EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT,
dated
as of the 16th
day of
October, 2006, by and between Xxxxxxxxx Energy Corporation, a Delaware
corporation (the “Company”) and Xxxx Xxxxxx (the “Executive”).
WHEREAS,
the
Company and the Executive desire to enter into an employment agreement which
will set forth the terms and conditions upon which the Executive shall be
employed by the Company and upon which the Company shall compensate the
Executive;
NOW,
THEREFORE, in
consideration of the foregoing and the mutual covenants hereinafter set forth,
the parties hereto have agreed, and do hereby agree, as follows:
1. EMPLOYMENT
TERM; POSITION
The
Company will employ the Executive in its business, and the Executive will
work
for the Company therein, as the Company’s Chief Executive Officer. The
Executive’s employment is “at will” and as such the Executive’s employment may
be terminated by the Company or the Executive at any time for any or no reason.
The period during which the Executive is employed the Company hereunder is
referred to as the “Employment Period”.
2. DUTIES
2.1 As
the
Company’s Chief Executive Officer of the Company, he shall be responsible for
coordinating and directing the Company’s activities in accordance with the
policies and objectives established by the Company’s Board of Directors, and
assisting the Board of Directors in developing policies regarding corporate
functions and short and long term planning and strategy, and he shall have
such
further duties of an executive character as shall, from time to time, be
delegated or assigned to him by the Board of Directors of the Company consistent
with Employee’s position. Employee shall be vested with such authority as is
generally concomitant with the position to which he is appointed. He shall
report to the Board of Directors of the Company.
2.2 The
Executive shall perform the duties hereunder at the Company=s
offices
in Englewood, Colorado (unless Executive is traveling for Company
business).
3. DEVOTION
OF TIME
The
Executive shall expend all of his working time for the Company, shall devote
his
best efforts, energy and skill to the services of the Company and the promotion
of its interests, and shall not take part in activities detrimental to the
best
interests of the Company.
4. COMPENSATION
4.1 For
all
services to be rendered by the Executive during the Employment Period and
in
consideration of the Executive=s
representations and covenants set forth in this Agreement, the Executive
shall
be entitled to the compensation set forth in Paragraph 4.2.
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4.2 The
Executive shall be entitled to receive from the Company during the Employment
Period salary at the rate of One Hundred Thirty Thousand Dollars ($130,000.00)
per annum, [The
Executive shall be entitled to such additional increments as shall be determined
from time to time by the Board of Directors of the Company in its sole
discretion.]
All
amounts due hereunder shall be payable in accordance with the
Company=s
standard payroll practices.
5. REIMBURSEMENT
OF EXPENSES
The
Company shall pay directly, or reimburse the Executive for, all reasonable
and
necessary expenses and disbursements incurred by the Executive for and on
behalf
of the Company in the performance of his duties during the Employment Period
pursuant to the Company=s
expense
reimbursement policy.
6. RESTRICTIVE
COVENANT
6.1 The
services of the Executive are unique and extraordinary and essential to the
business of the Company, especially since the Executive shall have access
to the
Company=s
Confidential Information (as hereinafter defined which is essential to the
Company=s
business. Therefore, the Executive agrees that, if the Employment Period
hereunder shall expire or his employment shall at any time terminate, the
Executive will not at any time within [two
(2)]
years
after such expiration or termination (the “Restrictive Covenant Period”),
without the prior written approval of the Company, directly or indirectly,
whether individually or as a principal, officer, employee, partner, director,
member, manager, agent of or consultant for any entity, (a) cause or seek
to
persuade any director, officer, employee, customer, agent, consultant, vendor,
supplier, co-venturer, investor or lender of the Company to discontinue the
status, employment or relationship of such person or entity with the Company,
or
to become employed or engaged in any activity similar to or competitive with
the
activities of the Company; (b) cause or seek to persuade any prospective
customer, account, vendor, supplier, co-venturer, investor or lender of the
Company (which at the date of cessation of the Executive=s
employment with the Company was then actively being solicited by the Company)
to
determine not to enter into a business relationship with Company; or (c)
solicit
with a view to hiring or retaining any director, officer or employee of the
Company. The foregoing restrictions set forth in this Paragraph 6.1 shall
apply
likewise during the Employment Period.
6.2 (a)
The
Executive represents that he has been informed that it is the policy of the
Company to maintain as secret all Confidential Information (as hereinafter
defined) relating to the Company, including, without limitation, any and
all
knowledge or information with respect to secret or confidential methods,
processes, plans, materials, customer lists or data, vendor and supplier
lists
or data, or with respect to any other confidential or secret aspect of the
Company=s
activities, and further acknowledges that such Confidential Information is
of
great value to the Company. The Executive recognizes that, by reason of his
employment with the Company, he has acquired and will acquire Confidential
Information as aforesaid. The Executive confirms that it is reasonably necessary
to protect the Company=s
goodwill, and, accordingly, hereby agrees that he will not, directly or
indirectly (except where authorized by the Board of Directors of the Company
for
the benefit of the Company or as required by law, or regulation or applicable
legal regulatory or administrative process or by a court of competent
jurisdiction), at any time during the term of this Agreement or thereafter
divulge to any person, or use, or cause or authorize any person, firm or
other
entity to use, any such Confidential Information.
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(b)
The
Executive agrees that he will not, at any time, remove, transfer or send
from
the Company=s
premises any drawings, notebooks, data, magnetic tape, floppy disks, CD-ROMS
or
any other means of storing electronic data, or other Confidential Information
relating to the business and procedures heretofore or hereafter acquired,
developed and/or used by the Company, except where necessary in the fulfillment
of his duties hereunder.
(c)
The
Executive agrees that, upon the expiration or termination of this Agreement
for
any reason whatsoever, or at anytime upon the Company=s
demand,
he shall promptly deliver to the Company any material relating to any
Confidential Information, Discoveries (as hereinafter defined) or Trade Secrets
(as hereinafter defined), as well as all memoranda, notes, records, drawings,
documents, or other writings or data whatsoever made, compiled, acquired,
or
received by the Executive during the term of this Agreement, in the form
of
writing, electronic data or any other medium, arising out of, in connection
with, or related to any activity or business of the Company including, but
not
limited to, the customers, vendors, suppliers, co-venturers, investors, lenders
or others with whom the Company has a business relationship, the arrangements
of
the Company with such parties, as well as any expansion policies and strategies
for the future development or growth of the Company, and the Executive further
agrees that all of the above mentioned items are, and shall continue to be,
the
sole and exclusive property of the Company.
(d)
For
purposes hereof, the term “Confidential Information” shall mean all information
given to, or obtained or received by, the Executive, directly or indirectly,
including, but not limited to, information contained in all correspondence,
memoranda, files, manuals, books, lists, financial, operating or marketing
records, magnetic tape, floppy disks, CD-ROMS, or any other means of storing
electronic data, as well as any electronic or other media or equipment of
any
kind by the Company and all other information relating to the Company otherwise
acquired by the Executive during the course of his employment with the Company,
including but not limited to, Trade Secrets, other than information which
(i)
was in the public domain at the time furnished to, or acquired by, the
Executive, or (ii) thereafter enters the public domain other than through
disclosure, directly or indirectly, by the Executive or others in violation
of
an agreement of confidentiality or nondisclosure.
6.3 The
Executive agrees to promptly disclose in writing to the Board all ideas,
processes, methods, devices, business concepts, inventions, improvements,
innovations, discoveries, know-how and other creative achievements (hereinafter
referred to collectively as "Discoveries"), whether or not the same or any
part
thereof is capable of being patented, trademarked, copyrighted, or otherwise
protected, which the Executive, while employed by the Company, conceives,
makes,
develops, acquires or reduces to practice, whether acting alone or with others
and whether during or after usual working hours, and which are related to
the
Company's business or interests, or are used or usable by the Company, or
which
arise out of or in connection with the duties performed by the Executive.
The
Executive hereby transfers and assigns to the Company all right, title and
interest in and to such Discoveries (whether conceived, made, developed,
acquired or reduced to practice on or prior to the date hereof or hereafter),
including any and all domestic and foreign copyrights and patent and trademark
rights therein and any renewals thereof. On request of the Company, the
Executive will, without any additional compensation, from time to time during,
and after the expiration or termination of the Employment Period, execute
such
further instruments (including, without limitation, applications for copyrights,
letters patent, trademarks and assignments thereof) and do all such other
acts
and things as may be deemed necessary or desirable by the Company to protect
and/or enforce its right in respect of such Discoveries. All expenses of
filing
or prosecuting any patent, trademark or copyright application shall be borne
by
the Company, but the Executive shall cooperate in filing and/or prosecuting
any
such application. For purposes of this Agreement, any Discovery shall be
deemed
to have been made during the Employment Period if, during such period, the
Discovery was conceived or first actually reduced to practice. The Executive
further agrees that any patent application filed by the Executive within
one (1)
year after a termination of the Executive=s
employment with the Company shall be presumed to relate to an invention made
during the Employment Period, unless the Executive can establish the contrary.
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6.4 The
Executive further acknowledges that the Company has developed or acquired
unique
skills, concepts, technical and nontechnical data, formulas, patterns, designs,
compilations, devices, inventions, innovations, improvements, enhancements,
methods, techniques, practices, drawings, processes, research, development,
know-how, computer programs, codes and software, financial and other
confidential and proprietary information concerning its products, business,
operations, and development and expansion plans (“Trade Secrets”). The Executive
agrees that it is necessary for the Company to protect its business from
the
hardship, loss and damage that could result from the release of any Trade
Secret(s) to any person, including the Executive, engaging in a business
in
competition with that of the Company, the measurement of which would be
difficult, if not impossible, to ascertain. The Executive agrees and covenants
to use his best efforts and exercise utmost diligence to protect and safeguard
the Trade Secrets of the Company. The Executive further agrees and covenants
that, except as may be required by the Company in connection with this
Agreement, or with the prior written consent of the Company, the Executive
shall
not, either during the Employment Period or thereafter, directly or indirectly,
use for the Executive=s
own
benefit or for the benefit of another, or disclose, disseminate, or distribute
to another, any Trade Secret (whether or not acquired, learned, obtained,
or
developed by the Executive alone or in conjunction with others) of the Company
or of others with whom the Company or its subsidiaries has a business
relationship. In the event of a conflict in the terms of Section 6.2 and
this
Paragraph 6.4, the terms of this Paragraph 6.4 shall govern.
6.5 For
purposes of this Paragraph 6, the term “Company” shall mean and include all
subsidiaries, parents and affiliated entities of the Company in existence
from
time to time.
7. VACATIONS
The
Executive shall be entitled to reasonable vacation time during each calendar
year during the Employment Period as mutually agreed to by the Executive
and the
Board of Directors of the Company.
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8. PARTICIPATION
IN EMPLOYEE BENEFIT PLANS
The
Executive and any beneficiary of the Executive shall be accorded the right
to
participate in and receive benefits under and in accordance with the provisions
of any pension, profit sharing, stock option, insurance, bonus, deferred
compensation, medical and dental insurance or reimbursement or other plan
or
program of the Company either in existence as of the date hereof or hereafter
adopted for the benefit of its executive employees.
9. TERMINATION
9.1 The
Executive=s
employment hereunder shall automatically terminate upon his death.
9.2 It
is
acknowledged that the Executive’s employment hereunder is “at will”.
Accordingly, the Company or the Executive may terminate the Executive’s
employment under this Agreement at any time upon notice to the
other.
9.3 Upon
termination of the Executive=s
employment with the Company, the Company shall have no further obligations
to
the Executive and the Executive shall be entitled to no further compensation
from the Company, except for any pro-rata amounts due to the Executive at
such
date of termination, as provided for in Paragraph 4.2.
9.4 Upon
the
termination of the Executive=s
employment, the Employment Period shall be deemed to have ended.
10. INJUNCTIVE
RELIEF
The
Executive acknowledges and agrees that, in the event he shall violate any
of the
restrictions of Paragraph 3 or 6 hereof, the Company will be without an adequate
remedy at law and will therefore be entitled to enforce such restrictions
by
temporary or permanent injunctive or mandatory relief in any court of competent
jurisdiction without the necessity of proving damages, or posting a bond
or
providing any surety, and without prejudice to any other remedies which it
may
have at law or in equity. The Executive acknowledges and agrees that, in
addition to any other state having proper jurisdiction, any such relief maybe
sought in, and for such purpose the Executive consents to the jurisdiction
of,
the courts of the State of Colorado.
11. REPRESENTATIONS
The
Executive hereby represents and warrants that:
(a) he
has
the requisite experience, competence and skill to carry out his duties hereunder
and to act as the Chief Executive Officer of the Company; and
5
(b) neither
the execution of this Agreement nor his performance hereunder will (i) violate,
conflict with or result in a breach of any provisions of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under the terms, conditions or provisions of any contract,
agreement or other instrument or obligation to which the Executive is a party,
or by which he may be bound, or (ii) violate any order, judgment, writ,
injunction or decree applicable to the Executive.
In
the
event of a breach hereof by the Executive, in addition to the
Company=s
right
to terminate this Agreement, the Executive shall indemnify the Company and
hold
it harmless from and against any and all claims, losses, liabilities and
expenses (including reasonable attorneys=
fees)
incurred or suffered in connection with or as a result of the
Company=s
entering into this Agreement or employing the Executive hereunder.
12. ASSIGNMENT
This
Agreement, as it relates to the employment of the Executive, is a personal
contract and the rights and interests of the Executive hereunder may not
be
sold, transferred, assigned, pledged or hypothecated.
13. NOTICES
Any
notice required or permitted to be given pursuant to this Agreement shall
be
deemed to have been duly given when delivered by hand or sent by certified
or
registered mail, return receipt requested and postage prepaid, overnight
mail or
telecopier as follows:
If
to the
Executive:
Xxxx
X.
Xxxxxx
180
Lone
Scout Lookout
Xxxxxxxx,
XX 00000
If
to the
Company:
Xxxxxxxxx
Energy Corporation
0000
Xxxxx XxxxxXxxx Xxxx.
Xxxxx
000
Xxxxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxx Xxxxxx-Xxxxxx, Director
Telecopier
Number: (000) 000-0000
6
With
a
copy to:
Certilman
Balin Xxxxx & Xxxxx, LLP
00
Xxxxxxx Xxxxxx
Xxxx
Xxxxxx, Xxx Xxxx 00000
Attention:
Xxxxx X. Xxxxx, Esq.
Telecopier
Number: (000) 000-0000
or
at
such other address as any party shall designate by notice to the other party
given in accordance with this Paragraph 13.
14. GOVERNING
LAW
This
Agreement shall be governed by, and construed and enforced in accordance
with
the laws of the State of Colorado applicable to agreements made and to be
performed entirely in Colorado.
15. WAIVER
OF BREACH; PARTIAL INVALIDITY
The
waiver by either party of a breach of any provision of this Agreement shall
not
operate or be construed as a waiver of any subsequent breach. If any provision,
or part thereof, of this Agreement shall be held to be invalid or unenforceable,
such invalidity or unenforceability shall attach only to such provision or
the
part thereof and not in any way affect or render invalid or unenforceable
any
other provisions of this Agreement, and this Agreement shall be carried out
as
if such invalid or unenforceable provision, or part thereof had been reformed,
and any court of competent jurisdiction or arbiters, as the case may be,
are
authorized to so reform such invalid or unenforceable provision, or part
thereof, so that it would be valid, legal and enforceable to the fullest
extent
permitted by applicable law.
16. ENTIRE
AGREEMENT; CONFLICTS
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter hereof. This Agreement supersedes all prior agreements,
understandings, negotiations and discussions, whether written or oral, of
the
parties hereto relating to the transactions contemplated by this Agreement.
This
Agreement may be amended only by a writing executed by the parties
hereto.
[Rest
of
Page Intentionally Left Blank; Signatures are on the Following
Page]
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IN
WITNESS WHEREOF, the
undersigned have executed this Agreement as of the day and year above
written.
XXXXXXXXX
ENERGY CORPORATION
By:
/s/
Xxxxx X. Xxxxxx
Name: Xxxxx
X. Xxxxxx
Title:
Trustee,
Board of Directors
/s/
Xxxx
X. Xxxxxx
XXXX
X. XXXXXX