EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of April 17, 2007 (this "Agreement") between
Dune Energy, Inc., a Delaware corporation having its principal place of business
at ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), and
▇▇▇▇ ▇▇▇▇▇▇, an individual residing in the State of Connecticut ("Executive").
WHEREAS, the Executive serves as the Company's Chairman and Chief
Executive Officer pursuant to an Employment Agreement dated as of May 12, 2005
(the "Prior Agreement");
WHEREAS, notwithstanding that the term of the Prior Agreement has not
expired, the parties thereto wish to terminate such Prior Agreement and enter
into a new employment arrangement pursuant to which Executive shall serve solely
in the capacity of Chairman of the Company's Board of Directors of the Company
(the "Board"); and
WHEREAS, the Company desires to employ Executive and Executive desires to
be employed by the Company in the capacity and for the term and compensation and
subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the parties
agree as follows:
1. Continuity of Employment: The Prior Agreement is hereby terminated and
Employer hereby employs the Executive and the Executive hereby accepts
employment upon the terms and conditions hereinafter set forth.
2. Title; Responsibilities; Reporting: During the term of this Agreement,
Executive shall diligently and faithfully: (a) serve the Company in the capacity
of Chairman of the Board ; (b) report directly to the Board; (c) discharge and
carry out all duties and responsibilities as may from time to time be assigned,
and such directions as may from time to time be given, to Executive by the Board
and (d) abide by and carry out the policies and programs of the Company in
existence or as the same may be changed from time to time.
3. Exclusivity: All services to be provided by Executive under this
Agreement shall be performed by Executive personally. During the term of this
Agreement, Executive shall devote the majority of Executive's business time,
attention and energies and all of his skills, learnings and best efforts to the
business of Company. At all times during the term of this Agreement, the
services required of Executive and the location at which he performs such
services shall not require that he reside outside of the State of Connecticut,
except for travel in the ordinary course of business. Executive may (a) serve on
corporate, civil or charitable boards or committees, (b) manage personal
investments, and (c) deliver lectures and teach at educational institutions or
events so long as such activities do not significantly interfere with the
performance of Executive's duties hereunder. It is expressly understood and
agreed that to the extent that any such activities have been conducted by
Executive prior to the Commencement Date, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto)
subsequent to the Commencement Date (as defined hereinafter) shall not
thereafter be deemed to interfere with the performance of Executive's
responsibilities to the Company.
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4. Term:
(a) The initial term of this Agreement shall commence simultaneously
with the execution of this Agreement by Executive (the "Commencement Date") and
shall end on the third year anniversary of the Commencement Date, unless sooner
extended by agreement of the parties or earlier terminated in accordance with
the provisions of this Agreement. The date on which this Agreement is scheduled
to expire is referred to as the "End Date". No more than one hundred twenty
(120) nor less than and sixty (60) days prior to an End Date (each such sixty
(60) day period is referred to as a "Renegotiation Period"), the Company and
Executive may agree in writing to extend this Agreement for an additional term.
If during any Renegotiation Period the Company and Executive fail to agree upon
an extension of this Agreement, this Agreement shall terminate as of the End
Date of the then current term notwithstanding the provision of services by
Executive after the end of the then current term. The term of this Agreement,
whether as originally scheduled, extended by agreement or shortened pursuant to
an earlier termination in accordance herewith is referred to as the "Term."
(b) Notwithstanding subparagraph (a) above, in the event that on or
before June 30, 2007, the Company has not acquired all of the outstanding
capital stock of Goldking Energy Corporation ("Goldking"), pursuant to that
certain Stock Purchase Agreement dated effective April 13, 2007, then the
initial term of this Agreement shall be for a period of one (1) year.
5. Base Salary: Commencing as of the Commencement Date, the Company shall
pay to Executive a base salary at the following per annum rates:
(a) $500,000, for the period commencing as of the Commencement Date
and ending the date immediately preceding the year anniversary date thereof (the
"First Anniversary Date");
(b) $550,000, for the period commencing as of the First Anniversary
Date and ending the date immediately preceding the year anniversary date thereof
(the "Second Anniversary Date"), provided, however, that the initial term shall
have not been reduced pursuant to Section 4(b) hereof; and
(c) $600,000, for the period commencing as of the Second Anniversary
Date and ending the date immediately preceding the year anniversary date thereof
(the "Third Anniversary Date"), provided, however, that the initial term shall
have not been reduced pursuant to Section 4(b) hereof.
The base salary shall be paid in equal monthly installments on the first day of
each month and shall be subject to such deductions by the Company as are
required to be made pursuant to law, government regulations or order. Executive
understands and agrees that Executive is an exempt Executive as that term is
applied for purposes of Federal or state wage and hour laws, and further
understands that Executive shall not be entitled to any compensatory time off or
other compensation for overtime.
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6. Performance Bonus; Transaction Bonus:
(a) During the Term of this Agreement, Executive shall be eligible
to earn a performance bonus ("Bonus"). The amount of the Bonus shall be targeted
at one-hundred percent (100%) of the then applicable base salary (the "Targeted
Bonus"), based upon quantitative and qualitative performance criteria to be
determined by the Board on or before the ninetieth (90th) day anniversary of the
Commencement Date. The actual Bonus may be less than or more than the Targeted
Bonus based upon the assessment by the Board, in its sole and absolute
discretion, of Executive's performance against such criteria. Notwithstanding
the foregoing, in no event shall the Bonus awarded in any year exceed
two-hundred percent (200%) of the then applicable base salary.
(b) So long as this Agreement has not been terminated, Executive
shall be eligible to receive a cash bonus, in the amount of $250,000, upon the
closing of the Goldking acquisition referred to in Section 4(b) above, which
bonus shall be payable from the Company to Executive within five (5) days of the
closing of such transaction.
(c) So long as this Agreement has not been terminated, Executive
shall be eligible to receive a cash bonus, in an amount equal to 0.9% (the
"Transaction Bonus") of the purchase price paid by the Company for the
acquisition of assets sourced by Executive, which Transaction Bonus shall be
payable from the Company to Executive within 5 days following the completion of
such transaction.
7. Restricted Stock Grant: The Company and Executive have executed a
certain Restricted Stock Agreement, of even date herewith, providing for a
restricted stock award of 3,000,000 shares of the Company's common stock, par
value $0.001 per share (the "Restricted Shares") to be granted to Executive in
accordance with the terms, and subject to the conditions thereof, including
compliance with the rules of the American Stock Exchange. The Restricted Stock
Agreement shall also provide that all Restricted Shares will be cancelled in the
event the Company does not complete its acquisition of all of the capital stock
of Goldking on or prior to June 30, 2007.
8. Fringe Benefits: During the Term of this Agreement, Executive shall be
entitled to major medical and full hospital insurance for Executive, his spouse
and immediate dependents, provided that Executive and his family are insurable
at "standard rates". Executive shall also be entitled to such disability, life
insurance, and other similar benefits as may be made available to other senior
officers of the Company under such group benefit plans and/or programs as may be
maintained by the Company from time to time, subject to any eligibility,
co-payment and waiting period requirements under or applicable to any such
benefit plans and/or programs. Executive acknowledges and agrees that the
Company has the right, in its sole discretion, to amend, modify or terminate any
such benefit plan or program at any time and for any reason or for no reason.
Executive's entitlement to such benefits shall end upon the termination of his
employment with the Company, however caused, except as provided (a) by
applicable law or (b) by the express terms of any such group benefit plan or
program maintained by the Company.
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9. Vacation, Etc.: During the Term of this Agreement, Executive shall be
entitled to six (6) weeks paid vacation each twelve (12) months, to be taken at
such time or times as shall be consistent with the proper performance by
Executive of his duties. No unused vacation, holidays, sick leave or personal
days may be carried forward from year to year.
10. Expense Reimbursement; Travel Policy: The Company shall provide
Executive with such reasonable business lodging and travel expense
reimbursements as are consistent with the Company's policies in effect from time
to time as they pertain to senior officers of the Company. All reimbursements by
the Company provided for in this Agreement are conditioned upon Executive's
submission to the Company of reasonably satisfactory documentation and an
itemized account for such expenses within a reasonable period after they are
incurred. Expense reports and requests for reimbursement which are submitted
later than two months after the expense is incurred will not be reimbursed
without the approval of the Company's Chief Financial Officer.
11. Other Employee Benefit Plans: During the Term, Executive shall be
entitled to participate in all employee, Executive or key-employee benefit or
incentive compensation plans maintained or established by the Company for the
purpose of providing compensation and/or benefits to employees, Executives or
key employees, generally, including without limitation, all pension, retirement,
profit sharing, savings, stock option, deferred compensation and/or restricted
stock grants. Unless otherwise provided herein, the compensation and benefits
hereunder, and Executive's participation in such plans, practices and programs
shall be on the same basis and terms as applicable to the other eligible
participants in the particular plan, practice or program. No additional
compensation provided under any such plans shall be deemed to modify or
otherwise affect the terms of this Agreement or any of Executive's entitlements
hereunder.
12. Death of Executive: In the event of Executive's death during the Term
of this Agreement, the Company's obligations and agreements under this Agreement
shall automatically terminate as of the date of such death, and in full
satisfaction thereof, the Company shall pay to Executive's estate any base
salary earned and unpaid through the date of such death and any business
expenses or other fringe benefits otherwise due to Executive. Executive's estate
shall also be entitled to payment for (i) any bonus earned in the year preceding
such termination but not yet paid and (ii) accrued but unused vacation days
during the year such termination occurs. Such event shall not be deemed a
"Termination Without Cause" as defined in Section 18 below. All other
obligations of the Company under this Agreement shall automatically cease, and
Executive's estate shall not be entitled to any other salary, payments or
benefits otherwise payable to Executive under this Agreement, except as
otherwise required by law.
13. Disability of Executive: If Executive shall, during the term of this
Agreement, suffer a "Disability," (as defined, from time to time, in a
disability plan that the Company may maintain for the benefit of its senior
officers (a "Disability Plan") or, whenever no such Disability Plan exists, as
defined in accordance with the meanings on Exhibit A hereto), then the Company
shall have the right to terminate this Agreement by written notice of such
Disability to Executive, whereupon the Company's obligations and agreements
under this Agreement shall automatically terminate as of the date of such
notice, and in full satisfaction thereof, the Company shall pay to Executive any
base salary earned and unpaid through the date of such notice (less any payments
received by Executive under a Disability Plan) and any business expenses or
other fringe benefits otherwise due to Executive. Executive shall also be
entitled to payment for (i) any bonus earned in the year preceding such
termination but not yet paid and (ii) accrued but unused vacation days during
the year such termination occurs. No such termination shall be deemed a
"Termination Without Cause". All other obligations of the Company under this
Agreement shall automatically cease, and Executive shall not be entitled to any
other salary, payments or benefits otherwise payable under this Agreement,
except as otherwise required by law.
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14. Resignation Notice; Termination: Executive agrees to give sixty (60)
days' prior written notice to the Company of any decision by Executive to resign
during the Term of this Agreement (such notice hereinafter referred to as a
"Resignation Notice"), provided, however, that in the case of Executive's
resignation for "Good Reason" as defined in Section 17 below, only fourteen (14)
days' prior written notice shall be required. Executive acknowledges and
understands that these notice periods are for the exclusive benefit of the
Company, and do not confer any employment obligation on the Company. If the
Company receives any such Resignation Notice, the Company may elect, in its sole
discretion and for any reason or for no reason, to terminate Executive's
employment, either immediately or at any point during the period indicated in
such notice.
15. Post-Resignation Actions: If Executive decides to resign from
Executive's employment with the Company, Executive agrees to make no public
announcement and no statement to persons or entities doing business with the
Company concerning Executive's departure prior to Executive's termination date
without the written consent of the Company, and to continue faithfully
performing and discharging Executive's duties and responsibilities for the
Company from the date of such Resignation Notice until such termination date.
16. Post-Resignation Obligations: Except as provided below with respect to
resignations for "Good Reason," no resignation under Section 14 hereof (or
termination by the Company following a Resignation Notice) shall be deemed to be
or treated as if it was a "Termination Without Cause" as defined below.
Executive agrees and understands that, in the event of any such resignation (or
termination by the Company following a Resignation Notice), Executive shall be
entitled to receive Executive's then applicable base salary through the date of
termination of Executive's employment and any business expenses otherwise due to
Executive. Executive shall also be entitled to payment for any bonus earned in
the year preceding such resignation but not yet paid and, in the event of a
"Resignation for Good Reason", accrued but unused vacation days during the year
such resignation occurs. All other obligations of the Company under this
Agreement shall automatically cease, and Executive shall not be entitled to any
other salary, payments or benefits otherwise payable under this Agreement,
except as otherwise required by law. The parties further agree and understand
that, in the event of any such resignation (or termination by the Company
following a Resignation Notice), Executive's obligations and agreements under
Sections 23 through 27 hereof shall continue in full force and effect in the
manner and on the terms set forth herein.
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17. Resignation for Good Reason: If Executive resigns for "Good Reason"
(as defined below), then such a resignation (a "Resignation for Good Reason")
shall be treated hereunder as if it were a "Termination Without Cause" as
defined in Section 19 below. "Good Reason" means any of the following failures
or conditions which shall remain uncured twenty (20) days after written notice
of such failure or condition is received by the Company from Executive: (i) the
failure of the Company to continue Executive in the position of the President
and Chief Executive Officer of the Company (or such other senior Executive
position as may be offered by the Company and which Executive in his sole
discretion may accept); (ii) material diminution by the Company of Executive's
responsibilities, duties, or authority in comparison with the responsibilities,
duties and authority held during the six month period immediately preceding such
diminution, or assignment to Executive of any duties inconsistent with
Executive's position as the senior Executive officer of the Company (or such
other senior Executive position as may be offered by the Company and which
Executive in his sole discretion may accept); (iii) failure by the Company to
pay and provide to Executive the compensation and benefits provided for in this
Agreement to which Executive is entitled; or (iv) the requirement that Executive
relocate his residence outside of the State of Connecticut.
18. Termination Without Cause: Executive's employment under this Agreement
may be terminated at any time by the Company, without cause, upon fourteen (14)
days' written notice to Executive (such termination referred to throughout this
Agreement as a "Termination Without Cause"). In the event of any such
Termination Without Cause, (a) Executive shall be entitled to receive
Executive's then applicable base salary through the date of termination of
Executive's employment and any business expenses or fringe benefits otherwise
due to Executive and (b) in addition, the Company agrees to pay to Executive, as
severance pay and in lieu of any further compensation for any subsequent period,
an amount equal to the two and ninety-nine one-hundredths times (2.99X) the sum
of the (1) Executive's then applicable base salary and (2) the Targeted Bonus
(the "Severance Payment"), which Severance Payment shall be payable in six (6)
equal monthly installments commencing on the first day of each month following
the date of termination. Executive shall also be entitled to payment for (i) any
bonus earned in the year preceding such termination but not yet paid and (ii)
accrued but unused vacation days during the year such termination occurs. At the
termination date, all of the Restricted Shares granted to Executive will be
immediately vested in accordance with the Restricted Stock Agreement and any
stock options or other grants made to Executive pursuant to any incentive or
benefit plans then in effect shall vest in accordance with the terms of any such
plans. All other obligations of the Company under this Agreement shall
automatically cease, and Executive shall not be entitled to any other salary,
payments or benefits otherwise payable under this Agreement, except as otherwise
required by law.
19. Termination following Change of Control: If Executive's employment is
terminated by the Company within twelve (12) months after a Change of Control
(as defined herein) for reasons other than For Cause pursuant to Section 20
below or by reason of Disability or Executive's death, (a) Executive shall be
entitled to receive Executive's then applicable base salary through the date of
termination of Executive's employment and any business expenses or fringe
benefits otherwise due to Executive and (b) in addition, the Company agrees to
pay to Executive, the Severance Payment, which Severance Payment shall be
payable in six (6) equal monthly installments commencing on the first day of
each month following the date of termination. Executive shall also be entitled
to payment for (i) any bonus earned in the year preceding such termination but
not yet paid and (ii) accrued but unused vacation days during the year such
termination occurs. At the termination date, all of the Restricted Shares
granted to Executive will be immediately vested in accordance with the
Restricted Stock Agreement and any stock options or other grants made to
Executive pursuant to any incentive or benefit plans then in effect shall vest
in accordance with the terms of any such plans. All other obligations of the
Company under this Agreement shall automatically cease, and Executive shall not
be entitled to any other salary, payments or benefits otherwise payable under
this Agreement, except as otherwise required by law.
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20. Termination For Cause: The Company, upon a vote of the Company's Board
of Directors (excluding Executive) shall be entitled to immediately terminate
Executive's services in any of the following circumstances, each of which shall
constitute "cause" for such termination:
(a) the breach by Executive, in any material respect, of this
Agreement (including, without limitation, the refusal or other failure by
Executive to perform any of Executive's duties hereunder other than a failure to
perform resulting from death or physical or mental disability) and failure by
Executive to cure such breach within ten (10) days of written notice thereof
from the Company;
(b) the commission by Executive of any act of dishonesty, fraud,
intentional material misrepresentation or moral turpitude in connection with his
employment, including, but not limited to, misappropriation or embezzlement of
any funds of the Company or any of its affiliates;
(c) the commission by Executive of any (1) willful misconduct or
gross negligence, or (2) intentional act having the effect of injuring the
reputation, business or business relationships of the Company or any of its
affiliates, and which intentional act would not reasonably be deemed to be in
the best interests of the Company;
(d) the entering by Executive of a plea of guilty or nolo contendere
to, or the conviction of Executive for, a crime (other than a routine traffic
offense) which carries a potential penalty of imprisonment for more than ninety
(90) days and/or a fine in excess of Ten Thousand Dollars ($10,000);
(e) Executive's abuse of alcohol, prescription drugs or controlled
substances to a degree which interferes with his performance on behalf of the
Company;
(f) Executive's deliberate disregard of any lawful material rule or
policy of the Company or order of the Company's Board of Directors and failure
to cure the same within ten (10) days of written notice thereof from the
Company; or
(g) excessive absenteeism of Executive other than for reasons of
illness, after written notice from the Company with respect thereto.
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If Executive is terminated for any of the causes referred to in the above
sub-paragraphs (a) through (g), all obligations of the Company under this
Agreement (except for obligations specifically referred to as continuing) shall
automatically cease, and Executive shall only be entitled to receive Executive's
then applicable base salary through the date of termination and any business
expenses or fringe benefits otherwise due to Executive and any Bonus earned in
the year preceding such termination but not yet paid. All other obligations of
the Company under this Agreement shall automatically cease, and Executive shall
not be entitled to any other salary, payments or benefits otherwise payable
under this Agreement, except as otherwise required by law. The parties further
agree and understand that, in the event of any such termination, Executive's
obligations and agreements under Sections 23 through 27 hereof shall continue in
full force and effect in the manner and on the terms set forth herein.
21. Payment Upon Expiration of Term: In the event that this Agreement
expires by the arrival of an End Date without a prior termination or
resignation, the Company agrees to pay to Executive his base salary and pro rata
Bonus earned and unpaid through the date of such expiration and any business
expenses or fringe benefits otherwise due to Executive. Executive shall also be
entitled to payment for any Bonus earned in the year preceding the expiration of
the Agreement but not yet paid and accrued but unused vacation days during the
year such expiration occurs. All other payments, benefits or arrangements
provided by the Company shall cease immediately, except as otherwise required by
law or the terms of any plan maintained by the Company. Notwithstanding the
foregoing, the parties further agree and understand that, in the event of any
such expiration, Executive's obligations and agreements under Sections 22
through 26 hereof shall continue in full force and effect in the manner and on
the terms set forth herein.
22. Gross-Up Payment:
(a) To the extent that (i) the grant of the Restricted Shares under
Section 7 hereof or (ii) the payment of any Severance Payment (or other payment
or benefit within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code")) under Sections 17, 18 and 19 hereof
(collectively, the "Payments") would be subject to taxes imposed against
Executive under the Code (inclusive of any excise tax imposed by Section 4999 of
the Code) and any state or local tax code or regulations, if applicable, or any
interest or penalties are incurred by Executive with respect to such taxes
(collectively, the "Taxes"), then the Company shall pay, and Executive will be
entitled to receive, an additional payment (the "Gross-Up Payment") in an amount
such that after payment by the Executive of all applicable Taxes (other than
interest and penalties due to Executive's failure to timely make any applicable
election, file a tax return or pay taxes shown on his return) including any
Taxes imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Taxes imposed by reason of the Payments. For the
avoidance of doubt, it is further provided that the Company shall pay all Taxes
as a result of any final determination by the Internal Revenue Service that the
right of first refusal granted to the Company in the Restricted Stock Agreement
does not decrease the value of the Restricted Shares as of the date of the grant
to the amount agreed upon by the Company and the Executive.
(b) The Company shall bear any expense necessary in determining
whether a Gross-Up Payment is required pursuant to this Agreement. The Gross-Up
Payment, if any, shall be paid by the Company to Executive on April 1st of the
year immediately following the taxable year in which such taxes accrued.
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23. Noncompetition:
(a) Executive expressly acknowledges that, in order to protect the
Company, and persons and entities that do business with the Company, it is an
essential condition of his employment that Executive agrees that during the Term
of this Agreement and (unless this Agreement is terminated as a result of a
Termination Without Cause or a Resignation For Good Reason):
(i) for a period of one (1) year thereafter, Executive will
not directly or indirectly, for his own account or on behalf of any other person
or as an employee, consultant, manager, agent, broker, stockholder, director or
officer of a corporation, investor, owner, lender, partner, joint venturer, or
otherwise engage in any business which is then directly engaged in the
exploration, drilling or production of natural gas or oil, within any one (1)
mile radius from any property in which the Company has an ownership, leasehold
or participation interest at the date of such termination;
(ii) for a period of one (1) year thereafter (i) solicit,
entice or induce any Customer (as defined below) of the Company to cease or
limit its business with the Company (except if and to the extent directed to do
so by the Chairman, Vice Chairman or Board of Directors of the Company), or to
become a customer, supplier, vendor or client of any other person (including,
without limitation, Executive, individually) or entity engaged in any activity
or business competitive with the Company if as a consequence thereof such party
shall reduce the business it does with the Company or (ii) interfere with the
relationship between the Company and any Customer, and Executive shall not
cause, assist or facilitate any person or entity in taking any such prohibited
actions;
(iii) for a period of one (1) year thereafter, solicit,
attempt to solicit or entice away from the Company's employment, any employee of
the Company, or disrupt or interfere with, or attempt to disrupt or interfere
with, the Company's relationship with any such person, and Executive shall not
cause, assist or facilitate any person or entity in taking any such prohibited
action;
(iv) disparage the Company or any of its shareholders,
directors, officers, employees or agents or take any actions that are harmful to
the Company's goodwill with its customers, employees or the public; and
(v) engage in any act or practice the purpose of which is to
evade the provisions of this covenant not to compete or to commit any act which
adversely affects the business of the Company.
For purposes of this Agreement, a "Customer" of the Company shall mean any
person or entity, who or which is, or was at any time within the prior one year
period, a purchaser of goods or services from the Company, a landlord,
sublandlord, licensor, licensee or supplier of (or prospective purchaser,
landlord, sublandlord, licensor, licensee or supplier, provided the Company was
in active discussions with such party prior to the termination of this
Agreement), to or from the Company, as the case may be.
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(b) It is understood by Executive that the covenants contained in
this Section 23 are essential elements of this Agreement and that, but for the
agreement of Executive to comply with such covenants, the Company would not have
agreed to enter into this Agreement and would not pay Executive the agreed
compensation for his services. Executive acknowledges that the provisions of
this Section 23 are reasonable and necessary for the protection of the Company
and that enforcement of the provisions of this Section 23 shall not result in an
unreasonable deprivation of the right of Executive to earn a living. The
existence of any claim or cause of action of Executive against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. The covenants of
Executive in this Section 23 shall be construed as agreements independent of any
provision in this Agreement. In the event a court of competent jurisdiction
determines that the provisions of this Section 23 are excessively broad as to
duration, geographical scope or activity, it is expressly agreed that Section 23
shall be construed so that the remaining provisions shall not be affected, but
shall remain in full force and effect, and any such overbroad provisions shall
be deemed, without further action on the part of any person, to be modified,
amended and/or limited, but only to the extent necessary to render the same
valid and enforceable in such jurisdiction.
24. Non-Disclosure of Confidential Information.
(a) Executive acknowledges and agrees that Executive's services for
the Company shall bring Executive into contact with sensitive or secret
information relating to the Company, its successors, subsidiaries, assigns,
officers, Executives, associated entities and/or agents including, but not
limited to (i) information concerning the objectives, plans, commitments,
contracts, leases, operations, Executives, methods, market investigations,
surveys, research, records, and costs and prices of the Company and/or the
Company's subsidiaries or associated entities, (ii) information concerning the
identities, objectives, plans, preferences, needs, requests, specifications,
commitments, contracts, operations, methods and records of the Company's and/or
its subsidiaries' or associated entities' lenders, prospective lenders,
investors, owners and/or prospective owners, and (iii) any and all information,
trade secrets or ideas that give the Company or its subsidiaries or associated
entities the opportunity to obtain an advantage over such competitors of the
Company or of such subsidiaries or associated entities that do not know or use
such information, trade secrets or ideas (the "Confidential Information").
(b) Executive further understands and acknowledges that Confidential
Information includes not only recorded or written information, but information
that Executive can recall or reconstruct from Executive's memory.
(c) Executive agrees that he will, at all times, faithfully hold all
such Confidential Information in the strictest of confidence and will, at all
times, use his best efforts and highest diligence to keep such Confidential
Information secret, to guard against its disclosure, and never, directly or
indirectly, to disclose or divulge any such Confidential Information to any
person, company, firm or other entity, or to use the same, except that (i)
Executive may use Confidential Information as necessary to perform his duties of
employment with the Company, (ii) Executive may disclose Confidential
Information to those within the Company who have a need to know it in the
performance of their duties for the Company, (iii) Executive may disclose
Confidential Information to parties outside the Company when, as and if he is
expressly directed to do so by Executive's supervisors within the Company, and
(iv) Executive may disclose Confidential Information as expressly directed by
judicial process, provided that Executive has promptly, and prior to making such
disclosure, provided a copy of such judicial process to the Company and the
Company does not intervene to oppose such disclosure. Executive shall use his
best efforts to afford the Company sufficient time to intervene to oppose any
such disclosure, including, if necessary, seeking reasonable extensions of
Executive's time to make such disclosure.
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(d) Executive shall continue to abide by all of his obligations
under this Agreement respecting Confidential Information not only during his
employment with the Company, but also for all time after any termination,
resignation or expiration of his employment with the Company, however caused.
(e) Notwithstanding the foregoing, after any termination or
resignation of Executive from his employment with the Company, Confidential
Information shall not include, and Executive shall not be restricted from
divulging or using, any information which Executive can demonstrate (i) is or
becomes generally available to the public other than as a result of a disclosure
by Executive, (ii) was available to Executive on a non-confidential basis prior
to its disclosure to Executive by the Company or any of its subsidiaries or
associated entities, or (iii) becomes available to Executive on a
non-confidential basis from a source other than the Company or any of its
subsidiaries or associated entities, provided, however, that such source was not
bound by a confidentiality agreement with the Company or any of its subsidiaries
or associated entities, or was not otherwise prohibited from transmitting such
information to Executive.
(f) Executive agrees that upon any termination, resignation or
expiration of his employment with the Company, however caused, Executive shall
deliver to the Company all writings, documents, recordings, computer discs or
other media of recordation or storage in his possession, custody or control
containing any Confidential Information (including, without limitation, all
duplicates and copies), shall relinquish access to any computer maintained by or
for the benefit of the Company or any of its subsidiaries or associated
entities, and shall purge all such Confidential Information (in whatever form,
including electronic data) from any electronic media or storage devices,
including computers, in Executive's possession, custody or control. To insure
compliance with this Agreement, at the time of such termination, resignation or
expiration, Executive shall provide the Company with a sworn statement, duly
notarized, that Executive has performed each and every agreement and obligation
contained or referred to in this Section.
25. Company Property: All inventions, improvements, systems, designs,
ideas, business plans, sales techniques, approaches, surveys, prospect books,
publications, memoranda, customer lists, files, notes, records, videotapes or
any other business documentation or products (including, without limitation,
Confidential Information) that Executive makes or conceives (either individually
or jointly with others) or that are made available to Executive during his
employment with the Company and until any termination, resignation or expiration
of such employment for any reason, relating to and connected with his
employment, or that Executive utilizes in carrying out his duties or
responsibilities to the Company (the "Property"), shall be the Company's
exclusive property, and Executive assigns to the Company all of his rights, if
any, in and to all such Property.
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26. Trade Names, Trademarks and Copyright: During his employment with the
Company, and continuing for all time after any termination, resignation or
expiration of such employment for any reason, Executive agrees that he shall
never have or claim any right, title or interest in any trade name, trademark or
copyright (statutory or common law) belonging to or used by the Company, its
subsidiaries, successors, assigns or associated entities, and shall never have
or claim any right, title or interest in any material or matter of any sort,
prepared for or used in connection with advertising, solicitation, circulation,
editorial content or promotion of the business of the Company, its subsidiaries,
successors, assigns or associated entities, whether produced, prepared or
published in whole or in part by Executive. Executive recognizes that the
Company and/or its subsidiaries or associated entities now have and shall
hereafter have and retain sole and exclusive rights in and to any and all such
trade names, trademarks, copyrights, material and matter.
27. Injunctive Relief: Executive expressly acknowledges and agrees that
the Property and the Confidential Information are of a special, unique, unusual,
extraordinary and intellectual character which gives them a peculiar value, and
that a breach by Executive of any of the restrictive covenants contained in
paragraphs 23 through 26 herein will cause the Company irreparable injury and
damage for which there is no adequate remedy available at law. Executive further
expressly acknowledges and agrees that the Company shall be entitled, in
addition to any remedies available at law, to injunctive or other equitable
relief to require specific performance, or to prevent a breach, of any provision
of this Agreement by Executive without any requirement or showing that the
Company has suffered any damages from such breach.
28. Further Instruments: Each of the Company and Executive shall execute,
acknowledge, deliver and procure the execution, acknowledgment and delivery to
the other of any and all further instruments which the other may reasonably deem
necessary or expedient to carry out or effectuate the purposes or intent of this
Agreement.
29. Representations. Executive represents and warrants to the Company that
Executive has the capacity and right to negotiate and enter into this Agreement,
and Executive's execution, delivery and performance of this Agreement does not
breach, interfere with or conflict with any other contractual agreement,
covenant not to compete, option, right of first refusal or other existing
business relationship or any judgment or order, in each case, to which Executive
is a party or otherwise subject.
30. Successors and Assigns: This Agreement shall not be assignable by the
Company without the prior consent of Executive, which shall not be unreasonably
withheld. For purposes of this Agreement a transfer of this Agreement in
connection with a merger, sale of a majority of the outstanding shares or
consolidation of the Company or a sale of substantially all of the Company
assets shall not constitute an assignment. This Agreement shall be binding upon
the successors, heirs, executors and personal representatives of Executive. This
Agreement contemplates the rendition of personal services by Executive and is
not assignable by Executive.
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31. Savings Clause: If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law. The Company's rights and remedies provided for
in this Agreement or by law shall, to the extent permitted by law, be
cumulative.
32. Governing Law and Construction: Any and all differences and disputes
of whatever nature arising out of or relating to this Agreement (including,
without limitation, the negotiation, execution, performance or termination of
this Agreement) shall be governed by the laws of the State of Delaware
applicable to contracts made, negotiated and to be performed entirely in such
State without giving effect to its principles of conflicts of laws. With respect
to all such differences and disputes, the parties agree and consent to be
subject to the exclusive jurisdiction of the state and federal courts located in
the State of Connecticut and consent to the exclusive venue of Connecticut.
33. Notices: All notices to be given under this Agreement shall be in
writing and shall be given by hand, by overnight courier services which obtain
acknowledgment of receipt or by certified or registered mail, return receipt
requested, addressed to the party receiving such notice (each of the foregoing
being referred to as "Written Notice"), or by facsimile transmission, such
transmission being effective as of the date thereof if followed within ten (10)
business days by Written Notice, as follows:
(a) if to the Company, to the Company's address set forth above,
with a copy to ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇▇, ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.;
(b) if to Executive, to Executive's address on file with the
Company; or
(c) to either party at such other addresses as shall have been
specified in a notice similarly given.
34. Freedom to Execute Agreement: The Company and Executive each
represent, warrant and agree that they are free to enter into this Agreement,
and that they are not subject to any obligations or disability which would
prevent them from or interfere with their fully keeping and performing all of
the covenants and conditions to be kept or performed under such agreements. The
Company and Executive further represent, warrant and agree that they have not
made and will not make any grant or assignment which conflicts with or impairs
the complete enjoyment of the rights and privileges granted to the Company and
Executive under this Agreement. Executive has had the opportunity to consult
with his personal attorney and to negotiate this Agreement at "arms-length".
35. Entire Agreement: This Agreement and the agreements annexed as
appendices hereto are intended together to constitute the entire agreement
between the Company and Executive relating to the subject matters of such
agreements, and all prior negotiations and understandings of the parties have
been merged in such agreements. No modification of any such agreements shall be
valid unless in writing and executed by the parties hereto. This Agreement
supersedes in its entirety the Prior Agreement, which effective as of the
Commencement Date is void and of no further force and effect.
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36. Waiver of Breach: The waiver of a breach or default of or under any
provision of this Agreement shall not be deemed a waiver of any other such
breach or default of any kind or nature.
37. Approvals: This Agreement has been approved by the necessary vote of
the Company's Board of Directors of the Company.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
first above written.
Company: DUNE ENERGY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and CEO
Executive: ▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇ ▇▇▇▇▇▇
Exhibit A
For the purposes of this Employment Agreement, whenever the term
"Disability" is not defined in a Disability Plan that the Company may maintain
for the benefit of its senior officers, that term shall mean that, for a period
of "120 continuous days", Executive is "limited" form performing the "material
and substantial duties" of his "regular occupation" due to his "sickness" or
"injury."
For purposes of this definition:
"120 continuous days" shall mean 120 days of sickness or injury which
meets all of the other criteria for a Disability as defined herein, with no
lapse of greater than 30 days (consecutively or in the aggregate);
"limited" from performing a duty or function means that Executive is
unable to perform such duty or function;
"material and substantial duties" means duties that are normally required
for the performance of Executive's "regular occupation" and cannot be reasonably
omitted or modified;
"regular occupation" means all of the functions that Executive was
routinely performing prior to the onset of the condition or conditions that
resulted in the Company's decision to terminate Executive's employment for
reasons related to Disability;
"sickness" means any illness or disease that renders Executive incapable
of performing material and substantial duties of his employment under the
Employment Agreement; and
"injury" means a bodily injury that is the direct result of an accident
and not related to any other cause.
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