Box Energy Corporation
Employment Agreement by and Between
Box Energy Corporation
and Xxxxx X. Xxxx
Exhibit 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 17th
day of March, 1997, between BOX ENERGY CORPORATION, a Delaware
corporation (the "Company"), and Xxxxx X. Xxxx (the"Employee").
In consideration of the mutual promises and covenants herein set
forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the
Employee agree as follows:
1. Employment. The Company hereby employs the Employee as
President and Chief Operating Officer of the Company upon the terms and
conditions and for the compensation herein provided, and the Employee
agrees to be so employed and to render the services as specified.
2. Term of Employment. The term of employment of the Employee
hereunder (the "Term") will be for a period of five years from the date
of this Agreement, subject to earlier termination of employment in
accordance with Section 5 hereof, renewable upon mutual agreement of the
parties. If this Agreement is not renewed at the end of the Term
because the Company does not agree to such renewal, notwithstanding the
termination of the Agreement, the Employee will be entitled to receive
the termination benefit provided in Section 6(b) hereof.
3. Duties. During the Term, the Employee agrees to devote his
full and exclusive business time and attention to the business of the
Company or any subsidiary thereof, except for vacations and sick leave
and charitable, educational and civic activities that do not detract
from the performance of his duties hereunder, in a professional and
prudent manner in accordance with the Company's policy consistent with
the Employee's position, and to devote his skill, energy, experience and
judgment to perform all duties carefully, efficiently and to the
satisfaction of the Company. The Employee shall have all the requisite
powers and agrees to perform all of the duties associated with the
position of President and Chief Operating Officer of the Company,
subject to such policies and guidelines as may be established by the
Company and agreements to which the Company is a party. The Employee
agrees not to engage in any other activity or own any interest that
would conflict with the interests of the Company or would interfere with
the Employee's responsibilities to the Company and the performance of
his duties hereunder.
4. Compensation. During the period of employment, the Company
will compensate the Employee as follows:
(a) Salary. The Company will pay the Employee for services
rendered a base salary at the rate of $210,000 per year, subject to such
withholding of taxes and other amounts as may be required by law, such
salary to be paid in equal periodic installments in accordance with the
Company's normal salary payment dates for employees. Salary will be
reviewed annually and may be increased at the sole discretion of the
Board of Directors.
(b) Bonus. In addition to base salary, the Employee will be
entitled to an annual performance bonus, with a target bonus amount of
50% of base salary, and based on performance goals and targets as
determined in the sole discretion of the Board of Directors or, if so
delegated, of the Chief Executive Officer.
(c) Benefits. During the period of employment hereunder, the
Employee shall be entitled to participate in all employee benefit plans
and programs for employees generally that the Company has in effect on
the date hereof or may hereafter establish in the future, in its sole
and absolute discretion, but the Company shall not be required to
establish any such plan or program and may discontinue any existing plan
or program at any time. The Employee shall be entitled to four weeks
paid vacation each year during the period of employment. The Company
will provide the Employee with a membership in a luncheon or petroleum
club and membership in appropriate professional associations.
(d) Stock. The Company will recommend to the Compensation
Committee of the Board of Directors the granting to the Employee,
subject to shareholder approval of appropriate stock plans, 15,000
shares of restricted Class B common stock of the Company and stock
options to purchase 100,000 shares of Class B common stock, both to vest
20% per year from the date hereof (in the event of termination of
employment, except termination by the Company for Cause (as hereinafter
defined) or by the Employee other than for Good Reason (as hereinafter
defined), such restricted stock and unvested options to fully vest and
be exercisable for 30 days following termination), and to be subject to
such restrictions and provisions as will be established by the
Compensation Committee. If the exercise price of such stock options
should be greater than the market price of the Class B common stock on
the date hereof, then the Employee will be entitled to receive on the
date or dates of the exercise of such stock options a cash bonus in an
amount equal to the difference between the exercise price of such stock
options minus the market price of the Class B common stock on the date
hereof, multiplied by the number of shares purchased by the Employee
upon the exercise of such stock option. The Employee will be eligible
for the award of periodic stock options as they may be granted in the
future at the discretion of the Compensation Committee.
(e) Reimbursements and Expenses. The Company will reimburse the
Employee for reasonable and necessary expenses incurred by the Employee
on the Company's business in accordance with such procedures as the
Company may from time to time establish, including documentation of such
expenses by the Employee. The Employee will be entitled to an
automobile allowance in an amount determined by the Chief Executive
Officer, and the Employee will be responsible for all costs and expenses
associated with such automobile.
(f) Relocation Expenses. The Company will reimburse the Employee
for normal moving expenses to relocate the Employee's residence from
Houston, Texas and, for a period not to exceed six months, will
reimburse the Employee, upon presentation of supporting documentation,
for a temporary apartment in Dallas and reasonable travel expenses
between Dallas and Houston. In the event that the Employee's residence
in Houston shall not have been sold within six months after the date
hereof, the Company will reimburse the Employee for 95% of the amount by
which the appraised value (the appraiser to be reasonably selected by
the Employee) of such residence six months from the date hereof exceeds
the gross sales price of such residence when it is sold. If the
Employment of the Employee shall terminate, except by way of resignation
of the Employee other than for Good Reason, and the Employee's residence
in Houston shall not have been sold and the Employee shall have
purchased a residence in Dallas, then the Company shall purchase for
cash one of such residences from the Employee, as selected by the
Employee, as promptly as practicable after selection by the Employee,
but in no event later than 60 days after such selection. In the case of
the Dallas residence, the purchase price shall be the prior purchase
price paid by the Employee therefor plus all out-of-pocket expenses
incurred by the Employee directly relating to such prior purchase,
including, without limitation, appraisal and survey costs and up front
lender fees and "points." In the case of the Houston residence, the
purchase price shall be 100% of the appraised value (the appraiser to be
reasonably selected by the Employee) of such residence. In each such
case the Company shall pay all customary closing costs and expenses of
such purchase and sale, including, without limitation, title insurance
for the property.
5. Termination.
(a) Death or Disability. The employment of the Employee shall
terminate immediately upon the death of the Employee. In the event of
illness, accident or other disability (physical or mental) of the
Employee as a result of which the Employee is unable to perform the
duties required hereunder for such period of time provided by the
Company's then disability policy, the Company may terminate the
employment of the Employee by written notice to the Employee, which
termination shall be effective upon the date of sending of such notice.
(b) Employee Misconduct. The Company may terminate the employment
of the Employee for "Cause" by written notice to the Employee, which
termination shall be effective upon the date of sending of such
notice,if the Employee, as determined by the Board of Directors of the
Company (i) shall have been convicted of a felony or entered a plea of
nolo contendere; (ii) shall have been involved in any act of material
fraud, theft or other material misconduct detrimental to the best
interests of the Company; (iii) shall have engaged in gross negligence
or willful misconduct with respect to his duties to the Company; (iv)
shall have engaged in competitive behavior against the Company,
misappropriated or aided in misappropriating a material opportunity of
the Company, secured or attempted to secure a personal benefit not fully
disclosed to and approved by the Board of Directors in connection with
any transaction of or on behalf of the Company; or (v) shall have failed
to substantially perform his duties hereunder, other than by reasons
specified in Section 7(a) hereof, and such failure continues more than
10 days after written notice thereof from the Company to the Employee
specifying in reasonable detail the manner of nonperformance, provided,
however, that no notice and opportunity to cure by the Employee shall be
required if the nonperformance is the same as or substantially similar
to that described in a previous notice.
(c) Resignation for Good Reason. The Employee may terminate
employment for "Good Reason" upon the occurrence and continuation for a
period of 30 days after written notice to the Company from the Employee
of any of the following: (i) any change in the Employee's duties or
responsibilities that results in the Employee not having duties and
responsibilities substantially equivalent to or greater than those the
Employee had immediately prior to such change or (ii) any failure to pay,
or any reduction of, the Employee's salary or reduction in the Employee's
participation in Company benefit plans or programs that are then available
to employees generally, provided that any reduction in performance,
incentive or bonus compensation awards, as long as the reductions also
apply to other employees, shall not constitute "Good Reason."
6. Termination Payments. Upon the termination of the employment
of the Employee prior to the expiration of the Term, the Employee shall
be entitled to the following:
(a) Death, Disability, For Cause or Resignation. In the event of
the termination of the Employee's employment by reason of death or
disability pursuant to Section 5(a) hereof, the termination of the
Employee's employment by the Company for Cause pursuant to Section 5(b),
or the resignation of the Employee other than for Good Reason pursuant
to Section 5(c), then the Employee shall be entitled to receive:
(i) all salary which is accrued and unpaid as of the date of
such termination;
(ii) all unpaid accumulated and accrued benefits due under
any benefit plan or program in which the Employee was a participant; and
(iii) all payments due with respect to accrued and unpaid
reimbursable expenses incurred by the Employee prior to the date of such
termination of employment.
(b) Without Cause or For Good Reason. Unless provided for in
Section 6(c) hereof, in the event of the termination of the Employee's
employment by the Company without Cause or the termination of employment
by the Employee for Good Reason, then the Employee shall be entitled to
receive a lump-sum cash payment equal to the sum of (i) the amount of
the Employee's then current annual base salary, plus (ii) the greater of
(A) the Employee's target bonus amount for the then current year or (B)
50% of the amount of the Employee's then annual base salary. In
addition, the Company will provide the Employee with executive
outplacement services of the Employee's choice for up to one year.
(c) Change of Control. In the event of the termination of the
Employee's employment by the Company without Cause or the termination of
employment by the Employee for Good Reason, in each case within one year
after a Change of Control (as defined below) and:
(i) such Change of Control shall occur within two years after
the date hereof, then the Employee shall be entitled to receive a
lump-sum cash payment equal to three times the sum of (I) the amount of
the Employee's then current annual base salary, plus (II) the greater of
(A) the Employee's target bonus amount for the then current year or (B)
50% of the amount of the Employee's then annual base salary; or (ii)
such Change of Control shall occur during the period commencing two
years after the date hereof and ending four years after the date hereof,
then the Employee shall be entitled to receive a lump-sum cash payment
equal to two times the sum of (I) the amount of the Employee's then
current annual base salary, plus (II) the greater of (A) the Employee's
target bonus amount for the then current year or (B) 50% of the amount
of the Employee's then annual base salary; or (iii) such Change of
Control shall occur more than four years after the date hereof, then the
Employee shall be entitled to receive a lump-sum cash payment equal to
the sum of (I) the amount of the Employee's then current annual base
salary, plus (II) the greater of (A) the Employee's target bonus amount
for the then current year or (B) 50% of the amount of the Employee's
then annual base salary. If the payment to the Employee provided in this
Section 6(c), together with all other payments, distributions and
acceleration of rights benefiting the Employee pursuant to any
agreement, plan, program or arrangement of the Company, including the
acceleration of vesting of stock options and restricted stock, shall be
subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), or any successor
provision, by reason of being contingent on a change in the ownership or
effective control of the Company pursuant to Section 280G of the Code, or
any successor provision, or subject to any comparable state or local
taxes; then the Employee shall be entitled to receive an additional
payment or payments in an amount (after taking into account federal,
state and local income taxes payable by the Employee as a result of the
receipt of such amount) necessary to place the Employee in the same
after-tax position as would have been the case if no such excise tax
were imposed.
The Company shall also provide the Employee with executive outplacement
services of the Employee's choice for up to one year.
"Change of Control" means (i) a merger or consolidation to which the
Company is a party if all persons who were stockholders of the Company
immediately prior to the effective date of such merger or consolidation
become beneficial owners (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) of less than 50%
of the total combined voting power for election of directors of the
surviving corporation or entity following the effective date of such
merger or consolidation; (ii) the acquisition or holding of direct or
indirect beneficial ownership (as defined under Rule 13d-3 of the
Exchange Act) of securities of the Company representing in the aggregate
30% or more of the total combined voting power of the Company's then
issued and outstanding voting securities by any person, entity or group
of associated persons or entities acting in concert, other than Box
Brothers Holding Company, any employee benefit plan of the Company or of
any subsidiary of the Company, or any entity holding such securities for
or pursuant to the terms of any such plan, beginning from and after such
time as Box Brothers Holding Company shall no longer have direct or
indirect beneficial ownership (as so defined) of securities of the
Company representing in the aggregate a larger percentage of the total
combined voting power of the Company's then issued and outstanding
securities than that held by any other person, entity or group; (iii)
during such time as Box Brothers Holding Company, Inc. owns or controls
a majority of the voting power for the election of directors of the
Company, a change in the ownership of a majority of the voting power for
the election of directors of Box Brothers Holding Company, Inc. such
that the entity, voting trust or group holding such voting power of Box
Brothers Holding Company, Inc. shall not include and be controlled by
Don D. Box or any affiliate of Don D. Box; (iv) the sale of all or
substantially all of the assets of the Company to any person or entity
that is not a wholly owned subsidiary of the Company; or (v) the
approval by the stockholders of the Company of any plan or proposal for
the liquidation of the Company or its subsidiaries, other than into the
Company.
7. Nondisclosure. (a) The Employee hereby acknowledges that in
connection with employment by the Company, the Employee will be exposed
to and may obtain certain information, including, without limitation,
information, trade secrets, formulae, technical data and know-how,
regarding the business and operations of the Company (collectively,
"Confidential Information"); Confidential Information, however, shall
not include information disclosed or otherwise made available to the
general public, information disclosed to third parties by the Company
without restriction on such third parties and information released from
confidential treatment by written consent of the Company. The Employee
further acknowledges that such Confidential Information is unique,
valuable, considered trade secrets and deemed proprietary by the
Company.
(b) The Employee agrees that all Confidential Information is and
will remain the property of the Company. The Employee further agrees,
for the duration of the Term and thereafter, to hold in strictest
confidence all Confidential Information, and not, directly or
indirectly, to duplicate, sell, use, lease, commercialize, disclose or
otherwise divulge to any person or entity any portion of the
Confidential Information or use any Confidential Information for the
Employee's benefit or profit or allow any person, entity or third party,
other than the Company and its authorized employees to use or otherwise
gain access to any Confidential Information.
(c) All written Confidential Information and all memoranda, notes,
records or other documents made or compiled by, or otherwise made
available to, the Employee concerning the business of the Company or its
affiliates shall be the Company's property and shall be delivered to the
Company upon the termination of the Employee's employment hereunder or
at any time upon the request of the Company. The Employee shall not at
any time have or claim any right, title or interest in any material or
matter of any sort prepared for or used in connection with the business
or promotion of the Company or its affiliates.
8. Non-Solicitation. The Employee further agrees that during
employment by the Company and for a period of one year after termination
of employment, except when acting on behalf of the Company, the Employee
will not, directly or indirectly in any manner or capacity induce any
person, who at any time during the Employee's employment was an the
employee of the Company, to discontinue his or her employment with the
Company or to interfere with the business of the Company.
9. Assignment. The Employee may not delegate the performance of
any of the Employee's obligations or duties hereunder, or assign any
rights hereunder. Any such purported delegation or assignment in the
absence of such written consent shall be null and void and of no force
or effect. Subject to the foregoing, this Agreement shall be binding
upon and shall inure to the benefit of the respective successors and
assigns of the parties hereto.
10. Survival of Covenants. Notwithstanding anything contained in
this Agreement, upon the expiration of the Term or in the event this
Agreement is terminated for any reason whatsoever, the covenants and
agreements of the Employee contained in Sections 9 and 10 hereof shall
survive any such expiration or termination and shall not lapse.
11. Severability. In case any one or more provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement;
this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
12. Waiver of Default. Any waiver by either party of a breach of
any provision in this Agreement shall not operate as or be construed as
a waiver of any subsequent breach thereof.
13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT
REGARD TO ITS RULES REGARDING CONFLICT OF LAWS.
14. Entire Agreement. This Agreement represents the entire
agreement between the parties hereto with respect to the subject matter
hereof and supersedes any and all prior agreements and understandings
with respect to such subject matter.
15. Amendment. This Agreement may not be amended, altered or
modified in any respect, except by an instrument in writing signed by
the parties hereto.
16. Notices. Notices given pursuant to the provisions of this
Agreement shall be in writing and shall be deemed given: upon receipt if
personally delivered or sent by facsimile transmission, or three days
after deposit if sent by certified mail, return receipt requested, to
the following address:
To the Company: Box Energy Corporation
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Attention: Don D. Box
Facsimile Number: (000) 000-0000
To the Employee: Xxxxx X. Xxxx
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
or such other address as shall be furnished in writing by either party
to the other party.
17. Headings. Section headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
18. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement effective as of the day and year first above written.
BOX ENERGY CORPORATION
By /s/ Don D. Box
-------------------
Don D. Box
Chairman of the Board and
Chief Executive Officer
EMPLOYEE:
/s/ Xxxxx X. Xxxx
-------------------
Xxxxx X. Xxxx
