EXHIBIT 10.18
EMPLOYMENT AGREEMENT
THIS AGREEMENT is hereby made and entered into by and between ENERGY
SEARCH, INCORPORATED, a Tennessee corporation ("Employer"), and XXXX X. XXXXXXXX
("Employee"), this 10th day of September, 1996.
W I T N E S S E T H:
1. EMPLOYMENT. Employer employs Employee, and Employee accepts employment,
upon the terms and conditions of this Agreement.
2. TERM. The term of this Agreement, and of Employee's employment
hereunder, shall begin on January 1, 1997, and shall terminate on December 31,
1997. This Agreement, and Employee's employment hereunder, shall be renewed
automatically for successive periods of one (1) year each, subject to
termination as provided hereinafter.
3. COMPENSATION.
(a) During the first year of employment, Employer shall pay to Employee
as Base Salary Compensation for his services the sum of Seventy-Two Thousand
Dollars ($72,000) per annum, which shall be paid in arrears in equal biweekly
installments of Three Thousand Dollars ($3,000) each.
(b) If the gross working interest revenue of the Employer increases by
20% per annum, Employee shall receive as additional compensation, a yearly
Performance Bonus of twenty-five percent (25%) of Employee's Base Salary.
(i) For those periods of Employee's employment that do not coincide
with Employer's fiscal year, the amount of the Performance Bonus shall be based
upon the proportion of whole months Employee is in the employ of Employer during
such fiscal year bears to twelve (12) months.
(ii) Payment of the bonus shall be made no later than ninety (90) days
after the end of the fiscal year for which the calculation is made and shall be
accompanied by a copy of the financial data on which the Performance Bonus is
based.
4. DUTIES. Employee is engaged as Vice-President of Exploration and
Development for Employer and shall have such authority as is commensurate with
said position and shall have the following specific duties: Coordinating all
geologic activities of the Company including geologic evaluation of sites, site
selection, coordination of all leasing, drilling and completion
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activities, and the general supervision of company personnel in the field and
such other duties as the President of the Company delegates.
5. EXTENT OF SERVICES. Employee shall devote his entire time, attention,
and energies to Employer's business 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. However,
Employee may invest his assets in such form or manner as will not require his
services in the operation of the affairs of the companies or entities in which
such investments are made.
6. WORKING FACILITIES. Employee shall have a private office, stenographic
help, typing and filing assistance, telephone(s) and facsimile machine(s), and
such other facilities and services as are suitable to his position and
appropriate for the performance of his duties.
7. EXPENSES.
(a) Reimbursement. Employer shall reimburse Employee for all reasonable
and necessary business expenses incurred by him in carrying out his duties under
this Agreement. Employee shall present to Employer from time to time an itemized
account of such expenses in such form as may be required by Employer.
(b) Automobile. In recognition of Employee's need for an automobile for
business purposes, Employer will provide Employee with an automobile, and pay
all maintenance, repair, insurance and reasonable costs incident thereto.
8. BENEFITS. Employer shall further:
(a) provide Employee with key man life insurance in the amount of
$300,000, of which $200,000 will be for the benefit of employee and $100,000
will be for the benefit of the Employer, provided Employee is insurable at
standard rates; however, if extra premiums are necessitated by virtue of
Employee's not being insurable at standard rates, Employee shall be obligated to
pay such additional premiums or accept such reduced death benefits as may be
purchased for the cost of standard premiums;
(b) provide Employee with the same medical health and hospitalization
insurance coverage as Employer provides to its other employees;
(c) provide Employee with the same disability insurance coverage which
Employer provides to its other employees; and
(d) allow Employee to take part in any executive bonus plan, profit-
sharing plan, qualified salary deferral plan, and pension plan which Employer
now has or may hereafter adopt during the term of Employee's employment
hereunder.
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9. VACATIONS. Employee shall be entitled each year to a vacation of three
(3) weeks, during which time his compensation shall be paid in full.
10. TERMINATION.
(a) Without cause, Employer and Employee may terminate this Agreement at
any time upon one hundred twenty (120) days' written notice. In such event,
Employee, if requested by Employer, shall continue to render his services and
shall be paid his regular compensation up to the date of termination. In
addition, there shall be paid to Employee on the date of termination a severance
allowance of one (1) year's salary (less all amounts required to be withheld and
deducted), plus the Performance Bonus set forth in Section 3(b), ratably
apportioned if termination is not at the end of the fiscal year.
(b) Employer may terminate Employee's employment for cause if:
(1) Employee refuses to perform, or does not perform, in a normal
business manner his duties of employment with Employer;
(2) Employee fails or refuses to obey and comply with the
instructions, rules and regulations of Employer as promulgated by its Board of
Directors respecting the operations of Employer; or
(3) Employee engages in any unlawful conduct in connection with his
duties of employment with Employer, is guilty of any acts of dishonesty in
connection therewith, is convicted of a felony, is convicted of a misdemeanor
involving moral turpitude, or engages in any conduct clearly detrimental to the
business of Employer.
(4) Employee breaches any confidentiality or non-competition
covenant or agreement with the Employer.
If Employee's employment is terminated for cause, as set forth just
hereinabove, Employee shall receive his Base Salary accrued up through the date
of termination and shall be entitled to receive any Performance Bonuses (or
portion thereof) and severance pay set forth in herein.
Upon termination for any reason, except as may be otherwise required by
law, all benefits set forth in Section 8 shall cease, although Employee may keep
any pension or other similar rights which have already vested in him.
11. DEATH DURING EMPLOYMENT. If Employee dies during the term of
employment, Employer shall pay to the estate of Employee the Base Salary and
Performance Bonus (but
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excluding severance pay) that would otherwise be payable to Employee up to the
end of the month in which his death occurs.
12. NOTICES. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing and delivered in person or by
courier or sent by certified, United States mail, return receipt requested,
postage prepaid, to his residence in the case of Employee, or to its principal
office in the case of Employer. Notice shall be effective upon the date of
delivery, if delivered in person or by courier, or three (3) days after
depositing the notice in the United States mail, if sent by certified mail.
13. 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. No waiver shall be valid unless in writing
and signed by an authorized officer of Employer.
14. ASSIGNMENT. Employee acknowledges that the services to be rendered by
him are unique and personal. Accordingly, Employee may not assign any of his
rights or delegate any of his duties or obligations under this Agreement. The
rights and obligations of Employer under this Agreement shall inure to the
benefit of, and shall be binding upon, the successors and assigns of Employer.
15. CONFIDENTIALITY. Employee acknowledges that he will become familiar
with Employer's special methods of processing, pricing formulae, trade secrets,
operational procedures, strategic plans, pricing guidelines, product
development, confidential reports and lists of costs, customers and suppliers.
Employee further acknowledges that said data is confidential and proprietary to
Employer and agrees not to impart to any third party any of such proprietary
data. Employer shall be entitled to protect its interest herein by specific
performance and the right to enjoin Employee from engaging in such prohibited
practices, without limiting any other remedies available to it. Employee agrees
to execute and deliver any confidentiality agreement or similar document
required by Employer of its employees.
16. COVENANT AGAINST COMPETITION. In recognition of the close personal
contact Employee will have with Employer's confidential and proprietary
information and records, and the position of trust in which Employer holds
Employee, Employee agrees as follows:
(a) Non-Compete. For a period of one (1) year from date of termination,
Employee shall not, either as an officer, stockholder, director, employee,
representative, broker, partner, sole proprietor or in any other manner or
capacity directly or indirectly work for or on behalf of a competitor of
Employer within a fifty mile radius of any Employer operations.
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(b) Anti-Solicitation: Customers, contractors, investors and employees.
For a period of one (1) year from date of termination, Employee shall not,
either as an officer, stockholder, director, employee, representative, broker,
partner, sole proprietor or in any other manner or capacity directly or
indirectly call upon or solicit any customer, contractor, investor or employee
of Employer for the purpose of doing business, investing or working, directly or
indirectly, in the oil and gas industry, within any states in which Employer,
during the term of Employee's employment, conducted any business or investment
activities.
(c) Anti-Solicitation: Employees. During the initial term of the
Agreement, any periods for which the Agreement may be extended, and for a period
of one (1) years thereafter, Employee shall not, directly or indirectly, or by
action in concert with others, induce or influence or seek to induce or
influence any person who has been engaged by Employer as an executive, employee,
manager, salesman, broker, independent contractor or otherwise, to terminate his
relationship with Employer.
(d) Judicial Modification, Severability and Survival. If any provision
of this Section 16, or any other Section of the Agreement, shall be held to be
invalid or unenforceable, the remaining provisions hereof shall nevertheless
continue to be valid and enforceable as though the invalid or unenforceable
parts had not been included herein. In the event that any provision of this
Section 16 relating to the duration, subject matter, or territory shall be
declared by a court of competent jurisdiction to exceed the maximum duration,
subject matter, or territory, such court deems reasonable and enforceable, then
the provision(s) deemed unenforceable shall be amended to reflect the maximum
duration, subject matter or territory which shall be enforceable.
Notwithstanding anything else herein contained, the parties hereto expressly
agree that this Section 16 shall survive the termination or expiration of
Employee's employment by Employer regardless of the reason for such termination
or expiration.
(e) Remedy for Breach. The parties hereto recognize that the services to
be rendered under this Agreement by Employee are of a special and unique
character; and that in the event of the breach by Employee of the terms and
conditions of this Agreement to be performed by Employee, or in the event the
Employee shall violate any of the restrictions set forth in this Section 16,
then Employer shall be entitled, if it so elects, to institute and prosecute
proceedings in any court of competent jurisdiction, either at law or in equity,
to obtain damages for any breach of this Agreement, to enforce the specific
performance hereof and to enjoin Employee from performing any prohibited act
hereunder. Nothing herein contained shall be
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construed to prevent Employer's election of any such remedy in the event of the
breach of the Agreement by Employee.
17. APPLICABLE LAW. This Agreement has been negotiated and entered into
and to some extent shall be performed in the State of Ohio, and by agreement of
the parties shall be interpreted and construed in accordance with and pursuant
to the laws of the State of Ohio.
18. TAXES. Employer shall withhold all taxes, such as FICA and all
employment-related taxes (income or otherwise), from the compensation, bonuses
and benefits paid hereunder, as required by law. Employee shall be responsible
for the payment of his income taxes on such compensation, bonuses, and benefits,
though the Employer will withhold such taxes as it is required to withhold.
19. ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties. It may not be changed orally but only by an agreement in writing
signed by both parties hereto.
20. CAPTIONS. The captions herein contained in no way limit or extend the
meaning of any Section, or the provisions therein, and are to be used for
reference purposes only.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate at Knoxville, Tennessee, on the day and date first above written.
EMPLOYEE:
/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
EMPLOYER:
ENERGY SEARCH, INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, President
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