EXHIBIT 6.4
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of February 19, 1996,
by and between PAN WESTERN ENERGY CORPORATION, an Oklahoma corporation (the
"Corporation"), and XXXXXX X. XXXXXXXXXX, XX., a resident of Bristow, Oklahoma
("Xxxxxxxxxx"), and is made with reference to the following:
X. Xxxxxxxxxx was employed by the Corporation as Vice President -
Operations effective January 1, 1996.
B. The parties desire to execute this Agreement to set forth the terms
and conditions of Xxxxxxxxxx'x 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 Xxxxxxxxxx, Title and Duties. The Corporation shall
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employ Xxxxxxxxxx and Xxxxxxxxxx shall render services to and on behalf of the
Corporation, subject to the terms and conditions of this Agreement. Xxxxxxxxxx
shall devote his full time and attention to the affairs of the Corporation.
Xxxxxxxxxx shall have the title of Vice President - Operations. Xxxxxxxxxx'x
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 Xxxxxxxxxx'x
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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 Xxxxxxxxxx the following
annual base salary:
Year Base Salary
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1996 $48,000
1997 $48,000
1998 $48,000
1999 $48,000
2000 $48,000
In addition, the Corporation shall pay normal employee fringe benefits,
including but not limited to the use of an automobile and me-
dical insurance for said employee, 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. Xxxxxxxxxx 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. Xxxxxxxxxx shall be eligible to participate in this bonus
pool. As further incentive compensation, Xxxxxxxxxx shall be eligible to
participate in the Corporation's existing Employee Stock Option Plan.
4. Covenant Not to Compete. Xxxxxxxxxx covenants and agrees that, during
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the 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 I(Pounds)i which the Corporation (or any affiliate)
is now engaged or in which it becomes engaged at any time during the term of
Xxxxxxxxxx'x 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 Xxxxxxxxxx, whether as a
principal, agent, manager, employee, lessor, consultant, partner, shareholder,
director, officer or otherwise. This covenant does not extend to Xxxxxxxxxx'x
ownership of less than two percent (2%) of the voting interests in a publicly
held corporation. Xxxxxxxxxx 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 Xxxxxxxxxx. Excluded
from this Paragraph 4. are working interests, royalty interests and overriding
royalty interests owned by Xxxxxxxxxx prior to the effective date of this
Agreement. Further, this Paragraph 4. will not apply to any working interests,
royalty interests or overriding royalty interests conveyed to Xxxxxxxxxx as
inheritance.
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 Xxxxxxxxxx, any other employee, contractor, or
consultant to the Corporation, which relate in any manner to any products,
equipment, work or oth-
er business activity of the Corporation or any affiliated corporation during the
term of Xxxxxxxxxx'x employment, shall be and become the exclusive property of
the Corporation. Further, Xxxxxxxxxx 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 Xxxxxxxxxx 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).
Xxxxxxxxxx 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 Xxxxxxxxxx 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 already 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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Xxxxxxxxxx, the Corporation may terminate Xxxxxxxxxx'x employment at any time
upon ten (10) days written notice to Xxxxxxxxxx and the Corporation shall be
obligated to pay Xxxxxxxxxx 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) Xxxxxxxxxx
shall engage in willful and material misconduct in the performance or
nonperformance of this Agreement; and (ii) Xxxxxxxxxx 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 Xxxxxxxxxx and after having
provided Xxxxxxxxxx an opportunity to present his position. Xxxxxxxxxx'x
commission of fraud or a felony criminal act shall be determined by a court of
competent jurisdiction or admitted by Xxxxxxxxxx. Termination under this
subsection 6(a) shall result in the termination for future periods of all
compensation otherwise payable to Xxxxxxxxxx under Section 3 (a), and shall
render null and void ab initio the Corporation's obligation to pay the incentive
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compensation specified in Section 3(b). Xxxxxxxxxx'x termination under this
Section 6(a) shall not affect Xxxxxxxxxx'x obligations under Sec-
tions 4 or 5 hereof.
(b) Termination Without Just Cause. The Corporation may terminate
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Xxxxxxxxxx'x employment without just cause, but in such event the Corporation
shall be obligated to pay to Xxxxxxxxxx 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 Xxxxxxxxxx'x 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 Xxxxxxxxxx'x individual income tax returns for such year), shall be
paid in cash thirty (30) days following the date of Xxxxxxxxxx'x termination.
The amount, if any, of Xxxxxxxxxx'x Section 3(a) compensation exceeding such
amount shall be paid in cash in two equal annual installments, on the first and
second anniversaries of Xxxxxxxxxx'x termination. No interest shall accrue on
such payments, and the Corporation shall deduct there from all normal employee
withholding taxes. If the Corporation terminates Xxxxxxxxxx'x employment under
this Section 6(b), the incentive compensation otherwise due to Xxxxxxxxxx, 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 Xxxxxxxxxx'x employment under
this subsection 6(b) shall not affect Xxxxxxxxxx'x obligations under Sections 4
or 5 hereof. The foregoing notwithstanding, Xxxxxxxxxx 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, Xxxxxxxxxx shall be relieved of his
obligations under Section 4 hereof. In order to be relieved of such Section 4
obligations, Xxxxxxxxxx agrees that his compensation under Sections 3(a) and
3(b) shall terminate as of the date of his termination, and Xxxxxxxxxx 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; Xxxxxxxxxx'x 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). Xxxxxxxxxx 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 Xxxxxxxxxx'x 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 Xxxxxxxxxx. Xxxxxxxxxx may terminate his employment at
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any time on thirty (30) days prior written notice to the Corporation, and in
such event, the Corporation shall be obligated to pay Xxxxxxxxxx his Section
3(a) compensation only up to the date of termination, including any accrued
employee benefits
and/or vacation pay. If Xxxxxxxxxx dies during the term of this Agreement, This
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 Xxxxxxxxxx'x
compensation shall terminate at such date. Termination under this subsection
6(c) shall not affect Xxxxxxxxxx'x obligations under Sections 4 or 5. If
Xxxxxxxxxx'x employment terminates under this Section 6(c), the incentive
compensation otherwise due to Xxxxxxxxxx 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 Xxxxxxxxxx. If Xxxxxxxxxx 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 Xxxxxxxxxx for such
breach, (ii) specific performance of this Agreement by Xxxxxxxxxx and an
injunction restraining Xxxxxxxxxx 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 Xxxxxxxxxx'x 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 Xxxxxxxxxx, 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 Xxxxxxxxxx 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 deemed to be
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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:
Xxxxxxxxxx: Xxxxxx X. Xxxxxxxxxx
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 enforce-ability 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 Xxxxxxxxxx then Xxxxxxxxxx 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 Xxxxxxxxxx and
his noncompetition 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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Xxxxxxxxxx that (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 shall survive the
execution hereof.
(i) Xxxxxxxxxx'x Representations and Warranties. Xxxxxxxxxx represents and
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warrants to the Corporation that (i) Xxxxxxxxxx has the full power and authority
to enter into this Agreement and to perform hereunder, and (ii) Xxxxxxxxxx'x
execution and delivery of this Agreement does not violate or contravene any
other agreement by which Xxxxxxxxxx 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
XXXXXX X. XXXXXXXXXX
/s/ Xxxxxx X. Xxxxxxxxxx
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An Individual
