Employment Agreement January 1, 1999
THIS AGREEMENT is made and shall be effective as of the
1st day of July, 1997 by and between BONNEVILLE FUELS
CORPORATION, a Colorado corporation (the "Employer") and
XXXXXX X. XXXXXXXX, an individual and resident of the State
of Utah (the "Employee").
RECITALS:
A. The Employer is engaged in the business of
exploration for and production of oil and gas reserves,
marketing of natural gas, and gathering of natural gas.
B. The Employee has, for some time, served as the
President of the Employer, and on its Board of Directors.
C. The Employer desires to employ the Employee to
serve as the President of the Employer, and on the
Employer's Board of Directors, and the Employee is willing
to serve the Employer in those capacities.
D. The Employer and the Employee have agreed to enter
into this Agreement in order to set forth the terms and
conditions upon which the Employee will serve as the
President of the Employer, and on the Employer's Board of
Directors.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual
covenants and promises contained herein, together with other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows: 1. Employment. Bonneville Fuels Corporation hereby
employs the Employee and the Employee hereby accepts employment with the
Employer as the President of Bonneville Fuels Corporation and its subsidiaries,
and as a member of the Board of Directors of Bonneville Fuels Corporation.
2. Term. (a) The term of this Agreement shall commence as of July 1, 1997
and, subject to the provisions for termination set forth in paragraph 13 hereof,
shall continue until June 30, 2000, and shall be adjusted to a remaining term of
24 months upon the effective date of the confirmed plan in the Bonneville
Pacific Corporation ("BPC") Chapter 11 Bankruptcy Case Number 91-27701 in the
United States Bankruptcy Court for the District of Utah. The term of this
Agreement may be extended or renewed by mutual agreement of the parties. (b) It
is specifically agreed that, notwithstanding any provision of this Agreement to
the contrary, the obligations imposed upon the Employee by paragraph 16 hereof
shall survive the termination or expiration of this Agreement, or the
termination of the Employee's employment with the Employer, whether voluntary or
otherwise. (c) It is specifically agreed that notwithstanding any provision of
this Agreement to the contrary, the obligations imposed upon the Employer by
paragraphs 5 and 14 hereof shall survive the termination or expiration of this
Agreement, or the termination of the Employee's employment with the Employer,
whether voluntary or otherwise.
3. Compensation. For all services as President of the Employer, and on its
Board of Directors which are rendered by the Employee to the Employer pursuant
to this Agreement, the Employer shall pay to the Employee an annual salary of
$130,000 payable in accordance with the normal salary practices of the Employer.
The annual salary of the Employee may be increased and an annual bonus may be
paid, at the discretion of the Board of Directors of the Employer, or by the
action of an appropriate Committee of the Board of Directors.
4. Duties. The Employee shall have such duties and responsibilities are as
normally associated with his position, together with the duties and
responsibilities of a Director of Bonneville Fuels Corporation, and together
with such specific duties as shall be determined from time to time by the Board
of Directors of the Employer.
5. Indemnification. (a) Indemnification. The Employer shall indemnify the
employee if: (i) The Employee was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Employer) by reason of the fact that said person is or
was an employee of the Employer, or is or was serving at the request of the
Employer as a director, officer, employee or agent of this and or another
employer, partnership, joint venture, trust or other enterprise, against
expenses (including reasonable attorney's fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by said person in connection
with such action, suit or proceeding if said person acted in good faith and in a
manner said person reasonably believed to be in the normal course and in the
best interests of the Employer, and said person did not receive or expect to
receive monetary benefit other than provided by terms of this Employment
Agreement and said person acted in accordance with standard industry practice of
similarly sized oil and gas companies. (ii) The Employee was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Employer to procure a judgment in its favor by
reason of the fact that said person is or was a director, officer, employee or
agent of the Employer, or is or was serving at the request of the Employer as a
director, officer, employee or agent of another employer, partnership, joint
venture, trust or other enterprise, against expenses (including reasonable
attorney's fees) actually and reasonably incurred by said person in connection
with the defense or settlement of such action or suit if said person acted in
good faith and in a manner said person reasonably believed to be in the normal
course and in the best interests of the Employer. However, no indemnification
shall be made in respect to any claim, issue or matter as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of said person's duty to the Employer unless and only to the extent
that the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper. The standard of
conduct as set forth above shall be that a reasonable man, i.e. that of a
fictitious person of ordinary prudence under the circumstances exercising
reasonable care, i.e. that degree of care which a person of ordinary prudence
would exercise in the same or similar circumstance. (b) Automatic
Indemnification. To the extent that the Employee has been successful on the
merits or otherwise in the defense of any action, suit or proceeding specified
in Section (a) of this Article, or in the defense of any claim, issue or matter
therein, the Employee shall be indemnified against expenses (including
attorney's fees) actually and reasonably incurred by Employee in connection
therewith. (c) Advancements. Expenses incurred in defending a civil or criminal
action, suit or proceeding will be paid by the Employer as incurred and in
advance of the final disposition of such action, suit or proceeding for which
the Employer may ultimately be liable under Section (a) of this Article.
However, the Employer may, for good cause in the event the claim for
indemnification arises out of an action, suit or proceeding based upon
allegations of fraud or alleged criminal action, demand that an undertaking
acceptable to both parties be posted by the Employee prior to dollars being
advanced and as a condition of payment in advance of the final disposition of
such action, suit or proceeding. If it is ultimately determined by a court of
law that the Employee is not entitled to be indemnified by the Employer,
Employee shall upon terms acceptable to both parties, repay such amount paid by
the Employer for said expenses. (d) Other Indemnification. The indemnification
herein provided shall not be deemed exclusive of any other rights to which the
Employee may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise, both as to action in said person's
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be an Employee, and
shall inure to the benefit of the heirs, executors and administrators of such
person. (e) Insurance. The Board of Directors may, in its discretion, direct
that the Employer purchase and maintain insurance on behalf of any person who is
or was an employee or Director of the Employer, or is or was serving at the
request of the Employer as an employee or Director of another employer,
partnership, joint venture, trust or other enterprise, against any liability
asserted against Employee and incurred by Employee in any such capacity, or
arising out of Employee's status as such, whether or not the Employer would have
the power to indemnify Employee against liability under the provisions of this
Article. (f) Settlement by Employer. The right of Employee to be indemnified
shall be subject always to the right of the Employer by the Board of Directors,
in lieu of such indemnity, to settle any such claim, action, suit or proceeding
at the expense of the Employer by the payment of the amount of such settlement
and the costs and expenses incurred in connection therewith.
6. Extent ofServices. During the entire term of this Agreement, the
Employee shall devote substantially his entire time, attention and energy to the
business of the Employer during regular business hours; provided, however, that
nothing herein shall prevent Employee from entering into business ventures which
do not interfere with his duties to the Employer and any business venture in
related fields which are not in competition with the Employer, and any business
venture in related fields which are in competition with the Employer, as long as
such competitive business ventures in related fields have been approved by the
Employer, such approval to not be unreasonably withheld. Nothing in this
paragraph shall be construed to limit the Employee's investment in any publicly
traded stock or commonly available investment vehicles including bonds, mutual
funds and other similar investments.
7. Expenses. The Employee is authorized to incur reasonable expenses in
promoting the business of the Employer, including expenses for entertainment,
travel, and similar items. In any event, such expenses shall not exceed
$2,000.00 outstanding at any one time, without the prior approval of the
Chairman of the Board of Directors. The Employer shall reimburse Employee for
all such reasonable expenses actually incurred by the Employee upon the
presentation by the Employee, from time to time, of an itemized account of such
expenses sufficient to enable the Employer to comply with applicable IRS
reporting requirements.
8. Vacations. The Employee shall be entitled, during the term of this
Agreement, to an annual vacation of twenty (20) paid days. The Employee has the
option of being paid for or carrying forward, up to a maximum of ten (10) days,
any accrued unused vacation of the preceding year.
9. Employee Benefits. The Employer shall provide the Employee, during the
entire term of this Agreement, with the opportunity to participate in any health
and medical insurance plans provided by the Employer to other Employees.
Additionally, during the term hereof, the Employee shall be entitled to
participate in all other benefit programs which the Employer may establish and
maintain, from time to time, for the benefit of its employees generally.
10. Relocation Expenses. In the event Employer requires Employee to
relocate out of Salt Lake City, Utah as a condition of continued employment and
Employee chooses to continue such employment and relocate, Employer shall
promptly pay Employee the amount of Employee's actual moving expenses up to a
maximum of $15,000.00 upon presentation of paid invoices for moving expense
incurred and shall also promptly pay to Employee up to $15,000.00 of actual real
estate commissions paid by Employee with regard to the sale of Employee's
personal residence upon presentation of a Seller's Closing Statement or other
similar documentation from the sale of said personal residence.
11. Disability.If the Employee is unable to perform the duties called for
by paragraph 4 hereof by reason of illness, incapacity or disability for a
period of thirteen (13) consecutive weeks, the Employer shall have the right to
terminate this Agreement pursuant to paragraph 13(c) or 13(d) hereof. If during
the sixty (60) day notice period provided in paragraph 13(c) or 13(d), Employee
regains the ability to resume his duties, the Employer may, at its discretion,
reinstate the Employee for the term of this contract. Notwithstanding the above,
in the event that Employee becomes disabled, the Employer shall maintain short
term disability insurance coverage that provides, at a minimum that once the
conditions of the policy have been met, the Employee will be paid at least Five
Hundred Dollars ($500.00) per week to the maximum of thirteen (13) weeks. Said
short term disability compensation shall begin on the 8th day of disability
caused by sickness and on the 1st day of disability caused by any other reason,
except for a disability which would be covered by xxxxxxx'x compensation
insurance. If the short term disability policy in place at the time of the
illness has provisions which are more beneficial to the Employee than those
outlined above, the policy in force at the time of the illness shall have
precedence over the benefits as described above. The Employer shall also
maintain long term disability coverage for the Employee comparable to the
coverage provided as of January 1, 1997 by the Prudential Insurance Company of
America.
12. Death During Employment. If the Employee dies during the term of this
Agreement, the Employer shall promptly pay to the estate of the Employee
compensation as described under paragraph 14(g) hereof. Such payment shall be
designated as a "Survivor's Allowance".
13. Termination. (a) The Employer may terminate the Employee's employment
under this Agreement, with good cause, at any time upon written notice to the
Employee. "Good cause" is defined for the purpose of this Agreement as that
which the Employer, in its reasonable discretion, determines to be a reasonable
business necessity as a consequence of Employee's conduct, acts or omissions. In
no event shall employees refusal to deviate from commonly accepted industry
practices and procedures be construed to be good cause. (b) The Employee may
terminate his employment under this Agreement, for any reason, upon sixty (60)
days written notice to the Employer. (c) The Employer, with Board approval, may
terminate the Employee's employment under this Agreement at any time without
good cause, prior to confirmation of a plan in the BPC Chapter 11 Bankruptcy
Case, upon sixty (60) days written notice to the Employee of the effective date
of such termination. (d) The Employer may terminate the Employee's employment
under this Agreement at any time, without good cause, after the effective date
of confirmation of a plan in the BPC Chapter 11 Bankruptcy Case, upon sixty (60)
days written notice to the Employee of the effective date of such termination.
(e) The Employee may terminate his employment upon thirty (30) days written
notice to the Employer in the event Employer requires Employee to locate outside
of Salt Lake City, Utah as a condition of employment and Employee, for whatever
reason, declines to relocate. (f) Non-renewal of this Agreement shall be
considered an event of termination.
14. Compensation Upon Termination or Death. (a) If the Employer shall
terminate the Employee's employment under this Agreement pursuant to paragraph
13(a) hereof, for good cause, the Employer shall be obligated to pay to the
Employee, in cash and upon the effective date of such termination, those
portions of the Employee's annual salary provided for by paragraph 3 hereof
which have accrued, but remain unpaid, up to and including the date upon which
such termination becomes effective, together with an amount calculated pursuant
to the Employer's normal policy for any unused vacation days due the Employee.
The Employee shall not be entitled to any additional severance payments or
benefits except as set forth herein except as may be provided by Federal and
State law. (b) If the Employee shall terminate his employment under this
Agreement pursuant to paragraph 13(b) hereof, the Employer shall be obligated to
pay to the Employee in cash, upon the effective date of such termination, those
portions of the Employee's annual salary provided for by paragraph 3 hereof
which have accrued, but remain unpaid, up to and including the date upon which
such termination becomes effective, together with an amount calculated pursuant
to the Employer's normal policy for any unused vacation days due the Employee.
The Employee shall not be entitled to any additional severance payments or
benefits except as set forth herein except as may be provided by Federal and
State law. (c) If the Employer shall terminate the Employee's employment under
this Agreement pursuant to paragraph 13(c) hereof, the Employer shall be
obligated to pay to the Employee in cash upon the effective date of such
termination, those portions of the Employee's annual salary provided for by
paragraph 3 hereof which have accrued, but remain unpaid, up to and including
the date upon which such termination becomes effective together with an amount
calculated pursuant to the Employer's normal policy for unused vacation days due
the Employee, together with an additional amount equal to the salary said
Employee would have been entitled to pursuant to paragraph 14(i) hereof had the
employment not been terminated for a period of thirty (30) months following the
effective date of termination. (d) If the Employer shall terminate the
Employee's employment under this Agreement pursuant to paragraph 13(d) hereof,
the Employer shall be obligated to pay to the Employee, in cash upon the
effective date of such termination, those portions of the Employee's annual
salary provided for by paragraph 3 hereof which have accrued, but remain unpaid,
up to and including the date upon which such termination becomes effective,
together with an amount calculated pursuant to the Employer's normal policy for
unused vacation days due the Employee, together with an additional amount equal
to the salary said Employee would have been entitled to pursuant to paragraph
14(i) hereof had the employment not been terminated, for a period of twenty-
four (24) months following the effective date of such termination. The
twenty-four (24) month termination benefit shall be reduced by 1 month per month
of service after the date of the first anniversary of the effective date of the
confirmed plan in the Bonneville Pacific Corporation Chapter 11 bankruptcy case
down to a minimum termination benefit of twelve (12) months. (e) If the Employer
shall terminate the Employee's employment under this Agreement pursuant to
paragraph 13(e) hereof, the Employer shall be obligated to pay to the Employee,
in cash upon the effective date of such termination, those portions of the
Employee's annual salary provided for by paragraph 3 hereof which have accrued,
but remain unpaid, up to and including the date upon which such termination
becomes effective, together with an amount calculated pursuant to the Employer's
normal policy for any unused vacation days due the Employee, together with an
additional amount equal to the salary said Employee would have been entitled to
pursuant to paragraph 14(i) hereof had the employment not been terminated for a
period of a period twelve (12) months following the effective date of
termination. (f) If the Employer shall terminate the Employee's employment under
this Agreement pursuant to paragraph 13(f) hereof, the Employer shall be
obligated to pay to the Employee, in cash upon the effective date of such
termination, those portions of the Employee's annual salary provided for by
paragraph 3 hereof, which have accrued, but remain unpaid, up to and including
the date upon which such termination becomes effective together with an amount
calculated pursuant to the Employer's normal policy for unused vacation days due
the Employee, together with an additional amount equal to the salary said
Employee would have been entitled to pursuant to paragraph 14(i) hereof had the
employment not been terminated for a period of twelve (12) months following the
effective date of termination. (g) If the Employee dies during the term of his
employment under this Agreement pursuant to paragraph 12 hereof, the Employer
shall be obligated to pay to the estate of the Employee, in cash within five (5)
working days of his death, those portions of the Employee's annual salary
provided for by paragraph 3 hereof which have accrued, but remain unpaid, up to
and including the date upon which such death occurred, together with an amount
calculated pursuant to the Employer's normal policy for unused vacation days due
the Employee, together with an additional amount equal to the salary said
Employee would have been entitled to pursuant to paragraph 14(i) hereof had the
employment not been terminated for a period of twelve (12) months following the
effective date of termination. (h) The sixty (60) days written notice required
pursuant to paragraphs 13(c) and 13(d) and the thirty (30), twenty-four (24),
twelve (12), and twelve (12) months salary provided for in paragraph 14(c)
through 14(g) above, calculated from the effective date of termination, shall
not be shortened or diminished in any way or in any amount by virtue of the fact
that the notice of termination occurs at a point in time when less than the
requisite number of days and/or the requisite number of months remains in the
term of this Agreement. (i) Calculation of the compensation provided pursuant to
this Section 14 will be accomplished by averaging for the last two (2) years the
total annual compensation including salary and bonus provided by Section 3 but
not including any BPC Plan confirmation bonus.
15. Covenant Not to Compete.During the entire period that the Employee
remains employed by the Employer pursuant to this Agreement, up to the effective
date of termination, the Employee shall not engage either directly or indirectly
in any activity or business, whether as an officer, director, sole proprietor,
employee, partner, majority shareholder, consultant or adviser, which is in
direct competition with any business engaged in by the Employer, except as
otherwise approved by the Employer.
16. Confidentiality. The business plans,marketing plans, development plans,
acquisition plans, construction plans, and financial data (the "Confidential
Information") of the Employer are, and shall remain, the valuable, special,
unique and proprietary assets of the Employer, access to and knowledge of which
are essential to the performance by the Employee of his duties under this
Agreement. The Employee shall not, during the term of this Agreement, except as
is necessary to promote the business of the Employer, or after the term of his
employment hereunder disclose the Confidential Information, in whole or in part,
to any person, firm, employer, association, or other entity for any reason or
purpose whatsoever, nor shall the Employee make use of the Confidential
Information for the benefit of any person, firm, employer or other entity
(except the Employer) under any circumstances during or after the term of his
employment [unless ordered to do so under appropriate court order],. Upon the
termination of this employment pursuant to this Agreement, the Employee shall
promptly return to the Employer any originals and all copies of any Confidential
Information which are in his possession. All information shall cease to be
Confidential Information at such time as it enters the public domain, other than
through the breach by the Employee of his obligations under this paragraph 16.
17. Default. Should default occur in the performance of any of the
obligations set forth in this Agreement, the non-defaulting party shall be
entitled to obtain an injunction compelling the cure of such default and the
specific performance of the obligations of this Agreement in addition to any
action for damage or other relief which may be available to the non-defaulting
party. The defaulting party shall, in addition to any damages which may result
from said default, pay to the non-defaulting party the costs, including
reasonable attorney's fees, incurred by the non-defaulting party in curing such
default or in enforcing the terms and conditions of this Agreement. If a bond is
required by the Court, the parties agree that a bond in the amount of $500.00
shall suffice. The Employee understands and agrees that the Employer shall
suffer irreparable harm in the event that the Employee breaches any of the
Employee's obligations under this Agreement and that monetary damages shall be
inadequate to compensate the Employer for such breach.
18. Entire Agreement. This Agreement supersedes any prior understandings or
agreements, whether written or oral, between the parties hereto in regard to the
subject matter hereof and contains the entire agreement between the parties in
that regard. This Agreement may not be changed or modified orally, but only by
an agreement, in writing, signed by both of the parties.
19. Assignment and Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their successors and permitted
assigns. The term "Employer" as used in this Agreement shall mean Bonneville
Fuels Corporation, its successor and successors, any surviving corporation into
which it may be merged, or any Employer resulting from its consolidation with
any other corporation or corporations, and the successor or successors of any
such surviving or consolidated corporation. This Agreement may not be assigned
by the Employee.
20. Notices Any notice which is required or permitted to be given to either
party to this Agreement shall be deemed to have been given only if such notice
is reduced to writing and delivered, by United States mail, with postage prepaid
and return receipt requested, to the appropriate party as set forth below:
Employer: Bonneville Fuels Corporation
00 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Chairman
with a copy to:
Xxxxx X. Xxxxx,
Chapter 11 Trustee for
Bonneville Pacific Corporation
COHNE, XXXXXXXXX & XXXXX,
P.C.
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Employee: Xxxxxx X. Xxxxxxxx
000 Xxxxx Xxxx
Xxxx Xxxx Xxxx, XX 8410
Either party may change his address by giving notice of the change in the
manner set forth above. Any notice given shall be deemed delivered upon its
receipt in the United States mail.
21. Arbitration of Disputes. Any controversy,dispute or claim arising out
of or relating to this Agreement, or the breach thereof, which cannot be
resolved amicably by the parties shall be settled by arbitration in accordance
with the Rules of the American Arbitration Association, except in cases where
immediate action is required whether or not arbitration has been requested or is
in process, nothing herein shall prevent any party from pursuing equitable
remedies, including interim relief, in any court of competent jurisdiction, and
except as may be unanimously otherwise agreed by the parties. In the event of
arbitration, the cost of arbitration, including all reasonable attorney's fees
and costs, incurred by the successful party shall be borne by the unsuccessful
party unless otherwise ordered by arbitration.
22. Savings Clause. Should any part of a provision of this Agreement be
rendered or declared invalid by reason of any state or federal law, or by decree
of any court of competent jurisdiction, such invalidation of said part or
provision of this Agreement shall not invalidate the remaining portions hereof,
and the remaining parts and provisions of this Agreement shall remain in full
force and effect.
23. Governing Law. The parties specifically agree that this Agreement shall
be governed by and interpreted in accordance with the laws of the State of
Colorado, without giving effect to the choice of law rules thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first herein written. EMPLOYER BONNEVILLE FUELS
CORPORATION
(s):_________________________________
Xxxxx X. Xxxxx
Chairman
EMPLOYEE
____________________________________
XXXXXX X. XXXXXXXX
Approved:
____________________________________
Xxxxx X. Xxxxx, Chapter 11 Trustee for
Bonneville Pacific Corporation
