EMPLOYMENT AGREEMENT
Exhibit 10.27
This
Employment Agreement (“Agreement”) is entered into this
1st day of October,
2011, by and between Xxxxxxxxx Energy, Inc. (“Employer”), 0000 Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xx.
Xxxxx, Xxxxxxxx 00000 and J. Xxxxxxx Xxxx (“Xxxx”), 0000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx
00000.
In consideration of the mutual covenants and promises contained herein, and other good and
valuable consideration, the adequacy and receipt of which are hereby acknowledged, Employer and
Gist hereby agree as follows.
1. Duties and Position. Gist shall be employed as the Senior Vice President of
Finance and Administration and Chief Financial Officer of Employer and shall report to Employer’s President. Gist shall have
such duties as are customarily performed by persons serving in similar capacities in other
businesses similar to Employer’s business. Gist shall devote his full working time, attention, and
best efforts to performing all reasonably assigned responsibilities. Gist shall not, while employed
by Employer, engage in any other business or employment without the prior written approval of
Employer’s President or Board of Directors (the “Board”). Notwithstanding the foregoing, nothing
herein is intended or shall be construed as preventing Gist from engaging in such civic,
charitable, or political activities as do not interfere with the performance of Gist’s duties
hereunder.
2. Term of Employment.
2.1 On-Going Term. Gist’s employment under this agreement shall be for one year
commencing on the date set forth above. However, the term of Gist’s employment under this
Agreement shall automatically extend for additional one (1) year terms until such time, if any, as
Employer or Gist give written notice to the other that such automatic extension shall cease, the
same of which shall be given with no less than sixty (60) days notice prior to the expiration of
the then current term.
2.2 Exemption. Notwithstanding the foregoing, Gist’s employment hereunder may be
earlier terminated in accordance with the terms of Section 6 of this Agreement.
3. Compensation.
3.1 Base Salary Compensation. Employer shall pay Gist an initial annual base salary
of Two Hundred Ten Thousand Dollars ($210,000.00) (the “Salary Compensation”), which Employer’s
President or Board may elect to adjust, in their sole discretion and without any requirement that
they do so, on each anniversary of the date first written above. Gist’s Salary Compensation shall
be payable in equal periodic installments according to Employer’s customary payroll practices, but
no less frequently than bi-monthly. During the term of his employment as defined herein, Gist shall
also be entitled to an annual target bonus of 50% of the then annual salary. Such bonus shall be
based upon the achievement of performance criteria
established by the Company and to be awarded at the discretion of the Company’s President or
Board of Directors.
3.2 Withholding. All payments under this Section 3 shall be less such amounts as are
required to be withheld by law or as otherwise authorized by Gist in writing.
4. Benefits.
Gist shall be eligible to participate in such benefits as may be authorized and adopted from
time to time by the Board for Employer employees including, without limitation, any pension plan,
profit-sharing plan, or other qualified retirement plan and any group insurance plan. Employer
shall reimburse Gist for normal and reasonable business expenses incurred in performance of his
responsibilities as determined in the sole discretion of Employer. During each calendar year Gist
shall be entitled to the vacation as Employer employees would be entitled to under Employer’s
standard vacation policy. Employer may furnish such other benefits to Gist as it shall determine,
from time to time, within its discretion, to be in the best interests of Employer and Gist.
Nothing herein is intended or shall be construed as precluding Employer from modifying or
discontinuing any benefit plan, policy or program.
5. Termination of Employment. Gist’s employment with Employer under this Agreement
shall terminate:
5.1 Cause. For “Cause” immediately upon notice from Employer to Gist. As used
herein, “Cause” shall mean:
X. Xxxx’x failure substantially to perform his duties hereunder in a manner
satisfactory to Employer, as determined in good faith by Employer, provided that Employer
has given Gist written notice of the action(s) or omission(s) which are claimed to
constitute such failure and Gist does not fully remedy such failure within ten (10) calendar
days after receipt of the written notice;
X. Xxxx has engaged in gross misconduct, dishonest, disloyal, illegal or unethical
conduct, or any other conduct which has or could reasonably have a detrimental impact on
Employer or its reputation, all facts to be determined in good faith by Employer;
X. Xxxx has acted in a dishonest or disloyal manner, or breached any fiduciary duty to
Employer, that, in either case, results or was intended to result in personal profit to Gist
at the expense of Employer or any of its customers;
X. Xxxx has been convicted of, pleads guilty, or enters a nolo plea, Xxxxxx plea or
plea or no contest to any felony.
X. Xxxx has one or more physical or mental impairments which have substantially
impaired his ability to perform the essential functions of his job under this
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Agreement. Any dispute as to whether Gist has been so impaired shall be determined by
Employer in consultation with a physician appointed by Employer;
X. Xxxx’x death;
G. Any breach by Gist of his obligations under Sections 7-11 or 13 of this Agreement;
or
X. Xxxx resigns under circumstances where a termination for “Cause” was impending or
could have reasonably been foreseen.
5.2 Change in Control. Upon the occurrence of a “Change in Control,” provided Gist’s
employment with Employer or an acquiring entity is terminated, other than for Cause, within twelve
(12) months of an event constituting a Change in Control. As used herein, “Change in Control”
means:
A. any purchase or other acquisition by an individual or group of person(s) (including
entity(ies)) acting in concert, which results in persons who are shareholders of Employer as
of the date first written above no longer being the legal and beneficial owners of fifty-one
percent (51%) or more of the outstanding equity in Employer, excluding any affiliates,
parents, subsidiaries or related parties of Employer;
B. consummation of a reorganization, merger, recapitalization, consolidation, or any
other transaction, in each case with respect to which persons who were shareholders of
Employer as of the date first written above do not, immediately thereafter, legally and
beneficially own fifty-one percent (51%) or more of the equity in the newly-organized,
merged, recapitalized, consolidated, or other resulting entity; or
C. the sale of all or substantially all of the assets of Employer in a transaction
approved by the Board.
5.3 Without Cause. Upon notice from Employer to Gist.
5.4 For Good Reason. For “Good Reason” immediately upon written notice from Gist to
Employer’s Board of Directors or at such later time as such notice may specify, which date shall
not be more than fourteen (14) calendar days after the date on which Employer is deemed to receive
such notice. As used herein, “Good Reason” shall mean a material demotion or reduction, without
Gist’s consent, in Gist’s duties.
5.5 Miscellaneous. Employer may pay Gist in lieu of having him work during all or
part of any notice period under this Section 5. Following any notice of termination, Gist shall
fully cooperate with Employer in all matters relating to the winding up of his pending work on
behalf of Employer and the orderly transfer of any such pending work to such others as may be
designated by Employer. To that end Employer shall be entitled to such full-time or part-time
services of Gist as Employer may reasonably require during all or any part of the period from the
time of giving any such notice until the effective date of such termination.
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6. Separation Package
6.1 Cause. In the event Employer terminates Gist’s employment for Cause, Gist shall
not be entitled to any compensation or benefits beyond his termination date.
6.2 Without Cause; For Good Reason. In the event Employer terminates Gist’s
employment without Cause, or Gist terminates his employment for Good Reason, Employer shall:
A. continue, for twelve (12) months following such termination, Gist’s Salary
Compensation at the same rate as such Salary Compensation was set hereunder on the day prior
to Gist’s termination, plus pay any accrued but unpaid Bonus as of the date of such
termination;
B. pay, for twelve (12) months, the premiums for Gist and his dependents to continue
group health insurance under such group policy(ies), if any, on the same terms as Employer
provides to Employer employees, provided such payments may cease earlier than twelve (12)
months following termination if:
(i) the applicable group policy does not permit continuation coverage
beyond the maximum time periods established by applicable law for
continuation coverage, in which case payments shall cease when the
applicable maximum period is reached for each covered individual; or
(ii) Gist and/or any covered dependent(s) advise Employer that Gist
and/or any covered dependent(s) have obtained other satisfactory group
health coverage in which case coverage shall cease only for such individuals
who have obtained such other group coverage; and
(iii) Employer ceases to provide any group health policy to any
employees.
6.3 Change in Control. In the event of a termination under Section 5.2, Employer
shall provide Gist with the benefits on the terms described in Section 6.2(B) for twelve (12)
months following termination. In addition, Employer shall, promptly following such termination,
pay Gist a lump sum payment equal to one (1) times Gist’s Salary Compensation at the time of his
termination plus one (1) year’s bonus in an amount equal to 1/2 of Gist’s then existing Salary
Compensation. To the extent Gist has received any restricted stock or similar inventive awards
from the Company, such awards shall vest in accordance with the terms of the agreement(s) pursuant
to which they were awarded and nothing in this Agreement shall be deemed to modify or amend the
terms of those awards.
6.4 Miscellaneous. Any payments under this Section 6 shall be subject to such
deductions as may be required by law. In addition, in the event Gist violates any of the terms of
Section 7 or 9-11 of this Agreement, as determined in good faith by Employer, any payments and
benefits otherwise due under this Section 6 shall immediately cease and Gist shall be required to
repay to Employer any amounts already paid to him under this Section 6. Any
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payments under this agreement associated with termination of employment are conditional upon
Gist’s execution of an appropriate release of all future claims against Employer or its successors.
7. Confidential Information and Relationships. Gist acknowledges and agrees that, in
the course of his employment with Employer, he has and will continue to come into possession of
technical, financial and/or business information pertaining to Employer which is not published or
readily available to the public, including, but not limited to: financing opportunities; market
research and analyses; customer contact information, specifications, needs and histories; contract
terms; sales figures, reports and projections; marketing concepts and plans; cost and pricing
information; plans for future developments including product and market expansion; and lists of and
other information pertaining to and/or received from customers, suppliers and/or employees
(“Confidential Information”). Gist also acknowledges and agrees that he has received training
regarding Employer’s business and shall have contact with Employer’s customers and suppliers. Such
contacts will enable Gist to establish and maintain, at Employer’s expense, favorable relationships
and goodwill with such person/entities, and to influence with whom such persons/entities do
business. Gist acknowledges that Confidential Information and such relationships and goodwill are
important to and will greatly affect the success of Employer. Gist agrees that during employment
with Employer and at all times thereafter, regardless of how, when and why employment may end, he
shall hold in the strictest confidence, and shall not disclose, duplicate and/or use for himself or
any other person or entity any Confidential Information without the prior written consent of
Employer, or unless required to do so in order to perform his responsibilities while employed by
Employer. Gist also agrees that at all times during his employment with Employer, he shall comply
with all of Employer’s policies and procedures relating to the protection and confidentiality of
Confidential Information.
8. No Other Contract. Gist warrants that he is not bound by any other agreement, oral
or written, which would limit or preclude him from performing any responsibility reasonably
assigned by Employer hereunder. Gist also agrees not to disclose to Employer or seek to induce
Employer to use, any confidential information, material or trade secret belonging to any other
person or entity.
9. Work Product. Any and all designs, plans, inventions, products, improvements,
programs, specifications, methods, reports, notebooks, databases, notes, analyses, memoranda,
files, correspondence, rolodexes, and other embodiments of work conceived, made, discovered and/or
produced by Gist during his employment by Employer, either solely or jointly with others: (A) in
the course of performing any duties for Employer, (B) which are based, in whole or part, upon
Confidential Information, the supplies, facilities or business, financial or technical information
of Employer, or (C) which relate to the business of Employer (“Work Product”), shall be the sole
property of Employer or its designee and available to Employer or its designee at all times. Gist
agrees promptly to disclose and hereby assigns in perpetuity to Employer or its designee, without
royalty or other additional consideration, any and all of his rights to any and all Work Product.
Gist further agrees that during his employment by Employer and after that employment ends,
regardless of how, when and why, he shall, upon request from the Chairman of the Board or his
designee: (i) execute any and all applications for copyright, patent, trademark or other
intellectual or proprietary right relating to Work Product which may be prepared for his signature,
(ii) assign to Employer or its designee any and all such applications, copyrights,
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patents, trademarks or other intellectual or proprietary rights relating thereto, and (iii) assist
Employer or its designee, as Employer or its designee deems necessary, in order for Employer or its
designee to apply for, defend or enforce any copyright, patent, trademark or other intellectual or
proprietary right or otherwise protect its interests in Work Product. Employer or its designee
shall pay all expenses of preparing, filing and prosecuting any such application and of obtaining
such copyrights, patents, trademarks or other intellectual or proprietary right.
10. Return of Property. All documents, records, reports, lists, databases, software,
analyses, notes and similar items relating to Employer’s business that Gist has or may prepare or
receive in the course of his employment are and shall remain Employer’s property. At such times as
Employer may request, and upon separation from employment with Employer, regardless of how, when
and why employment may end, Gist shall immediately deliver to Employer all Confidential
Information, Work Product and other property of Employer in his possession or control, including,
but not limited to, all records, documents, notes and disks (including copies), containing,
excerpting or relating, in whole or in part, to Confidential Information.
11. Non-Competition. Gist recognizes that Employer will or has spent substantial
money, time and effort to develop and maintain its relationships with its customers, suppliers and
employees, Employer is paying Gist to, among other things, develop and preserve business
information, methods of doing business and goodwill, and Employer has agreed to employ or continue
employing Gist based on his assurances and promises not to divert or misuse Employer’s Confidential
Information, Work Product or goodwill or to put himself in a position following employment with
Employer in which the confidentiality of Confidential Information or Work Product might somehow be
comprised. Therefore, Gist agrees that while employed by Employer and for twelve (12) months
following termination of that employment, regardless of how, when or why employment may end, he
shall not in any manner or in any capacity, directly or indirectly, for himself or any other person
or entity, actually or attempt:
A to acquire any interest in, be employed by or otherwise associated or affiliated with
any person or entity which offers any product or service which competes or operates in any
coal producing region in which Employer or its affiliates, parent companies, subsidiary
companies or related entities also operate;
B. to solicit, interfere with, divert or take away from Employer any business with or
from any person or entity who/that was a customer or prospective customer of Employer:
| (i) | in the case of Gist’s on-going employment, during all or part of the twelve (12) months immediately preceding any dispute under this Section 11; and | ||
| (ii) | in the case of employment having ended, during all or part of the twelve (12) months preceding termination of Gist’s employment. |
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A prospective customer shall mean any person/entity who/that, within the relevant period
described in subsection (B)(i) and (ii) above, was in negotiation with Employer or received
a written proposal from Employer; or
C. to hire or solicit for work any employee of Employer or otherwise to induce any
employee of Employer to leave employment with Employer.
Gist further agrees that if he has any question regarding the scope of activities restricted by
this Section 11, he shall submit the question in writing to Employer. Gist also agrees to keep
Employer advised of the identity of any employer (including, without limitation, any contractors or
consulting arrangements), his work location and general responsibilities during the twelve (12)
month post-employment period covered by this Section 11. The provisions of this Section 11 shall
not apply to those business relationships set forth on Exhibit A.
12. Securities. Notwithstanding the terms of Sections 1 and 11 above, nothing in this
Agreement is intended or shall be construed as limiting Gist’s right, as an investor, to hold or
acquire the stock of any business that is registered on a national securities exchange or regularly
traded on a generally recognized over-the-counter market, so long as his interest in any such
business does not exceed five percent (5%) of the ownership of that business.
13. Remedies. The parties agree that the terms of Sections 7 and 9-11 of this
Agreement are intended and shall be construed not as personal services but as terms governing the
ownership and use of property, including Confidential Information and goodwill. Gist agrees that
the covenants in Sections 7 and 9-11 of this Agreement are reasonable and necessary to protect the
legitimate business interests of Employer, that any violation by Gist of any such covenant would
result in great damage and irreparable injury to Employer, and that his experience, knowledge and
skills are such that enforcement of Sections 7 and 9-11 by way of injunction would not cause him
unreasonable hardship or prevent him from earning a living. Gist further acknowledges and agrees
that if he were to violate the terms of Section 11, the unauthorized disclosure or use of
Confidential Information, goodwill and/or Work Product would be inevitable. Gist, therefore,
agrees that, in the event of actual or threatened violation of any of the covenants in Sections 7
or 9-11 of this Agreement, in addition to whatever other legal and/or equitable remedies allowed by
law, Employer shall be entitled to enforce the terms of this Agreement by way of injunction and/or
specific performance. In addition, Gist and Employer agree that any dispute or controversy arising
between/among them relating to this Agreement shall be brought in the Missouri or federal court
with jurisdiction in the County of St. Louis, State of Missouri (the “Courts”), and that the Courts
shall have exclusive jurisdiction over any such dispute or controversy. Furthermore, each of the
parties hereby voluntarily consents to the jurisdiction of the Courts and stipulates that the
Courts are not an unreasonable forum within which to litigate any dispute or controversy related to
this Agreement. Gist further agrees that if there is any question as to the enforceability of any
of the covenants in Sections 7 or 9-11 of this Agreement, he shall not engage in any conduct
inconsistent with or contrary to any such covenant until after the question has been resolved by a
final judgment of the Courts. In the event Employer has to consult with or retain any attorney to
enforce the terms of this Agreement, Gist agrees that he shall pay Employer for all costs, expenses
and attorneys’ fees Employer incurs in enforcing this Agreement, whether or not litigation is
commenced.
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14. Binding Effect.
X. Xxxx may not sell, assign or transfer this Agreement or any of his rights, interests
or obligations under this Agreement, in whole or in part, by operation of law or otherwise.
B. Employer may sell, assign or transfer any of its rights and/or interests under
Sections 7, 9-11 and 13-21 of this Agreement without any additional consent of or notice to
Gist. In such event, said Sections shall remain in full force after such sale, assignment
or other transfer, shall inure to the benefit of and may be enforced by (i) any successor,
assignee, or transferee of all or any part of Employer’s business as fully and completely as
it would inure to the benefit of and it could be enforced by Employer if no such sale,
assignment or transfer had occurred, and (ii) Employer in the case of any sale, assignment
or other transfer of a part, but not all, of the business.
C. Whether or not Employer assigns any of its rights and/or interests under Sections 7,
9-11 and 13-21 of this Agreement, the parties intend and agree that any successor or
transferee of all or part of Employer’s business shall be a third party beneficiary of the
terms of said Sections. The parties further intend and agree that, in the event of any
sale, merger or other change in the ownership or structure of Employer, in whole or in part,
the resulting entity shall step into the place of Employer under Sections 7, 9-11 and 13-21
of this Agreement, without any additional consent of or notice to Gist, as if the term
“Employer” were defined in this Agreement to include such person/entity. In addition, the
parties agree that, in the event Employer sells, transfers or merges part, but not all, of
its business, the terms of Sections 7, 9-11 and 13-21 shall be enforceable by both Employer
and the successor or transferee of part of Employer’s business. As used herein, a
“successor” or “transferee” includes any person/entity which, at any time, merges with, or
purchases all or substantially all of the stock or assets of Employer.
15. Severability/Interpretation. The parties acknowledge and agree that the terms of
Sections 7, 9-11 and 13-21 are severable from the remainder of this Agreement and supported by
adequate consideration. In the event any one or more whole or partial provisions of this Agreement
shall be adjudicated to be invalid or unenforceable in any respect, the validity and enforceability
of the remaining whole or partial provisions shall not be affected, and such adjudication shall not
affect the validity or enforceability of such whole or partial provision in any other jurisdiction.
The parties further agree that if any whole or partial restrictive covenant in this Agreement is
deemed invalid or unenforceable because overly broad in geographic scope, activity or time
duration, this Agreement shall be interpreted as if such invalid or unenforceable whole or partial
provision were not contained herein; provided, however, if, under applicable law, such whole or
partial provision may be modified or interpreted so as to be enforceable, that provision shall be
so modified or interpreted so as to be enforceable to the maximum extent permitted by applicable
law.
16. Preservation of Rights. Gist agrees that termination of his employment with
Employer, regardless of how, when or why employment may end, shall in no manner affect his promises
contained in Sections 7, 9-11 and 13-21 of this Agreement. In order to preserve its rights
hereunder, Employer may advise any third party with whom Gist may consider, establish
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or contract a relationship of the existence of this Agreement and its terms, and Employer shall
have no liability for so acting.
17. Notice. Any written notice required under this Agreement shall be deemed given on
the date of hand delivery, the calendar day following the day sent by a next day mail or delivery
service, and two (2) calendar days following the date postmarked by U.S. mail, all postage or
delivery charges prepaid. Any such notice shall be given:
to Employer, addressed to its President at:
|
7733 Forsyth Suite 1625. | |
| Xx. Xxxxx, Xx. 00000 | ||
to Gist at:
|
0000 Xxxxxxxxx Xxxxxx Xxxxx | |
| Xxxxxxxx, Xx. 00000 |
or such other address as specified in notice given in accordance with the foregoing.
18. Entire Agreement. This Agreement contains the entire agreement between Gist and
Employer and supersedes any prior oral or written agreement between them pertaining to the subject
matter of this Agreement. Each party warrants that, in entering into this Agreement, it is not
relying on any representation or promise other than those set forth in this Agreement. This
Agreement may be modified only by a writing signed by Gist and Employer.
19. Waiver of Breach. Failure of either party to exercise any right under this
Agreement, in the event the other party breaches this Agreement, shall not be construed as a waiver
of such breach or prevent the non-breaching party from later enforcing strict compliance with the
terms of this Agreement. Waiver of any right by Employer hereunder must be in writing signed by
Employer.
20. Choice of Law. The parties agree that this Agreement shall be governed and
construed in accordance with the laws of the State of Missouri without giving effect to any choice
of law or conflict of law rule or principle that would cause application of the law of a
jurisdiction other than the State of Missouri.
21. Miscellaneous. The headings of each Section herein are for convenience only and
shall have no significance in the interpretation of this Agreement. This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original but all of which
together will constitute but one instrument.
22. Acknowledgment. Gist acknowledges and agrees that, to the extent desired, he has
discussed this Agreement with the advisors of his choice, he has read, fully understands and
intends to comply with all of the provisions of this Agreement, and he is voluntarily signing it
below.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
Xxxxxxxxx Energy, Inc.
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, President
/s/
J. Xxxxxxx Xxxx
J. Xxxxxxx Xxxx
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