EXHIBIT 10.23
Employment Agreement
(Xxxxx X. Xxxx)
THIS EMPLOYMENT AGREEMENT, effective as of September 1, 2001, is
between Xxxxxx Resources Corporation, a Colorado corporation (the
"Company"), and Xxxxx X. Xxxx ("Employee").
1. Employment. The Company hereby employs Employee and Employee hereby
accepts employment from the Company on the terms and conditions set forth
in this Agreement.
2. Duties.
a. Employee shall be an Executive Vice President of the Company.
Employee's duties shall include responsibility for corporate development,
financial planning, capital procurement, relationships with investors and
bankers, and those other duties typically performed by management personnel
in like positions with companies similar to the Company. Employee shall
faithfully and diligently perform such duties, subject to the direction and
control of the Company's board of directors (the "Board") and CEO.
Additionally, Employee shall perform such duties as shall be required by
the Bylaws of the Company and such duties as shall be assigned to him from
time to time by the Board or CEO.
b. Employee shall devote such working time to the business of the
Company as may reasonably be required by the nature of the Company's
business, from time to time. It is expected that Employee will spend at
least 10 working days each month on Company business outside of New York,
primarily in Denver. Except for his continuing relationship with Mitcham
Industries, Employee shall not engage in any other business activity
requiring significant personal services by Employee except with the
express, informed, prior, written, approval of the Company's CEO. Such
approval may be withheld for any reason.
3. Compensation. Employee's compensation shall be as follows:
a. Annual Base Salary. The Company shall pay to Employee a base salary
("Annual Base Salary") at an annual rate of $120,000.00 for each year of
this Agreement, as it may be extended. The Annual Base Salary shall be
subject to such withholding regulations as are required by law and shall be
paid in installments in accordance with the Company's customary payroll.
b. Annual Cash Bonus. Employee shall be paid, in arrears, an annual cash
bonus of not less than $25,000 during each year of this Agreement.
c. Other Bonus Payments. Upon completion of each equity funding of the
Company (whether common or preferred) during the term of this Agreement,
Employee shall be paid a bonus equal to 0.75% of the net capital raised in
such funding. Beginning September 1, 2002, Employee shall become eligible
to thereafter receive discretionary payments made from Xxxxxx'x Employee
Bonus Pool.
d. Stock Compensation. Employee shall be eligible to participate in such
of the Company's stock-based compensation plans for which he is otherwise
qualified.
i) Upon execution of this Agreement, Employee shall exchange the
84,666 outstanding "Xxxxxx & Xxxxxxx" warrants owned by him for 18,000
shares of the Company's $0.01 par value per share common stock ("Common
Stock") to be issued by the Company.
ii) Upon execution of this Agreement, Employee shall cause the
forfeiture and disclaimer of options to purchase shares of Common Stock
number BRC - 02 and BRC - 03.
iii) Upon execution of this Agreement, the Company shall grant to
Employee options to purchase shares of Common Stock, as follows:
(1) Option #1: Option to purchase 12,500 shares of Common Stock for
$0.01 per share, vesting upon issuance.
(2) Option #2: Option to purchase 25,000 shares of Common Stock for
$0.01 per share, vesting September 1, 2002.
(3) Option #3: Option to purchase 30,000 shares of Common Stock for
$0.01 per share, vesting September 1, 2003. The shares covered by this
option will be issued outside of the Company's 1997 Equity Participation
Plan.
(4) Option #4: Option to purchase 30,000 shares of Common Stock for
$0.01 per share, vesting September 1, 2004. The shares covered by this
option will be issued outside of the Company's 1997 Equity Participation
Plan.
e. Miscellaneous. Employee shall be entitled to participate in any
insurance plans, hospitalization plans, medical reimbursement plans, profit
sharing plans, retirement plans and other employee benefit plans for which
Employee is qualified. Nothing in this paragraph shall require the Company
to adopt or maintain any such plans. The Company shall reimburse Employee
for such family health insurance costs he incurs, up to the maximum amount
of such costs paid by the Company for a Denver-based employee.
4. Sick Leave and Vacation. Employee shall be entitled to four weeks of
annual vacation and sick leave consistent with the Company's vacation and
sick leave policies, as they may be changed from time to time.
5. Expenses. The Company shall reimburse Employee for all reasonable
entertainment, travel and lodging expenses incurred by Employee in
connection with the business of the Company, subject, however, to such
rules, regulations and record-keeping requirements as may be established
from time to time by the Company; and further subject to the limitation
that only such expenses as may be deducted by the Company shall be
reimbursed.
6. Term.
a. The term of this Agreement shall commence as of the date of this
Agreement and shall continue for a period of 36 months from that date.
b. The Company shall have the right to terminate Employee's employment
by the Company by not less than 5 days prior written notice.
i) A termination "for cause" shall only be made if a majority of the
Board determines that Employee has (1) failed to perform his duties
hereunder in a proper and timely manner, and such failure has continued for
more than 30 days following written notice in which the deficiencies were
detailed with reasonable particularity, (2) materially violated any of the
covenants described in paragraph 8, or (3) has been convicted of any felony
or any misdemeanor that involves moral turpitude. If Employee is terminated
for cause, Employee shall only be entitled to his Annual Base Salary
through the date of termination and the Company shall have no further
obligations hereunder, including payment of any bonus amount for such
applicable year of termination.
ii) Employee's employment may be terminated by the Company at any time
without cause at the discretion of the Company's CEO.
(1) If such termination is before March 1, 2002, Employee shall be
entitled to his Annual Base Salary through two-months past the date of
termination plus a pro-rata portion of the annual bonus described in
paragraph 3(b).
(2) If such termination is after March 1, 2002 but before September
1, 2002, Employee shall be entitled to his Annual Base Salary through two-
months past the date of termination plus a pro-rata portion of the annual
bonus described in paragraph 3(b). In addition, Option #2 (described in
paragraph 3(d)(iii)(2)) shall vest, in full.
(3) If such termination is after September 1, 2002, Employee shall
be entitled to his entire Annual Base Salary through the year of
termination plus the entire annual bonus described in paragraph 3(b). In
addition, the next unvested option (described in paragraph 3(d)(iii)) shall
vest, in full.
c. Employee may terminate this Agreement at any time upon not less than
30 days' prior written notice. If Employee terminates this Agreement,
Employee shall only be entitled to his Annual Base Salary through the date
of termination and a proportionate share of the Annual Cash Bonus. The
Company shall have no further obligations hereunder.
d. Notwithstanding the provisions of paragraphs 6(b) and (c), upon the
occurrence of a Change of Control of the Company (as defined in the
Company's Bylaws) Employee may, at his election made within 30 days
following consummation of such event, terminate all of his obligations
under this Agreement and receive in one cash payment from the Company an
amount equal to 200% of the sum of the Annual Base Salary then payable to
Employee under this Agreement and an amount equal to his then current
Annual Cash Bonus.
e. Notwithstanding the provisions of paragraphs 6 (b), (c) and (d), upon
the occurrence of a Change of Control of the Company (as defined in the
Company's Bylaws) that is not supported by a majority of the members of the
Board in office immediately prior to the Change of Control, Employee may,
at his election made within 30 days following consummation of such event,
terminate all of his obligations under this Agreement, and receive in one
cash payment from the Company an amount equal to 300% of all Annual Base
Salary and Annual Cash Bonus payments that would otherwise be paid to
Employee under this Agreement through-out the then unexpired term of this
Agreement, as it may have been extended.
7. Death or Incapacity. If Employee dies or (in the reasonable judgment of
the Board) is incapacitated during the term of this Agreement, this
Agreement shall terminate immediately and the Company shall pay to Employee
or his legal representative the Annual Base Salary that would otherwise be
payable to Employee through the last day of the calendar month during which
his death or incapacity occurs, plus a proportionate share of the Annual
Cash Bonus.
8. Confidentiality.
a. The relationship between the Company and Employee is one of
confidence and trust.
b. As used herein, "Confidential Information" means information about
the Company's plans, properties, business contacts, business objectives and
goals, including information relating to business opportunities and plans,
and negotiating strategies and directives with respect to any of the
Company's business activities, whether relating to past, present or
prospective activities, and in addition including but not limited to any
potential purchases or sales, all geological data and maps, all seismic
data and maps, all engineering data, reserves calculations and production
methods, all oil and gas prospects, whether domestic or foreign. The
foregoing shall constitute Confidential Information whether it is known by
Employee prior to his employment by the Company, or otherwise.
c. Employee agrees that he shall at no time during the term of his
employment by the Company or for a period of three years following the
termination of this Agreement disclose any Confidential Information or
component thereof to any person, firm or corporation to any extent or for
any reason or purpose, or otherwise use any Confidential Information for
his own benefit or in any way contrary to the best interest of the Company.
9. Enforcement of Covenants. In addition to any other remedies available to
the Company, it shall be entitled to specific performance of the covenants
contained in paragraph 8. If the Company is successful in enforcing its
rights under this paragraph 9, Employee shall reimburse the Company for all
of the costs of such enforcement, including but not limited to reasonable
attorney's fees.
10. Miscellaneous Provisions.
a. This Agreement contains the entire agreement between the parties and
supersedes all prior agreements, including the letter agreement dated
August 16, 2001. This Agreement shall not be amended or otherwise modified
in any manner except by an instrument in writing executed by both parties.
b. All notices under this Agreement shall be delivered by hand or by
registered or certified mail and, if intended for Employee, shall be
addressed to Employee at the address contained in the Company's personnel
records and if intended for the Company, shall be addressed to the Company
at its corporate headquarters. All notices shall be effective upon actual
delivery if by hand or, if by mail, five days after being deposited in the
United States mail, postage prepaid and addressed as required by this
paragraph.
c. Neither this Agreement not any rights or duties under this Agreement
may be assigned or delegated by either party unless the other party
consents in writing.
d. Except as otherwise provided in this Agreement, this Agreement shall
be binding upon and inure to the benefit of the parties and their
respective heirs, personal representatives, successors and assigns.
e. The provisions of paragraphs 8 and 9 shall survive the termination of
Employee's employment by the Company.
f. This Agreement shall be governed by the laws of the State of
Colorado.
IN WITNESS WHEREOF the parties have executed this Agreement to be
effective as of the day and year first above written.
Xxxxxx Resources Corporation
By: ____________________________ ____________________________
Xxxxxx X. Xxxxxx, Xx., Xxxxx X. Xxxx
President
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