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Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is dated as of May 3, 1999
and made by and between XXX XXXXX, INC., a Delaware corporation (the
"Company"), having its principal offices at 000 00xx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx 00000, and XXXXX X. XXXXXXXX (the "Employee"), an individual
residing at 0000 X. Xxxxx Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
W I T N E S S E T H :
NOW, THEREFORE, in consideration of the premises and the other mutual
covenants contained herein, the Company and Employee hereby agree as follows:
1. Employment. The Company hereby agrees to employ Employee, and
Employee hereby agrees to render his exclusive service to the Company, in the
capacity of President of the Company, with such duties as may be assigned to
him from time to time by the Board of Directors of the Company (the "Board")
for the period commencing on the date hereof and ending on April 30, 2002 (the
"Employment Period"), subject to earlier termination as hereinafter provided.
2. Place of Employment. Unless otherwise agreed by the Company and
Employee, throughout the Employment Period of this Agreement, Employee's
business office shall be located in Denver, Colorado, at such location in the
Denver metropolitan area as may be specified by the Board.
3. Compensation. Upon execution of this Agreement, the Company shall
pay to Employee a lump sum cash payment of One Hundred Thousand and No/100
Dollars ($100,000). Additionally, Employee shall be compensated by the Company
at a minimum base rate of Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) per annum, payable semi-monthly on the fifteenth and final days
of each month during the Employment Period, subject to such increases and
additional payments as may be determined from time to time by the Board in its
sole discretion. Such compensation shall be in addition to any group insurance,
pension, profit sharing and other employee benefits, including the Company's
existing employee benefit plans, which are extended from time to time to
Employee in the discretion of the Board and for which Employee is eligible.
Subject to such rules and procedures as are from time to time specified by the
Company, the Company shall also reimburse Employee for all reasonable expenses
incurred by him on behalf of the Company.
4. Performance of Services. Employee shall devote his full working time
to the business of the Company; provided, however, Employee shall be excused
from performing any services for the Company hereunder during periods of
temporary incapacity and during vacations conforming to the Company's standard
vacation policy (which for Employee shall be a minimum of four weeks per year),
without thereby in any way affecting the compensation to which he is entitled
hereunder.
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5. Noncompetition. Employee agrees that during his employment by the
Company and for so long thereafter as he is receiving Severance Benefit
Payments (as such term is defined in Section 10), he will not, directly or
indirectly, either through any kind of ownership (other than ownership of
securities of publicly held corporations of which Employee owns less than one
percent (1%) of any class of outstanding securities) or as a director, officer,
agent, employee or consultant, engage in any business which is competitive with
the business of the Company within the states of Texas, Wyoming, Utah,
Colorado, New Mexico, Montana or North Dakota. It is expressly agreed that the
remedy at law for breach of this covenant is inadequate and that injunctive
relief shall be available to prevent the breach thereof. Employee shall be
relieved from the restrictions of this Section 5 only in the event Employee is
terminated due to Trigger Events in accordance with the Severance Agreement (as
defined in Section 20).
6. Continuing Obligations. In order to induce the Company to enter into
this Agreement, the Employee hereby agrees that all documents, records,
techniques, business secrets and other information which have come into his
possession from time to time during his employment by the Company or which may
come into his possession during his employment hereunder, shall be deemed to be
confidential and proprietary to the Company and the Employee further agrees to
retain in confidence any confidential information known to him concerning the
Company and its subsidiaries and their respective businesses so long as such
information is not publicly disclosed; provided, however, that the express
obligation to retain such confidence shall expire eighteen (18) months after
Employee's termination of employment. In the event of a breach or threatened
breach by the Employee of the provision of this Section 6, the Company shall,
in addition to any other available remedies, be entitled to an injunction
restraining Employee from disclosing, in whole or in part, any such information
or from rendering any services to any person, firm or corporation to whom any
of such information may have been disclosed or is threatened to be disclosed.
7. Property of Company. All data, drawings and other records and
written material prepared or compiled by Employee or furnished to Employee
while in the employ of the Company shall be the sole and exclusive property of
the Company, and none of such data, drawings or other records, or copies
thereof, shall be retained by Employee upon termination of his employment.
8. Surviving Provisions. The provisions of Sections 5 (for so long as
the Employee is receiving Severance Benefit Payments), 6 and 7 of this
Agreement shall continue to be binding upon Employee in accordance with their
terms, notwithstanding termination of Employee's employment hereunder for any
reason.
9. Termination for Cause. It is agreed and understood that the Company
can terminate the employment of the Employee under this Agreement without
obligation to pay the Severance Benefit Payment (as described below) if such
termination is for cause, and that, without prejudice to the generality of the
right to terminate for cause, each of the following contingencies shall be
examples of cause:
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(i) conviction of a felony or a misdemeanor involving moral turpitude,
(ii) failure to perform his duties or responsibilities in a manner
satisfactory to the Company, (iii) engagement in conduct which is
injurious (monetarily or otherwise) to the Company or any of its
affiliates (including, without limitation, misuse of the Company's or
an affiliate's funds or other property), (iv) engagement in business
activities which are in conflict with the business interests of the
Company, (v) insubordination or (vi) engagement in conduct which is in
violation of the Company's safety rules or standards or which otherwise
causes injury to another employee or any other person (collectively,
termination for "cause"); provided, however, that if the Board
determines, in the reasonable exercise of its discretion and business
judgment, the matter is such that it may be cured by the employee, the
Board shall provide written notice specifying the matters constituting
cause for dismissal as well as the manner in which the matters shall be
cured, and the employee shall be given 30 days to correct the matters
in a manner satisfactory to the Board.
The Company may for cause terminate Employee's employment under this
Agreement without advance notice, except as otherwise specifically provided for
in respect of cureable situations. Termination shall not affect any of the
Company's other rights and remedies.
10. Severance Benefit Payment. The Company shall provide Employee with
a severance benefit payment in an amount equal to the Employee's then existing
annual base pay (or an amount equal to the Employee's base pay for the balance
of the term hereof if less than one year) (the "Severance Benefit Payment")
upon the occurrence of any one of the events specified in subsections (a)
through (d) below and Employee's subsequent resignation from or termination of
employment (each, a "Severance Event"):
(a) Without the express written consent of Employee, the
assignment of Employee to any duties inconsistent with his position,
duties, responsibilities or status with the Company as such exist as of
the date hereof or a reduction of his duties or responsibilities for
reasons other than cause;
(b) Any failure of the Company to obtain the assumption of the
obligation to perform this Agreement by any successor as contemplated
in Section 13 hereof;
(c) Any failure by the Company or its stockholders, as the case
may be, to re-elect the Employee to the corporate office of President,
or upon his removal from any such office for reasons other than cause;
or
(d) Any breach by the Company (or any successor) of any of the
provisions of this Agreement or any failure by the Company to carry out
any of its obligations hereunder for reasons other than cause.
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The Severance Benefit Payment shall be paid to Employee in semi-monthly
installments in the same amounts and at the same times as Employee's base pay
was being paid at the time of the Severance Event, until the full amount of the
Severance Benefit Payment has been paid.
11. Payment of Certain Costs of Employee. If a dispute arises regarding
a termination of the Employee or the interpretation or enforcement of this
Agreement, all legal fees and expenses incurred by the Employee in contesting
or disputing any such termination or seeking to obtain or enforce any right or
benefit provided for in this Agreement or in otherwise pursuing his claim will
be paid by the Company, to the extent the Employee prevails. The Company
further agrees to pay prejudgment interest on any money judgment obtained by
the Employee calculated at the Chase Manhattan Bank prime interest rate in
effect from time to time from the date that payment(s) to him should have been
made under this Agreement.
12. Mitigation. The Employee is not required to mitigate the amount of
any payments to be made by the Company pursuant to this Agreement by seeking
other employment or otherwise.
13. Successors. (a) The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Employee, to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Employee to compensation from the Company in the same amount and on the same
terms as the Employee would be entitled hereunder if he were to terminate his
employment pursuant to subsections 10(a), 10(b), 10(c) or 10(d). As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which executes and
delivers the agreement provided for in this Section 13 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
(b) This Agreement shall inure to the benefit of and be enforceable by
the Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Employee should
die during the term hereof, the Company shall pay an amount equal to any amounts
then payable to Employee hereunder, plus an amount equal to three months'
salary, with all such amounts to be paid to Employee's devisee, legatee or other
designee or, if there be no designee, to his estate.
14. No Inconsistent Obligation. Employee represents and warrants that
he has not previously assumed any obligations inconsistent with those of this
Agreement.
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15. Modification. This Agreement shall be in addition to all previous
agreements, written or oral, relating to Employee's employment by the Company,
and shall not be changed orally, but only by a written instrument to which the
Company and the Employee are both parties.
16. Binding Effect. This Agreement and the rights and obligations
hereunder shall be binding upon and inure to the benefit of the parties hereto
and their respective legal representatives, and shall also bind and inure to
the benefit of any successor of the Company by merger or consolidation or any
assignee of all or substantially all of its properties.
17. Law Governing. This Agreement is made, accepted and delivered in
Denver, Colorado, is performable in Denver, Colorado, and it shall be construed
and enforced according to the laws of the State of Colorado. Venue shall lie in
the City and County of Denver, Colorado for the purpose of resolving and
enforcing any dispute which may arise under this Agreement and the parties
agree that they will submit themselves to the jurisdiction of the competent
State or Federal Court situated in the City and County of Denver, Colorado.
18. Invalid Provision. In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be impaired thereby.
19. Notice. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to Employee:
Xxxxx X. Xxxxxxxx
0000 X. Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
If to Company:
Xxx Xxxxx, Inc.
000 00xx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: General Counsel
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
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20. Effective May 3, 1999, Employee and the Company have entered into
that certain Severance Agreement (the "Severance Agreement") which provides
Employee with compensation in the event of a Change in Control or an Asset
Acquisition (each as defined therein and collectively referred to herein as
"Trigger Events"). Notwithstanding anything to the contrary set forth in this
Agreement, if Employee's employment with the Company is terminated such that
the provisions of the Severance Agreement are applicable to Employee, Employee
shall have the option to accept the greater of the benefits of this Agreement
or the Severance Agreement (which benefits are intended to be mutually
exclusive and not cumulative upon a termination in conjunction with the
occurrence of either of the Trigger Events).
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
EMPLOYEE XXX XXXXX, INC.
By: /s/ XXXXX X. XXXXXXXX By: /s/ XXXXXX X. XXXXX
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Xxxxx X. Xxxxxxxx Xxxxxx X.Xxxxx
Chief Executive Officer
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