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EXHIBIT 99.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"); effective as of December
1, 1999, by and between TBX Resources, Inc., a Texas corporation (the
"Company"), with offices at 00000 Xxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 and
Xxxxxxx Xxxxxxxxx, ("Xxxxxxxxx"), who resides at 0000 Xxxxx Xxxxxx, Xxxxxx
Xxxxx, Xxxxx 00000.
RECITALS
WHEREAS, the Company is engaged in the business of exploring for,
producing, and selling oil and gas (the "Business"), with its principal
Executive office in Dallas, Texas. For purposes of this Agreement, the term
"Company" shall include the Company, its subsidiaries, affiliates, and assignees
and any successors in interest of the Company and its subsidiaries and/or
affiliates;
WHEREAS, the Company desires to employ Xxxxxxxxx and Xxxxxxxxx desires
to be employed by the Company, on the terms set forth herein;
NOW, THEREFORE, in consideration of the foregoing the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Employment.
1.1 Engagement of Employee. The Company agrees to employ
Xxxxxxxxx and Xxxxxxxxx agrees to accept employment as President of the
Company, all in accordance with the terms and conditions of this
Agreement.
1.2 Duties and Powers.
a. During the Employment Period (as defined herein),
Xxxxxxxxx shall serve as President of the Company,
reporting directly to the Board of Directors of the
Company (the "Board"), and will have such
responsibilities, duties and authorities, and will render
such services of an administrative character, or act in
such other capacity for the Company as the Company's Board
of Directors (the "Board") shall from time to time direct.
Xxxxxxxxx shall devote his best efforts, energies and
abilities and his full business time, skill and attention
(except for permitted vacation periods and
EMPLOYMENT AGREEMENT - EXHIBIT A
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reasonable periods of illness or other incapacity) to
the Business and affairs of the Company.
x. Xxxxxxxxx acknowledges that his duties
and responsibilities will require his full-time
business efforts and agrees that during he Employment
Period, he will not engage in any other business
activity or have any business pursuits or interests
which interfere or conflict with the performance of
his duties hereunder or which compete with the
Company.
1.3 Employment Period. Xxxxxxxxx' employment under this
Agreement shall begin on the date hereof and shall continue through and
until the third anniversary of the date hereof (the "Initial Period")
unless extended as provided in this Section 1.3 or terminated as
provided in Section 1.4. The Company may renew this Agreement for
additional one (1) year periods (the "Renewal Periods") on terms that
are mutually acceptable to Xxxxxxxxx and the Company at least ninety
(90) days prior to the expiration of the Initial Period or any Renewal
Period. The Initial Period and the Renewal Period are collectively
referred to herein as the "Employment Period." Notwithstanding anything
to the contrary contained herein, the Employment Period is subject to
termination pursuant to Section 1.4 and Section 1.5 below.
1.4 Termination. The Company has the right to terminate
Xxxxxxxxx' employment hereunder, by notice to Xxxxxxxxx in writing at
any time (i) for "Cause," (ii) without Cause for any or no reason, and
(iii) due to the Disability of Xxxxxxxxx. Any such termination shall be
effective upon the date of service of such notice pursuant to Section
15. In addition, this Agreement shall terminate automatically upon
Xxxxxxxxx' death.
"Cause", as used herein, means the occurrence of any of the
following events:
a. the failure of Xxxxxxxxx to perform his
duties or comply with reasonable directions of the
Board;
b. the determination by the Board in the
exercise of its reasonable judgment that Xxxxxxxxx
has committed an act or acts constituting (i) a
felony or other crime involving moral turpitude,
dishonesty or theft (ii) dishonesty or breach of duty
with respect to the Company; or (iii) fraud;
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c. the determination by the Board in the
exercise of its reasonable judgment that Xxxxxxxxx
has committed an act that (i) negatively affects the
Company's business or reputation (including its
relationships with its customers, suppliers, or
employees), or (ii) indicates alcohol or drug abuse
by Xxxxxxxxx that adversely affects his performance
hereunder;
d. a material breach by Xxxxxxxxx of any of
the terms and conditions of the Agreement; or
x. Xxxxxxxxx' xxxxx negligence in
performance of his duties hereunder.
Xxxxxxxxx shall be deemed to have a "Disability" for purposes of this
Agreement if he shall be unable, by reason of illness or physical or mental
incapacity or disability to perform his duties hereunder, with or without
reasonable accommodation by the Company, in substantially the manner and to the
extent required hereunder prior to the commencement of such Disability for a
total period of ninety (90) days in any one hundred eighty (180) day period.
2. Compensation and Benefits
2.1 Base Compensation. During the Employment Period, the
Company will pay Xxxxxxxxx a base salary at a rate of $150,000 per
annum (the "Base Salary"). The Board shall perform an annual review of
Xxxxxxxxx' Base Salary based on Xxxxxxxxx' performance of his duties
and the Company's other compensation policies.
2.2 Bonuses. During the Employment Period, Xxxxxxxxx shall be
eligible for bonuses of up to 10% of his base salary of $150,000 each
time the Company completes a major acquisition, funding, or financing.
2.3 Options. At the inception of the Employment Period,
Xxxxxxxxx shall receive stock options good for three years from the
date of issuance to purchase up to 500,000 shares of the Company's
common stock a year at a price which shall not be greater than 50% of
the average bid price for the shares during the previous year.
2.4 Benefits. In addition to the Base Salary, Xxxxxxxxx will
be entitled to the following benefits during the Employment Period if
offered by the Company, unless otherwise altered by the Board with
respect to all Executives of the Company:
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a. hospitalization, disability, life and
health insurance, to the extent offered by the
Company, and in amounts consistent with Company
policy, for all key management employees, as
reasonably determined by the Board;
b. up to two (2) weeks paid vacation each
year with salary, consistent with Company policy for
all senior employees and provided that unused
vacation time shall not be carried over to subsequent
years;
c. reimbursement for reasonable, ordinary
and necessary out-of-pocket expenses incurred by
Xxxxxxxxx in the performance of his duties, subject
to the Company's policies in effect from time to time
with respect to travel, entertainment and other
expenses, including, without limitation, requirements
with respect to reporting and documentation of such
expenses;
d. a $500 a month car allowance;
e. other benefit arrangements, including a
401(k) or similar tax deferral plan, to the extent
made generally available by the Company to its
Executives and key management employees.
2.5 Compensation After Termination.
a. If the Employment Period is terminated
(i) by the Company for Cause or due to the death or
Disability of Xxxxxxxxx, (ii) by Xxxxxxxxx or (iii)
through expiration of the Employment Period, then the
Company shall have no further obligations hereunder
or otherwise with respect to Xxxxxxxxx' employment
from and after the termination or expiration date
(except payment of Xxxxxxxxx' Base Salary accrued
through the date of termination or expiration and the
Company shall continue to have all other rights
available hereunder (including, without limitation,
all rights under Section 3 hereof at law or in
equity).
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b. If the Employment Period is terminated by
the Company without Cause, Xxxxxxxxx shall be
entitled to receive the payment of the Base Salary
through the remainder of the Initial Period or, at
the option of the Company, in lieu of such Base
Salary a lump sum payment other payments in a
mutually agreeable amount. The Company shall have no
other obligations hereunder or otherwise with respect
to Xxxxxxxxx' employment from and after the
termination of his employment or expiration of this
Agreement, and the Company shall continue to have all
rights available hereunder (including, without
limitation, all rights under Sections 3, 4, 5 and 6
hereof, at law or in equity).
2.6 Profit Sharing, Pension and Salary Deferral Benefits. It
is understood by the parties to this Agreement that, during the
Employment Period, Xxxxxxxxx shall be entitled to participate in or
accrue benefits under any pension, salary deferral or profit sharing
plan now existing or hereafter created for employees of the Company
upon terms and conditions equivalent to those which the Company may
provide for other senior Executive employees. The termination of this
Agreement shall not result in forfeiting vested benefits such as
pension or 401(k) plan benefits that have vested in Xxxxxxxxx as of the
date of termination.
3. Covenant Not to Compete.
3.1 Xxxxxxxxx' Acknowledgment. Xxxxxxxxx agrees and
acknowledges that in order to assure the Company that it will retain
its value as a going concern, it is necessary that Xxxxxxxxx undertake
not to utilize his knowledge of the Business and his relationships with
customers and suppliers to compete with the Company. Xxxxxxxxx further
acknowledges that:
a. the Company is and will be engaged in the
Business;
x. Xxxxxxxxx occupies a position of trust
and confidence with the Company and, during
employment under this Agreement, Xxxxxxxxx will be
familiar with the Company's trade secrets and with
other proprietary and confidential information
concerning the Company;
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c. the agreements and covenants contained in
this Section 3 are essential to protect the Company
and the goodwill of the Business; and
x. Xxxxxxxxx' employment with the Company
has special, unique and extraordinary value to the
Company and the Company would be irreparably damaged
if Xxxxxxxxx were to provide services to any person
or entity in violation of the provisions of this
Agreement.
3.2 Competitive Activities. The following terms have the
following meanings for the purposes of this Section 3.2:
"Restricted Period" means the longer of: (i) the period during
which Xxxxxxxxx is employed by the Company, or (ii) the period of
twelve (12) months from and after the date hereof.
"Territory" means each and every city and county in each state
in which the Company conducted business on or prior to the date hereof
and/or in which the Company conducts business. A complete list of those
counties is attached as Exhibit X.
Xxxxxxxxx hereby agrees that during the Restricted Period he
will not, directly or indirectly, as employee, agent, consultant,
stockholder, director, co-partner or in any other individual or
representative capacity, own, operate, manage, control, engage in,
invest or participate in any manner in, act a consultant or advisor to,
render services for (alone or in association with any person, firm,
corporation or entity), or otherwise assist any person or entity (other
than the Company) that engages in or owns, invests in, operate, manages
or controls any venture or enterprise that directly or indirectly
engages or proposes to engage in the business of (i)exploring for,
producing, or selling oil and gas at the time of termination to be
provided by the Company, anywhere in the Territory. With respect to the
Territory, Xxxxxxxxx specifically acknowledges that the Company has
conducted the Business throughout those areas comprising the Territory
and that the Company intends to continue to expand the Business
throughout the Territory.
3.3 Solicitation of Employees. Without limited the generality
of the provisions of Section 3.2 above, Xxxxxxxxx hereby agrees that
during the Restricted Period he will not (except on behalf of the
Company), directly or indirectly, solicit or participate as employee,
agent, consultant, stockholder, director, partner or in any other
individual or representative capacity in any business which solicits,
business from any person, firm, corporation or other
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entity which is or was a customer or supplier of the Company during the
term of this Agreement.
4. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one the same Agreement.
5. Descriptive Headings; Interpretation. The descriptive headings in
this Agreement are inserted for convenience of reference only, and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement. The use of the word "including" in this Agreement shall be by way of
example rather than by limitation.
6. Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been duly given if (i) delivered personally
to the recipient, (ii) sent to the recipient by reputable express courtier
service (charges prepaid) or mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid, or (iii) transmitted by
telecopy to the recipient with a confirmation copy to follow the next day to be
delivered by overnight carrier. Such notices, demands and other communications
shall be sent to these addresses indicated below:
If to Xxxxxxxxx:
Xxxxxxx Xxxxxxxxx
0000 Xxxxx Xxxxxx
Xxxxxx Xxxxx, Xxxxx 00000
If to the Company:
TBX Resources, Inc.
00000 Xxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
with a copy to:
Xxxxxxx X. Xxxxxx, P.C.
Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxx 00000
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
COMPANY:
TBX RESOURCES, INC.
By:
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Xxxxxxx Xxxxxxxxx, Director*
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Xxxxxxxxx Xxxxx, Director*
EMPLOYEE:
By:
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Xxxxxxx Xxxxxxxxx
*Being all the Directors of the Company.
