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EXHIBIT (e)(5)
PENNACO ENERGY, INC.
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of the 28th day of July, 2000 by
and between XXXXXXX X. XXXXXX, residing at 00 Xxxxxxx Xxx. Xxxxxx, XX 00000
("Executive"), and PENNACO ENERGY, INC., a Delaware corporation, with offices at
0000 00xx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (the "Company"), for the
purpose of setting forth the terms and conditions of Executive's employment by
the Company and to protect the Company's knowledge, expertise, customer
relationships and the confidential information the Company has developed
regarding clients, customers, shareholders, option holders, employees, products,
business operations and services. As of the Effective Date, this Agreement
supersedes any prior understandings or agreements between Executive and the
Company or any of the Company's subsidiaries or affiliates.
RECITALS:
WHEREAS, the Board desires to provide for the continued employment of
Executive and to make certain changes in Executive's employment arrangements
with the Company which the Board has determined will reinforce and encourage the
continued attention and dedication to the Company of Executive as a member of
the Company's management, in the best interest of the Company and its
shareholders. Executive is willing to commit himself to continue to serve the
Company, on the terms and conditions herein provided, although this Agreement
may be amended at any time by written agreement among the parties; and
WHEREAS, in order to effect the foregoing, the Company and Executive
wish to enter into an employment agreement on the terms and conditions set forth
below;
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. TIME AND EFFORTS
1.1 Executive shall be employed as the Company's Vice President - Legal
and shall devote his attention to the duties and responsibilities of Vice
President - Legal in furtherance of the Company's business. Subject to
consultation with and the direction of the President and the Board of Directors,
Executive shall have responsibility for, and authority over, legal matters
concerning the Company and other duties and responsibilities delegated by the
President and the Board of Directors of the Company.
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1.2 In the performance of all of his responsibilities hereunder,
Executive shall be subject to all of the Company's policies, rules, and
regulations applicable to its officers and employees generally and its Vice
President -Legal specifically. Executive shall report to the President and
Executive Vice President of the Company.
1.3 In order to induce the Company to enter into this Agreement,
Executive represents and warrants to the Company that (i) Executive is not a
party or subject to any employment agreement or arrangement with any other
person, firm, company, corporation or other business entity which is competitive
with or adverse to the Company's business; and (ii) Executive is subject to no
restraint, limitation or restriction by virtue of any agreement or arrangement,
or by virtue of any law or rule of law or otherwise which would impair
Executive's right or ability to enter the employ of the Company or to perform
fully his duties and obligations pursuant to this Agreement.
1.4 Without first obtaining the written permission of the Board in each
instance, Executive will not authorize or permit the Company to engage the
services, of, or engage in any business activity with, or provide any financial
or other benefit to, any affiliate of Executive. The phrase "affiliate of
Executive" as used in this Agreement shall mean and include Executive's family
by blood or marriage (including, without limitation, parents, spouse, siblings,
children and in-laws), and any business or business entity which is directly or
indirectly owned or controlled by Executive or any member of Executive's family
or in which Executive or any member of Executive's family has any direct or
indirect financial interest whatsoever.
2. TERM
The initial Term of this Agreement is from August 1, 2000 (the
"Effective Date") until August 1, 2004; on each anniversary of the Effective
Date after August 1, 2004, this Agreement shall be automatically renewed for a
new one-year Term from such anniversary date unless the Company notifies
Executive in writing 90 days prior to the anniversary of the Effective Date that
the Company will not be renewing this Agreement on the next anniversary of the
Effective Date, or unless sooner terminated pursuant to Section 4. References
hereinafter to the "Term" of this Agreement shall refer to both the initial term
and any extended term of Executive's employment hereunder.
3. COMPANY'S AUTHORITY
Executive agrees to observe and comply with the reasonable rules and
regulations of Company as adopted by the Board of Directors of the Company or
committee of the Board of Directors respecting performance of Executive's duties
and to carry out and perform orders, directions, and policies of Company as they
may be, from time-to-time, stated to Executive either verbally or in writing.
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4. TERMINATION
This Agreement shall be terminated upon the happening of any of the
following events:
4.1 Upon the death of Executive.
4.2 Whenever the Company and Executive shall mutually agree to
termination.
4.3 At the option of the Company, upon written notice by the Company to
Executive, for Cause. "Cause" shall exist for such termination if Executive (i)
pleads or is found guilty of a felony involving an act of dishonesty or moral
turpitude by a court of competent jurisdiction; (ii) has engaged in serious
misconduct, materially and demonstratively injurious to the company; (iii) has
made any material misrepresentation or omission to the Company under Section 1.4
hereof; (iv) has committed an unexcused material breach of his duty in the
course of Executive's employment; (v) has been guilty of habitual neglect of his
duties; (vi) has usurped a corporate opportunity, is guilty of fraudulent
embezzlement of property or funds of the Company, or committed any act of fraud
or intentional misrepresentation, moral turpitude, dishonesty or other
misconduct that would constitute a felony; or (vii) has committed a material,
unexcused breach of this Agreement.
4.4 The Company may terminate Executive's employment under this
Agreement at any time without Cause, subject to provisions for payment of
compensation as specified under Section 5.5 of this Agreement. Should the
Company demote the Executive below the status of Vice President - Legal without
Cause, this Agreement shall terminate subject to provisions for payment of
compensation as specified under Section 5.5 of this Agreement.
4.5 At the option of Executive, upon 90 days written notice by
Executive to the Company.
4.6 If as a result of Executive's incapacity due to physical or mental
illness, Executive shall have begun to receive benefits under an insured long
term disability plan of the Company, and within 30 days after written notice of
termination is given shall not have returned to the performance of his duties
hereunder, the Board of Directors may terminate Executive's employment
hereunder.
4.7 Upon the expiration of the Term of this Agreement, or any extension
or renewal thereof.
5. CURRENT COMPENSATION
5.1 Annual Salary. For all services rendered by Executive under this
Agreement, the Company shall pay or cause to be paid to Executive, and Executive
shall accept the annual Salary and Incentive Compensation, if
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any, all in accordance with the subject to the terms of this Agreement. For
purposes of this Agreement, the term "Compensation" shall mean the Annual Salary
and Bonus Compensation, if any. Executive shall be entitled to receive as
current compensation an annual salary in an amount of not less than $60,000 per
annum (hereinafter referred to as the "Annual Salary"). References in this
Agreement to "annual" or "per annum" or "Annual" and similar phrases shall mean
the twelve-month period commencing on August 1st of each year during the Term of
this Agreement unless otherwise indicated.
5.2 Bonus Compensation. Executive shall be entitled, to annual
incentive compensation ("Bonus Compensation") as set by the Board of Directors
and its Compensation Committee .
5.3 401(k) plan. Executive shall be entitled to participate in the
Company's 401(k) or other similar retirement benefit plan.
5.4 Payments of Current Compensation. The payment of Executive's Annual
Salary shall be made in semi-monthly installments on the then prevailing paydays
of the Company. Any payment for Incentive Compensation will be made in
accordance with any executive incentive compensation plan implemented by the
Board of Directors, and payment will be made in one lump sum concurrently with
payments made to others in senior management. All payments are subject to the
customary withholding tax and other employment taxes as required with respect to
compensation paid to an employee.
5.5 Payment of Compensation on Termination.
5.5.1 Upon termination of Executive's employment prior to the
expiration of this Agreement, if such termination is pursuant to Section 4.1,
4.2, 4.3, 4.5, 4.6, or 4.7 hereof, Executive shall be entitled to any Annual
Salary, Bonus Compensation, and vacation accrued but unpaid through the date of
termination of employment (the "Accrued Obligations"), payable on the date of
termination. Executive shall also be entitled to exercise any vested options for
a period of 90 days following the termination of his employment hereunder, or as
provided by the terms of grant of the options, if longer, but in no event beyond
their remaining terms.
5.5.2 Upon termination of Executive's employment prior to the
expiration of this Agreement, if such termination is pursuant to Section 4.4
hereof prior to a change in control, Executive shall be entitled to the Accrued
Obligations, payable on the date of termination. In addition, Executive shall be
paid $300,000 in cash (or by wire transfer) within 30 days of said termination.
Executive shall also be entitled to exercise any vested options for a period of
90 days following the termination of his employment hereunder or as provided by
the terms of grant of the options, if longer, but in no event beyond their
remaining terms.
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5.5.3 If, on or following a change in control, (i) Executive's
employment is terminated during the Term by the Company pursuant to Section 4.4,
or (ii) Executive has any adverse change in his status, title, duties,
responsibilities, or authority, as determined in good faith by Executive, and
Executive terminates his employment at any time thereafter during the Term
pursuant to Section 4.5, Executive shall be entitled to receive (w) the Accrued
Obligations, payable within five days of the date of such termination, (x) the
Noncompete Payment (as defined in Section 9.3A below), payable within five days
of the date of such termination, (y) exercise any vested stock options for a
period of 180 days following the termination of employment hereunder or as
provided by the terms of grant of the options, if longer, but in no event beyond
their remaining terms, and (z) for the 12-month COBRA period following such
termination, the Company shall provide Executive and his eligible family members
with continued coverage under the Company's group health plan(s) at a monthly
premium rate equal to that charged by the Company to its active employees for
similar coverage. Notwithstanding anything in this Agreement to the contrary, in
no event shall the Term of this Agreement end prior to the second anniversary of
the date of a change in control, subject to its earlier termination as provided
in Section 4. If Executive's employment is terminated by the Company pursuant to
Section 4.4 within 12 months prior to a change in control and it is reasonably
demonstrated by Executive that such termination was in connection with or in
anticipation of such change in control, then for all purposes of this Agreement
the change in control shall be deemed to have occurred the day before
Executive's termination of employment, and Executive shall be entitled to
receive, within five days of such change in control, the amounts provided in (x)
and (y) above less any payments already made to Executive pursuant to Section
5.5.2. To the extent any stock options of Executive have already lapsed or been
forfeited as a result of or following his termination of employment prior to a
change in control, which would not have lapsed or terminated had his employment
continued until the change in control, Executive shall have, effective as of the
date of the change in control, a vested cash stock appreciation right ("SAR")
with respect to Company stock (or successor stock) in lieu of each such
terminated or forfeited option which SAR can be exercised by Executive at any
time within 180 days following the change in control with an exercise price
equal to the exercise price of the cancelled option that the SAR replaces.
5.5.4 For all purposes of this Agreement, a "change of control"
shall mean and shall be deemed to have occurred if: (i) there shall be
consummated (x) any consolidation or merger of the Company with another
corporation or entity and as a result of such consolidation or merger less than
50% of the outstanding voting securities of the surviving or resulting
corporation or entity shall be owned in the aggregate by the stockholders of the
Company, other than "affiliates," as defined in the Securities Exchange Act of
1934, as amended (the "Exchange Act"), of any party to such consolidation or
merger, as the same shall have existed immediately prior to such consolidation
or merger, or (Y) any sale, lease, exchange or other transfer (or in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company; (ii) the stockholders of the Company shall have
approved any plan or proposal for the liquidation or dissolution of the Company;
(iii) any "person" (as such term is used in the Section 13(d) and 14(d) (2) of
the Exchange Act) shall have become the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act) of 50% or more of the Company's outstanding
common stock, without the prior approval of the Board; (iv) during any period of
two consecutive years, individuals who at the
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beginning of such period constituted the entire Board of Directors shall have
ceased for any reason to constitute a majority thereof unless the election, or
the nomination for election by the Company's stockholders, of each new Director
was approved by vote of at least two-thirds of the Directors then still in
office who were Directors at the beginning of the period; (v) a change of
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act shall
have occurred; (vi) any consolidation or merger of the Company with another
corporation or entity and as a result of such consolidation or merger Executive
is not retained by the Board of Directors as the Vice President - Legal of the
Company.
6. DETERMINATION OF DISABILITY; PAYMENT OF DISABILITY INSURANCE PREMIUMS
6.1 In the event Executive's disability, as defined in Section 4.6, is
in question, and after written request by the Company, Executive refuses to be
examined by his regularly attending physician or if the regularly attending
physician fails to submit a report within 30 days after the examination has been
requested by the Company, the determination of disability shall be made by the
Company.
6.2 Executive shall be entitled to the disability benefits available to
all executive employees of the Company.
7. MISCELLANEOUS BENEFITS
7.1 Medical Insurance. Executive and his family shall be entitled to
participate in any medical, dental, vision, life, long-term disability, other
insurance or employee benefit program instituted or maintained by the Company
for the benefit of its executive employees.
7.2 Payment of Benefits on Termination of Employment. If Executive's
employment with the Company is terminated, Executive shall be entitled to
maintain his employee benefits in accordance with his maximum COBRA rights.
7.3 Business Expenses. Executive shall be reimbursed for all reasonable
expenses incurred by Executive in connection with Executive's attendance of
business meetings and promotion of Company business upon presentation by
Executive to the Company of an expense report and adequate records or other
documentation substantiating the expenditures, not less frequently than monthly.
Any such amounts disallowed as a business expense for federal or state income
tax purposes shall be deemed additional salary to Executive. The fact that the
Company may not reimburse Executive for an expense is not an indication that the
Company determined that the expense was not incurred on its behalf or in
connection with the Company's business.
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7.4 Additional Benefits. Executive shall be entitled to participate in
all programs, rights and benefits for which executive is otherwise entitled to
any bonus plan, incentive plan, participation plan or extra compensation plan,
pension plan, profit sharing plan, life, medical, dental, disability or other
insurance plan or policy or other plan or benefit the Company may provide for
senior executives or for employees of the Company generally from time to time in
effect during the term of this Agreement. For the avoidance of doubt, the rights
granted or afforded to Executive under any such plans shall be not less than the
most favorable rights and highest amounts granted to employees of similar or
lower position with the Company and on terms at least as favorable.
8. VACATION
During each calendar year of the Term of this Agreement, Executive
shall be entitled three weeks of paid vacation, earned ratably over the Term of
each calendar year during the Term of this Agreement. Executive shall be
entitled to receive payment for accrued vacation not taken during each calendar
year during the Term of this Agreement or may accrue such vacation for use in a
subsequent calendar year; however Executive shall be subject to a maximum of six
weeks of accrued vacation.
9. RESTRICTIVE COVENANTS
9.1 Confidential Information. Executive acknowledges that in his
employment hereunder he occupies a position of trust and confidence. During the
Term, and thereafter in accordance with the provisions of this Agreement,
Executive shall not, except as may be required to perform his duties hereunder
as required by applicable law, and except for information which is or becomes
publicly available other than as a result of a breach by Executive of the
provisions hereof, disclose to others or use, whether directly or indirectly,
any Confidential Information. "Confidential Information" shall mean information
about the Company, its subsidiaries and affiliates, and their respective
suppliers, clients and customers that is not disclosed by the Company for
financial reporting purposes and that was learned by Executive in the course of
his employment hereunder, including (without limitation) proprietary knowledge,
trade secrets, market research, data, formulae, information and supplier, client
and customer lists and all papers, resumes, and records (including computer
records) of the documents containing such Confidential Information. Executive
agrees to deliver or return to the Company, at the Company's request at any time
or upon termination or expiration of his employment, or as soon thereafter as
possible, all documents, computer tapes and disks, records, lists, data,
drawings, prints, notes and written information (and all copies thereof)
furnished by the Company or any of its subsidiaries affiliates or prepared by
Executive during the Term of his employment by the Company. The obligations
hereof shall not apply to any information which is or becomes public or in the
public domain by action of the Company or through no fault of Executive.
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9.2 Business Diversion. During the term and for 30 months thereafter,
Executive shall not, directly or indirectly, influence or attempt to influence
customers or suppliers of the Company or any of its subsidiaries or affiliates
to divert their business to any competitor of the Company, to the exclusion of
the Company. However, Executive may contract with the same customers and
suppliers after the Term hereof so long as it is not to the exclusion of the
Company's relationships with such customers and suppliers.
9.3 Non-Solicitation. Executive recognizes that he will possess
confidential information about other employees of the Company and its
subsidiaries and affiliates relating to, among other things, their education,
experience, skills, abilities, compensation and benefits, and interpersonal
relationships with suppliers and customers of the Company. Executive recognizes
that the information he will possess about these other employees is not
generally known, is of substantial value to the Company, and will be acquired by
him because of his business position with the Company. Executive agrees that,
during the Term and for 12 months thereafter (or 24 months thereafter if his
termination of employment occurs on or following a change in control), he will
not, directly or indirectly, solicit or recruit any employee of the Company, its
subsidiaries or affiliates for the purpose of being employed by him or by any
other person on whose behalf he is acting as an agent, representative or
employee and that he will not convey any such confidential information or trade
secrets about other employees of the Company, including its subsidiaries or
affiliates, to any other person. However, if Executive's employment is
terminated prior to a change in control in accordance with the provisions of
Section 4.4, nothing herein shall prevent Executive from soliciting or
recruiting, directly or indirectly, any employee of the Company recruited to the
Company by Executive.
9.3A Non-Competition. In consideration for the Company's agreement to
provide Executive access to Confidential Information and the Noncompete Payment
(as provided below), Executive agrees that while employed by the Company and, if
Executive's employment terminates for any reason other than Cause, death or
disability on or within two years following a change in control, for the
two-year period after such termination of employment (the "Restricted Period"),
subject to Section 9.3A.3 below, Executive shall not, unless Executive receives
the prior written consent of the Board of Directors of the Company, own an
interest in, manage, operate, join, control, lend money or render financial or
other assistance to or participate in or be connected with, as an officer,
employee, partner, stockholder, consultant or otherwise, any person that
competes with the Company or its subsidiaries in the oil and gas exploration or
production business (the "Business") within the Powder River Basin in Wyoming
(the "Noncompete Area"). Within five days of any such termination of employment,
the Company shall pay Executive a lump sum amount in cash (or by wire transfer)
equal to $500,000 (the "Noncompete Payment").
9.3A.1 Executive has carefully read and considered the provisions of
this Section 9.3A and, having done so, agrees that the restrictions set forth in
this Section 9.3A (including the Restricted Period, scope of activity to be
restrained and the geographical scope) are fair and reasonable and are
reasonably required for the protection of the
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interests of the Company, its officers, directors, employees, creditors and
shareholders. Executive understands that the restrictions contained in this
Section 9.3A may limit his ability to engage in a business similar to the
Company's Business, but acknowledges that he will receive sufficiently high
remuneration and other benefits from the Company hereunder to justify such
restrictions.
9.3A.2 It is specifically agreed that the period of two years following
termination of employment, during which the agreements and covenants of
Executive made in this Section 9.3A shall be effective, shall be computed by
excluding from such computation any time which Executive is in violation of any
provision of this Section 9.3A. In the event that any provision of this Section
9.3A relating to the Restricted Period and/or the areas of restriction shall be
declared by a court of competent jurisdiction to exceed the maximum time period
or areas such court deems reasonable and enforceable, the Restricted Period
and/or areas of restriction deemed reasonable and enforceable by the court shall
become and thereafter be the maximum time period and/or areas.
9.3A.3 Nothing in this Agreement shall prohibit Executive from (1)
acquiring or holding any issue of stock or securities of any person that has any
securities registered under Section 12 of the Exchange Act, listed on a national
securities exchange or quoted on the automated quotation system of the National
Association of Securities Dealers, Inc. so long as (i) Executive is not deemed
to be an "affiliate" of such person as such term is used in paragraphs (c) and
(d) of Rule 145 under the Securities Act of 1933, as amended, and (ii) Executive
and members of his immediate family do not own or hold more than 3% of any
voting securities of any such person or (2) becoming an employee of or a
consultant to a person that competes with the Company or an affiliate in the
Noncompete Area, provided that for the Restricted Period Executive does not
perform any services for such person in or relating to the Noncompete Area.
9.3A.4 Executive acknowledges that a breach of any of the covenants
contained in Section 9.3 or this Section 9.3A may result in material irreparable
injury to the Company for which there is no adequate remedy at law, that it will
not be possible to measure damages for such injuries precisely and that, in the
event of such a breach, the Company shall be entitled, in addition to any other
remedies at law, to obtain a temporary restraining order and/or a preliminary or
permanent injunction restraining Executive from engaging in activities
prohibited by Section 9.3 or this Section 9.3A or such other relief as may
required to specifically enforce any of the covenants contained in Section 9.3
or this Section 9.3A. Executive agrees to waive any requirement for the
Company's securing or posting
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of any bond in connection with such remedies. Executive further agrees to and
hereby does submit to in personam jurisdiction before each and every such court
for that purpose.
9.4 If Executive breaches, or threatens to commit a breach of, any of
the provisions of Section 9 (the "Restrictive Covenants"), the Company and its
subsidiaries shall have the right to the following:
9.4.1 Specific Performance. The right and remedy to have the
Restrictive Covenants specifically enforced by any court of competent
jurisdiction, it being agreed that any breach or threatened breach of the
Restrictive Covenants would cause irreparable injury to the Company or its
subsidiaries and that money damages would not provide an adequate remedy to the
Company or its subsidiaries.
9.4.2 Accounting. The right and remedy to require Executive to
account for and pay over to the Company or its subsidiaries, as the case may be,
all compensation, profits, monies, accruals, increments or other benefits
derived or received by Executive as a result of any transaction constituting a
breach of the Restrictive Covenants.
9.4.3 Severability of Restrictive Covenants. Executive acknowledges
and agrees that the Restrictive Covenants are reasonable and valid in geographic
and temporal scope and in all other respects. If any court determines at any of
the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the
remainder of the Restrictive Covenants shall not thereby be affected and shall
be given full effect without regard to the invalid provisions.
9.4.4 Blue Penciling. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographic scope or such provision, such court shall have the power
to reduce the duration or scope of such provision, as the case may be, and, in
its reduced form, such provision shall not be enforceable.
9.4.5 Enforceability of Jurisdictions. The obligations in this
Section 9 shall survive the termination of Executive's employment or expiration
of this Agreement and shall be fully enforceable thereafter. Executive intends
to and hereby confers jurisdiction to enforce the Restrictive Covenants upon the
courts of any jurisdiction within the geographic scope of such Restrictive
Covenants. If the courts of any one or more of such jurisdictions hold the
Restrictive Covenants unenforceable by reason of the breadth of such scope or
otherwise, it is the intention of Executive that such determination not bar or
in any way affect the right of the Company or its subsidiaries to the relief
provided above in the courts of any other jurisdiction within the geographic
scope of such Restrictive Covenants, as to breaches of such Restrictive
Covenants in such other respective jurisdictions, such
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Restrictive Covenants as they relate to each jurisdiction being, for this
purpose, severable into diverse and independent Restrictive Covenants.
10. PARTICIPATION IN STOCK AND OPTION EXECUTIVE COMPENSATION PLAN
10.1 Executive is a current participant in the Company's Employee Stock
Option and Incentive Plan and has been granted options pursuant to the terms of
individual option grants. Executive shall be considered for additional grants of
options, stock appreciation rights, phantom stock rights, and any similar option
or securities or equity compensation when and as such grants are considered for
other executives or employees of the Company.
10.2 Executive agrees to grant the Company a right of first refusal for
a 30-day period to purchase any shares of Common Stock owned by Executive
offered to anyone other than the Company and agrees that the Company has the
right to assign its rights to purchase Executive's shares pursuant to the terms
hereof.
11. DISPUTE RESOLUTION
The parties agree that any dispute that may arise in connection with,
arising out of or relating to this Agreement, or any dispute that relates in any
way, in whole or in part, to Executive's employment with the Company, the
termination of that employment, or any other dispute by and among the parties or
their successors, assigns or affiliates, shall be submitted to binding
arbitration in Denver County, Colorado according to the Employment Dispute
Resolution Rules and Procedures of the American Arbitration Association. This
arbitration obligation extends to any and all claims that may arise by and
between the parties or their successors, assigns or affiliates, and expressly
extends to, without limitation, claims or cause of action for wrongful
termination, impairment of ability to compete in the open labor market, breach
or an express or implied contract, breach of the covenant of good faith and fair
dealing, breach of fiduciary duty, fraud, misrepresentation, defamation,
slander, infliction of emotional distress, disability, loss of future earnings,
and claims under the applicable state constitution, the United States
Constitution, and applicable state fair employment laws, federal equal
employment opportunity laws, and federal and state labor statutes and
regulations, including, but not limited to, the Civil Rights Act of 1964, as
amended, the Labor-Management Relations Act, as amended, the Worker Retraining
and Notification Act of 1988, the Americans With Disabilities Act of 1990, the
Rehabilitation Act of 1973, as amended, the Employee Retirement Income Security
Act of 1974, as amended, the Age Discrimination in Employment Act of 1967, as
amended, and the California Fair Employment and Housing Act, as amended.
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12. ASSIGNMENT
This Agreement is a personal contract, and the rights, interests and
obligations of Executive hereunder may not be sold, transferred, assigned,
pledged or hypothecated except as otherwise expressly permitted by the
provisions of this Agreement. Executive shall not under any circumstances have
any option or right to require payment hereunder otherwise than in accordance
with the terms hereof. Except as otherwise expressly provided herein, Executive
shall not have any power of anticipation, alienation or assignment of payments
contemplated hereunder, and all rights and benefits of Executive shall be for
the sole personal benefit of Executive, and no other person shall acquire any
right, title or interest hereunder by reason of any sale, assignment, transfer,
claim or judgment or bankruptcy proceedings against Executive; provided,
however, that in the event of Executive's death, Executive's estate, legal
representatives or beneficiaries (as the case may be) shall have the right to
receive all of the benefits that accrued to Executive pursuant to, and in
accordance with, the terms of this Agreement.
13. SUCCESSOR
This Agreement may be assigned by the Company to any successor interest
to its business. This Agreement shall bind and inure to the benefit of the
Company's successors and assigns as well.
14. NOTICES
All notices, requests and demands hereunder shall be in writing and
delivered by hand, by mail, or by telegram, and shall be deemed given if by hand
delivery, upon such delivery, and if by mail, 48 hours after deposit in the
United States mail, first class, registered or certified mail, postage prepaid
and properly addressed to the party at the address set forth at the beginning of
this Agreement. Any party may change its address for purposes of this paragraph
by giving the other party written notice of the new address in the manner set
forth above.
15. INVALID PROVISIONS
Invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this Agreement shall
be construed in all respects as if such invalid or unenforceable provision were
omitted.
16. AMENDMENT, MODIFICATION OR REVOCATION
This Agreement may be amended, modified or revoked in whole or in part,
but only by a written instrument which specifically refers to this Agreement and
expressly states that it constitutes an amendment, modification or
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revocation hereof, as the case may be, and only if such written instrument has
been signed by each of the parties to this Agreement.
17. HEADINGS
The headings in this Agreement are inserted for convenience only and
are not to be considered in construction of the provisions hereof.
18. ENTIRE AGREEMENT
This Agreement contains the entire understanding among the parties and
supersedes any prior written or verbal agreements between them respecting the
subject matter hereof, including, without limitation, any prior verbal or
written employment agreement between Executive and the Company. Upon the
effectiveness hereof, any such prior verbal or written agreements shall
terminate.
No representations or warranties of any kind or nature relating to the
Company or its affiliates or their respective businesses, assets, liabilities,
operations, future plans or prospects have been made by or on behalf of the
Company to Executive; nor have any representations or warranties of any kind or
nature been made by Executive to the Company, except as expressly set forth in
this Agreement.
19. ATTORNEYS' FEES
If any legal action is necessary to enforce the terms and conditions of
this Agreement, the prevailing party in such action shall be entitled to recover
all costs of suit and reasonable attorneys' fees as determined by the
arbitrator.
20. FURTHER ASSURANCES
The parties shall execute such documents and take such other action as
is necessary or appropriate to effectuate the provisions of this Agreement.
21. CONTROLLING LAW
This Agreement shall be governed by the laws of the State of Colorado.
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22. WAIVER
A waiver by either party of any of the terms and conditions hereof
shall not be construed as a general waiver by such party, and such party shall
be free to reinstate such part or clause, with or without notice to the other
party.
23. INDEMNIFICATION
To the fullest extent permitted by law and the Company's Certificate of
Incorporation and Bylaws, the Company shall indemnify, defend, and hold harmless
the Executive for all amounts (including, without limitation, judgments, fines,
settlement payments, losses, damages, costs and expenses, including reasonable
attorneys fees, incurred or paid by Executive in connection with any action,
proceeding, suit or investigation arising out of or relating to the performance
by Executive of services for, or acting as, an officer or employee of the
Company or any subsidiary thereof. The Company agrees to use its best efforts to
maintain directors' and officers' liability insurance, but the failure of the
Company to maintain such insurance or any portion thereof shall not negate nor
diminish Company's obligations as set forth in this paragraph.
24. PERIODIC REVIEWS
During January of each year during the term hereof, the Board of
Directors of the Company shall review Executive's Annual Salary, bonus, stock
options, and additional benefits then being provided to Executive. Following
each such review, the Company may in its discretion increase the Annual Salary,
bonus, stock options, and benefits; however, the Company shall not decrease such
items during the period Executive serves as an employee of the Company. Prior to
February 28th of each year during the term hereof, the Board of Directors of the
Company shall communicate in writing the results of such review to Executive.
IN WITNESS WHEREOF, the parties have entered into this Agreement
effective for all purposes as of the Effective Date.
THE COMPANY: EXECUTIVE:
PENNACO ENERGY, INC.
By: /s/ XXXX X. XXXX /s/ XXXXXXX X. XXXXXX
------------------------------ ------------------------------
Xxxx X. Xxxx, President & XXXXXXX X. XXXXXX
CHIEF EXECUTIVE OFFICER
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