Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made to be effective as
of the 27th day of August, 1999 (the "Effective Date") by and between MIDDLE BAY
OIL COMPANY, INC., an Alabama corporation (hereinafter referred to as the
"Company"), and XXXX X. XXXXXXX (hereinafter referred to as "Employee").
W I T N E S S E T H :
WHEREAS, the Company is engaged in the oil and gas business;
WHEREAS, as of the Effective Date of this Agreement, Employee has
resigned his position as President and Chief Executive Officer of the Company;
and
WHEREAS, the Company and Employee desire to embody in this Agreement
the terms and conditions under which Employee shall continue his employment as
Executive Vice President of the Company;
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises herein contained and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, agree as follows:
1. TERM OF EMPLOYMENT. The Company shall employ Employee in the
capacity set forth herein for a term commencing on the Effective Date and ending
on February 1, 2002 (the "Employment Period"). Within the period commencing one
hundred twenty (120) days prior to the end of the Employment Period, Employee
and the Company shall review the terms of this Employment Agreement in light of
the circumstances existing at that time and, if the parties in good xxxxx xxxx
it necessary or advisable, agree to extend the term of this Employment Agreement
or negotiate and enter into a new employment agreement. Notwithstanding the
foregoing, Employee's employment hereunder may be terminated earlier in
accordance with the provisions of Section 8 hereof.
2. RESPONSIBILITIES OF EMPLOYEE.
(a) In accepting employment by the Company, Employee shall
undertake and assume the responsibility of performing for and on behalf of the
Company any and all duties of the sole Executive Vice President of the Company
as set forth in the Company's Bylaws, as they may be amended from time to time,
and shall have such other duties, functions, responsibilities and authority
commensurate with such office from time to time delegated to Employee by the
Board of Directors; provided, that such duties, functions, responsibilities and
authority (and the office
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facilities, staff and working environment made available to Employee) are
customarily associated with the senior executive position of Executive Vice
President and are subordinate only to the offices of President and/or Chief
Executive Officer.
(b) Employee agrees to devote his full time and effort to
his duties as an employee of the Company. Employee may devote a reasonable
amount of his time to civic and community affairs, and subject to the
provisions of Section 7, to the business and financial interests described
on EXHIBIT A attached hereto; provided that such other activities do not
materially interfere with the performance of Employee's responsibility as
Executive Vice President, and provided further that no additional outside
business activities shall be undertaken without the prior written consent of
the Board of Directors.
3. COMPENSATION. As compensation for the services to be rendered
by Employee for the Company under this Agreement, Employee shall be entitled to
the following:
(a) The Company shall pay Employee during the Employment
Period an annual salary of not less than One Hundred Twenty Thousand Dollars
($120,000). The amount of such annual salary may be amended by the Company's
Board of Directors (the "Board") from time to time (but in no event shall such
annual salary be less than One Hundred Twenty Thousand Dollars ($120,000)). Such
annual salary shall be payable periodically for such periods as may be
established by the Company for payment of its employees under its normal payroll
practices.
(b) Employee may receive a bonus and fringe benefits each
year in amounts to be determined by the Board. Such bonus may, in the discretion
of the Board, be based, in part, upon the Company meeting certain financial
goals, which goals may be agreed upon by the Board and Employee.
4. EXPENSES. Employee shall be reimbursed for all reasonable business
expenses incurred by him in connection with or incident to the performance of
his duties and responsibilities hereunder upon the Employee's submission to the
Company of vouchers or expense statements evidencing such expenses in such form
or format as the Company may reasonably require.
5. VACATION AND OTHER BENEFITS.
(a) VACATION. Employee shall be entitled to four (4) weeks
of paid vacation per year during the Employment Period. In addition, Employee
shall be entitled to participate in all other present and future benefit plans
provided by the Company to its employees and for which Employee meets the
eligibility requirements thereof.
(b) MEDICAL INSURANCE. The Company shall provide Employee
and his dependents with medical insurance coverage under the Company's medical
insurance plan, which plan shall be reasonably acceptable to Employee.
6. BUSINESS OPPORTUNITIES AND INTELLECTUAL PROPERTY.
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(a) During the period in which Employee is employed by the
Company, Employee shall promptly disclose to the Company all "Business
Opportunities" and "Intellectual Property" (each as defined below).
(b) Employee hereby assigns and agrees to assign to the
Company, its successors, assigns or designees, all of Employee's right, title
and interest in and to all "Business Opportunities" and "Intellectual Property,"
and further acknowledges and agrees that all Business Opportunities and
Intellectual Property constitute the exclusive property of the Company.
(c) For purposes hereof, "Business Opportunities" shall
mean all business ideas, prospects, proposals or other opportunities pertaining
to the lease, acquisition, exploration, production, gathering or marketing of
hydrocarbons and related products and the exploration potential of geographical
areas on which hydrocarbon exploration prospects are located, which are:
(i) developed by Employee (A) during the period in
which Employee is employed by the Company, or (B) before the period in
which Employee is employed by the Company, but only to the extent of
Employee's rights thereto during such period, or
(ii) originated by any third party and brought to
the attention of Employee (A) during the period in which Employee is
employed by the Company, or (B) before the period in which Employee is
employed by the Company, but only to the extent of Employee's rights
thereto during such period,
together with information relating thereto, including, without limitation, any
"Business Records" (as defined below).
(d) For purposes hereof "Intellectual Property" shall mean
all ideas, inventions, discoveries, processes, designs, methods, substances,
articles, computer programs and improvements (including, without limitation,
enhancements to, or further interpretation or processing of, information that
was in the possession of Employee prior to the date of this Agreement), whether
or not patentable or copyrightable, which do not fall within the definition of
Business Opportunities, which are discovered, conceived, invented, created or
developed by Employee, alone or with others: (i) during the period in which
Employee is employed by the Company if such discovery, conception, invention,
creation, or development (A) occurs in the course of the Employee's employment
with the Company, or (B) occurs with the use of any of the Company's time,
materials or facilities, or (C) in the opinion of the Board of Directors of the
Company, relates or pertains in any way to the Company's purposes, activities or
affairs, or (ii) before the period in which Employee is employed by the Company,
but only to the extent of Employee's rights thereto during such period.
7. NON-COMPETITION AND NON-DISCLOSURE; INJUNCTIVE RELIEF. Employee
acknowledges that the services he is to render in the course of his employment
by the Company are of a special and unusual character with unique value to the
Company. In view of the value to the Company of the services of Employee during
the course of his employment by the Company, because of the Business
Opportunities, Intellectual Property and "Confidential Information" (as defined
below) to be obtained by or disclosed to Employee, and as a inducement to the
Company to enter into this Agreement and to pay to Employee the compensation
stated herein, Employee covenants and agrees as follows:
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(a) During the period in which Employee is employed by the
Company, unless otherwise extended pursuant to the terms of this Section 7,
Employee shall not directly or indirectly be employed by or render advisory,
consulting or other services in connection with any business enterprise or
person that is engaged in leasing, acquiring, exploring, producing, gathering or
marketing hydrocarbons and related products.
(b) During the period in which Employee is employed by the
Company, unless otherwise extended pursuant to the terms of this Section 7,
Employee shall not, directly or indirectly, in any capacity (including, without
limitation, as a proprietor, investor, director or officer or in any other
individual or representative capacity), be financially interested in or engage
in any business that is engaged in leasing, acquiring, exploring, producing,
gathering or marketing hydrocarbons and related products; however, it is
specifically agreed between the parties that Employee may continue to be
financially interested in and engage in any business similar to or related to
the Company's business that is described on EXHIBIT A attached hereto, provided
that such activities do not materially detract from the Employee's performance
of his responsibilities as Executive Vice President, and provided, further, that
nothing contained in this paragraph 7(b) shall relieve Employee of his
obligations contained in paragraph 7(a) above.
(c) During the period in which Employee is employed by the
Company, unless otherwise extended pursuant to the terms of this Section 7, all
investments made by Employee (whether in his own name or in the name of any
family members or made by Employee's controlled affiliates), which relate to the
lease, acquisition, exploration, production, gathering or marketing or
hydrocarbons and related products shall be made solely through the Company; and
Employee will not (directly or indirectly through any family members), and will
not permit any of his controlled affiliates to (i) invest or otherwise
participate alongside the Company in any Business Opportunities, or (ii) invest
or otherwise participate in any business or activity relating to a Business
Opportunity, regardless of whether the Company ultimately participates in such
business or activity.
(d) During the period in which Employee is employed by the
Company and thereafter, Employee will not disclose to any third party or
directly or indirectly make use of, in a way materially detrimental to the
Company, any and all trade secrets and confidential or proprietary information
pertaining to the Company (collectively referred to as "Confidential
Information"). For purposes of this Section 7, it is agreed that Confidential
Information includes, without limitation, any information heretofore or
hereafter acquired, developed or used by the Company relating to Business
Opportunities or Intellectual Property or other geological, geophysical,
economic, financial or management aspects of the business, operations,
properties or prospects of the Company whether oral or in written form in a
"Business Records" (as defined in paragraph 7(g) below). Notwithstanding the
foregoing, no information of the Company will be deemed confidential for the
purposes of this paragraph 7(d) if such information is or becomes public
knowledge through no act of Employee or was previously known by Employee prior
to entering into this Agreement.
(e) During the Employment Period or the period in which
Employee is employed by the Company, whichever is longer, and for a six-month
period commencing upon the termination of such longer period, unless otherwise
extended pursuant to the terms of this Section 7, Employee may not solicit,
raid, entice or induce, directly or indirectly, any employee (or person who
within the preceding ninety (90) days was an employee) of the Company or any
other person who is under contract with or rendering services to the Company, to
(i) terminate his employment by, or contractual relationship with, the Company,
(ii) refrain from extending or renewing the same (upon
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the same or new terms), (iii) refrain from rendering services to or for the
Company, (iv) become employed by or to enter into contractual relations with
any persons other than the Company, or (v) enter into a relationship with a
competitor of the Company; provided that during the six-month period
commencing upon the termination of the Employment Period or the period in
which the Employee is employed by the Company, whichever is longer, nothing
in this paragraph 7(e) shall prohibit Employee from entering into contractual
relations to obtain capital as long as the Board of Directors of the Company
in good faith determines that such relations are not detrimental to the
Company.
(f) Employee acknowledges and agrees that the services to be
rendered by him are of a special, unique and extraordinary character and, in
connection with such services, he will have access to Business Opportunities,
Intellectual Property and Confidential Information vital to the Company's
businesses. By reason of this, Employee consents and agrees that if he violates
any of the provisions of this Section 7, the Company would sustain irreparable
harm and, therefore, in addition to any other remedies which the Company may
have under this Agreement or otherwise, the Company shall be entitled to an
injunction restraining Employee from committing or continuing any such violation
of this Agreement. Such right to an injunction shall be cumulative and in
addition to, and not in lieu of, any other remedies to which the Company may
show itself justly entitled. Further, during any period in which Employee is in
breach of the covenants set forth in this Section 7, the time period of this
covenant shall be extended for an amount of time that Employee is in breach.
(g) Employee agrees to promptly deliver to the Company, upon
termination of Employee's employment with the Company, or at any other time when
the Company so requests, all documents relating to the business of the Company,
including, without limitation: all geological and geophysical reports and
related data such as maps, charts, logs, seismographs, seismic records and other
reports and related data, calculations, summaries, memoranda and opinions
relating to the foregoing, production records, electric logs, core data,
pressure data, lease files, well files and records, land files, abstracts, title
opinions, title or curative matters, contract files, notes, records, drawings,
manuals, correspondence, financial and accounting information, customer lists,
statistical data and compilations, patents, copyrights, trademarks, trade names,
inventions, formulae, methods, processes, agreements, contracts, manuals or any
other documents relating to the business of the Company (collectively, the
"Business Records") and all copies thereof and therefrom. Employee confirms that
all of the Business Records (and all copies thereof and therefrom) that are
required to be delivered to the Company pursuant to this paragraph 7(g)
constitute the exclusive property of the Company. The obligation of
confidentiality set forth in this Section 7 shall continue notwithstanding
Employee's delivery of any such documents to the Company. Notwithstanding the
foregoing provisions of this Section 7 or any other provision of this Agreement,
Employee shall be entitled to retain any written materials which, as shown by
Employee's records, were in Employee's possession on or prior to the date
hereof, subject to the Company's right to receive a copy of all such materials.
(h) The representations and covenants contained in this
Section 7 on the part of Employee will be construed as ancillary to and
independent of any other provision of this Agreement, and the existence of any
claim or cause of action of Employee against the Company or any officer,
director, or shareholder of the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
the covenants of Employee contained in this Section 7. In addition, the
provisions of this Section 7 shall continue to be binding upon Employee in
accordance with their terms, notwithstanding the termination of Employee's
employment hereunder for any reason.
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(i) The parties to this Agreement agree that the limitations
contained in this Section 7 with respect to time, geographical area, and scope
of activity are reasonable. However, if any court shall determine that the time,
geographical area, or scope of activity of any restriction contained in this
Section 7 is unenforceable, it is the intention of the parties that such
restrictive covenants set forth herein shall not thereby be terminated but shall
be deemed amended to the extent required to render it valid and enforceable.
8. TERMINATION BY THE COMPANY FOR CAUSE.
(a) The Company may terminate Employee's employment under
this Agreement for Cause. The termination shall be evidenced by written notice
thereof to Employee and shall specify the Cause for termination. For purposes
hereof, the term "Cause" shall mean (i) the inability of Employee, despite any
reasonable accommodation required by law, due to bodily injury or disease or any
other physical or mental incapacity, to perform the services provided for
hereunder for a period of 120 days in the aggregate, within any given period of
180 consecutive days during the term of this Agreement, in addition to any
statutorily required leave of absence, (ii) conduct of Employee that constitutes
fraud, dishonesty, theft, or a criminal act involving moral turpitude, in each
case only if it materially affects his ability to perform the duties and
responsibilities of his position or has a material adverse effect on the
Company, (iii) commission of a material act of fraud against the Company, (iv)
embezzlement of funds or misappropriation of other property by Employee from the
Company; or (v) failure of Employee to observe or perform his material duties
and obligations as an employee of the Company or a material breach of this
Agreement, after thirty (30) days advance written notice of such failure or
breach which has not been cured.
(b) Upon Employee's death or if Employee's employment with
the Company is terminated for Cause, Employee shall be paid his salary through
the month of his death or termination.
9. TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY EMPLOYEE FOR
GOOD REASON.
(a) The Company may terminate Employee's employment under
this Agreement without Cause. The termination shall be evidenced by written
notice thereof to Employee and shall specify that the termination was without
Cause.
(b) If Employee elects to terminate his employment by
written notice to the Company during the three (3) month period after the
Effective Date, such election by Employee shall be deemed termination of
employment for "Good Reason."
(c) If Employee's employment with the Company is terminated
without Cause or if Employee terminates his employment for Good Reason, Employee
shall be entitled to receive, within ten (10) days of such termination, an
amount equal to the greater of: (i) two (2) times his annual compensation as
initially set forth in paragraph 3(a) herein, as such may be amended by the
Board from time to time; or (ii) the amount of compensation Employee would have
earned if his employment had continued through the remainder of the Employment
Period. Notwithstanding the foregoing, if the payment referred to above is not
made within ten (10) days of Employee's
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termination, all unpaid amounts shall bear interest at a rate equal to the
New York Prime (as published in the Wall Street Journal) on the date of such
termination.
10. BURDEN AND BENEFIT. This Agreement shall be binding upon, and
shall inure to the benefit of, the Company and Employee, and their respective
heirs, personal and legal representatives, successors and permitted assigns.
11. GOVERNING LAW. It is understood and agreed that the construction
and interpretation of this Agreement shall at all times and in all respects be
governed by the laws of the State of Texas. The parties hereto hereby
irrevocably submit to the exclusive jurisdiction of the courts of the State of
Texas and the federal courts of the United States of America located in Texas,
and appropriate appellate courts therefrom, over any dispute arising out of or
relating to this Agreement or any of the transactions contemplated hereby, and
each party hereby irrevocably agrees that all claims in respect of such dispute
or proceeding may be heard and determined in such courts. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
dispute arising out of or relating to this Agreement or any of the transactions
contemplated hereby brought in such court or any defense of inconvenient forum
for the maintenance of such dispute. Each of the parties hereto agrees that a
judgment in any such dispute may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law. This consent to
jurisdiction is being given solely for purposes of this Agreement and is not
intended to, and shall not, confer consent to jurisdiction with respect to any
other dispute in which a party to this Agreement may become involved. Each of
the parties hereto hereby consents to process being served by any party to this
Agreement in any suit, action, or proceeding of the nature specified above by
the mailing of a copy thereof in the manner specified by the provisions of
Section 13.
12. SEVERABILITY. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any one or more of the
provisions of this Agreement shall not affect the validity and enforceability of
the other provisions.
13. NOTICE. Any notice required to be given shall be sufficient if it
is in writing and sent by certified or registered mail, return receipt
requested, first-class postage prepaid, to his last know residence in the case
of Employee, and to its principal office in the State of Texas in the case of
the Company.
14. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding by and between the Company and Employee with respect to the
employment of Employee, and no representations, promises, agreements, or
understandings, written or oral, not contained herein shall be of any force or
effect. No waiver of any provision of this Agreement shall be valid unless it is
in writing and signed by the party against whom the waiver is sought to be
enforced. No valid waiver of any provision of this Agreement at any time shall
be deemed a waiver of any other provision of this Agreement at such time or any
other time.
15. MODIFICATION. No amendment, alteration or modification to any of
the provisions of this Agreement shall be valid unless made in writing and
signed by both parties.
16. PARAGRAPH HEADINGS. The paragraph headings have been inserted
for convenience only and are not
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to be considered when construing the provisions of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have executed, acknowledged, sealed
and delivered this Agreement on the 27th day of August, 1999, to become
effective as of the Effective Date.
MIDDLE BAY OIL COMPANY, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------
Name: ----------------------
Title: ---------------------
EMPLOYEE
/s/ Xxxx X. Xxxxxxx
--------------------------
Xxxx X. Xxxxxxx
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EXHIBIT "A"
ENERGY RELATED BUSINESS
1. Employee owns a 9.1644% limited partnership interest in the Bay City Energy
Fund, LTD. The aggregate value of Employee's limited partnership interest is
less than $2 million in value.
2. Employee owns approximately 53 shares (8.32%) of common stock of Bay City
Energy Group, Inc.
3. Employee owns shares of capital stock of various publicly traded energy and
production companies. The aggregate number of shares the Employee owns in each
entity does not exceed 1% of the total outstanding shares.
4. Employee holds non-operated, non-managed working and royalty interests in oil
and gas properties through Middle Bay Oil Company or other entities.
5. Employee owns interest in a newly developed patented traveling valve to be
installed in xxxxx that are having gas locking problems.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
MIDDLE BAY OIL COMPANY, INC.
(Registrant)
Date: November 12, 1999 By: /s/ Xxxxx X. Xxxxxx XX
------------------------
Xxxxx X. Xxxxxx XX
Chief Financial Officer
