AMENDED EMPLOYMENT AGREEMENT
THIS AGREEMENT is effective as of October 28, 1998 ("the "Effective
Date") by and between Xxxxx Oil and Gas Company, a Nevada corporation
("Corporation") and Xxxxxxx X. Xxxxx, Xx.
("Employee").
The Corporation and Employee has employed Employee pursuant to the
terms of an Employment Agreement dated September 16, 1994. For consideration,
the receipt and sufficiency of which is acknowledged, the parties have agreed to
modify the agreement to provide as set forth in this Amended Employment
Agreement ("Amended Agreement").
The Parties hereby enter into this Amended Agreement (i) setting forth
their mutual promises and understandings and (ii) mutually acknowledging the
receipt and sufficiency of consideration to enter into this Amended Agreement as
of the Effective Date.
ARTICLE 1
EMPLOYMENT DUTIES AND RESPONSIBILITIES
Section 1.1. Employment. The Corporation shall employ the Employee as its
Manager of Operations. The Employee accepts such employment effective on the
Effective Date and agrees to abide by the Articles of Incorporation, Bylaws and
decisions of the Board of Directors of the Corporation.
Section 1.2. Duties and Responsibilities. The Employee is employed pursuant
to the terms of this Amended Agreement and agrees to render exclusive and
full-time services to the Corporation under this Amended Agreement. The Employee
shall be vested with authority to and shall, to the best of his ability, direct,
supervise and implement certain day-to-day operations of the Corporation. The
Employee shall perform such duties as (i) are specified by the President of the
Corporation and (ii) may be determined and assigned to him from time to time by
the Board of Directors of the Corporation. The Employee may not pursue any other
material business activities on his own behalf unless the Board of Directors in
a formal written statement expressly authorizes the Employee to do so.
Section 1.3. Working Facilities. The Employee shall be based in the Grand
Junction, Colorado metropolitan area where the Corporation shall provide
reasonable office facilities. The Employee agrees to travel to the extent
necessary to perform his duties hereunder. ^The Corporation shall provide
reasonable transportation to perform these duties.
Section 1.4. Vacations. The Employee shall be entitled to vacations
totaling at least two weeks per year. Each vacation shall be taken by the
Employee over a period meeting with the approval of the President or the Board
of Directors of the Corporation and no one vacation shall be so long as to
disturb the operations of the Corporation. Should the business of the
Corporation preclude the Employee from taking all vacation earned during a year,
then, with the consent of the President or the Board of Directors, the vacation
shall be accrued and available to be taken by the Employee in subsequent years.
If the Board of Directors does not consent to such accrual of vacation time, the
Corporation shall pay the Employee an airnount equal to the number of days of
unused vacation times the Employee's equivalent daily compensation.
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Section 1.5. Expenses.
A. Employee Reimbursed for Expenses. During the period of
employment pursuant to this Amended Agreement, the Employee will be
reimbursed for reasonable expenses incurred for the benefit of the
Corporation in accordance with the general policy of the Corporation as
adopted from time to time by the Corporation's Board of Directors, and
specifically approved beforehand by the Board of Directors. While
employed under this Amended Agreement, Employee shall be entitled to
use the Corporation automobile provided by the corporation for use by
Employee prior to the Effective Date .
B. Additional Expenses. In addition to such reimbursable
expenses, the Employee may incur in the course of the employment by the
Corporation certain other necessary expenses of the business which the
Employee will be required to pay personally but which the Corporation
shall be under no obligation to reimburse or otherwise compensate the
Employee, including, but not limited to, the cost of maintaining office
facilities in the Employee's home or similar items of reasonable and
necessary expense incurred by the Employee in the course of employment.
However, nothing in this Section shall prevent the Corporation from
assuming to pay or reimbursing the Employee for any such expense if the
Board of Directors so determines.
C. Employee Shall Account for Expenses to Corporation. With
respect to any expenses which are reimbursed by the Corporation to the
Employee, the Employee agrees to make an itemized accounting to the
Corporation (i) for proper accounting by the Corporation and (ii) in
detail sufficient to entitle the Corporation to an income tax deduction
for paid items if deductible.
Section 1.6. Review of Work. The Employee's performance shall a
all times be subject to review by the Board of Directors, in its sole discretion
ARTICLE 2
COMPENSATION
Section 2.1. Salary. Commencing effective the Effective Date, the
Corporation shall pay a salary to the Employee during the term of this Amended
Agreement at an annual rate of $80,000, bi-weekly, or such other amount as
determined from time to time by the Board of Directors.
Section 2.2. Death During Employment. In the event of the Employee's
death during the term of this Amended Agreement the Corporation shall pay to the
Employee's estate, bi-weekly, the compensation which otherwise would be payable
to the Employee for 60 days following the Employee's death at the rate of
compensation described in Section 2.1
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Section 2.3. Benefits. In addition to all other compensation, the
Employee shall be entitled to participate in any pension plans, profit sharing
plans, medical or dental reimbursement plans, group term or other life insurance
plans, medical or hospitalization insurance plans and any other group employee
benefit plan which may be established by the Corporation. Such participation
shall be in accordance with the terms of any such plan as adopted and maintained
by the Corporation.
Section 2.4. Life and Disability Insurance. The Corporation may obtain
for its own benefit such amounts of key executive term life insurance on the
life of the Employee as it may deem necessary or advisable. The proceeds of this
may be used to pay Corporation obligations under Sections 2.2 and 3.6 of this
contract; but the Corporation's obligations thereunder shall be absolute.
ARTICLE 3
TERM OF EMPLOYMENT AND TERMINATION
Section 3.1. Term. Employment under this Amended Agreement shall be "at
will" with no specific term and shall be in effect for a period until
termination in accordance with this Article 3 (the "Term").
Section 3.2. Termination by the Corporation Without Cause. The Board of
Directors, without cause, may terminate this Amended Agreement at any time upon
30 days written notice to the Employee, unless Section 3.7 applies in which case
this Section 3.2 shall be inapplicable. In such event, the Employee, if
requested by the Board of Directors, shall continue to render the services
required under this Amended Agreement for 30 days. Upon termination under this
Section 3.2, the Employee shall be paid $150,000 in a lump sum within 30 days of
termination. All outstanding stock options will be extended to the original
expiration date established at the date of grant.
Section 3.3. Termination by the Employee Without Cause. The Employee,
without cause, may terminate this Amended Agreement upon 90 days written notice
to the Corporation. In such event, the Employee shall, if requested by the
Corporation, continue to render the services required under this Amended
Agreement to the date identified in the Employee's written notice. The Employee
shall continue to be paid compensation at the rate set forth in Section 2.1 of
this Amended Agreement for at least 30 days and thereafter through the earlier
of (i) the date identified in the Employee's written notice or (ii) the date
through which the Employee furnishes services at the request of the Corporation,
and no further payments shall be made by the Corporation unless agreed to by the
Board of Directors.
Section 3.4. Termination by the Corporation With Cause. The Corporation
may terminate the Employee's employment for cause, which shall be limited to the
following: (a) the Employee's knowing and willful or reckless commission of an
act of gross misconduct which the Employee knows or reasonably should have known
at the time would be injurious to the Corporation; or (b) the Employee's refusal
to devote substantially all his time and efforts to his duties under this
Amended Agreement after the Board of Directors has notified the Employee in
writing of his noncompliance; or (c) the Employee's continued refusal, after
written notice from the Board of Directors to follow the specific instructions
of the Board of Directors. Termination pursuant to this subsection shall result
in
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no further compensation being due or payable to the Employee hereunder from and
as of the date of such termination.
Section 3.5. Termination Upon Death of Employee. Subject to Section 2.3 of
this Amended Agreement, this Amended Agreement shall be terminated in the event
of the Employee's death.
Section 3.6. Termination Upon Disability of Employee. The Corporation
may terminate the Employee's employment if, during the Term, the Employee
becomes physically or mentally disabled, whether totally or partially, so that
the Employee is unable substantially to perform his services under this Amended
Agreement (i) for a period of two consecutive months or (ii) for shorter periods
aggregating four months during any twelve month period, by written notice to the
Employee. Notwithstanding any such disability, the Corporation shall continue to
pay the Employee his full salary up to and including the date of such
termination and for 12 months thereafter in addition to any amounts payable to
Employee under any disability or similar insurance.
Section 3.7. Termination Upon Change of Control. If the Employee is
terminated as a direct or indirect result of either (i) actions taken by the
Board of Directors following the replacement of at least 40% of the members of
the Board of Directors with persons who are not also employees of the
Corporation in any 15 month period which were opposed by a majority of the
directors before the replacement, (ii) a shareholder or group of shareholders or
a person acting on behalf of shareholders increasing his, hers, their or its
ownership of the Corporation's outstanding stock by more than 10% within 24
months of the Employee's termination, or (iii) upon a merger, consolidation or
other business combination where the Corporation is not the surviving entity,
then the Employee shall be paid in a lump surn an amount equal to $150,000
within 30 days of termination. Further, all amounts then owed by Employee to the
Corporation shall be deemed to be paid in full and all outstanding stock options
shall become immediately exercisable. The Corporation shall within 10 business
days pay in full all amounts then owed to the Employee or any affiliates of the
Employee, including members of the family of Xxxxxxx Xxxxx, Xx., family
businesses or family partnerships. If the Corporation does not pay the amount
specified by this Section 3.7 on a timely basis, the unpaid amount shall bear
interest at ten percent per annum until paid and the Corporation shall pay all
costs and expenses, including attorney's fees, incurred by the Employee in
collecting all amounts owed under this Section 3.7.
Section 3.8. Resignation as Director. Upon any termination described in
Sections 3.2 through 3.7, Employee shall promptly resign as a Director of the
Corporation. Employee's right to compensation upon termination, as set forth in
sections 3.2 and 3.7 shall be subject to such resignation.
ARTICLE 4
DISCLOSURE OF INFORMATION
Section 4.1. Definitions.
4.1.1. As used herein, the term "proprietary information"
shall mean technical information and know-how concerning the
Corporation's oil and gas exploration, development,
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production and servicing business and its related equipment, books,
maps and records developed by or otherwise owned or controlled by the
Corporation.
4.1.2. As used herein, the term "trade secrets" shall mean any
proprietary information and any other non-public information used by
the Corporation, including such matters as geologic records, maps,
surveys, documents evidencing interests in real property, patented or
unpatented technology, supplier information, books, processes,
concepts, methods, formulae or technique know-how, customer or vendor
lists or information or development plans or strategy, owned or
controlled by the Corporation or otherwise subject to an obligation or
intent of the Corporation to maintain the confidentiality thereof which
is of a proprietary or secret nature and which is or may be applicable
to, or related to the business, equipment or services, present or
future, of the Corporation or the oil and gas exploration and
development business of the Corporation, or the contractual
relationships of the Corporation with customers or clients.
4.1.3. As used herein, the term "document" shall mean any
data, notes, drafts, manuals, blueprints, maps, notebooks, reports,
photographs, drawings, sketches or other records, in any tangible form
whatsoever, whether originals, copies, reproductions, or excerpts,
produced or obtained from the Corporation by the Employee or any other
representative of the Corporation which relates to trade secrets of the
Corporation.
4.1.4. As used herein, the term "Corporation invention" shall
mean any invention, discovery, improvement, or trade secret, whether
patentable or not and whether or not reduced to practice, conceived or
learned by the Employee either alone or jointly with others, while
employed by the Corporation, which relates to or results from the
actual or anticipated investigation, research, development, or
production of the Corporation, or which results to any extent from use
of the Corporation's facilities.
4.1.5. As used herein, the term "Corporation" shall mean not
only the Corporation as first defined above, but also the Corporation's
subsidiaries and all affiliates of the Corporation.
Section 4.2. Employee Shall Not Disclose Proprietary Information or
Trade Secrets. The Employee recognizes that the trade secrets of the
Corporation, as they may exist from time to time, are a valuable, special and
unique asset of the Corporation. The Employee will not, during or for a period
of 24 months after termination of the Employee's employment relationship under
this Amended Agreement, disclose or confirm the Corporation's trade secrets or
any part thereof to any person, firm, corporation, association or other entity
for any reason or purpose whatsoever, without the prior written authorization to
do so from the Corporation.
Further, all documents shall be property of the Corporation and the
Employee shall not remove these documents upon termination of employment with
the Corporation except pursuant to a specific authorization in writing from the
Board of Directors of the Corporation. The Employee agrees that any document
produced or obtained by the Employee while employed by the Corporation shall be
the sole and exclusive property of the Corporation. The Employee agrees to
return any such document to the
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Corporation Immediately upon termination of employment with the Corporation, or
upon request of the Corporation.
In no event shall the Employee copy or remove any documents of any
person, Corporation or association with whom the Employee did not directly work
while an Employee of the Corporation.
The Employee recognizes and acknowledges that much of the information
and knowledge which he has received or will receive by virtue of his employment
with the Corporation is or will be proprietary information and trade secrets
which have unique, special value to the successful operation of the
Corporation's business. The Employee agrees not to disclose any proprietary
information or trade secrets to any other person for any purpose, for his own
direct or indirect benefit or the benefit of any other employer or affiliate
during the term of this Amended Agreement or for a period of 24 months
thereafter without the prior written consent of the Corporation.
The aforesaid noncompetition covenant shall remain in any effect at all
times while the Employee is in the employ of the Corporation and for a period of
24 months after termination of the Employee's relationship with the Corporation
in any capacity whatsoever, regardless of the reason for termination or
cessation of the Employee's relationship. The aforesaid covenant is intended to
be a reasonable restriction on the Employee. If all, or any portion of the
covenant is held unreasonable or unenforceable by a court or agency having valid
jurisdiction, the Employee expressly agrees to be bound by any lesser covenant
subsumed within the terms of such covenant that imposes the maximum duty
permitted by law, as if the resulting covenant were separately stated in and
made apart of this Article 4.
Section 4.3. Duty of Loyalty, Conflicts of Interest. The Employee
agrees that he will not, while employed by the Corporation and for a period of
24 months thereafter, be an employee or consultant, or assist in any way, or
work directly or indirectly on behalf of, any person, corporation, firm or other
entity engaged in, or proposing to engage in, any line of business which would
directly compete or conflict with the Corporation's business, without the prior
express written consent of the Corporation. Notwithstanding the foregoing,
however, the Corporation and the Employee acknowledge that at the present time,
the Employee individually owns various interests in certain oil and gas
properties in which the Corporation also owns interests and/or which are
operated by the Corporation; and the parties agree that in such circumstances,
where the Board of Directors is fully informed about and approves of the
Employee's individual interest in a business opportunity of the Corporation, it
shall not be considered a violation of this Section 4.3. The Employee agrees
that he will not use any assets of the Corporation for his own individual
projects and that he will not use any proprietary information to the
disadvantage of the Corporation. The Employee agrees that he will not interfere
with the right of the Corporation to do business with any person, corporation,
firm or other entity.
Section 4.4. Enforcement. The Employee acknowledges that monetary
damages would not adequately or fairly compensate the Corporation for breach of
any of the obligations of the Employee under Article 4 of this Amended Agreement
and agrees that in the event of any breach or threatened breach the Corporation
shall be entitled to seek appropriate injunctive relief from a court of
competent jurisdiction, in addition to any other relief or damages which may be
available.
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ARTICLE 5
MISCELLANEOUS
Section 5.1. Colorado Law. It is the intention of the parties hereto
that this Amended Agreement and its performance hereunder be construed in
accordance with and pursuant to the laws of the state of Colorado and that, in
any action, special proceedings, or other proceeding that may be brought arising
out of, in connection with, or by reason of this Amended Agreement, the law of
the state of Colorado shall be applicable and shall govern to the exclusion of
any forum, without regard to the jurisdiction in which any action or special
proceeding may be instituted.
Section 5.2. No Waiver. No provision of this Amended Agreement may be
waived except by an agreement in writing signed by the waiving party. A waiver
of any term or provision shall not be construed as a waiver of any other term or
provision.
Section 5.3. Amendment. This Amended Agreement may be amended, altered
or revoked at any time, in whole or in part, by filing with this Amended
Agreement a written instrument setting forth such changes, signed by all of the
parties.
Section 5.4. Effect of Agreement. The terms of this Amended Agreement
shall be binding upon and inure to the benefit of the Employee and the
Corporation and their heirs, personal representa tives, successors and assigns
to the extent that any such benefits survive or may be assigned under the terms
of this Amended Agreement.
Section 5.5. Construction. Throughout this Amended Agreement the singular
shall include the plural, the plural shall include the singular, and the
masculine and neuter shall include the feminine, wherever the context so
requires.
Section 5.6. Text to Control. The headings of articles and sections are
included solely for convenience or reference. If any conflicts between any
headings and the text of this Amended Agreement exists, the text shall control.
Section 5.7. Severability. If any provision of this Amended Agreement
is declared by any court of competent jurisdiction to be invalid for any reason,
such invalidity shall not affect the remaining provisions. On the contrary, such
remaining provisions shall be fully severable, and this Amended Agreement shall
be construed and enforced as if such invalid provisions never had been inserted
in the Amended Agreement.
Section 5.8. Complete Agreement. This Amended Agreement contains the
complete agreement concerning the employment arrangement between the Parties and
shall, as of the Effective Date hereto, supersede all other agreements between
the parties, whether oral or written. The parties acknowledge that neither of
them has made any representations with respect to the subject matter of this
Amended Agreement, including the execution and delivery hereof, except such
representations as are
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specifically set forth herein, and each of the parties hereto acknowledges that
he or it has relied on his or its own judgment in entering into this Amended
Agreement. The parties hereto further acknowledge that any statement or
representation that may have heretofore been made by either of them to the other
are of no effect and that neither of them has relied thereon in connection with
his or its dealings with the other. Employee hereby waives and releases any
obligation by the Corporation under the original Employment Agreement and any
other claims which Employee might otherwise assert against the Corporation or
its officers or directors through the Effective Date except as set forth in this
Agreement.
Section 5.9. Binding Arbitration. Any controversy arising out of or
relating to this Amended Agreement or any modification or extension of this
Amended Agreement, including any claim for damages and/or rescission, shall be
settled by binding arbitration in Grand Junction, Colorado in accordance with
the Commercial Arbitration rules of the American Arbitration Association before
a panel of one arbitrator. The arbitrator sitting in any such controversy shall
have no power to alter or modify any express provisions of the Amended Agreement
or to render any award which by its terms effects any such alteration, or
modification. This section shall survive the termination of the Amended
Agreement.
Wherefore, the Parties have signed this Amended Agreement effective as
of the date first above written.
XXXXX OIL AND GAS COMPANY,
a Nevada corporation
By _______________________________________
President
EMPLOYEE
------------------------------------------
Xxxxxxx X. Xxxxx, Xx.
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Section 5.10. General Release. Employee, on his own behalf, and on
behalf of his heirs and assigns, hereby fully and forever unconditionally
releases and discharges the Corporation, all of its past and present parent,
subsidiary, affiliated and related corporations, their predecessors, successors
and assigns, together with their divisions and departments, and all past or
present officers, directors, employees, insurers and agents of any of them,
(hereinafter referred to collectively as "Releasees"), of and from, and
covenants not to xxx or assert against Releasees, for any purpose, all claims,
administrative complaints, demands, actions and causes of action, of every kind
and nature whatsoever, whether at law or in equity, arising from or in any way
related to my employment by the Corporation including the termination thereof,
based in whole or in part upon any act or omission concerning on or before the
date of this general release, whether negligent or intentional, without regard
to Employee's present actual knowledge of the act or omission, which Employee
may now have, or which Employee, or any person acting on his behalf may at any
future time have or claim to have, including specifically, but not by way of
limitation, unpaid wages, unpaid benefits, matters which may arise at common
law, such as breach of contract, express or implied, promissory estoppel,
wrongful discharge, tortious interference with contractual rights, infliction of
emotional distress, defamation, or under federal, state or local laws, such as
the Fair Labor Standards Act, the Employee Retirement Income Security Act, the
National Labor Relations Act, Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Rehabilitation Act of 1973, the Americans
with Disabilities Act, the Family and Medical Leave Act, the Pregnancy
Disability Act, the Equal Pay Act, and the Colorado Civil Rights Act, excepting
only retirement benefits described herein, COBRA rights, unemployment
compensation and worker's compensation. Employee warrants that he has not
assigned or transferred any right or claim described in this general release.
Employee expressly assumes all risk that the facts and law concerning this
general release may be other than as presently known to Employee, and
acknowledges that, in signing this general release, Employee is not relying on
any information provided by Releasees or upon Releasees to provide information
not known to Employee. Employee acknowledges that he has been advised to consult
an attorney regarding this release. This release shall be governed by and
construed in accordance with the laws of Colorado. In the event of any dispute
under this release, the prevailing party shall be entitled to recover all costs
and reasonable attorneys' fees incurred in connection therewith.
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