EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made effective the 14th day of June 1999, by
and between Voice Design, Inc., a Texas corporation, with principal offices
located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ 77054(hereinafter
referred to as "Employer"), and ▇▇▇▇▇▇▇ "▇▇▇▇" ▇▇▇▇▇▇, a resident of ▇▇▇▇▇▇
County, Texas (hereinafter referred to as "Employee").
WITNESSETH:
WHEREAS, the Company desires to employ Employee as its President and
Employee is desirous of undertaking such responsibilities;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DUTIES
1.1 Duties. During the term of this Agreement, the Company agrees to employ
Employee as the Company's President and Employee agrees to serve the Company
in such capacities or in such other capacities (subject to Employee's
termination rights under section 4.2) as the Board of Directors of the
Company may direct, all upon the terms and subject to the conditions set
forth in this Agreement.
1.2 Extent of Duties. Employee shall devote substantially all of his
business time, energy and skill to the affairs of the Company as the
Company, acting through its Board of Directors, shall reasonably deem
necessary to discharge Employee's duties in such capacities. Employee with
extensive local public service may participate in social, civic, charitable,
religious, business, education or professional associations, so long as such
participation would not materially detract from Employee's ability to perform
his duties under this Agreement. Employee shall not engage in any other
business activity during the term of this Agreement without prior written
consent of the Company, other than the passive management of Employee's
personal investment or activities which would not materially detract from
Employee's ability to perform his duties under this Agreement (such as
Employee's current positions with other companies and other future positions
of a similar nature.)
ARTICLE II
TERM OF EMPLOYMENT
The term of this AGREEMENT shall commence on the effective date and continue
for a period of three (3) years, except if terminated as provided herein.
This Agreement is subject to earlier termination as hereinafter provided.
Within six months from the expiration of the term, the parties agree to meet
to negotiate an extension of the employment agreement on terms mutually
acceptable to all parties.
ARTICLE III
COMPENSATION
3.1 Annual Base Compensation. As compensation for services rendered under
this Agreement, Employee shall be entitled to receive from Company an annual
base salary (before standard deductions) of no less than $75,000 during the
initial term of this Agreement. Employees' annual base salary shall be
subject to review and adjustment by the Compensation Committee of the
Company on an annual basis, provided that there shall not be any downward
adjustment. Employees' annual base salary shall be payable at regular
intervals in accordance with the prevailing practice and policy of the Company.
3.2 Incentive Bonus. As additional compensation for services rendered under
this Agreement, the Compensation Committee may, in its sole discretion and
without any obligation to do so, declare that Employee shall be entitled to
an annual incentive bonus (whether payable in cash, stock, stock rights or
other property) as the Compensation Committee shall determine. If any such
bonus is declared, the bonus shall be payable in accordance with the terms
prescribed by the Compensation Committee. Should the Company change control,
the Compensation Committee may consider a bonus to the Employee as part of a
severance package
3.3 Other Benefits. Employee shall, in addition to the compensation
provided for in Sections 3.1 and 3.2 above, be entitled to the following
additional benefits:
a) Life Insurance. The Company shall purchase term life insurance policies in
the aggregate amount of two times the Employee's annual salary to be owned
by Employee or his designee.
b) Medical, Health and Disability Benefits. Employee shall be
entitled to receive all of the medical, health and disability benefits that
may, from time to time, be provided by the Company.
c) Vacation Pay. Employee shall be entitled to an annual vacation as
determined in accordance with the prevailing practice and policy
of the Company but in no: event less than two (2) weeks per calendar
year during the initial year of employment and three (3) weeks per calendar
year in years two and three of this Agreement.
d) Holidays. Employee shall be entitled to holidays in accordance with the
prevailing practice and policy of the Company.
e) Reimbursement of Expenses. The Company shall reimburse Employee for
all expenses reasonably incurred by Employee on behalf of the Company
including, but not limited to, entertainment expenses and cellular phone
expenses in accordance with the prevailing practice and policy of the
Company. However, Employee shall obtain pre-approval for the expenditure
of any single expense in excess of $250.
ARTICLE IV
TERMINATION
4.1 Termination by the Company Without Cause. Subject to the provisions of
this Section 4. 1, this Agreement may be terminated by the Company without
cause upon 30 days prior written notice thereof given to Employee. In the
event of termination pursuant to this Section 4. 1, (a) the Company shall at
the election of Employee either (x) continue to pay Employee his then
effective base salary under Section 3.1 hereof and all benefits under
Sections 3.3 hereof through the expiration of the three-year term then in
effect or (y) pay Employee, within 45 days of such termination, a lump sum
payment equal to (without discounting present value) his then aggregate
effective base salary owed under Section 3.1 hereof through the expiration
of the three-year term then in effect. Employee must make election under
clause (a) above by giving the Company written notice thereof within 3 0
days after notice of termination is given pursuant to this section 4. 1. If
Employee does not make such an election within the 30-day period, he will be
deemed to have elected to receive the payment described in clause (a)(x)
above. Payment or performance by the Company in accordance with this Section
shall constitute Employee's full severance pay and the Company shall have no
further obligation to Employee arising out of such termination.
4.2 Voluntary Termination by Employee for Good Reason. Employee may at any
time voluntarily terminate his employment for "good reason" (as defined
below) upon 30 days prior written notice thereof to the Company. In the
event of such voluntary termination for "good reason". (a) the Company shall
at the election of Employee either continue to pay Employee his then
effective base salary under Section 3.1 hereof and all benefits under
Section 3.3 hereof through the expiration of the three-year term then in
effect or pay Employee, within 45 days of such termination, a lump sum
payment equal to (without discounting to present value) his then effective
base salary under Section 3.1 hereof through the expiration of the
three-year term then in effect.
Employee must make his election under clause (a) above by giving the Company
written notice thereof with 30 days after notice of termination is given
pursuant to this Section 4.2. If Employee does not make such an election
within the 30-day period, he will be deemed to have elected to receive the
lump sum payment described in clause (a)(x) above.
For purposes of this Agreement, "good reason" shall mean the occurrence of
any of the following events:
a) Removal from the office(s) Employee holds on the date of this
Agreement or a material reduction in Employee's authority or responsibility,
including, without limitation, involuntary removal from the Board of
Directors, but not including termination of Employee for "cause", as defined
below, or
b) Relocation of the Company's headquarters from its current location without
the approval of Employee; or
c) An involuntary reduction in the Employee's compensation; or
d) The Company otherwise commits a material breach of this Agreement.
4.3 Termination by the Company for Cause. The Company may terminate this
Agreement at any time if such termination is for "cause" (as defined below),
by delivering to Employee written notice describing the cause of termination
30 days before the effective date of such termination and by granting Employee
at I : east 3 0 days to cure the cause. In the event the employment
of Employee is terminated for "cause", Employee shall be entitled only to
the base salary earned pro rata to the date of such termination with 0:0
entitlement to any base salary continuation payments or benefits continuation
(except as specifically provided by the terms of an employee benefit plan of
the Company). Except as otherwise provided in this Agreement, the
determination of whether Employee shall be terminated for "cause" shall be made
by the Board of Directors of the Company, in reasonable exercise of its
business judgment, and shall be limited to the occurrence of the following
events:
a) Conviction of or a~ plea of nolo contendere to the charge of a felony
(which, through lapse of time or otherwise, is not subject to appeal);
b) Willful refusal without proper legal cause to perform, or gross negligence
in performing, Employee's duties and responsibilities;
c) Material breach of fiduciary duty to the Company through the
misappropriation of Company funds or property; or
d) The unauthorized absence of Employee from work (other than for sick leave
or disability) for 4 period of 15 business days or more during any period of
45 business days during the term of this Agreement.
4.4 Termination Upon Death or Permanent Disability. In the event that Employee
dies, this Agreement shall terminate upon the Employee's death. Likewise, if
the Employee becomes unable to perform the essential functions of the position,
with or without reasonable accommodation, on account of illness, disability, or
other reason whatsoever for a period of more than six consecutive or
nonconsecutive months in any twelve month period, this Agreement shall
terminate effective upon such incapacity, and Employee (or his legal
representatives/trust) shall be entitled only to the base salary earned
pro rata to the date of s: ch termination with no entitlement to any base
salary continuation payments or benefits continuation (except as specifically
provided by the terms of an employee benefit plan of the Company.
4.5 Voluntary Termination by Employee. Employee may terminate this Agreement
at any time upon delivering 30 days written notice of resignation to the
Company. In the event of such voluntary termination other than for "good
reason" (as defined above), Employee shall be entitled to his base salary
earned pro rata to the date of his resignation, but no base salary
continuation payments or benefits continuation (except as specifically
provided by the terms of an employee benefit plan of the Company, on or after
the date the Company receives notice of Employee's resignation, the Company
may, at its option, pay Employee his base salary through the effective date
of his resignation and terminate his employment immediately.
4.6 Termination following Change of Control.
a) Notwithstanding anything to the contrary herein, should Employee at any
time within 12 months of the occurrence of a "change of control" (as defined
below) cease to be~ an employee of the Company (or its successor), by reason
of (i) termination by the Company (or its successor) other than for "cause"
or (ii) voluntary termination by Employee for "good reason upon change of
control" (as defined below), then in any such event,
(1) If the Company is merged or acquires a company in a field outside of
the current product alignment, the Company and Employee could
consider the assignment of existing product lines and technology to
Employee or Employee's assignee as part of or in lieu of the value of
the settlement severance pay highlighted above.
(2) The Company shall at the election of Employee either continue to pay
Employee his then effective base salary, under Section 3.1 hereof and
all benefits under Sections 3.3 hereof through the expiration of the
term described then in effect or (y) pay Employee, within 45 days of
the severance of employment described in this Section 4.6, a lump
sum payment equal to (without discounting present value) his then
effective base salary under Section 3.1 hereof through the expiration
of the three-year term then in effect.
b) As used in this Section, voluntary termination by Employee "for good
reason upon change of control" shall mean (i) removal of Employee from the
offices Employee holds on the date of this Agreement, (ii) a material reduction
in Employee's authority or responsibility, including, without limitation,
involuntary removal from the Board of Directors, (iii) relocation of the.
Company's headquarters from its then current location, (iv) a involuntary
reduction in Employee compensation without the approval of Employee, or
(v) the Company otherwise commits a breach of this Agreement.
c) As used in this Agreement, a "change of control" shall be deemed to
have occurred if (i) any "'Person" (as such term is used in Sections 12(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), is or becomes a "beneficial owner" (as defined in Rule 12d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing more than 50% of the combined voting power of the Company's
then outstanding securities, or (ii) at any time during the 24 month period
after a tender offer, merger, consolidation, sale of assets or contested
election, or any combination of such transactions, at least a majority of the
Company's Board of Directors shall cease to consist of "continuing directors"
(meaning directors of the Company who either were directors prior to such
transaction or who subsequently became directors and whose election, or
nomination for election by the Company's stockholders, was approved by a vote
of a least two-thirds of the directors then still in office who were directors
prior to such transaction), or (iii) the stockholders of the Company approve
a merger or consolidation of the Company with any other corporation, other
than a merger or consolidation that would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity) at least 51% of the total voting power represented
by the voting securities :of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (iv) the stockholders of the
Company approve a plan for complete liquidation of the Company or an agreement
of sale or disposition by the Company of all or substantially all of the
Company's assets.
4.7 Exclusivity of Termination Provisions. The termination provisions of
this Agreement regarding the parties' respective obligations in the event
Employee's employment is terminated, are intended to be exclusive and in
lieu of any other rights or remedies to which Employee or the Company may
otherwise be entitled by law, in equity or otherwise. It is also agreed
that, although the personnel policies and fringe benefit programs of the
Company may be unilaterally modified from time to time, the termination
provisions of the Agreement are not subject to modification, whether orally,
implied or in writing, unless any such modification is mutually agreed upon
and signed by the parties.
ARTICLE V
CONFIDENTIAL INFORMATION AND NONCOMPETITION
5.1 Nondisclosure. During the term of Agreement and thereafter, Employee
shall not, without the prior written consent of the Board of Directors,
disclose or use for any purpose (except in the course of his employment
under this Agreement and in furtherance of the business of the Company)
confidential information or proprietary data of the Company (or any of its
subsidiaries), except as required by applicable law or legal process,
provided, however, that confidential information shall not include any
information known generally to the public or ascertainable from public or
published information (other than as a result of unauthorized disclosure
by Employee) or any information of a type not otherwise considered
confidential by persons engaged in the same business or a business similar
to that conducted by the Company (or any of its subsidiaries).
5.2 Noncompetition. The Company and Employee agree that the services
rendered by Employee hereunder are unique and irreplaceable. Employee hereby
agrees that, during the term of this Agreement and for a period of 12 months
thereafter, he shall not (except in the course of his employment under this
Agreement and in furtherance of the business of the Company or any of its
subsidiaries), (i) engage in as principal, consultant or employee in any
segment of a business of a company, partnership or firm ("Business Segment")
that is directly competitive with any significant business of the Company in
one of its major commercial or geographic markets or (ii) hold an interest
(except as a holder of less than 5% interest in a publicly traded firm or
mutual funds, or as a minority stockholder or unitholder in a form not
publicly traded) in a company, partnership or firm with a Business Segment
that is directly competitive, without the prior written consent of the Company.
5.3 Validity of Noncompetition. The foregoing, provisions of Section 5.2
shall not be held invalid because of the scope of the territory covered, the
actions restricted thereby, or the period of time such covenant is
operative. Any judgment of a court of competent jurisdiction may define the
maximum territory, the actions subject to and restricted by Section 5.2 and
the period of time during which such agreement is enforceable.
5.4 Noncompetition Covenants Independent. The covenants of the Employee
contained in Section 5.2 will be construed as independent of any other
provision in this Agreement; and the existence of any claim or cause of
action by the Employee against the Company will not constitute a defense to
the enforcement by the Company of said covenants. The Employee
understands that the covenants contained in Section 5.2 are essential
elements of the transaction contemplated by this Agreement and, but for the
agreement for the. Employee to Section 5.2, the Company would not have agreed
to enter into such transaction. The Employee has been advised to consult with
counsel in order to be informed in all respects concerning the reasonableness
and propriety of Section 5.2 and its provisions with specific regard to the
nature of the business conducted by the Company and the Employee acknowledges
that Section 5.2 and its provisions are reasonable in all respects.
5.5 Confidential and Proprietary Information. This shall include, without
limitation, matters of a technical nature, such a know-how, formula,
computer programs, software and documentation, secret processes or machines,
inventions. Research projects, plans for further development and matters of
a business nature, such as information about costs, profits, markets, sales
lists of customers, and business data regarding customers, salaries, and
other personnel data, and any other information of a similar nature to the
extent not available to the public.
The Employee shall promptly disclose to the Employer or its designee any
and all ideas, inventions, improvements, discoveries, developments,
innovations, or works of authorship (hereinafter referred to as the
"Inventions"), whether patentable or unpatentable, copyrightable or
uncopyrightable, made, created, developed, discovered, worked on or
conceived by the Employee, either solely or jointly with others, whether or
not reduced to drawings, written description, documentation, models or other
intangible form, during the Employment Period and for a period of
12 months thereafter that relate to, or arise out of, any developments,
services research or products of, or pertain to the business of, the Employer.
5.6 Remedies. In the event of a breach or threatened breach by the Employee
of Section 5.2 or its provisions, the Company shall be entitled to a
temporary restraining order and an injunction restraining the Employee from
the commission of such breach. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies available to it for
such breach or threatened breach, including the recovery of money damages.
ARTICLE VI
ARBITRATION
Any controversy of any nature whatsoever, including but not limited to tort
claims or contract disputes, between the parties. to this Agreement or
between. the Employee, his heirs, executors, administrators, legal
representatives, successors, and assigns and the Company and its affiliates,
arising out of or related to the Employee's employment with the Company; any
resignation from or termination of such employment and/or the terms and
conditions of this Agreement, including the implementation, applicability
and interpretation thereof, shall, upon the written request of one party
served upon the other, be submitted to and settled by arbitration in
accordance with the provision of the Federal Arbitration Act, 9 U.S.C.
SectionSection1-15, as amended. Each of the parties to this Agreement shall
appoint one person as an arbitrator to hear and determine such disputes, and
if they should be unable to agree, then the two arbitrators shall chose a
third arbitrator from a panel made up of experienced arbitrators selected
pursuant to the procedures of the American Arbitration Association (the
"AAA") and, once chosen, the third arbitrator's decision shall be final,
binding and conclusive upon the parties to this Agreement. Each party shall
be responsible for the fees and expenses of its arbitrator and the fees and
expenses of the third arbitrator shall be shared equally by the parties. The
terms or the Commercial arbitration rules~ of AAA shall apply except to the
extent they conflict with the provisions of this paragraph. It is further
agreed than any of the parties hereto may petition the United States
District Court for the Southern District of Texas, Houston Division, for a
judgment to be entered upon any award entered through such arbitration
proceedings.
ARTICLE VII
MISCELLANEOUS
7.1 Complete Agreement. This Agreement constitutes the entire agreement
between the parties and cancels and supersedes all other agreements between
the parties, which may have related to the subject matter contained in this
Agreement.
7.2 Modification; Amendment; Waiver. No modification, amendment or waiver of
any provisions of this Agreement shall be effective unless approved in
writing by booth parties. The failure at any time to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of
such provisions and shall not affect the right of either party thereafter to
enforce each. and every provision hereof in accordance with its terms.
7.3 Governing Law; Jurisdiction. This Agreement and performance under it,
and all proceedings that may ensue from its breach, shall be construed in
accordance with and under the laws of the State of Texas.
7.4 Employee's Representation. Employee represents and warrants that he is
free to enter into this Agreement and to perform each of the terms and
covenants of it. Employee represents and warrants that he is not restricted
or prohibited, contractually or otherwise, from entering into and performing
this Agreement, and that his execution and performance of this Agreement is
not a violation or breach on any other agreement between Employee and any
other person or entity.
7.5 Company's Representation. Company represents and warrants that it is
free to enter into this Agreement and to perform each 6,f the terms and
covenants of it. Company represents and warrants that it is not restricted
or prohibited, contractually or otherwise, from entering into and performing
this Agreement, and that its' execution and performance of this Agreement
is not a violation or breach on any other agreement between Employee and any
other person or entity. The Company represents and warrants that this
Agreement is a legal, valid and binding agreement of the Company,
enforceable in accordance with its terms.
7.6 Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
7.7 Assignment. The rights and obligations of the parties under this
Agreement shall be binding upon and inure to the benefit of their respective
successors, assigns, executors, administrators and heirs, provided, however,
that neither the Company nor Employee assign any duties under this Agreement
without the prior written consent of the other.
7.8 Limitation. This Agreement shall not confer any right or impose any
obligation on the Company to continue the employment of Employee in any
capacity, or limit the right of the Company or Employee to terminate
Employee's employment.
7.9 Attorney's Fee and Costs. If any action at law or in equity is brought
to enforce or interpret the terms of this Agreement or any obligation owing
thereunder, venue will be in ▇▇▇▇▇▇ County, Texas and the prevailing party
shall be entitled to reasonable attorney's fees and all costs and expenses
of the suit, including, without limitation, expert and accountant fees, and
such other relief which a court of competent jurisdiction may deem appropriate.
7.10 Notices. All notices and other communications under this Agreement
shall be in writing and shall be given in person or by either personal
delivery, facsimile with confirmation of receipt, overnight delivery, or
first class mail, certified or registered with return receipt requested,
with postal or delivery charges prepaid, and shall be deemed to have been
duly given when delivery personally, or three days after mailing first
class, certified or registered with return receipt requested, to the
respective persons named below:
If to the Company:
Corporate Secretary
Lakota Energy, Inc.
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Fax (▇▇▇) ▇▇▇-▇▇▇▇
If to the Employee:
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of
the day and year indicated above.
COMPANY: LAKOTA ENERGY, INC.
By: /s/▇▇▇ ▇▇▇▇▇▇▇▇
Printed Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
EMPLOYEE:
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ "▇▇▇▇" ▇▇▇▇▇▇
