EXHIBIT 10.2
WARLEY SETTLEMENT AGREEMENT
This Warley Settlement Agreement ("Agreement") is made and entered into
as a compromise among the Parties for the complete and final settlement of their
claims, differences and alleged causes of action as set forth below.
PARTIES
The signatories to this Agreement are Midland Resources, Inc., a Texas
corporation ("Midland" and the "Company") and Xxxx X. Xxxxxx III ("Warley"). The
signatories to this Agreement are referred to jointly as the "Parties."
PREAMBLE
WHEREAS, Midland is in the business of acquiring, operating and
producing oil and gas properties;
WHEREAS, Warley was hired by Midland to serve as its President at its
offices in Houston, Texas;
WHEREAS, Warley and Midland entered into an Employment Contract dated
January 3, 1995, and an Amendment to Employment Contract dated January 8, 1996
(collectively, the "Employment Contract"), copies of which are attached as
Exhibit A;
WHEREAS, Warley was employed continuously by Midland until March 27,
1998 (the "Separation Date"), at which time his employment with Midland was
terminated;
WHEREAS, Warley continues to serve as a director of Midland;
WHEREAS, Midland has concurrently entered into a definitive agreement
(the "Vista Merger Agreement") with Vista Resources Partners, L.P. ("Vista")
which contemplates generally that Midland will merge with a subsidiary of Vista
Energy Resources, Inc. ("Vista-Newco"), the shareholders and warrant holders of
Midland will receive shares and warrants, respectively, of Vista-Newco, and
that the partners of Vista will exchange their partnership interests in Vista
for shares and warrants of Vista-Newco, with Vista-Newco becoming a new publicly
held company (the "Vista Merger'");
WHEREAS, Midland has advised Warley in writing to consult with a
lawyer;
WHEREAS, Warley has been given a period of at least twenty-one (21)
days to consider this Agreement;
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WHEREAS, the Parties have consulted with independent counsel with
respect to the terms, meaning and effect of this Agreement;
WHEREAS, Warley has represented and hereby reaffirms that he does not
believe that either he or Midland have engaged in any conduct involving Midland
that is or may be illegal in any respect, or in violation of any Midland policy,
including Midland's policy prohibiting sexual harassment;
WHEREAS, each Party understands that the other regards the above
representations by him or it as material and that each Party is relying on these
representations in entering into this Agreement; and
WHEREAS, the Parties intend that this Agreement, along with the
attached Exhibits, as described below, shall govern all issues related to
Warley's employment and separation from Midland.
NOW, THEREFORE, in consideration of the mutual promises and obligations
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties agree as
follows:
1. DEFINITIONS
1.1 "The Company" shall mean and include Midland Resources, Inc.
and all of its predecessors, successors, affiliated companies, assigns, present
and former officers, directors, employees, shareholders, attorneys and agents,
whether in their individual or official capacities.
1.2 "Warley" shall mean Xxxx X. Xxxxxx, III, and any person
claiming by, through or under him.
1.3 The "Parties" shall mean Warley and the Company.
1.4 "Midland" shall mean Midland Resources, Inc.
1.5 A "Change in Control" shall be deemed to have occurred if:
(a) the Vista Merger or any similar or related transactions is
consummated;
(b) the Company merges or consolidates with any other corporation
(other than a wholly-owned direct or indirect subsidiary of
the Company as of the date of this Agreement) and is not the
surviving corporation (or survives as a subsidiary of another
corporation);
(c) the Company sells all or substantially all of its assets to
any other person or entity;
(d) the Company is dissolved;
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(e) any third person or entity, or a trustee or committee of any
qualified employee benefit plan of the Company) together with
his, her or its affiliates shall become (by tender offer or
otherwise), directly or indirectly, the beneficial owner of
forty percent (40%) or more of the voting stock of the
Company;
(f) the individuals who constitute the Board of Directors of the
Company as of the Effective Date (the "Incumbent Board") shall
cease for any reason to constitute at least a majority of the
Board of Directors; except that any person becoming a director
whose election or nomination for election was approved by a
majority of the members of the Incumbent Board shall be
considered, for the purposes of this paragraph, a member of
the Incumbent Board; or
(g) any other event that a majority of the Board of Directors, in
its sole discretion, shall determine constitutes a Change in
Control.
1.6 "Material Breach" shall mean a judicial determination that
either Party has unjustifiably failed or refused to perform his or its
obligations as defined in paragraphs 3 and 4 of this Agreement.
2. EFFECTIVE DATE; REMEDIES
2.1 The Effective Date of this Agreement shall be March 27, 1998.
This Agreement shall automatically terminate on the first to occur of (a) the
termination of the Vista Merger Agreement, or (b) December 31, 1998. Upon
termination, this Agreement shall be void and unenforceable in its entirety.
2.2 If Warley commits a Material Breach of this Agreement, the
Parties agree that Midland shall be excused from any remaining performance under
paragraphs 3.1, 3.2, 3.3 and 3.4, and that this remedy shall be Midland's sole
remedy.
2.3 If Midland commits a Material Breach of this Agreement, the
Parties agree that Warley may (a) accelerate the due date of all remaining
payments under paragraphs 3.1 and 3.4, so that they are immediately due and
payable, and (b) if not previously performed, recover actual damages caused by
Midland's breach of paragraphs 3.5, 3.6, 3.7, 3.8 and 3.9, or any of them, and
that these remedies shall be Warley's sole remedies.
2.4 The prevailing Party in any proceeding to enforce or avoid the
terms of this Agreement shall be entitled to recover his or its reasonable
attorney's fees and costs from the nonprevailing Party.
3. COMPANY'S OBLIGATIONS
3.1 (a) Beginning March 27, 1998, and ending on the first to
occur of (i) the effective date of the Vista Merger, (ii) the termination of the
Vista Merger Agreement or (iii) December 31,
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1998, the Company agrees to pay Warley the sum of $11,390.82 per month, with
one-half of such sum paid on the first and fifteenth of each month, less amounts
required to be withheld by local, state or federal law, and/or other deductions
authorized by Warley in writing. If the Vista Merger occurs, then the payments
provided for in this Section 3.1(a) shall also be paid until the first payment
becomes payable under Section 3.2(b)
(b) On the effective date of the Vista Merger, the Company agrees
to pay to Warley the sum of $1,300,000 (the "Settlement Payment"). Warley agrees
that the Company shall reduce the Settlement Payment by the amount Warley is
obligated to pay under the Xxxx Release, and the Company agrees to make such
payment to Xx. Xxxx in accordance with the Xxxx Release. The remaining balance
of the Settlement Payment in the amount of $1,200,000 shall be paid in the
following manner. Beginning with a payment on the first day of the month
immediately following the effective date of the Vista Merger, and ending with a
payment on the first day of the sixtieth month from such date, the Company
agrees to pay $20,000 to Warley, less amounts required to be withheld by local,
state or federal law, and/or other deductions authorized by Warley in writing.
The Company agrees that all such payments under this 3.1(b) shall be made by
cheek payable to "Xxxx X. Xxxxxx III," and mailed by postage paid first class
mail to Warley's address set forth herein, and are due on the first day of each
month. If a payment does not reach Warley by the 10th day of each month, the
Company will upon written notice from Warley, issue stop payment instructions to
such missing check and immediately issue a replacement check that will be sent
to Warley's address by overnight courier service. A payment not made or sent
according to the above procedure will accrue interest at the rate of one and
one-half percent (1-1/2%) per month from the 10th day of the month in which
such payment was due until paid.
Warley acknowledges that he has received all payments required by
Section 3.1(a) as of the execution of this Agreement.
3.2 omitted.
3.3 Warley shall have the option at any time up to one year after
any Change in Control to elect to receive a lump sum payment equal to the
present value (using a discount factor of six percent (6%)) of the remaining
payments due Warley under paragraph 3.1 at the time of the election. Likewise,
the Company may elect at any time after one year following the date of any
Change in Control to pay a lump sum calculated in the same manner. The lump sum
payment shall be due to Warley within ten (10) days after either Party notifies
the other in writing of his or its election under this paragraph.
3.4 For a period beginning April 1, 1998 ending on the earlier of
(i) the termination of the Vista Merger Agreement, or (ii) September 1, 1999 the
Company shall continue to pay an amount (equal to the employer's portion of the
applicable insurance premiums) for Warley's and his current eligible dependent's
medical and dental insurance COBRA continuation coverage, which on the date
hereof is $324.36 per month.
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3.5 Within thirty (30) days after the date of this Agreement,
Warley shall remove from the Company's offices those personal effects described
in Exhibit B.
3.6 The Company agrees to convey to Warley the vehicles and items
described on Exhibit C, free of all liens and encumbrances, upon any Change in
Control. Until the termination of this Agreement or a Change in Control, Warley
may continue to use those items listed on Exhibit C that are currently in his
possession.
3.7 Warley agrees that, upon a Change in Control, all his existing
stock options for 15,000 shares of Midland's common stock at an exercise price
of $2.375 per share (the "Options"). shall expire at 5:00 p.m. on the 120th day
following such a Change in Control (including the Vista Merger), unless earlier
exercised.
3.8 Midland agrees to reimburse Warley for all reasonable travel
expenses incident to his continuing service as a director of Midland, and any
other reasonable business expenses approved in advance by the Company.
3.9 The Company agrees to reimburse Warley upon a Change in
Control for all legal and professional fees incurred by Warley in connection
with previous disputes between the Parties and the termination of his employment
and the preparation and negotiation of this Agreement, provided that the
Company's obligation under this paragraph shall not exceed $20,000.00.
3.10 Midland shall return one fully executed original of this
Agreement to Warley simultaneously with the execution of the Vista Merger
Agreement.
4. WARLEY'S OBLIGATIONS
4.1 Simultaneously with the execution of the Vista Merger
Agreement, Warley shall execute and return to counsel for Midland two originals
of this Agreement.
4.2 Warley agrees that he will support the Vista Merger, including
without limitation the execution of documents and the taking of, or refraining
from taking, actions, as contemplated in the Vista Merger Agreement. Warley
further agrees to support any transaction similar in form to the Vista Merger
Agreement, insofar as his support is consistent with his fiduciary duties as a
director of Midland, including the duty to exercise his informed and independent
judgment with respect to the proposed transaction.
4.3 Warley agrees that he will not contact or communicate with any
existing Midland shareholder or warrant holder (other than existing officers,
directors of Midland), directly or indirectly, in a manner which disparages or
is intended to disparage the Vista Merger as contemplated in the Vista Merger
Agreement.
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4.4 Contemporaneously with the execution of this Agreement, Warley
shall execute and deliver, and thereafter comply with the terms of the Voting
Agreement. attached as Exhibit D, in his capacity as an individual shareholder
of Midland.
4.5 Warley agrees to comply with the surviving portions of the
Employment Contract as defined in paragraph 6.2(a). The remainder of the
Employment Contract shall be void and unenforceable.
5. RELEASE BY WARLEY
5.1 Except as specifically set forth in Paragraph 5.3, Warley, for
himself, his attorneys, agents, heirs, executors, administrators, successors and
assigns, hereby releases, waives and discharges the Company from each and every
claim, action or right of any sort, known or unknown, absolute or contingent,
(i) arising on or before the Effective Date or (ii) any and all claims relating
to or arising from the adoption, execution and performance of the Vista Merger
Agreement and related documents insofar as the terms of such agreements and
documents exist on the date hereof. The foregoing release includes, but is not
limited to, any claim for salary, wages or benefits, any claim of discrimination
on the basis of race, sex, marital status, sexual preference, national origin,
handicap or disability, age, veteran status, or special disabled veteran status;
any other claim based on a statutory prohibition; any claim arising out of or
related to the Employment Contract, or any other express or implied employment
contract; any other contract affecting terms and conditions of employment; any
claim for breach of any covenant of good faith and fair dealing; any tort
claims; and any personal gain with respect to any claim arising under the qui
tam provisions of any state or federal law.
5.2 Warley represents that he understands the foregoing release
provision, that rights and claims under the Age Discrimination in Employment Act
of 1967 are among the rights and claims against the Company he is releasing and
that he understands that he is not releasing any rights or claims arising after
the Effective Date, except insofar as a claim relates to or arises from the
adoption, execution and performance of the Vista Merger Agreement and related
documents insofar as the terms of such agreements and documents exist on the
date hereof.
5.3 Warley's release does not include (a) the Company's
obligations as defined in this Agreement; or (b) Warley's right to defense and
indemnification for claims relating to his alleged actions in his capacity as an
officer or director of the Company. Warley agrees to cooperate with counsel for
the Company with respect to any litigation as to which Warley has a right of
defense or indemnification. Warley shall not be entitled to indemnification for
any payment made by, or for his benefit, pursuant to the Release and Hold
Harmless Agreement dated May 22, 1998 among Warley, the Company and Xxxxxxx X.
Xxxx (the "Xxxx Release"), attached as Exhibit X.
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6. RELEASE BY COMPANY
6.1 Except as specifically set forth in Paragraph 6.2, the Company
releases, waives and discharges Warley, his attorneys, agents, heirs, executors,
administrators, successors and assigns from each and every claim, action or
right of any sort, known or unknown, arising on or before the Effective Date.
6.2 The Company's release does not include:
(a) the following provisions of the Employment Contract, which
shall remain in effect in accordance with their terms:
(i) Paragraph 6.1 of the Employment Contract (Trade
Secrets);
(ii) Paragraph 6.2 of the Employment Contract
(Confidential Information);
(iii) Paragraph 6.3 of the Employment Contract (Covenant
not to Compete), except that if a Change In Control
occurs, in which event the Company agrees that this
portion of the Employment Contract shall be void and
not binding;
(iv) Paragraph 6.5 of the Employment Contract (Inventions
and Patents).
(b) Warley's obligations as defined in paragraph 4 of this
Agreement.
(c) Any claims brought by any shareholder derivatively on behalf
of the Company relating to or arising out of Warley's service
as a director of the Company.
7. XXXX RELEASE
7.1 Midland, Warley and Xxxxxxx X. Xxxx have entered into a
Release and Hold Harmless Agreement dated May 22, 0000 (xxx "Xxxx Release"),
attached as Exhibit E.
7.2 If and when the Vista Merger is consummated, the Parties agree
that Midland shall pay, on behalf of Warley, the amount due to Xxxx from Warley
pursuant the Xxxx Release.
7.3 Midland and Warley agree that to the extent the Company is not
adversely economically impacted, the Xxxx Advance shall be a tax-neutral event
for Warley.
8. NOTICES
8.1 All notices to Midland under this Agreement shall be sent by
United States mail or messenger to:
Midland Resources, Inc.
Attention: Xxxxxx X. Xxxxxxxx
President
616 F.M. 0000 Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
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8.2 All notices and payments to Warley under this Agreement shall
be sent by United States mail or messenger to:
Xxxx X. Xxxxxx III
0000 Xxxxxxxx
Xxxxxxxx, Xxxxx 00000-0000
8.3 Either party may change his or its address upon reasonable
written notice delivered to the other by United States mail or messenger.
9. MISCELLANEOUS
9.1 The Parties acknowledge and agree that this Agreement is the
result of a compromise and shall never be construed as, or said by either of
them to be, an admission by either Party of any liability, wrongdoing, or
responsibility, and the Parties expressly disclaim any such liability,
wrongdoing, fault, or responsibility.
9.2 This Agreement and the documents referenced in it constitute
the entire agreement between the Parties. This Agreement may be executed in
identical counterparts, each of which shall constitute an original and all of
which shall constitute one and the same agreement.
9.3 Warley represents that he has not filed or authorized the
filing of any complaints, charges to lawsuits against the Company with any
federal, state or local court, governmental agency, or administrative agency,
and that if, unbeknownst to Warley, such a complaint has been filed on his
behalf, he will use his best efforts to cause it to immediately be withdrawn and
dismissed with prejudice.
9.4 The Company represents that it has not filed or authorized the
filing of any complaints, charges or lawsuits against the Warley with any
federal, state or local court, governmental agency, or administrative agency,
and that if, unbeknownst to the Company, such a complaint has been filed on its
behalf, it will use its best efforts to cause it to immediately be withdrawn and
dismissed with prejudice.
9.5 This Agreement may not be modified or amended except by a
writing signed by all Parties. No waiver of this Agreement or of any of the
promises, obligations, terms, or conditions contained herein shall be valid
unless it is in writing signed by the party against whom the waiver is to be
enforced.
9.6 If any part or any provision of this Agreement shall be
finally determined to be invalid or unenforceable under applicable law by a
court of competent jurisdiction, that part shall
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be ineffective to the extent of such invalidity or unenforceability only,
without in any way affecting the remaining parts of the affected provision or
the remaining provisions of This Agreement.
9.7 The Parties have cooperated in the preparation of this
Agreement and, hence, the Agreement shall not be interpreted or construed
against or in favor of any Party by virtue of the identity, interest, or
affiliation of its preparer.
9.8 This Agreement is made and shall be enforced pursuant to the
laws of the State of Texas, and all performance required by the terms of this
Agreement shall take place in Xxxxxx County, Texas.
9.9 The Parties warrant that no promise or representation has been
made to him or it in executing this Agreement other than those expressly stated
in the written provisions of this Agreement; and that they do not rely on any
promise, statement. or representation of the other Party or any agent of the
other Party not expressly stated in this Agreement, or on any alleged obligation
of the other Party or his or its agents to disclose any information. The Parties
further warrant that each is relying on the Party's own judgment and has been
advised by legal counsel of the Party's choice.
9.10 The Parties further warrant that their undersigned
representatives are legally competent and fully authorized to execute and
deliver this Agreement.
DATED: May 22, 1998.
[SIGNATURE PAGE FOLLOWS]
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XXXX X. XXXXXX III MIDLAND RESOURCES, INC.
/s/ Xxxx X. Xxxxxx III By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------ -----------------------------------
Xxxx X. Xxxxxx III Printed Name: Xxxxxx X. Xxxxxxxx
Date: May 22, 1998 Title: President
Date: May 22, 1998
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EXHIBIT A
EMPLOYMENT CONTRACT DATED JANUARY 3, 1995,
AND
AMENDMENT TO EMPLOYMENT CONTRACT DATED JANUARY 8, 1996
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EMPLOYMENT CONTRACT
By this Agreement effective January 1, 1995, Midland Resources, Inc., a
Texas corporation, referred to in this Agreement as "Employer," located at 000
X. Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx, 00000 employs Xxxx X. Xxxxxx III referred
to in this Agreement as "Employee," who accepts employment on the following
terms and conditions:
Article 1 - TERM OF EMPLOYMENT
1.1 Term of Employment. By this Agreement, the Employer employs
the Employee, and the Employee accepts employment with the Employer, for a
period of five (5) years beginning on the 1st day of January, 1995; however,
this Agreement may be terminated earlier, as provided in Article 7, below.
Article 2 - COMPENSATION
2.1 Basic Compensation. As basic compensation for all services
rendered under this Agreement, the Employee shall be paid by the Employer a
salary of $204,000 per year, payable in equal semi-monthly installments of
$8,500 during the period of employment. The amount paid is to be pro rated for
any partial employment. The basic compensation stated herein is gross salary.
Employee's basic compensation will be reviewed and increased at a minimum of
five percent (5%) semi-annually.
2.2 Incentive Compensation. In addition to the basic compensation
hereinabove stated, the Employee may be entitled to receive incentive
compensation, including but not limited to bonuses, stock options, and stock
appreciation rights, ("Incentive Compensation") as determined from time to time
by the Compensation Committee of the Board of Directors ("Compensation
Committee") of the Employer. Any Incentive Compensation the Compensation
Committee awards Employee shall not contain any vesting or termination
provisions.
2.3 Vacation Pay. The Employee shall be entitled to an annual
vacation leave of four weeks at full pay.
Article 3 - DUTIES OF EMPLOYEE
3.1 Duties. The Employee is employed as President and agrees to
serve as an officer of Employer as determined from time to time by the
Employer's Board of Directors. The Employee shall perform all duties as may be
required of Employee by the Board of Directors from time to time during the term
of employment.
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3.2 Extent of Services. The Employee shall devote eighty percent
(80%) of his productive time, ability, attention, and energies to the business
of the Employer during the term of this Agreement.
3.3 Pilot Training. The Employee shall remain current on training
in any Employer owned aircraft the Employee may fly. Any training Employee may
need pursuant to this paragraph shall be provided by Employer.
Article 4 - EMPLOYEE BENEFITS
4.1 Medical Benefits. The Employer agrees to include the Employee
and his dependents in any hospital, surgical, and medical benefit plan adopted
by the Employer and as amended and/or changed from time to time by Employer's
Board of Directors. Employer shall pay for any medical procedures not otherwise
covered by insurance up to an amount of $10,000 annually.
4.2 Annual Physical. Employee shall receive an executive physical
annually. The expense of such physical shall be paid by Employer in addition to
those expenses covered in paragraph 4.1.
4.3 Disability Benefit. In the event Employee is disabled in any
way that prevents him from performing the responsibilities contained herein,
Employee shall be entitled to one-half (1/2) of the compensation described in
Paragraph 2.1 herein for ten years following the date of the disability.
4.4 Key Man Life Insurance. The Employer may elect to maintain
key-man life insurance on Employee for the term of this Agreement. The Employer
shall pay all costs associated with such policy. Employee agrees to cooperate
with any and all physical exams necessary to obtain this policy.
Article 5 - REIMBURSEMENT OF EXPENSES INCURRED BY EMPLOYEE
5.1 Business Expenses. The Employee shall be authorized from time
to time in the form of an operating budget approved by Employer's Board of
Directors to incur reasonable business expenses for promoting the business of
the Employer. The Employer will reimburse the Employee for all such expenses
upon the Employee's monthly presentation and itemized account of such
expenditures. Employee agrees to abide by the guidelines for reimbursable
business expenses which may be adopted by Employer's Board of Directors from
time to time.
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Article 6 - PROPERTY RIGHTS OF PARTIES
6.1 Trade Secrets. During the term of employment, the Employee
will have access to and become familiar with various trade secrets, consisting
of devices, secret inventions, processes, compilations of information, records,
and specifications, owned by the Employer and regularly used in the operation of
the business of the Employer. The Employee shall not disclose any such trade
secrets, directly or indirectly, nor use them in any way, either during the term
of this Agreement or at any time thereafter, except as required in the course of
his employment by Employer. All files, records, documents, drawings,
specifications, equipment, and similar items relating to the business of the
Employer, whether or not prepared by the Employee, shall remain the exclusive
property of the Employer and shall not be removed from the premises of the
Employer under any circumstances without the prior written consent of the
Employer.
6.2 Confidential Information. Employee is employed by Employer in
a position of trust and confidence in which Employee will acquire confidential
information of Employer. All information relating to the business of Employer,
including but not limited to company records, the identity and addresses of
customers and suppliers of Employer, the Agreements of Employer with customers
and suppliers, including pricing information and technical and financial data
and information of Employer, or information relating to the business of Employer
or the marketing techniques and sales procedures of Employer are confidential
and shall be held in strict confidence by Employee during employment and after
the termination of employment. Employer intends for Employee to keep all
confidential information protected and undisclosed except as required by the
fulfillment of Employee's duties for Employer.
6.3 Covenant not to Compete. Employee covenants not to compete
with Employer for a period of six (6) months immediately following the
termination of Employee's employment by Employer, in the same geographical areas
where Employer conducted its operations during the Employee's period of
employment, the proscribed competition being defined as any form of ownership
and/or participation as owner, principal, agent, partner, officer, employee,
independent contractor, consultant or shareholder holding more than ten percent
(10%) in a company engaged in the oil and gas business except in those
geographical areas where Employee already owns, either directly or indirectly,
said interests.
6.3.1 Ancillary Agreement. Employee acknowledges that this
covenant not to compete is ancillary to this Agreement which Agreement
Employee acknowledges to be enforceable in all respects.
6.3.2 Employer's Protectible Interests. Employee acknowledges
that Employer has valuable relationships with Employer's customers,
suppliers, employees, and other business relationships for which
Employer has expended large sums of money, much Employee time and
effort, and has made other financial commitments to create. Employee
acknowledges that these relationships constitute legitimate business
interests
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of Employer which this covenant not to compete is designed to protect
without imposing on Employee a greater restraint than is necessary to
protect Employer's goodwill and other legitimate business interests.
6.3.3 Injunctive Relief. Employee agrees that Employer will
not have all the remedies necessary to enforce this covenant not to
compete without injunctive relief and agrees that injunctive relief is
available to the Employer for the enforcement of this covenant not to
compete.
6.3.4 Court Costs and Attorney's Fees. The prevailing party
in any litigation to enforce this covenant shall be entitled to costs
of court and reasonable attorney's fees.
6.3.5 Reformation of Covenant. Employee agrees that if a
court shall find this covenant not to compete unreasonable in any
respect the court shall reform this covenant not to compete so that
its terms and conditions are reasonable.
6.4 Return of Employer's Property. On the termination of
employment or whenever requested by the Employer, the Employee shall immediately
deliver to the Employer all property in the Employee's possession or under the
Employee's control belonging to Employer.
6.5 Inventions and Patents. The Employee agrees that any
inventions, designs, improvements, and discoveries made by the Employee during
the term of his employment, solely or jointly with others, which are made with
the Employer's equipment, supplies, facilities, trade secrets, or time, or which
relate to the business of the Employer or the Employer's actual or anticipated
research or development, or which result from any work performed by the Employee
for the Employer, shall be the exclusive property of the Employer. The Employee
agrees that he will promptly and fully inform and disclose to the Employer all
such inventions, designs, improvements, and discoveries, and the Employee
promises to assign such inventions to the Employer. The Employee also agrees
that the Employer shall have the right to keep such inventions as trade secrets,
if the Employer chooses. The Employee shall assist the Employer in obtaining
patents in the United States and in all foreign countries on all inventions,
designs, improvements, and discoveries deemed patentable by the Employer, and
shall execute all documents and do all things necessary to obtain letters of
patents, to invest the company with full and extensive titles to the patents,
and to protect the patents against infringement by others.
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Article 7 - TERMINATION
7.1 Termination Prior to Expiration of Employment Term. This
Agreement may be terminated, and the Employee discharged, prior to the
expiration of its terms as set forth herein only by mutual agreement of Employee
and Employer.
7.2 Termination by Employer for Cause. The Employer may at its
option terminate this Agreement by giving written notice of termination to the
Employee without prejudice to any other remedy to which the Employer may be
entitled at law, in equity, or under this Agreement, if the Employee:
7.2.1 Willfully breaches or habitually neglects the duties
that the Employee is required to perform under the terms of this
Agreement; or
7.2.2 Willfully violates reasonable and substantial rules
governing Employee's performance, after notice in writing of the rules
governing Employee's performance; or
7.2.3 Refuses to perform the duties assigned to the Employee
by the Employer's Board of Directors; or
7.2.4 Is convicted of acts defined by the penial laws of the
United States or any of the various states of the United States as a
felony.
7.3 Termination on Grounds other than for Good Cause. This
Agreement shall immediately on the occurrence of any one of the following events
without cause:
7.3.1 The occurrence of circumstances that make it impossible
for the business of the Employer to be continued; or
7.3.2 The death of the Employee; or
7.3.3 The continued incapacity on the part of the Employee to
perform his duties for a continuous period of 180 days, unless waived
by the Employer; or
7.3.4 Employer has a receiver of the Employer's assets or
property appointed because of Employer's insolvency; or
7.3.5 Employer makes a general assignment for the benefit of
Employer's creditors.
7.4 Effective Termination. In the event of the termination of this
Agreement prior to the completion of the term of employment specified in it, for
any of the reasons set forth in
Warley Settlement Agreement Page 16
Article 7, save and except Paragraph 7.2, the Employee shall be entitled to the
full compensation due employee under the terms of this contract.
Article 8 - GENERAL PROVISIONS
8.1 Notices. All notices or other communications required under
this Agreement may be effected either by personal delivery in writing or by
certified mail, return receipt requested. Notice shall be deemed to have been
given when delivered or mailed to the parties at their respective addresses as
set forth above or when mailed to the last address provided in writing to the
other party by the addressee.
8.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, specifically
including without limitation the covenant not to compete contained in this
Agreement.
8.3 Venue. This Agreement is performable in Midland County, Texas.
8.4 Agreement to Submit to Arbitration on Written Request. Any
controversy between the parties to this Agreement involving the construction or
application of any of the terms, covenants, or conditions of this Agreement,
shall on the written request of one party served on the other, be submitted to
arbitration. Arbitration shall comply with and be governed by the provisions of
the Texas General Arbitration Act, Articles 224 through 238-6 of the Revised
Civil Statutes of Texas. Each of the parties to this Agreement shall appoint one
person as an arbitrator to hear and determine the dispute, and if they shall be
unable to agree, then the two arbitrators so chosen shall select a third
impartial arbitrator whose decision shall be final and conclusive upon the
parties to this Agreement. The expenses of arbitration proceedings conducted
pursuant to this paragraph shall be borne by the parties in such proportions as
the arbitrators shall decide.
8.5 Entirety. This Agreement constitutes the entire understanding
between the parties. No Agreements, representations, or warranties other than
those specifically set forth in this Agreement shall be binding on any of the
parties unless set forth in writing and signed by both parties. This Agreement
supersedes all other prior agreements, either oral or in writing, between the
parties with respect to the employment of the Employee by the Employer and
contains all of the covenants and agreements between the parties with respect to
such employment in any manner. Each party to this Agreement acknowledges that no
inducements or promises, oral or otherwise, have been made by any party, or
anyone acting on behalf of any party, that are not embodied in this Agreement.
8.6 Modification. This Agreement shall not be amended, modified,
or altered in any manner except in writing signed by both parties.
Warley Settlement Agreement Page 17
8.7 Assignment. The Employer and Employee acknowledge that the
services to be rendered by the Employee under this Agreement are unique and
personal. Therefore, neither party may assign any rights or delegate any duties
under this Agreement, without the other party's prior written consent. If either
the Employer or the Employee obtains a consent to an assignment of rights or
delegations of duties, rights or duties under this Agreement it shall inure only
to the benefit of the assignee or delegee named in the written instrument, and
such consent shall not be deemed as a general consent to assignment or
delegation.
EXECUTED at Midland, Texas on January 3, 1995.
EMPLOYER
Board of Directors
Midland Resources, Inc.
/Abstained/ /s/ Xxx X. Xxxxxx
------------------------------------ ------------------------------------
Xxxx X. Xxxxxx III - Chairman Xxx X. Xxxxxx, Director
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxx X. Xxxxxx
------------------------------------ ------------------------------------
Xxxxxxx X. Xxxxxxx, Director Xxx X. Xxxxxx, Director
Compensation Committee Member Vice President
/s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, Director
Compensation Committee Member
EMPLOYEE
/s/ Xxxx X. Xxxxxx III
------------------------------------
Xxxx X. Xxxxxx III
Warley Settlement Agreement Page 18
AMENDMENT TO EMPLOYMENT CONTRACT
This Amendment to Employment Contract ("Amendment") effective January
1, 1996, by and between Midland Resources, Inc., a Texas corporation, referred
to in this Amendment as "Employer", located at 00000 Xxxxxxxxxxx Xxxx Xxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000 and Xxxx X. Xxxxxx III referred to in this
Agreement as "Employee".
WITNESSETH:
WHEREAS, the Employer and the Employee desire to amend the terms of the
Employment Contract (the "Agreement") between them effective January 1, 1995;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties agree to amend the Agreement as follows:
1. TERM OF EMPLOYMENT. The term of the Agreement, as set forth in
paragraph 1.1 thereof is hereby extended through December 31, 2000. On the
anniversary of the effective date of this Amendment, the term of the Agreement
shall be automatically extended for an additional period of one (1) year;
provided that (i) the Employee is employed by the Employer on such anniversary
and (ii) neither party has, within three (3) months prior to such anniversary
given the other party written notice that the Agreement shall not be
automatically extended thereafter.
2. RATIFICATION. Except as herein amended, the provision of the Agreement
remain in full force and effect and are hereby ratified and confirmed.
EXECUTED at Houston, Texas this 8th of January, 1996.
EMPLOYER
By: /s/ Xxxx X. Xxxxxx III
----------------------------------------
Xxxx X. Xxxxxx III - President
By: /s/ Xxx X. Xxxxx
----------------------------------------
Xxx X. Xxxxx, Director
Compensation Committee Member
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxxx, Director
Compensation Committee Member
EMPLOYEE
By: /s/ X.X. Xxxxxx III
----------------------------------------
Xxxx X. Xxxxxx III
Warley Settlement Agreement Page 19
EXHIBIT B
SCHEDULE OF PERSONAL FURNITURE, EQUIPMENT
AND EFFECTS TO BE RETURNED TO WARLEY
-----------------------------------------------------------------------------------------------------
Line Quantity Description Serial. No.
-----------------------------------------------------------------------------------------------------
1 1 1
-----------------------------------------------------------------------------------------------------
2 1 Harley-Davidson (HD) Piggy Bank
-----------------------------------------------------------------------------------------------------
3 1 HD Beer Mug
-----------------------------------------------------------------------------------------------------
4 1 HD Motorcycle Model
-----------------------------------------------------------------------------------------------------
5 1 Radio Shack Model
-----------------------------------------------------------------------------------------------------
6 1 Wanted Women Poster
-----------------------------------------------------------------------------------------------------
7 1 MRI Belt Buckle
-----------------------------------------------------------------------------------------------------
8 1 Xxxxxx Paperweight
-----------------------------------------------------------------------------------------------------
9 1 Texas Brass Paperweight with base
-----------------------------------------------------------------------------------------------------
10 1 HD Big Book
-----------------------------------------------------------------------------------------------------
11 6 Photo with Frames
-----------------------------------------------------------------------------------------------------
12 1 Solar Pump Xxxx
-----------------------------------------------------------------------------------------------------
13 1 IPAA Paperweight
-----------------------------------------------------------------------------------------------------
14 3 HD Replica Models
-----------------------------------------------------------------------------------------------------
15 Aviation Books
-----------------------------------------------------------------------------------------------------
16 Misc. Engineering Books
-----------------------------------------------------------------------------------------------------
17 1 Propeller Clock
-----------------------------------------------------------------------------------------------------
18 1 Wall Clock
-----------------------------------------------------------------------------------------------------
19 1 Signed Football
-----------------------------------------------------------------------------------------------------
20 1 Xxxxx Xxxx Signed Baseball
-----------------------------------------------------------------------------------------------------
21 1 Swordfish Wood Sculpture
-----------------------------------------------------------------------------------------------------
22 1 HD Illustrated Book
-----------------------------------------------------------------------------------------------------
23 1 X.X. Xxxxxxx - Xxxx Book
-----------------------------------------------------------------------------------------------------
24 6 Framed Certificates
-----------------------------------------------------------------------------------------------------
25 3 Duck Stamp Pictures
-----------------------------------------------------------------------------------------------------
26 1 MG Picture
-----------------------------------------------------------------------------------------------------
27 1 Mounted Pheasant
-----------------------------------------------------------------------------------------------------
28 1 Framed Portrait
-----------------------------------------------------------------------------------------------------
29 1 HD Mug
-----------------------------------------------------------------------------------------------------
30 1 Electric Shoe Shine Machine
-----------------------------------------------------------------------------------------------------
31 1 Wood Whale Carving
-----------------------------------------------------------------------------------------------------
32 1 Love Brass Paperweight
-----------------------------------------------------------------------------------------------------
33 1 Desk Set
-----------------------------------------------------------------------------------------------------
34 1 Framed Photo
-----------------------------------------------------------------------------------------------------
Warley Settlement Agreement Page 20
EXHIBIT C
SCHEDULE OF ITEMS TO BE CONVEYED TO WARLEY
-----------------------------------------------------------------------------------------------------
Line Quantity Description Serial. No.
-----------------------------------------------------------------------------------------------------
1 1 1992 Cadillac Seville 1G6KY529uPU
829556
-----------------------------------------------------------------------------------------------------
2 1 1997 Dodge Ram Pickup Truck 337KC23Z7V
M577408
-----------------------------------------------------------------------------------------------------
3 1 Utility Trailer Lic. 87SLDC
-----------------------------------------------------------------------------------------------------
4 1 HP Series 4M- JPFG002328
-----------------------------------------------------------------------------------------------------
5 1 NEC Monitor 3X02125CA
-----------------------------------------------------------------------------------------------------
6 1 Computer 840RC
-----------------------------------------------------------------------------------------------------
7 1 HP 870Cse SG6BJ141ZZ
-----------------------------------------------------------------------------------------------------
8 2 File Cabinets
-----------------------------------------------------------------------------------------------------
9 1 Storage Cabinet
-----------------------------------------------------------------------------------------------------
10 1 Secretary's Desk
-----------------------------------------------------------------------------------------------------
11 1 Secretary's Credenza
-----------------------------------------------------------------------------------------------------
12 1 Secretary's Desk
-----------------------------------------------------------------------------------------------------
13 1 Secretary's Bookcase
-----------------------------------------------------------------------------------------------------
14 1 Secretary's Computer Table
-----------------------------------------------------------------------------------------------------
15 1 Cellular Phone and docking Station
-----------------------------------------------------------------------------------------------------
16 1 Executive Desk - DHW Office
-----------------------------------------------------------------------------------------------------
17 1 Executive Chair - DHW Office
-----------------------------------------------------------------------------------------------------
18 1 Wood Floormat - DHW Office
-----------------------------------------------------------------------------------------------------
19 1 Executive Credenza - DHW office
-----------------------------------------------------------------------------------------------------
20 1 Computer Table - DHW office
-----------------------------------------------------------------------------------------------------
21 1 Work table - DHW office
-----------------------------------------------------------------------------------------------------
22 1 Storage Cabinets - DHW office
-----------------------------------------------------------------------------------------------------
23 1 Wood Bookcases - DHW office
-----------------------------------------------------------------------------------------------------
Warley Settlement Agreement Page 21
EXHIBIT D
VOTING AGREEMENT
Filed as Exhibit 9.1 to Vista Energy Resources, Inc.'s Registration
Statement on Form S-4
Warley Settlement Agreement Page 22
EXHIBIT E
RELEASE AND HOLD HARMLESS AGREEMENT BETWEEN
MIDLAND, WARLEY AND XXXX
DATED MAY 22 , 1998
CONFIDENTIAL
Filed as Exhibit 10.3 to Vista Energy Resources, Inc.'s Registration
Statement on Form S-4
Warley Settlement Agreement Page 23
