MANAGEMENT AGREEMENT
THIS AGREEMENT is made as of this 30th day of November, 1995, by and
among METRO CAPITAL CORPORATION, a Wyoming corporation (the "Company"),
XXXXXX CABLE COMMUNICATIONS CORPORATION, a Wyoming corporation and
wholly-owned subsidiary of the Company (the "Subsidiary") and XXXXXX X.
XXXXXXXXXX ("R. E. Xxxxxxxxxx") (the "Executive").
R. E. Xxxxxxxxxx is presently employed by the Company as President and
Chief Executive Officer and has previously entered into an Executive
Employment Agreement, dated April 1, 1993, whereby he is to be employed as
the President of the Company until March 31, 1998. This Agreement supersedes
and constitutes a novation of the Executive Employment Agreement between the
Company and R. E. Xxxxxxxxxx.
Pursuant to an Asset Purchase Agreement, dated October 19, 1995, between
the Company and Xxxxxxx Xxxxx Oil Company, Xxxxxxx Xxxxx and Xxxxx Xxxxx
(collectively "KTOC"), KTOC will be obtaining control of the Company. KTOC
is transferring certain assets to the Company and the Company is transferring
to the Subsidiary all of its assets except for (i) the amount of cash and
marketable securities in excess of $1.2 million, which amount in any event
shall be at least $700,000; and, (ii) the Company's working interest in, and
its operating agreement with respect to, the property known as Twenty Mile
Hill, which is held by Metro Minerals Corporation, a wholly-owned subsidiary
of the Company. The Subsidiary is to be operated autonomously by the current
management of the Company until the Company effects a distribution of the
Common Stock of the Subsidiary to the holders of the Company's Common Stock,
but in no event for more than five (5) years.
The Company and the Subsidiary recognize (i) that the Executive's
contribution to the growth and success of the Company since its inception has
been substantial, (ii) the Executive has extensive experience in the
management of the Company's business, and (iii) KTOC has extensive experience
in the management of KTOC's oil and gas business. The Company and the
Subsidiary desire to provide for the continued employment of the Executive by
the Subsidiary and to make certain changes in the Executive's employment
arrangements with the Company which the Company and the Subsidiary have
determined will reinforce and encourage the Executive's continued attention
and dedication to the Subsidiary as members of the Subsidiary's management.
The Executive is willing to commit himself to serve the Subsidiary, on the
terms and conditions herein provided.
In order to effect the foregoing, the Company, the Subsidiary and the
Executive wish to enter into a management/employment agreement on the terms
and conditions set forth below. Accordingly, in consideration of the promises
and the respective covenants and agreements of the parties herein contained,
and intending to be legally bound hereby, the parties hereto agree as follows:
1. EMPLOYMENT. The Subsidiary hereby agrees to employ the Executive,
and the Executive hereby agrees to serve the Subsidiary, on the terms and
conditions set forth herein.
2. TERM. The employment of the Executive by the Subsidiary as
provided in Section 1 will commence on the date hereof and continue for five
(5) years from the date hereof, unless sooner terminated as hereinafter
provided. On September 30, 1996, and on the last day of September of each
year thereafter, the term of each Executive's employment shall be
automatically extended an additional year unless, prior to such last day of
September, the Subsidiary shall have delivered to the Executive or the
Executive shall have delivered to the Subsidiary written notice that the term
of the Executive's employment hereunder will not be extended.
3. POSITIONS AND DUTIES. R. E. Xxxxxxxxxx shall serve as President of
the Subsidiary, his powers and duties in that capacity to be such as may be
determined from time to time by the Board of Directors of the Subsidiary.
During the period of this Agreement, R. E. Xxxxxxxxxx shall serve also,
without additional compensation, as Chairman of the Board, Chief Executive
Officer and a director of the Subsidiary, and to any other such office as he
may be elected or appointed by the Board of Directors of the Subsidiary,
provided such other duties will not interfere with R. E. Xxxxxxxxxx'x duties
as President of the Subsidiary. His duties in those capacities shall be as
set forth in the Bylaws of the Subsidiary.
The Subsidiary agrees to headquarter the Executive in the Riverton,
Wyoming area except for required travel on the Subsidiary's business.
4. EXTENT OF SERVICES. The Executive shall devote his entire time,
attention and energies to the business of the Subsidiary and shall not,
during the term of this Agreement, be engaged in any other business activity,
whether or not such business activity is pursued for gain, profit or other
pecuniary advantage, unless prior approval therefor has been obtained from
the Board of Directors of the Subsidiary. This provision shall not be
construed as preventing the Executive from investing his assets in such form
or manner as will not require any services on the part of the Executive in
the operation of the affairs of the companies in which such investments are
made.
5. COMPENSATION AND RELATED MATTERS. The Executive's compensation, as
set forth below, is to be self-funded by the Subsidiary with no liability to
pay such compensation by the Company.
(a) SALARY. During the period of R. E. Xxxxxxxxxx'x employment
hereunder, the Subsidiary shall pay to R. E. Xxxxxxxxxx a salary at a rate of
not less than $145,000 per annum.
The Executive's salary shall be paid in equal installments as nearly as
practicable on the 15th and the last days of each month in arrears. The
Executive's salary may be increased from time to time (i) in accordance with
normal business practices of the Subsidiary, (ii) based upon the Executive's
performance and/or (iii) to reflect increases in the cost of living. The
Executive's salary, if so increased, shall not thereafter during the term of
this Agreement be decreased. Compensation of the Executive by salary
payments shall not be deemed exclusive and shall not prevent the Executive
from participating in any other compensation or benefit plan of the
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Subsidiary or the Company. The salary payments (including any increased
salary payments) hereunder shall not in any way limit or reduce any other
obligation of the Company or the Subsidiary hereunder, and no other
compensation, benefit or payment hereunder shall in any way limit or reduce
the obligation of the Subsidiary to pay the Executive's salary hereunder.
(b) EXPENSES. During the term of the Executive's employment
hereunder, the Executive shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by the Executive in performing services
hereunder, including all expenses of travel and living expenses while away
from home on business or at the request of and in the service of the
Subsidiary, provided that such expenses are incurred and accounted for in
accordance with the policies and procedures presently established by the
Company.
(c) OTHER BENEFITS. The Company and the Subsidiary shall maintain
in full force and effect, and the Executive shall be entitled to continue to
participate in, all of its employee benefit plans and arrangements in effect
on the date hereof in which the Executive participates or plans or
arrangements providing the Executive with at least equivalent benefits
thereunder (including without limitation each stock option plan, stock bonus
plan, life insurance and health-and-accident plan and arrangement, medical
insurance plan, disability plan and vacation plan). The Company and the
Subsidiary shall not make any changes in such plans or arrangements which
would adversely affect the Executive's rights or benefits thereunder, unless
such change occurs pursuant to a program applicable to all executives of the
Company and the Subsidiary and does not result in a proportionately greater
reduction in the rights of or benefits to the Executive as compared with any
other of the executives of the Company. The Executive shall be entitled to
participate in or receive benefits under any employee benefit plan or
arrangement made available by the Company or the Subsidiary in the future to
executives and key management employees, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans and
arrangements. Nothing paid to the Executive under any plan or arrangements
presently in effect or made available in the future shall be deemed to be in
lieu of the salaries payable to the Executive pursuant to paragraph (a) of
this Section. Any payments or benefits payable to the Executive hereunder in
respect of any calendar year during which the Executive is employed by the
Subsidiary for less than the entire such year shall, unless otherwise
provided in the applicable plan or arrangement, be prorated in accordance
with the number of days in such calendar year during which the Executive is
so employed.
(d) VACATIONS. The Executive shall be entitled to the number of
vacation days in each calendar year, and to compensation in respect of earned
but unused vacation days, determined in accordance with the Subsidiary's
vacation plan. The Executive shall also be entitled to all paid holidays
given by the Subsidiary to its executives.
(e) SERVICES FURNISHED. The Subsidiary shall furnish the
Executive with office space and such other facilities and services as shall
be suitable to the individual Executive's positions and adequate for the
performance of their respective duties as set forth in Section 3 hereof.
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6. DISCLOSURE OF INFORMATION. The Executive recognizes and
acknowledges that the operation of the Company and the Subsidiary's
businesses and know how as it may exist from time to time, and the Company
and the Subsidiary's trade secrets are valuable, special and unique assets of
the Company and the Subsidiary's businesses. The Executive will not, during
or after the term of his employment, disclose such information and know how
or any part thereof, or any trade secrets, to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever. In the
event of a breach or threatened breach by an Executive of the provisions of
this paragraph, the Company and/or the Subsidiary shall be entitled to an
injunction restraining the Executive from disclosing in whole or in part such
information or any trade secrets or from rendering any services to any
person, firm, corporation, association or other entity to whom such
information in whole or in part has been disclosed or is threatened to be
disclosed. Nothing herein shall be construed as prohibiting the Company or
the Subsidiary from pursuing any other remedies available to the Company or
the Subsidiary for such breach or threatened breach, including the recovery
of damages from the Executive.
7. TERMINATION. The Company may not terminate the Executive's
employment for any reason. The individual Executive's employment hereunder
may be terminated only by the Subsidiary without any breach of this Agreement
only under the following circumstances:
(a) DEATH. The Executive's employment hereunder shall terminate
upon his death.
(b) DISABILITY. If, as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall have been absent from his
duties hereunder on a full-time basis for the entire period of six
consecutive months, and within thirty (30) days after written notice of
termination is given (which may occur before or after the end of such
six-month periods) shall not have returned to the performance of his duties
hereunder on a full-time basis, the Subsidiary may terminate the Executive's
employment hereunder.
(c) CAUSE. The Subsidiary may terminate the Executive's
employment hereunder for Cause. For purposes of this Agreement, the
Subsidiary shall have "Cause" to terminate the Executive's employment
hereunder upon (A) the willful and continued failure by the Executive to
substantially perform his duties hereunder (other than any such failure
resulting from the executive's incapacity due to physical or mental illness),
after demand for substantial performance is delivered by the Subsidiary that
specifically identifies the manner in which the Subsidiary believes the
Executive has not substantially performed his duties, or (B) the willful
engaging by the Executive in misconduct which is materially injurious to the
Subsidiary, monetarily or otherwise. For purposes of this paragraph, no act,
or failure to act, on the Executive's part shall be considered "willful"
unless done, or omitted to be done, by him not in good faith and without
reasonable belief that his action or omission was in the best interest of the
Subsidiary. Notwithstanding the foregoing, the Executive shall not be deemed
to have been terminated for Cause without (i) reasonable notice to the
Executive setting forth the reasons for the Subsidiary's intention to
terminate for Cause; (ii) an opportunity for the Executive, together with his
counsel, to be heard before the Board of Directors of the Subsidiary, and
(iii) delivery to the Executive of
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a Notice of termination as defined in subsection (e) hereof from the Board of
Directors of the Subsidiary finding that in the good faith opinion of such
Board the Executive was guilty of conduct set forth above in clause (A) or (B)
of the preceding sentence, and specifying the particulars thereof in detail.
(d) TERMINATION BY THE EXECUTIVE. The Executive may terminate his
employment hereunder (i) for Good Reason or (ii) if his health should become
impaired to an extent that makes his continued performance of his duties
hereunder hazardous to his physical or mental health or his life, provided
that the Executive shall have furnished the Subsidiary with a written
statement from a qualified doctor to such effect.
For purposes of this Agreement, "Good Reason" shall mean (A) a change in
control of the Subsidiary (as defined below) which is not approved by the
Executive, (B) a failure by the Company or the Subsidiary to comply with any
material provision of this Agreement which has not been cured within ten days
after notice of such noncompliance has been given by the Executive to the
Company and Subsidiary as the case may be, or (C) any purported termination
of the Executive's employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of paragraph (e) hereof (and for
purposes of this Agreement no such purported termination shall be effective).
For purposes of this Agreement, a "change in control of the Subsidiary"
shall mean a change in control of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx");
provided that, without limitation, such a change in control shall be deemed
to have occurred if (i) any "person" (as that term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than the Subsidiary or any "person" who
on the date hereof is a director or officer of the Subsidiary, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company or the Subsidiary
representing 20% or more of the combined voting power of the Subsidiary's
then outstanding securities, or (ii) during any period of two consecutive
years during the term of this Agreement, individuals who at the beginning of
such period constitute the Board of the Subsidiary cease for any reason to
constitute at least a majority thereof, unless the election of each director
who was not a director at the beginning of such period has been approved in
advance by directors representing at least two-thirds of the directors then
in office who were directors at the beginning of the period.
The Company shall consult with the Executive regarding any proposed
change in control of the Company. For purposes hereof, "change in conrol"
shall have the same meaning as set forth in the preceding paragraph.
(e) Any termination of the Executive's employment by the
Subsidiary or by the Executive (other than termination pursuant to subsection
(a) above) shall be communicated by written Notice of Termination to the
other parties hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision
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in this Agreement relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated.
(f) "Date of Termination" shall mean (i) if the Executive's
employment is terminated by his death, the date of his death, (ii) if the
Executive's employment is terminated pursuant to subsection (b) above, 30
days after Notice of Termination is given (provided that the Executive shall
not have returned to the performance of his duties on a full-time basis
during such 30 days period), (iii) if the Executive's employment is
terminated pursuant to subsection (e) above, the date specified in the Notice
of Termination, and (iv) if the Executive's employment is terminated for any
other reason, the date on which a Notice of Termination is given; provided
that if within 30 days after any Notice of Termination is given the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be the date
on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding and final arbitration award or by a
final judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected).
8. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) If the Executive is unable to perform his services by reason
of illness or incapacity for a period of more than six months, the
compensation otherwise payable to him during the continued period of such
illness or incapacity shall be reduced by the amount of any insurance
benefits provided by the Company or the Subsidiary. The Subsidiary may
terminate this Agreement at any time after Executive shall be absent from his
employment for whatever cause, for a continuous period of more than six
months and all obligations of the Subsidiary and shareholders hereunder shall
cease upon such termination, provided, however, that in the event that such
absence is due to illness or incapacity, the Subsidiary shall be obligated to
pay the full amount of Executive's salary for the balance of the term of this
Agreement or until Executive becomes gainfully employed, whichever is sooner.
(b) If the Executive's employment is terminated by his death, the
Subsidiary shall pay to the Executive's spouse, or if he leaves no spouse, to
his estate, commencing on the next succeeding day which is the 15th day or
last day of the month, as the case may be, and semi-monthly thereafter on the
15th and last days of each month, until a total of 24 payments has been made,
an amount on each payment date equal to the semi-monthly salary payment
payable to the Executive pursuant to Section 5(a) hereof at the time of his
death.
(c) If the Executive's employment shall be terminated for Cause,
the Subsidiary shall pay the Executive his full salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given
and the Subsidiary shall have no further obligations to the Executive under
this Agreement.
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(d) If (A) in breach of this Agreement, the Company or the
Subsidiary shall terminate an Executive's employment other than pursuant to
Section 7(b) or 7(c) hereof (it being understood that a purported termination
pursuant to Section 7(b) or 7(c) hereof which is disputed and finally
determined not to have been proper shall be a termination by the Company
and/or the Subsidiary in breach of this Agreement) or (B) the Executive shall
terminate his employment for Good Reason, then
(i) the Company and the Subsidiary shall pay the Executive
his full salary through the Date of Termination at the rate in effect at the
time Notice of Termination is given;
(ii) in lieu of any further salary payments to the Executive
for periods subsequent to the Date of Termination, the Subsidiary shall pay
as severance pay to the Executive an amount equal to the product of (A) the
Executive's annual salary rate in effect as of the Date of termination,
multiplied by (B) the greater of the number of years (including partial
years) remaining in the term of employment hereunder or the number three,
such payments to be made in a lump sum on or before the 5th day following the
Date of Termination;
(iii) if termination of the Executive's employment arises out
of a breach by the Subsidiary of this Agreement, the Subsidiary shall pay all
other damages to which the Executive may be entitled as a result of such
breach, including damages for any and all loss of benefits to the Executive
under the Company and the Subsidiary's employee benefit plans (other than the
Subsidiary's Incentive Compensation Plan) which the Executive would have
received if the Subsidiary had not breached this Agreement and had the
Executive's employment continued for the full term provided in Section 2
hereof, and including all legal fees and expenses incurred by him as a result
of such termination; and
(iv) if termination of the Executive's employment arises out
of a breach by the Company of this Agreement, the Company shall pay all other
damages to which the Executive may be entitled as a result of such breach,
including damages for any and all loss of benefits to the Executive under the
Company and the Subsidiary's employee benefit plans (other than the Company's
Incentive Compensation Plan) which the Executive would have received if the
Company had not breached this Agreement and had the Executive's employment
continued for the full term provided in Section 2 hereof, and including all
legal fees and expenses incurred by him as a result of such termination.
(e) If the Executive shall terminate his employment under clause
(ii) of Section 7(d) hereof, the Subsidiary shall pay the Executive his full
salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given together with such reasonable severance
payment, if any, or the Subsidiary's Board of Directors may determine.
(f) Unless the Executive is terminated for Cause, the Company and
the Subsidiary shall maintain in full force and effect, for the continued
benefit of the Executive for the greater of the number of years (including
partial years) remaining in the term of employment hereunder
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or the number three, all employee benefit plans and programs in which the
Executive was entitled to participate immediately prior to the Date of
Termination provided that the Executive's continued participation is possible
under the general terms and provisions of such plans and programs. In the
event that the Executive's participation in any such plan or program is
barred, the Company and the Subsidiary shall arrange to provide the Executive
with benefits substantially similar to those which the Executive would
otherwise have been entitle to receive under such plans and programs from
which his continued participation is barred.
(g) The Executive shall not be required to mitigate the amount of
any payment provided for in this Section 8 by seeking other employment or
otherwise.
9. SUCCESSORS: BINDING AGREEMENT.
(a) The Company and the Subsidiary will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company or
the Subsidiary, by agreement in form and substance satisfactory to the
Executive, to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company and the Subsidiary would
be required to perform it if no such succession had taken place. Failure by
the Company or the Subsidiary to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of the Agreement and
shall entitle the Executive to compensation from the Company and the
Subsidiary in the same amount and on the same terms as they would be entitled
to hereunder if they terminated their employment for Good Reason, except that
for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. As
used in this Agreement, "Subsidiary" shall mean the Subsidiary as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this
Section 9 or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid which executes and delivers the agreement
provided for in this Section 9 or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law.
(b) This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If an Executive should die while any
amounts would still be payable to him hereunder if he had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's devisee,
legatee or other designee or, if there be no such designee, to the
Executive's estate.
10. INDEMNIFICATION. The Subsidiary shall indemnify and hold the
Company harmless for all actions of the Executive.
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11. NOTICE. For purposes of this Agreement, notices, demands and all
other communications provided for in the agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States registered mail, return receipt requested,
postage prepaid, addressed to the Company, the Subsidiary and the Executive
at the following addresses:
(i) If to the Company:
Xxxxxxx Xxxxx, President
Metro Capital Corporation
000 X. 0xx Xxx., Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
(ii) If to the Subsidiary:
Xxxxxx X. Xxxxxxxxxx, President
Xxxxxx Cable Communications Corporation
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
(iii) If to the Executive:
Xxxxxx X. Xxxxxxxxxx
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Any party to this Agreement may change the address for giving notices by
written notice to the other parties in conformity with the foregoing, except
that notices of change of address shall be effective only upon receipt.
12. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed
to in writing signed by the Executives and such officers as may be
specifically designated by the Company and the Subsidiary. No waiver by any
party hereto at any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by any party which are
not set forth expressly in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws
of the State of Wyoming.
13. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not effect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force
and effect.
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14. 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 will constitute one and the same instrument.
15. GOVERNING LAW. This interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the internal
laws of the State of Wyoming.
16. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators, in Riverton, Wyoming, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction. The expense of such arbitration shall be borne by the
Company.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
METRO CAPITAL CORPORATION
By______________________________
Xxxxxxx Xxxxx, President
XXXXXX CABLE COMMUNICATIONS
CORPORATION
By_______________________________
Xxxxxx X. Xxxxxxxxxx, President
__________________________________
Xxxxxx X. Xxxxxxxxxx
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