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EXHIBIT 10.6.2
CONFIDENTIALITY AND NON-COMPETE AGREEMENT
CONFIDENTIALITY AND NON-COMPETE AGREEMENT (this "AGREEMENT"), dated as
of September 30, 1996, between Titan Exploration, Inc., a Delaware corporation
(the "COMPANY"), Titan Resources I, Inc., a Texas corporation (the "GENERAL
PARTNER"), and [See Schedule II attached hereto], an individual residing in
Midland, Texas (the "EMPLOYEE").
WHEREAS, the General Partner is the general partner of Titan
Resources, L.P., a Texas limited partnership (the "PARTNERSHIP");
WHEREAS, the Company has been recently created and organized to serve
as the holding company of the General Partner and the Partnership in connection
with a transaction in which the shareholders of the General Partner and the
limited partners of the Partnership exchanged their ownership interests for
common stock of the Company (the "REORGANIZATION");
WHEREAS, in connection with the Reorganization, the Company will adopt
certain option plans pursuant to which particular employees and directors will
be eligible to receive options (the "OPTIONS") to purchase the common stock of
the Company on the terms provided by those option plans and the related option
agreements to be executed in connection therewith;
WHEREAS, the Company and/or the General Partner desire to employ
Employee on an "at-will" basis, and Employee desires to be employed on such
basis;
WHEREAS, Employee acknowledges that in the course of his employment by
the Company and/or the General Partner and his performance of services on
behalf of the Company, the General Partner and their respective subsidiaries
and affiliates, if any (the "RELATED PARTIES"), Employee will become privy to
various business opportunities, economic and trade secrets and relationships of
the Related Parties;
WHEREAS, it is a condition to (i) the employment of Employee by the
Company and/or the General Partner, and (ii) the eligibility of Employee to
receive any grants of the Options, that Employee enter into a confidentiality
and non-compete agreement on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of, and as a material inducement to,
Employee's eligibility to receive grants of Options and the employment of
Employee by the Company and/or the General Partner, the parties intending to be
legally bound, hereby agree as follows:
1. Business Opportunities and Intellectual Property.
(a) Employee shall promptly disclose to the Company and the
General Partner all "Business Opportunities" and "Intellectual Property" (as
defined below).
(b) Employee hereby assigns and agrees to assign to the Company
and the General Partner, its successors, assigns, or designees, all of
Employee's right, title, and interest in and to all Business Opportunities and
Intellectual Property, and further acknowledges and agrees that all
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Business Opportunities and Intellectual Property constitute the exclusive
property of the Company and the General Partner.
(c) For purposes hereof "BUSINESS OPPORTUNITIES" shall mean all
business ideas, prospects, proposals or other opportunities pertaining to the
lease, acquisition, exploration, production, gathering or marketing of
hydrocarbons and related products and the exploration potential of geographical
areas on which hydrocarbon exploration prospects are located, which are
developed by Employee during the Employment Term, or originated by any third
party and brought to the attention of Employee during the period that Employee
is employed by any of the Related Parties (the "EMPLOYMENT TERM"), together
with information relating thereto (including, without limitation, geological
and seismic data and interpretations thereof, whether in the form of maps,
charts, logs, seismographs, calculations, summaries, memoranda, opinions or
other written or charted means).
(d) For purposes hereof "INTELLECTUAL PROPERTY" shall mean all
ideas, inventions, discoveries, processes, designs, methods, substances,
articles, computer programs, and improvements (including, without limitation,
enhancements to, or further interpretation or processing of, information that
was in the possession of Employee prior to the date of this Agreement), whether
or not patentable or copyrightable, which do not fall within the definition of
Business Opportunities, which Employee discovers, conceives, invents, creates,
or develops, alone or with others, during the Employment Term, if such
discovery, conception, invention, creation, or development (i) occurs in the
course of Employee's employment with the Company or the General Partner, or
(ii) occurs with the use of any of the Related Parties' time, materials, or
facilities, or (iii) in the opinion of the Board of Directors of the Company or
of the General Partner, relates or pertains in any way to the Related Parties'
purposes, activities, or affairs;
2. Non-Compete Obligations During Employment Term. Employee
agrees that during the Employment Term:
(i) Employee will not, other than through the Company and the
General Partner, engage or participate in any manner, whether directly
or indirectly through any family member or as an employee, employer,
consultant, agent, principal, partner, more than one percent
shareholder, officer, director, licensor, lender, lessor or in any
other individual or representative capacity, in any business or
activity which is engaged in leasing, acquiring, exploring, producing,
gathering or marketing hydrocarbons and related products; and
(ii) all investments made by Employee (whether in his own name
or in the name of any family members or made by Employee's controlled
affiliates), which relate to the lease, acquisition, exploration,
production, gathering or marketing of hydrocarbons and related
products shall be made solely through the Related Parties; and
Employee will not (directly or indirectly through any family members),
and will not permit any of his controlled affiliates to: (A) invest or
otherwise participate alongside the Related Parties in any Business
Opportunities, or (B) invest or otherwise participate in any business
or activity relating to a Business Opportunity, regardless of whether
any of the Related Parties ultimately participates in such business or
activity;
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provided that, this Section 2 shall not apply to (x) the existing personal oil
and gas investments owned by Employee, his family members and his controlled
affiliates as of the date hereof, which are described in a schedule,
substantially in the format set forth as Schedule I hereto, delivered to the
Company within 30 days of the date hereof (the "EXISTING PERSONAL
INVESTMENTS"), and (y) future expenditures made by Employee, his family members
and his controlled affiliates which are required to maintain, but not increase,
their respective current ownership interests in the Existing Personal
Investments, excluding however, any expenditure to participate in the
acquisition, exploration or development of any acreage which is not currently
included in the Existing Personal Investments as of the date hereof, unless
such opportunity is first offered to, and subsequently declined by, the Company
or the General Partner.
3. Confidentiality Obligations.
(a) Employee hereby acknowledges that all trade secrets and
confidential or proprietary information of the Related Parties (collectively
referred to herein as "CONFIDENTIAL INFORMATION") constitutes valuable, special
and unique assets of the Related Parties' business, and that access to and
knowledge of such Confidential Information is essential to the performance of
Employee's duties hereunder. Employee agrees that during the Employment Term
and during the one year period following the date of termination of Employee's
employment by the Related Parties (the "TERMINATION DATE"), Employee will hold
the Confidential Information in strict confidence and will not publish,
disseminate or otherwise disclose, directly or indirectly, to any person other
than the Related Parties and their respective officers, directors and
employees, any Confidential Information or use any Confidential Information for
Employee's own personal benefit or for the benefit of anyone other than the
Related Parties.
(b) For purposes of this Section 3, it is agreed that Confidential
Information includes, without limitation, any information heretofore or
hereafter acquired, developed or used by any of the Related Parties relating to
Business Opportunities or Intellectual Property or other geological,
geophysical, economic, financial or management aspects of the business,
operations, properties or prospects of the Related Parties, whether oral or in
written form in a "Related Parties' Business Records" (as defined in Section 5
below), but shall exclude any information which (i) has become part of the
common knowledge or understanding in the oil and gas industry or otherwise in
the public domain (other than from disclosure by Employee in violation of this
Agreement), or (ii) was rightfully in the possession of Employee, as shown by
Employee's records, prior to the date of this Agreement; provided, however,
that Employee shall provide to the Company copies of all information described
in clause (ii); and provided further that this Section 3 shall not be
applicable to the extent Employee is required to testify in a judicial or
regulatory proceeding pursuant to the order of a judge or administrative law
judge after Employee requests that such Confidential Information be preserved.
4. Post Employment Non-Compete Covenant.
(a) Employee agrees that during the one year period following the
Termination Date, he will not engage or participate in any manner, whether
directly or indirectly through any family member or as an employee, employer,
consultant, agent, principal, partner, more than one percent shareholder,
officer, director, licensor, lender, lessor or in any other individual or
representative capacity, in any business or activity which is in direct
competition with the business of the
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Related Parties as to leasing, acquiring, exploring, producing, gathering or
marketing hydrocarbons and related products within the boundaries of, or within
a two mile radius of the boundaries of, any mineral property interest of any of
the Related Parties (including, without limitation, a mineral lease, overriding
royalty interest, production payment, net profits interest, mineral fee
interest, or option or right to acquire any of the foregoing, or an area of
mutual interest as designated pursuant to contractual agreements between any of
the Related Parties and any third party) or any other property on which the
Related Parties has an option, right, license, or authority to conduct or
direct exploratory activities, such as three dimensional seismic acquisition or
other seismic, geophysical and geochemical activities (but not including any
preliminary geological mapping), as of the Termination Date; provided that,
this Section 4 shall not preclude Employee from:
(i) making investments in securities of oil and gas companies
which are registered on a national stock exchange, if (A) the
aggregate amount owned by Employee and all family members and
affiliates does not exceed 5% of such company's outstanding
securities, and (B) the aggregate amount invested in such investments
by Employee and all family members and affiliates after the date
hereof does not exceed $3,000,000; or
(ii) maintaining his Existing Personal Investments, if such
personal investments do not involve any business activity that relates
to the lease, acquisition, exploration, production, gathering or
marketing of hydrocarbons and related products other than as permitted
by Section 2; and
(b) Employee agrees that during the one year period following the
Termination Date, he will not solicit, entice, persuade or induce, directly or
indirectly, any employee (or person who within the preceding ninety (90) days
was an employee) of any of the Related Parties or any other person who is under
contract with or rendering services to any of the Related Parties, to (i)
terminate his or her employment by, or contractual relationship with, such
person, (ii) refrain from extending or renewing the same (upon the same or new
terms), (iii) refrain from rendering services to or for such person, (iv)
become employed by or to enter into contractual relations with any Persons
other than such person, or (v) enter into a relationship with a competitor of
any of the Related Parties.
5. Business Records.
(a) Employee agrees to promptly deliver to the Company, upon
termination of his employment by the Related Parties, or at any other time when
the Company so requests, all documents relating to the business of the Related
Parties, including, without limitation: all geological and geophysical reports
and related data such as maps, charts, logs, seismographs, seismic records and
other reports and related data, calculations, summaries, memoranda and opinions
relating to the foregoing, production records, electric logs, core data,
pressure data, lease files, well files and records, land files, abstracts,
title opinions, title or curative matters, contract files, notes, records,
drawings, manuals, correspondence, financial and accounting information,
customer lists, statistical data and compilations, patents, copyrights,
trademarks, trade names, inventions, formulae, methods, processes, agreements,
contracts, manuals or any other documents relating to the business of the
Related Parties, (collectively, the "RELATED PARTIES' BUSINESS RECORDS"), and
all copies thereof and therefrom.
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(b) Employee confirms that all of the Related Parties' Business
Records (and all copies thereof and therefrom) which are required to be
delivered to the Company pursuant to this Section 5 constitute the exclusive
property of the Company and the other Related Parties.
(c) The obligation of confidentiality set forth in Section 3 shall
continue notwithstanding Employee's delivery of any such documents to the
Company.
(d) Notwithstanding the foregoing provisions of this Section 5 or
any other provision of this Agreement, Employee shall be entitled to retain any
written materials which, as shown by Employee's records, were in Employee's
possession on or prior to the date hereof, subject to the Company's right to
receive a copy of all such materials.
(e) The provisions of this Section 5 shall continue in effect
notwithstanding termination of Employee's employment hereunder for any reason.
6. Miscellaneous.
(a) The invalidity or non-enforceability of any provision of this
Agreement in any respect shall not affect the validity or enforceability of
this Agreement in any other respect or of any other provision of this
Agreement. In the event that any provision of this Agreement shall be held
invalid or unenforceable by a court of competent jurisdiction by reason of the
geographic or business scope or the duration thereof, such invalidity or
unenforceability shall attach only to the scope or duration of such provision
and shall not affect or render invalid or unenforceable any other provision of
this Agreement, and, to the fullest extent permitted by law, this Agreement
shall be construed as if the geographic or business scope or the duration of
such provision had been more narrowly drafted so as not to be invalid or
unenforceable.
(b) Employee acknowledges that the Related Parties' remedies at
law for any breach of the provisions of this Agreement is and will be
insufficient and inadequate and that the Company and the General Partner shall
be entitled to equitable relief, including by way of temporary and permanent
injunction, in addition to any remedies the Company and the General Partner may
have at law.
(c) The representations and covenants contained in this Agreement
on the part of Employee will be construed as ancillary to and independent of
any other agreement between the Company and/or the General Partner and
Employee, and the existence of any claim or cause of action of Employee against
the Company or any of the other Related Parties or any officer, director, or
shareholder of the Company or any of the other Related Parties, whether
predicated on Employee's employment or otherwise, shall not constitute a
defense to the enforcement by the Company or the General Partner of the
covenants of Employee contained in this Agreement. In addition, the provisions
of this Agreement shall continue to be binding upon Employee in accordance with
their terms, notwithstanding the termination of Employee's employment for any
reason.
(d) The parties to this Agreement agree that the limitations
contained in Section 4 with respect to time, geographical area, and scope of
activity are reasonable. However, if any court shall determine that the time,
geographical area, or scope of activity of any restriction contained
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in Section 4 is unenforceable, it is the intention of the parties that such
restrictive covenant set forth herein shall not thereby be terminated but shall
be deemed amended to the extent required to render it valid and enforceable.
(e) Any notices or other communications required or permitted to
be sent hereunder shall be in writing and shall be duly given if personally
delivered or sent postage pre-paid by certified or registered mail, return
receipt requested, if to Employee at the address set forth opposite Employee's
name on the signature page hereof, and if to the Company or the General
Partner, at 000 Xxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000. Either party may
change his or its address for the sending of notice to such party by written
notice to the other party sent in accordance with the provisions hereof.
(f) This Agreement may not be altered or amended except by a writing,
duly executed by the party against whom such alteration or amendment is sought
to be enforced.
(g) This Agreement may be executed in counterparts, each of which
shall be an original and all of which together shall constitute one and the
same instrument.
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement in multiple counterparts as of the day and year first above written.
COMPANY
TITAN EXPLORATION, INC.
By:
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Name:
------------------------
Title:
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GENERAL PARTNER
TITAN RESOURCES I, INC.
By:
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Name:
------------------------
Title:
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ADDRESS FOR NOTICE: EMPLOYEE
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[See Schedule II attached hereto]
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SCHEDULE I
FORM OF SCHEDULE OF EXISTING INVESTMENT
Well Name Nature of Interest Lessor/Owner Lessee Acquired Location/County Description WI% NRI%
--------- ------------------ ------------ ------ -------- --------------- ----------- --- ----
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SCHEDULE II
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxx
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