EXHIBIT 6.1
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of November 1, 1995, by
and between PAN WESTERN ENERGY CORPORATION, an Oklahoma corporation (the
"Corporation"), and XXXXXX X. XXXXXXXX, a resident of Tulsa, Oklahoma
("Xxxxxxxx"), and is made with reference to the following:
X. Xxxxxxxx serves the Corporation as President and Chief Executive
Officer without an Employment Agreement and has done so since the formation of
the Corporation September 2, 1981.
B. The parties desire to execute this Agreement to set forth the terms
and conditions of Xxxxxxxx'x employment hereinafter.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth in this Agreement, the parties agree as follows:
1. Employment of Xxxxxxxx, Title and Duties. The Corporation shall employ
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Xxxxxxxx and Xxxxxxxx shall render services to and on behalf of the Corporation,
subject to the terms and conditions of this Agreement. Xxxxxxxx shall devote
his full time and attention to the affairs of the Corporation. Xxxxxxxx shall
have the title of President and Chief Executive Officer. Xxxxxxxx'x duties
shall be as specified in the by-laws of the Corporation and as directed from
time to time by unanimous vote of the Board of Directors of the Corporation.
2. Term of Employment. The term of this Agreement and Xxxxxxxx'x
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employment pursuant hereto shall commence on the date first above written and
shall expire on the later of (a) October 31, 2000; or, (b) such other date to
which the term of employment has been extended pursuant to provisions of this
Agreement hereinafter set forth; or, (c) so long as Xxxxxxxx is a personal
guarantor on any Corporation debt. The Agreement will automatically be extended
for an additional one (l) year period on November 1st of each subsequent year
commencing November 1, 1996. Unless otherwise agreed by the parties, all terms
and conditions of this Agreement, including the incentive compensation
arrangements contained in Section 3, shall continue during the extension period.
Xxxxxxxx'x employment may be terminated as specified in Section 6.
3. Compensation.
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(a) Base Compensation and Fringe Benefits. As compensation for his
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services rendered hereunder, the Corporation shall pay Xxxxxxxx the following
annual base salary:
Year Base Salary
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1996 $150,000
1997 $150,000
1998 $150,000
1999 $150,000
2000 $150,000
In addition, the Corporation shall pay normal employee fringe benefits,
including but not limited to an automobile allowance of $1,000 per month, from
which amount shall be deducted normal employee withholding and other applicable
employment taxes, and such other benefits as may from time to time be determined
by the Board of Directors of the Corporation. Xxxxxxxx shall receive four weeks
vacation annually, which may be carried over one year. Salary shall be payable
in installments not less often than twice monthly. All of Xxxxxxxx'x previously
accrued vacation and other benefits as shown on the Corporation's books and
records shall continue and be included in this Agreement.
(b) Annual Incentive Compensation. As annual incentive compensation, the
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Corporation shall pay to Xxxxxxxx annually an amount equal to ten percent (10%)
of all of the Corporation's pre-tax net profit, as defined in this Agreement, in
excess of $150,000. This amount shall be paid in cash to Xxxxxxxx annually
within thirty (30) days following the Corporation's receipt of its annual
audited financial statements. Xxxxxxxx'x annual incentive compensation
hereunder shall be payable in all events unless and until Xxxxxxxx'x employment
is terminated under Section 6(a) hereof or as otherwise expressly provided
herein. Annual incentive compensation payable to Xxxxxxxx in respect of the
Corporation's fiscal year 1996 shall not be prorated, but shall be prorated in
any other fiscal year of the Corporation in which Xxxxxxxx is not employed
hereunder for the entire fiscal year. The Corporation's fiscal year is the
calendar year. No change in the Corporation's fiscal year will result in the
reduction of any amounts payable under this subsection. For purposes of this
Section 3 (b), the Corporation's pre-tax net profit in any year shall be that
shown on the Corporation's annual audited financial statements. This definition
is for the sole purpose of determining Xxxxxxxx'x annual incentive compensation
and shall have no effect on the Corporation's financial reporting. Anything to
the contrary set forth herein notwithstanding, this Section 3 (b) shall not be
construed to create any liability or obligation of Xxxxxxxx to the Corporation
with regard to any period during the term hereof in which the Corporation's pre-
tax net profit fails to exceed the amounts set forth above.
4. Covenant Not to Compete. Xxxxxxxx covenants and agrees that, during
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the term of his employment and for a period of two (2) years thereafter, he will
not, directly or indirectly, engage in or become financially or otherwise
interested in any business in which the Corporation (or any affiliate) is now
engaged or in which it becomes engaged at any time during the term of Xxxxxxxx'x
employment with the Corporation relating to the primary business of the
Corporation. The area covered by this covenant includes the continental United
States. This covenant extends to Xxxxxxxx, whether
as a principal, agent, manager, employee, lessor, consultant, partner,
shareholder, director, officer or otherwise. This covenant does not extend to
Xxxxxxxx'x ownership of less than two percent (2%) of the voting interests in a
publicly held corporation. Xxxxxxxx expressly acknowledges that his execution of
this covenant not to compete is a material factor in the Corporation's execution
of this Agreement; that its specific terms were bargained for; that this
covenant not to compete is of material import to the Corporation as the business
in which the Corporation is engaged is highly competitive; and that the covenant
not to compete does not constitute an unreasonable restriction on Xxxxxxxx.
5. Disclosure of Information. It is agreed that any and all improvements,
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discoveries or results of research, whether patentable or not, which are made,
discovered or invented by Xxxxxxxx, any other employee, contractor, or
consultant to the Corporation, which relate in any manner to any products,
equipment, work or other business activity of the Corporation or any affiliated
corporation during the term of Xxxxxxxx'x employment, shall be and become the
exclusive property of the Corporation. Xxxxxxxx expressly acknowledges that the
list of the Corporation's customers, its trade secrets and other information
pertaining to the patent rights, designs, methods, systems, improvements,
proprietary information, sales data, trademarks, products, and business affairs
of the Corporation, as the same may exist from time to time, are the sole
property of the Corporation (or its affiliated corporations as the case may be),
are strictly confidential, and shall be held in trust solely for the benefit and
use of the Corporation (or its affiliated corporations as the case may be). All
knowledge and information which Xxxxxxxx may acquire by, from or through the
Corporation during the course of rendering services under this Agreement, or
from the employees or consultants to the Corporation (or of any affiliated
corporation as the case may be), with respect to any such information as is
specified above, and other confidential matters shall for all purposes, be
regarded as strictly confidential and held in trust and solely for the benefit
and use of the Corporation (or its affiliated corporations as the case may be).
Xxxxxxxx covenants and agrees that he shall not, during the term of this
Agreement, or at any time after the termination hereof, disclose any such
information to any person, firm, corporation, association or other entity or
group of persons, for any reason or purpose whatsoever; provided, however, that
the covenants contained in this Section 5 shall not prevent Xxxxxxxx from making
such disclosures (i) as may be necessary in the performance of the services
hereunder, (ii) as may be necessary to comply with legal process or
governmental order, or (iii) to the extent such information is already in the
public domain at the date of such disclosure.
6. Termination of Employment.
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(a) Termination for Just Cause. For just cause due to the fault of
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Xxxxxxxx, the Corporation may terminate Xxxxxxxx'x employment at any time upon
ten (10) days written notice to Xxxxxxxx and the Corporation shall be obligated
to pay Xxxxxxxx the compensation
under Section 3 due him only up to the date of termination, including any
accrued employee benefits and/or vacation pay. As used in this Agreement, the
term "just cause" shall mean (i) Xxxxxxxx shall engage in willful and material
misconduct in the performance or nonperformance of this Agreement; and (ii)
Xxxxxxxx shall commit actual fraud or a felony criminal act on or after the date
of execution hereof, and any such act shall have been determined by the Board of
Directors to be materially harmful to the Corporation. Said Board action shall
only be taken after reasonable notice to Xxxxxxxx and after having provided
Xxxxxxxx an opportunity to present his position. Xxxxxxxx'x commission of fraud
or a felony criminal act shall be determined by a court of competent
jurisdiction or admitted by Xxxxxxxx. Termination under this subsection 6(a)
shall result in the termination for future periods of all compensation otherwise
payable to Xxxxxxxx under Section 3 (a), and shall render null and void ab
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initio the Corporation's obligation to pay the incentive compensation specified
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in Section 3 (b). Xxxxxxxx'x termination under this Section 6(a) shall not
affect Xxxxxxxx'x obligations under Sections 4 or 5 hereof.
(b) Termination Without Just Cause. The Corporation may terminate
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Xxxxxxxx'x employment without just cause, but in such event the Corporation
shall be obligated to pay to Xxxxxxxx the compensation otherwise payable under
Section 3(a) for the remainder of the term of his employment as determined in
Section 2, including any accrued employee benefits and/or vacation pay. Any
amount of such Section 3(a) compensation in a gross amount before withholding
taxes up to the greater of One Hundred Thousand Dollars ($100,000) or the amount
of Xxxxxxxx'x combined federal and estate income taxes, if any, resulting from
the Corporation's obligation to pay such remaining Section 3(a) compensation
which are due in the year of termination (or not later than the due date for the
filing of Xxxxxxxx'x individual income tax returns for such year), shall be paid
in cash thirty (30) days following the date of Xxxxxxxx'x termination. The
amount, if any, of Xxxxxxxx'x Section 3(a) compensation exceeding such amount
shall be paid in cash in two equal annual installments, on the first and second
anniversaries of Xxxxxxxx'x termination. No interest shall accrue on such
payments, and the Corporation shall deduct therefrom all normal employee
withholding taxes. If the Corporation terminates Xxxxxxxx'x employment under
this Section 6(b), the incentive compensation otherwise due to Xxxxxxxx under
Section 3(b) shall be payable at the time(s) and in the form and manner set
forth in Section 3(b). Termination of Xxxxxxxx'x employment under this
subsection 6(b) shall not affect Xxxxxxxx'x obligations under Sections 4 or 5
hereof. The foregoing notwithstanding, Xxxxxxxx may, within ninety (90) days
following the termination of his employment under this Section 3 (b), notify the
Corporation in accordance with Section 8(b) that he has determined to take
actions which would otherwise violate Section 4 hereof. In such case, and
subject to the following conditions, Xxxxxxxx shall be relieved of his
obligations under Section 4 hereof. In order to be relieved of such Section 4
obligations, Xxxxxxxx agrees that his compensation under Sections 3(a) and 3(b)
shall terminate as of the date of his termination, and
Xxxxxxxx shall forfeit and return to the Corporation any Section 3(a)
compensation and evidences of indebtedness of the Corporation therefor
applicable to periods after his termination; Xxxxxxxx'x Section 3(b)
compensation shall accrue only to the date of his termination and it shall be
paid as and when it would otherwise be paid under Section 3(b). Xxxxxxxx may be
terminated under this Section 6(b) only by unanimous vote of the Board of
Directors of the Corporation, including Xxxxxxxx if he is a director of the
Corporation at the time the vote is taken. The Corporation shall have the right
to prepay all or any part of any payments provided for in this Section 6(b) at
any time without penalty.
(c) Termination by Xxxxxxxx. Xxxxxxxx may terminate his employment at any
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time on thirty (30) days prior written notice to the Corporation, end in such
event, the Corporation shall be obligated to pay Xxxxxxxx his Section 3(a)
compensation only up to the date of termination, including any accrued employee
benefits and/or vacation pay. If Xxxxxxxx dies during the term of this
Agreement, his compensation shall continue only to the date of his death. If he
becomes disabled such that he cannot perform his principal duties hereunder for
a period of longer than three (3) months, the Corporation may terminate his
employment after the end of such three (3) month period and in such event
Xxxxxxxx'x compensation shall terminate at such date. Termination under this
subsection 6(c) shall not affect Xxxxxxxx'x obligations under Sections 4 or 5.
If Xxxxxxxx'x employment terminates under this Section 6(c), the incentive
compensation otherwise due to Xxxxxxxx under Section 3(b) shall accrue to the
date of termination of his employment under this Section 6(c). The Corporation
shall have the right to prepay all or any part of any payments provided for in
this Section 6(c) at any time without penalty.
7. Remedy for Breach.
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(a) Breach by Xxxxxxxx. If Xxxxxxxx breaches any agreement, provision,
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covenant, duty or requirement made herein or required herein on his part, and
such breach is not cured or corrected within five (5) days following written
notice of the same from the Corporation, then the Corporation, in its sole
discretion, shall be entitled to (i) actual damages from Xxxxxxxx for such
breach, (ii) specific performance of this Agreement by Xxxxxxxx and an
injunction restraining Xxxxxxxx from violating the terms of this Agreement,
(iii) terminate payment of the compensation described in Section 3 as of the
date of such breach (but only under the circumstances specified and to the
extent provided in Sections 6(a) or 6(b), as the case may be), and/or (iv)
terminate Xxxxxxxx'x employment for cause under Section 6(a) (but only under the
circumstances set forth therein), and (v) to the fullest extent permitted by
applicable law, recovery of its attorneys fees, court costs, and all related
expenses of litigation, together with pre- and post-judgment interest thereon.
Nothing herein shall be construed as prohibiting the Corporation from pursuing
any other remedies available to it for such breach or threatened breach
including the recovery of damages from any third party involved or associated
with
such breach.
(b) Breach by Corporation. If the Corporation breaches any agreement,
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provision, covenant, duty or requirement made herein or required herein on its
part, then Anderson, in his sole discretion, shall be entitled to (i) actual
damages from the Corporation for such breach, (ii) specific performance of this
Agreement by the Corporation and an injunction restraining the Corporation from
violating the terms of this Agreement, and (iii) to the fullest extent permitted
by applicable law, recovery of his attorneys fees, court costs, and all related
expenses of litigation, together with pre- and post-judgement interest thereon.
Nothing herein shall be construed as prohibiting Xxxxxxxx from pursuing any
other remedies allowed by law which may be available to him including the
recovery of damages from any third party involved or associated with such reach.
8. Miscellaneous.
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(a) Binding Effect. This Agreement shall be binding upon and inure to the
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benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) Notices. All notices given under this Agreement shall be deemed to be
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effectively given when personally delivered to the party entitled to receive the
notice, or when placed in the United States Mails, registered or certified,
postage prepaid, at the addresses stated below:
Xxxxxxxx: Xxxxxx X. Xxxxxxxx
0000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
The Corporation: Pan Western Energy Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Either party may change his or its address for the purpose of notice by giving
notice of the change of address to the other party in accordance with the
provisions of this Section.
(c) Waiver and Modification. No waiver of any term of condition of this
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Agreement shall be effective unless in writing signed by the waiving party. The
waiver of the breach of any term or condition of this Agreement shall not be
deemed to constitute the waiver of any other or subsequent breach of the same or
any other term or condition. This Agreement may only be modified in a writing
signed by both parties.
(d) Severability. The invalidity or unenforceability of any provision
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hereof shall in no way affect the validity or enforceability of any other
provision. In the event any court shall finally hold that the time or territory
or any other provisions con-
tained herein constitutes an unreasonable restriction against Xxxxxxxx, then
Xxxxxxxx and the Corporation expressly agree that the provisions of this
Agreement shall not be rendered void but shall apply only as to such time,
territory or other extent as such court may judicially determine or indicate
constitutes a reasonable restriction under the circumstances involved.
(e) Applicable Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Oklahoma.
(f) Entire Agreement. The parties agree that this Agreement, shall be the
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sole agreement between the parties respecting the employment of Xxxxxxxx and his
noncompetition obligations to the Corporation. All prior written and oral
agreements respecting such subject matter are terminated.
(g) Time of Essence. Time is of the essence of this Agreement.
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(h) Corporate Authority. The Corporation represents and warrants to
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Xxxxxxxx that (i) all necessary corporate and shareholder action has been taken
on behalf of the Corporation to authorize the execution and delivery of this
Agreement by the undersigned officer of the Corporation and the satisfaction by
the Corporation of its obligations hereunder, (ii) the Corporation has the full
power and authority to enter into this Agreement and to perform hereunder, and
(iii) the Corporation's execution and delivery of this Agreement does not
violate or contravene any other agreement by which the Corporation is bound.
These representations and warranties shall survive the execution hereof.
(i) Xxxxxxxx'x Representations and Warranties. Xxxxxxxx represents and
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warrants to the Corporation that (i) Xxxxxxxx has the full power and authority
to enter into this Agreement and to perform hereunder, and (ii) Xxxxxxxx'x
execution and delivery of this Agreement does not violate or contravene any
other agreement by which Xxxxxxxx is bound. These representations and
warranties shall survive the execution hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
ATTEST: PAN WESTERN ENERGY CORPORATION
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx
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Secretary By: Xxxxxxx X. Xxxxxxx
Executive Vice President
XXXXXX X. XXXXXXXX
/s/ Xxxxxx X. Xxxxxxxx
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An Individual
