EMPLOYMENT AGREEMENT
Exhibit 10.1
This Employment Agreement (this “Agreement”) is made this 28th day of April,
2009, by and between NYTEX Energy Holdings, Inc., a Delaware Corporation (“Company”), and Xxxxxxx
Xxxxxx (“Executive”).
WHEREAS, the Company, which for the purposes of this Agreement shall mean NYTEX Energy
Holdings, Inc. and all of its subsidiaries whether or not wholly-owned, wishes to employ Executive
and Executive desires to be employed by the Company, as President and Chief Executive Officer of
the Company upon the terms and conditions set forth herein;
WHEREAS, the Company and its subsidiaries are engaged in the business of oil and gas
production and products and services related thereto (the “Business”).
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promises in
this Agreement and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Executive agree as follows:
1. Employment. The Company agrees to employ Executive and Executive agrees
to be employed by the Company upon the terms and conditions of this Agreement.
2. Term of Employment. The term of Executive’s employment under this
Agreement (the “Employment Term”) will commence on the date of this Agreement and,
unless earlier terminated in accordance with Section 10 below, will continue for two
years, ending on the second anniversary of the date of this Agreement (the “Initial
Term”). At the end of the Initial Term, the Employment Term will automatically be
extended for successive one-year periods (each an “Extended Term”) unless either party
elects not to renew this Agreement by giving written notice of such election at least sixty
days prior to the scheduled expiration of the Initial Term or then-current Extended Term,
as applicable.
3. Position and Responsibilities. Executive will be employed as “President” and
“Chief Executive Officer” of the Company and will perform the duties of President and
Chief Executive Officer as described in the Company’s Bylaws and such other executive
duties for the Company and/or its subsidiaries as the Company’s Board of Directors may
prescribe from time to time.
4. Commitment. During the Employment Term, Executive shall devote
substantially all of his business time, attention, skill, and efforts to the faithful
performance of his duties herein. Nothing herein shall preclude Executive from making
passive investments which do not interfere with Executive’s responsibilities to the
Company and its subsidiaries. In addition, with the prior written approval of the
Company’s Board of Directors, Executive may engage in more active investments or
business ventures so long as such investments and ventures do not conflict or interfere
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with Executive’s obligations to the Company and its subsidiaries as provided in this Agreement.
5. Compensation. The following shall constitute Executive’s “Compensation” hereunder:
(a) Base Salary. During the Employment Term, the Company will pay Executive
an initial base salary (the “Base Salary”) of $478,000.00 per year payable in accordance
with the Company’s then-current executive salary payment practice. Such Base Salary
may be reviewed during the Employment Period in the sole discretion of the Company’s
Board of Directors, and shall not be decreased without the prior written consent of
Executive.
(b) Auto Allowance. The Company will pay Executive an auto allowance (the
“Auto Allowance”) of $825.00 per month. Such Auto Allowance may be reviewed
during the Employment Period in the sole discretion of the Company’s Board of
Directors, and shall not be decreased without the prior written consent of Executive.
(c) Incentive Compensation. Executive will be eligible for, but is not guaranteed
to receive, additional compensation (“Incentive Compensation”) as determined from time
to time by the Company’s Board of Directors in its sole discretion.
(d) Insurance and Benefits. Executive will be entitled to participate in any group
life and medical insurance plans, profit-sharing and similar plans, stock option plans and
other fringe benefits, if and when such fringe benefits are made available to other of its
senior executive officers, in accordance with the terms of such plans. Along with the
Executive, costs for the Executive’s family, if so elected by the Executive will also be
paid by the Company on any group medical insurance plan. Until a group medical plan
for senior executive officers is established, Company shall pay Executive $1,200.00 per
month towards Executive’s private health insurance plan.
(e) Withholding. All compensation payable to Executive under this Agreement is
stated in gross amount and to the extent required by law will be subject to all applicable
withholding taxes, other normal payroll deductions, and any other amounts required by
law to be withheld.
(f) Expenses. The Company, in accordance with its then-current policies, will pay
or reimburse Executive for the expenses (including travel and entertainment expenses)
reasonably incurred by Executive during the Employment Term in connection with the
performance of Executive’s duties under this Agreement, provided that Executive must
provide to the Company documentation of the expenses for which Executive seeks
reimbursement.
(g) Vacation and Holidays. Executive will be entitled to receive paid vacation and
paid holidays in accordance with then-current Company policy.
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(h) Location of Employment. Executive will be entitled to perform his duties under
this Agreement at the Company’s corporate offices or such location(s) that the Company and
Executive determine to be in the best interests of the Company.
6. Trade Secret Protection.
(a) In the course of his relationship with the Company, Executive understands and
acknowledges that he will have access to confidential information, technical or non-technical data,
formulae, patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, lists of actual or potential customers or supplies,
records, specifications, and other knowledge owned by the Company, business methods,
plans, policies and/or personnel of the Company, all of which constitutes the trade secrets
and proprietary information of the Company (hereinafter, “trade secrets”). Executive
agrees that at no time during or after his relationship with the Company shall the
Executive remove or caused to be removed from the premises of the Company any
record, file, memorandum, document, equipment or like item relating to the business of
the Company or its trade secrets except in furtherance of his duties to the Company, and,
immediately following the termination of Executive’s relationship with the Company or
at any other time at the request of the Company or any person authorized thereby, all
such records, files, memoranda, documents, equipment or trade secrets then in
Executive’s possession shall promptly be returned to the Company.
(b) Executive further agrees that, during and after his relationship with the
Company, he shall not without the prior written approval of the Company or any person
authorized thereby, disclose to any person, other than those specifically authorized by the
Company or any person authorized thereby and to whom such disclosure is reasonably
necessary or appropriate in connection with the performance by him of his duties to the
Company, any trade secrets obtained by him during or in furtherance of his relationship
with the Company, whether or not he knows or has reason to believe will be damaging to
the Company; provided, however, that the above shall not preclude disclosure of any
information which is generally known to the public (other than as a direct or indirect
result of unauthorized disclosure by the Executive or others similarly situated).
7. Non-Competition.
(a) Executive agrees that so long as he is an employee of the Company and for a period of
three (3) years thereafter, he shall not, directly or indirectly, through any Company,
partnership, company or any other person or entity:
(i) compete directly or indirectly in any manner whatsoever within a one hundred mile
radius around the outside boundaries of either leasehold and fee acreage held by the
Company or those counties and/or parishes in which the Company conducts oilfield service
operations or holds in excess of 5% ownership interests in entities and properties
operated by other entities;
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(ii) solicit, entice, persuade or induce any individual who is then or has been within
the preceding three-month period an employee, officer, director, shareholder or consultant
to the Company to terminate his or her employment with the Company or to become employed by
or enter into contractual relations with any other individual or entity, and Executive
shall not approach any such person for any purpose or authorize or knowingly approve the
taking of any such actions by any other individual or entity;
(iii) solicit, entice, persuade or induce any individual or entity which is then or
has within the preceding twelve-month period been a client, partner, customer or supplier
of the Company to terminate its contractual or other relationship with the Company, and
Executive shall not approach any such client, partner, customer or supplier for such
purpose or authorize or knowingly approve the taking of any such actions by any other
individual or entity; or
(iv) solicit, entice, persuade or induce any employee, officer, director, shareholder
or consultant to the Company to engage in any activity which, were it done by Executive,
would violate any provision of this Agreement.
(b) Executive acknowledges that because of the nature of the Company’s business
and operations that the geographical restrictions contained in this Agreement and the
restrictions as to specific clients or customers or prospective clients or customers are fair
and reasonable.
(c) Executive agrees that prior to the commencement of any employment or
business relationship with a new employer or associate in a business similar to that of the
Company, it will furnish the new employer or associate, as the case may be, with a copy of
this Agreement. Executive also agrees that the Company may advise any new or prospective
employer or associate of the Executive of the existence and the terms of this Agreement and
furnish a copy thereof to said employer or associate.
8. Equitable Remedies.
(a) Executive acknowledges and agrees that the agreements and covenants set forth in Sections
6 and 7 are reasonable and necessary for the protection of the Business and other interests, that
irreparable injury will result to the Company if Executive breaches any of the terms of said
covenants, and that in the event of Executive’s actual or threatened breach of any such covenants,
the Company will have no adequate remedy at law. Executive accordingly agrees that, in the event
of any actual or threatened breach by him of any of said covenants, the Company will be entitled
to immediate injunctive and other equitable relief, without bond and without the necessity of
showing actual monetary damages. Nothing in this Section 8 will be construed as prohibiting the
Company from pursuing any other remedies available to it for such breach or threatened breach,
including the recovery of any damages that it is able to prove.
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(b) Each of the covenants in Sections 6 and 7 shall be construed as independent of
any other covenants or other provisions of this Agreement.
(c) In the event of any judicial determination that any of the covenants in Sections
6 and 7 are not fully enforceable, it is the intention and desire of the parties that the
court treat said covenants as having been modified to the extent deemed necessary by the court
to render them reasonable and enforceable, and that the court enforce them to such extent.
9. Termination.
(a) If there has been a material breach of this Agreement by Executive, the
Company may terminate the Employment Term upon fifteen days’ prior written notice to
Executive issued upon approval of the Company’s Board of Directors, Executive for this
purpose not being considered a member of the Board. Executive shall have the right to
cure any such breach within such fifteen-day period. Any uncured material breach shall
be considered “cause” hereunder. Upon expiration of such notice period, the Employment
Term will immediately end and Executive will not be entitled to receive any further
compensation (whether described in Section 5 or otherwise) other than accrued but
unpaid Base Salary and any vested stock options. Without limiting the generality of the
foregoing, any breach by Executive of any of his obligations under Sections 6 and 7 will
be deemed a material breach of this Agreement that is incapable of being cured.
(b) Any of the following events will also be deemed a material breach of this
Agreement:
(i) Executive’s continued and deliberate neglect of, willful misconduct in connection
with the performance of, or refusal to perform his duties in accordance with, Section 3 of
this Agreement;
(ii) Executive’s failure to devote his full business time to the Company’s business
in accordance with Section 4 of this Agreement;
(iii) such willful misconduct on the part of Executive that causes or is likely to
cause a material financial injury to the Company, including, without limitation,
embezzlement of Company funds or theft or misappropriation of the Company’s property; or
(iv) Executive’s conviction of a felony class crime.
(c) Without cause, the Company may terminate this agreement at any time upon
ten days’ written notice to the Executive. At the Company request, the Executive will
continue to perform his duties and may be paid his regular salary up to the date of
termination. In addition, the Company will pay Executive a severance allowance
determined by dividing Executive’s base salary compensation by 257 to compute a “daily
base salary rate” and then multiplying the daily base salary rate by the product of
multiplying the number of full months of Executive’s employment with the Company by
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84%; less taxes and Social Security required to be withheld. At the Company’s discretion, it can
pay the severance allowance in a single payment within ten days’ of Executive’s termination date or
in installments equal to the then-current Executive salary payment practice.
(d) The Employment Term will terminate upon the death or disability of Executive. Disability
of Executive will be deemed to have occurred whenever Executive has suffered physical or mental
illness, injury, or infirmity that prevents Executive from fulfilling his duties under this
Agreement for 30 consecutive days and the Company determines in good faith that such illness or
other disability is likely to continue for at least the next following 60 days. If terminated for
death or disability, the Company shall provide Executive, or Executive’s estate with severance pay,
which shall be equal to two months of base salary compensation.
11. General Provisions.
(a) Amendment. This Agreement may not be modified or amended except by an
instrument in writing signed by the parties. No term or condition of this Agreement will
be deemed to have been waived, except by written instrument of the party charged with
such waiver. No such written waiver will be deemed to be a continuing waiver unless
specifically stated therein, and each such waiver will operate only as to the specific term
or condition waived and shall not constitute a waiver of such term or condition for the
future or as to any act other than that specifically waived.
(b) Applicable Law. This Agreement shall be construed according to the laws of the
State of Delaware. In furtherance thereof, the Company shall have all legal and equitable
remedies provided by any Delaware statute dealing with Trade Secrets and the common law.
It is expressly agreed that, notwithstanding such applicable law, the United States Copyright
Act shall be deemed equally applicable to any breach of the terms of this Agreement by the
Executive, Executive thereby waiving any claim of preemption of state law by said Act.
(c) Enforceability. The invalidity or unenforceability of any particular provision or
provisions of this Agreement shall not affect or impair the other provisions herein and this
Agreement shall be construed in all respects as if such invalid or unenforceable provision or
provisions were omitted.
(d) Assignment. This Agreement shall inure to the benefit of and be binding upon
the Company, its subsidiaries, affiliates, successors and assigns, including without
limitation, any person, partnership or other entity which may acquire all or substantially
all of the Company’s assets or business, or with or into which the Company may be
consolidated or merged, and shall be binding upon the Executive, his successors, assigns,
executors and personal representatives, except that this Agreement may not be assigned
by the Executive without the prior written consent of the Company.
(e) Notices. All notices, consents, waivers, and other communications under this
Agreement must be in writing and must be delivered (i) personally, (ii) by facsimile
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with confirmation of transmission by the transmitting equipment, or (iii) by certified or
registered mail (postage prepaid, return receipt requested), and will be deemed given when so
delivered personally or by facsimile, or if mailed, three (3) days after the date of mailing, to
the addresses and facsimile numbers set forth below (or to such other addresses and facsimile
numbers as a party may designate by notice to the other parties):
If to Executive:
Xx. Xxxxxxx Xxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
If to the Company:
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above
written.
By: |
/s/ Xxxxxxx Xxxxxx | /s/ Xxxxxxx Xxxxxx | |||
| President | Executive |
| Attest: | ||||
| /s/ Xxxxxxxxxx Xxxxx | ||||
| Secretary | ||||
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