EMPLOYMENT AGREEMENT
Exhibit 10.4
This Employment Agreement (this “Agreement”) is made this 13th day of April, 2009, by and
between NYTEX Energy Holdings, Inc., a Delaware Corporation (“Company”), and Xxxxx Xxxxxxxx
(“Xxxxxxxx ”).
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 Xxxxxxxx
and Xxxxxxxx desires to be employed by the Company, as Vice President of Exploration and
Production 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 Xxxxxxxx agree as follows:
1. Employment. The Company agrees to employ Xxxxxxxx and Xxxxxxxx agrees
to be employed by the Company upon the terms and conditions of this Agreement.
2. Term of Employment. The term of Xxxxxxxx’x 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. Xxxxxxxx will be employed as “Vice President”
of Exploration and Production of the Company and will perform the duties of Vice
President as described in the Company’s Bylaws and such other engineering related
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, Xxxxxxxx shall devote
substantially all of his business time, attention, skill, and efforts to the faithful
performance of his duties herein. Nothing herein shall preclude Xxxxxxxx from making
passive investments which do not interfere with Xxxxxxxx’x responsibilities to the
Company and its subsidiaries. In addition, with the prior written approval of the
Company’s Board of Directors, Xxxxxxxx may engage in more active investments or
business ventures so long as such investments and ventures do not conflict or interfere
with Xxxxxxxx’x obligations to the Company and its subsidiaries as provided in this Agreement.
5. Compensation. The following shall constitute Xxxxxxxx’x “Compensation” hereunder:
(a) Signing Bonus. On the first date of Xxxxxxxx’x employment with the
Company, the Company will pay Xxxxxxxx a signing bonus of $5,000.00.
(b) Base Salary. During the Employment Term, the Company will pay Xxxxxxxx
an initial base salary (the “Base Salary”) of $160,000.00 per year, which shall be
increased to $180,000.00 per year after Xxxxxxxx’x first ninety (90) days of employment,
payable in accordance with the Company’s then-current Xxxxxxxx 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 Xxxxxxxx.
(c) Company Stock. Effective the first date of Xxxxxxxx’x employment, the
Company shall grant 100,000 shares of the Company’s Common Stock ( the “Grant”),
par value $0.001 (“Common Stock”), pursuant to, and subject to the following vesting
terms and provisions. The Grant shall become vested over the specified time periods
following the Effective Date for the specified number of shares of Common Stock vested
after the time listed in accordance with the following schedule:
18 Months
|
50,000 shares | ||
36 Months
|
50,000 shares | ||
| 100,000 shares Total |
(i) The vesting period set forth in the schedule above may be adjusted by the Company
to reflect the decreased level of employment during any period in which the Xxxxxxxx is on
an approved leave of absence or is employed on a less than full time basis.
(ii) If any of the Common Stock Granted has not vested at the time Xxxxxxxx is
terminated pursuant to Section 9, the non-vested Common Stock will not be owed to Xxxxxxxx
and shall return to the Company.
(iii) Shares of Common Stock granted hereunder are restricted under SEC Rule 144 and
may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of in
violation of such restrictions.
(d) Incentive Compensation. Xxxxxxxx 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.
(e) Insurance and Benefits. Xxxxxxxx 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 Xxxxxxxx officers, in accordance with the terms of such plans. Until a group
medical plan is established, Company shall pay Xxxxxxxx $500.00 per month towards
Xxxxxxxx’x private health insurance plan.
(f) Withholding. All compensation payable to Xxxxxxxx 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.
(g) Expenses.
(i) The Company, in accordance with its then-current policies, will pay or reimburse
Xxxxxxxx for the expenses (including travel and entertainment expenses) reasonably
incurred by Xxxxxxxx during the Employment Term in connection with the performance of
Xxxxxxxx’x duties under this Agreement, provided that Xxxxxxxx must provide to the Company
documentation of the expenses for which Xxxxxxxx seeks reimbursement.
(ii) When traveling to meetings at third party locations and field locations in a
personal vehicle, the Company will reimburse Xxxxxxxx for mileage at the rate then posted
by the IRS, which is currently $0.55 per mile. After the initial six month period of
employment, the Company may provide Xxxxxxxx with a company vehicle if Xxxxxxxx and the
Company can mutually agree upon the vehicle type and terms.
(h) Vacation and Holidays. Xxxxxxxx will be entitled to receive paid vacation and
paid holidays in accordance with then-current Company policy.
(i) Location of Employment. Xxxxxxxx will be entitled to perform his duties under
this Agreement at the Company’s corporate offices or such location(s) that the Company and
Xxxxxxxx determine to be in the best interests of the Company.
6. Trade Secret Protection.
(a) In the course of his relationship with the Company, Xxxxxxxx understands and acknowledges
that he will have access to confidential information, technical or nontechnical data, formulae,
patents, 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”). Xxxxxxxx agrees that at no time during or after his relationship
with the Company shall Xxxxxxxx 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 Xxxxxxxx’x 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 Xxxxxxxx’x possession shall promptly be returned to the Company.
(b) Xxxxxxxx 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 Xxxxxxxx or others similarly
situated).
7. Non-Competition.
(a) Xxxxxxxx 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;
(ii) solicit, entice, persuade or induce any individual who is then or has been
within the preceding six-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
Xxxxxxxx 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
Xxxxxxxx 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;
(iv) offer, directly or indirectly, to any party which has been a shareholder,
partner or customer of the Company, which has been solicited as shareholder,
partner or a customer of the Company in the preceding twelve-month period, or which is a
potential shareholder, partner or customer of the Company and is known or reasonably known
to Xxxxxxxx to be a potential shareholder, partner or customer of the Company because of
the business and affairs it then conducts, any product or service which competes with, or
materially replicates, any product or service (or is a reasonable extension of any such
product or service) offered by the Company, or perform services for, or accept employment
with or act as agent, consultant, adviser, officer or partner for, or acquire any interest
in (or negotiate with respect to the acquisition of) any entity, product or service which
competes with, or materially replicates any product or service (or is a reasonable
extension of such product or service) offered by the Company, except that nothing contained
herein shall prevent or restrict Xxxxxxxx from owning or acquiring, directly or indirectly,
not more than 1% of the securities of any publicly-held and traded Company for the purpose
of passive investment; 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 Xxxxxxxx,
would violate any provision of this Agreement.
(b) Xxxxxxxx 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) Xxxxxxxx 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. Xxxxxxxx also agrees that the Company may advise any new or prospective
employer or associate of the Xxxxxxxx of the existence and the terms of this Agreement and
furnish a copy thereof to said employer or associate.
8. Equitable Remedies.
(a) Xxxxxxxx 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 Xxxxxxxx breaches any of the terms of said
covenants, and that in the event of Xxxxxxxx’x actual or threatened breach of any such covenants,
the Company will have no adequate remedy at law. Xxxxxxxx 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.
(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 or 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 Xxxxxxxx, the
Company may terminate the Employment Term upon fifteen days’ prior written notice to
Xxxxxxxx issued upon approval of the Company’s Board of Directors. Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx of any of his obligations under
Sections 6 or 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) Xxxxxxxx’x 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) Xxxxxxxx’x 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 Xxxxxxxx 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) Xxxxxxxx’x 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 Xxxxxxxx. At the Company request, Xxxxxxxx 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 Xxxxxxxx a severance allowance determined by dividing
Xxxxxxxx’x 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 Xxxxxxxx’x employment with the Company by 41.67%; 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 Xxxxxxxx’x termination date or in installments
equal to the then-current Xxxxxxxx salary payment practice.
(d) The Employment Term will terminate upon the death or disability of Xxxxxxxx. Disability of
Xxxxxxxx will be deemed to have occurred whenever Xxxxxxxx has suffered physical or mental illness,
injury, or infirmity that prevents Xxxxxxxx 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 Xxxxxxxx, or Xxxxxxxx’x estate with severance pay, which shall be equal
to one month of base salary compensation.
10. 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
Xxxxxxxx, Xxxxxxxx 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 Xxxxxxxx, his successors, assigns,
executors and personal representatives, except that this Agreement may not be assigned
by the Xxxxxxxx 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
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 Xxxxxxxx:
Xx. Xxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxxxx Xx.
Xxxx Xxxxx, Xxxxx 00000
0000 Xxxxxxxxxx Xxxxxx Xx.
Xxxx Xxxxx, Xxxxx 00000
If to the Company:
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first
above written.
| NYTEX Energy Holdings, Inc. | ||||||
By:
|
/s/ Xxxxxxx Xxxxxx
|
/s/ Xxxxx Xxxxxxxx
|
||||
| President | Xxxxxxxx | |||||
| 4/13/09 | ||||||
| Attest: | ||||||
| /s/ Xxxxxxxxxx Xxxxx
|
||||||
| Secretary | ||||||
