EMPLOYMENT AGREEMENT
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This Agreement (the "Agreement") is made and entered into on this 17th day
of October, 2005 (the "Effective Date"), between QUEST RESOURCE CORPORATION (the
"Company), and XXXXX X. XXXX ("Employee").
1. Agreement to Employ; Duties.
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a Agreement to Employ. The Company hereby employs Employee
and Employee hereby accepts employment upon the terms and conditions hereinafter
set forth. Employee will serve as Chief Executive Officer and President of the
Company. In consideration of the mutual promises set forth below, the employment
agreement entered into between Employee and the Company dated November 7, 2002
(the "2002 Agreement") is terminated, and this Agreement replaces the 2002
Agreement in its entirety.
b Duties. Employee agrees that so long as he is employed
pursuant to this Agreement, he will: (i) to the satisfaction of the Company,
devote his best efforts and his entire business time to further properly the
interests of the Company; (ii) at all times be subject to the direction and
control of the Board of Directors of the Company with respect to his activities
on behalf of the Company; (iii) comply with all rules, orders and regulations of
the Company and all statutes, regulations, interpretive rulings and other
enactments to which the Company is subject; (iv) truthfully and accurately
maintain and preserve such records and make all reports as the Company may
require; and (v) fully account for all monies which he may from time to time
have custody over and deliver the same to the Company whenever and however
directed to do so.
2. Compensation.
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a Base Salary. For all services to be rendered by Employee,
the Company shall pay Employee a salary at the rate of Four Hundred Thousand
($400,000.00) and No/100 Dollars per year, in installments of equal frequency to
the Company's standard payroll practices. Salary payments shall be subject to
withholding and other applicable taxes (e.g., federal and state withholding,
FICA, earnings tax, etc).
b Incentive Bonus Compensation/Stock Options. Employee shall
be entitled to participate in an incentive bonus plan or program and/or stock
option plan as may be established by the Company's Compensation Committee for
senior executives of the Company.
3. Term. This Agreement shall be effective on October 17, 2005, and shall
continue
thereafter until terminated by either party as provided in Section 5 or 6
hereof.
4. Employee Benefits. Employee shall be entitled, during his employment
hereunder, to receive and participate in employee benefits available to senior
executives of the Company as the Board of Directors (or the Compensation
Committee) of the Company determines, in its sole discretion, from time to time.
Employee acknowledges that the benefits described above are subject to
change in the discretion of the Board of Directors (or the Compensation
Committee) of the Company, and that Employee is only entitled to participate in
these benefits to the extent they are made available by the Company to senior
executives from time to time.
5. Termination of Employment by the Employee. Employee shall have the
right to terminate his employment at any time by providing no less than thirty
(30) days prior written Notice of Termination to the Company. Employee hereby
agrees to assist in the training of his replacement, if requested.
6. Termination of Employment by the Company.
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a Without Cause. The Company may terminate Employee's
employment under this Agreement at any time without cause. In such event, the
Company shall continue to pay Employee Base Salary as required pursuant to
Section 2a hereof as severance pay for a period equal to twelve (12) months from
the date of the Company's giving of Notice of Termination to Employee; provided,
however, that Employee shall only be paid such severance pay if he signs an
agreement containing a release of claims against the Company, in a form
substantially similar to that included in Exhibit A, attached hereto and
incorporated herein. Such severance pay will be paid in equal installments on
the Company's regular payroll dates. Employee will cease to be an employee of
the Company as of the date Notice of Termination is given, and he will not
receive or accrue any benefits of employment after such termination of
employment (e.g., life insurance, health insurance, disability insurance,
vacation accrual or other benefits provided pursuant to this Agreement or
otherwise in conjunction with Employee's employment). Severance pay shall not be
paid to the Employee if Employee owns, manages, operates, joins, contracts with,
or is employed by or connected in any manner with (whether as principal,
partner, shareholder, member, director, officer, employee, agent or otherwise),
any business which may be competitive in any manner to the business engaged in
by the Company.
b With Cause The Company may terminate Employee's employ-
ment under this Agreement at any time for cause effective immediately upon
Notice of Termination. In the event the Company terminates this Agreement for
cause on the part of Employee, Employee shall receive Base Salary for the period
to the date of his termination. Employee shall not be entitled to receive
severance pay from the Company if his employment is terminated for cause. For
purposes of this Agreement, "cause" shall be defined to include, but not be
limited to, the following: (i) any act or omission by Employee that constitutes
gross negligence or willful misconduct; (ii) theft, dishonest acts or breach of
fiduciary duty that materially enrich the Employee or materially damage the
Company or conviction of
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a felony, (iii) any conflict of interest, except those consented to in writing
by the Company; (iv) any material failure by Employee to observe Company work
rules, policies or procedures that is not cured by Employee after 10 days
written notice; (v) bad faith refusal by Employee to carry out reasonable
instruction that is not cured by Employee after 10 days written notice; or (vi)
any material breach of this Agreement by Employee.
7. Notice of Termination. Any termination of Employee's employment by the
Company pursuant to Section 6 or by Employee pursuant to Section 5 shall be
communicated by written Notice of Termination to the other party hereto. Said
Notice shall be deemed to have been duly given when delivered personally or by
overnight delivery, sent via facsimile, or mailed by United States certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to the Company:
Quest Resource Corporation
0000 Xxxxx Xxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx (or then current Chief Financial Officer)
Facsimile: (000) 000-0000
If to Employee:
Xxxxx X. Xxxx
0000 Xxxxx Xxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
or at such other address as either party may designate in writing to the other.
8. Company Property. Upon termination of this Agreement for any reason
whatsoever, Employee shall immediately deliver to the Company any and all
Company property, including, without limitation, all Confidential Information,
as such Confidential Information is defined in Section 15. From and after
termination of this Agreement, Employee shall not represent that he has any
further authority to act as a representative of the Company, in any capacity.
9. Intellectual Property. Any interest in patents, patent applications,
inventions, copyrights, developments and processes ("Inventions") which Employee
now or hereafter during the period Employee is employed by the Company may own
or develop relating to the fields in which the Company may then be engaged shall
belong to the Company; and forthwith upon request of the Company, Employee shall
execute all assignments and other documents and take all such other action as
the Company may reasonably request in order to vest in the Company all his
right, title and interest in and to the Inventions free and clear of all liens,
charges and encumbrances.
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10. No Conflicts. Employee represents and warrants to the Company that
neither the execution nor delivery of this Agreement, nor the performance of
Employee's obligations hereunder, will conflict with, or result in a breach of,
any term, condition, or provision of, or constitute a default under, any
obligation, contract, agreement, covenant or instrument to which Employee is a
party or under which the Employee is bound, including, without limitation, the
breach by Employee of a fiduciary duty to any former employers.
11. Personnel Policies. The general personnel policies of the Company (as
said policies may exist from time to time) will apply to Employee with the same
force and effect as to any other employee of the Company, except to the extent
such general personnel policies are inconsistent with the terms and provisions
of this Agreement, in which event the terms and provisions of this Agreement
shall control.
12. Compensation Review. The Company will conduct periodic reviews of
Employee and his performance no less frequently than annually. While the Company
currently anticipates that during such reviews, it may consider possible
increases to Base Salary, both Employee and the Company hereby agree that the
Company shall have no obligation to alter or adjust any compensation or benefits
due to Employee pursuant to the terms of this Agreement.
13. Expense Reimbursement. Employee shall be reimbursed by the Company for
the reasonable and necessary business expenses incurred by Employee in the
discharge of his duties, subject to the Company's standard policies and
procedures related to expense reimbursement and approval thereof.
14. Conflict of Interest. Employee shall devote his full time and attention
to the business of the Company and the diligent discharge of the duties assigned
to Employee throughout the term of this Agreement. Unless consented to by the
Company, Employee will not, directly or indirectly, have any business interests
or investments (whether as principal, partner, shareholder, director, officer,
employee, agent or otherwise) that: (i) are other than passive investments which
do not require Employee's direct personal time, attention, or services; or (ii)
create any conflict of interest with the Company or with Employee's employment
by the Company. For purposes of the foregoing, a conflict of interest shall
include, but not be limited to, any direct or indirect interest in any business
or enterprise that is competitive with the Company or any corporation or
business enterprise directly or indirectly controlling, controlled by or under
common control with the Company.
Notwithstanding the foregoing, during the period Employee is employed by
the Company, Employee may own up to 1% of the outstanding equity securities of
stock in any corporation which is listed upon a national stock exchange or
traded in the over-the-counter market.
15. Confidentiality; Restrictive Covenants. Employee acknowledges that his
employment with the Company will afford Employee an opportunity to identify the
Company's business strategies and know-how, enable him to establish favorable
relations with the Company's customers, business prospects and suppliers and
provide him with access to other confidential, trade secret or proprietary
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information of the Company (collectively, the "Confidential Information")
including, without limitation, business and marketing plans, customer files and
lists, business prospects, sales techniques, billing files, software, source
code, financial information, reports, summaries, spreadsheets, evaluations,
drawings, specifications, seismic data, reserve reports, prospect analyses,
geological and geophysical data, maps, models, interpretations, and other
confidential or proprietary information of the Company whether in written,
graphic, electronic or any other format. Employee further acknowledges that the
Company will expend considerable amounts of time, money and other assets in the
development of this Confidential Information which is essential to its business,
and Employee acknowledges that his employment by the Company is conditioned on
his promise not to use any Confidential Information or to divulge any
Confidential Information to any person or entity not employed by the Company
without the Company's prior written approval. Employee, therefore, agrees not to
use, disclose or in any manner reveal to any person, firm, company, corporation
or other entity any of the Confidential Information conveyed to him or in
connection with his employment by the Company prior or subsequent to this
Agreement other than for Employee to carry out his duties under this Agreement.
Anything herein to the contrary notwithstanding, this Agreement shall be
inoperative as to such portions of the Confidential Information which (i) are or
become generally available to the public other than as a result of a disclosure
by Employee; (ii) become available to Employee on a nonconfidential basis from a
source, other than the Company or its representatives, which has represented to
Employee (and which Employee has no reason to disbelieve after due inquiry) that
such source is entitled to disclose it, or (iii) were known to Employee on a
nonconfidential basis prior to disclosure to Employee by the Company or its
representatives.
Employee further agrees that while he remains in the employ of the Company
and for a period of twelve (12) months following termination of such employment
by Employee or by the Company for cause, Employee will not directly or
indirectly (whether through any person, firm, company, corporation or other
entity, other than the Company), do any of the following anywhere within the
geographical area in which the Company does business:
a. For his own account, for any person, firm, company, corporation or
other entity, other than the Company, or for any other reason, solicit
business or cause agents of any person, firm, company, corporation or other
entity to solicit business of a type similar to that solicited by the
Company from or for any person, firm, company, corporation or other entity
who was, at the effective date of the termination of his employment with
the Company, or within a one (1) year period prior to such termination, a
customer of the Company, as disclosed by the Company's books and records,
or solicit business from any prospective customer of the Company with whom
the Company has had contact within the one (1) year period prior to such
termination as disclosed by the Company's books and records;
b. In any way, directly or indirectly, whether personally or through
agents, other persons or otherwise, divert or take away or attempt to
divert or take away any of such customers or prospective customers or any
of the Company's suppliers or business prospects, or otherwise interfere
with or attempt to interfere with the Company's relations with any of such
customers, prospective customers, business prospects or suppliers; or
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c. In any other way, whether personally or through agents, other
persons or otherwise, induce or attempt to induce any director, employee or
agent of the Company to terminate his employment with the Company.
16. Severability of Restrictive Covenants. It is understood and agreed that
the restrictions imposed by the provisions of the foregoing Section 15 and each
subsection thereof are separate and severable, and it is the intent of the
parties hereto that in the event the restrictions imposed by said Section or any
subsection should be determined by any court of competent jurisdiction to be
void for any reason whatsoever, the remaining provisions of this Agreement and
the restrictions imposed by the remainder of said Section or subsection shall
remain valid and binding upon the parties. It is also agreed and understood that
in the event any restriction contained in Section 15 should be considered by any
court of competent jurisdiction to be unenforceable because unreasonable either
in length of time or area to which said restriction applies, it is the intent of
both parties hereto that said court reduce and reform the provisions thereof so
as to apply to limits considered enforceable by said court.
17. Equitable Remedies. Recognizing that irreparable damage will result to
the Company in the event of breach of any of the foregoing covenants and
assurances of Section 15 by Employee, the Company shall be entitled to an
injunction to be issued by any court of competent jurisdiction enjoining and
restraining Employee and each and every person, firm, company, corporation or
other entity acting in concert or participating with Employee from the
continuation of such breach, and in addition thereto, Employee shall pay to the
Company all ascertainable damages, including costs and reasonable attorneys'
fees and expenses, sustained by the Company by reason of the breach of said
covenants and assurances.
18. Survival of Representations. The covenants, agreements, representations
and warranties contained in or made by Employee pursuant to this Agreement shall
survive Employee's termination of employment, irrespective of any investigation
made by or on behalf of any party.
19. Waiver. Failure of either party to demand strict compliance with any of
the terms, covenants or conditions hereof shall not be deemed a waiver of such
term, covenant or condition, nor shall any waiver or relinquishment by either
party of any right or power hereunder at any one time or more times be deemed a
waiver or relinquishment of such right or power at any other time or times.
20. Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
21. Governing Law; Binding Effect. This Agreement shall be governed by and
construed in accordance with the laws of the State of Oklahoma and shall be
binding upon the parties hereto, their heirs, executors, administrators,
successors and assigns.
22. Entire and Final Agreement. This Agreement shall supersede any and all
agreements
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of employment, oral or written (including correspondence, memoranda, term
sheets, etc.), heretofore existing and contains the entire agreement of the
parties with respect to the subject matter hereof. This Agreement may not be
modified orally, but only by an agreement in writing, signed by the party
against whom the enforcement of any waiver, change, modification, extension or
discharge is sought.
23. Assignment. Neither this Agreement nor any of the rights, obligations
or interests arising hereunder may be assigned by Employee without the prior
written consent of the Company. Neither this Agreement nor any of the rights,
obligations or interests arising hereunder may be assigned by the Company,
without the prior written consent of the Employee, to a person other than: (1)
an affiliate of the Company; or (2) any party with which the Company merges or
consolidates, or to whomever the Company may sell all or substantially of its
assets; provided, however, that any such affiliate or successor shall expressly
assume all of the Company's obligations and liabilities to Employee under this
Agreement.
24. Section Headings. The section headings contained in this Agreement are
inserted for purposes of convenience only and shall not affect the meaning or
interpretation of this Agreement.
25. Signature Blocks.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf and Employee has hereunto set his hand the day and year first above
written.
"Employee" "Company"
QUEST RESOURCE CORPORATION
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Title: Chief Financial Officer
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EXHIBIT A
RELEASE AGREEMENT
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THIS RELEASE AGREEMENT ("Release") is entered into effective the date
signed below, by and between XXXXX X. XXXX ("Employee") and QUEST RESOURCE
CORPORATION ("Company").
WHEREAS, the Company has determined that Employee's employment with the
Company should end effective ________________________ ("Termination Date"); and
WHEREAS, the Company and Employee desire to fully and finally resolve all
issues which might relate to Employee's employment with the Company.
NOW THEREFORE, in consideration of the mutual promises set forth below, it
is hereby agreed by and between Employee and Company as follows:
A. Payment to Employee. The Company agrees to pay Employee the sum of
$________ (the "Payment") as severance pay, less all applicable
withholdings for state, federal and FICA taxes. The Payment shall be
paid in [insert number of installments] equal installments of
$_________ on each regular payroll date of the Company. Such
installments shall commence on the first payroll date that follows the
expiration of the seven-day revocation period set forth in paragraph G
below.
B. Employee's Release of Liability. Employee agrees to the following
general release:
(a) Employee hereby releases, acquits and forever discharges the
Company, its subsidiaries, divisions, affiliates, agents, independent
contractors, shareholders, employees, directors, and officers, and all
of its predecessors and successors (collectively referred to in this
Release as "Released Parties") of and from any and all causes of
action, suits, proceedings, claims, demands, rights, obligations,
losses, injury, costs, expenses, compensation and all other damages
and liabilities of any kind or nature whatsoever, whether known or
unknown, suspected or unsuspected, asserted or assertable
(collectively "Claims") which Employee now owns or holds, or at any
time has owned or held, against the Released Parties arising out of or
related to contract (express and/or implied), tort, payment of wages,
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of
1991, the Civil Rights Acts of 1866 and 1871, the Age Discrimination
in Employment Act, as amended, the Family Medical Leave Act, the Fair
Labor Standards Act, the Employee Retirement Income Security Act of
1974, the Americans With Disabilities Act of 1991, the Equal Pay Act
of 1963, the Rehabilitation Act of 1973, and/or any other federal,
state or local statute, law, ordinance, order or principle of common
law, or any Claim in relation to Employee's ownership or sale of
Company stock or participation in any compensation or
A-1
stock plan or any Claim relating to any other law, common or
statutory, resulting from any act or omission committed or omitted
prior to the date this Release is signed, and specifically including
Claims arising out of or in consequence of the employment relationship
between Employee and Company, or the termination thereof.
(b) Employee hereby represents, warrants and agrees that Employee has
not initiated, nor will he initiate, any legal proceedings, charges,
complaints or other actions in any court or administrative agency
regarding the Claims released herein and that none of the Claims has
been assigned, encumbered or otherwise transferred. Employee further
waives any right he may have to any benefit or other relief the Equal
Employment Opportunity Commission, or similar state or local agency,
might seek on his behalf, and he agrees to direct such agency to
withdraw or dismiss any such action.
C. Confidentiality of this Release. Employee agrees to keep the terms,
amount and fact of this Release confidential. Employee will not
disclose any information concerning this Release to anyone other than
his immediate family, tax advisor and attorney, each of whom will be
informed and bound by this confidentiality provision. Employee
acknowledges that revealing any information regarding the terms of his
separation from employment or discussing the terms of this Release may
cause the Company injury and damage and will constitute a breach of
his obligations under the Release and will cause a forfeiture of his
rights hereunder.
D. Employee Agreement. The parties acknowledge that Employee's
obligations in Sections 15 through 17 of the Employment Agreement
entered into between Company and Employee dated October 17, 2005 (the
"Employment Agreement") remain in full force and effect. This Release
and Sections 15 through 17 of the Employment Agreement constitute the
entire agreement between Employee and the Company. This Release may
not be modified orally, but only by an agreement in writing, signed by
the party against whom the enforcement of any waiver, change,
modification, extension or discharge is sought.
E. Time to Review. Employee acknowledges that he has been given the
opportunity to consider and review this Release with counsel of his
choice for a reasonable period of time, up to twenty-one (21) days,
and that he understands his respective rights and obligations pursuant
to this Release. Employee further declares he enters into this Release
freely, voluntarily and without any pressure or coercion from any
person or entity, including, but not limited to, the Company or any of
its representatives.
F. Time to Revoke. Employee understands that he has the right to revoke
this Release within a period of seven (7) days following his signing
this Release and that this Release shall not become effective or
enforceable, nor shall he receive the Payment, until the seven-day
revocation period has ended.
G. Governing Law; Binding Effect. This Release is made and entered into
in the State of Oklahoma and shall be interpreted, enforced and
governed by the laws of the State of Oklahoma, and shall be binding
upon the parties hereto, their heirs, executors, administrators,
successors and assigns.
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H. Non-Admission of Liability. Employee understands and agrees that the
Company denies that he has cognizable claims against it. He further
understands and agrees that neither this Release nor any action taken
hereunder is to be construed as an admission by the Company of
violation of any local, state, federal or common law. In fact, the
Employee understands that the Company expressly denies any such
violation.
I. Severability. The invalidity or unenforceability of any provision or
provisions of this Release shall not affect the validity or
enforceability of any other provision of this Release, which shall
remain in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Release to be executed on
its behalf to be effective the date signed below.
QUEST RESOURCE CORPORATION
By:
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Name:
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Title:
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I HAVE CAREFULLY READ AND FULLY UNDERSTAND THE TERMS OF THIS RELEASE, INCLUDING
THE RELEASE OF CLAIMS HEREIN, AND HAVE HAD SUFFICIENT OPPORTUNITY TO CONSULT
WITH LEGAL COUNSEL PRIOR TO EXECUTING THIS RELEASE TO THE EXTENT I DEEMED SUCH
CONSULTATION NECESSARY AND I VOLUNTARILY ACCEPT AND AGREE TO THE TERMS OF THIS
RELEASE, INCLUDING THE RELEASE OF CLAIMS HEREIN.
EMPLOYEE
Dated: _________________
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Xxxxx X. Xxxx
Current Address:
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Current Telephone No.
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