EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of April 17, 2007 (this "Agreement") between
Dune Energy, Inc., a Delaware corporation having its principal place of business
at 0000 Xxxx Xxx Xxxx., Xxxxx 000, Xxxxxxx, Xxxxx 00000 (the "Employer" or the
"Company"), and Xxxxx X. Xxxxx, Xx., an individual residing in the State of
Texas (the "Executive").
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is essential and in the best interest 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: The Employer hereby employs the Executive and the Executive
hereby accepts employment upon the terms and conditions hereinafter set forth.
2. Title; Responsibilities; Reporting: During the Term of this Agreement,
the Executive shall diligently and faithfully: (a) serve the Company in the
capacities of Senior Vice President and Chief Financial Officer, and/or in
whatever similar executive capacities as shall from time to time be assigned to
the Executive by the Board or by such other person(s) as directed by the Board;
(b) report directly to the 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 the Executive by the Company's
Board and/or Chief Executive Officer 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.
3. Exclusivity: All services to be provided by the Executive under this
Agreement shall be performed by the Executive personally. During the term of
this Agreement, the Executive shall devote substantially all of the Executive's
business time, attention and energies and all of his skills, learnings and best
efforts to the business of 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 State of
Texas, except for travel in the ordinary course of business. Executive may (a)
serve on corporate, civil or charitable boards or committees, (b) manage
personal investments, and (c) deliver lectures and teach at educational
institutions or events so long as such activities do not significantly interfere
with the performance of Executive's duties hereunder. It is expressly understood
and agreed that to the extent that any such activities have been conducted by
Executive prior to the Commencement Date, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto)
subsequent to the Commencement Date (as defined hereinafter) shall not
thereafter be deemed to interfere with the performance of Executive's
responsibilities to the Company.
4. Term: The initial term of this Agreement shall commence on the date
hereof (the "Commencement Date") and shall end on April 17, 2009, unless sooner
extended by agreement of the parties or 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 the an End Date (each such sixty (60)
day period is referred to as a "Renegotiation Period"), the Company and the
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
a termination in accordance herewith is referred to as the "Term."
5. Base Compensation: Commencing as of the Commencement Date, the Company
shall pay to Executive a base salary at the following per annum rates:
(a) $200,000, for the period commencing as of the Commencement Date
and ending on April 17, 2008 (the "First Anniversary Date"); and
(b) $225,000, for the period commencing as of the First Anniversary
Date and ending on April 17, 2009.
The base salary shall be paid in monthly installments on the first day of each
month and shall be subject to such deductions by the Employer as are required to
be made pursuant to law, government regulations or order. The Executive
understands and agrees that the Executive is an exempt Executive as that term is
applied for purposes of Federal or State wage and hour laws, and further
understands that the Executive shall not be entitled to any compensatory time
off or other compensation for overtime.
6. Performance Bonus: During the Term of this Agreement, Executive shall
be eligible to earn a performance bonus ("Bonus"). The amount of the Bonus shall
be targeted at forty percent (40%) of Executive's then applicable base salary
(the "Targeted Bonus"), based upon quantitative and qualitative performance
criteria to be determined by the Board on or before the ninetieth (90th) day
following the Commencement Date. The actual Bonus may be less than or more than
the Targeted Bonus based upon the assessment by the Board, in its sole and
absolute discretion, of Executive's performance against such criteria.
7. Restricted Stock Grant: Upon the execution of this Agreement, the
Company shall grant a restricted stock award to Executive of 75,000 shares of
the Company's common stock, par value $0.001 per share (the "Restricted Shares")
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 25,000 shares on the Commencement Date, an additional
25,000 shares on the First Anniversary Date and the remaining 25,000 shares two
years from the Commencement Date, provided that Executive shall be employed by
the Company on such date(s).
8. Fringe Benefits: During the Term of this Agreement, the Executive shall
be entitled to major medical and full hospital insurance for the Executive, his
spouse and immediate dependents, provided that the Executive and his family are
insurable at "standard rates". The 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 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 Executive acknowledges and agrees
that the Company has the right, in its sole discretion, to amend, modify or
terminate any such benefit plan or program at any time and for any reason or for
no reason. The 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.
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9. Vacation, Etc.: During the Term of this Agreement, the Executive shall
be entitled to four (4) weeks paid vacation to be taken at such time or times as
shall be consistent with the proper performance by the Executive of his duties,
and which shall accrue ratably during the fiscal year. No unused vacation,
holidays, sick leave or personal days may be carried forward from year to year.
In the event that the Executive's employment terminates by virtue of
"Termination Without Cause", "Resignation for Good Reason", death or disability,
then the Executive shall be entitled to payment for any accrued but unused
vacation days during the year such termination occurs.
10. Expense Reimbursement; Travel Policy; Relocation Expenses:
(a) The Company shall provide the 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 the 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 months after the expense is
incurred will not be reimbursed without the approval of the Company's Chief
Executive Officer.
(b) The Company shall pay directly or, if applicable, reimburse
Executive for his expenses to relocate from the Dallas/Fort Worth area to
Houston, Texas, which expenses shall consist of: (i) temporary living expenses;
(ii) closing costs on the purchase of a new home in the Houston, Texas area; and
(iii) moving expenses (collectively, the "Relocation Expenses"). To the extent
that the reimbursement of any Relocation Expenses would be subject to taxes
imposed against Executive under the Internal Revenue Code of 1986, as amended
(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 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 Relocation Expenses. 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.
11. 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.
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12. Death of Executive: In the event of the Executive's death during the
Term of this Agreement, the Employer'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 the Executive's estate any
base salary and pro rata performance bonus earned and unpaid through the date of
such death and any business expenses or other fringe benefits or otherwise due
to Executive. The Executive's estate 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.
Such event shall not be deemed a "Termination Without Cause" as defined 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.
13. Disability of Executive: If the 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 Employer
shall have the right to terminate this Agreement by written notice of such
Disability to the Executive, whereupon the Employer'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 the Executive
any base salary and pro rata performance bonus earned and unpaid through the
date of such notice (less any payments received by the 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 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" as defined below. All
other obligations of the Employer 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.
14. Resignation Notice; Termination: The Executive agrees to give sixty
(60) days' prior written notice to the Company of any decision by the 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 the
Executive's resignation for "Good Reason" as defined in Section 17 below, only
fourteen (14) days' prior written notice shall be required. The 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
the Executive's employment, either immediately or at any point during the period
indicated in such notice.
15. Post-Resignation Actions: If the Executive decides to resign from the
Executive's employment with the Company, the Executive agrees to make no public
announcement and no statement to persons or entities doing business with the
Company, without the written consent of the Company, and to continue faithfully
performing and discharging the Executive's duties and responsibilities for the
Company from the date of such Resignation Notice until such termination date.
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16. Post-Resignation Obligations: Except as provided below with respect to
resignations for "Good Reason," no such resignation under Section 14 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. The
Executive agrees and understands that, in the event of any such resignation (or
termination by the Company following a Resignation Notice), the Executive shall
be entitled to receive the Executive's base salary from the Employer at the rate
provided in this Agreement through the date of termination of the Executive's
employment and any business expenses otherwise due to Executive. The Executive
shall also be entitled to payment for any bonus earned in the 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 Employer 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. The parties further agree and understand that, in the
event of any such resignation (or termination by the Company following a
Resignation Notice), the Executive's obligations and agreements under Sections
21 through 24 hereof shall continue in full force and effect in the manner and
on the terms set forth herein.
17. Resignation for Good Reason: If the 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 the
Executive: (i) the failure of the Company to continue the Executive in the
position of the Chief Financial Officer of the Company (or such other senior
executive position as may be offered by the Company and which the Executive in
his sole discretion may accept); (ii) material diminution by the Company of the
Executive's responsibilities, duties, or authority in comparison with the
responsibilities, duties and authority held during the six month period
following the Commencement Date, or assignment to the Executive of any duties
inconsistent with the 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 the Executive in his sole discretion may accept); (iii)
failure by the Company to pay and provide to the Executive the compensation and
benefits provided for in this Agreement; or (iv) the requirement that the
Executive relocate his residence outside of the State of Texas.
18. Termination Without Cause: The 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 of the then-current base
salary plus the Targeted Bonus for the year of such termination (the "Severance
Payment"). The Severance Payment shall be payable in six (6) equal monthly
installments commencing on the first day of each month following the date of
termination, provided that the Executive adheres to his obligations hereunder
and in no way disparages the Company, its officers, directors or affiliates.
Upon Termination Without Cause, 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 Employer 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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19. 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 herein) for reasons other than For Cause pursuant to Section 20
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.
20. Termination For Cause: The Employer, upon a vote of the Board
(excluding the Executive) shall be entitled to immediately terminate the
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 the 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 Board and failure to cure the same within
ten (10) days of written notice thereof from the Company; or
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(g) excessive absenteeism of Executive other than for reasons of
illness, after written notice from the Company with respect thereto.
If the Executive is terminated for any of the causes referred to in
the above sub-paragraphs (a) through (g), all obligations of the Employer under
this Agreement (except for obligations specifically referred to as continuing)
shall automatically cease, and the 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 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
for Cause, the Executive's obligations and agreements under Sections 22 through
25 hereof shall continue in full force and effect in the manner and on the terms
set forth herein.
21. 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 the Executive his base salary and pro
rata performance bonus earned and unpaid through the date of such expiration and
any business expenses or fringe benefits otherwise due to the Executive.
Executive shall also be entitled to payment for any bonus earned in the 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, the Executive's obligations and agreements
under Sections 22 through 25 hereof shall continue in full force and effect in
the manner and on the terms set forth herein.
22. Noncompetition:
(a) The 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 the Executive agrees that during
the Term of this Agreement and (unless this Agreement is terminated as a result
of a Termination Without Cause or a Resignation For Good Reason):
(i) for a period of one (1) year thereafter, the 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 one (1)
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 (i) 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
Chairman or 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 (ii) 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;
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(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.
(b) It is understood by the Executive that the covenants contained
in this Section 22 are essential elements of this Agreement and that, but for
the agreement of the 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) The Executive acknowledges and agrees that the Executive's
services for the Company shall bring the 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").
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(b) The Executive further understands and acknowledges that
Confidential Information includes not only recorded or written information, but
information that the Executive can recall or reconstruct from the Executive's
memory.
(c) The 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) the
Executive may use Confidential Information as necessary to perform his duties of
employment with the Company, (ii) the 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) the Executive may disclose
Confidential Information to parties outside the Company when, as and if he is
expressly directed to do so by the Executive's supervisors within the Company,
and (iv) the Executive may disclose Confidential Information as expressly
directed by judicial process, provided that the Executive has promptly, and
prior to making such disclosure, provided a copy of such judicial process to the
Company and the Company does not successfully intervene to prevent such
disclosure. The 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 the Executive's time to make such
disclosure.
(d) The 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 the Executive from his employment with the Company, Confidential
Information shall not include, and the Executive shall not be restricted from
divulging or using, any information which the Executive can demonstrate (i) is
or becomes generally available to the public other than as a result of a
disclosure by the Executive, (ii) was available to the Executive on a
non-confidential basis prior to its disclosure to the Executive by the Company
or any of its subsidiaries or associated entities, or (iii) becomes available to
the 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 the Executive.
(f) The Executive agrees that upon any termination, resignation or
expiration of his employment with the Company, however caused, the 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 the Executive's possession, custody or control. To
insure compliance with this Agreement, at the time of such termination,
resignation or expiration, at the Company's request, the Executive shall provide
the Company with a sworn statement, duly notarized, that the Executive has
performed each and every agreement and obligation contained or referred to in
this Section 23.
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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 the Executive makes or conceives (either
individually or jointly with others) or that are made available to the 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 (the "Property"), shall be the Company's exclusive property, and the
Executive assigns to the Company all of his rights, if any, in and to all such
Property.
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, the 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 the Executive. The 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: The 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 the 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. The
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 the Executive without any requirement or showing
that the Company has suffered any damages from such breach.
27. Further Instruments: Each of the Company and the 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. Successors and Assigns: This Agreement shall not be assignable by the
Company without the prior consent of the 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 the Executive.
10
29. 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.
30. Governing Law and 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 Delaware
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.
31. 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,
with a copy to Xxxxx & Xxx Xxxxxx, 0 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, Attn: Xxxxxxx X. Xxxxx, Esq;
(b) if to the Executive, to the Executive's address set forth above;
or
(c) to either party at such other addresses as shall have been
specified in a notice similarly given.
32. Freedom to Execute Agreement: The Company and the 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
the Executive under this Agreement. The Executive has had the opportunity to
consult with his personal attorney and to negotiate this Agreement at
"arms-length".
11
33. Entire Agreement: This Agreement and the agreements annexed as
appendices hereto are intended together to constitute the entire agreement
between the Company and the 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.
34. 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.
35. Approvals: This Agreement has been approved by the necessary vote of
the Company's Board of Directors of the Company.
12
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
above written.
Company: Dune Energy, Inc.
By: /s/ Xxxxx X. Xxxx
-------------------------
Name: Xxxxx X. Xxxx
Title: President & CEO
Executive:
/s/ Xxxxx X. Xxxxx, Xx.
-------------------------
Xxxxx X. Xxxxx, Xx.
13
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", the 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 the Executive is
unable to perform such duty or function;
"material and substantial duties" means duties that are normally required
for the performance of the Executive's "regular occupation" and cannot be
reasonably omitted or modified;
"regular occupation" means all of the functions that the Executive was
routinely performing prior to the onset of the condition or conditions that
resulted in the Company's decision to terminate the Executive's employment for
reasons related to Disability;
"sickness" means any illness or disease that renders the 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.
