EXHIBIT 6.5
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of February 28th,
1996, by and between PAN WESTERN ENERGY CORPORATION, an Oklahoma corporation
(the "Corporation"), and XXXXXXX X. XXXXXXX, a resident of Tulsa, Oklahoma
("Kemendo"), and is made with reference to the following:
X. Xxxxxxx was employed by the Corporation as Chief Financial Officer and
Vice President - Finance effective January 1, 1996.
B. The parties desire to execute this Agreement to set forth the terms and
conditions of Kemendo's employment hereinafter.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth in this Agreement, the parties agree as follows:
1. Employment of Kemendo and Duties. The Corporation shall employ Kemendo
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and Kemendo shall render services to and on behalf of the Corporation, subject
to the terms and conditions of this Agreement. Kemendo shall devote his full
time and attention to the affairs of the Corporation. Kemendo shall have the
title of Chief Financial Officer and Vice President-Finance. Kemendo's duties
shall be as specified in the by-laws of the Corporation and as directed from
time to time by the Corporation's President and Chief Executive Officer and its
Board of Directors.
2. Term of Employment. The term of this Agreement and Kemendo's
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employment pursuant hereto shall commence on the date first above written and
shall expire on December 31, 2000; or, (b) such other date to which the term of
employment has been extended by the Corporation's Board of Directors.
3. Compensation.
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(a) Base Compensation and Fringe Benefits. As compensation for his
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services rendered hereunder, the Corporation shall pay Kemendo the following
annual base salary:
Year Base Salary
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1996 $40,000
1997 $40,000
1998 $40,000
1999 $40,000
2000 $40,000
In addition, the Corporation shall pay normal employee fringe benefits,
including but not limited to medical insurance for said em-
ployee, from which amount shall be deducted normal employee withholding and
other applicable employment taxes, and such other benefits as may from time to
time be determined by the Board of Directors of the Corporation. Kemendo shall
receive annually vacation time as specified in the Corporation's Personnel
Manual, which may be carried over one year. Salary shall be payable in
installments twice monthly.
(b) Annual Incentive Compensation. As annual incentive compensation, the
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Corporation will establish a bonus pool equal to ten percent (10%) of the
Corporation's net income in excess of $100,000 as reflected by the Corporation's
annual audited financial statements. This sum shall be paid to those
individuals participating in said bonus pool as incentive compensation within
forty five (45) days from the date the annual audited financial statements are
delivered to the Corporation's Board of Directors. The amount to be paid to
each individual participant shall be determined by the Corporation's Board of
Directors based upon recommendations made to it by the Corporation's Chief
Executive Officer. Kemendo shall be eligible to participate in this bonus pool.
As further incentive compensation, Kemendo shall be eligible to participate in
the Corporation's existing Employee Stock Option Plan.
4. Covenant Not to Compete. Kemendo covenants and agrees that, during the
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term of his employment and for a period of two (2) years thereafter, he will
not, directly or indirectly, engage in or become financially or otherwise
interested in any business in which the Corporation (or any affiliate) is now
engaged or in which it becomes engaged at any time during the term of Kemendo's
employment with the Corporation relating to the primary business of the
Corporation. The area covered by this covenant includes the Oklahoma and its
adjoining states. This covenant extends to Kemendo, whether as a principal,
agent, manager, employee, lessor, consultant, partner, shareholder, director,
officer or otherwise. This covenant does not extend to Kemendo's ownership of
less than two percent (2%) of the voting interests in a publicly held-
corporation. Kemendo expressly acknowledges that his execution of this covenant
not to compete is a material factor in the Corporation's execution of this
Agreement; that its specific terms were bargained for; that this covenant not to
compete is of material import to the Corporation as the business in which the
Corporation is engaged is highly competitive; and that the covenant not to
compete does not constitute an unreasonable restriction on Kemendo.
5. Disclosure of Information. It is agreed that any and all improvements,
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discoveries or results of research, whether patentable or not, which are made,
discovered or invented by Kemendo, any other employee, contractor, or consultant
to the Corporation, which relate in any manner to any products, equipment, work
or other business activity of the Corporation or any affiliated corporation
during the term of Kemendo's employment, shall be and become the exclusive
property of the Corporation. Further, Kemendo expressly acknowledges that the
list of the Corporation's customers, its trade secrets and other information
pertaining to the patent
rights, designs, methods, systems, improvements, proprietary information, sales
data, trademarks, products, and business affairs of the Corporation, as the same
may exist from time to time, are the sole property of the Corporation (or its
affiliated corporations as the case may be), are strictly confidential, and
shall be held in trust solely for the benefit and use of the Corporation (or its
affiliated corporations as the case may be). All knowledge and information which
Kemendo may acquire by, from or through the Corporation during the course of
rendering services under this Agreement, or from the employees or consultants to
the Corporation (or of any affiliated corporation as the case may be), with
respect to any such information as is specified above, and other confidential
matters shall for all purposes, be regarded as strictly confidential and held in
trust and solely for the benefit and use of the Corporation (or its affiliated
corporations as the case may be). Kemendo covenants and agrees that he shall
not, during the term of this Agreement, or at any time after the termination
hereof, disclose any such information to any person, firm, corporation,
association or other entity or group of persons, for any reason or purpose
whatsoever; provided, however, that the covenants contained in this Section 5
shall not prevent Kemendo from making such disclosures (i) as may be necessary
in the performance of the services hereunder, (ii) as may be necessary to comply
with legal process or governmental order, or (iii) to the extent such
information is al- ready in the public domain at the date of such disclosure.
6. Termination of Employment.
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(a) Termination for Just Cause. For just cause due to the fault of
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Kemendo, the Corporation may terminate Kemendo's employment at any time upon ten
(10) days written notice to Kemendo and the Corporation shall be obligated to
pay Kemendo the compensation under Section 3 due him only up to the date of
termination, including any accrued employee benefits and/or vacation pay. As
used in this Agreement, the term "just cause" shall mean (i) Kemendo shall
engage in willful and material misconduct in the performance or nonperformance
of this Agreement; and (ii) Kemendo shall commit actual fraud or a felony
criminal act on or after the date of execution hereof. Such action shall only
be taken after reasonable notice to Kemendo and after having provided Kemendo an
opportunity to present his position. Kemendo's commission of fraud or a felony
criminal act shall be determined by a court of competent jurisdiction or
admitted by Kemendo. Termination under this subsection 6(a) shall result in the
termination for future periods of all compensation otherwise payable to Kemendo
under Section 3(a), and shall render null and void ab initio the Corporation's
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obligation to pay the incentive compensation specified in Section 3(b).
Kemendo's termination under this Section 6(a) shall not affect Kemendo's
obligations under Sections 4 or 5 hereof.
(b) Termination Without Just Cause. The Corporation may terminate
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Kemendo's employment without just cause, but in such event the Corporation shall
be obligated to pay to kemendo the compensation otherwise payable under Section
3(a) for the remainder of the
term of his employment as determined in Section 2, including any accrued
employee benefits and/or vacation pay. Any amount of such Section 3(a)
compensation in a gross amount before withholding taxes up to the greater of One
Hundred Thousand Dollars ($100,000) or the amount of Kemendo's combined federal
and state income taxes, if any, resulting from the Corporation's obligation to
pay such remaining Section 3 (a) compensation which are due in the year of
termination (or not later than the due date for the filing of Kemendo's
individual income tax returns for such year), shall be paid in cash thirty (30)
days following the date of Kemendo's termination. The amount, if any, of
Kemendo's Section 3(a) compensation exceeding such amount shall be paid in cash
in two equal annual installments, on the first and second anniversaries of
Kemendo's termination. No interest shall accrue on such payments, and the
Corporation shall deduct therefrom all normal employee withholding taxes. If the
Corporation terminates Kemendo's employment under this Section 6(b), the
incentive compensation otherwise due to Kemendo, if any, under Section 3(b)
shall be payable at the time(s) and in the form and manner set forth in Section
3(b). Termination of Kemendo's employment under this subsection 6(b) shall not
affect Kemendo's obligations under Sections 4 or 5 hereof. The foregoing
notwithstanding, Kemendo may, within ninety (90) days following the termination
of his employment under this Section 3 (b), notify the Corporation in accordance
with Section 8(b) that he has determined to take actions which would otherwise
violate Section 4 hereof. In such case, and subject to the following conditions,
Kemendo shall be relieved of his obligations under Section 4 hereof. In order to
be relieved of such Section 4 obligations, Kemendo agrees that his compensation
under Sections 3(a) and 3(b) shall terminate as of the date of his termination,
and Kemendo shall forfeit and return to the Corporation any Section 3(a)
compensation and evidences of indebtedness of the Corporation there for
applicable to periods after his termination; Kemendo's Section 3(b) compensation
shall accrue only to the date of his termination and it shall be paid as and
when it would otherwise be paid under Section 3 (b). Kemendo may be terminated
under this Section 6(b) only by a seventy five percent (75%) vote of the Board
of Directors of the Corporation, including Kemendo's if he is a director of the
Corporation at the time the vote is taken. The Corporation shall have the right
to prepay all or any part of any payments provided for in this Section 6(b) at
any time without penalty.
(c) Termination by Kemendo. Kemendo may terminate his employment at any
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time on thirty (30) days prior written notice to the Corporation, and in such
event, the Corporation shall be obligated to pay Kemendo his Section 3(a)
compensation only up to the date of termination, including any accrued employee
benefits and/or vacation pay. If Kemendo dies during the term of this Agreement,
his compensation shall continue only to the date of his death. If he becomes
disabled such that he cannot perform his principal duties hereunder for a period
of longer than three (3) months, the Corporation may terminate his employment
after the end of such three (3) month period and in such event Kemendo's
compensation shall terminate at such date. Termination under this subsection
6(c) shall
not affect Kemendo's obligations under Sections 4 or 5. If Kemendo's employment
terminates under this Section 6(c), the incentive compensation otherwise due to
Kemendo under Section 3(b) shall accrue to the date of termination of his
employment under this Section 6(c). The Corporation shall have the right to
prepay all or any part of any payments provided for in this Section 6(c) at any
time without penalty.
7. Remedy for Breach.
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(a) Breach by Kemendo. If Kemendo breaches any agreement, provision,
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covenant, duty or requirement made herein or required herein on his part, and
such breach is not cured or corrected within five (5) days following written
notice of the same from the Corporation, then the Corporation, in its sole
discretion, shall be entitled to (i) actual damages from Kemendo for such
breach, (ii) specific performance of this Agreement by Kemendo and an injunction
restraining Kemendo from violating the terms of this Agreement, (iii) terminate
payment of the compensation described in Section 3 as of the date of such breach
(but only under the circumstances specified and to the extent provided in
Sections 6(a) or 6(b), as the case may be), and/or (iv) terminate Kemendo's
employment for cause under Section 6(a) (but only under the circumstances set
forth therein), and (v) to the fullest extent permitted by applicable law,
recovery of its attorneys fees, court costs, and all related expenses of
litigation, together with pre- and post-judgment interest thereon. Nothing
herein shall be construed as prohibiting the Corporation from pursuing any other
remedies available to it for such breach or threatened breach including the
recovery of damages from any third party involved or associated with such
breach.
(b) Breach by Corporation. If the Corporation breaches any agreement,
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provision, covenant, duty or requirement made herein or required herein on its
part, then Kemendo, in his sole discretion, shall be entitled to (i) actual
damages from the Corporation for such breach, (ii) specific performance of this
Agreement by the Corporation and an injunction restraining the Corporation from
violating the terms of this Agreement, and (iii) to the fullest extent permitted
by applicable law, recovery of his attorneys fees, court costs, and all related
expenses of litigation, together with pre- and post-judgement interest thereon.
Nothing herein shall be construed as prohibiting Kemendo from pursuing any other
remedies allowed by law which may be available to him including the recovery of
damages from any third party involved or associated with such breach.
8. Miscellaneous.
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(a) Binding Effect. This Agreement shall be binding upon and inure to the
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benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns.
(b) Notices. All notices given under this Agreement shall be
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deemed to be effectively given when personally delivered to the party entitled
to receive the notice, or when placed in the United States Mails, registered or
certified, postage prepaid, at the addresses stated below:
Kemendo: Xxxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxxx 00000
The Corporation: Pan Western Energy Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Either party may change his or its address for the purpose of notice by giving
notice of the change of address to the other party in accordance with the
provisions of this Section.
(c) Waiver and Modification. No waiver of any term of condition of this
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Agreement shall be effective unless in writing signed by the waiving party. The
waiver of the breach of any term or condition of this Agreement shall not be
deemed to constitute the waiver of any other or subsequent breach of the same or
any other term or condition. This Agreement may only be modified in a writing
signed by both parties.
(d) Severability. The invalidity or unenforceability of any provision
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hereof shall in no way affect the validity or enforceability of any other
provision. In the event any court shall finally hold that the time or territory
or any other provisions contained herein constitutes an unreasonable restriction
against Kemendo then Kemendo and the Corporation expressly agree that the
provisions of this Agreement shall not be rendered void but shall apply only as
to such time, territory or other extent as such court may judicially determine
or indicate constitutes a reasonable restriction under the circumstances
involved.
(e) Applicable Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Oklahoma.
(f) Entire Agreement. The parties agree that this Agreement, shall be the
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sole agreement between the parties respecting the employment of Kemendo non-
competition obligations to the Corporation. All prior written and oral
agreements respecting such subject matter are terminated.
(g) Time of Essence. Time is of the essence of this Agreement.
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(h) Corporate Authority. The Corporation represents and warrants to
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Kemendo (i) all necessary corporate and shareholder action has been taken on
behalf of the Corporation to authorize the execution and delivery of this
Agreement by the undersigned officer of
the Corporation and the satisfaction by the Corporation of its obligations
hereunder, (ii) the Corporation has the full power and authority to enter into
this Agreement and to perform hereunder, and (iii) the Corporation's execution
and delivery of this Agreement does not violate or contravene any other
agreement by which the Corporation is bound. These representations and
warranties hall survive the execution hereof.
(i) Kemendo's Representations and Warranties. Kemendo represents
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and warrants to the Corporation that (i) Kemendo has the full power and
authority to enter into this Agreement and to perform hereunder, and (ii)
Kemendo's execution and delivery of this Agreement does not violate or
contravene any other agreement by which Kemendo is bound. These representations
and warranties shall survive the execution hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
ATTEST: PAN WESTERN ENERGY CORPORATION
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxx X. Xxxxxxxx
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Secretary By: Xxx X. Xxxxxxxx
President
XXXXXXX X. XXXXXXX
/s/ Xxxxxxx X. Xxxxxxx
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An Individual
