EMPLOYMENT AGREEMENT
This
Employment Agreement ("Agreement") is made as of February 21 2006 by and between
Xxxxxx Petroleum Inc., a Tennessee Corporation (the "Company"), and Xxxxxx
Xxxxx. (hereinafter, the "Executive").
RECITALS
A.
The
Board of Directors of the Company (the "Board") recognizes the Executive's
potential contribution to the growth and success of the Company, and desires
to
assure the Company of the Executive's employment in an executive capacity and
to
compensate him therefore, and has approved the provisions of this Agreement
and
has authorized the officers of the Company to execute the Agreement on behalf
of
the Company.
B.
The
Executive is willing to make his services available to the Company and on the
terms and conditions hereinafter set forth.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the parties agree as follows:
1.
Employment.
1.1. Employment
and Term.
The
Company hereby agrees to employ the Executive and the Executive hereby agrees
to
serve the Company on the terms and conditions set forth herein.
1.2.
Duties
of Executive.
During
the Term of Employment under this Agreement, the Executive shall serve as the
President of the Company. As allowed by the Company's Articles and Bylaws,
and
with the approval of the Board, the Executive may also serve as a member of
the
Board, during the Term of Employment under this Agreement. The Executive shall
be accountable only to the Chairman of the Board, and, subject to the authority
of the Chairman of The Board, shall have supervision and control over, and
responsibility for, the general management and operation of the Company. He
also
shall have such other powers and duties as may from time to time be prescribed
by the Board, provided that such duties are consistent with the Executive's
position as President of a company the size and type of the Company. The
Executive shall devote his full time and attention to the business and affairs
of the Company, render such services to the best of his ability, and use his
reasonable best efforts to promote the interests of the Company. Notwithstanding
the foregoing or any other provision of this Agreement, it shall not be a breach
or violation of this Agreement for the Executive to (i) serve on corporate
(subject to approval of the Board), civic or charitable boards or committees,
(ii) deliver lectures, fulfill speaking engagements or teach at educational
institutions, or (iii) manage personal investments, so long as such activities
do not significantly interfere with or significantly detract from the
performance of the Executive's responsibilities to the Company in accordance
with this Agreement.. The Executive may continue to serve out the remaining
term
as a board member on any corporate board on which he serves as of the
Commencement Date.
2.
Term.
2.1.
Term. The term of employment under this Agreement (the "Term of Employment")
shall commence as of February 21 2006 (the "Commencement Date") and shall
continue for a period ending three (3) years from any date as of which the
Term
of Employment is being determined, subject to earlier termination pursuant
to
Section 5 hereof. The date on which the Term of Employment shall expire is
sometimes referred to in this Agreement as the "Expiration Date".
3. Compensation.
3.1 Base
Salary.
The
Executive shall receive a base salary at the annual rate of $200,000 (the “Base
Salary”) during the Term of Employment, with such Base Salary payable in
installments consistent with the Company's normal payroll schedule, subject
to
applicable withholding and other taxes. The Base Salary shall be reviewed,
at
least annually, for merit increases and may, by action and in the discretion
of
the Board, be increased at any time or from time to time.
3.2. Bonuses.
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a.
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Guaranteed
Loan
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b.
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Formula
Bonus
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c.
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Termination
Year Bonus
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d.
Additional
Discretionary Bonuses.
The
Executive shall receive such additional bonuses, if any, as the Board may in
its
sole and absolute discretion determine.
e. Definitions.
Any
bonuses, other than the Signing Bonus, payable pursuant to this Section 3.2
are
sometimes hereinafter referred to as "Incentive Compensation." Each period
for
which Incentive Compensation is payable under this Section 3.2 is sometimes
hereinafter referred to as a Bonus Period. Except as otherwise provided in
Section 3 .2c, and unless otherwise agreed to by the Board and the Executive,
the Bonus Period shall be the fiscal year of the Company; provided, however,
that the initial Bonus Period shall commence on February 21, 2006 and end on
February 20, 2009.
f.
Time
of Payment.
Except
as otherwise provided herein, any Incentive Compensation payable pursuant to
this Section 3.2 shall be paid by the Company to the Executive within 2112
months after the end of the Bonus Period for which it is payable.
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4.
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Expense
Reimbursement and Other
Benefits.
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4.1.
Reimbursement
of Expenses.
Upon
the submission of proper substantiation by the Executive, and subject to such
rules and guidelines as the Company may from time to time adopt with respect
to
the reimbursement of expenses of executive personnel, the Company shall
reimburse the Executive for all reasonable expenses actually paid or incurred
by
the Executive during the Term of Employment in the course of and pursuant to
the
business of the Company. The Executive shall account to the Company in writing
for all expenses for which reimbursement is sought and shall supply to the
Company copies of all relevant invoices, receipts or other evidence reasonably
requested by the Company.
4.2.
Compensation/Benefit
Programs.
During
the Term of Employment, the Executive shall be entitled to participate in all
medical, dental, hospitalization, accidental death and dismemberment,
disability, travel and life insurance plans and all other plans as are presently
and hereinafter offered by the Company, to its executive personnel, including
savings, pension, profit-sharing and deferred compensation plans, subject to
the
general eligibility and participation provisions set forth in such
plans.
4.3.
Working
Facilities.
During
the Term of Employment, the Company shall furnish the Executive with an office,
secretarial help and such other facilities and services suitable to his position
and adequate for the performance of his duties hereunder.
4.4. Automobile.
To be
supplied with company truck.
4.5. Stock
a. Initial
Grant.
As of
the Commencement Date, the Company shall grant to the Executive, Five Hundred
Thousand (500,000) shares of common stock of the Company at the closing price
on
the Commencement Date, parvalue being 001.
b.
Future
Grants.
In
addition, during the Term of Employment, the Executive shall be eligible to
be
granted options (the "Stock Options") to purchase common stock (the "Common
Stock") of the Company under (and therefore subject to all terms and conditions
of) the Company's Stock Option Plan, and any successor plan thereto (the "Stock
Option Plan"); provided, however, that the Stock Options shall become
immediately exercisable in full upon termination of the Executive's employment
with the Company for any reason other than termination by the Company for Cause
under Section 5.1 hereof or termination by the Executive without Good Reason
under Section 5.5b hereof. The number of Stock Options and terms and conditions
of the Stock Options shall be determined by the committee of the Board appointed
pursuant to the Stock Option Plan, or by the Board of Directors of the Company,
in its discretion and pursuant to the Stock Option Plan.
4.6.
Other
Benefits.
The
Executive shall be entitled to Two-weeks of paid vacation each calendar year
during the Term of Employment, to be taken at such times as the Executive and
the Company shall mutually determine and provided that no vacation time shall
significantly interfere with the duties required to be rendered by the Executive
hereunder. Any vacation time not taken by Executive during any calendar year
may
be carried forward into any succeeding calendar year. The Executive shall
receive such additional benefits, if any, as the Board of the Company shall
from
time to time determine.
5.
Termination.
5.1.
Termination
for Cause.
The
Company shall at all times have the right, upon written notice to the Executive,
to terminate the Term of Employment, for Cause as defined below. For purposes
of
this Agreement, the term "Cause" shall mean (i) an action or omission of the
Executive which constitutes a willful and material breach of, or a willful
and
material failure or refusal (other than by reason of his disability or
incapacity) to perform his duties under, this Agreement which is not cured
within fifteen (15) days (or if the Executive is acting diligently to effect
a
cure, such longer time as shall be reasonably necessary to effect the cure)
after receipt by the Executive of written notice of same, (ii) fraud,
embezzlement, misappropriation of funds or breach of trust in connection with
his services hereunder, or (iii) a conviction of any crime which involves
dishonesty or a breach of trust. Any termination for Cause shall be made in
writing by notice to the Executive, which notice shall set forth in reasonable
detail all acts or omissions upon which the Company is relying for such
termination. The Executive (and his legal representative) shall have the right
to address the Board regarding the acts set forth in the notice of termination.
Upon any termination pursuant to this Section 5.1, the Company shall (i) pay
to
the Executive any unpaid Base Salary through the date of termination and (ii)
pay to the Executive his accrued but unpaid Incentive Compensation, if any,
for
any Bonus Period ending on or before the date of the termination of Executive's
employment with the Company. Upon any termination effected and compensated
pursuant to this Section 5.1, the Company shall have no further liability
hereunder (other than for (x) reimbursement for reasonable business expenses
incurred prior to the date of termination, subject, however, to the provisions
of Section 4.1, and (y) payment of compensation for unused vacation days that
have accumulated during the calendar year in which such termination
occurs).
5.2.
Disability.
The
Company shall at all times have the right, upon Written notice to the Executive,
to terminate the Term of Employment, if the Executive shall as the result of
mental or physical incapacity, illness or disability, become unable to perform
his obligations hereunder for a period of 180 days in any l2-month period.
The
determination of whether the Executive is or continues to be disabled shall
be
made in writing by a physician selected by the Board and reasonably acceptable
to the Executive. Upon any termination pursuant to this Section 5.2, the Company
shall (i) pay to the Executive any unpaid Base Salary through the effective
date
of termination specified in such notice, (ii) pay to the Executive his accrued
but unpaid Incentive Compensation, if any, for any Bonus Period ending on or
before the date of termination of the Executive’s employment with the Company
(iii) pay to the Executive his Termination Year Bonus, if any, at the time
provided in Section 3.2f hereof Upon any termination effected and compensated
pursuant to this Section 5.2, the Company shall have no further liability
hereunder (other than for (x) reimbursement for reasonable business expenses
incurred prior to the date of termination, subject, however to the provisions
of
Section 4.1, and (y) payment of compensation for unused vacation days that
have
accumulated during the calendar year in which such termination
occurs).
5.3.
Death.
Upon the
death of the Executive during the Tenn of Employment, the Company shall (i)
pay
to the estate of the deceased Executive any unpaid Base Salary through the
Executive's date of death, (ii) pay to the estate of the deceased Executive
his
accrued but unpaid Incentive Compensation, if any, for any Bonus Period ending
on or before the Executive's date of death, (iii) pay to the estate of the
deceased Executive, the Executive's Termination Year Bonus, if any, at the
time
provided in Section 3.2f hereof Upon any termination effected and compensated
pursuant to this Section 5.3, the Company shall have no further liability
hereunder (other than for (x) reimbursement for reasonable business expenses
incurred prior to the date of the Executive's death, subject, however to the
provisions of Section 4.1, and (y) payment of compensation for unused vacation
days that have accumulated during the calendar year in which such termination
occurs).
5.4.
Termination
Without Cause.
At any
time the Company shall have the right to terminate the Term of Employment by
written notice not less than thirty (30) days prior to the termination date,
to
the Executive. Upon any termination pursuant to this Section 5.4 (that is not
a
termination under any of Sections 5.1, 5.2, 5.3 or 5.5, the Company shall (i)
pay to the. Executive on the termination date any unpaid' Base Salary through
the date of termination specified in such notice, (ii) pay to the Executive
the
accrued but unpaid Incentive Compensation, if any, for any Bonus Period ending
on or before the date of the termination of the Executive's employment with
the
Company, at the time provided in Section 3.2f, (iii) pay to the Executive on
the
termination date a lump sum payment equal to his Base Salary through the
remaining term of this Agreement subject to board approval and the Formula
Bonus
for the year in which such termination occurs, assuming a Target Award
Percentage of 100%, (iv) continue to provide the Executive with the benefits
he
was receiving under Sections 4.2 and 4.4 hereof (the "Benefits") for the
remaining term of this Agreement in the manner and at such times as the Benefits
otherwise would have been provided to the Executive, (v) pay to the Executive
his Termination Year Bonus, if any, at the time provided in Section 3.2f; and
(vi) pay to the Executive as a single lump sum payment, within 30 days of the
date of termination, a lump sum benefit equal to the value of the portion of
his
benefits under any savings, pension, profit sharing or deferred compensation
plans that are forfeited under such plans but that would not have been forfeited
if the Executive's employment had contained for an additional three (3) years.
In the event that the Company is unable to provide the Executive with any
Benefits required hereunder by reason of the termination of the Executive's
employment pursuant to this Section 5.4, then the Company shall promptly
reimburse the Executive for amounts paid by the Executive to acquire comparable
coverage. Upon any termination effected and compensated pursuant to this Section
5.4, the Company shall have no further liability hereunder (other than for
(x)
reimbursement for reasonable business expenses incurred prior to the date of
termination, subject, however, to the provisions of Section 4.1, and (y) payment
of compensation for unused vacation days that have accumulated during the
calendar year in which such termination occurs).
5.5. Termination
by Executive.
a.
The
Executive shall at all times have the right, by written notice not less than
(30) days prior to the termination date, to terminate the Term of
Employment.
b. Upon
termination of the Term of Employment pursuant to this Section 5.5 by the
Executive without Good Reason (as defined below), the Company shall (i) pay
to
the Executive upon the termination date any unpaid Base Salary through the
effective date of termination specified in such notice or otherwise mutually
agreed and (ii) pay to the Executive his accrued but unpaid Incentive
Compensation, if any, for any Bonus Period ending on or before the termination
of Executive's employment with the Company, at the time provided in Section
3.2f
Upon any termination effected and compensated pursuant to this Section 5.5(b),
the Company shall have no further liability hereunder (other than for (x)
reimbursement for reasonable business expenses incurred prior to the date of
termination, subject, however, to the provisions of Section 4.1, and (y) payment
of compensation for unused vacation days that have accumulated during the
calendar year in which such termination occurs.)
c.
Upon
termination of the Term of Employment pursuant to this. Section 5.5 by the
Executive for Good Reason, the Company shall pay to the Executive the same
amounts, and shall continue or compensate for Benefits in the same amounts,
that
would have been payable or provided by the Company to the Executive under
Section 5.4 of this Agreement if the Term of Employment had been terminated
by
the Company without Cause. Upon any termination effected and compensated
pursuant to this Section 5.5(c), the Company shall have no further liability
hereunder (other than for (x) reimbursement for reasonable business expenses
incurred prior to the date of termination, subject, however, to the provisions
of Section 4.1, and (y) payment of compensation for unused vacation days that
have accumulated during the calendar year in which such termination
occurs.)
d.
For
purposes of this Agreement, "Good Reason" shall mean (i) the assignment to
the
Executive of any duties inconsistent in any respect with the Executive's
position (including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Section 1.2 of this
Agreement, or any other action by the Company which results in a diminution
in
such position, authority, duties or responsibilities, excluding for this purpose
an isolated, insubstantial and inadvertent action not taken in bad faith and
which is remedied by the Company promptly after receipt of notice thereof given
by the Executive; (ii) any failure by the Company to comply with any of the
provisions of Article 3 of this Agreement, other than an isolated, insubstantial
and inadvertent failure not occurring in bad faith and which is remedied by
the
Company promptly after receipt of notice thereof given by the Executive; (iii)
the Company's requiring the Executive to be based at any office or location,
that is not within a 100 mile radius of Huntsville, TN , except for travel
reasonably required in the performance of the Executive's responsibilities;
(iv)
any purported termination by the Company of the Executive's employment other
than for Cause pursuant to Section 5.1 or because of the Executive's disability
pursuant to . Section 5.2 of this Agreement; or (v) the occurrence of a Change
in Control. For purposes of this "" ". Section 5.5 (d), the Executive
acknowledges that the Company's holding company functions are headquartered
and
centralized in Huntsville TN. For purposes of this Section 5.5(d), any good
faith determination of "Good Reason" made by the Executive shall be conclusive;
provided that the Executive shall not exercise his right to terminate his
employment for Good Reason without first giving sixty (60) days written notice
to the Chief Executive Officer of the factual basis constituting good reason.
The Company shall have the right to cure the problem(s) noted by the Executive,
before the Executive may terminate his employment for Good Reason.
e. For
purposes of this Agreement, the term "Change in Control" shall
mean:
(i) Approval
by the shareholders of the Company of (x) a reorganization, merger,
consolidation or other form of corporate transaction or series of transactions,
in each case, with respect to which persons who were the shareholders of the
Company immediately prior to such reorganization, merger or consolidation or
other transaction do not, immediately thereafter, own more than 50% of the
combined voting power entitled to vote generally in the election of directors
of
the reorganized, merged or consolidated company's then outstanding voting
securities, in substantially the same proportions as their ownership immediately
prior to such reorganization, merger, consolidation or other transaction, or
(y)
a liquidation or dissolution of the Company or (z) the sale of all or
substantially all of the assets of the Company (unless such reorganization,
merger, consolidation or other corporate transaction, liquidation, dissolution
or sale is subsequently abandoned);
(ii)
A
new
Board member is elected without the approval of at least two of the Individuals
who, as of the Commencement Date of this Agreement, constitute the Board (the
"Incumbent Board"); or
(iii)
the
acquisition (other than from the Company) by any person, entity or "group",
within the meaning of Section l3(d)(3) or 14(d)(2) of the Securities Exchange
Act, of beneficial ownership within the meaning of Rule l3-d promulgated under
the Securities Exchange Act of more than 51 % of either the then outstanding
shares of the Company's Common Stock or the combined voting power of the
Company's then outstanding voting securities entitled to vote generally in
the
election of directors (hereinafter referred to as the ownership of a
"Controlling Interest") excluding, for this purpose, any acquisitions by (1)
the
Company or its Subsidiaries, (2) any person, entity or "group" that as of the
Commencement Date of this Agreement owns beneficial ownership (within the
meaning of Rule I3d-3 promulgated under the Securities Exchange Act) of a
Controlling Interest or (3) any employee benefit plan of the Company or its
Subsidiaries;
(iv)
provided that, with respect to this Section 5.5(e), a Change in Control shall
not be deemed to have occurred should any of the contingencies referred to
in
this Section involve any of the companies, persons or other legal entities
with
whom the Company is negotiating on or before the Commencement Date.
5.6.
Certain
Additional Payments by the Company.
Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment, distribution or other action by the Company to
or
for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, including
any additional payments required under this Section 5.6) (a "Payment") would
be
subject to an excise tax imposed by Section 4999 of the Internal Revenue Code
of
1986, as amended (the "Code"), or any interest or penalties are incurred by
the
Executive with respect to any such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as
the
"Excise Tax"), the Company shall make a payment to the Executive (a "Gross-Up
Payment") in an amount such that after payment by the Executive of aU taxes
(including any Excise Tax) imposed upon the Gross-Up Payment, the Executive
retains (or has had paid to the Internal Revenue Service on his behalf) an
amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed
upon the Payments and (y) the product of any deductions disallowed because
of
the inclusion of the Gross-Up Payment in. the Executive's adjusted gross income
and the highest applicable marginal rate of federal income taxation for the
calendar year in which the Gross-Up Payment is to be made. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed
to
(i) pay federal income taxes at the highest marginal rates of federal income
taxation for the calendar year in which the Gross-Up Payment is to be made,
and
(ii) pay applicable state and local income taxes at the highest marginal rate
of
taxation for the calendar year in which the Gross-Up Payment is to be made,
net
of the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. .
5.7.
Resignation.
Upon
any termination of employment pursuant to this Article 5, the Executive shall
be
deemed to have resigned as an officer, and if he or she was then serving as
a
director of the Company, as a director, and if required by the Board, the
Executive hereby agrees to immediately execute a resignation letter to the
Board.
5.8.
Survival.
The
provisions of this Article 5 shall survive the termination of this Agreement,
as
applicable.
6. Restrictive
Covenants.
6.1.
Non-competition.
At all
times during the Restricted Period, the Executive shall not, directly or
indirectly, engage in or have any interest in any sole proprietorship,
corporation, company, partnership, association, venture or business or any
other
person or entity (whether as an employee, officer, director, partner, agent,
security holder, creditor, consultant or otherwise) that directly or indirectly
(or through any affiliated entity) competes with the Company's business (for
this purpose, any business that engages in a competing business of the Company
shall be deemed to compete with the Company); provided that such provision
shall
not apply to the Executive's ownership of Common Stock of the Company or the
acquisition by the Executive, solely as an investment, of securities of any
issuer that is registered under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended, and that are listed or admitted for trading
on
any United States national securities exchange or that are quoted on the
National Association of Securities Dealers Automated Quotations System, or
any
similar system or automated dissemination of quotations of securities prices
in
common use, so long as the Executive does not control, acquire a controlling
interest in or become a member of a group which exercises direct or indirect
control of, more than five percent of any class of capital stock of such
corporation. For purposes of this Agreement the "Restricted Period" shall be
the
period during which the Executive is employed by the Company and, if the
Executive's employment with the Company is either terminated by the Company
without Cause pursuant to Section 5.4, or by the Executive for Good Reason
pursuant to Section 5.5c, and the Company has paid to the Executive all of
amounts then payable to the Executive pursuant to Sections 5.4 or 5. 5c, as
applicable, the three (3) year period immediately following the termination
of
the Executive's employment with the Company.
6.2. Confidential
Information.
The
Executive shall not at any time divulge, communicate, use to the detriment
of
the Company or for the benefit of any other person or persons, or misuse in
any
way, any Confidential Information (as hereinafter defined) pertaining to the
business of the Company. Any Confidential Information or data now or hereafter
acquired by the Executive with respect to the business of the Company (which
shall include, but not be limited to, information concerning the Company's
financial condition, prospects, technology, customers, suppliers, sources of
leads and methods of doing business) shall be deemed a valuable, special and
unique asset of the Company that is received by the Executive in confidence
and
as a fiduciary, and Executive shall remain a fiduciary to the Company with
respect to all of such information. For purposes of this Agreement,
"Confidential Information" means information disclosed to the Executive or
known
by the Executive as a consequence of or through the unique position of his
employment with the Company (including information conceived, originated,
discovered or developed by the Executive) prior to or after the date hereof,
and
not generally or publicly known, about the Company or its business.
Notwithstanding the foregoing, nothing herein shall be deemed to restrict the
Executive from disclosing Confidential Information to promote the best
'interests of the Company or to the extent required by law. .
6.3.
Nonsolicitation
of Employees and Customers.
At all
times during the Restricted Period, as defined in Section 6. I hereof, the
Executive shall not, directly or indirectly, for himself or for any other
person, firm, corporation, partnership, association or other entity (a) employ,
solicit, recruit or attempt to employ, solicit, or recruit any employee of
the
Company to leave the Company's employment, or (b) solicit or attempt to solicit
any of the actual or targeted prospective customers or clients of the Company
with whom the Executive had material contact or about whom the Executive learned
Confidential Information on behalf of any person or entity in connection with
any business that competes with the Business or the Company nor shall the
Executive make known the names and addresses of such clients or any information
relating in any manner to the Company's trade or business relationships with
such customers, other than in connection with the performance of Executive's
duties under this Agreement.
6.4. Ownership
of Developments.
All
copyrights, patents, trade secrets, or other intellectual property rights
associated with any ideas, concepts, techniques, inventions, processes, or
works
of authorship developed or created by Executive during the course of performing
work for the Company or its clients (collectively, the "Work Product") shall
belong exclusively to the Company and shall, to the extent possible, be
considered a work made by the Executive for hire for the Company within the
meaning of Title 17 of the United States Code. To the extent the Work Product
may not be considered work made by the Executive for hire for the Company,
the
Executive agrees to assign, and automatically assign at the time of creation
of
the Work Product, without any requirement of further consideration, any right,
title, or interest the Executive may have in such Work Product. Upon the request
of the Company, the Executive shall take such further actions, including
execution and delivery of instruments of conveyance, as may be appropriate
to
give full and proper effect to such assignment.
6.5.
Books
and Records. All
books, records, and accounts relating in any manner to the customers or clients
of the Company, whether prepared by the Executive or otherwise corning into
the
Executive's possession, shall be the exclusive property of the Company and
shall
be returned immediately to the Company on termination of the Executive's
employment hereunder or on the Company's request at any time.
6.6.
Definition
of Company.
Solely
for purposes of this Article 6, the term "Company" also shall include any
existing or future subsidiaries of the Company that are operating during the
time periods described herein and any other entities that directly or
indirectly, through one or more intermediaries, control, are controlled by
or
are under common control with the Company during the periods described
herein.
6.7.
Acknowledgment
by Executive.
The
Executive acknowledges and confirms that (a) the restrictive covenants contained
in this Article 6 are reasonably necessary to protect the legitimate business
interests of the Company, and (b) the restrictions contained in this Article
6
(including without limitation the length of the term of the provisions of this
Article 6) are not overbroad, overlong, or unfair and are not the result of
overreaching, duress or coercion of any kind. The Executive further acknowledges
and confirms that his full, uninhibited and faithful observance of each of
the
covenants contained in this Article 6 will not cause him any undue hardship,
financial or otherwise, and that enforcement of each of the covenants contained
herein will not impair his ability to obtain employment commensurate with his
abilities and on terms fully acceptable to him or otherwise to obtain income
required for the comfortable support of him and his family and the satisfaction
of the needs of his creditors. The Executive acknowledges and confirms that
his
special knowledge of the business of the Company is such as would cause the
Company serious injury or loss if he were to use such ability and knowledge
to
the benefit of a competitor or were to compete with the Company in violation
of
the terms of this Article 6. The Executive further acknowledges that the
restrictions contained in this Article 6 are intended to be, and shall be,
for
the benefit of and shall be enforceable by, the Company's successors and
assigns.
6.8.
Reformation
by Court.
In the
event that a court of competent jurisdiction shal1 determine that any provision
of this Article 6 is invalid or more restrictive than permitted under the
governing law of such jurisdiction, then only as to enforcement of this Article
6 within the jurisdiction of such court, such provision shall be interpreted
and
enforced as if it provided for the maximum restriction permitted under such
governing law.
6.9.
Extension
of Time.
If the
Executive shall be in violation of any provision of this Article 6, then each
time limitation set forth in this Article 6 shall be extended for a period
of
time equal to the period of time during which such violation or violations
occur. If the Company seeks injunctive relief from such violation in any court,
then the covenants set forth in this Article 6 shall be extended for a period
of
time equal to the pendency of such proceeding including all appeals by the
Executive.
6.10.
Survival.
The
provisions of this Article 6 shall survive the termination of this Agreement,
as
applicable.
7.
Injunction.
It is
recognized and hereby acknowledged by the parties hereto that a breach by the
Executive of any of the covenants contained in Article 6 of this Agreement
will
cause irreparable harm and damage to the Company, the monetary amount of which
may be virtually impossible to ascertain. As a result, the Executive recognizes
and hereby acknowledges that the Company shall be entitled to an injunction
from
any court of competent jurisdiction enjoining and restraining any violation
of
any or all of the covenants contained in Article 6 of this Agreement by the
Executive or any of his affiliates, associates, partners or agents, either
directly or indirectly, and that such right to injunction shall be cumulative
and in addition to whatever other remedies the Company may possess.
8.
Attorney's
Fees.
Nothing
contained herein shall be construed to prevent the Company or the Executive
from
seeking and recovering from the other damages sustained by either or both of
them as a result of its or his breach of any term or provision of this
Agreement. In the event that either party hereto brings suit for the collection
of any damages resulting from, or the injunction of any action constituting,
a
breach of any of the terms or provisions of this Agreement, then the party
found
to be at fault shall pay all reasonable court costs and attorneys' fees of
the
other.
9.
Assignment.
Neither
party shall have the right to assign or delegate his fights or obligations
hereunder, or any portion thereof, to any other person.
10.
Governing
Law and Venue.
This
Agreement shall be governed by and construed and enforced in accordance with
the
internal laws of the State of Georgia. The venue for any action to enforce
this
Agreement shall be the state or federal courts located within Knoxville, Xxxx
County Tennessee
11. Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and, upon its effectiveness, shall
supersede all prior agreements, understandings and arrangements, both oral
and
written, between the Executive and the Company (or any of its affiliates) with
respect to such subject matter. This Agreement may not be modified in any way
unless by a written instrument signed by both the Company and the
Executive.
12.
Notices.
All
notices required or permitted to be given hereunder shall be in writing and
shall be personally delivered by courier, sent by registered or certified mail,
return receipt requested or sent by confirmed facsimile transmission addressed
as set forth herein. Notices personally delivered, sent by facsimile or sent
by
overnight courier shall be deemed given on the date of delivery and notices
mailed in accordance with the foregoing shall be deemed given upon the earlier
of receipt by the addressee, as evidenced by the return receipt thereof, or
three (3) days after deposit in the U.S. mail. Notice shall be sent (i) if
to
the Company, addressed to 0000 Xxxxx Xxxxxxx Xxxxxxxxxx XX 00000 Attention:
Chairman of the Board, and (ii) if to the Executive, to his address as reflected
on the payroll records of the Company, or to such other in accordance with
this
provision.
13.
Benefits;
Binding Effect.
This
Agreement shall be for the benefit of and binding upon the parties hereto and
their respective heirs, personal representatives, legal representatives,
successors and, where permitted and applicable, assigns, including, without
limitation, any successor to the Company, whether by merger, consolidation,
sale
of stock, sale of assets or otherwise.
14.
Severability.
The
invalidity of anyone or more of the words, phrases, sentences, clauses,
provisions, sections or articles contained in this Agreement shall not affect
the enforceability of the remaining portions of this Agreement. or any part
thereof, all of which are inserted conditionally on their being valid in law,
and, in the event that anyone or more of the words, phrases, sentences, clauses,
provisions, sections or articles contained in this Agreement shall be declared
invalid, this Agreement shall be construed as if such invalid word or words,
phrase or phrases, sentence or sentences, clause or clauses, provisions or
provisions, section or sections ot article or articles had not been inserted.
If
such invalidity is caused by length of time or size of area, or both, the
otherwise invalid provision will be considered to be reduced to a period or
area
which would cure such invalidity.
15.
Waivers.
The
waiver by either party hereto of a breach or violation of any term or provision
of this Agreement shall not operate nor be construed as a waiver of any
subsequent breach or violation. .
16.
Damages.
Nothing
contained herein shall be construed to prevent the Company or the Executive
from
seeking and recovering from the other damages sustained by either or both of
them as a result of its or his breach of any term or provision of this
Agreement. In the event that either party hereto brings suit for the collection
of any damages resulting from, or the injunction of any action constituting,
a
breach of any of the terms or provisions of this Agreement, then the party
found
to be at fault shall pay all reasonable court costs and attorneys' fees of
the
other.
17.
Section
Headings.
The
article, section and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
18.
No
Third Party Beneficiary.
Nothing
expressed or implied in this Agreement is intended, or shall be construed,
to
confer upon or give any person other than the Company, the parties hereto and
their respective heirs, personal representatives, legal representatives,
successors and permitted assigns, any rights or remedies under or by reason
of
this Agreement.
19. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together shall constitute one and
the
same instrument and agreement.
20. Indemnification.
a.
Subject
to limitations imposed by law, the Company shall indemnify and hold harmless
the
Executive to the fullest extent permitted by law from and against any and all
claims, damages, expenses (including attorneys' fees), judgments, penalties,
fines, settlements, and all other liabilities incurred or paid by him in
connection with the investigation, defense, prosecution, settlement or appeal
of
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative and to which the Executive was or
is a
party or is threatened to be made a party by reason of the fact that the
Executive is or was an officer, employee or agent of the Company, or by reason
of anything done or not done by the Executive in any such capacity or
capacities, provided that the Executive acted in good faith, in a manner that
was not grossly negligent or constituted willful misconduct and in a manner
he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Company also shall
pay
any and all expenses (including attorney's fees) incurred by the Executive
as a
result of the Executive being called as a witness in connection with any matter
involving the Company and/or any of its officers or directors.
b.
The
Company shall pay any expenses (including attorneys' fees), judgments,
penalties, fines, settlements, and other liabilities. incurred by the Executive
in investigating, defending, settling or appealing any action, suit or
proceeding described in this Section 20 in advance of the final disposition
of
such action, suit or proceeding. The Company shall promptly pay the amount
of
such expenses to the Executive, but in no event later than 10 days following
the
Executive's delivery to the Company of a written request for an advance pursuant
to this Section 20, together with a reasonable accounting of such
expenses.
c.
The
Executive hereby undertakes and agrees to repay to the Company any advances
made
pursuant to this Section 20 if and to the extent that it shall ultimately be
found that the Executive is not entitled to be indemnified by the Company for
such amounts.
d.
The
Company shall make the advances contemplated by this Section 20 regardless
of
the Executive's financial ability to make repayment, and regardless whether
indemnification of the Indemnitee by the Company will ultimately be required.
Any advances and undertakings to repay pursuant to this Section 20 shall be
unsecured and interest-free.
e. The
provisions of this Section 20 shall survive the termination of this
Agreement.
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IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written,
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COMPANY:
Xxxxxx
Petroleum Inc
By:
/s/ Xxxxx
Xxxxxx
Name:
Xxxxx Xxxxxx
Title:
Chief Executive Officer
EXECUTIVE:
/s/
Xxxxxx X.
Xxxxx
Xxxxxx
X. Xxxxx
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