Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made, effective the 1st day
of July, 2005 (the "Effective Date"), by and between Bayou City Exploration,
Inc. ("Company"), duly organized and existing under the laws of the State of
Nevada, having a usual place of business located at 00000 Xxxxxxxxxx, Xxxxxxx,
Xxxxx 00000, and Xxxxxx X. Xxxxxxx, Xx. ("Employee"), whose residential address
is 00000 Xxxxxxxxx Xxxx, Xxxx, Xxxxx 00000.
WITNESSETH:
WHEREAS, the Company is engaged in the exploration for and production
of oil and gas (the "Business of the Company" or the "Business" hereinafter);
and
WHEREAS, the Company wishes to engage the employment services of
Employee upon and subject to the terms, provisions, and conditions set forth in
this Agreement, including without limitation the covenants in Sections 8 and 9;
and
WHEREAS, Employee wishes to become employed by and with the Company
upon and subject to the terms, provisions, and conditions set forth in this
Agreement and acknowledges that such employment is contingent upon the execution
of this Agreement and/or that Employee was advised at the inception of
Employee's employment that Employee would be required to execute this Agreement
and that Employee's employment would be contingent upon the execution of this
Agreement;
NOW, THEREFORE, in consideration of the premises set forth above and
the mutual exchange of other good and valuable consideration by and between the
parties, as described in further detail below (including, without limitation,
the Company's agreement to employ Employee and the advantages and benefits
thereby inuring to Employee), the sufficiency of which is hereby acknowledged,
the Company and Employee do hereby agree, covenant, and contract as follows:
1. TERM OF AGREEMENT. Employee's employment under this Agreement shall
commence on the Effective Date of this Agreement and shall continue for a term
of 12 months unless sooner terminated by the Company, as hereinafter provided.
Notwithstanding the foregoing, Employee's employment under this Agreement shall
be extended automatically for successive 12-month terms unless, at least 60 days
prior to the then-scheduled expiration date, either party provides written
notice to the other that such party elects not to so extend Employee's
employment under this Agreement. Should the Company provide notice of its
intention not to extend Employee's employment under this Agreement less than 60
days prior to the then-scheduled expiration date, Employee's employment under
this Agreement shall not automatically renew; however, the Company shall
continue to pay Employee's base salary for the entire 60-day period following
its notice. At the Company's request, Employee shall remain employed pursuant to
the terms of this Agreement for an additional period of up to 60 days after the
expiration of a term of employment if the Company makes such request more than
15 days prior to the expiration
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of such term. Employee's covenants in Sections 8, 9, and 13 of this Agreement
shall survive the termination of Employee's employment, regardless of the reason
for such termination, or either party's compliance with the notice provisions of
this Section 1.
2. DUTIES OF EMPLOYEE. Employee shall perform all the duties that are from
time to time required of him by the Company faithfully, industriously, and, to
the best of his ability, experience, skill, and talents. Employee's performance
of the duties assigned to him by the Company shall be to the reasonable
satisfaction of the Company. Employee shall at all times conduct himself in
accordance with the Company's Employee Manual, such other statements of Company
policy as may be in effect from time to time, and the standards of conduct
customarily applicable to a person employed in Employee's capacity. Employee
expressly agrees that any failure to conduct himself in accordance with these
manuals, policies, and standards shall constitute a material breach relieving
the Company of any further performance under this Agreement. Employee shall
promptly report to the President of the Company any contacts, whether by
telephone, e-mail, in-person visit or otherwise, with a person engaged in the
Business of the Company, or acting on behalf of a person engaged in the
Business, if all or any portion of such contact relates to the possibility of
Employee working for such person.
Employee will assume the title, position and responsibilities of
Senior Vice President, Chief Financial Officer and will direct and manage all
activities normally associated with the position. As such, Employee is entitled
to all benefits provided by the Company for this position. So long as Employee
remains employed under this Agreement, as a part of Employee's duties set forth
in the Agreement, and not by way of limitation, Employee shall perform the
ongoing duties typical of a Chief Financial Officer in the oil and gas
exploration and production industry with respect to any and all business of the
Company.
3. COMPENSATION. The Company agrees to compensate Employee at the rates and
upon the terms, provisions, and conditions set forth on Schedule A, entitled
"Compensation," a copy of which is attached to and made a part of this
Agreement.
4. OTHER EMPLOYMENT. Employee agrees that, while employed by the Company,
he will devote all of his working time, attention, knowledge, and skills solely
to the business and interest of the Company and that the Company shall be
entitled to all of the benefits, profits, or other results arising from or
incidental to all work, services, and advice of Employee. Employee further
agrees that, during the course of his employment with the Company, he will not
have an interest in or be associated with, affiliated with, employed by, or in
any manner whatsoever engaged in any business, enterprise, or endeavor similar
to, or in or potentially in direct or indirect competition with, the Business of
the Company; provided, however, that nothing in this Section 4 shall be deemed
to prevent or limit Employee's right to invest any of his funds in up to three
percent of the outstanding stock or other securities of any corporation whose
stock or securities are publicly owned or are regularly traded on any public
exchange. Company acknowledges that Employee may presently own working and/or
other types of interest in oil and gas xxxxx and such interests shall not be
affected in any way by this provision.
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5. BENEFICIAL RECOMMENDATIONS. Employee shall make all suggestions and
recommendations that will be of benefit to the operations and business of the
Company.
6. EMPLOYEE ACKNOWLEDGMENTS. Employee acknowledges that (A) in the course
of his employment under this Agreement, the Company will introduce Employee to
various of the Company's customers and clients whose identities are
confidential, and that by virtue of his employment, Employee will be placed in a
position of confidence and trust with respect to such customers and clients, and
Employee will generate and have access to Confidential Information (as
hereinafter defined) of the Company; (B) the nature and period of the
restrictions imposed by the covenants contained in Sections 8 and 9 of this
Agreement are fair, reasonable, and necessary to protect and preserve for the
Company the benefits of Employee's services under this Agreement; and (C) the
Company would sustain great and irreparable loss and damage if Employee in any
manner were to breach any of such covenants.
7. CONFIDENTIAL INFORMATION. "CONFIDENTIAL INFORMATION" as used in this
Agreement shall mean any information which relates to the Company, its business,
its suppliers, customers, or clients or the business, suppliers, customers, or
clients of its affiliates, which is not generally known by persons not employed
by the Company and which Employee has learned as a consequence of or during
Employee's employment with the Company, including but not limited to prospect
information and data, seismic data, financial information, strategic plans and
forecasts, marketing plans and forecasts, customer and client lists and data,
customer and client identities, customer and client contacts, prospective
customer and client lists and data, and any other information relating to the
Company (whether constituting a trade secret or proprietary information or
otherwise) which has value to the Company and is treated by the Company as being
confidential.
8. TRADE SECRETS AND CONFIDENTIAL INFORMATION. Having made the
acknowledgments contained in Section 6 of this Agreement, Employee covenants and
agrees with the Company that he will not, directly or indirectly, both during
his employment and after the termination of his employment for any reason,
disclose to any person or use or otherwise exploit for his own benefit or for
the benefit of any other person or entity any Confidential Information which was
disclosed to him or came within his knowledge during his employment with the
Company; provided, however, that this Section 8 shall not limit in any manner
the protection of the Company's trade secrets otherwise afforded by law. The
Company agrees to provide Employee with, and to allow Employee to have access
to, Confidential Information as reasonably required for Employee to perform his
job duties, as determined by the Company in its sole judgment.
9. SOLICITATION OF, AND DOING BUSINESS WITH, CUSTOMERS.
(A) Having made the acknowledgments contained in Section 6 of this
Agreement, Employee covenants and agrees with the Company that he will not,
directly or indirectly, during his employment and through the period ending 2
year(s) after the termination of his employment for any reason, actually or
attempt to solicit, divert, or
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appropriate to any person or entity in the business of oil and/or gas
exploration and production, on his own behalf or in the service of or on behalf
of any other person or entity, the business of any person that was a customer or
client or prospective customer or client of the Company to whom Employee was
introduced by the Company, or with whom Employee otherwise had contact by virtue
of having access to Confidential Information regarding such customer or client
or prospective customer or client, or whose identity Employee otherwise learned,
in the course of his employment ("RESTRICTED CLIENT(S)" hereinafter). Employee
further covenants and agrees with the Company that he will not, directly or
indirectly, during his employment and through the period ending 2 year(s) after
the termination of his employment for any reason, transact or do any business
regarding or related to oil and/or gas exploration and production with any
Restricted Client.
(B) "Customer" and "client" for purposes of Section 7 of this
Agreement and this Section 9 shall mean investment bankers, broker-dealers,
and/or passive investors in oil and gas exploration and production ventures that
invest in such venture solely by investing monies or funds. The parties agree
that excluded from such definition shall be oil and gas exploration companies
(i) that are actively engaged, beyond just investment of monies, in the drilling
of oil and/or gas xxxxx, and (ii) are commonly recognized and known in the oil
and gas exploration and production industry as companies that are actively
engaged in oil and gas exploration and production.
10. ENFORCEMENT OF RESTRICTIVE COVENANTS.
(A) Employee acknowledges that his breach of any covenant contained in
Sections 8 or 9 of this Agreement will result in irreparable injury to the
Company and that the Company's remedy at law for such breach will be inadequate.
Accordingly, Employee agrees and consents that the Company, in addition to all
other remedies available at law and in equity, shall be entitled to both
preliminary and permanent injunctions to prevent and/or halt a breach or
threatened breach by Employee of any covenant contained therein.
(B) Each covenant contained in this Agreement shall be construed as
separate and independent of any other covenant or provision of this Agreement,
and the existence or assertion of any claim, demand, action, or cause of action
against the Company, whether predicated upon this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company of any of the
covenants contained in Sections 8 or 9 of this Agreement. In the event that the
provisions of Sections 8 or 9 of this Agreement should ever be deemed to exceed
the time, scope, or geographic limitations permitted by applicable law, then
such provisions shall be reformed to the maximum time, scope, and geographic
limitations permitted by such law. In the event the Company is required to
enforce any of its rights under this Agreement, the Company shall be entitled to
recover from Employee its attorney's fees, court costs, and other expenses in
connection therewith.
(C) Notwithstanding anything else in this Agreement, the covenants
contained in Sections 8 and 9 shall survive the expiration or termination of
Employee's employment or of this Agreement.
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(D) In the event of a violation by Employee of any covenant contained
in Sections 8 or 9 of this Agreement, in calculating the term of the violated
covenant(s), any period(s) of time required for litigation to enforce the
violated covenant(s) shall not be included so that the Company shall enjoy, for
2 year(s), the full benefit of such covenant(s) without violation by Employee.
(E) Employee shall present a copy of this Agreement to any prospective
new employer but may redact and/or withhold Schedule A ("Compensation").
11. TERMINATION BY COMPANY.
(A) Employee's employment hereunder (1) shall be terminated by his
death and, in accordance with applicable law, may be terminated by Employee's
total disability and (2) may be terminated by the Company at any time for
"cause" (as hereinafter defined). In the event of any such termination of
employment, Employee shall be paid his base salary through the date of death,
disability, or termination for cause, as the case may be, and shall not be
entitled to receive any further compensation or benefits, and, in particular,
shall not receive any severance pay. Employee's employment may be terminated for
cause, effective immediately, upon the giving of written notice to Employee by
the Company's President or the President's designee.
Employee's employment hereunder may be terminated by the Company
without cause for any or no reason upon the giving of 30 days' written notice to
Employee by the Company's President or the President's designee. In the event of
any such termination of employment, Employee shall be paid his base salary for
such 30-day period, and no other compensation or benefits; however, if such
termination occurs during the initial 12-month term of Employee's employment
under this Agreement, Employee shall thereafter be paid his base salary for the
remainder of such initial 12-month term, if any, in accordance with the
Company's regular payroll practices, and no other compensation or benefits. In
the event of a violation by Employee of any covenant contained in Sections 8 or
9 of this Agreement, however, the Company shall make no further payments to
Employee, and Employee shall not be entitled to any further compensation from
the Company. For purposes of the covenants contained in Sections 8 or 9,
Employee's employment shall be deemed to terminate on the date of the last
payment received from the Company as set forth above.
(C) Whenever used herein,
(1) "total disability" shall mean the failure or inability of
Employee to perform substantially all of his duties of employment as required
hereunder for a total of 90 days (whether consecutive or not) due to any
physical or mental disorder; and
(2) "cause" shall mean: (a) any willful or material breach or
violation of any of Employee's covenants, duties, or obligations under this
Agreement (including without limitation Employee's resignation), or willful or
material neglect of or failure or refusal to perform any of such covenants,
duties, or obligations; (b) any willful or material misconduct, including,
without limitation, misconduct involving fraud or dishonesty in the performance
of Employee's covenants, duties, or obligations under this Agreement
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or conduct which is deemed, in the sole judgment of the Company, to be injurious
to the Company; (c) Employee's engagement in the illegal use of drugs; (d) the
commission by Employee of a crime; or (e) any willful violation or refusal to
obey the lawful directives or reasonable instructions of the Company's President
or the President's designee.
12. DUTIES UPON TERMINATION. Upon termination of Employee's employment for
any reason, Employee shall promptly return to the Company any and all records,
files, notes, memoranda, reports, tape recordings, computer programs, disks,
cassettes, copies, and other physical or virtual representations of any
information relating to the Company or its affiliates whether or not
constituting Confidential Information. Employee hereby acknowledges that any and
all such items are and shall remain at all times the sole property of the
Company.
13. INVENTIONS AND DISCOVERIES. During Employee's employment and for a
period of one year after the termination of Employee's employment for any
reason, any and all articles and processes invented or discovered by or with the
participation of Employee (whether or not patented or patentable), trademarks,
patents, designs, and theories of production, management, operations, and
marketing, and, in general, anything of value received or created by Employee,
relating to the Company or the Business of the Company or to any of its
affiliates, or the business of its affiliates, and all rights of every kind and
nature whatsoever thereunder are and shall immediately be and become the
property of the Company and not of Employee. Employee shall promptly notify the
President of the Company of all such items and shall assign, transfer, and
deliver to the Company all patents, copyrights, royalties, designs, copy, and
theories and any and all rights and interests whatsoever thereto and thereunder,
without further compensation, immediately upon the request of the President.
14. MODIFICATION. Except as otherwise provided herein, no waiver or
modification of this Agreement or of any covenant, condition, or limitation
contained in this Agreement shall be valid unless in writing and duly executed
by the party to be charged therewith. No evidence of any waiver or modification
shall be offered or received in evidence in any proceedings, arbitration, or
litigation between the parties hereto arising out of or affecting this
Agreement, or the rights or obligations of the parties hereunder, unless such
waiver or modification is in writing and duly executed. The parties further
agree that the provisions of this Section 14 may not be waived except as set
forth in this Section. No delay or failure by the Company in exercising any of
its rights, remedies, powers, or privileges under this Agreement, at law or in
equity, and no course of dealing between the Company and Employee or any other
person, shall be deemed to be a waiver by the Company of any such rights,
remedies, powers, or privileges, even if such delay or failure is continuous or
repeated, nor shall any single or partial exercise of any right, remedy, power,
or privilege preclude any other or further exercise thereof by the Company or
the exercise of any other right, remedy, power, or privilege by the Company.
15. COMPLIANCE WITH OTHER AGREEMENTS. In the performance of Employee's
duties hereunder, Employee shall not disclose or use any confidential
information obtained
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by or disclosed to Employee during the course and scope of Employee's employment
with any other employer.
16. INDEMNIFICATION. Employee warrants and represents to the Company that
he is not a party to any existing written employment agreements, including
without limitation any employment-related noncompetition and/or nondisclosure
agreements. Employee hereby indemnifies and holds harmless the Company from and
against any and all costs, expenses, or liabilities of whatever name, nature, or
description, including but not limited to reasonable attorney's fees and costs,
arising from the Company's employment of Employee in reliance on this
representation by Employee.
17. SEVERABILITY. Every portion of this Agreement is intended to be
severable. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be valid and enforceable under applicable law.
However, with the exception of the provisions of Sections 8 or 9 of this
Agreement, if any provision shall be determined by a court or other tribunal of
competent jurisdiction to be prohibited by or invalid under such law, such
provision shall be deemed severed herefrom and shall be unenforceable to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Agreement. The provisions of
Sections 8 or 9 of this Agreement shall be reformed, if necessary, in accordance
with applicable law.
18. COLLATERAL AGREEMENTS. This Agreement and the most recently executed
Schedule A attached to it set forth the entire agreement and understanding of
the parties concerning their employment relationship as of the Effective Date of
this Agreement and the effective date stated on such Schedule, and supersede all
other agreements between the parties regarding their employment relationship.
The parties stipulate that neither has made any representations with respect to
the subject matter of this Agreement except those representations specifically
set forth in this Agreement and the incorporated Schedule. The parties
acknowledge that any payments or representations that may have been made by
either of them prior to the Effective Date of this Agreement, but which are not
set forth or contained herein, are of no force and effect and neither party has
relied on any such payments or representations in entering into this Agreement.
19. CHOICE OF LAW AND ASSIGNMENT. This Agreement, which may be executed in
multiple original copies, shall be governed by and construed in accordance with
the laws of the State of Texas without regard to conflicts of law principles.
Claims arising out of or requiring the interpretation of this Agreement shall be
brought and litigated in the courts located within Xxxxxx County, Texas, and
Employee unconditionally consents and submits to the jurisdiction of such
courts. Employee acknowledges that the services to be rendered by him under this
Agreement are unique and personal. Accordingly, Employee shall not assign any of
his rights or delegate any of his duties or obligations under this Agreement.
The rights and obligations of the Company under this Agreement, including those
rights which survive the expiration or termination of Employee's employment or
of this Agreement, may be assigned or delegated by the Company to any
subsidiary, affiliate, or successor of the Company, and, in that event, shall
inure to the benefit of and be enforceable by any such assignee or delegate.
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20. NOTICES. All notices or other communications required or permitted to
be given pursuant to this Agreement shall be in writing and shall be given
either (i) in person, (ii) by regular mail, certified or registered, return
receipt requested, postage prepaid, or (iii) by expedited delivery service with
proof of delivery, to the parties at the addresses set forth below their
respective names on the signature page hereto (or at such other addresses as
shall be specified by the parties by like notice).
IN WITNESS WHEREOF, the parties hereto have set their hands to this
Agreement, to be effective as of the date and year first above written.
Bayou City Exploration, Inc.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
Date: 9-30-05
Address for Notice Purposes:
00000 Xxxxxxxxxx
Xxxxxxx, Xxxxx 00000
Phone: 000-000-0000
EMPLOYEE
/s/ Xxxxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Date: 9-30-05
Address for Notice Purposes:
00000 Xxxxxxxxx Xxxx
Xxxx, Xxxxx 00000
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SCHEDULE "A"
COMPENSATION
1. BASE SALARY: $9,000.00 per month, less all applicable withholdings, paid in
accordance with the Company's regular payroll practices.
2. STOCK OPTIONS:
(a) Within 30 days of the completion by Employee of any 12-month term under
the Agreement, the Company shall grant to Employee the right and option to
purchase up to 10,000 shares of common stock of the Company at an exercise
price of 50 cents per share, which stock option shall be fully vested upon
assignment. Stock options granted under this Agreement shall not be treated
as an incentive stock option within the meaning of section 422(b) of the
Internal Revenue Code of 1986, as amended.
(b) If Employee's employment is terminated for "cause" as defined in the
Agreement at any time during any 12-month term under this Agreement, then
no such assignment of stock options shall be made for the 12-month term in
which Employee's employment is terminated. If Employee's employment is
terminated without cause, then the Company shall assign Employee stock
options in accordance with the terms of subsection 2.(a) above for the
12-month term in which Employee's employment is terminated. Anything herein
to the contrary notwithstanding, the otherwise unexpired portion of any
option shall expire and become null and void no later than upon the first
to occur of: (i) the expiration of 10 years from the date such option was
granted, (ii) the expiration of ninety (90) days from the date of the
termination of the Employee's employment or service with the Company for
any reason other than death or disability, or (iii) the expiration of one
year from the date of the termination of the Employee's employment or
service with the Company by reason of death or disability. Anything herein
to the contrary notwithstanding, the otherwise unexpired portion of any
option granted hereunder shall expire and become null and void immediately
upon Employee's termination of employment or service with the Company by
reason of Employee's fraud, dishonesty or performance of other acts
detrimental to the Company.
(c) In the event the Company requests Employee to continue employment for
up to 90 days after either party provides written notice to the other that
such party elects not to extend the term of Employee's employment as
provided in Section 1 of the Agreement, the terms of subsection 2.(b) shall
not apply with respect to Employee's continued employment, and Employee
shall not be entitled to receive any stock options as a result of such
additional period of employment or the termination or expiration thereof.
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3. BENEFITS: Employee and his dependents shall be eligible for coverage under
any healthcare plan which the Company offers to similarly situated
employees on the same terms and conditions as offered to such other
employees. Employee shall be entitled to take up to three (3) weeks' paid
vacation during any 12-month term under the Agreement, the scheduling of
which shall be subject to the operational needs and requirements of the
Company as determined by the Company in its sole discretion. Vacation days
not taken in a 12-month term shall not carry over to the next 12-month
term. Employee shall be entitled to all other benefits provided by the
Company for the position described in Section 2 of the Agreement.
BAYOU CITY EXPLORATION, INC. XXXXXX X. XXXXXXX, XX.
By: /s/ Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxx, Xx.
--------------------------------- ----------------------------------------
Name: Xxxxxx X. Xxxxxx Date: 9-30-05
Title: President
Date: 9-30-05
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