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EXHIBIT 10.23
XXXXXX OIL AND GAS COMPANY
EMPLOYMENT AGREEMENT
FOR
XXXXX X. XXXXXX
This Employment Agreement (the "Agreement") is entered into as of December 7,
2000 by XXXXXX OIL AND GAS COMPANY, a Delaware corporation ("Company") and XXXXX
X. XXXXXX ("Employee").
In consideration of the promises below, the parties agree as follows.
1. TITLE. Employee shall hold the title of Senior Vice President and Chief
Financial Officer.
2. DUTIES.
2.1. GENERAL DUTIES. Employee shall undertake and render services as
may from time to time be assigned to him by the Chief Executive Officer. The
duties shall be reasonably consistent with Employee's experiences.
2.2. OUTSIDE ACTIVITIES. Employee shall devote his full time to the
performance of his duties, and agrees that his first duty of loyalty is to
Company. Except with the express written consent of the Board of Directors,
Employee shall not, directly or indirectly, alone or as a member of any
partnership, or as an officer, director or employee of any other corporation,
partnership or other organization, be actively engaged in any other duties or
pursuits which interfere or compete with the performance of his duties under
this Agreement.
3. TERM. This Agreement shall commence on January 1, 2001 and continue in
force until December 31, 2002 (the "Employment Period") unless sooner terminated
by either party pursuant to Section 5.
4. COMPENSATION. As payment in full for services rendered to Company,
Employee shall be entitled to receive from Company, and Company shall pay to
Employee, salary and benefits as follows.
4.1. SALARY. Company shall initially pay to Employee base salary at a
rate of $250,000 per annum ("Base Salary") payable bi-weekly or at such other
time or times as Company may allow or provide to other similarly situated
employees in accordance with policies adopted from time to time by the Board of
Directors. Base Salary for any partial period of employment shall be prorated.
All compensation shall be subject to deductions or withholding for taxes.
Company shall annually review Employee's salary.
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4.2. ANNUAL INCENTIVE COMPENSATION. Employee shall be entitled to an
annual bonus (the "Annual Bonus") as determined by the Compensation Committee of
the Company's Board of Directors (the "Compensation Committee"). Such Annual
Bonus for 2001 shall include, but is not limited to, the issuance of options
equal to $117,800 divided by the fair market value of the Company's common stock
on the date of the grant of the Annual Bonus. The final structure and terms of
said Bonus Plan will be agreed upon between the CEO and Compensation Committee
by January 31, 2001.
4.3. EQUITY COMPENSATION. As of the Commencement Date, the Company shall
issue stock options (the "Options") to purchase shares of the Company's common
stock under the Company's Stock Option Plan. The initial grant shall be Options
to purchase 150,000 shares of the Company's stock.
4.4. FRINGE BENEFITS. Employee shall be entitled to annual vacation of
four (4) weeks per year and to receive employee and fringe benefits including
but not limited to any compensation plan such as an incentive stock option,
restricted stock or stock purchase plan or any employee benefit plan such as a
thrift, pension, profit sharing, medical disability, accident, plan program or
policy (the Company's "Plans") as Company may allow or provide to other
similarly situated employees in accordance with policies adopted from time to
time by the Board of Directors.
4.5. EXPENSES REIMBURSEMENT. Employee shall be reimbursed for all
direct, out-of-pocket business expenses incurred by him in connection with his
employment (including, without limitation, expenses for travel and entertainment
incurred in conducting or promoting business for the Company), upon timely
submission by the Employee of receipts and other documentation, and in
accordance with the normal expense reimbursement policy of the Company. In
connection with Employees relocation, the Company shall reimburse Employee for
the following: (1) all costs of temporary housing in California for a period of
up to four (4) weeks; (2) all moving expenses (limited to $20,000), including
closing costs (exclusive of real estate commissions) to sell one home and
purchase another home.
4.6. SICKNESS AND DISABILITY. Except as set forth in Section 5.2,
Employee shall receive full compensation for any period of illness or incapacity
during the term of this Agreement.
4.7. HOLIDAYS. Employee shall be entitled to holidays recognized as
State and/or National holidays and as Company may allow or provide in accordance
with policies adopted from time to time by the Board of Directors.
5. TERMINATION OF EMPLOYMENT. The following provisions shall apply in the
event of termination of Employee's employment for any reason.
5.1. RIGHT TO TERMINATE BY COMPANY. Company may terminate Employee's
Agreement, by action of its Board of Directors, immediately upon written notice
of termination
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for Cause or upon thirty (30) days notice for any other reason. The term "Cause"
when referring to termination by Company means only the following and any other
termination shall be without Cause: (i) any act of personal dishonesty taken by
the Employee in connection with his responsibilities as an Employee which is
intended to result in substantial personal enrichment to the Employee; (ii)
Employee's conviction of a felony which the Board responsibly believes has had
or will have a material detrimental effect on the Company's reputation or
business; (iii) a willful act by the Employee which constitutes misconduct and
is injurious to the Company; and (iv) continued willful violations by the
Employee of the Employee's obligations to the Company after there has been
delivered to Employee a written demand for performance from the Company which
describes the basis for the Company's belief that the Employee has not
substantially performed his duties.
5.2. TERMINATION FOR DEATH OR DISABILITY. Employee's employment shall
terminate upon the earliest of the events specified below:
(i) the death of Employee;
(ii) the date of termination specified in a written notice of
termination by reason of physical or mental condition of Employee which shall
substantially incapacitate him from performing his principal duties delivered by
the Company to Employee at least 30 days prior to the date specified in the
notice, which shall be any date after the expiration of any 120 consecutive days
during which Employee shall be unable, by reason of his disability, to perform
his principal duties, provided however, that such notice shall be null and void
if Employee fully resumes the performance of his duties under this Agreement
prior to the date of termination set forth in the notice.
5.3. TERMINATION BY EMPLOYEE. If an Involuntary Termination has
occurred, Employee shall be entitled to terminate his employment and to receive
compensation equal to such compensation provided in Section 6.3. If Employee
terminates his employment for any reason other than death, disability or
Involuntary Termination, then Employee shall provide the Company with thirty
(30) days prior notice and Employee shall be paid his compensation until the
effective date of termination.
6. CHANGE OF CONTROL AND INVOLUNTARY TERMINATION.
6.1. DEFINITION OF TERMS. The following terms referred to in this
Agreement shall have the following meanings:
(i) CHANGE OF CONTROL. "Change of Control" shall mean the occurrence of
any of the following events:
(a) the approval by shareholders of the Company of a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than fifty percent
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(50%) of the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation;
(b) any approval by the shareholders of the Company of a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets;
(c) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) becoming the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly
or indirectly, of securities of the Company representing 25% or more
of the total voting power represented by the Company's then
outstanding voting securities; or
(d) a change in the composition of the Board, as a result of
which fewer than a majority of the directors are Incumbent Directors.
"Incumbent Directors" shall mean directors who either (A) are
directors of the Company as of the date hereof, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at
least a majority of those directors whose election or nomination was
not in connection with any transaction described in subsections (a),
(b) or (c) or in connection with an actual or threatened proxy contest
relating to the election of directors of the Company.
(ii) INVOLUNTARY TERMINATION. "Involuntary Termination" shall mean (a)
without the Employee's express written consent, a significant reduction of the
Employee's duties, position or responsibilities relative to the Employee's
duties, position or responsibilities in effect immediately prior to such
reduction, or the removal of the Employee from such position, duties and
responsibilities, unless the Employee is provided with comparable duties,
position and responsibilities; (b) without the Employee's express written
consent, a substantial reduction, without good business reasons, of the
facilities and perquisites (including office space and location) available to
the Employee immediately prior to such reduction; (c) a reduction by the Company
of the Employee's Base Salary as in effect immediately prior to such reduction;
(d) a material reduction by the Company in the kind or level of employee
benefits to which the Employee is entitled immediately prior to such reduction
with the result that the Employee's overall benefits package is significantly
reduced; (e) without the Employee's express written consent, the relocation of
the Employee to a facility or a location more than fifty (50) miles from the
location of the Company's principal office; (f) any purported termination of the
Employee by the Company which is not effected for Cause or for which the grounds
relied upon are not valid; or (g) the failure of the Company to obtain the
assumption of this Agreement by any successors contemplated in Section 7(i).
6.2. PAYMENTS UPON TERMINATION.
(i) SEVERANCE PAYMENTS. If the Employee's employment with the Company
terminates as a result of an Involuntary Termination at any time after a Change
of Control, then the Employee shall be entitled to receive a lump sum payment
equal to one (1) times Employee's annual Base Salary at the rate in effect just
prior to the date of the notice of termination. Such amount shall be in addition
to any amounts due under this agreement.
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Such severance payments shall be paid in a single lump sum within thirty
(30) days of such termination. In addition, the Company shall continue to make
available to the Employee and Employee's spouse and dependents covered under any
group health plans or life insurance plans of the Company on the date of such
termination of employment, all group health, life and other similar insurance
plans in which Employee or such covered dependents participate on the date of
the Employee's termination for a period of twelve (12) months on the same basis
as provided on the date of termination.
(ii) OPTION ACCELERATION. If the Employee's employment with the Company
terminates as a result of an Involuntary Termination at any time after a Change
of Control, then the vesting and exercisability of each option granted to the
Employee by the Company (the "Options") shall be automatically accelerated in
full.
6.3. PAYMENTS ON OTHER TERMINATION. If the Employee's employment with
the Company terminates as a result of an Involuntary Termination, other than as
a result of an Involuntary Termination after a Change of Control, or termination
by the Company without Cause, then the Employee shall not be entitled to receive
severance or other benefits hereunder, other than payments through the end of
this Agreement, or for one year, whichever is longer. If termination is for
Cause, Employee shall be paid his Base Salary to the date of the notice of
termination.
6.4. ACCRUED WAGES AND VACATION; Expenses. Without regard to the reason
for, or the timing of, Employee's termination of employment: (a) the Company
shall pay the Employee any unpaid base salary due for periods prior to the date
of termination; (b) the Company shall pay the Employee all of the Employee's
accrued and unused vacation through the date of termination; and (c) following
submission of proper expense reports by the Employee, the Company shall
reimburse the Employee for all expenses reasonably and necessarily incurred by
the Employee in connection with the business of the Company prior to the date of
termination. These payments shall be made promptly upon termination and with the
period of time mandated by law.
7. SUCCESSORS.
(i) COMPANY'S SUCCESSORS. Any successor to the Company (whether direct
or indirect and whether by purchase, lease, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company's business and/or
assets shall assume the Company's obligations under this Agreement and agree
expressly to perform the Company's obligations under this Agreement in the same
manner and to the same extent as the Company would be required to perform such
obligations in the absence of a succession. For all purposes under this
Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this section or which becomes bound by the terms of this Agreement
by operation of law.
(ii) EMPLOYEE'S SUCCESSORS. Without the written consent of the Company,
Employee shall not assign or transfer this Agreement or any right or obligation
under this Agreement to any other person or entity. Notwithstanding the
foregoing, the terms of this
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Agreement and all rights of Employee hereunder shall inure to the benefit of,
and be enforceable by, Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
8. NOTICES.
(i) GENERAL. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of the Employee, mailed
notices shall be addressed to him at the home address that he most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of its Secretary.
(ii) NOTICE OF TERMINATION. Any termination by the Company for cause or
by the Employee as a result of a voluntary resignation or an Involuntary
Termination shall be communicated by a notice of termination to the other party
hereto given in accordance with this Section. Such notice shall indicate the
specific termination provision in this Agreement relied upon, shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated. The failure by the Employee to
include in the notice any fact or circumstance which contributes to a showing of
Involuntary Termination shall not waive any right of the Employee hereunder or
preclude the Employee from asserting such fact or circumstance in enforcing his
rights hereunder.
9. ARBITRATION.
(i) Any dispute or controversy arising out of, relating to, or in
connection with this Agreement, or the interpretation, validity, construction,
performance, breach, or termination thereof, shall be settled by binding
arbitration to be held in Houston, Texas, in accordance with the National Rules
for the Resolution of Employment Disputes then in effect of the American
Arbitration Association (the "Rules"). The arbitrator may grant injunctions or
other relief in such dispute or controversy. The decision of the arbitrator
shall be final, conclusive and binding on the parties to the arbitration.
Judgment may be entered on the arbitrator's decision in any court having
jurisdiction.
(ii) The arbitrator(s) shall apply Texas law to the merits of any
dispute or claim, without reference to conflicts of law rules. The arbitration
proceedings shall be governed by federal arbitration law and by the Rules,
without reference to state arbitration law. Employee hereby consents to the
personal jurisdiction of the state and federal courts located in Texas for any
action or proceeding arising from or relating to this Agreement or relating to
any arbitration in which the parties are participants.
(iii) EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES
ARBITRATION. EMPLOYEE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING OUT OF,
RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION,
VALIDITY, CONSTRUCTION,
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PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION TO THE EXTENT
PERMITTED BY LAW, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF
EMPLOYEE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES
RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT
LIMITED TO, THE FOLLOWING CLAIMS:
(a) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT;
BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF
GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR
INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL
MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT
OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION.
(b) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL, STATE OR
MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL
RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION
IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990,
THE FAIR LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING
ACT, AND LABOR CODE SECTION 201, ET SEQ.;
(c) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND
REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
10. MISCELLANEOUS PROVISIONS.
(i) NO DUTY TO MITIGATE. The Employee shall not be required to mitigate
the amount of any payment contemplated by this Agreement, nor shall any such
payment be reduced by any earnings that the Employee may receive from any other
source.
(ii) WAIVER. No provision of this Agreement may be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Employee and by an authorized officer of the Company (other
than the Employee). No waiver by either party of any breach of, or of compliance
with, any condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision or of the same condition
or provision at another time.
(iii) INTEGRATION. This Agreement and the stock option agreements
representing the Options represent the entire agreement and understanding
between the parties as to the subject matter herein and supersede all prior or
contemporaneous agreements, whether written or oral.
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(iv) CHOICE OF LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal substantive
laws, but not the conflicts of law rules, of the State of Texas.
(v) SEVERABILITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.
(vi) EMPLOYMENT TAXES. All payments made pursuant to this Agreement
shall be subject to withholding of applicable income and employment taxes.
(vii) COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together will constitute
one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.
COMPANY: XXXXXX OIL AND GAS COMPANY
By:___________________________
Xxxxx X. Xxxx
Chief Executive Officer
EMPLOYEE: ______________________________
XXXXX X. XXXXXX
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