Exhibit 10.10
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), entered into on August
17, 2005 and made effective as of September 1, 2005 (the "Effective Date") by
and among Calibre Energy, Inc. (referred to as "CALIBRE" or the "Company") and
Xxxxxxx X. Xxxxxxxxx, Xx. ("Executive");
W I T N E S S E T H:
WHEREAS, the Company desires to retain the services of the Executive,
and the Executive is willing to provide such services to the Company, all upon
the terms and conditions set forth herein;
NOW THEREFORE, in consideration of the premises, the terms and
provisions set forth herein, the mutual benefits to be gained by the performance
thereof and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Employment. The Company hereby employs the Executive, and
the Executive hereby accepts such employment, all upon the terms and conditions
set forth herein.
SECTION 2. Term. Unless sooner terminated pursuant to Section 5 of
this Agreement, the Executive shall be employed for a term commencing on the
Effective Date and ending on the third anniversary of the Effective Date (the
"Term"); provided, however, that the Term shall automatically be extended on a
daily basis for an additional day such that, at all times, the remaining Term
shall be three years. Notwithstanding any other provision of this Agreement to
the contrary, this Agreement may be terminated by Company upon written notice,
in which case the Agreement will terminate upon the expiration of the three-year
Term.
SECTION 3. Duties and Responsibilities.
A. Capacity. The Executive shall serve in the capacity of Chairman and
Chief Executive Officer and Director of CALIBRE, and in such other or additional
capacity or capacities for the Company or an affiliate of CALIBRE as the Board
of Directors of CALIBRE (the "Board") may direct from time to time. During the
term of this Agreement, as Chairman and Chief Executive Officer of the Company,
Executive agrees to perform such duties as are normally incident to that
position and shall perform such other duties and responsibilities as may be
prescribed from time to time by the board of directors of the Company.
B. Duties. The Executive shall devote at least seventy five percent
(75%) of his full business time, attention and energies to the business of the
Company and shall not be engaged in any other business activity, whether or not
pursued for gain, profit or other pecuniary advantage, which would impair his
ability to fulfill his duties to the Company under this Agreement, without the
prior written consent of the Board. Nothing contained in this Section 3(B) shall
prevent the Executive from passively investing his assets in such a form or
manner as will not conflict with the terms of this Agreement and will not
require services on the part of the Executive in the operation of the business
of the companies or other enterprises in which such investments are made.
C. Standard of Performance. The Executive will perform his duties
under this Agreement with fidelity and loyalty, to the best of his ability,
experience and talent and in a manner consistent with his fiduciary
responsibilities.
SECTION 4. Compensation.
A. Base Salary. The Company shall pay the Executive a salary (the "Base Salary")
of U.S. $180,000 per annum. The Base Salary shall be payable in accordance with
the general payroll practices of the Company in effect from time to time. The
Company shall review the Base Salary then being paid to the Executive at such
times as the Company regularly reviews the compensation paid to employees. Upon
completion of such review, the Company in its sole discretion may increase or
maintain the Executive's then current Base Salary, and any increased salary
shall be the "Base Salary" for all purposes under this Agreement.
Notwithstanding the above, the Base Salary shall be increased to $360,000 upon
the third anniversary date from the effective date of this agreement. The
Company may decrease the Executive's then current Base Salary after the third
anniversary date only with the prior written consent of the Executive.
B. Stock Options. The Company shall grant the Executive 4,000,000 non-qualified
options to purchase the Company's stock at $.05 per share. Such options shall be
immediately vested and such vested options shall survive Executives termination
date.
C. Bonus. The Executive shall be eligible, in the sole discretion of the Board,
to be considered for a bonus following each fiscal year ending during the Term
based upon the Executive's performance and the operating results of the Company
and their affiliates during such year in relation to performance targets
established by the Board. Determination of the bonus amount shall take into
account such unusual or nonrecurring items as the Chief Executive Officer of
CALIBRE and/or the Board deem appropriate.
D. Benefits. If and to the extent that the Company maintains employee benefit
plans (including, but not limited to, pension, profit sharing, disability,
accident, medical, life insurance and hospitalization plans), the Executive
shall be entitled to participate therein in accordance with the terms of such
plans and the Company's regular practices with respect to its employees. In
addition, the Company promises to provide reasonable health and dental insurance
for the Executive and his family, including $500,000 in life insurance. The
Executive shall be entitled to reimbursement from the Company for reasonable
out-of-pocket expenses incurred by him in the course of the performance of his
duties, hereunder, including all reasonable commuting and communication costs,
upon the submission of appropriate documentation.
E. Vacation. The Executive shall be entitled to four weeks of paid vacation per
calendar year, which, if not taken, may be carried forward to any subsequent
year, except in accordance with Company policy applicable to the Company's
employees generally. The Executive shall also be entitled to such holidays and,
subject to the provisions of Section 5, other paid or unpaid leaves of absence
as are consistent with the Company's normal policies.
SECTION 5. Termination of Employment.
Notwithstanding the provisions of Section 2, the Executive's
employment hereunder shall terminate under any of the following conditions:
A. Death. The Executive's employment under this Agreement shall
terminate automatically upon his death.
B. Disability. The Executive's employment under this Agreement shall
terminate automatically upon his Disability. For purposes of this Agreement,
"Disability" means permanent and total disability (within the meaning of section
22(e) (3) of the Internal Revenue Code of 1986, as amended, or any successor
provision) which has existed for at least 180 consecutive days.
C. Termination by the Company Without Cause. The Company may terminate
the Executive's employment hereunder without "Cause" (as hereinafter defined) on
three months written notice by the Company.
D. Termination by the Company for Cause. The Executive's employment
hereunder may be terminated for Cause upon written notice by the Company. For
purposes of this Agreement, "Cause" shall mean (i) the willful and continued
failure by the Executive to substantially perform his obligations under this
Agreement (other than such failure resulting from his Disability) after a demand
for substantial performance has been delivered to him by the Board which
specifically identifies the manner in which the Board believes the Executive has
not substantially performed such provisions and the Executive has failed to
remedy the situation three months after such demand; (ii) the Executive's
willfully engaging in conduct materially and demonstrably injurious to the
property or business of the Company, including without limitation, fraud,
misappropriation of funds or other property of the Company, other willful
misconduct, gross negligence or conviction of a felony or any crime of moral
turpitude; or (iii) the Executive's material breach of this Agreement which
breach has not been remedied by the Executive within three months after the
receipt by the Executive of written notice from the Company that the Executive
is in material breach of this Agreement, specifying the particulars of such
breach.
For purposes of this Agreement, no act, or failure to act, on the part
of the Executive shall be deemed "willful" or engaged in "willfully" if it was
due primarily to an error in judgment or negligence, but shall be deemed
"willful" or engaged in "willfully" only if done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated as a result of "Cause"
hereunder unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the Board then in office at a meeting of the Board called and
held for such purpose (after reasonable notice to the Executive and an
opportunity for the Executive, together with his counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Executive has
committed an act set forth above in this Section 5(D) and specifying the
particulars thereof in detail. Nothing herein shall limit the right of the
Executive or his legal representative to contest the validity or propriety of
any such determination.
E. Termination by the Executive for Good Reason. The Executive may
terminate his employment hereunder for "Good Reason." For purposes of this
Agreement, "Good Reason" for termination shall mean any of the following (which
occur without the Executive's prior written consent):
(1) a decrease in the Executive's Base Salary not in accordance
with section 4 (A) above;
(2) a materially adverse diminution of the overall level of
responsibilities of the Executive;
(3) a material breach by the Company of any term or provision of
this Agreement;
(4) after a Change of Control (as defined in Section 7(B)) and
during the Effective Period (as defined in Section 7(C)), (a) the
failure of the Company to continue in effect any benefit or
compensation plan (including, but not limited to, any bonus,
incentive, retirement, supplemental executive retirement, savings,
profit sharing, pension, performance, stock option, stock purchase,
deferred compensation, life insurance, medical, dental, health,
hospital, accident or disability plans) in which the Executive is
participating at the time of such Change of Control (or plans
providing to the Executive, in the aggregate, substantially similar
benefits as the benefits enjoyed by the Executive under the benefit
and compensation plans in which the Executive is participating at the
time of such Change of Control), or (b) the taking of any action by
the Company that would adversely affect the Executive's participation
in or materially reduce the Executive's benefits under any of such
plans or deprive the Executive of any material fringe benefit enjoyed
by the Executive at the time of such Change in Control;
(5) any personal reason that the Compensation Committee of the
Board in its discretion determines shall constitute Good Reason.
However, that no event or condition described in clauses (1) - (4) of
this Section 5(E) shall constitute Good Reason unless (a) the Executive gives
the Company written notice of his objection to such event or condition within 90
days after the Executive learns of such event, (b) such event or condition is
not corrected by the Company within 10 days of its receipt of such notice and
(c) the Executive voluntarily resigns his employment with the Company and its
affiliates not more than 60 days following the expiration of the 10-day period
described in the foregoing clause (b).
F. Voluntary Termination by the Executive. The Executive may terminate
his employment hereunder at any time for reason other than Good Reason on 30
days written notice to the Company.
SECTION 6. Payments Upon Termination.
A. Upon termination of the Executive's employment hereunder, the
Company shall be obligated to pay and the Executive shall be entitled to
receive, on the pay date for the pay period in which the termination occurs, all
accrued and unpaid Base Salary to the date of termination. In addition, the
Executive shall be entitled to any benefits to which he is entitled under the
terms of any applicable employee benefit plan or program or applicable law.
B. Except as provided in Section 7(A), upon termination of the
Executive's employment by the Company without Cause or by the Executive due to
Good Reason, in addition to the amount set forth in Section 6(A), the Company
shall be obligated to pay, and the Executive shall be entitled to receive, (i)
Base Salary for a period of three years and (ii) continued medical and dental
benefits for a period of three years at no cost to the Executive. The Company
may cease all payments of Base Salary and bonus under this Section 6(B) in the
event of a willful breach by the Executive of the provisions of Sections 8, 9 or
10 of this Agreement or any inadvertent breach that continues after notice given
to the Executive by the Company. As a condition precedent to the receipt of any
of the severance benefits hereunder the Executive hereby agrees to execute a
release of claims against the Company and its affiliates in form and substance
reasonably satisfactory to the Company.
C. In the event Executive elects to terminate employment as set forth
in Section 5(F) then in such event any options not vested as set forth in
Section 3(B) shall terminate.
D. Upon any termination or expiration of the Executive's employment
hereunder pursuant to Section 5, the Executive shall have no further liability
or obligation under or in connection with this Agreement; provided, however,
that the Executive shall continue to be subject to the provisions of Sections 8,
9, 10, 11 and 12 hereof (it being understood and agreed that such provisions
shall survive any termination or expiration of the Executive's employment
hereunder for any reason). Upon any Voluntary Termination by the Executive
(other than a resignation by the Executive for Good Reason), or expiration of
Executive's employment agreement, the Company shall have no further liability
under or in connection with this Agreement, except to pay the portion of the
Executive's Base Salary earned or accrued at the date of termination.
SECTION 7. Change of Control.
A. In the event that, during the Effective Period (as hereinafter
defined), the Executive's employment is terminated by the Company without Cause
or by the Executive for Good Reason, in lieu of the amount set forth in Section
6(B), the Executive shall immediately become entitled to the following benefits:
(1) the outstanding options to acquire shares of the Company held
by the Executive under any share option plan and granted on or prior
to the Change of Control shall become immediately fully exercisable
and shall remain exercisable for three years after termination of
employment or, if less, their remaining term;
(2) a lump-payment equal to three times: (a) the Executive's then
current Base Salary or (b) $360,000, whichever is greater;
(3) a lump-sum payment equal to three times the highest annual
bonus allowed under the Executive Bonus Plan for the Executive during
the three-year period preceding the date of the Change of Control; and
(4) continued medical and dental coverage for three years from
the termination date at no cost to the Executive.
B. For purposes of this Agreement, a "Change of Control" shall be
deemed to have taken place upon the earliest occurrence of any of the following:
(i) a tender offer is made and consummated for the beneficial ownership of 25%
or more of the outstanding voting securities of CALIBRE; (ii) CALIBRE is merged
or consolidated with another corporation, and as a result of such merger or
consolidation, less than 75% of the outstanding voting securities of the
surviving or resulting corporation are beneficially owned in the aggregate by
the persons or entities who were shareholders of CALIBRE immediately prior to
such merger or consolidation; (iii) CALIBRE sells all or substantially all of
its assets to another entity or person that is not a wholly owned subsidiary;
(iv) during any 15-month period, individuals who at the beginning of such period
constituted the Board (including for this purpose any new member whose election
or nomination for election by the shareholders of CALIBRE was approved by a vote
of at least 2/3 of the members then still in office and who were members at the
beginning of such period) cease for any reason to constitute at least a majority
of the Board; (v) the Compensation Committee of the Board determines, in its
sole discretion, that a Change of Control has occurred for purposes of this
Agreement; (vi) the Company sells all or substantially all of its assets to
another entity or person that is not a subsidiary or affiliate of the Company or
(vii) 80% or more of the outstanding voting securities of the Company are
acquired by any person or entity other than CALIBRE, its subsidiaries or
affiliates.
C. For purposes of this Agreement, "Effective Period" shall mean the
period beginning on the date of a Change of Control and ending on the earlier of
the third anniversary of the Change of Control or the expiration of the Term.
D. To the extent that the acceleration of vesting or any payment,
distribution or issuance made to the Executive in the event of a Change of
Control is subject to federal income, excise or other tax at a rate above the
rate ordinarily applicable to compensation paid in the ordinary course of
business (collectively, a "Parachute Tax"), whether as a result of the
provisions of Section 280G and 4999 of the Internal Revenue Code of 1986, as
amended, or any similar or analogous provisions of any statute adopted
subsequent to the date hereof, or otherwise, then the Company shall pay to the
Executive an additional sum (the "Additional Amount") such that the net amount
received by the Executive, after paying any applicable Parachute Tax and any
federal or state income tax on such Additional Amount, shall be equal to the
amount that the Executive would have received if such Parachute Tax were not
applicable.
SECTION 8. Confidential Information and Inventions.
A. Nondisclosure. The Executive hereby acknowledges that the Executive
has knowledge of certain confidential and proprietary information relating to
Company, CALIBRE or their affiliates and that it will be necessary, in
connection with the performance of services hereunder, to provide or make
available to the Executive certain confidential and proprietary information,
including, but not limited to, business and financial information, technological
information, strategies, the status and content of contracts with suppliers or
clients, customer lists and financial information on customers, intellectual
property, trade secrets and other information relating to the businesses,
products, technology, services, customers, methods or tactics of the Company,
CALIBRE or its affiliates (any such confidential or proprietary information
being hereinafter referred to as "Confidential Information"). The Executive
further acknowledges that the Confidential Information constitutes valuable
trade secrets of Company, CALIBRE and its affiliates and agrees that any such
Confidential Information shall remain the property of the Company, CALIBRE and
their affiliates at all times during the term of this Agreement and following
the expiration or termination hereof. The Executive shall not publish,
disseminate, distribute, disclose, sell, assign, transfer, copy, remove from the
premises of the Company, CALIBRE or their affiliates, commercially exploit, make
available to others, or otherwise make use of any Confidential Information to or
for the use or benefit of the Executive or any other person, firm, corporation
or entity, except as specifically and previously authorized in writing by the
Board or as required for the due and proper performance of his duties and
obligations under this Agreement. In addition, the Executive shall employ all
necessary safeguards and precautions in order to ensure that unauthorized access
to the Confidential Information is not afforded to any person, firm, corporation
or entity. Upon any expiration or termination of this Agreement, or if the Board
or the Company so requests at any time, the Executive shall promptly return to
the Company, CALIBRE and their affiliates all Confidential Information in the
Executive's possession, whether in writing, on computer disks or other media,
without retaining any copies, extracts or other reproductions thereof.
Notwithstanding the foregoing, nothing contained in this Section 8(A) shall
prevent the publishing, dissemination, distribution, disclosure, sale,
assignment, transfer, copying, removal, commercial exploitation or other use by
the Executive of any information that (i) is generally available to the public
(other than through a breach of an obligation of confidentiality, or (ii) is
lawfully obtained by the Executive without obligation of confidentiality from a
source other than the Company, CALIBRE or its affiliates, directors, officers,
employees, agents or other representatives (provided, however, that such source
is not bound by a confidentiality agreement with the Company, CALIBRE or any of
its affiliates and is not otherwise under an obligation of secrecy or
confidentiality to either of them).
B. Requests for Disclosure. It shall not be a breach of the
obligations of Section 8(A) if Executive discloses Confidential Information as
required by judicial or administrative process or, in the written opinion of
Executive's counsel, by the requirements of applicable law, but only upon
satisfaction of the following conditions: (i) the Executive gives prompt written
notice to the Chairman of the Board of the existence of, and the circumstances
attendant to, such request, sufficient to permit the Company, CALIBRE or an
affiliate to contest or seek to restrict the required disclosure (ii) the
Executive consults with the Chairman of the Board as to the advisability of
taking legally available steps to resist or narrow any such request or otherwise
to eliminate the need for such disclosure, (iii) if disclosure is required, the
Executive cooperates with the Chairman of the Board in obtaining a protective
order or other reliable assurance in form and substance satisfactory to the
Chairman of the Board that confidential treatment will be accorded to such
portion of the Confidential Information as is required to be disclosed, and (iv)
that Executive disclosed only such Confidential Information as is legally
required (or, where applicable, only such information as the written opinion of
Executive's counsel deems required).
C. Confidential Information of Others. The Executive shall not
disclose to the Company, CALIBRE or their affiliates, or induce them to use, the
proprietary information, trade secrets, or confidential information of others.
D. Disclosure. Upon each occurrence of conception, creation, and/or
reduction to practice, the Executive will promptly provide a written description
of each Invention (as hereinafter defined) to the Board or its designee.
E. Assignment and Ownership of Rights. The Executive agrees that all
Inventions shall and, to the extent necessary, shall become and remain the
property of CALIBRE or the Company, and their successors and assigns, unless
expressly released by CALIBRE and the Company in writing. The Executive assigns,
and to the extent such assignment is not effective, the Executive agrees to
assign all such Inventions to CALIBRE or the Company. The Executive agrees that
all copyrightable works created for CALIBRE or the Company during the
Executive's employment are owned by CALIBRE or the Company and, if necessary or
appropriate, are works made for hire.
F. Obtaining Patents. CALIBRE or the Company shall have sole
discretion to decide whether to obtain any patent or other protection on any
Invention. If CALIBRE or the Company seeks any such protection, the Executive
shall have no obligation to pay any expenses of the filing or maintenance of any
such patent or other protection.
G. Inventions. "Inventions" means (i) any invention, development,
improvement, or copyrightable work, (ii) created, conceived, or reduced to
practice by the Executive individually or jointly with others while the
Executive is employed by the Company, CALIBRE or their affiliates or within a
six-month period following termination of the Executive's employment, (iii)
whether patentable or not, (iv) whether or not conceived or reduced to practice
during regular working hours, (v) that relates to any methods, apparatus,
products, or components thereof which, before termination of the Executive's
employment, are manufactured, sold, leased, or used by the Company, CALIBRE or
their affiliates or which are under development by, or which otherwise pertain
to the business of, the Company, CALIBRE or their affiliates. However,
"Inventions" shall not include any inventions, developments, improvements, or
copyrightable work (i) for which no equipment, supplies, facility, or trade
secret information of the Company, CALIBRE or their affiliates were used, (ii)
which the Executive developed entirely on the Executive's own time (iii) which
does not relate directly to the business of the Company, CALIBRE or their
affiliates or to their actual or demonstrably anticipated research or
development, or (iv) which does not result from any work performed by the
Executive for the Company, CALIBRE or their affiliates. The Executive represents
that he has provided CALIBRE, on or prior to the date hereof, a complete written
description of all unpatented inventions and improvements in which the Executive
has any rights that are not included in the term "Inventions", in a form
acknowledged in writing by the Chief Executive Officer of CALIBRE.
SECTION 9. Covenant Not to Compete.
A. Noncompetition. The Executive hereby agrees that during the
"Noncompetition Period" (as hereinafter defined), he will not, except as
otherwise permitted under this Agreement, directly or indirectly (whether as an
employee, consultant, shareholder or director, or whether acting alone or
through any of his affiliates, as a member of a partnership or a joint venture
or an investor in, or a holder of securities of, any corporation or other
entity, or otherwise), engage in any business conducted by the Company, CALIBRE
or its affiliates in the area of particle impact drilling (the "Noncompetition
Area"). Notwithstanding anything to the contrary in this Section 9, the
Executive may passively invest his assets in such a form or manner as will not
conflict with the terms of this Agreement and will not require services on the
part of the Executive in the operation of the business of the companies or other
enterprises in which such investments are made. The Executive acknowledges that
(i) the provisions set forth in this Section 9 are for the benefit of the
Company, CALIBRE and its affiliates, (ii) his agreement to such provisions is an
express condition to his employment by the Company and (iii) such provisions are
reasonably necessary to protect the goodwill and other business interests of the
Company, CALIBRE and its affiliates. The "Noncompetition Period" shall be the
period commencing on the Effective Date and ending on the second anniversary of
the date of termination of the Executive's employment.
B. Reformation of Scope. If any of the provisions of this Section 9 is
found to be unreasonably broad, oppressive or unenforceable in an action, suit
or proceeding before any federal or state court, such court (i) shall narrow the
Noncompetition Period or the Noncompetition Area or shall otherwise endeavor to
reform the scope of such agreements in order to ensure that the application
thereof is not unreasonably broad, oppressive or unenforceable and (ii) to the
fullest extent permitted by law, shall enforce such agreements as so reformed.
SECTION 10. Nonsolicitation. The Executive shall not, directly or
indirectly, during the Noncompetition Period, (A) take any action to solicit or
divert any business (or potential business) or customers (or potential
customers) away from the Company, CALIBRE or its affiliates, (B) induce
customers, potential customers, suppliers, agents or other persons under
contract or otherwise associated or doing business with the Company, CALIBRE or
its affiliates to terminate, reduce or alter any such association or business
with or from the Company, CALIBRE or its affiliates and/or (C) induce any person
in the employment of the Company, CALIBRE or its affiliates or any consultant to
the Company, CALIBRE or its affiliates to (i) terminate such employment or
consulting arrangement, (ii) accept employment, or enter into any consulting
arrangement, with anyone other than the Company, CALIBRE or its affiliates
(except to the extent the consultant makes its services available to third
parties on a regular basis) and/or (iii) interfere with the customers, suppliers
or clients of the Company, CALIBRE or its affiliates in any manner or the
business of the Company, CALIBRE or its affiliates in any manner. For purposes
of this Section 10, a "potential customer" shall mean a person or entity that
the Company, CALIBRE or its affiliates, as of the date the Executive's
employment terminates, is soliciting or is considering soliciting (or has
targeted for solicitation).
SECTION 11. Remedies. The Executive hereby agrees that a violation of
the provisions of Section 8, 9 or 10 hereof may cause irreparable injury to the
Company, CALIBRE and its affiliates for which they would have no adequate remedy
at law. Accordingly, in the event of any such violation, the Company, CALIBRE
and/or its affiliates shall be entitled to preliminary and other injunctive
relief. Any such injunctive relief shall be in addition to any other remedies to
which the Company, CALIBRE and/or its affiliates may be entitled at law or in
equity or otherwise.
SECTION 12. Arbitration. Any dispute or controversy arising under or
in connection with this Agreement (other than any dispute or controversy arising
from a violation or alleged violation by the Executive of the provisions of
Section 8, 9 or 10 hereof) shall be settled exclusively by final and binding
arbitration in Houston, Texas, in accordance with the Rules for the Resolution
of Employment Disputes of the American Arbitration Association ("AAA"). The
arbitrator shall be selected by mutual agreement of the parties, if possible. If
the parties fail to reach agreement upon appointment of an arbitrator within 30
days following receipt by one party of the other party's notice of desire to
arbitrate, the arbitrator shall be selected from a panel or panels of persons
submitted by the AAA. The selection process shall be that which is set forth in
the AAA Rules for the Resolution of Employment Disputes then prevailing, except
that, if the parties fail to select an arbitrator from one or more panels, AAA
shall not have the power to make an appointment but shall continue to submit
additional panels until an arbitrator has been selected. This agreement to
arbitrate shall not preclude the parties from engaging in voluntary, nonbinding
settlement efforts, including, but not limited to, mediation. In the event the
arbitration is decided in whole or in part in favor of the Executive, the
Company will reimburse the Executive for his reasonable costs and expenses of
the arbitration (including reasonable attorneys' fees).
SECTION 13. Notices. All notices and other communications hereunder
shall be in writing and shall be given (and shall be deemed to have been duly
given upon receipt) by delivery in person, by registered or certified mail
(return receipt requested and with postage prepaid thereon) or by facsimile
transmission to the respective parties at the following addresses (or at such
other address as either party shall have previously furnished to the other in
accordance with the terms of this Section 13):
If to the Company:
Calibre Energy, Inc.
0000 X Xxxxxx XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
if to the Executive:
Xxxxxxx X. Xxxxxxxxx, Xx.
P. O. Xxx 0000
Xxxxxxxxxx, XX 00000
SECTION 14. No Mitigation. In the event of any termination of
employment by the Company without Cause, by the Executive for Good Reason, the
Executive shall be under no obligation to seek other employment, or otherwise
engage in mitigating activity, following the date of termination, and there
shall be no offset against amounts due the Executive under this Agreement on
account of any remuneration attributable to any subsequent employment that he
may obtain.
SECTION 15. Indemnification. CALIBRE and the Company agree that, in
the event the Executive's employment is terminated during the Term by the
Company without Cause or by the Executive for Good Reason, the Company shall
continue to indemnify the Executive following termination to the fullest extent
permitted by applicable law consistent with the Certificate of Incorporation and
By-Laws and the Company in effect as of the date of termination with respect to
Executives sole, joint or concurrent negligence and any acts or omissions he may
have committed during the period during which he was an officer, director and/or
employee of the Company or any of their affiliates for which he served as an
officer, director or employee at the request of the Company.
SECTION 16. Amendment; Waiver. The terms and provisions of this
Agreement may be modified or amended only by a written instrument executed by
each of the parties hereto, and compliance with the terms and provisions hereof
may be waived only by a written instrument executed by each party entitled to
the benefits thereof. No failure or delay on the part of any party in exercising
any right, power or privilege granted hereunder shall constitute a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege granted hereunder.
SECTION 17. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior written or oral agreements or understandings between the
Executive and the Company or its affiliates relating thereto, including, without
limitation.
SECTION 18. Severability. In the event that any term or provision of
this Agreement is found to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining terms and provisions hereof shall
not be in any way affected or impaired thereby, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained therein.
SECTION 19. Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns (it being understood and agreed that, except as expressly
provided herein, nothing contained in this Agreement is intended to confer upon
any other person or entity any rights, benefits or remedies of any kind or
character whatsoever). The Executive may not assign this Agreement without the
prior written consent of the Company. Except as otherwise provided in this
Agreement, the Company may assign this Agreement to any of their affiliates or
to any successor (whether by operation of law or otherwise) to all or
substantially all of their business and assets without the consent of the
Executive, and any transfer of employment from the Company to such affiliate or
successor shall be deemed to constitute an assignment and not a termination of
employment hereunder. In the event of an assignment of this Agreement by the
Company, all references herein to CALIBRE or the Company shall be deemed to be
references to the assignee. Similarly, in the event CALIBRE is no longer an
affiliate of the Company (or any assignee), all references to CALIBRE shall be
deemed to be references to the Company (or the assignee).
SECTION 20. Withholding of Taxes. The Executive agrees that the
Company shall deduct, or shall cause to be deducted, from the amount of any
benefits to be paid hereunder any taxes required to be withheld by the federal
or any state or local government.
SECTION 21. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas (except that no
effect shall be given to any conflicts of law principles thereof that would
require the application of the laws of another jurisdiction).
SECTION 22. Headings. The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.
SECTION 23. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 24. Subsidiaries and Affiliates. As used herein, the term
"subsidiary" shall mean any corporation or other business entity controlled by
the corporation in question, and the term "affiliate" shall mean and include any
corporation or other business entity controlling, controlled by or under common
control with the corporation in question. The terms "controlled," "controlling,"
"controlled by" and "under common control with," as used with respect to any
person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such person, whether
through the ownership of voting securities or by contract or otherwise.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
CALIBRE ENERGY, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Xxxxxx X. Xxxxx
Snr. V. P. of Operations
Xxxxxxx X. Xxxxxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxxxxx, Xx.
------------------------------------
Executive
