Exhibit 10.4
RESTATED AND AMENDED EMPLOYMENT AGREEMENT
This RESTATED AND AMENDED EMPLOYMENT AGREEMENT (the "Agreement"), entered
into on October 3, 2006 and made effective as that date (the "Effective Date")
by and among Calibre Energy, Inc. (referred to as "CALIBRE" or the "Company")
and O. Oliver Pennington, III ("Executive");
W I T N E S S E T H:
WHEREAS, the Company desires to retain the services of the Executive, and
the Executive is willing to provide such services to the Company, all upon the
terms and conditions set forth herein; and
WHEREAS, the parties hereto entered into an Employment Agreement dated as
of December 28, 2005 and now wish to amend such Employment Agreement and restate
it in its entirety as provided herein;
NOW THEREFORE, in consideration of the premises, the terms and provisions
set forth herein, the mutual benefits to be gained by the performance thereof
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Employment. The Company hereby employs the Executive, and the
Executive hereby accepts such employment, all upon the terms and conditions set
forth herein.
SECTION 2. Term. Unless sooner terminated pursuant to Section 5 of this
Agreement, the Executive shall be employed for a term commencing on the
Effective Date and ending on the third anniversary of the Effective Date (the
"Term"); provided, however, that the Term shall automatically be extended on a
daily basis for an additional day such that, at all times, the remaining Term
shall be three years. Notwithstanding any other provision of this Agreement to
the contrary, this Agreement may be terminated by Company upon written notice,
in which case the Agreement will terminate upon the expiration of the three-year
Term.
SECTION 3. Duties and Responsibilities.
A. Capacity. The Executive shall serve in the capacity of Vice President
and Chief Financial Officer and in such other or additional capacity or
capacities for the Company or an affiliate of CALIBRE as the Board of Directors
of CALIBRE (the "Board") may direct from time to time. During the term of this
Agreement, as Vice President and Chief Financial Officer of the Company,
Executive agrees to perform such duties as are normally incident to that
position and shall perform such other duties and responsibilities as may be
prescribed from time to time by the board of directors of the Company.
B. Duties. The Executive shall devote such of his business time, attention
and energies to the business of the Company as are reasonably necessary to
perform his duties under this Agreement. Such duties shall be performed at the
headquarters of the Company in Washington, DC and in Houston, Texas and at such
other places as the Board may reasonably require without necessitating any
change in Executive's place of residence. The Executive shall not be engaged in
any other business activity, whether or not pursued for gain, profit or other
pecuniary advantage, which would impair his ability to fulfill his duties to the
Company under this Agreement, without the prior written consent of the Board.
Nothing contained in this Section 3(B) shall prevent the Executive from
passively investing his assets in such a form or manner as will not conflict
with the terms of this Agreement and will not require services on the part of
the Executive in the operation of the business of the companies or other
enterprises in which such investments are made.
C. Standard of Performance. The Executive will perform his duties under
this Agreement with fidelity and loyalty, to the best of his ability, experience
and talent and in a manner consistent with his fiduciary responsibilities.
SECTION 4. Compensation.
A. Base Salary. The Company shall pay the Executive a salary (the "Base
Salary") of U.S. $200,000 per annum. The Base Salary shall be payable in
accordance with the general payroll practices of the Company in effect from time
to time. The Company shall review the Base Salary then being paid to the
Executive at such times as the Company regularly reviews the compensation paid
to employees. Upon completion of such review, the Company in its sole discretion
may increase or maintain the Executive's then current Base Salary, and any
increased salary shall be the "Base Salary" for all purposes under this
Agreement. Notwithstanding the above, the Base Salary shall be increased to
$360,000 upon the third anniversary date from the effective date of this
agreement. The Company may decrease the Executive's then current Base Salary
after the third anniversary date only with the prior written consent of the
Executive.
B. Stock Options. The Company shall grant the Executive 500,000
non-qualified options to purchase the Company's stock at $.24 per share. Such
options shall be immediately vested and such vested options shall survive
Executives termination date. The Company shall also grant the Executive 500,000
qualified options to purchase the Company's stock at $.24 per share. Such
options shall vest ratably over a four year period and become exercisable on the
third anniversary of the Effective date and such vested options shall survive
Executives termination date.
C. Bonus. The Executive shall be eligible, in the sole discretion of the
Board, to be considered for a bonus following each fiscal year ending during the
Term based upon the Executive's performance and the operating results of the
Company and their affiliates during such year in relation to performance targets
established by the Board. Determination of the bonus amount shall take into
account such unusual or nonrecurring items as the Chief Executive Officer of
CALIBRE and/or the Board deem appropriate.
D. Benefits. If and to the extent that the Company maintains employee
benefit plans (including, but not limited to, pension, profit sharing,
disability, accident, medical, life insurance and hospitalization plans), the
Executive shall be entitled to participate therein in accordance with the terms
of such plans and the Company's regular practices with respect to its employees.
In addition, the Company promises to provide reasonable health and dental
insurance for the Executive and his family, including $500,000 in life
insurance. The Executive shall be entitled to reimbursement from the Company for
reasonable out-of-pocket expenses incurred by him in the course of the
performance of his duties, hereunder, including all reasonable commuting and
communication costs, upon the submission of appropriate documentation.
E. Vacation. The Executive shall be entitled to four weeks of paid vacation
per calendar year, which, if not taken, may be carried forward to any subsequent
year, except in accordance with Company policy applicable to the Company's
employees generally. The Executive shall also be entitled to such holidays and,
subject to the provisions of Section 5, other paid or unpaid leaves of absence
as are consistent with the Company's normal policies.
SECTION 5. Termination of Employment.
Notwithstanding the provisions of Section 2, the Executive's employment
hereunder shall terminate under any of the following conditions:
A. Death. The Executive's employment under this Agreement shall terminate
automatically upon his death.
B. Disability. The Executive's employment under this Agreement shall
terminate automatically upon his Disability. For purposes of this Agreement,
"Disability" means permanent and total disability (within the meaning of section
22(e) (3) of the Internal Revenue Code of 1986, as amended, or any successor
provision) which has existed for at least 180 consecutive days.
C. Termination by the Company Without Cause. The Company may terminate the
Executive's employment hereunder without "Cause" (as hereinafter defined) on
three months written notice by the Company.
D. Termination by the Company for Cause. The Executive's employment
hereunder may be terminated for Cause upon written notice by the Company. For
purposes of this Agreement, "Cause" shall mean (i) the willful and continued
failure by the Executive to substantially perform his obligations under this
Agreement (other than such failure resulting from his Disability) after a demand
for substantial performance has been delivered to him by the Board which
specifically identifies the manner in which the Board believes the Executive has
not substantially performed such provisions and the Executive has failed to
remedy the situation three months after such demand; (ii) the Executive's
willfully engaging in conduct materially and demonstrably injurious to the
property or business of the Company, including without limitation, fraud,
misappropriation of funds or other property of the Company, other willful
misconduct, gross negligence or conviction of a felony or any crime of moral
turpitude; or (iii) the Executive's material breach of this Agreement which
breach has not been remedied by the Executive within three months after the
receipt by the Executive of written notice from the Company that the Executive
is in material breach of this Agreement, specifying the particulars of such
breach.
For purposes of this Agreement, no act, or failure to act, on the part of
the Executive shall be deemed "willful" or engaged in "willfully" if it was due
primarily to an error in judgment or negligence, but shall be deemed "willful"
or engaged in "willfully" only if done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that his action or omission was
in the best interest of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated as a result of "Cause"
hereunder unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the Board then in office at a meeting of the Board called and
held for such purpose (after reasonable notice to the Executive and an
opportunity for the Executive, together with his counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Executive has
committed an act set forth above in this Section 5(D) and specifying the
particulars thereof in detail. Nothing herein shall limit the right of the
Executive or his legal representative to contest the validity or propriety of
any such determination.
E. Termination by the Executive for Good Reason. The Executive may
terminate his employment hereunder for "Good Reason." For purposes of this
Agreement, "Good Reason" for termination shall mean any of the following (which
occur without the Executive's prior written consent):
(1) a decrease in the Executive's Base Salary not in accordance with
section 4 (A) above;
(2) a materially adverse diminution of the overall level of
responsibilities of the Executive;
(3) a material breach by the Company of any term or provision of this
Agreement;
(4) after a Change of Control (as defined in Section 7(B)) and during
the Effective Period (as defined in Section 7(C)), (a) the failure of the
Company to continue in effect any benefit or compensation plan (including,
but not limited to, any bonus, incentive, retirement, supplemental
executive retirement, savings, profit sharing, pension, performance, stock
option, stock purchase, deferred compensation, life insurance, medical,
dental, health, hospital, accident or disability plans) in which the
Executive is participating at the time of such Change of Control (or plans
providing to the Executive, in the aggregate, substantially similar
benefits as the benefits enjoyed by the Executive under the benefit and
compensation plans in which the Executive is participating at the time of
such Change of Control), or (b) the taking of any action by the Company
that would adversely affect the Executive's participation in or materially
reduce the Executive's benefits under any of such plans or deprive the
Executive of any material fringe benefit enjoyed by the Executive at the
time of such Change in Control;
(5) any personal reason that the Compensation Committee of the Board
in its discretion determines shall constitute Good Reason.
However, that no event or condition described in clauses (1) - (4) of this
Section 5(E) shall constitute Good Reason unless (a) the Executive gives the
Company written notice of his objection to such event or condition within 90
days after the Executive learns of such event, (b) such event or condition is
not corrected by the Company within 10 days of its receipt of such notice and
(c) the Executive voluntarily resigns his employment with the Company and its
affiliates not more than 60 days following the expiration of the 10-day period
described in the foregoing clause (b).
F. Voluntary Termination by the Executive. The Executive may terminate his
employment hereunder at any time for reason other than Good Reason on 30 days
written notice to the Company.
SECTION 6. Payments Upon Termination.
A. Upon termination of the Executive's employment hereunder, the Company
shall be obligated to pay and the Executive shall be entitled to receive, on the
pay date for the pay period in which the termination occurs, all accrued and
unpaid Base Salary to the date of termination. In addition, the Executive shall
be entitled to any benefits to which he is entitled under the terms of any
applicable employee benefit plan or program or applicable law.
B. Except as provided in Section 7(A), upon termination of the Executive's
employment by the Company without Cause or by the Executive due to Good Reason,
in addition to the amount set forth in Section 6(A), the Company shall be
obligated to pay, and the Executive shall be entitled to receive, (i) Base
Salary for a period of three years and (ii) continued medical and dental
benefits for a period of three years at no cost to the Executive. The Company
may cease all payments of Base Salary and bonus under this Section 6(B) in the
event of a willful breach by the Executive of the provisions of Sections 8, 9 or
10 of this Agreement or any inadvertent breach that continues after notice given
to the Executive by the Company. As a condition precedent to the receipt of any
of the severance benefits hereunder the Executive hereby agrees to execute a
release of claims against the Company and its affiliates in form and substance
reasonably satisfactory to the Company.
C. In the event Executive elects to terminate employment as set forth in
Section 5(F) then in such event any options not vested as set forth in Section
3(B) shall terminate.
D. Upon any termination or expiration of the Executive's employment
hereunder pursuant to Section 5, the Executive shall have no further liability
or obligation under or in connection with this Agreement; provided, however,
that the Executive shall continue to be subject to the provisions of Sections 8,
9, 10, 11 and 12 hereof (it being understood and agreed that such provisions
shall survive any termination or expiration of the Executive's employment
hereunder for any reason). Upon any Voluntary Termination by the Executive
(other than a resignation by the Executive for Good Reason), or expiration of
Executive's employment agreement, the Company shall have no further liability
under or in connection with this Agreement, except to pay the portion of the
Executive's Base Salary earned or accrued at the date of termination.
SECTION 7. Change of Control.
A. In the event that, during the Effective Period (as hereinafter defined),
the Executive's employment is terminated by the Company without Cause or by the
Executive for Good Reason, in lieu of the amount set forth in Section 6(B), the
Executive shall immediately become entitled to the following benefits:
(1) the outstanding options to acquire shares of the Company held by
the Executive under any share option plan and granted on or prior to the
Change of Control shall become immediately fully exercisable and shall
remain exercisable for three years after termination of employment or, if
less, their remaining term;
(2) a lump-payment equal to three times: (a) the Executive's then
current Base Salary or (b) $360,000, whichever is greater;
(3) a lump-sum payment equal to three times the highest annual bonus
allowed under the Executive Bonus Plan for the Executive during the
three-year period preceding the date of the Change of Control; and
(4) continued medical and dental coverage for three years from the
termination date at no cost to the Executive.
B. For purposes of this Agreement, a "Change of Control" shall be deemed to
have taken place upon the earliest occurrence of any of the following: (i) a
tender offer is made and consummated for the beneficial ownership of 25% or more
of the outstanding voting securities of CALIBRE; (ii) CALIBRE is merged or
consolidated with another corporation, and as a result of such merger or
consolidation, less than 75% of the outstanding voting securities of the
surviving or resulting corporation are beneficially owned in the aggregate by
the persons or entities who were shareholders of CALIBRE immediately prior to
such merger or consolidation; (iii) CALIBRE sells all or substantially all of
its assets to another entity or person that is not a wholly owned subsidiary;
(iv) during any 15-month period, individuals who at the beginning of such period
constituted the Board (including for this purpose any new member whose election
or nomination for election by the shareholders of CALIBRE was approved by a vote
of at least 2/3 of the members then still in office and who were members at the
beginning of such period) cease for any reason to constitute at least a majority
of the Board; (v) the Compensation Committee of the Board determines, in its
sole discretion, that a Change of Control has occurred for purposes of this
Agreement; (vi) the Company sells all or substantially all of its assets to
another entity or person that is not a subsidiary or affiliate of the Company or
(vii) 80% or more of the outstanding voting securities of the Company are
acquired by any person or entity other than CALIBRE, its subsidiaries or
affiliates.
C. For purposes of this Agreement, "Effective Period" shall mean the period
beginning on the date of a Change of Control and ending on the earlier of the
third anniversary of the Change of Control or the expiration of the Term.
D. To the extent that the acceleration of vesting or any payment,
distribution or issuance made to the Executive in the event of a Change of
Control is subject to federal income, excise or other tax at a rate above the
rate ordinarily applicable to compensation paid in the ordinary course of
business (collectively, a "Parachute Tax"), whether as a result of the
provisions of Section 280G and 4999 of the Internal Revenue Code of 1986, as
amended, or any similar or analogous provisions of any statute adopted
subsequent to the date hereof, or otherwise, then the Company shall pay to the
Executive an additional sum (the "Additional Amount") such that the net amount
received by the Executive, after paying any applicable Parachute Tax and any
federal or state income tax on such Additional Amount, shall be equal to the
amount that the Executive would have received if such Parachute Tax were not
applicable.
SECTION 8. Confidential Information and Inventions.
A. Nondisclosure. The Executive hereby acknowledges that the Executive has
knowledge of certain confidential and proprietary information relating to
Company, CALIBRE or their affiliates and that it will be necessary, in
connection with the performance of services hereunder, to provide or make
available to the Executive certain confidential and proprietary information,
including, but not limited to, business and financial information, technological
information, strategies, the status and content of contracts with suppliers or
clients, customer lists and financial information on customers, intellectual
property, trade secrets and other information relating to the businesses,
products, technology, services, customers, methods or tactics of the Company,
CALIBRE or its affiliates (any such confidential or proprietary information
being hereinafter referred to as "Confidential Information"). The Executive
further acknowledges that the Confidential Information constitutes valuable
trade secrets of Company, CALIBRE and its affiliates and agrees that any such
Confidential Information shall remain the property of the Company, CALIBRE and
their affiliates at all times during the term of this Agreement and following
the expiration or termination hereof. The Executive shall not publish,
disseminate, distribute, disclose, sell, assign, transfer, copy, remove from the
premises of the Company, CALIBRE or their affiliates, commercially exploit, make
available to others, or otherwise make use of any Confidential Information to or
for the use or benefit of the Executive or any other person, firm, corporation
or entity, except as specifically and previously authorized in writing by the
Board or as required for the due and proper performance of his duties and
obligations under this Agreement. In addition, the Executive shall employ all
necessary safeguards and precautions in order to ensure that unauthorized access
to the Confidential Information is not afforded to any person, firm, corporation
or entity. Upon any expiration or termination of this Agreement, or if the Board
or the Company so requests at any time, the Executive shall promptly return to
the Company, CALIBRE and their affiliates all Confidential Information in the
Executive's possession, whether in writing, on computer disks or other media,
without retaining any copies, extracts or other reproductions thereof.
Notwithstanding the foregoing, nothing contained in this Section 8(A) shall
prevent the publishing, dissemination, distribution, disclosure, sale,
assignment, transfer, copying, removal, commercial exploitation or other use by
the Executive of any information that (i) is generally available to the public
(other than through a breach of an obligation of confidentiality, or (ii) is
lawfully obtained by the Executive without obligation of confidentiality from a
source other than the Company, CALIBRE or its affiliates, directors, officers,
employees, agents or other representatives (provided, however, that such source
is not bound by a confidentiality agreement with the Company, CALIBRE or any of
its affiliates and is not otherwise under an obligation of secrecy or
confidentiality to either of them).
B. Requests for Disclosure. It shall not be a breach of the obligations of
Section 8(A) if Executive discloses Confidential Information as required by
judicial or administrative process or, in the written opinion of Executive's
counsel, by the requirements of applicable law, but only upon satisfaction of
the following conditions: (i) the Executive gives prompt written notice to the
Chairman of the Board of the existence of, and the circumstances attendant to,
such request, sufficient to permit the Company, CALIBRE or an affiliate to
contest or seek to restrict the required disclosure (ii) the Executive consults
with the Chairman of the Board as to the advisability of taking legally
available steps to resist or narrow any such request or otherwise to eliminate
the need for such disclosure, (iii) if disclosure is required, the Executive
cooperates with the Chairman of the Board in obtaining a protective order or
other reliable assurance in form and substance satisfactory to the Chairman of
the Board that confidential treatment will be accorded to such portion of the
Confidential Information as is required to be disclosed, and (iv) that Executive
disclosed only such Confidential Information as is legally required (or, where
applicable, only such information as the written opinion of Executive's counsel
deems required).
C. Confidential Information of Others. The Executive shall not disclose to
the Company, CALIBRE or their affiliates, or induce them to use, the proprietary
information, trade secrets, or confidential information of others.
D. Disclosure. Upon each occurrence of conception, creation, and/or
reduction to practice, the Executive will promptly provide a written description
of each Invention (as hereinafter defined) to the Board or its designee.
E. Assignment and Ownership of Rights. The Executive agrees that all
Inventions shall and, to the extent necessary, shall become and remain the
property of CALIBRE or the Company, and their successors and assigns, unless
expressly released by CALIBRE and the Company in writing. The Executive assigns,
and to the extent such assignment is not effective, the Executive agrees to
assign all such Inventions to CALIBRE or the Company. The Executive agrees that
all copyrightable works created for CALIBRE or the Company during the
Executive's employment are owned by CALIBRE or the Company and, if necessary or
appropriate, are works made for hire.
F. Obtaining Patents. CALIBRE or the Company shall have sole discretion to
decide whether to obtain any patent or other protection on any Invention. If
CALIBRE or the Company seeks any such protection, the Executive shall have no
obligation to pay any expenses of the filing or maintenance of any such patent
or other protection.
Inventions. "Inventions" means (i) any invention, development, improvement, or
copyrightable work, (ii) created, conceived, or reduced to practice by the
Executive individually or jointly with others while the Executive is employed by
the Company, CALIBRE or their affiliates or within a six-month period following
termination of the Executive's employment, (iii) whether patentable or not, (iv)
whether or not conceived or reduced to practice during regular working hours,
(v) that relates to any methods, apparatus, products, or components thereof
which, before termination of the Executive's employment, are manufactured, sold,
leased, or used by the Company, CALIBRE or their affiliates or which are under
development by, or which otherwise pertain to the business of, the Company,
CALIBRE or their affiliates. However, "Inventions" shall not include any
inventions, developments, improvements, or copyrightable work (i) for which no
equipment, supplies, facility, or trade secret information of the Company,
CALIBRE or their affiliates were used, (ii) which the Executive developed
entirely on the Executive's own time (iii) which does not relate directly to the
business of the Company, CALIBRE or their affiliates or to their actual or
demonstrably anticipated research or development, or (iv) which does not result
from any work performed by the Executive for the Company, CALIBRE or their
affiliates. The Executive represents that he has provided CALIBRE, on or prior
to the date hereof, a complete written description of all unpatented inventions
and improvements in which the Executive has any rights that are not included in
the term "Inventions", in a form acknowledged in writing by the Chief Executive
Officer of CALIBRE.
SECTION 9. Remedies. The Executive hereby agrees that a violation of the
provisions of Section 8 hereof may cause irreparable injury to the Company,
CALIBRE and its affiliates for which they would have no adequate remedy at law.
Accordingly, in the event of any such violation, the Company, CALIBRE and/or its
affiliates shall be entitled to preliminary and other injunctive relief. Any
such injunctive relief shall be in addition to any other remedies to which the
Company, CALIBRE and/or its affiliates may be entitled at law or in equity or
otherwise.
SECTION 10. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement (other than any dispute or controversy arising
from a violation or alleged violation by the Executive of the provisions of
Section 8hereof) shall be settled exclusively by final and binding arbitration
in Houston, Texas, in accordance with the Rules for the Resolution of Employment
Disputes of the American Arbitration Association ("AAA"). The arbitrator shall
be selected by mutual agreement of the parties, if possible. If the parties fail
to reach agreement upon appointment of an arbitrator within 30 days following
receipt by one party of the other party's notice of desire to arbitrate, the
arbitrator shall be selected from a panel or panels of persons submitted by the
AAA. The selection process shall be that which is set forth in the AAA Rules for
the Resolution of Employment Disputes then prevailing, except that, if the
parties fail to select an arbitrator from one or more panels, AAA shall not have
the power to make an appointment but shall continue to submit additional panels
until an arbitrator has been selected. This agreement to arbitrate shall not
preclude the parties from engaging in voluntary, nonbinding settlement efforts,
including, but not limited to, mediation. In the event the arbitration is
decided in whole or in part in favor of the Executive, the Company will
reimburse the Executive for his reasonable costs and expenses of the arbitration
(including reasonable attorneys' fees).
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person, by registered or certified mail (return
receipt requested and with postage prepaid thereon) or by facsimile transmission
to the respective parties at the following addresses (or at such other address
as either party shall have previously furnished to the other in accordance with
the terms of this Section 13):
If to the Company:
Calibre Energy, Inc.
1825 I Street NW, Suite 400
Washington, DC 20006
if to the Executive:
O. Oliver Pennington, III
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SECTION 12. No Mitigation. In the event of any termination of employment by
the Company without Cause, by the Executive for Good Reason, the Executive shall
be under no obligation to seek other employment, or otherwise engage in
mitigating activity, following the date of termination, and there shall be no
offset against amounts due the Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that he may obtain.
SECTION 13. Indemnification. CALIBRE and the Company agree that, in the
event the Executive's employment is terminated during the Term by the Company
without Cause or by the Executive for Good Reason, the Company shall continue to
indemnify the Executive following termination to the fullest extent permitted by
applicable law consistent with the Certificate of Incorporation and By-Laws and
the Company in effect as of the date of termination with respect to Executives
sole, joint or concurrent negligence and any acts or omissions he may have
committed during the period during which he was an officer, director and/or
employee of the Company or any of their affiliates for which he served as an
officer, director or employee at the request of the Company.
SECTION 14. Amendment; Waiver. The terms and provisions of this Agreement
may be modified or amended only by a written instrument executed by each of the
parties hereto, and compliance with the terms and provisions hereof may be
waived only by a written instrument executed by each party entitled to the
benefits thereof. No failure or delay on the part of any party in exercising any
right, power or privilege granted hereunder shall constitute a waiver thereof,
nor shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege granted hereunder.
SECTION 15. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior written or oral agreements or understandings between the
Executive and the Company or its affiliates relating thereto, including, without
limitation.
SECTION 16. Severability. In the event that any term or provision of this
Agreement is found to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining terms and provisions hereof shall
not be in any way affected or impaired thereby, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained therein.
SECTION 17. Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
assigns (it being understood and agreed that, except as expressly provided
herein, nothing contained in this Agreement is intended to confer upon any other
person or entity any rights, benefits or remedies of any kind or character
whatsoever). The Executive may not assign this Agreement without the prior
written consent of the Company. Except as otherwise provided in this Agreement,
the Company may assign this Agreement to any of their affiliates or to any
successor (whether by operation of law or otherwise) to all or substantially all
of their business and assets without the consent of the Executive, and any
transfer of employment from the Company to such affiliate or successor shall be
deemed to constitute an assignment and not a termination of employment
hereunder. In the event of an assignment of this Agreement by the Company, all
references herein to CALIBRE or the Company shall be deemed to be references to
the assignee. Similarly, in the event CALIBRE is no longer an affiliate of the
Company (or any assignee), all references to CALIBRE shall be deemed to be
references to the Company (or the assignee).
SECTION 18. Withholding of Taxes. The Executive agrees that the Company
shall deduct, or shall cause to be deducted, from the amount of any benefits to
be paid hereunder any taxes required to be withheld by the federal or any state
or local government.
SECTION 19. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas (except that no
effect shall be given to any conflicts of law principles thereof that would
require the application of the laws of another jurisdiction).
SECTION 20. Headings. The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.
SECTION 21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 22. Subsidiaries and Affiliates. As used herein, the term
"subsidiary" shall mean any corporation or other business entity controlled by
the corporation in question, and the term "affiliate" shall mean and include any
corporation or other business entity controlling, controlled by or under common
control with the corporation in question. The terms "controlled," "controlling,"
"controlled by" and "under common control with," as used with respect to any
person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such person, whether
through the ownership of voting securities or by contract or otherwise.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
CALIBRE Drilling Corporation
By:
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Prentis B. Tomlinson, Jr.
President and CEO
O. Oliver Pennington, III
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Executive