EMPLOYMENT AGREEMENT
Exhibit 99.2
This Employment Agreement (the “Agreement”) is made and entered into as of the 1st
day of October, 2009 (the “Effective Date”), by and between GreenHunter Energy, Inc., a Delaware
corporation (“Employer” or “Company”) and Xxxxxxxx X. Xxxxxx (“Employee”).
WHEREAS, the Board of Directors of the Employer (the “Board”) recognizes that it is important
to attract, hire and retain key officers and management personnel;
WHEREAS, the Board has determined that it is essential and in the best interest of the
Employer and its stockholders to retain officers and key employees and to ensure their continued
dedication and efforts in such event without undue concern for their personal, financial and
employment security; and
WHEREAS, in order to induce qualified candidates to accept employment with the Employer and to
remain in the employ of the Employer, the Employer desires to enter into this Agreement with the
Employee.
NOW THEREFORE, for and in consideration of the mutual covenants and agreements contained
herein and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Employment. Employer hereby employs Employee and Employee hereby accepts
employment with Employer upon the terms and conditions hereinafter set forth.
2. Duties, Services and Other Interests. Employee shall serve the Employer as
President and Chief Operating Officer of the Employer with such responsibilities as shall be
determined from time to time by the Chairman, CEO and Board of Directors; provided, however,
that all duties assigned to Employee hereunder shall be commensurate with the skill and
experience of Employee. Employee agrees to devote all of his professional time, attention,
skills, benefits and best efforts to the performance of his duties hereunder and to the
promotion of the business and interests of Employer. The foregoing notwithstanding, the
parties recognize and agree that Employee may engage in passive personal investment and
charitable activities and serve on corporate boards of directors that, in any case, do not
conflict with the business and affairs of Employer or interfere with Employee’s performance
of his duties hereunder, which service on boards of directors, other than on Company’s,
shall be at the sole determination of the Board. The Board’s approval of said service shall
not be unreasonably withheld, provided however that Employee shall serve on no more than two
(2) additional corporate boards of directors during the Term.
3. Board Representation. During the term of this Agreement and provided that
Employee remains an employee of the Company, Employee shall be permitted to serve on the
Board.
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4. Term. This Agreement shall become effective on the Effective Date, and shall
continue, unless earlier terminated in accordance with the terms of this Agreement, for a
period of two (2) years commencing on the Effective Date. This Agreement shall thereafter
be automatically renewed for a period of six (6) months, unless earlier terminated as
provided herein, and unless one party has given written notice to the other party of its or
his intention not to renew this Agreement at least thirty (30) days prior to the expiration
of its then current term (the “Term”).
5. Compensation. As compensation for his services rendered under this Agreement,
Employee shall be entitled to receive the following:
(a) Annual Base Salary. During the Term, Employee shall initially be paid
an annual salary of Two Hundred Fifty Thousand dollars ($250,000) per annum (the
“Annual Base Salary”) payable in equal bi-weekly payments for a total of twenty-six
(26) payments per year. The Annual Base Salary may be increased as the Board may
determine from time to time but shall not be decreased;
(b) Expenses. Employer shall reimburse Employee for, or pay on behalf of
Employee, all reasonable and necessary out-of-pocket travel and other expenses
including dues and fees to industry, licensing, and professional organizations and
costs of entertainment and business development incurred by Employee in rendering
services required under the terms of this Agreement, promptly after submission, of a
detailed statement of such expenses and reasonable documentation provided that all
such expenses are associated with the business affairs of the Employer.
(c) Bonus. Expressly conditioned on the Employee being employed on the date
the Board grants such bonus, the Employee may receive a bonus in an amount
determined solely by the approval of the compensation committee of the Employer and
the Board, in their sole discretion. It being understood by the Company that the
Employee is targeting a cash bonus of at least 100% the Annual Base Salary.
(d) Benefits. During the Term, Employee, his spouse and dependents shall be
entitled to receive such group benefits, plans, and programs, including improvements
or modifications of the same, which are now, or may hereafter be, provided by
Employer to its other executive employees. Such benefits, plans, and programs shall
include, without limitation, any profit sharing plan, thrift plan, health insurance
or health care plan, dental plant, vision plan, life insurance, disability
insurance, pension plan, supplemental retirement plan, vacation and sick leave plan,
and the like which may be maintained by Company.
(e) Automobile. During the Term, Employee shall be entitled to use the
Company’s Ford F-150 pick up truck as Employee’s Company vehicle.
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(f) Moving Allowance. Cash consideration of $50,000 will be paid to
Employee as a moving allowance for him and his family to move their home from
Connecticut to Texas. Allowance to be paid to Employee on the Effective Date, or as
soon as administratively practicable, but in no case later than the 15th
day of October, 2009. Allowance to be reported as non-qualified moving expenses and
subject to all applicable tax withholding. In the event Employee voluntarily
terminates his employment with Employer pursuant to Section 8(b)(ii) within one year
of the Effective Date, Employee shall repay the entire $50,000 moving allowance to
Employer prior to his last date of employment with the Company.
(g) Restricted Stock Grant. Employer shall grant employee 100,000 shares of
restricted common stock of the Company with vesting to occur as outlined on Exhibit
I attached hereto. Additional discretionary restricted stock grants to be
determined by the Chairman and approved by the compensation committee of the Board
of Directors of the Employer from time to time but at least on an annual basis on or
before April 30 each calendar year.
(h) Stock Options. Employee shall be eligible to receive stock options to
acquire Five Hundred Thousand (500,000) shares of the Company’s common stock upon
approval by the Board of Directors. Exercise price and a vesting schedule shall be
determined on the date of grant. The form of stock option agreement shall be the
same form as provided to all other employees of the Employer during 2009.
Additional discretionary stock options to acquire shares of the Company’s common
stock to be determined by the Chairman and approved by the compensation committee of
the Board of Directors of the Employer from time to time but at least on an annual
basis on or before April 30 each calendar year.
(i) Vacation. Employee shall be entitled to all holidays provided to
executives of Company generally in addition to 120 hours of paid vacation from
Employer on an annual basis which shall be prorated for calendar year 2009 from the
effective date of this Agreement.
(j) Other Benefits. This Agreement governs the rights and obligations of
Employee and Company with respect to Employee’s base salary and certain perquisites
of employment. Except as expressly provided herein, Employee’s rights and
obligations both during the term of his employment and thereafter with respect to
stock options, restricted stock, incentive and deferred compensation, life insurance
policies insuring the life of Employee, and other benefits under the plans and
programs maintained by Company shall be governed by the separate agreements, plans
and other documents and instruments governing such matters
Except as provided in Section 8, the compensation set forth in this Section 5 will be the
sole compensation payable to Employee and no additional compensation or fee will be payable
by Employer to Employee by reason of any benefit gained by the Employer directly or
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indirectly
through Employee’s efforts on Employer’s behalf, nor shall Employer be liable in any way for
any additional compensation or fee unless Employer shall have expressly agreed thereto in
writing.
6. Confidentiality; Covenants Not-To-Compete.
(a) Acknowledgment of Proprietary Interest. Employee acknowledges and
agrees that he has had access to proprietary information and also recognizes the
sole proprietary interest of Employer in any Trade Secrets (as hereinafter defined)
of Employer. Employee further acknowledges and agrees that any and all Trade
Secrets of Employer, learned by Employee during the course of his employment by
Employer or otherwise, whether developed by Employee alone or in conjunction with
others or otherwise, is and shall be the property of Employer. Employee further
acknowledges and understands that his disclosure of any Trade Secrets of Employer
will result in irreparable injury and damage to Employer. As used herein, “Trade
Secrets” means all non-public confidential and proprietary information of Employer
whether embodied in writing, a computer disk, video or magnetic tape, CD-Rom or in
other form, relating to the business, operations or affairs of Employer and, any
other confidential information that Employee may then possess or have under
Employee’s control, including, without limitation, information derived from reports,
investigations, experiments, research, work in progress, drawings, designs, plans,
proposals, codes, marketing and sales programs, client lists, mailing lists,
financial projections, any information regarding Employer’s properties, maps, plats,
surveys, cost summaries, pricing formula, reports, studies, land and title records,
leases and all other materials, or information prepared, compiled, evaluated,
interpreted or performed, for or by Employer. “Trade Secrets” also includes
confidential information related to the business, products or sales of Employer or
Employer’s customers or other business relationships.
(b) Covenants Not-To-Divulge Trade Secrets. Employee acknowledges and
agrees that Employer is entitled to prevent the disclosure of Trade Secrets of
Employer. As a portion of the consideration for the employment of Employee and for
the compensation being paid to Employee by Employer, Employee agrees at all times
during the term of this Agreement and for two (2) years thereafter to hold in
strictest confidence and not to disclose or allow to be disclosed to any person,
firm, or corporation, other than to persons engaged by Employer to further the
business of Employer, Trade Secrets of Employer, without the prior written consent
of Employer, including Trade Secrets developed by Employee. Notwithstanding the
foregoing, Employee shall not be obligated to keep secret and not to disclose or
allow to be disclosed knowledge or information (a) which has become generally known
to the public through no wrongful act of Employee; (b) which has been rightfully
received by Employee from a third party which to Employee’s knowledge was received
without restriction on disclosure and not in violation of any confidentiality
obligation of said third party; (c) which has been approved for release
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without
restriction as to
use or disclosure by written authorization of Employer; or (d) which has been
disclosed pursuant to a requirement of a governmental agency or of law without
similar restrictions or other protections against public disclosure, or which
disclosure is required by operation of law. Without limiting the generality of the
foregoing, Employee agrees to affirmatively take such precautions as Employer may
reasonably request or Employee reasonably believes are appropriate to prevent the
disclosure, copying or use of any of the computer software programs, data bases or
other such information now existing or hereafter developed to any person or for any
purpose not specifically authorized by Employer.
(c) Abide by Third Party Confidentiality Agreements. Employee acknowledges
that Employer enters into confidentiality agreements with third parties. Without
limiting the generality of the foregoing, Employee agrees to abide by the terms and
conditions of such confidentiality agreements during the term of this Agreement for
a period beginning on the Effective Date and ending two (2) years following the
Employee’s termination of employment with the Employer for any reason.
(d) Return of Materials at Termination. In the event of any termination of
this Agreement for any reason whatsoever, Employee will promptly deliver to Employer
all documents, data and other information pertaining to Trade Secrets. Employee
shall not take any documents or other information, or any reproduction or excerpt
thereof, containing or pertaining to any Trade Secrets.
(e) Competition During and After the Term of this Agreement. From the
period beginning on the Effective Date and ending two (2) years following the
Employee’s termination of employment with the Employer, Employee shall not, without
the prior written consent of Company:
(i) directly or indirectly participate in the ownership, management, operation,
or control of, or be connected as an officer, employee, partner, director,
consultant, contractor, or otherwise with, or have any financial interest in or aid
or assist anyone else in the conduct of, any renewable energy business in any of the
Business Territories of the Company where “Business Territories” as hereby defined
means locations in which the Company has existing renewable energy generating assets
or bio fuel refineries, including but not limited to, any location to which the
Company has devoted any significant efforts for renewable energy production,
analysis of, joint venture consideration or interest even if efforts for the actual
generation of electricity or refinement of fuel from renewable resources has not yet
commenced at the time of Employee’s termination; provided, however that this Section
6(e) shall not prohibit Employee from (A) purchasing or holding an equity interest
of any class of securities of any enterprise (but without otherwise participating in
the activities of such enterprise) whether or not such securities are listed on any
national or regional securities exchanges or have been registered under Section
12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange
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Act”), (B) being engaged as a research analyst, an investment banker and/or
financial advisor to renewable energy business entities, or (C) being employed by a
commercial bank or investment management company; or
(ii) directly or indirectly, either for himself or any other person (A)
solicit, induce, recruit, or attempt to solicit, induce or recruit any employee of
the Employer to leave the employ of the Employer, (B) in any way interfere with the
relationship between the Employer and any employee thereof, (C) employ, or otherwise
engage as an employee, independent contractor or otherwise, any employee of the
Employer or (D) induce or attempt to induce any customer, representative, supplier,
licensee or business relation of the Employer to cease doing business with the
Employer, or in any way interfere with the relationship between any customer,
representative, supplier, licensee or business relation of the Employer.
This section 6(e) applies only if Employer is a viable, operating company at the
time of Employee’s termination, and/or it has not had a Change of Control (as
defined hereafter) which precipitated Employee’s termination.
(f) Tolling of Statute of Limitations. In the event of a breach by Employee
of any covenant set forth in Section 6 above, the term of such covenants shall be
extended by the period of the duration of such breach.
7. Prohibition of Disparaging Remarks. During Executive’s employment with Company
and following any termination of employment with Company, Executive and Company mutually
agree not to disparage, either orally or in writing, Executive, Company, or any of
affiliates’ business, products, services, or practices, or any of Company’s or its
affiliates’ directors, officers, agents, representatives, stockholders, partners, members,
employees, or affiliates.
8. Termination Events.
(a) Company’s Right to Terminate. Notwithstanding the provisions of Section
4, Company shall have the right to terminate Employee’s employment under this
Agreement at any time for any of the following reasons:
(i) The expiration of the Term or any renewal period as set forth in Section 4
above, provided that either Employee or Employer has given at least thirty (30) days
prior written notice to the other party of such party’s intention not to renew;
(ii) The death of Employee;
(iii) The “Disability” (as hereinafter defined) of Employee; or
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(iv) Written notice from Employer to Employee of termination for “Just Cause”
(as hereinafter defined).
(b) Employee’s Right to Terminate. Notwithstanding the provisions of
Section 4, Employee shall have the right to terminate his employment under this
Agreement for any of the following reasons:
(i) For “Good Reason” (as hereinafter defined); or
(ii) at any time for any other reason whatsoever, in the sole discretion of
Employee.
(c) Definitions.
(i) For purposes of Section 8(a)(iii) above, the “Disability” of Employee
shall mean a physical or mental infirmity which impairs the Employee’s ability to
substantially perform his duties under this Agreement for a period of 120
consecutive days or for 120 days out of any 150 consecutive day period.
(ii) For purposes of Section 8(a)(iv) above, “Just Cause” shall mean the
Employee:
(1) has engaged in gross negligence, gross incompetence, or willful
misconduct in the performance of his duties at the Company;
(2) has refused, without proper reason, to perform his duties,
(3) has materially breached any provision of this Agreement,
(4) has willfully and materially breached a significant corporate
policy or code of conduct established by Company,
(5) has committed an act of fraud, embezzlement, or breach of a
fiduciary duty to Company or an affiliate of Company (including the
unauthorized disclosure of material confidential or proprietary information
of the Company or an affiliate),
(7) has been convicted of (or pleaded no contest to) a criminal act
involving fraud, dishonesty, or moral turpitude or any felony, or
(8) has been convicted for any violation of U.S. or foreign securities
laws or has entered into a cease and desist order with the Securities and
Exchange Commission alleging violation of U.S. or foreign securities laws.
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(9) has been accused of sexually-harassing another individual and such
accusation is confirmed by Employer upon its own investigation and/or
confirmed by a finding of a court of competent jurisdiction or the EEOC;
provided, however, that no termination of Employee’s employment shall be for Just
Cause under Section 8(a)(iv) until there shall have been delivered to the Employee
a copy of a written notice setting forth that the Employee was guilty of the
particular conduct and specifying the particulars thereof in detail, and the
Employee shall have been provided an opportunity to be heard by the entire Board.
(iii) For purposes of Section 8(b)(i) above, “Good Reason” shall mean any one
or more of the following:
(1) a diminution in Employee’s Annual Base Salary not in accordance
with Section 5(a);
(2) a material diminution in Employee’s authority, duties, or
responsibilities from those applicable to him as of the Effective Date,
including a material change in the reporting structure so that Employee
reports to someone other than the Chairman, CEO and the Board;
(3) a material change in the geographic location at which Employee must
perform services which for purposes of this Agreement includes only Company
requiring Employee to involuntarily relocate to a geographic location other
than the Dallas/Ft. Worth, Texas metroplex area; or
(4) a material breach by Company of any provision of this Agreement
(including, without limitation, the requirements of Sections 2, 3, 5, or 24
of this Agreement).
Notwithstanding the foregoing provisions of this Section 8(c)(iii)(4) or any other
provision in this Agreement to the contrary, any assertion by Employee of a
termination of employment for “Good Reason” shall not be effective unless all of the
following conditions are satisfied: (A) any condition described in clauses (1)
through (4) of this Section 8(c)(iii)(4) giving rise to Employee’s termination of
employment must have arisen without Executive’s consent; (B) Employee must provide
written notice to Company of such condition in accordance with Section 12 within 30
days of the initial existence of the condition; (C) the condition specified in such
notice must remain uncorrected for a period of 30 days following receipt of such
notice by Company; and (D) the date of Employee’s termination of employment must
occur within one year following the initial existence of the condition specified in
such notice.
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(iv) For purposes of Sections 9, 10 and 11 below, “Involuntary Termination”
shall mean any termination of Employee’s employment with Company which:
(1) does not result from a resignation by Employee (other than a
resignation pursuant to clause (2) of this Section 8(c)(iv)); or
(2) results from a resignation by Executive for Good Reason;
provided, however, the term “Involuntary Termination” shall not include a
termination for Just Cause, any termination as a result of death or disability, or
the natural expiration of the Term of this Agreement.
(v) For purposes of Sections 10 and 11 below, “Change of Control” shall mean:
(1) the stockholders approval of a merger or consolidation of Company
with another corporation in greater than 50% change in the total voting
power of Company or the surviving company immediately following such
transaction;
(2) the stockholders approval of a plan of liquidation of Company;
(3) the stockholders approval of an agreement for the sale by Company
of all or substantially all of Company’s assets;
(4) the acquisition by any person of securities representing 50% or
more of the total voting power of Company which person does not already own
50% or more of the total voting power of Company as of the effective date;
or
(5) certain changes in the majority composition of the Board not
initiated by the Board.
(vi) For purposes of Sections 10 and 11 below, “Change of Control Period” shall
mean with respect to a Change of Control, the one-year period beginning on the date
upon which such Change of Control occurs.
(d) Notice of Termination: If Company desires to terminate Employee’s
employment hereunder at any time prior to expiration of the term of employment as
provided in Section 4, it shall do so by giving a 30-day written notice to Employee
that it has elected to terminate Employee’s employment hereunder and stating the
effective date and reason for such termination, provided that no such action shall
alter or amend any other provisions hereof or rights arising hereunder. If Employee
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desires to terminate his employment hereunder at any time prior to expiration of the
term of employment as provided in Section 4, he shall do so by giving a 30-day
written notice to Company that he has elected to terminate his employment hereunder
and stating the effective date and reason for such termination, provided that no
such action shall alter or amend any other provisions hereof or rights arising
hereunder.
(e) Deemed Resignations. Unless otherwise agreed to in writing by Company
and Employee prior to the termination of Employee’s employment, any termination of
Employee’s employment shall constitute an automatic resignation of Employee as an
officer of Company and each affiliate of Company and an automatic resignation of
Employee from the Board (if applicable) and from the board of directors or similar
governing body of any affiliate of Company and from the board of directors or
similar governing body of any corporation, limited liability entity, or other entity
in which Company or any affiliate holds an equity interest and with respect to which
board or similar governing body Employee serves as Company’s or such affiliate’s
designee or other representative.
(f) Meaning of Termination of Employment. For all purposes of this
Agreement, Employee shall be considered to have terminated employment with Company
when Employee incurs a “separation from service” with Company within the meaning of
Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986 (the “Code”), as
amended and applicable administrative guidance issued thereunder.
9. Termination Other Than an Involuntary Termination. If Employee’s employment
hereunder shall terminate upon expiration of the term provided in Section 4 hereof or if
Employee’s employment hereunder shall terminate for any other reason except those described
in Sections 10 and 11, then Company shall continue to provide all compensation and benefits
to Employee hereunder until the date of such termination of employment, and such
compensation and benefits shall terminate contemporaneously with such termination of
employment.
10. Involuntary Termination Other Than During a Change of Control Period. If
Employee’s employment by Company or any successor thereto shall be subject to an Involuntary
Termination which occurs prior to the date that Change of Control Period begins or after the
expiration of a Change of Control Period, then Company shall, as additional compensation for
services rendered to Company (including its subsidiaries), pay to Employee the following
amounts and take the following actions:
(a) Pay Employee a lump sum cash payment in an amount equal to one times the
Employee’s Annual Base Salary within 30 days after Employee’s termination of
employment with Company.
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(b) In the event of the termination of Employee’s employment for any reason
specified in Section 8 (other than the reasons set forth in Sections 8(a)(iii)),
Employee shall be entitled only to the compensation earned by him as of the
effective
date of termination, including any declared but unpaid, bonus or pro-rata portion
thereof.
(c) In the event of the termination of Employee’s employment as the result of
Section 8(a)(iii), Employee shall be entitled to compensation for the remaining term
of the Agreement until the disability insurance company begins making payments to
the Employee.
(d) During the portion, if any, of the 12-month period commencing on the date of
such Involuntary Termination that Employee is eligible to elect and elects to
continue coverage for himself and his eligible dependents under Company’s or a
subsidiary’s group medical, dental and group life insurance plans as applicable,
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and/or
Sections 601 through 608 of the Employee Retirement Income Security Act of 1974, as
amended, Company shall promptly reimburse Employee on a monthly basis for the
difference between the amount Employee pays to effect and continue such coverage and
the employee contribution amount that active senior executive employees of Company
pay for the same or similar coverage under such group health plans; provided,
however, that such reimbursement shall cease to be effective if and to the extent
Employee becomes eligible to receive medical and/or dental coverage from a
subsequent employer (and any such eligibility shall be promptly reported to Company
by Employee).
(e) If the Employee pays or becomes obligated to pay any excise tax under Section
4999 of the Code on any payment or benefit he receives (whether pursuant to this
Agreement or otherwise) in connection with the event giving rise to his right to
receive payments and benefits under Section 9(c) of this Agreement, the Employer
shall pay to the Employee an amount equal to the total excise tax paid or payable.
11. Involuntary Termination During a Change of Control Period. If Employee’s
employment by Company or any successor thereto shall be subject to an Involuntary
Termination during a Change of Control Period, then Company shall, as additional
compensation for services rendered to Company (including its subsidiaries), pay to Employee
the following amounts and take the following actions:
(a) Pay Employee a lump sum cash payment in an amount equal to two times the
Employee’s Annual Base Salary within 30 days after Employee’s termination of
employment with Company.
(b) During the portion, if any, of the 12-month period commencing on the date of
such Involuntary Termination that Executive is eligible to elect and elects to
continue
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coverage for himself and his eligible dependents under Company’s or a
subsidiary’s group health plans, as applicable, under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, and/or Sections 601 through 608 of
the
Employee Retirement Income Security Act of 1974, as amended, Company shall promptly
reimburse Executive on a monthly basis for the difference between the amount
Executive pays to effect and continue such coverage and the employee contribution
amount that active senior executive employees of Company pay for the same or similar
coverage under such group health plans; provided, however, that such reimbursement
shall cease to be effective if and to the extent Executive becomes eligible to
receive medical and/or dental coverage from a subsequent employer (and any such
eligibility shall be promptly reported to Company by Executive).
12. Release and Full Settlement. As a condition of the receipt of any severance
compensation and benefits under this Agreement, Employee must first execute a release and
agreement, in a form reasonably satisfactory to Company, which (a) shall release and
discharge Company and its affiliates, and their officers, directors, employees, and agents,
from any and all claims or causes of action of any kind or character, including all claims
or causes of action arising out of Employee’s employment with Company or its affiliates or
the termination of such employment, and (b) must be effective and irrevocable within 55 days
after the termination of Employee’s employment. If Employee is entitled to and receives the
benefits provided hereunder, performance of the obligations of Company hereunder will
constitute full settlement of all claims that Employee might otherwise assert against
Company on account of Employee’s termination of employment
13. Remedies. Each party recognizes and acknowledges that in the event of any
default in, or breach of any of, the terms, conditions and provisions of this Agreement
(either actual or threatened) by the other party, then the non-defaulting party’s remedies
at law shall be inadequate. Accordingly, each party agrees that in such event, the
non-defaulting party shall have the right of specific performance and/or injunctive relief
in addition to any and all other remedies and rights at law or in equity, and such rights
and remedies shall be cumulative.
14. Acknowledgments. Employee acknowledges and recognizes that the enforcement of
any of the non-competition provisions set forth in Section 6 above by Employer will not
interfere with Employee’s ability to pursue a proper livelihood.
15. Notices. Any notices, consents, demands, requests, approvals and other
communications to be given under this Agreement by either party to the other shall be deemed
to have been duly given in writing personally delivered, by facsimile or sent by mail,
registered or certified, postage prepaid with return receipt requested, as follows:
If to Employer:
|
0000 Xxxxx Xxxxx | |
| Xxxxxxxxx, Xxxxx 00000 | ||
| Attention: Xxxxxx X. Xxxxxxxx | ||
| Telephone: (000) 000-0000 | ||
| Facsimile: (000) 000-0000 |
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If to Employee:
|
00 Xxxx Xxxxxx | |
| Xxxxxx, XX 00000 | ||
| (Address to be changed once Employee relocates to Texas) |
Notices delivered personally shall be deemed communicated as of actual receipt or receipt of
facsimile; mailed notices shall be deemed communicated as of three (3) days after mailing.
16. Survival. The following sections of this Agreement shall survive termination of
this Agreement for any reason: Sections 6, 7, 8, 9, 10, 11, 12, 15, 17, 20, 21, 22 and 23.
17. Dispute Resolution.
(a) General. Employee and the Company explicitly recognize that no
provision of this Section 17 shall prevent either party from seeking to resolve any
dispute relating to this Agreement in a court of law.
(b) Negotiation. The parties shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement promptly by negotiations
between Employee and an executive officer of Company who has authority to settle the
controversy. Any party may give the other party written notice of any dispute not
resolved in the normal course of business. Within ten days after the effective date
of such notice, Employee and an executive officer of Company shall meet at a
mutually acceptable time and place within the Dallas/Ft. Worth, Texas metroplex
area, and thereafter as often as they reasonably deem necessary, to exchange
relevant information and to attempt to resolve the dispute. If the matter has not
been resolved within 30 days of the disputing party’s notice, or if the parties fail
to meet within ten days, either party may initiate arbitration of the controversy or
claim as provided in Section 17(c) below. If a negotiator intends to be accompanied
at a meeting by an attorney, the other negotiator shall be given at least three
business days’ notice of such intention and may also be accompanied by an attorney.
All negotiations pursuant to this Section 17(b) shall be treated as compromise and
settlement negotiations for the purposes of the federal and state rules of evidence
and procedure.
(c) Arbitration. Company and Employee agree that after efforts to negotiate
any dispute in accordance with Section 17(b) have failed, then either party may by
written notice (the “Notice”) demand arbitration of the dispute as set out below,
and each party hereto expressly agrees to submit to, and be bound by, such
arbitration.
(i) Each party will, within ten business days of the Notice, nominate an
arbitrator, who shall be a non-neutral arbitrator. Each nominated arbitrator must be
someone experienced in dispute resolution and of good character without moral
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turpitude and not within the employ or direct or indirect influence of the
nominating party. The two nominated arbitrators will, within ten business days of
nomination, agree upon a third arbitrator, who shall be neutral. If the two
appointed arbitrators
cannot agree on a third arbitrator within such period, the parties may seek
such an appointment through any permitted court proceeding or by the American
Arbitration Association (“AAA”). The three arbitrators will set the rules and
timing of the arbitration, but will generally follow the rules of the AAA and this
Agreement where same are applicable and shall provide for a reasoned opinion.
(ii) The arbitration hearing will in no event take place more than 180 days
after the appointment of the third arbitrator.
(iii) The arbitration will take place in Dallas, Texas unless otherwise
unanimously agreed to by the parties.
(iv) The results of the arbitration and the decision of the arbitrators will be
final and binding on the parties, and each party agrees and acknowledges that these
results shall be enforceable in a court of law.
(v) All administrative costs and expenses of the mediation and arbitration
shall be borne equally by the Company and Employee during the pendency of the
proceedings. Such costs and expenses do not include attorney’s fees, expert witness
fees or other party generated expenses. Upon the conclusion of the proceedings, the
prevailing party shall be entitled to recover reasonable and necessary attorneys’
fees, expert witness fees, and costs and expenses of arbitration.
18. Indemnification. Company shall continue to indemnify Employee following any
termination of this Agreement to the fullest extent permitted by applicable law consistent
with the Articles of Incorporation and By-Laws of Company in effect as of the date of the
termination with respect to Employee’s sole, joint, or concurrent negligence and any acts of
or omissions he may have committed during the period during which he was an officer,
director, and/or employee of (a) Company, (b) any subsidiary thereof for which he served as
an officer, director, or employee at the request of Company, or (c) any successor thereto;
provided. Any reimbursement of reasonable attorneys’ fees and disbursements required under
this Section 18 shall be made within thirty days of the date that Employee submits an
invoice for payment or reimbursement. In the event Company and Employee shall have entered
into a separate indemnity agreement, the terms of such agreement, and not this Section 18,
shall govern Company’s obligations to indemnify Employee following the termination of this
Agreement.
19. Payment Obligations Absolute. Except as specifically provided in this Agreement, Company’s obligation to pay (or cause one of its subsidiaries to pay) Employee the amounts
and to make the arrangements provided herein shall be absolute and unconditional and shall
not be affected by any circumstances, including, without limitation, any set-off,
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counterclaim, recoupment, defense, or other right which Company (including its subsidiaries)
may have against Employee or anyone else. All amounts payable by Company (including its
subsidiaries hereunder) shall be paid without notice or demand. Employee shall not be
obligated to seek other employment in mitigation of the amounts payable or arrangements made
under any provision of this Agreement, and, except as provided in Sections 10(d) and 11(b)
hereof, the obtaining of any such other employment shall in no event effect any reduction of
Company’s obligations to make (or cause to be made) the payments and arrangements required
to be made under this Agreement.
20. Entire Agreement. This Agreement contains the entire agreement of the parties
hereto and supersedes all prior agreements and understandings, oral or written between the
parties hereto, with the exception of the Existing Consulting Contract which is described
hereafter. No modification or amendment of any of the terms, conditions or provisions
herein may be made otherwise than by written agreement signed by the parties hereto.
21. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS.
22. Parties Bound. This Agreement and the rights and obligations hereunder shall be
binding upon and inure to the benefit of Employer and Employee, and their respective heirs,
personal representatives, successors and assigns. Employer shall have the right to assign
this Agreement to any affiliate or to its successors or assigns provided that such
affiliate, successor or assign agrees to be bound by the terms hereof. The terms
“successors” and “assigns” shall include any person, corporation, partnership or other
entity that buys all or substantially all of Employer’s assets or all of its stock, or with
which Employer merges or consolidates. The rights, duties or benefits to Employee hereunder
are personal to him, and no such right or benefit may be assigned by him.
23. Estate. If Employee dies prior to the payment of all sums owed, or to be owed,
to Employee pursuant to Section 5 above, then such sums, as they become due, shall be paid
to Employee’s estate.
24. Enforceability. If, for any reason, any provision contained in this Agreement
should be held invalid in part by a court of competent jurisdiction, then it is the intent
of each of the parties hereto that the balance of this Agreement be enforced to the fullest
extent permitted by applicable law.
25. Waiver of Breach. The waiver by any party hereto of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any subsequent breach by
any party.
26. Captions. The captions in this Agreement are for convenience of reference only
and shall not limit or otherwise affect any of the terms or provisions hereof.
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27. Costs. If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’
fees, costs and necessary disbursements in addition to any other relief to which he or it
may be entitled.
28. Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original and all of which shall constitute one and the same
instrument, but only one of which need be produced.
29. Existing Consulting Contract. Employer and Employee recognize the existing
consulting contract agreement between the parties attached hereto as Exhibit II will remain
in full force and affect.
EMPLOYER:
By: |
||||
| Xxxx X. Xxxxx | ||||
| Chairman and Chief Executive Officer |
EMPLOYEE:
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