EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as
of October 1, 2008 (this "Agreement") between ABC Funding, Inc., a Nevada
corporation having its principal place of business at 0000 XX 0000 Xxxx, Xxxxx
000, Xxxxxxx, Xxxxx 00000 (the "Company"), and Xxx X. Xxxxx, an individual
residing in the State of Texas ("Executive").
WHEREAS, the Board of
Directors of the Company (the "Board") has determined that it is essential and
in the best interests of the Company and its stockholders to retain the services
of Executive and to ensure his continued dedication and efforts to the Company;
and
WHEREAS, the Company desires
to employ Executive and Executive desires to be employed by the Company in the
capacities and for the term and compensation and subject to the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth herein, and for
other good and valuable consideration, the parties agree as
follows:
1. Employment;
Title; Responsibilities; Reporting: The Company hereby employs
the Executive and the Executive hereby accepts employment upon the terms and
conditions hereinafter set forth. During the term of this Agreement,
Executive shall diligently and faithfully: (a) serve the Company in the capacity
of Senior Vice President of Operations in charge of all the Company’s production
and field operations; (b) report directly to the Company’s Chief Executive
Officer; (c) discharge and carry out all duties and responsibilities as may from
time to time be assigned, and such directions as may from time to time be given,
to Executive by the Chief Executive Officer and/or the Board; and (d) abide by
and carry out the policies and programs of the Company in existence or as the
same may be changed from time to time.
2. Exclusivity: All
services to be provided by Executive under this Agreement shall be performed by
Executive personally. During the term of this Agreement, Executive
shall devote substantially all of Executive’s business time, attention and
energies and all of his skills, learnings and best efforts to the business of
the Company. At all times during the term of this Agreement, the
services required of Executive and the location at which he performs such
services shall not require that he reside outside of the area of Houston, Texas,
except for travel in the ordinary course of business operations and production
management.
3. Term: The
initial term of this Agreement shall commence as of October 1, 2008 (the
“Commencement Date”) and shall end on October 1, 2010, unless sooner extended by
agreement of the parties or earlier terminated in accordance with the provisions
of this Agreement. The date on which this Agreement is scheduled to
expire is referred to as the “End Date”. No more than one hundred
twenty (120) nor less than and sixty (60) days prior to an End Date (each such
sixty (60) day period is referred to as a “Renegotiation Period”), the Company
and Executive may agree in writing to extend this Agreement for an additional
term. If during any Renegotiation Period the Company and Executive
fail to agree upon an extension of this Agreement, this Agreement shall
terminate as of the End Date of the then current term notwithstanding the
provision of services by Executive after the end of the then current
term. The term of this Agreement, whether as originally scheduled,
extended by agreement or shortened pursuant to an earlier termination in
accordance herewith is referred to as the “Term.”
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4. Base
Salary: Effective upon
the Commencement Date, the Company shall pay to Executive a base salary of
$190,000 per annum.
The base salary shall be paid in
semi-monthly installments on the fifteenth day and last day of each month and
shall be subject to such deductions by the Company as are required to be made
pursuant to law, government regulations or order. The first payment
shall be made on October 15, 2008. Executive understands and agrees
that Executive is an exempt Executive as that term is applied for purposes of
Federal or state wage and hour laws, and further understands that Executive
shall not be entitled to any compensatory time off or other compensation for
overtime.
5. Bonus: During
the first year of the initial term, provided that the Executive remains in the
employ of the Company on October 1, 2009 (the “First Anniversary Date”),
Executive shall be entitled to a bonus of $38,000, payable within three (3)
business days following the First Anniversary Date. No later than
February 28, 2009, the Board shall establish quantitative and qualitative
performance criteria for the twelve (12) months ended December 31,
2009. Based upon the achievement of such performance criteria, the
Executive shall be entitled to earn a performance bonus up to 75% of Executive’s
then current base salary. In awarding such performance bonus the
Company may take into account the bonus paid to Executive on the First
Anniversary date. Such bonus shall be deemed earned by the Executive
as of December 31, 2009, and shall be paid to the Executive no later than
February 15, 2010.
6. Restricted
Stock Grant; Grant of Stock Options:
(a) The
Company hereby commits to grant to Executive, 750,000 shares of the Company’s
common stock, par value $0.001 per share (the “Restricted Shares”), no later
than three (3) business days following the effectiveness of an Amendment to the
Company’s Articles of Incorporation (the Charter Amendment”), which Charter
Amendment will increase the number of shares of common stock that the Company is
presently authorized to issue to 149,000,000. The
Restricted Shares will be issued in accordance with the terms, and subject to
the conditions, of that certain Restricted Stock Agreement, of even date
herewith, between the Company and Executive. Under the Restricted
Stock Agreement, the Restricted Shares shall vest with respect to (i) 250,000
shares upon their issuance, (ii) an additional 250,000 shares on the First
Anniversary Date, and (iii) the remaining 250,000 shares on the second
anniversary date of the Commencement Date (the “Second Anniversary
Date”).
(b) Concurrently
with the execution of this Agreement, the Company hereby grants seven (7) year
options to Executive, exercisable for (i) 333,334 shares of the Company’s common
stock, at an exercise price equal to $0.54 per share, which shall vest upon the
effectiveness of the Charter Amendment (ii) 333,333 shares, at an exercise price
of $0.59 per share, which shall vest on the First Anniversary Date, and (iii)
333,333 shares, at an exercise price of $0.65 per share, which shall vest on the
Second Anniversary date, provided that the Executive remains in the employ of
the Company on such dates.
(c) In
addition to the Restricted Shares and stock options granted hereunder, Executive
shall remain eligible to earn additional options and/or shares of common stock
as the Board, from time to time may approve, and Executive shall be entitled to
participate in such stock/option plans as the Company may implement after the
date of this Agreement.
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7. Fringe
Benefits: During the Term of this Agreement, Executive shall
be entitled to participate in the Company’s major medical and full hospital
insurance for Executive, his spouse and immediate
dependents. Executive shall also be entitled to such disability, life
insurance and other similar benefits as may be made available to other senior
officers of the Company under such group benefit plans and/or programs as may be
implemented and maintained by the Company from time to time, subject to any
eligibility, copayment and waiting period requirements under or applicable to
any such benefit plans and/or programs. The Company will pay eighty
percent (80%) of the cost of such fringe benefits for Executive, his spouse and
immediate, eligible dependents. Executive acknowledges and agrees
that the Company has the right, in its sole discretion, to amend or modify such
benefit plan or program at any time and for any reason or for no
reason. Executive's entitlement to such benefits shall end upon the
termination of his employment with the Company, however caused, except as
provided (a) by applicable law or (b) by the express terms of any such group
benefit plan or program maintained by the Company.
8. Vacation,
Etc.: During the Term of this Agreement, Executive shall be
entitled to four (4) weeks paid vacation each twelve (12) months, to be taken at
such time or times as shall be consistent with the proper performance by
Executive of his duties. No unused vacation, holidays, sick leave or
personal days may be carried forward from year to year. In the event
that Executive’s employment terminates by virtue of "Termination Without Cause",
"Resignation for Good Reason", “Termination following a Change of Control”,
death or disability, then Executive shall be entitled to payment for any accrued
but unused vacation days during the year such termination occurs.
9. Expense
Reimbursement; Travel Policy: The Company shall provide
Executive with such reasonable business lodging and travel expense
reimbursements as are consistent with the Company’s policies in effect from time
to time as they pertain to senior officers of the Company. All
reimbursements by the Company provided for in this Agreement are conditioned
upon Executive’s submission to the Company of reasonably satisfactory
documentation and an itemized account for such expenses within a reasonable
period after they are incurred. Expense reports and requests for
reimbursement which are submitted later than two (2) months after the expense is
incurred will not be reimbursed without the approval of the Company’s Chief
Financial Officer.
10. Other
Employee Benefit Plans: During the Term, Executive shall be
entitled to participate in all employee, Executive or key-employee benefit or
incentive compensation plans maintained or established by the Company for the
purpose of providing compensation and/or benefits to employees, Executives or
key employees, generally, including without limitation, all pension, retirement,
profit sharing, savings, stock option, deferred compensation and/or restricted
stock grants. Unless otherwise provided herein, the compensation and
benefits hereunder, and Executive's participation in such plans, practices and
programs shall be on the same basis and terms as applicable to the other
eligible participants in the particular plan, practice or program. No
additional compensation provided under any such plans shall be deemed to modify
or otherwise affect the terms of this Agreement or any of Executive's
entitlements hereunder.
11. Death of
Executive: In the event of Executive’s death during the Term
of this Agreement, the Company’s obligations and agreements under this Agreement
shall automatically terminate as of the date of such death, and in full
satisfaction thereof, the Company shall pay to Executive’s estate any base
salary earned and unpaid through the date of such death and any business
expenses or other fringe benefits otherwise due to
Executive. Executive’s estate shall also be entitled to payment for
(i) any bonus earned in the contract year preceding such termination but not yet
paid and (ii) accrued but unused vacation days during the contract year such
termination occurs. Such event shall not be deemed a "Termination
Without Cause" as defined in Section 17 below. All other obligations
of the Company under this Agreement shall automatically cease, and Executive’s
estate shall not be entitled to any other salary, payments or benefits otherwise
payable to Executive under this Agreement, except as otherwise required by
law.
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12. Disability
of Executive: If Executive shall, during the term of this
Agreement, suffer a "Disability," (as defined, from time to time, in a
disability plan that the Company may maintain for the benefit of its senior
officers (a "Disability Plan") or, whenever no such Disability Plan exists, as
defined in accordance with the meanings on Exhibit A hereto), then the Company
shall have the right to terminate this Agreement by written notice of such
Disability to Executive, whereupon the Company’s obligations and agreements
under this Agreement shall automatically terminate as of the date of such
notice, and in full satisfaction thereof, the Company shall pay to Executive any
base salary earned and unpaid through the date of such notice (less any payments
received by Executive under a Disability Plan) and any business expenses or
other fringe benefits otherwise due to Executive. Executive shall
also be entitled to payment for (i) any bonus earned in the contract year
preceding such termination but not yet paid and (ii) accrued but unused vacation
days during the year such termination occurs. No such termination
shall be deemed a "Termination Without Cause”. All other obligations
of the Company under this Agreement shall automatically cease, and Executive
shall not be entitled to any other salary, payments or benefits otherwise
payable under this Agreement, except as otherwise required by law.
13. Resignation
Notice; Termination: Executive agrees to give sixty (60) days’
prior written notice to the Company of any decision by Executive to resign
during the Term of this Agreement (such notice hereinafter referred to as a
"Resignation Notice"), provided, however, that in the case of Executive’s
resignation for "Good Reason" as defined in Section 16 below, only fourteen (14)
days’ prior written notice shall be required. Executive acknowledges
and understands that these notice periods are for the exclusive benefit of the
Company, and do not confer any employment obligation on the
Company. If the Company receives any such Resignation Notice, the
Company may elect, in its sole discretion and for any reason or for no reason,
to terminate Executive’s employment, either immediately or at any point during
the period indicated in such notice.
14. Post-Resignation
Actions: If Executive decides to resign from Executive’s
employment with the Company, Executive agrees to make no public announcement and
no statement to persons or entities doing business with the Company concerning
Executive’s departure prior to Executive’s termination date without the written
consent of the Company, and to continue faithfully performing and discharging
Executive’s duties and responsibilities for the Company from the date of such
Resignation Notice until such termination date.
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15. Post-Resignation
Obligations: Except as provided below with respect to
resignations for "Good Reason," no resignation under Section 13 hereof (or
termination by the Company following a Resignation Notice) shall be deemed to be
or treated as if it was a "Termination Without Cause" as defined
below. Executive agrees and understands that, in the event of any
such resignation (or termination by the Company following a Resignation Notice),
Executive shall be entitled to receive Executive’s then applicable base salary
through the date of termination of Executive’s employment and any business
expenses otherwise due to Executive. Executive shall also be entitled
to payment for any bonus earned in the contract year preceding such resignation
but not yet paid and, in the event of a "Resignation for Good Reason", accrued
but unused vacation days during the year such resignation occurs. All
other obligations of the Company under this Agreement shall automatically cease,
and Executive shall not be entitled to any other salary, payments or benefits
otherwise payable under this Agreement, except as otherwise required by
law. The parties further agree and understand that, in the event of
any such resignation (or termination by the Company following a Resignation
Notice), Executive’s obligations and agreements under Sections 22 through 26
hereof shall continue in full force and effect in the manner and on the terms
set forth herein.
16. Resignation
for Good Reason: If Executive
resigns for "Good Reason" (as defined below), then such a resignation (a
"Resignation for Good Reason") shall be treated hereunder as if it were a
"Termination Without Cause" as defined in Section 18 below. "Good
Reason" means any of the following failures or conditions which shall remain
uncured twenty (20) days after written notice of such failure or condition is
received by the Company from Executive: (i) the failure of the Company to
continue Executive in the position of Senior Vice President of Operations of the
Company (or such other senior Executive position as may be offered by the
Company and which Executive in his sole discretion may accept); (ii) material
diminution by the Company of Executive’s responsibilities, duties, or authority
in comparison with the responsibilities, duties and authority held during the
six month period immediately preceding such diminution, or assignment to
Executive of any duties inconsistent with Executive’s position as a senior
Executive officer of the Company (or such other senior Executive position as may
be offered by the Company and which Executive in his sole discretion may
accept); (iii) failure by the Company to pay and provide to Executive the
compensation and benefits provided for in this Agreement to which Executive is
entitled; or (iv) the requirement that Executive relocate his residence outside
of the area of Houston, Texas.
17. Termination
Without Cause: Executive’s employment under this Agreement may
be terminated at any time by the Company, without cause, upon fourteen (14)
days’ written notice to the Executive (such termination referred to throughout
this Agreement as a "Termination Without Cause"). In the event of any
such Termination Without Cause, the Company agrees to pay to the Executive as
severance pay, an amount equal to twelve (12) months base salary (at the then
current rate) plus pro rata
performance bonus earned and unpaid through the date of such termination and any
business expenses and other fringe benefits otherwise due to the Executive (the
“Severance Payment”). The Severance Payment shall be payable in
twelve (12) equal monthly installments commencing on the first day of each month
following the date of termination. The Executive shall also be
entitled to payment for (i) any bonus earned in the year preceding such
termination but not yet paid and (ii) accrued but unused vacation days during
the year such termination occurs. At the termination date, all of the
Restricted Shares granted to Executive will be immediately vested in accordance
with the Restricted Stock Agreement and any stock options or other grants made
to Executive pursuant to any incentive or benefit plans then in effect shall
vest in accordance with the terms of any such plans. All other
obligations of the Company under this Agreement shall automatically cease, and
the Executive shall not be entitled to any other salary, payments or benefits
otherwise payable under this Agreement, except as otherwise required by
law.
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18. Termination
Following Change of Control: If
Executive's employment is terminated by the Company within twelve (12) months
after a Change of Control (as defined on Exhibit B) for reasons other than For
Cause pursuant to Section 19 below or by reason of Disability or Executive's
death, (a) Executive shall be entitled to receive Executive’s then applicable
base salary through the date of termination of Executive’s employment and any
business expenses or fringe benefits otherwise due to Executive and (b) in
addition, the Company agrees to pay to Executive, the Severance Payment, which
Severance Payment shall be payable in six (6) equal monthly installments
commencing on the first day of each month following the date of
termination. Executive shall also be entitled to payment for (i) any
bonus earned in the year preceding such termination but not yet paid and (ii)
accrued but unused vacation days during the year such termination
occurs. At the termination date, all of the Restricted Shares granted
to Executive will be immediately vested in accordance with the Restricted Stock
Agreement and any stock options or other grants made to Executive pursuant to
any incentive or benefit plans then in effect shall vest in accordance with the
terms of any such plans. All other obligations of the Company under
this Agreement shall automatically cease, and Executive shall not be entitled to
any other salary, payments or benefits otherwise payable under this Agreement,
except as otherwise required by law.
19. Termination
For Cause: The Company, upon
a vote of the Company’s Board of Directors shall be entitled to immediately
terminate Executive’s services in any of the following circumstances, each of
which shall constitute "cause" for such termination:
(a) the
breach by Executive, in any material respect, of this Agreement (including,
without limitation, the refusal or other failure by Executive to perform any of
Executive’s duties hereunder other than a failure to perform resulting from
death or physical or mental disability) and failure by Executive to cure such
breach within ten (10) days of written notice thereof from the
Company;
(b) the
commission by Executive of any act of dishonesty, fraud, intentional material
misrepresentation or moral turpitude in connection with his employment,
including, but not limited to, misappropriation or embezzlement of any funds of
the Company or any of its affiliates;
(c) the
commission by Executive of any (1) willful misconduct or gross negligence, or
(2) intentional act having the effect of injuring the reputation, business or
business relationships of the Company or any of its affiliates, and which
intentional act would not reasonably be deemed to be in the best interests of
the Company;
(d) the
entering by Executive of a plea of guilty or nolo contendere to, or the
conviction of Executive for, a crime (other than a routine traffic offense)
which carries a potential penalty of imprisonment for more than ninety (90) days
and/or a fine in excess of Ten Thousand Dollars ($10,000);
(e) Executive’s
abuse of alcohol, prescription drugs or controlled substances to a degree which
interferes with his performance on behalf of the Company;
(f) Executive’s
deliberate disregard of any lawful material rule or policy of the Company or
order of the Company’s Board of Directors and failure to cure the same within
ten (10) days of written notice thereof from the Company; or
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(g) Executive’s
excessive absenteeism other than for reasons of illness, after written notice
from the Company with respect thereto.
If Executive is terminated for any of
the causes referred to in the above sub-paragraphs (a) through (g), all
obligations of the Company under this Agreement (except for obligations
specifically referred to as continuing) shall automatically cease, and Executive
shall only be entitled to receive Executive’s then applicable base salary
through the date of termination and any business expenses or fringe benefits
otherwise due to Executive and any bonus earned in the contract year preceding
such termination but not yet paid. All other obligations of the
Company under this Agreement shall automatically cease, and Executive shall not
be entitled to any other salary, payments or benefits otherwise payable under
this Agreement, except as otherwise required by law. The parties
further agree and understand that, in the event of any such termination,
Executive’s obligations and agreements under Sections 22 through 26 hereof shall
continue in full force and effect in the manner and on the terms set forth
herein.
20. Payment
Upon Expiration of Term: In the event that this Agreement
expires by the arrival of an End Date without a prior termination or
resignation, the Company agrees to pay to Executive his base salary and pro rata
bonus earned and unpaid through the date of such expiration and any business
expenses or fringe benefits otherwise due to Executive. Executive
shall also be entitled to payment for any bonus earned in the contract year
preceding the expiration of the Agreement but not yet paid and accrued but
unused vacation days during the year such expiration occurs. All
other payments, benefits or arrangements provided by the Company shall cease
immediately, except as otherwise required by law or the terms of any plan
maintained by the Company. Notwithstanding the foregoing, the parties
further agree and understand that, in the event of any such expiration,
Executive’s obligations and agreements under Sections 22 through 26 hereof shall
continue in full force and effect in the manner and on the terms set forth
herein.
21. Gross-Up
Payment:
(a) To
the extent that the payment of any Severance Payment (or other
payment or benefit within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code")) under Sections 16, 17 and 18 hereof
(collectively, the “Payments”) would be subject to taxes imposed against
Executive under the Code (including any excise tax imposed by Section 4999 of
the Code) and any state or local tax code or regulations, if applicable, or any
interest or penalties are incurred by Executive with respect to such taxes
(collectively, the “Taxes”), then the Company shall pay, and Executive will be
entitled to receive, an additional payment (the "Gross-Up Payment") in an amount
such that after payment by the Executive of all applicable Taxes (other than
interest and penalties due to Executive's failure to timely make any applicable
election, file a tax return or pay taxes shown on his return) including any
Taxes imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Taxes imposed by reason of the
Payments.
(b) The
Company shall bear any expense necessary in determining whether a Gross-Up
Payment is required pursuant to this Agreement. The Gross-Up Payment,
if any, shall be paid by the Company to Executive on April 1st of the
year immediately following the taxable year in which such taxes
accrued.
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22. Noncompetition:
(a) Executive
expressly acknowledges that, in order to protect the Company, and persons and
entities that do business with the Company, it is an essential condition of his
employment that Executive agrees that during the Term of this Agreement and
(unless this Agreement is terminated as a result of a Termination Without Cause,
Termination Following a Change of Control or a Resignation For Good
Reason):
(i) for a
period of one (1) year thereafter, Executive will not directly or indirectly,
for his own account or on behalf of any other person or as an employee,
consultant, manager, agent, broker, stockholder, director or officer of a
corporation, investor, owner, lender, partner, joint venturer, or otherwise
engage in any business which is then directly engaged in the exploration,
drilling or production of natural gas or oil, within any five (5) mile radius
from any property in which the Company has an ownership, leasehold or
participation interest at the date of such termination;
(ii) for a
period of one (1) year thereafter (a) solicit, entice or induce any Customer (as
defined below) of the Company to cease or limit its business with the Company
(except if and to the extent directed to do so by the Board of Directors of the
Company), or to become a customer, supplier, vendor or client of any other
person (including, without limitation, Executive, individually) or entity
engaged in any activity or business competitive with the Company if as a
consequence thereof such party shall reduce the business it does with the
Company or (b) interfere with the relationship between the Company and any
Customer, and Executive shall not cause, assist or facilitate any person or
entity in taking any such prohibited actions;
(iii) for a
period of one (1) year thereafter, solicit, attempt to solicit or entice away
from the Company’s employment, any employee of the Company, or disrupt or
interfere with, or attempt to disrupt or interfere with, the Company’s
relationship with any such person, and Executive shall not cause, assist or
facilitate any person or entity in taking any such prohibited
action;
(iv) disparage
the Company or any of its shareholders, directors, officers, employees or agents
or take any actions that are harmful to the Company’s goodwill with its
customers, employees or the public; and
(v) engage in
any act or practice the purpose of which is to evade the provisions of this
covenant not to compete or to commit any act which adversely affects the
business of the Company.
For
purposes of this Agreement, a “Customer” of the Company shall mean any person or
entity, who or which is, or was at any time within the prior one year period, a
purchaser of goods or services from the Company, a landlord, sublandlord,
licensor, licensee or supplier of (or prospective purchaser, landlord,
sublandlord, licensor, licensee or supplier, provided the Company was in active
discussions with such party prior to the termination of this Agreement), to or
from the Company, as the case may be.
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(b) It is
understood by Executive that the covenants contained in this Section 22 are
essential elements of this Agreement and that, but for the agreement of
Executive to comply with such covenants, the Company would not have agreed to
enter into this Agreement and would not pay Executive the agreed compensation
for his services. Executive acknowledges that the provisions of this
Section 22 are reasonable and necessary for the protection of the Company and
that enforcement of the provisions of this Section 22 shall not result in an
unreasonable deprivation of the right of Executive to earn a
living. The existence of any claim or cause of action of Executive
against the Company, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company of such
covenants. The covenants of Executive in this Section 22 shall be
construed as agreements independent of any provision in this
Agreement. In the event a court of competent jurisdiction determines
that the provisions of this Section 22 are excessively broad as to duration,
geographical scope or activity, it is expressly agreed that Section 22 shall be
construed so that the remaining provisions shall not be affected, but shall
remain in full force and effect, and any such overbroad provisions shall be
deemed, without further action on the part of any person, to be modified,
amended and/or limited, but only to the extent necessary to render the same
valid and enforceable in such jurisdiction.
23.
Non-Disclosure
of Confidential Information:
(a) Executive
acknowledges and agrees that Executive’s services for the Company shall bring
Executive into contact with sensitive or secret information relating to the
Company, its successors, subsidiaries, assigns, officers, Executives, associated
entities and/or agents including, but not limited to (i) information concerning
the objectives, plans, commitments, contracts, leases, operations, Executives,
methods, market investigations, surveys, research, records, and costs and prices
of the Company and/or the Company’s subsidiaries or associated entities, (ii)
information concerning the identities, objectives, plans, preferences, needs,
requests, specifications, commitments, contracts, operations, methods and
records of the Company’s and/or its subsidiaries’ or associated entities’
lenders, prospective lenders, investors, owners and/or prospective owners, and
(iii) any and all information, trade secrets or ideas that give the Company or
its subsidiaries or associated entities the opportunity to obtain an advantage
over such competitors of the Company or of such subsidiaries or associated
entities that do not know or use such information, trade secrets or ideas (the
"Confidential Information").
(b) Executive
further understands and acknowledges that Confidential Information includes not
only recorded or written information, but information that Executive can recall
or reconstruct from Executive’s memory.
(c) Executive
agrees that he will, at all times, faithfully hold all such Confidential
Information in the strictest of confidence and will, at all times, use his best
efforts and highest diligence to keep such Confidential Information secret, to
guard against its disclosure, and never, directly or indirectly, to disclose or
divulge any such Confidential Information to any person, company, firm or other
entity, or to use the same, except that (i) Executive may use Confidential
Information as necessary to perform his duties of employment with the Company,
(ii) Executive may disclose Confidential Information to those within the Company
who have a need to know it in the performance of their duties for the Company,
(iii) Executive may disclose Confidential Information to parties outside the
Company when, as and if he is expressly directed to do so by Executive’s
supervisors within the Company, and (iv) Executive may disclose Confidential
Information as expressly directed by judicial process, provided that Executive
has promptly, and prior to making such disclosure, provided a copy of such
judicial process to the Company and the Company does not intervene to oppose
such disclosure. Executive shall use his best efforts to afford the
Company sufficient time to intervene to oppose any such disclosure, including,
if necessary, seeking reasonable extensions of Executive’s time to make such
disclosure.
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(d) Executive
shall continue to abide by all of his obligations under this Agreement
respecting Confidential Information not only during his employment with the
Company, but also for all time after any termination, resignation or expiration
of his employment with the Company, however caused.
(e) Notwithstanding
the foregoing, after any termination or resignation of Executive from his
employment with the Company, Confidential Information shall not include, and
Executive shall not be restricted from divulging or using, any information which
Executive can demonstrate (i) is or becomes generally available to the public
other than as a result of a disclosure by Executive, (ii) was available to
Executive on a non-confidential basis prior to its disclosure to Executive by
the Company or any of its subsidiaries or associated entities, or (iii) becomes
available to Executive on a non-confidential basis from a source other than the
Company or any of its subsidiaries or associated entities, provided, however, that such
source was not bound by a confidentiality agreement with the Company or any of
its subsidiaries or associated entities, or was not otherwise prohibited from
transmitting such information to Executive.
(f) Executive
agrees that upon any termination, resignation or expiration of his employment
with the Company, however caused, Executive shall deliver to the Company all
writings, documents, recordings, computer discs or other media of recordation or
storage in his possession, custody or control containing any Confidential
Information (including, without limitation, all duplicates and copies), shall
relinquish access to any computer maintained by or for the benefit of the
Company or any of its subsidiaries or associated entities, and shall purge all
such Confidential Information (in whatever form, including electronic data) from
any electronic media or storage devices, including computers, in Executive’s
possession, custody or control. To insure compliance with this
Agreement, at the time of such termination, resignation or expiration, Executive
shall provide the Company with a sworn statement, duly notarized, that Executive
has performed each and every agreement and obligation contained or referred to
in this Section.
24. Company
Property: All inventions, improvements, systems, designs,
ideas, business plans, sales techniques, approaches, surveys, prospect books,
publications, memoranda, customer lists, files, notes, records, videotapes or
any other business documentation or products (including, without limitation,
Confidential Information) that Executive makes or conceives (either
individually or jointly with others) or that are made available to Executive
during his employment with the Company and until any termination, resignation or
expiration of such employment for any reason, relating to and connected with his
employment, or that Executive utilizes in carrying out his duties or
responsibilities to the Company (the "Property"), shall be the Company’s
exclusive property, and Executive assigns to the Company all of his rights, if
any, in and to all such Property.
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25. Trade
Names, Trademarks and Copyright: During his employment with
the Company, and continuing for all time after any termination, resignation or
expiration of such employment for any reason, Executive agrees that he shall
never have or claim any right, title or interest in any trade name, trademark or
copyright (statutory or common law) belonging to or used by the Company, its
subsidiaries, successors, assigns or associated entities, and shall never have
or claim any right, title or interest in any material or matter of any sort,
prepared for or used in connection with advertising, solicitation, circulation,
editorial content or promotion of the business of the Company, its subsidiaries,
successors, assigns or associated entities, whether produced, prepared or
published in whole or in part by Executive. Executive recognizes that
the Company and/or its subsidiaries or associated entities now have and shall
hereafter have and retain sole and exclusive rights in and to any and all such
trade names, trademarks, copyrights, material and matter.
26. Injunctive
Relief: Executive expressly acknowledges and agrees that the
Property and the Confidential Information are of a special, unique, unusual,
extraordinary and intellectual character which gives them a peculiar value, and
that a breach by Executive of any of the restrictive covenants contained in
paragraphs 22 through 25 herein will cause the Company irreparable injury and
damage for which there is no adequate remedy available at
law. Executive further expressly acknowledges and agrees that the
Company shall be entitled, in addition to any remedies available at law, to
injunctive or other equitable relief to require specific performance, or to
prevent a breach, of any provision of this Agreement by Executive without any
requirement or showing that the Company has suffered any damages from such
breach.
27. Further
Instruments: Each of the Company and Executive shall execute,
acknowledge, deliver and procure the execution, acknowledgment and delivery to
the other of any and all further instruments which the other may reasonably deem
necessary or expedient to carry out or effectuate the purposes or intent of this
Agreement.
28. Representations. Executive
represents and warrants to the Company that Executive has the capacity and right
to negotiate and enter into this Agreement, and Executive's execution, delivery
and performance of this Agreement does not breach, interfere with or conflict
with any other contractual agreement, covenant not to compete, option, right of
first refusal or other existing business relationship or any judgment or order,
in each case, to which Executive is a party or otherwise subject.
29. Successors
and Assigns: This Agreement shall not be assignable by the
Company without the prior consent of Executive, which shall not be unreasonably
withheld. For purposes of this Agreement a transfer of this Agreement
in connection with a merger, sale of a majority of the outstanding shares or
consolidation of the Company or a sale of substantially all of the Company
assets shall not constitute an assignment. This Agreement shall be
binding upon the successors, heirs, executors and personal representatives of
Executive. This Agreement contemplates the rendition of personal
services by Executive and is not assignable by Executive.
30. Savings
Clause: If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law. The Company’s rights and remedies
provided for in this Agreement or by law shall, to the extent permitted by law,
be cumulative.
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31. Indemnification: In
the event Executive is made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by the Company against Executive, by reason
of the fact that Executive was performing services under this Agreement or that
Executive was or is an officer, director or employee of the Company), then the
Company shall indemnify, hold harmless and defend Executive against all expenses
(including attorneys' fees and expenses), judgments, fines and amounts paid in
settlement, as actually and reasonably incurred by Executive in connection
therewith, to the maximum permitted by applicable law. The advance of
expenses shall be mandatory to the extent permitted by applicable
law. In the event that both Executive and the Company are made party
to the same third-party action, complaint, suit or proceeding, the Company
agrees to engage counsel, and Executive consents to use the same counsel, which
consent will not be unreasonable withheld, provided that if counsel selected by
the Company shall have a conflict of interest that prevents such counsel from
representing Executive and the Company at the same time, Executive may engage
separate counsel and the Company shall pay all reasonable attorneys' fees and
expenses of separate counsel. The Company shall not be required to
pay the fees of more than one law firm except as described in the preceding
sentence. Further, while Executive is expected to faithfully
discharge his duties under this Agreement, Executive shall not be held liable to
the Company for errors or omissions made in good faith where Executive has not
exhibited intentional misconduct or performed criminal or fraudulent
acts. Notwithstanding the above, the Company’s obligation to
indemnify Executive is subject to any prohibitions as a matter of law that the
Company cannot indemnify Executive.
32. Governing
Law; Construction: Any and all differences and disputes of
whatever nature arising out of or relating to this Agreement (including, without
limitation, the negotiation, execution, performance or termination of this
Agreement) shall be governed by the laws of the State of Texas applicable to
contracts made, negotiated and to be performed entirely in such State without
giving effect to its principles of conflicts of laws. With respect to
all such differences and disputes, the parties agree and consent to be subject
to the exclusive jurisdiction of the state and federal courts located in the
State of Texas and consent to the exclusive venue of Texas.
33. Notices: All
notices to be given under this Agreement shall be in writing and shall be given
by hand, by overnight courier services which obtain acknowledgment of receipt or
by certified or registered mail, return receipt requested, addressed to the
party receiving such notice (each of the foregoing being referred to as "Written
Notice"), or by facsimile transmission, such transmission being effective as of
the date thereof if followed within ten (10) business days by Written Notice, as
follows:
(a) if
to the Company, to the Company’s address set forth above.;
(b) if
to Executive, to Executive’s address on file with the Company; or
(c) to
either party at such other addresses as shall have been specified in a notice
similarly given.
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34. Freedom
to Execute Agreement: The Company and Executive each
represent, warrant and agree that they are free to enter into this Agreement,
and that they are not subject to any obligations or disability which would
prevent them from or interfere with their fully keeping and performing all of
the covenants and conditions to be kept or performed under such
agreements. The Company and Executive further represent, warrant and
agree that they have not made and will not make any grant or assignment which
conflicts with or impairs the complete enjoyment of the rights and privileges
granted to the Company and Executive under this Agreement. Executive
has had the opportunity to consult with his personal attorney and to negotiate
this Agreement at “arms-length”.
35. Entire
Agreement: This Agreement and the agreements annexed as
appendices hereto are intended together to constitute the entire agreement
between the Company and Executive relating to the subject matters of such
agreements, and all prior negotiations and understandings of the parties have
been merged in such agreements. No modification of any such
agreements shall be valid unless in writing and executed by the parties
hereto.
36. Waiver of
Breach: The waiver of a breach or default of or under any
provision of this Agreement shall not be deemed a waiver of any other such
breach or default of any kind or nature.
37. Approvals: This
Agreement has been approved by the necessary vote of the Company’s Board of
Directors.
[Remainder
of Page Intentionally Left Blank]
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IN WITNESS
WHEREOF, the parties have signed this Agreement as of the date first
above written.
| ABC FUNDING, INC. | |||
|
|
By:
|
/s/ Xxxx X. Xxxxx | |
| Xxxx X. Xxxxx | |||
| Chief Financial Officer | |||
| EXECUTIVE | |||
|
|
By:
|
/s/ Xxx X. Xxxxx | |
| Xxx X. Xxxxx | |||
Exhibit
A
For the
purposes of this Employment Agreement, whenever the term "Disability" is not
defined in a Disability Plan that the Company may maintain for the benefit of
its senior officers, that term shall mean that, for a period of "120 continuous
days", Executive is "limited" from performing the "material and substantial
duties" of his "regular occupation" due to his "sickness" or
"injury."
For
purposes of this definition:
"120
continuous days" shall mean 120 days of sickness or injury which meets all of
the other criteria for a Disability as defined herein, with no lapse of greater
than 30 days (consecutively or in the aggregate);
"limited"
from performing a duty or function means that Executive is unable to perform
such duty or function;
"material
and substantial duties" means duties that are normally required for the
performance of Executive’s "regular occupation" and cannot be reasonably omitted
or modified;
"regular
occupation" means all of the functions that Executive was routinely performing
prior to the onset of the condition or conditions that resulted in the Company’s
decision to terminate Executive’s employment for reasons related to
Disability;
"sickness"
means any illness or disease that renders Executive incapable of performing
material and substantial duties of his employment under the Employment
Agreement; and
"injury"
means a bodily injury that is the direct result of an accident and not related
to any other cause.
Exhibit
B
For the
purposes of this Employment Agreement, the term "Change of Control” shall mean:
(i) a sale, transfer, or other disposition through a single transaction or a
series of transactions of all or substantially all of the assets of the Company
to another entity; or (ii) any consolidation or merger of the Company with or
into another entity, unless immediately after the consolidation or merger the
holders of the common stock of the Company immediately prior to the
consolidation or merger are the beneficial owners of securities of the surviving
corporation representing at least fifty (50%) percent of the combined voting
power of the surviving corporation’s then outstanding
securities. Notwithstanding the previous sentence, a change of
control will be deemed to have occurred if 50% or more of the fully diluted
voting shares transfer to a single entity or group of shareholders that act as a
single entity for voting purposes, within a twelve month period, in any manner
other than a primary or secondary public stock
offering.
