EXHIBIT 10.9
EMPLOYMENT AGREEMENT
This Agreement, made this 12th day of March, 1997, by and between Xxxxxx
Oil & Gas Corporation, a Delaware corporation (the "Company"), and Xxxxx X.
Xxxxxxx ("Executive").
WITNESSETH:
WHEREAS, the Company desires to employ Executive as Senior Vice President
and Chief Financial Officer on the terms set forth below, and Executive is
willing to accept such employment on such terms.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the parties hereto do hereby agree:
1. DEFINITIONS
As used in this Agreement, defined words and phrases have the meaning
first ascribed to them herein whenever the first letter of each word is
capitalized. Words used in the masculine apply equally to the feminine,
and wherever the context dictates, the plural should be read as the
singular and the singular as the plural. References to Sections are to
Sections of this Agreement. The headings at the beginning of each section
are inserted for convenience only and are not intended to describe,
interpret, define, or limit the scope, extent, or intent of this
Agreement.
a. Board" means the Company's board of directors.
b. Cause" shall be deemed to exist if, and only if:
i. Executive is convicted in a court of law of any crime (i) that
constitutes a felony relating to the Company or any other
business endeavor or (ii) that constitutes a felony which
involves moral turpitude; or
ii. Executive engages in willful misconduct or any material breach of
or willful material failure to perform his duties and
responsibilities hereunder, which misconduct, breach, or failure
shall continue after the Company, by action of the Board, shall
have advised Executive thereof in writing and shall have afforded
Executive a reasonable opportunity (which shall be at least 30
days from the date of such written advice or knowledge thereof)
to correct the acts or omissions complained of, and which
Executive shall have so failed to take action to correct within
such period.
c. "Disability" means Executive's inability to fully and competently
perform the duties hereunder for a period of at least three consecutive
months by reason of mental or physical illness or other incapacity. The
Company and Executive or his attorney-in-fact shall, based on competent
medical advice, determine whether Executive is and continues to be
disabled. If the Company and Executive or his attorney-in-fact disagree
with the determination of disability, then each of them shall appoint a
doctor and the two doctors shall select a third independent doctor
whose decision as to whether Executive has been unable to perform the
duties of the nature contemplated hereunder for a
three-consecutive-month period shall be binding on the parties.
The doctor advising the Company with regard to the Company's initial
determination of whether Executive has been disabled within the
foregoing meaning and the independent doctor selected by the two
doctors designated by the Company and Executive or his attorney-in-fact
shall be given full access to Executive's medical records and shall be
afforded a reasonable opportunity to examine Executive. The Company
agrees to instruct such doctors to maintain all information reflected
in Executive's records in full confidence and not to disclose such
information to any person (including the Company) except as may be
necessary for the
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determination described above. All references to doctor in this
paragraph 1.d shall mean a practicing doctor of medicine.
d. "Executive Officer" means Senior Vice President and Chief Financial
Officer.
e. "Notice of Termination" means a notice that sets forth the date of
termination and, in the event of termination for Cause, the facts and
circumstances claimed to provide a basis for termination of Executive's
employment.
2. TERM
This Agreement commences, subject to approval of this Agreement in all
respects by the Company's Board of Directors, effective as of March 20,
1997 (the "Commencement Date") and shall continue for 36 months after the
Commencement Date, unless sooner terminated.
3. DUTIES
During the term of his employment as provided in Section 2 above, the
Company will employ Executive in a senior executive capacity, with such
responsibilities as the Company may from time to time determine during the
term of this Agreement. Executive will comply with all applicable laws,
with all corporate documents governing the conduct of the Company's
business and affairs, and with the Company's policies.
Executive agrees to devote substantially all of his business time to the
performance of his duties hereunder.
4. COMPENSATION
a. The Company shall pay Executive for all services to be performed
hereunder during the term of this Agreement. The Company agrees to pay
to Executive an annual salary of $190,000.00, payable in semimonthly
installments in arrears on the fifteenth and last day of each calendar
month, the first such installment to be payable for the period ended
March 31, 1997.
b. The Company may, in the discretion of the Board, provide incentive
awards to Executive.
c. The Company shall provide Executive with an interest free loan of
$55,000.00, which Executive must repay to the Company on or before the
third anniversary of the Commencement Date. In addition, in the event
Executive voluntarily terminates his employment with the Company or his
employment is terminated by the Company for Cause, the loan must be
repaid on demand by the Company.
d. The Company shall pay Executive's initiation fees and membership dues
for both a luncheon club and a country club of Executive's choosing,
located in the Houston, Texas metropolitan area.
e. The Company shall, effective the Commencement Date, grant Executive a
total of 575,000 options to purchase shares of the Company's common
stock for a purchase price of $1.00 per share (the "Options"), which
shall vest in cumulative annual installments as follows: (i) 331/3% of
such Options on the first anniversary of the Commencement Date, (ii)
662/3% of such Options on the second anniversary of the Commencement
Date, and (iii) 100% of such Options on the third anniversary of the
Commencement Date.
f. In addition to the payments and awards set forth in paragraphs a,b,c,d
and e above:
i. During the term of this Agreement, upon submission of a
reasonable accounting, the Company shall reimburse Executive for
all reasonable travel, entertainment, and other business expenses
that are in compliance with company policy related to his
employment hereunder.
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ii. During the term of this Agreement, Executive shall be eligible
for the Company's employee benefit programs on the terms on which
the same are extended to the Company's executives generally,
including but not limited to a health care plan, five weeks
vacation and partial reimbursement for parking expenses.
The Company shall have the right to deduct from all payments to be made
under this Agreement any federal, state, or local taxes required by law to
be withheld from such payments.
5. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
Executive agrees that, during his employment by the Company and for 1 year
thereafter, he will not use or disclose to others, directly or indirectly,
any confidential information relating to the business, prospects, or plans
of the Company or its subsidiaries. Notwithstanding the previous sentence,
Executive shall not be in violation of this section in the event of a
disclosure pursuant to a court action or governmental rule, regulation, or
proceeding (hereinafter referred to as an "Ordered Disclosure") provided
Executive has notified the Company of such Ordered Disclosure within five
business days of being personally served with such Ordered Disclosure.
Executive agrees to cooperate in good faith with the Company in responding
to such Ordered Disclosure in order to prevent, limit or impose
restrictions on such Ordered Disclosure. In no event, however, shall this
section require Executive to take action or otherwise cause Executive to
be in violation of any law or result in contempt of such Ordered
Disclosure.
Upon termination of his employment with the Company, Executive shall
surrender to the Company any and all work papers, reports, manuals,
documents, and the like (including all originals and copies thereof) in
his possession which contain confidential information relating to the
business, prospects, or plans of the Company or its affiliates.
Executive agrees that following any termination of his employment with the
Company, he will endorse strategies of the Company, and will not disclose
or cause to be disclosed any negative, adverse or derogatory comments or
information of a substantial nature about the Company or its management,
or about any product or service provided by the Company, or about the
Company's prospects for the future. The Company may seek the assistance,
cooperation or testimony of Executive following any such termination in
connection with any investigation, litigation or proceeding arising out of
matters within the knowledge of Executive and related to his position as
an officer or employee of the Company, and in any instance, Executive
shall provide such assistance, cooperation or testimony and the Company
shall pay Executive's reasonable costs and expenses in connection
therewith. In addition, if such assistance, cooperation or testimony
requires more than a nominal commitment of Executive's time, the Company
will compensate Executive for such time at a per diem rate derived from
Executive's salary from the Company at the time of Executive's
termination.
6. TERMINATION
a. This Agreement shall automatically terminate upon Executive's death or
Disability. In addition, this Agreement may be terminated by the
Company or Executive at any time for any reason whatsoever. Any
termination of Executive's employment by the Company or by Executive
(other than termination pursuant to the first sentence of this
subsection a.) shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 16.
b. Upon termination of this Agreement for any reason, Executive shall be
entitled to receive, and the Company shall pay Executive (or, if such
termination is caused by Executive's death, his estate or as may be
directed by the legal representatives of such estate) within 30 days of
the termination date, any unpaid amounts earned by or payable to
Executive through the date of termination under Sections 4.a., 4.b. (if
any) and 4.f., which amounts shall be reduced by any amounts owed to
the Company pursuant to the loan provided for in Section 4.c. (and the
principal amount of such loan shall be reduced by a corresponding
amount).
c. In addition to the amounts to which Executive is entitled under Section
6.b., if this Agreement is terminated by the Company other than for
Cause, the Company shall pay Executive in a single lump-sum payment an
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amount equal to the compensation that would have been payable under
Section 4.a. over the next 24 months had this Agreement not otherwise
been terminated, which amounts shall be reduced by any amounts owed to
the Company pursuant to the loan provided for in Section 4.c. (and the
principal amount of such loan shall be reduced by a corresponding
amount). Such compensation shall be the only compensation payable as a
result of such termination and, except as may otherwise be provided in
any other agreement or option plans, Executive shall not be entitled to
any accrued bonuses, acceleration of vesting with respect to any
options or acceleration of any other rights he may have under any
employee benefit plan or arrangement, it being understood and agreed
that the Company may terminate this Agreement at any time with or
without Cause by notice to the Executive as provided herein. The
amounts payable under this Section 6.c. shall be paid no later than 30
days after the date of termination.
7. RESTRICTIVE COVENANT
During the term of Executive's employment with the Company, and (except as
provided in clause (c) below) for a period of one year following the
termination of Executive's employment with the Company for any reason,
including termination occasioned by the expiration of this Agreement,
Executive shall not:
a. interfere with the relationship of the Company or any of its employees,
agents or representatives;
b. directly or indirectly divert or attempt to divert from the Company any
property acquisition in which the Company has been actively engaged
during the term hereof; or
c. directly or indirectly render engineering or other services of the
nature of those provided to the Company to any person, company or
entity other than the Company, provided, this clause (c) shall
terminate upon the termination of Executive's employment with the
Company.
8. INDEMNIFICATION
Except to the extent attributable to Executive's willful misconduct or
actions leading to the Company's termination of this Agreement for Cause,
the Company shall indemnify Executive against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him in connection with any action,
suit, or proceeding to which Executive has been made a party by reason of
his capacity as Executive Officer of the Company if Executive acted in
good faith and in a manner Executive reasonably believed to be in or not
opposed to the best interest of the Company and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
Executive's conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that Executive did not act in good faith and in a manner which
Executive reasonably believed to be in or not opposed to the best interest
of the Company, and with respect to any criminal action or proceeding, had
reasonable cause to believe that Executive's conduct was unlawful.
9. ADDITIONAL REMEDIES
In the event of a breach or a threatened breach of the terms of Section 5
or 7 of by Executive, the Company shall, in addition to all other
remedies, be entitled to a temporary or permanent injunction and/or a
decree for specific performance, in accordance with the provisions hereof,
without showing any actual damage or that monetary damages would not
provide an adequate remedy and without any bond or other security being
required.
10. NONASSIGNMENT
This Agreement is personal to Executive and shall not be assigned by him.
Executive shall not hypothecate, delegate, encumber, alienate, transfer,
or otherwise dispose of his rights and duties hereunder. The Company may
assign this Agreement without Executive's consent to any other entity who,
in connection with such assignment,
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acquires all or substantially all of the Company's assets, or into or with
which the Company is merged or consolidated.
11. WAIVER
The waiver by the Company of a breach by Executive of any provision of
this Agreement shall not be construed as a waiver of any subsequent breach
by Executive.
12. SEVERABILITY
If any clause, phrase, provision, or portion of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable under any applicable law, such event shall not affect or
render invalid or unenforceable the remainder of this Agreement and shall
not affect the application of any clause, provision, or portion hereof to
other persons or circumstances.
13. DISPUTES
Each of the parties hereto hereby irrevocably agrees that any legal action
or proceeding arising out of this Agreement shall be brought only in the
state or federal courts located in the state of Texas. Each party hereto
hereby irrevocably consents to the service or process outside the
territorial jurisdiction of such courts in any such action or proceeding
by the mailing of such documents by registered United States mail, postage
prepaid, if to the Company to the address of its principal place of
business and if to Executive to the address listed in the Company's books
and records.
14. RELEVANT LAW
This Agreement shall be construed by, subject to, and governed in
accordance with the internal laws of the State of Texas.
15. NOTICES
All notices, requests, demands, and other communications in connection
with this Agreement shall be made in writing and shall be deemed to have
been given when delivered by hand or 48 hours after mailing at any general
or branch United States post office by registered or certified mail,
postage prepaid, addressed as follows, or to such other address as shall
have been designated in writing by the addressee:
a. If to the Company:
Xxxxxx Oil & Gas Corporation
Suite 1100
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Corporate Secretary
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b. If to Executive:
Xxxxx X. Xxxxxxx
Xxxxxx Oil & Gas Corporation
Suite 1100
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
16. Entire Agreement
This Agreement sets forth the entire understanding of the parties and
supersedes all prior agreements, arrangements, and communications, whether
oral or written, and this Agreement shall not be modified or amended
except by written agreement of the Company and Executive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first set forth above.
COMPANY:
XXXXXX OIL & GAS CORPORATION
By /S/ XXXX X. XXXXXXX
Xxxx X. Xxxxxxx
President and Chief Executive Officer
EXECUTIVE:
/S/ XXXXX X. XXXXXXX
Xxxxx X. Xxxxxxx
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