EMPLOYMENT AGREEMENT
Exhibit 10.1
This Agreement, dated as of October 1, 2006 is by and between Knight Energy Corp., a
Delaware corporation (“Employer”), and Xxxxxxx X. Xxxxx (“Employee”).
WHEREAS, Employee desires to enter into the employment of Employer, and Employer desires to
employ Employee provided that, in so doing, it can protect its confidential information, business,
accounts, patronage and good will;
NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual covenants set
forth below, the parties hereto agree as follows:
1. Compensation and Employment. Employee agrees to enter into the employment of
Employer, and Employer agrees to employ Employee, on the terms and conditions set forth below.
Employer shall pay to Employee, and Employee agrees to accept as full consideration for his
employment:
(a) $250,000 per annum during the term of this Agreement, payable by-weekly and in accordance
with Employer’s standard payroll practices, subject to all appropriate withholdings
(b) Employee shall be entitled to four (4) weeks paid vacation per year and such other fringe
benefits as the Board of Directors of Employer may, in its sole discretion, determine. Employee
may at his or her sole option carry 100% of all unused vacation into the next year or chose to be
paid for the time at his or her normal rate of pay. If payment is chosen, it will occur within
January of the year following the year in which it was earned. Employee agrees during the term of
his employment to devote such of his business time as may reasonably be required and his
reasonable best efforts, skills and abilities to the performance of his duties as stated in this
Agreement and to the furtherance of the business of Employer and its affiliates.
(c) Employee shall be entitled to additional compensation of $3,000.00 per month as (1) car
and local travel expenses re-imbursement including insurance, maintenance and fuel expenses and
(2) miscellaneous expenses. This shall be payable by-weekly and in accordance with Employer’s
standard payroll practices, subject to all appropriate withholdings.
(d) Employee shall be entitled to re-imbursement of up to $1,750.00 per month for health
insurance expenses until such time as Employer makes a company sponsored health insurance plan
available to Employee.
(e) Employee shall be entitled to reimbursement for country club membership dues and fees,
mobile and office telephone fees and office related expenses.
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(f) Employee’s job title initially shall be Chief Executive Officer (CEO). Employee agrees
that this position is at all times subject to oversight by the Board of Directors of Employer.
Employment includes all tasks and assignments reasonable to such position and performing such
other services for Employer and its affiliates as may be reasonably directed from time to time by
the Board of Directors. Employee’s job title may be changed to such other title as may be
determined from time to time by the Board of Directors of Employer.
(g) Employee shall also use his reasonable best efforts to preserve the business of Employer
and its affiliates.
(h) Employee acknowledges receipt of Employer’s Employment handbook as of the date of this
Agreement and agrees to act in conformity with the lawful terms and provisions set forth therein
at all times during the term of his employment by Employer provided that all amendments or
supplements thereto are delivered to Employee in writing and that he shall only be subject to any
such amendment or supplement after his receipt thereof.
2. Term. The employment of Employee shall begin on the date of this Agreement and
shall continue for five (5) years or until the earliest of (a) the date Employer terminates it for
just cause, (b) the death of Employee, or (c) upon termination by the Employee through written
notice given at least 14 days’ prior written notice. For purposes of this Section 2, “just cause”
for termination shall be: (a) the failure or inability for any reason of Employee to devote such
time as agreed to by the Employee and the Employer pursuant hereto to Employer’s and its
affiliates’ business, (b) the failure of Employee to perform his duties under this Agreement, (c)
the commission by Employee of any act involving moral turpitude or the commission by Employee of
any act or the suffering by Employee of any occurrence or state of facts, which renders Employee
incapable of performing his duties under this Agreement, or adversely affects Employer’s business
reputation, (d) any breach by Employee of any of the material terms of, or the failure to perform
any material covenant contained in, this Agreement, (e) the violation by Employee of instructions
or policies established by Employer communicated to Employee with respect to the operation of its
business and affairs or Employee’s failure to carry out the reasonable instructions of the Board of
Directors and Chairman of the Board of Employer, (f) the commission by Employee of any action or
the existence of any state of facts which would legally justify an employer in terminating a
contract of employment or (g) provision of 14 days’ prior written notice to Employee.
(a) Notwithstanding anything to the contrary in this Agreement, the provisions of Sections 3,
4 and 5 shall survive any termination of Employee’s employment under this Agreement. In the event
of the termination of Employee’s employment prior to the completion of the term of employment
specified above, Employee shall be entitled not only to the compensation and commissions earned
and benefits accrued by him as of the date of termination, but an additional one time net
termination fee of $1,000,000 after appropriate withholdings tax to employee. Said fee is
compensation for Employee’s honoring and abiding of Sections 3, 4, and 5 herein which would
directly impact Employee’s future earnings.
3. Nondisclosure Agreement. Employee, during the term of employment under this
Agreement, shall have access to and become familiar with various trade secrets and proprietary and
confidential information consisting of, but not limited to, processes, computer programs,
compilations of information, records, sales procedures, customer requirements, pricing techniques,
customer lists, methods of doing business and other confidential information (collectively referred
to as the “Trade Secrets”), which are owned by Employer and its affiliates and regularly
used in the operation of its business, but in connection with which Employer takes
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precautions to prevent dissemination to persons other than certain directors, officers and
employees. Employee acknowledges and agrees that the Trade Secrets (a) are secret and not known in
the industry; (b) are entrusted to Employee after being informed of their confidential and secret
status by Employer and because of the fiduciary position occupied by Employee with Employer; (c)
have been developed by Employer for and on behalf of Employer through substantial expenditures of
time, effort and money and are used in its business; (d) give Employer an advantage over
competitors who do not know or use the Trade Secrets; (e) are of such value and nature as to make
it reasonable and necessary to protect and preserve the confidentiality and secrecy of the Trade
Secrets; and (f) the Trade Secrets are valuable, special and unique assets of Employer, the
disclosure of which could cause substantial injury and loss of profits and goodwill to Employer.
Employee shall not use in any way or disclose any of the Trade Secrets, directly or indirectly,
either during the term of this Agreement or at any time thereafter, except as required in the
course of his employment under this Agreement. All files, records, documents, information, data
and similar items relating to the business of Employer, whether prepared by Employee or otherwise
coming into his possession, shall remain the exclusive property of Employer and shall not be
removed from the premises of Employer under any circumstances without the prior written consent of
the Board of Directors of Employer (except in the ordinary course of business during Employee’s
period of active employment under this Agreement), and in any event shall be promptly delivered to
Employer upon termination of this Agreement. Employee agrees that upon his receipt of any
subpoena, process or other request to produce or divulge, directly or indirectly, any Trade Secrets
to any entity, agency, tribunal or person, Employee shall timely notify and promptly hand deliver
or deliver through a reputable overnight delivery service a copy of the subpoena, process or other
request to the President of Employer.
4. Non-competition Agreement. Employee acknowledges and agrees that as a result of
the information he has acquired regarding the Employer prior to the date hereof, as well as the
further training he will receive, the experience he will gain while employed and the information he
will acquire regarding the Trade Secrets will enable him to injure Employer if he should compete
with Employer or its affiliates in a business that is competitive with the business conducted or to
be conducted by Employer or its affiliates. For these reasons, Employee hereby agrees as follows:
(a) Consent of Employer shall be obtained for business Employee obtains from any (i)
customers of Employer or its affiliates or (ii) person or entity whose business Employer or its
affiliates is soliciting, (iii) contact (other than for social purposes), solicit or attempt to
solicit or accept or direct business that is competitive with such business being conducted by
Employer or any of its affiliates during Employee’s employment under this Agreement from any of
the customers of Employer or any of its affiliates, or (iv) take any action inconsistent with the
fiduciary relationship of an employee to his employer. As used herein, “affiliates” shall mean
persons or entities that directly or indirectly, through one or more
5. Non-employment Agreement. For a period of two years after the termination or
cessation of his employment with Employer for any reason whatsoever, Employee shall not, on his own
behalf or on behalf of any other person, partnership, association, corporation or other entity,
hire or solicit or in any manner attempt to influence or induce any employee of Employer or its
affiliates to leave the employment of Employer or its affiliates, nor shall he use or disclose to
any person, partnership, association, corporation or other entity any information obtained while an
employee of Employer concerning the names and addresses of such employees.
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6. Severability. The parties hereto intend all provisions of Sections 4 and 5 hereof
to be enforced to the fullest extent permitted by law. Accordingly, should a court of competent
jurisdiction determine that the scope of any provision of Sections 4 and 5 hereof is too broad to
be enforced as written; the parties intend that the court reform the provision to such narrower
scope as it determines to be reasonable and enforceable. In addition, however, Employee agrees
that the non-competition agreements, nondisclosure agreements and non-employment agreements set
forth above each constitute separate agreements independently supported by good and adequate
consideration and shall be severable from the other provisions of, and shall survive, this
Agreement. If any provision of this Agreement is held to be illegal, invalid or unenforceable
under present or future laws effective during the term hereof, such provision shall be fully
severable and this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part of this Agreement; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance here from. Furthermore, in lieu of such
illegal, invalid or unenforceable provision, there shall be added automatically as part of this
Agreement, a provision as similar in its terms to such illegal, invalid or unenforceable provision
as may be possible and be legal, valid and enforceable.
7. Inventions. Employee shall promptly disclose, grant and assign to Employer for its
sole use and benefit any and all inventions, improvements, technical information and suggestions
relating in any way to the products of Employer or any of its affiliates or capable of beneficial
use by Employer or any of its affiliates, which Employee has while providing services to Employer
conceived, developed or acquired, or may conceive, develop or acquire during the term hereof
(whether or not during usual working hours), together with all patent applications, letters patent,
copyrights and reissues thereof that may at any time be granted for or upon any such invention,
improvement or technical information. In connection therewith, Employee shall promptly at all
times during and after the term hereof:
(a) Execute and deliver such applications, assignments, descriptions and other instruments as
may be reasonably necessary or proper in the opinion of Employer to vest title to such inventions,
improvements, technical information, patent applications and patents or reissues thereof in
Employer and to enable it to obtain and maintain the entire right and title thereto throughout the
world at Employer’s cost and expense.
(b) Render to Employer, at its expense at Employee’s reasonable rate, all such assistance as
it may require in the prosecution of applications for said patents or reissues thereof, in the
prosecution or defense of interferences which may be declared involving any said application or
patents, and in any litigation in which Employer may be involved relating to any such patents,
inventions, improvements or technical information.
8. Remedies. Employee recognizes and acknowledges that the ascertainment of damages
in the event of his breach of any provision of this Agreement would be difficult, and Employee
agrees that Employer, in addition to all other remedies it may have, shall have the right to
injunctive relief if there is such a breach.
9. Acknowledgements. Employee acknowledges and recognizes that the enforcement of any
of the non-competition provisions in this Agreement by Employer will not interfere with Employee’s
ability to pursue a proper livelihood. Employee further represents that he is capable of pursuing
a career in other industries to earn a proper livelihood. Employee recognizes and agrees that the
enforcement of this Agreement is necessary to ensure the preservation and continuity of the
business and good will of Employer. Employee agrees that
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due to the nature of Employer’s business, the non-competition restrictions set forth in this
Agreement are reasonable as to time and geographic area. At any time during Employee’s employment
with Employer and for a period of two years thereafter, Employer may request Employee to supply
such information as is reasonably necessary to ascertain whether or not Employee has complied with,
or has violated, the restrictive covenants of Sections 3, 4, and 5 hereof. Any such request for
information will be sent to Employee by certified mail, return receipt requested, addressed to
Employee’s last known address. Employee shall furnish the requested information to Employer within
10 days following the receipt of such request unless the disclosure of such information causes
Employee to breach a binding nondisclosure agreement.
10. Notices. Any notices, consents, demands, requests, approvals and other
communications to be given under this Agreement by either party to the other shall be deemed to
have been duly given if given in writing and personally delivered or sent by mail, registered or
certified, postage prepaid with return receipt requested, as follows:
| If to Employee: | Xxxxxxx X. Xxxxx | |||
| 000 Xxxxxxx Xxxx Xxxxx | ||||
| Xxxxxxxxxx, XX 00000 | ||||
| If to Employer: | Knight Energy Corp. | |||
| 000 Xxxx Xxx Xxxx | ||||
| Xxxxxxx, XX 00000 |
Any party may change its address for notice by written notice given to the other parties. Notices
delivered personally shall be deemed communicated as of actual receipt; mailed notices shall be
deemed communicated as of three days after mailing.
11. Entire Agreement. This Agreement supersedes any and all other agreements, either
oral or written, between the parties hereto with respect to the subject matter hereof and contains
all of the covenants and agreements between the parties with respect thereto.
12. Modification. No change or modification of this Agreement shall be valid or
binding upon the parties hereto, nor shall any waiver of any term or condition in the future be so
binding, unless such change or modification or waiver shall be in writing and signed by the parties
hereto.
13. Governing Law and Venue. The parties acknowledge and agree that this Agreement
and the obligations and undertakings of the parties hereunder will be performable in Dallas, Dallas
County, Texas. This Agreement shall be governed by, and construed in accordance with, the laws of
the State of Texas. If any action is brought to enforce or interpret this Agreement, venue for
such action shall be in Dallas County, Texas.
14. Counterparts. This Agreement may be executed in counterparts, each of which shall
constitute an original, but all of which shall constitute one document.
15. Costs. If any action at law or in equity is necessary to enforce or interpret the
terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees,
costs and necessary disbursements in addition to any other relief to which he or it may be
entitled.
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16. Estate. If Employee dies prior to the expiration of the term of employment, any
monies that may be due him from Employer under this Agreement as of the date of his death shall be
paid to his estate or such other beneficiaries as are designated by Employee in writing.
17. Assignment. Employer shall have the right to assign this Agreement to its
successors or assigns. The terms “successors” and “assigns” shall include any person, corporation,
partnership or other entity that buys all or substantially all of Employer’s assets or all of its
stock, or with which Employer merges or consolidates. The rights, duties and benefits to Employee
hereunder are personal to him, and no such right or benefit may be assigned by him.
18. Binding Effect. This Agreement shall be binding upon the parties hereto, together
with their respective executors, administrators, successors, personal representatives, heirs and
assigns.
19. Waiver of Breach. The waiver by Employer of a breach of any provision of this
Agreement by Employee shall not operate or be construed as a waiver of any subsequent breach by
Employee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
| KNIGHT ENERGY CORP. | ||||||
| By: | ||||||
| Its Chief Financial Officer | ||||||
AND |
||||||
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