EMPLOYMENT AGREEMENT
THIS
AGREEMENT is made effective January 1, 2008 (the “Effective Date”), between XXXXXXXXX
ENERGY, INC., a Delaware corporation (the “Company”), and XXXX X. XXXXXX, an individual (the
“Executive”).
WITNESSETH:
WHEREAS, the Company and the Executive desire to set forth the terms of their agreements
relating to the employment of Executive by the Company; and
NOW, THEREFORE, in consideration of the mutual promises herein contained, the Company and the
Executive agree as follows:
1. Employment. The Company hereby employs the Executive and the
Executive hereby accepts such employment subject to the terms and conditions
contained in this Agreement. The Executive is engaged as an employee of the
Company and the Executive and the Company do not intend to create a joint venture,
partnership or other relationship that might impose a fiduciary obligation on the
Executive or the Company in the performance of this Agreement, other than as an
officer and director of the Company.
2. Executive’s Duties. The Executive is employed on a full-time basis.
Throughout the term of this Agreement, the Executive will use his/her best efforts and
due diligence to assist the Company in the objective of achieving the most profitable
operation of the Company and the Company’s affiliated entities consistent with
developing and maintaining a quality business operation. The Executive shall also
devote all of Executive’s working time, attention and energies to the performance of
Executive’s duties and responsibilities under this Agreement.
2.1 Specific Duties. During the term of this Agreement, the Executive
will serve as the Executive Vice President — Exploration for the Company. The
Executive will perform all of the services required to fully and faithfully execute
the position to which the Executive is appointed and such other services as may
be assigned by the Company’s Board of Directors in their sole discretion. The
Executive agrees to use the Executive’s best efforts to perform all of the
services required to fully and faithfully execute the offices and positions to which
the Executive is appointed and elected. In addition, the precise duties to be
performed by Executive may be changed or curtailed in the sole discretion of the
Board of Directors of the Company.
2.2 Rules and Regulations. From time to time, the Company may
issue policies and procedures applicable to employees and the Executive
including an employment policies manual. The Executive agrees to comply with
such policies and procedures, except to the extent such policies are inconsistent
with this Agreement. Such policies and procedures may be supplemented,
modified, changed or adopted without notice in the sole discretion of the
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Company at any time. In the event of a conflict between such policies and procedures and
this Agreement, this Agreement will control unless compliance with this Agreement will
violate any law or regulation applicable to the Company or its affiliated entities.
3. Other Activities. The Executive shall not engage in any business
activity that in the judgment of the Board conflicts with the Executive’s duties hereunder,
whether or not such activity is pursued for gain, profit, or other pecuniary advantage. In
addition, except for the activities permitted under paragraph 3.1 of this Agreement or
approved by the Board of Directors in writing, the Executive will not: (a) engage in
activities which require such substantial services on the part of the Executive that the
Executive is unable to perform the duties assigned to the Executive in accordance with
this Agreement; (b) serve as an officer or director of any publicly held entity; or (c)
directly or indirectly invest in, participate in or acquire an interest in any oil and gas
business, including, without limitation, (i) producing oil and gas, (ii) drilling, owning or
operating oil and gas leases or xxxxx, (iii) providing services or materials to the oil and
gas industry, (iv) marketing or refining oil or gas, or (v) owning any interest in any
corporation, partnership, company or entity which conducts any of the foregoing
activities. The limitations in this paragraph 3 will not prohibit an investment by the
Executive in publicly traded securities. The Executive is not restricted from maintaining
or making investments, or engaging in other businesses, enterprises or civic, charitable
or public service functions if such activities, investments, businesses or enterprises do
not result in a violation of clauses (a) through (c) of this paragraph 3. Notwithstanding
the foregoing, the Executive will be permitted to participate in the activities set forth in
Section 3.1 that will be deemed to be approved by the Company, if such activities are
undertaken in strict compliance with this Agreement.
3.1 Royalty Interests and Gifts. The foregoing restriction in clause (c) will not
prohibit the ownership of royalty interests where the Executive owns or previously owned
the surface of the land covered by the royalty interest and the ownership of the royalty
interest is incidental to the ownership of the surface estate or the ownership of royalty,
overriding royalty or working interests that are received by gift or inheritance subject to
disclosure by Executive to the Company in writing.
4. Executive’s Compensation. The Company agrees to compensate the
Executive as follows:
4.1 Base Salary. Executive will be paid a base salary (the “Base
Salary”) in an annual rate of not less than Three Hundred Forty-five Thousand
Dollars ($345,000.00), which will be paid to the Executive in installments
consistent with the Company’s customary payroll practices, beginning January
23, 2008, during the term of this Agreement.
4.2 Bonus. In addition to the Base Salary described at paragraph 4.1
of this Agreement, the Company may periodically pay bonus compensation to
the Executive. Any bonus compensation will be paid by separate check apart
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from Executive’s Base Salary less appropriate deductions pursuant to Internal Revenue Service
guidelines. In order to be entitled to the bonus compensation set forth herein and any future
bonuses, Executive must be an active full-time employee of the Company on the date the bonus is to
be paid. Upon notice of intent to separate employment or separation of employment for any reason
prior to the date any bonuses are paid, Executive shall not be eligible for any pro rata bonus
compensation. Executive recognizes and acknowledges that except as provided above, the award of
bonus is not guaranteed or promised in any way. Any additional bonus compensation will be at the
absolute discretion of the Company in such amounts and at such times as the Board of Directors of
the Company (or a Compensation Committee thereof) may determine.
4.3 Equity Compensation. In addition to the compensation set forth
in paragraphs 4.1 and 4.2 of this Agreement, the Executive may periodically be
granted awards of Company restricted stock under and subject to the
Company’s equity compensation plans (the “Equity Compensation Plans”).
Such equity compensation will vest over a four (4) year period which begins to
run from the date of each grant. In order to be entitled to the award of equity
compensation, the Executive must be an active full-time employee of the
Company on the grant date. Further, the terms and provisions of the Equity
Compensation Plans control and direct the award of Company restricted stock.
4.4 Benefits. The Company agrees to extend to the Executive
retirement benefits and deferred compensation (if any and if made available)
and reimbursement of reasonable expenditures. The Company will also provide
the Executive the opportunity to apply for coverage under the Company’s
medical, life and disability plans, if any. If the Executive is accepted for
coverage under such plans, the Company will provide such coverage on the
same terms as is customarily provided by the Company to the plan participants
as modified from time to time. The Executive is subject to all of the terms and
provisions of the Company’s benefit plans or policies.
4.5 Paid Time Off. The Executive shall be eligible for thirty (30) days
of Paid Time Off (“PTO”) each continuous year of employment during the term of
this Agreement under the Company’s PTO policy. Such PTO shall be calculated
from the Executive’s original date of hire. No additional compensation will be
paid for failure to take PTO and no PTO may be carried forward from one twelve
(12) month period to another.
4.6 Membership Dues. The Company will reimburse the Executive for:
(a) the monthly dues necessary to maintain a full membership in a club in the
Oklahoma City area selected by the Executive; and (b) the reasonable cost of
any approved business entertainment at such club. All other costs, including,
without implied limitation, any initiation costs, initial membership costs, personal
use and business entertainment unrelated to the Company will be the sole
obligation of the Executive and the Company will have no liability with respect to
such amounts.
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5. Term. The employment relationship evidenced by this Agreement is an
“at will” employment relationship and the Company reserves the right to terminate the
Executive at any time with or without cause. In the absence of termination as set forth
in paragraph 6 below, this Agreement will extend for a term commencing on the
Effective Date, and ending on December 31, 2009 (the “Expiration Date”). Unless the
Company provides thirty (30) days prior written notice of non-extension to the
Executive, on or before the Expiration Date, the term and the Expiration Date will be
automatically extended for one (1) additional year from the Expiration Date.
6. Termination. This Agreement will continue in effect until the expiration of
the term stated in paragraph 5 of this Agreement unless earlier terminated pursuant to
this paragraph 6.
6.1 Termination by Company. The Company will have the following rights to terminate
Executive’s employment:
6.1.1 Termination without Cause. The Company may terminate
Executive’s employment without Cause at any time by the service of
written notice of termination to the Executive specifying an effective date
of such termination not sooner than ten (10) days after the date of such
notice (the “Termination Date”). In the event the
Executive is terminated without Cause (other than a CC Termination under paragraph
6.3 of this Agreement), the Executive will receive as termination
compensation a lump sum payment equal to twelve (12) months Base
Salary (as in effect on the Termination Date). If on the Termination Date,
the Executive is a “specified employee” as defined in regulations under
Section 409A of the Code, such payment will commence on the first
payroll payment date which is more than six months following the
Termination Date. The right to the foregoing termination compensation
set forth above is subject to the Executive’s execution of the Company’s
severance agreement which will operate as a release of all legally
waivable claims against the Company. Such payment is further
conditioned upon the Executive’s compliance with all of the provisions of
this Agreement, including all post-employment obligations.
6.1.2 Termination for Cause. The Company may terminate the
employment of the Executive hereunder at any time for Cause (as
hereinafter defined) (such a termination being referred to in
this
Agreement as a “Termination For Cause”) by giving the Executive written
notice of such termination, which shall take effect immediately upon the
giving of such notice to the Executive. As used in this Agreement,
“Cause” means (A) the Executive’s material breach or threatened breach
of this Agreement; (B) the Executive fails to substantially perform the
Executive’s duties hereunder; (C) the misappropriation or fraudulent
conduct by the Executive with respect to the assets or operations of the
Company or any of its subsidiaries or affiliated companies; (D) the
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Executive’s willful disregard of the instructions of the Board or the Executive’s material
neglect of duties or failure to act, other than by reason of disability or death; (E) the
Executive’s personal misconduct which substantially injures the Company; or (F) the
conviction of the Executive for, or a plea of guilty or no contest to, a felony or any
crime involving fraud, theft or dishonesty. In the event Executive’s employment is
terminated for Cause, the company will not have any obligation to provide any further
payments or benefits to the Executive after the effective date of such termination.
6.2 Termination by Executive. The Executive may voluntarily
terminate his employment with or without Cause by the service of written notice
of such termination to the Company specifying an effective date of such
termination thirty (30) days after the date of such notice. The Company may in
its sole discretion, elect to waive all or any part of the 30-day notice period with no
further obligations being owed to the Executive by the Company. In the event
employment is terminated by the Executive, neither the Company nor the
Executive will have any further obligations hereunder, except for any obligations
which expressly survive termination of employment including Sections 7, 8, 9,
10, 11 ,12 and 13.
6.3 Termination After Change in Control. If during the term of this
Agreement there is a “Change of Control” and within one (1) year thereafter
there is a CC Termination (as hereafter defined), then the Executive will be
entitled to a severance payment (in addition to any other rights and other
amounts payable to the Executive under Section 6.7 or under Company plans in
which Executive is a participant) payable in a lump sum in cash within 10 days
following the CC Termination in an amount equal to the sum of the following: (a)
two (2) times the Executive’s Base Salary for the last 12 calendar months ending
immediately prior to the CC Termination and bonus paid during such 12 month
period pursuant to Section 4.2 (based on the average of the last three years’
annual bonuses or such lesser number of years as Executive may have been
employed). If the foregoing amount is not paid within ten (10) days after the CC
Termination, the unpaid amount will bear interest at the per annum rate of 12%.
The right to the foregoing termination compensation under clause (a) above is
subject to the Executive’s execution of the Company’s severance agreement
which will operate as a release of all legally waivable claims against the
Company. Such payment is further conditioned upon the Executive’s
compliance with all of the provisions of this Agreement, including all post-
employment obligations. Notwithstanding the foregoing, if at the time of a CC
Termination, the Executive is a “specified employee” as defined in regulations
under Section 409A of the Code, such payment will be made on the first day
which is more than six months following the CC Termination. In connection with
any Change of Control, the Company shall obtain the assumption of this
Agreement, without limitation or reduction, by any successor to the Company or
any parent corporation of the Company.
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6.3.1 Change of Control. For the purpose of this Agreement, a “Change of Control” means
the occurrence of any of the following:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) (a “Person”), other than
Executive or his affiliates or Xxx X. Xxxx or his affiliates (the “Exempt
Persons”), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 40% or more of either (i) the
then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (ii) the combined voting
power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the “Outstanding Company
Voting Securities”). For purposes of this paragraph (a) the following
acquisitions by a Person will not constitute a Change of Control: (i) any
acquisition directly from the Company; (ii) any acquisition by the
Company; (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company; or (iv) any acquisition by any corporation
pursuant to a transaction which complies with clauses (i), (ii) and (iii) of
paragraph (c) of this paragraph 6.3.1.
(b) The individuals who, as of the date hereof, constitute the
Board of Directors (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board of Directors. Any individual
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company’s shareholders, is approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board will be considered a member of the Incumbent Board as of the date
hereof, but any such individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Incumbent
Board will not be deemed a member of the Incumbent Board as of the
date hereof.
(c)
The consummation of a reorganization, merger,
consolidation or sale or other disposition of all or substantially all of the
assets of the Company (a “Business Combination”), unless following
such Business Combination: (i) the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more
than 60% of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may be,
of the corporation resulting from such Business Combination (including,
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without limitation, a corporation which as a result of such transaction owns the Company or
all or substantially all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership, immediately prior
to such Business Combination of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or related trust) of
the Company or such corporation resulting from such Business Combination) other than one or
more of the Exempt Persons beneficially owns, directly or indirectly, 40% or more of,
respectively, the then outstanding shares of common stock of the corporation resulting from
such Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed prior to
the Business Combination and (iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination.
(d) The approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.
6.3.2 CC Termination. The term “CC Termination” means any of the following: (a) the
Executive’s employment is terminated by the Company other than under paragraphs 6.1.2, 6.4
or 6.5; or (b) the Executive resigns as a result of a change in the Executive’s duties or
title, a reduction in the Executive’s then current Base Salary or a significant reduction
in the Executive’s then current benefits as provided in Section 4, a relocation of more
than 25 miles from the Executive’s then current place of employment being required by the
Board of Directors or a default by the Company under this Agreement.
6.4 Incapacity of Executive. If the Executive suffers from a physical or mental condition,
which in the reasonable judgment of the Company’s Board of Directors, prevents the Executive in
whole or in part from performing the duties specified herein for a period of sixteen (16)
consecutive weeks, the Executive’s employment may be terminated by the Company, in which event,
the Company will pay Executive the equivalent of six (6) months Base Salary in effect on the date
of termination. If, on the termination date, the Executive is a “specified employee” as defined in
regulations under Section 409A of the Code, such payment will commence on the first payroll
payment date which is more than six months following the termination date. Notwithstanding the
foregoing, the amount payable hereunder will be reduced by any benefits payable under any
disability plans provided by the Company under paragraph 4.4 of this Agreement. The right to the
compensation due under this paragraph 6.4 is subject to the execution by the Executive or the
Executive’s legal representative
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of the Company’s severance agreement which will operate as a release of all legally waivable
claims against the Company. In applying this section, the Company will comply with any applicable
legal requirements, including the Americans with Disabilities Act.
6.5 Death of Executive. If the Executive dies during the term of this
Agreement, Executive’s employment will terminate without compensation to the
Executive’s estate except: (a) the obligation to continue the Base Salary
payments under paragraph 4.1 of this Agreement for twelve (12) months after
the effective date of such termination.
6.6 Effect of Termination. The termination of Executive’s
employment will terminate all obligations of the Executive to render services on
behalf of the Company. The Executive will maintain the confidentiality of all
information acquired by the Executive during the term of his employment in
accordance with paragraph 7 of this Agreement and the Executive shall comply
with all other post employment requirements including paragraphs 7, 8, 9, 10,
11, 12 and 13. Except as otherwise provided in this paragraph 6, no accrued
bonus, severance pay or other form of compensation will be payable by the
Company to the Executive by reason of the termination of his employment. All
keys, entry cards, credit cards, files, records, financial information, furniture,
furnishings, computers, equipment, supplies and other items relating to the
Company will remain the property of the Company. The Executive will have the
right to retain and remove all personal property and effects that are owned by
the Executive and located in the offices of the Company. All such personal
items will be removed from such offices no later than ten (10) days after the
effective date of termination, and the Company is hereby authorized to discard
any items remaining and to reassign the Executive’s office space after such
date. Prior to the effective date of termination, the Executive will cooperate with
the Company to provide for the orderly separation of the Executive’s
employment.
6.7 Equity Compensation Provisions. Notwithstanding any
provision to the contrary in any option agreement, restricted stock agreement,
plan or other agreement relating to equity based compensation, in the event of a
termination under paragraph 6.3 of this Agreement, or in the event of a
termination under paragraph 6.1.1 of this Agreement if at the time of such
termination Xxx X. Xxxx is not the Chairman and Chief Executive Officer of the
Company: (a) all units, stock options, incentive stock options, performance
shares, stock appreciation rights and restricted stock granted and held by
Executive immediately prior to such termination will immediately become 100%
vested; and (b) the Executive’s right to exercise any previously unexercised
options will not terminate until the latest date on which such option would expire
but for Executive’s termination of employment. To the extent Company is
unable to provide for one or both of the foregoing rights the Company will
provide in lieu thereof a lump-sum cash payment equal to the difference
between the total value of such units, stock options, incentive stock options,
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performance shares, stock appreciation rights and shares of restricted stock (the “Equity
Compensation Rights”) with the foregoing rights as of the date of Executive’s termination
of employment and the total value of the Equity Compensation Rights without the foregoing
rights as of the date of the Executive’s termination of employment. The foregoing amounts
will be determined by the Board of Directors in good faith based on a valuation performed
by an independent consultant selected by the Board of Directors and the cash payment, if
any, will be paid in a lump sum in the case of a termination under Section 6.1.1, at the
same time as the severance payment is otherwise due under such Section, and in the case of
a termination under Section 6.3, at the same time the payment is due under such Section.
The right to the foregoing termination compensation under clauses (a) and (b) above is
subject to the Executive’s execution of the Company’s severance agreement which will
operate as a release of all legally waivable claims against the Company. Such payment is
further conditioned upon the Executive’s compliance with all of the provisions of this
Agreement, including all post-employment obligations.
7. Confidentiality. The Executive recognizes that the nature of the Executive’s services are
such that the Executive will have access to information which constitutes trade secrets, is of a
confidential nature, is of great value to the Company or is the foundation on which the business
of the Company is predicated. The Executive agrees not to disclose to any person other than the
Company’s employees or the Company’s legal counsel or other parties authorized by the Company to
receive confidential information (“Confidential Information”) nor use for any purpose, other than
the performance of this Agreement, any Confidential Information. Confidential Information includes
data or material (regardless of form) which is: (a) a trade secret; (b) provided, disclosed or
delivered to Executive by the Company, any officer, director, employee, agent, attorney,
accountant, consultant, or other person or entity employed by the Company in any capacity, any
customer, borrower or business associate of the Company or any public authority having
jurisdiction over the Company of any business activity conducted by the Company; or (c) produced,
developed, obtained or prepared by or on behalf of Executive or the Company (whether or not such
information was developed in the performance of this Agreement) with respect to the Company or any
assets oil and gas prospects, business activities, officers, directors, employees, borrowers or
customers of the foregoing. However, Confidential Information will not include any information,
data or material which at the time of disclosure or use was generally available to the public
other than by a breach of this Agreement, was available to the party to whom disclosed on a
non-confidential basis by disclosure or access provided by the Company or a third party, or was
otherwise developed or obtained independently by the person to whom disclosed without a breach of
this Agreement. On request by the Company, the Company will be entitled to a copy of any
Confidential Information in the possession of the Executive. The provisions of this paragraph 7
will survive the termination, expiration or cancellation of Executive’s employment for a period of
one (1) year after the date of termination. The Executive will deliver to the Company all
originals and copies of the documents or materials containing Confidential Information. For
purposes of paragraphs 7, 8, and 9 of this
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Agreement, the Company expressly includes any of the Company’s subsidiaries or affiliates.
8. Non-Solicitation. The Executive agrees that during the Non-Solicitation
Period (as hereafter defined), Executive will not directly, either personally or by or
through his agent, on behalf of himself or on behalf of any other individual, association
or entity, (i) use any of the Confidential Information for the purposes of calling on any
established customer of the Company or soliciting or inducing any of such customers to
acquire, or providing to any of such customers, any product or service provided by the
Company or any affiliate or subsidiary of the Company; (ii) solicit, influence or
encourage any established customer of the Company to divert or direct such
customer’s business to the Executive or any person or entity by which or with which the
Executive is employed, associated, affiliated or otherwise related; or (iii) solicit, divert
or
attempt to solicit or divert any entity which has been identified and contacted by the
Company, either directly or through such entity’s agent(s), with respect to a possible
acquisition by the Company. For the purposes hereof, the term “Non-Solicitation
Period” shall mean a period of six (6) months after Executive’s employment ceases for
any reason.
9. Non-interference. The Executive agrees that during the Non
interference Period (as hereafter defined) he will not, directly or indirectly, either
personally or by or through his agent, on behalf of himself or on behalf of any other
individual, association or entity, hire, solicit or seek to hire any employee of the
Company or any affiliate or subsidiary of the Company, or any individual who was an
employee of the Company or any affiliate or subsidiary of the Company during the
twelve-month period prior to the Termination Date, or in any other manner attempt,
directly or indirectly, to persuade any such employee to discontinue his or her status of
employment with the Company or any affiliate or subsidiary of the Company or to
become employed in a business or activities likely to be competitive with the business
of the Company or any affiliate or subsidiary of the Company. For the purposes hereof,
the term “Non-Interference Period” shall mean a period of six (6) months after
Executive’s employment ceases for any reason.
10. Severability. It is the desire and intent of the parties hereto that the
provisions of this Agreement be enforced to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated by a court
of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such provision
in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more
narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction,
it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such provision
in any other jurisdiction.
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11. Remedies. The Executive acknowledges and understands that the
provisions of this Agreement are of a special and unique nature, the loss of which
cannot be adequately compensated for in damages by an action at law, and that the
breach or threatened breach of the provisions of this Agreement would cause the
Company or any of its Subsidiaries irreparable harm. In the event of a breach or
threatened breach by the Executive of the provisions of this Agreement, the Company
or any of its subsidiaries or affiliates shall be entitled to an injunction restraining the
Executive from such breach. In addition to the foregoing and not in any way in
limitation thereof, or in limitation of any right or remedy otherwise available, if the
Executive violates any provision of Paragraphs 7, 8 or 9 hereof, any compensation or
severance payments then or thereafter due from the Company to the Executive shall
be terminated forthwith and the Company’s obligation to pay and the Executive’s right
to receive such compensation as severance payments shall terminate and be of no
further force or effect, in each case without limiting or affecting the Executive’s
obligations under such Paragraphs 7, 8 and 9 or the Company’s or its subsidiaries’ or
affiliates’ other rights and remedies available at law or equity. Nothing contained in this
Agreement shall be construed as prohibiting the Company or any of its subsidiaries or
affiliates from pursuing, or limiting the Company’s or any of its subsidiaries’ or affiliates’
ability to pursue, any other remedies available for any breach or threatened breach of
this Agreement by the Executive. The provisions of Paragraph 13 of this Agreement
relating to arbitration shall not be applicable to the Company to the extent it seeks an
injunction in any court to restrain the Executive from violating Paragraphs 7, 8 or 9
hereof.
12. Proprietary Matters.
12.1 The Executive acknowledges and agrees that the Company owns
all right, title and interest (including patent rights, copyrights, trade secret
rights,
trademark rights and all other intellectual and industrial property rights) relating
to any and all inventions (whether or not patentable), works of authorship,
design, know-how, ideas and information made or conceived or reduced to
practice, in whole or in part, by the Executive during the term of this Agreement
which are useful in, or directly or indirectly related to, the business of the
Company or any Confidential Information (collectively, the “Proprietary Rights”).
The Executive further acknowledges and agrees that all such Proprietary Rights
are “works made for hire” of which the Company is the author. The Executive
agrees to promptly disclose and provide all Proprietary Rights to the Company;
provided, in the event the Proprietary Rights shall not be deemed to constitute
“works made for hire,” or in the event the Executive should, by operation of law
or otherwise, be deemed to retain any rights in the Proprietary Rights, the
Executive agrees to assign to the Company, without further consideration, the
Executive’s entire right, title and interest in and to each and every such
Proprietary Right.
12.2 The Executive hereby agrees to assist Company in obtaining and
enforcing United States and/or foreign letters patent and copyright registrations
covering the Proprietary Rights and further agrees that Executive’s obligation to
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assist Company shall continue beyond the termination of Executive’s employment hereunder. If
Company is unable because of Executive’s mental or physical incapacity or for any other
reason to secure Executive’s signature to apply for or to pursue any application for any
United States or foreign letters patent or copyright registrations covering inventions
assigned to Company, then Executive hereby irrevocably designates and appoints Company and
its duly authorized officers and agents as Executive’s agent and attorney-in-fact to act for
and on Executive’s behalf to execute and file any such applications and to do all other
lawfully permitted acts to further the prosecution and issuance of letters patent or
copyright registrations thereon with the same legal force and effect as if executed by
Executive. Executive hereby waives and quitclaims to Company any and all claims of any
nature whatsoever which Executive now or hereafter may have for infringement of any patent
or copyright resulting from any such application for letters patent or copyright
registrations assigned hereunder to Company. Executive will further assist Company in every
lawful way to enforce any copyrights or patents obtained, including without limitation,
testifying in any suit or proceeding involving any of the copyrights or patents or executing
any documents deemed necessary by Company, all without further consideration except as
contemplated by the immediately following sentence but at the expense of Company. If
Executive is called upon to render such assistance after termination of Executive’s
employment hereunder, then Executive shall be entitled to a fair and reasonable per diem fee
(which shall not be less than Executive’s equivalent daily Base Salary) in addition to
reimbursement of any expenses incurred at the request of Company.
13. Arbitration. Any dispute between the parties out of or related to this
Agreement or the employment relationship, whether arising during the term of this
Agreement or afterwards, and involving a claim for money damages shall be subject to
binding arbitration and resolved pursuant to the rules of the American Arbitration
Association. All arbitration shall be final and binding and shall be governed by the
Federal Arbitration Act and the arbitration decision shall be enforceable in any court of
competent jurisdiction. This obligation to arbitrate shall survive even if this Agreement
shall be alleged to be rescinded or terminated. The arbitration hearing shall be
convened in Oklahoma City, Oklahoma. The Company will pay the costs and
expenses of the arbitration including, without limitation, the fees for the arbitrators.
14. Miscellaneous. The parties further agree as follows:
14.1 Time. Time is of the essence of each provision of this Agreement.
14.2 Notices. Any notice, payment, demand or communication
required or permitted to be given by any provision of this Agreement will be in
writing and will be deemed to have been given when received by personal
delivery, by facsimile, by overnight courier, or by certified mail, postage and
charges prepaid, directed to the following address or to such other or additional
addresses as any party might designate by written notice to the other party:
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To
the Company: XxxxXxxxx Energy, Inc.
0000 X.X. Xxxxxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
To
the Executive: Xxxx X. Xxxxxx
0000 Xxx Xxxxx Xxxx
Xxxxxx, XX 00000
Xxxxxx, XX 00000
14.3 Assignment. Neither this Agreement nor any of the parties’ rights
or obligations hereunder can be transferred or assigned without the prior written
consent of the other parties to this Agreement.
14.4 Construction. If any provision of this Agreement or the
application thereof to any person or circumstances is determined, to any extent,
to be invalid or unenforceable, the remainder of this Agreement, or the
application of such provision to persons or circumstances other than those as to
which the same is held invalid or unenforceable, will not be affected thereby, and
each term and provision of this Agreement will be valid and enforceable to the
fullest extent permitted by law. This Agreement is intended to be interpreted,
construed and enforced in accordance with the laws of the state of Oklahoma
14.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter herein
contained, and no modification hereof will be effective unless made by a
supplemental written agreement executed by all of the parties hereto.
14.6 Binding Effect; Third Party Beneficiary; Assignment. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective affiliates, officers, employees, agents, successors and
assigns (including, in the case of the Company or any of its subsidiaries or
affiliated companies, the successor to the business of the Company as a result
of the transfer of all or substantially all of the assets or capital stock of the
Company or any of its subsidiaries or affiliates); provided, that the Executive
may not assign this Agreement or any of his rights or interests herein, in whole
or in part, to any other person or entity without the prior written consent of the
Company.
14.7 Supercession. This Agreement is the final, complete and
exclusive expression of the agreement between the Company and the Executive
and supersedes and replaces in all respects any prior oral or written
employment agreements. On execution of this Agreement by the Company and
the Executive, the relationship between the Company and the Executive after
the effective date of this Agreement will be governed by the terms of this
Agreement and not by any other agreements, oral or otherwise.
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14.8 Non-Contravention. Executive represents and warrants to the
Company that the execution and performance of this Agreement will not violate,
constitute a default under, or otherwise give rights to any third party, pursuant to
the terms of any Agreement to which Executive is a party.
14.9 Indemnity. EXECUTIVE AGREES TO INDEMNIFY AND HOLD
HARMLESS THE COMPANY, ITS DIRECTORS, OFFICERS AND
EMPLOYEES AND AGENTS (THE “INDEMNIFIED PARTIES”) AGAINST ANY
LOSS, CLAIM, DAMAGE, LIABILITY OR EXPENSE, AS INCURRED, (“LOSS”)
TO WHICH THE INDEMNIFIED PARTIES MAY BECOME SUBJECT OR
INCUR, INSOFAR AS SUCH LOSS ARISES OUT OF OR IS BASED UPON
ANY INACCURACY IN ANY REPRESENTATION OR WARRANTY GIVEN BY
EXECUTIVE IN THIS AGREEMENT AND TO REIMBURSE THE INDEMNIFIED
PARTIES FOR ANY AND ALL EXPENSES (INCLUDING THE FEES AND
DISBURSEMENTS OF COUNSEL CHOSEN BY THE INDEMNIFIED PARTIES)
AS SUCH EXPENSES ARE REASONABLY INCURRED BY THE
INDEMNIFIED PARTIES IN CONNECTION WITH INVESTIGATING,
DEFENDING, SETTLING, COMPROMISING OR PAYING ANY SUCH LOSS.
14.10 Compliance with Section 409A of the Code. This Agreement is
intended to comply with Section 409A of the Code and shall be construed and
interpreted in accordance with such intent. To the extent any benefit paid under
this Agreement shall be subject to Section 409A of the Code, such benefit shall
be paid in a manner that will comply with Section 409A, including any IRS 409A
Guidance. Any provision of this Agreement that would cause the payment of any
benefit to fail to satisfy Section 409A of the Code shall have no force and effect
until amended to comply with Section 409A (which amendment may be
retroactive to the extent permitted by the IRS 409A Guidance.
IN WITNESS WHEREOF, the undersigned have executed this Agreement effective the date
first above written.
[SIGNATURES ON FOLLOWING PAGE]
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| XXXXXXXXX ENERGY, INC. |
||||
| By: | /s/ Xxx X. Xxxx 03/19/08 | |||
| Xxx X. Xxxx Date | ||||
| Chief Executive Officer | ||||
| (the “Company”) |
||||
| By: | /s/ Xxxx X. Xxxxxx 01/14/08 | |||
| Xxxx X. Xxxxxx Date |
||||
| (the “Executive”) | ||||
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