ii) if the Executive's employment is terminated by the Company other
than for Cause, death or Disability, the Date of Termination shall be
the date on which the Company notifies the Executive of such
termination; and
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(iii) if the Executive's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of the
Executive or the Disability Effective Date, as the case may be.
4. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) Good Reason; Other than For Cause, Death or Disability. If, during the
Employment Period, the Company shall terminate the Executive's employment other
than for Cause, death or Disability, or the Executive shall terminate employment
for Good Reason:
(i) The Company shall pay to the Executive in a lump sum in cash within
thirty (30) days after the Date of Termination the aggregate of the
following amounts:
(A) the sum of (1) the Executive's Annual Base Salary through
the Date of Termination to the extent not theretofore paid,
(2) the product of (x) the higher of (I) the highest Annual
Bonus received by the Executive over the preceding three year
period and (II) the Annual Bonus paid or payable, including
any bonus or portion thereof which has been earned but
deferred (and annualized for any fiscal year consisting of
less than 12 full months or during which the Executive was
employed for less than 12 full months), for the most recently
completed fiscal year during the Employment Period, if any
(such higher amount being referred to as the "Highest Annual
Bonus") and (y) a fraction, the numerator of which is the
number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365, and (3) any
compensation previously deferred by the Executive under a plan
sponsored by the Company (together with any accrued interest
or earnings thereon), and any accrued vacation pay, in each
case to the extent not theretofore paid (the sum of the
amounts described in clauses (1), (2) and (3) shall be
hereinafter referred to as the "Accrued Obligations"), and
(B) an amount equal to the sum of (i) the then current Annual
Base Salary of the Executive and (ii) the Highest Annual
Bonus, and
(C) an amount equal to the total of the employer matching
contributions credited to the Executive under the Company's
401(k) Savings Plan (the "401(k) Plan"), any other excess or
supplemental retirement plan in which the Executive
participates or any other deferred compensation plan during
the twelve (12) month period immediately preceding the month
of the Executive's Date of Termination, such amount to be
grossed up so that the amount the Executive actually receives
after payment of any federal or state taxes payable thereon
equals the amount first described above.
Provided that, notwithstanding anything contained herein to the
contrary, for that portion of the Accrued Obligations consisting of compensation
previously deferred by the Executive under a plan sponsored by the Company
(together with any accrued interest or earnings thereon), the Executive shall
have the option, at Executive's sole discretion, to receive any payments due
from such plan in accordance with the terms of the plan or in cash within thirty
(30) days after
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the Date of Termination as provided in this Section 4(a)(i), so long as the
election to receive cash under this Section is permitted under all applicable
regulations governing payouts from the plan and does not have an adverse effect
on the plan or the remaining participants in the plan.
(ii) For a period of one year from the Executive's Date of Termination
(the "Remaining Contract Term") or such longer period as may be
provided by the terms of the appropriate plan, program, practice or
policy, the Company shall continue benefits to the Executive and/or the
Executive's family equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies
described in Section 2(b)(iv) of this Agreement if the Executive's
employment had not been terminated; provided, however, that with
respect to any of such plans, programs, practices or policies requiring
an employee contribution, the Executive shall continue to pay the
monthly employee contribution for same, and provided further, that if
the Executive becomes reemployed by another employer and is eligible to
receive medical or other welfare benefits under another employer
provided plan, the medical and other welfare benefits described herein
shall be secondary to those provided under such other plan during such
applicable period of eligibility (for purpose of determining
eligibility of the Executive for retiree benefits pursuant to such
plans, programs, and arrangements, the Executive shall be considered to
have remained employed until one year after the Date of Termination and
to have retired on the last day of such period);
(iii) The Company shall, at its sole expense as incurred, provide the
Executive with outplacement services, the scope and provider of which
shall be selected by the Executive in his sole discretion;
(iv) All options to purchase Common Stock held by the Executive
pursuant to a stock option plan on or prior to the Date of Termination
shall be governed by the terms of the option agreement or plan between
the Executive, NOI, and/or the Company;
(v) All benefits under the Company's 401(k) Savings Plan and any other
similar plans, including any restricted stock held by the Executive,
not already vested shall be 100% vested, to the extent such vesting is
permitted under the Code (as defined below);
(vi) To the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to
receive under any plan, program, policy or practice or contract or
agreement of the Company and its affiliated companies (such other
amounts and benefits shall be hereinafter referred to as the "Other
Benefits"); and
(vii) The foregoing payments are intended to compensate the Executive
for a breach of the Company's obligations and place Executive in
substantially the same position had the employment of the Executive not
been so terminated as a result of a breach by the Company.
(b) Death. If Executive's employment is terminated by reason of the
Executive's death during the Employment Period, this Agreement shall terminate
without further obligations to the
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Executive's legal representatives under this Agreement, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive's estate or beneficiaries, as
applicable, in a lump sum in cash within thirty (30) days after the Date of
Termination. With respect to the provision of Other Benefits, the term Other
Benefits as utilized in this Section 4(b) shall include, without limitation, and
the Executive's estate and/or beneficiaries shall be entitled to receive,
benefits at least equal to the most favorable benefits provided by the Company
and affiliated companies to the estates and beneficiaries of the Executive's
peer executives of the Company and such affiliated companies under such plans,
programs, practices and policies relating to death benefits, if any, in effect
on the date hereof or, if more favorable, those in effect on the date of the
Executive's death.
(c) Disability. If the Executive's employment is terminated by reason of
the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
thirty (30) days after the Date of Termination. With respect to the provision of
Other Benefits, the term Other Benefits as utilized in this Section 4(c) shall
include, without limitation, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits at least
equal to the most favorable benefits generally provided by the Company and its
affiliated companies to the Executive's disabled peer executives and/or their
families in accordance with such plans, programs, practices and policies
relating to disability, if any, in effect generally on the date hereof or, if
more favorable, those in effect at the time of the Disability.
(d) Cause; Other Than for Good Reason. If the Executive's employment is
terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than the
obligation to pay to the Executive (x) his or her Annual Base Salary through the
Date of Termination, (y) the amount of any compensation previously deferred by
the Executive, and (z) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued Obligations
and the timely payment or provision of Other Benefits. In such case, all Accrued
Obligations shall be paid to the Executive in a lump sum in cash within thirty
(30) days after the Date of Termination subject to such other options or
restrictions as provided by law.
5. OTHER RIGHTS.
Except as provided herein, nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any of its affiliated companies. Except as
provided herein, amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan, policy, practice or program of or
any contract or agreement with the Company or any of its affiliated companies at
or subsequent to the Date of Termination shall be payable in
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accordance with such plan, policy, practice or program or contract or agreement.
It is expressly agreed by the Executive that he or she shall have no right to
receive, and hereby waives any entitlement to, any severance pay or similar
benefit under any other plan, policy, practice or program of the Company. In
addition, if the Executive has an employment or similar agreement with the
Company at the Date of Termination, he or she agrees that he or she shall have
the right to receive all of the benefits provided under this Agreement or such
other agreement, whichever one, in its entirety, the Executive chooses, but not
both agreements, and when the Executive has made such election, the other
agreement shall be superseded in its entirety and shall be of no further force
and effect. The Executive also agrees that to the extent he or she may be
eligible for any severance pay or similar benefit under any laws providing for
severance or termination benefits, such other severance pay or similar benefit
shall be coordinated with the benefits owed hereunder, such that the Executive
shall not receive duplicate benefits.
6. FULL SETTLEMENT.
(a) No Rights of Offset. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others.
(b) No Mitigation Required. In no event shall the Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and such amounts shall not be reduced whether or not the Executive obtains other
employment.
(c) Legal Fees. The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expense which the Executive may reasonably
incur as a result of any contest (regardless of the outcome thereof) by the
Company or the Executive of the validity or enforceability of, or liability
under, any provision of this Agreement or any guarantee of performance thereto
(including as a result of any contest by the Executive about the amount of any
payment pursuant to this Agreement), plus in each case interest on any delayed
payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Internal Revenue Code of 1986, as amended (the "Code").
7. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Although this Agreement is not being entered into in connection with
or contingent upon a change of control of the Company, anything in this
Agreement to the contrary notwithstanding and except as set forth below, in the
event it shall be determined that any payment or distribution by the Company to
or for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section
7) (a "Payment") would be subject to the excise tax imposed by Section 4999 of
the Code or any interest or penalties are incurred by the Executive with respect
to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after
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payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this Section 7(a), if it shall be
determined that the Executive is entitled to a Gross-Up Payment, but that the
Executive, after taking into account the Payments and the Gross-Up Payment,
would not receive a net after-tax benefit of at least $50,000 (taking into
account both income taxes and any Excise Tax) as compared to the net after-tax
proceeds to the Executive resulting from an elimination of the Gross-Up Payment
and a reduction of the Payments, in the aggregate, to an amount (the "Reduced
Amount") such that the receipt of Payments would not give rise to any Excise
Tax, then no Gross-Up Payment shall be made to the Executive and the Payments,
in the aggregate, shall be reduced to the Reduced Amount.
(b) Subject to the provisions of Section 7(c), all determinations required
to be made under this Section 7, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination shall be made by Ernst & Young,
L.L.P., 1221 McKinney, Suite 2400, Houston, Texas 77010 or, as provided below,
such other certified public accounting firm as may be designated by the
Executive (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within fifteen (15) business
days after the receipt of notice from the Executive that there has been a
Payment, or such earlier time as is requested by the Company. In the event that
the Accounting Firm is serving as accountant or auditor for the individual,
entity or group affecting a change of control of the Company, the Executive
shall appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 7, shall be paid by the Company to the Executive within
five days after the receipt of the Accounting Firm's determination. Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 7(c) and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.
(c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment (or an additional Gross-Up Payment) in the event
the IRS seeks higher payment. Such notification shall be given as soon as
practicable, but no later than ten business days after the Executive is informed
in writing of such claim, and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the thirty (30) day period
following the date on which he
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gives such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Company notifies
the Executive in writing prior to the expiration of such period that it desires
to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim;
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time,
including without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Company;
(iii) cooperate with the Company in good faith in order effectively to
contest such claim; and
(iv) permit the Company to participate in any proceedings relating to
such claims; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and
penalties) incurred in connection with such costs and shall indemnify
and hold the Executive harmless, on an after-tax basis, for any Excise
Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of
costs and expenses. Without limitation on the foregoing provisions of
this Section 7(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may,
at its sole option, either direct the Executive to pay the tax claimed
and sue for a refund or contest the claim in any permissible manner,
and the Executive agrees to prosecute such contest to determination
before any administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as the Company shall determine;
provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount
of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or with respect
to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with respect to
which such contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issues raised by
the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 7(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 7(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or
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credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 7(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.
8. CONFIDENTIAL INFORMATION.
The Executive shall hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data relating to
the Company or any of its affiliated companies, and their respective businesses,
which shall have been obtained by the Executive during the Executive's
employment by the Company or any of its affiliated companies, provided that it
shall not apply to information which is or shall become part of the public
domain (other than by acts by the Executive or representatives of the Executive
in violation of this Agreement), information that is developed by the Executive
independently of such information, or knowledge or data or information that is
disclosed to the Executive by a third party under no obligation of
confidentiality to the Company. After termination of the Executive's employment
with the Company, the Executive shall not, without the prior written consent of
the Company or as may otherwise be required by law or legal process, communicate
or divulge any such information, knowledge or data to anyone other than the
Company and those designated by it. In no event shall an asserted violation of
the provisions of this Section 8 constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this Agreement.
9. SUCCESSORS.
(a) This Agreement is personal to the Executive and shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
10. POST EMPLOYMENT NON-COMPETITION OBLIGATIONS.
(a) As part of the consideration for the compensation and benefits to be
paid to Executive hereunder, and as an additional incentive for the Company and
NOI to enter into this Agreement,
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the Company, NOI and Executive agree to the non-competition provisions of this
Section 10. Executive agrees that during the period of Executive's
non-competition obligations hereunder, Executive will not, directly or
indirectly for Executive or for others, in any geographic area or market where
the Company, NOI or any of their subsidiaries or affiliated companies are
conducting any business as of the date of termination of the employment
relationship or have during the previous twelve months conducted any business:
(i) engage in any business competitive with any line of business
conducted by the Company, NOI, or any of their subsidiaries or
affiliates;
(ii) render advice or services to, or otherwise assist, any other
person, association, or entity who is engaged, directly or
indirectly, in any business competitive with any line of
business conducted by the Company, NOI, or any of their
subsidiaries or affiliates;
(iii) induce any officer or manager of the Company or NOI, or any of
their subsidiaries or affiliates to terminate his or her
employment with the Company, NOI, or any of their subsidiaries
or affiliates, or hire or assist in the hiring of any such
officer or manager by person, association, or entity not
affiliated with the Company, NOI or any of their subsidiaries
or affiliates.
These non-competition obligations shall apply during Executive's employment and
for a period ending on the first (1st ) anniversary date of the Date of
Termination. After termination of Executive's employment these non-competition
obligations shall apply only to businesses having annual revenues in excess of
$10 million competitive with any line of business conducted by the Company, NOI,
or any of their subsidiaries having annual revenues in excess of $10 million for
the last fiscal year prior to the time of termination. If the Company, NOI, or
any of their subsidiaries or affiliates abandons a particular aspect of its
business, that is, ceases such aspect of its business with the intention to
permanently refrain from such aspect of its business, then this post-employment
non-competition covenant shall not apply to such former aspect of that business.
(b) Executive understands that the foregoing restrictions may limit his
ability to engage in certain businesses anywhere in the world during the period
provided for above, but acknowledges that Executive will receive sufficiently
high remuneration and other benefits under this Agreement to justify such
restriction. Executive acknowledges that money damages would not be sufficient
remedy for any breach of this Section 10 by Executive, and the Company, NOI, or
any of their subsidiaries or affiliates shall be entitled to specific
performance and injunctive relief as remedies for such breach or any threatened
breach after notification by the Company of any breach and Executive's failure
to cure same. Such remedies shall not be deemed the exclusive remedies for a
breach of this Section 10, but shall be in addition to all remedies available at
law or in equity to the Company, NOI, or any of their subsidiaries or
affiliates, including, without limitation, the recovery of damages from
Executive and his agents involved in such breach.
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(c) The Executive, the Company and NOI each expressly acknowledge and agree
that the restrictions contained in this Agreement, including this Section 10,
are deemed by each to reasonable and necessary to protect the business interests
of NOI and the Company and their subsidiaries and affiliates. However, in the
event that any of the restrictions contained in this Agreement, and specifically
this Section 10, are found by a court of competent jurisdiction to be
unreasonable, or overly broad as to geographic area or time, or otherwise
unenforceable, it is the parties express intention for the restrictions herein
set forth to be modified by such court so as to be reasonable and enforceable
and, as so modified by the court, to be fully enforced.
11. MISCELLANEOUS.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORD-ANCE WITH
THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF
LAWS. The captions of this Agreement are not part of the provisions hereof and
shall have no force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive: If to Company:
Dwight W. Rettig National-Oilwell, L.P.
1100 Bering Drive, Apt. 513 P.O. Box 4888
Houston, Texas 77057 Houston, Texas 77210-4888
Attn: President
With copy to:
National-Oilwell, Inc.
10000 Richmond Ave., Suite 400
Houston, Texas 77042
Attn: Chief Financial Officer
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
(d) The Company may withhold from any amounts payable under this Agreement
such Federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
Page 14
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 3(c)(i)-(vi) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
Executive National-Oilwell, L.P.
by its general partner
NOW Oilfield Services, Inc.
- -------------------------
Dwight W. Rettig
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
National-Oilwell, Inc.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
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