Exhibit 10.5
Syntroleum - Employment Agreement
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CONFIDENTIAL
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into on the
2nd day of June, 1997 by and between Syntroleum Corporation, an Oklahoma
corporation (the "Company"), and Branch J. Russell, an individual (the
"Employee").
WHEREAS, the Company desires to enter into an employment relationship with
Employee and Employee is willing to accept such employment on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the Company and Employee hereby agree as follows.
1. Employment and Duties. The Company employs Employee in the capacity of
_______________________, or in such other position and at such location as the
Company may direct or desire and Employee hereby accepts such employment, on the
terms and conditions hereinafter set forth. Employee agrees to perform such
services and duties (including reasonable travel)and hold such offices at such
locations as may be reasonably assigned to him from time to time by the Company
and to devote substantially his full business time, energies and best efforts to
the performance thereof to the exclusion of all other business activities,
except any activities disclosed to the Company in advance and consented to by
the Company.
2. Compensation. As compensation for the services to be rendered by
Employee to the Company pursuant to this Agreement, Employee shall be paid the
following compensation and other benefits.
(a) $102,000.00, per year, payable in equal bi-monthly installments in
arrears, or such higher compensation as may be established by the Company from
time to time. Payments of salary shall be made in accordance with the Company's
usual payroll procedures.
(b) Employee shall be eligible to participate, to the extent he may be
eligible, in any group medical and hospitalization, profit sharing, retirement,
life insurance or other employee benefit plans which the Company may from time
to time offer to its employees. All group insurance provided to Employee shall
be in such form and provide such coverage as is provided to other employees of
the Company.
(c) All compensation payments to Employee shall be made subject to normal
deductions therefrom, including federal and state social security and
withholding taxes.
3. Life Insurance. The Company, in its discretion, may apply for and
procure in its own name and for its own benefit, life insurance on the life of
Employee in any amount or amounts considered advisable by the Company. Employee
shall submit to any
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Exhibit 10.5
medical or other examination and execute and deliver any application or other
instrument in writing, reasonably necessary for the Company to acquire such
insurance.
4. Expenses. The Company shall reimburse Employee for his actual
out-of-pocket expenses incurred in carrying out his duties hereunder in the
conduct of the Company's business, which expenses shall be limited to ordinary
and necessary items and which shall be supported by vouchers, receipts or
similar documentation submitted in accordance with the Company's expense
reimburse policy and as required by law.
5. Vacations and Leave. Employee shall be entitled to vacation and leave
in accordance with the Company's policies in effect from time to time.
6. Non-Disclosure of Confidential Information.
(a) Employee acknowledges that in and as a result of his employment by the
Company, he will be making use of, acquiring, and/or adding to the Company's
Trade Secret Information. Except as required in the performance of Employee's
duties under this Agreement, Employee will not use or disclose to third parties,
directly or indirectly, any Trade Secret Information of the Company, either
during or after Employee's employment with the Company.
(b) As used in this Agreement, "Trade Secret Information" means
information, including any formula, pattern, compilation, program, device,
method, technique or process, that: (i) derives independent economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by other persons who can obtain economic value
from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. For purposes of this
Agreement, "Trade Secret Information" includes both information disclosed to
Employee by the Company and information developed by Employee in the course of
his employment with the Company. The types and categories of information which
the Company considers to be its Trade Secret Information include, without
limitation: (a) specifications, descriptions, designs, dimensions, content
(including chemical composition) and tolerances of products, parts and
components; (b) plans, blueprints, design packages construction, part and
assembly drawings and diagrams; (c) design, construction and component costs and
cost estimates; (d) the existence, terms or conditions of any agreements
(including license agreements) between the Company and any third party; (e)
computer programs (whether in the form of source code, object code or any other
form, including software, firmware and programmable array logic), formulas,
algorithms, methods, techniques, processes, designs, specifications, diagrams,
flow charts, manuals, descriptions, instructions, explanations, improvements,
and the ideas, systems and methods of operation contained in such programs; (f)
information concerning or resulting from research and development work performed
by Syntroleum; (g) information concerning Syntroleum's management, financial
condition, financial operations, purchasing activities, sales activities,
marketing activities and business plans; (h) information acquired or compiled by
Syntroleum concerning actual or potential customers; and (i) all other types and
categories of information (in whatever form) with respect to which, under all
the circumstances, Employee knows or has reason to
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Exhibit 10.5
know that Syntroleum intends or expects secrecy to be maintained and as to which
Syntroleum has made reasonable efforts to maintain its secrecy.
(c) The Company may also advise Employee from time to time as to
restrictions upon the use or disclosure of specified information which has been
licensed or otherwise disclosed to the Company by third parties pursuant to
license or confidential disclosure agreements which contain restrictions upon
the use or disclosure of such information. Employee agrees to abide by the
restrictions upon use and/or disclosure contained in such agreements.
(d) Employee will not use or disclosure to the Company any confidential or
proprietary information belonging to others without the consent of the person to
whom such information is confidential, and Employee represents that his
employment with the Company will not require the use of such information or the
violation of any confidential relationship with any third party.
7. Other Property of the Company. All documents, encoded media, and other
tangible items provided to Employee by the Company or prepared, generated or
created by Employee or others in connection with any business activity of the
Company are the property of the Company. Upon termination of Employee's
employment with the Company, Employee will promptly deliver to the Company all
such documents, media and other items in his possession, including all complete
or partial copies, recordings, abstracts, notes or reproductions of any kind
made from or about such documents, media, items or information contained
therein. Employee will neither have nor claim any right, title or interest in
any trademark, service mark or trade name owned or used by the Company.
8. Inventions and Works of Authorship.
(a) Employee hereby irrevocably assigns to the Company all of Employee's
right, title and interest in and to any and all Inventions and Works of
Authorship made, generated or conceived by Employee during the period of his
employment with the Company, and Employee agrees to and shall promptly disclose
all such Inventions and Works of Authorship to the Company in writing. As used
herein, "Invention" means any discovery, improvement, innovation, idea, formula,
or shop right (whether or not patentable, whether or not put into writing and
whether or not put into practice) made, generated or conceived by Employee
(whether alone or with others) while employed by the Company. As used herein,
"Work of Authorship" means any original work of authorship within the purview of
the copyright laws of the United States of America, and both the Company and
Employee intend and agree that all Works of Authorship created by Employee in
the course of his employment with the Company will be and shall constitute works
made for hire within the meaning and purview of such copyright laws.
(b) Employee will execute and assign any and all applications,
assignments, and other documents and will render all assistance which may be
reasonably necessary for the Company to obtain patent, copyright, or any other
form of intellectual property protection with respect to all Inventions and
Works of Authorship in all countries. The Company will
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Exhibit 10.5
pay Employee $200 for each patent issued to the Company upon which Employee's
name appears as an inventor. For purposes of this Agreement, any Invention
relating directly to the business of the Company or to the Company's actual or
demonstrably anticipated business, research or development with respect to which
Employee files a patent application within two years after termination of
employment with the Company shall be presumed to be an Invention conceived by
Employee during the period of his employment with the Company, rebuttable only
by accurate, written and duly corroborated evidence that such Invention was not
first conceived by Employee during the term of his employment with the Company.
(c) The provisions of this Paragraph 8 do not apply to an invention for
which no equipment, supplies, facility or Trade Secret Information of the
Company was used and which was developed entirely on Employee's own time, and
(i) which does not relate (A) directly to the business research or development
of the Company, or (B) to the Company's actual or demonstrably anticipated
business, research or development, or (ii) which does not result from any work
performed by Employee for the Company.
9. Limited Covenants Against Competition; Non-Solicitation.
(a) Employee acknowledges that the services he is to render to the Company
are of a special and unusual character with a unique value to the Company, the
loss of which cannot adequately be compensated by damages in an action at law.
In view of the unique value to the Company of the services of Employee and
because of the confidential Trade Secret Information to be obtained by or
disclosed to Employee, as set forth above, and as a material inducement to the
Company to enter into this Agreement and to pay to Employee the compensation
stated in Paragraph 2, Employee covenants and agrees that during the period of
Employee's employment within the Company and for a period of one year following
termination of Employee's employment with the Company for any reason,
voluntarily or involuntarily, Employee will not directly or indirectly: (i)
start or participate or assist (as a proprietor, partner, shareholder, lender,
investor, director, employee, consultant, independent contractor or otherwise)
in starting any Competing Business; (ii) assist (as a proprietor, partner,
shareholder, lender, investor, director, employee, consultant, independent
contractor or otherwise) any existing Competing Business in the design,
development or manufacture of any Competing Product; (iii) sell or assist in the
sale of any Competing Product to any person or organization with whom Employee
had any direct contact while employed with the Company, except for persons or
organizations with whom Employee had direct contact prior to being employed with
the Company; (iv) directly or indirectly solicit for employment or employ any of
the Company's employees; or (v) become employed by a former employee of the
Company.
(b) Employee further acknowledges that, while employed by the Company, he
will have contact with and become aware of the Company's customers and licensees
and their respective representatives, including their names and addresses,
specific needs and requirements, as well as leads and references to prospective
customers and licensees. Employee further acknowledges that loss of such
customers or licensees would cause the Company great and irreparable harm.
Employee agrees that for a period of two years
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Exhibit 10.5
following termination of Employee's employment with the Company for any reason,
voluntarily or involuntarily, Employee will not directly or indirectly solicit,
contact, call upon, communicate with or attempt to communicate with any customer
or licensee, former customer or licensee, or prospective customer or licensee of
the Company for the purpose of selling, installing, implementing, or modifying
any Competing Product. This restriction shall apply only to any customer or
licensee, former customer or licensee, or prospective customer or licensee of
the Company with whom Employee had contact during the last two years of
Employee's employment with the Company.
(c) The Employee agrees that for as long as he is employed by the Company
and for a period of two years after termination of Employee's employment with
the Company for any reason, voluntarily or involuntarily, Employee will not
solicit, recruit, hire or attempt to solicit, recruit or hire, directly or by
assisting others, any other employee of the Company with whom the Employee had
contact during his employment with the Company.
(d) As used in this Agreement, (i) "Competing Business" means any person,
entity or organization other than the Company which is engaged in or is about to
become engaged in the design, manufacture or sale of a Competing Product, (ii)
"Competing Product" means any product (including, without limitation, any
chemical formula or process) which is or may be marketed in direct competition
with any product marketed or under development by the Company at any time during
Employee's employment with the Company, and (iii) "Contact" means interaction
between Employee and a customer or licensee, former customer or licensee, or
prospective customer or licensee of the Company, which takes place to further
the business relationship; or performing services for the customer or licensee,
former customer or licensee, or prospective customer or licensee on behalf of
the Company.
10. Reasonableness of Restrictions.
(a) Employee expressly acknowledges that he has carefully read and
considered the provisions of Paragraphs 6, 7, 8 and 9, and, having done so,
agrees that the restrictions set forth in these Paragraphs, including, but not
limited to, the time periods and geographic areas of restriction are fair and
reasonable and are reasonably required for the protection of the interests of
the Company and its officers, directors, shareholders and other employees.
(b) In the event that, notwithstanding the foregoing, any of the
provisions of Paragraphs 6, 7, 8 and 9 shall be held to be invalid or
unenforceable, the remaining provisions thereof shall nevertheless continue to
be valid and enforceable as though the invalid or unenforceable parts had not
been included therein. In the event that any provision of Paragraphs 6, 7, 8 and
9 relating to the time period and/or the areas of restriction and/or related
aspects shall be declared by a court of competent jurisdiction to exceed the
maximum restrictiveness such court deems reasonable and enforceable, the time
period and/or areas of restriction and/or related aspects deemed reasonable and
enforceable by the court shall become and thereafter be the maximum restriction
in such regard, and the restriction shall remain enforceable to the fullest
extent deemed reasonable by such court.
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Exhibit 10.5
11. Requests for Clarification. In the event Employee is uncertain as to
the meaning of any provision of this Agreement or its application to any
particular information, item or activity, Employee will inquire in writing to
the Company, specifying any areas of uncertainty. The Company will respond in
writing within a reasonable time and will endeavor to clarify any areas of
uncertainty, including such things as whether it considers particular
information to be its Trade Secret Information or whether it considers any
particular activity or employment to be in violation of this Agreement.
12. Remedies. In the event of a breach or threatened breach of any of the
covenants in Paragraphs 6, 7, 8 and 9, the Company shall have the right to seek
monetary damages and equitable relief, including specific performance by means
of an injunction against Employee or against Employee's partners, agents,
representatives, servants, employers, employees, family members and/or any and
all persons acting directly or indirectly by or with him, to prevent or restrain
any such breach. In lieu thereof, or should a court refuse for any reason to
grant equitable relief to prevent continuing breaches of the covenants in
Paragraphs 6, 7, 8 and 9, the Company shall be entitled to liquidated damages
equal to 100% of the gross amount derived by the breaching party from all
transactions in breach of the restrictive covenants in this Agreement, it being
impossible to ascertain or estimate the entire or exact cost, damage or injury
which the Company may sustain by reason of the breach, and such sum is agreed on
as compensation for the injury suffered by the Company, and not as a penalty.
13. Term and Termination.
(a) The term of this Agreement shall be for an initial term of ____ months
from the effective date hereof, unless sooner terminated as provided herein, and
shall thereafter be automatically renewed for successive terms of 12 months each
unless sooner terminated as provided herein.
(b) Employment of Employee under this Agreement may be terminated:
(i) by the Company upon the death of Employee.
(ii) by the Company if Employee becomes disabled. For the purposes
of this Agreement, Employee will be deemed disabled if he (i) has been
declared legally incompetent by a final court decree (the date of such
decree being deemed to be the date on which the disability occurred), or
(ii) receives disability insurance benefits from any disability income
insurance policy maintained by the Company for a period of three
consecutive months, or (iii) has been found to be disabled pursuant to a
disability determination. A "disability determination" means a finding that
Employee, because of a medically determinable disease, injury, or other
mental or physical disability, is unable to perform substantially all of
his regular duties to the Company and that such disability is determined or
reasonably expected to last at least six months. The disability
determination shall be based upon the written opinion of the physician
regularly attending Employee whose disability is in question. If the
Company disagrees with the opinion of this physician (the "First
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Exhibit 10.5
Physician"), it may engage, at its own expense, another physician of its
choice (the "Second Physician") to examine Employee. If the First and
Second Physicians agree in writing that Employee is or is not disabled,
their written opinion shall, except as otherwise set forth in this
subsection, be conclusive on the issue of disability. If the First and
Second Physicians disagree on the disability of Employee, they shall choose
a third consulting physician (whose expense shall be borne by the Company),
and the written opinion of a majority of these three physicians shall,
except as otherwise provided in this subsection, be conclusive as to
Employee's disability. The date of any written opinion conclusively finding
Employee to be disabled is the date on which the disability will be deemed
to have occurred. If there is a conclusive finding that Employee is not
totally disabled, the Company shall have the right to request additional
disability determinations provided it agrees to pay all the expenses of the
disability determinations and does not request an additional disability
determination more frequently than once every three months. In connection
with any disability determination, Employee hereby consents to any required
medical examination, and agrees to furnish any medical information
requested by any examining physician and to waive any applicable
physician-patient privilege that may arise because of such examination. All
physicians except the First Physician must be board-certified in the
specialty most closely related to the nature of the disability alleged to
exist.
(iii) by the Company when Employee reaches mandatory retirement age
under any retirement policy applicable to all executive officers adopted by
the Company.
(iv) by mutual agreement of Employee and the Company.
(v) by the Company upon the dissolution and liquidation of the
Company (other than as part of a reorganization, merger, consolidation or
sale of all or substantially all of the assets of the Company whereby the
business of the Company is continued).
(vi) by the Company for just cause at any time upon written notice.
For purposes of this Agreement, "just cause" shall mean any one or more of
the following: (A) Employee's material breach of his obligations, duties
and responsibilities under any term or provision of this Agreement, which
breach remains uncured for a period of five days after written notice by
the Company to Employee; (B) Employee's failure to adhere to the standards
of performance prescribed by the Company; (C) Employee's act of
insubordination to the Company's Board of Directors; (D) Employee's gross
negligence or willful misconduct in the performance of his duties under
this Agreement; (E) Employee's dishonesty, fraud, misappropriation or
embezzlement in the course of, related to or connected with the business of
the Company; (F) Employee's conviction of a felony; or (G) Employee's
failure (after written notice to Employee of such failure and Employee not
correcting such failure within five days of such notice) to devote his
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Exhibit 10.5
time, attention and best efforts to the business of the Company as provided
in this Agreement.
(vii) by either the Company or Employee upon 60 days written notice.
(c) Any termination of Employee's employment, either by the Company or
Employee, shall be communicated by a written notice of termination to the other
party.
(d) If Employee's employment is terminated pursuant to the terms of this
Agreement for any reason, Employee shall be entitled to all arrearages of salary
and expenses up to and including the date of termination but shall not be
entitled to further compensation. Provided, that if, at any time after the first
12 months of this Agreement, Employee's employment is terminated by the Company
for any reason other than pursuant to Paragraph 13(b)(v) or (vi), Employee shall
be entitled to and the Company shall pay Employee all arrearages of salary and
expenses up to and including the date of termination and, in addition,
Employee's monthly salary for an additional period of ______ months.
14. Resignation Upon Termination. In the event of termination of this
Agreement other than for death, Employee agrees to resign from all positions
held in the Company, including without limitation any position as a director,
officer, agent, trustee or consultant of the Company or any affiliate of the
Company.
15. Notice to Subsequent Employers. For a period of two years after
termination of Employee's employment with the Company for any reason, Employee
will inform any new employer (before accepting employment) of the terms of this
Agreement.
16. Obligations Unconditional. The obligations of the parties under this
Agreement are unconditional and do not depend upon the performance of any
agreements, duties, obligations, or terms outside this Agreement.
17. Waiver. A party's failure to insist on compliance or enforcement of
any provision of this Agreement shall not affect the validity or enforceability
or constitute a waiver of future enforcement of that provision or of any other
provision of this Agreement by that party or any other party.
18. Governing Law. This Agreement shall in all respects be subject to, and
governed by, the laws of the State of Oklahoma.
19. Severability. If for any reason any paragraph, term or provision of
this Agreement is held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect any other provision hereof, and
this Agreement shall be construed and enforced as if such provision had not been
included herein and all other valid provisions herein shall remain in full force
and effect. If for any reason the restrictions and covenants contained herein
are held to cover a geographical area or be for a length of time which is
unreasonable or unenforceable, or in any other way are construed to be too broad
or to any extent invalid, then to the extent the same are or would be valid or
enforceable
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Exhibit 10.5
under applicable law, any court of competent jurisdiction shall construe and
interpret or reform this Agreement to provide for a covenant having the maximum
area, time or other provisions (not greater than those contained herein) as
shall be valid and enforceable under such applicable law.
20. Jurisdiction. The Company and Employee intend to and hereby confer
jurisdiction to enforce the provisions of this Agreement and any restrictive
covenants contained herein upon the courts of any jurisdiction within the
geographical scope of such covenants. If the courts of any one or more of such
jurisdictions hold the provisions of this Agreement or any of the restrictive
covenants contained herein unenforceable by reason of the breadth of such scope
or otherwise, it is the intention of the Company and Employee that such
determination not bar or in any way affect the Company's right to the relief
provided herein in the courts of any other jurisdiction within the geographical
scope of such covenants, as to breaches of such covenants as they relate to each
jurisdiction being, for this purpose, severable into diverse and independent
covenants.
21. Notice. Any and all notices required or permitted herein shall be
deemed delivered if delivered personally or if mailed by registered or certified
mail to the Company at its principal place of business and to Employee at the
address hereinafter set forth following Employee's signature, or at such other
address or addresses as either party may hereafter designate in writing to the
other.
22. Amendments. This Agreement may be amended at any time by mutual
consent of the parties hereto, with any such amendment to be invalid unless in
writing, signed by the Company and Employee.
23. Burden and Benefit. This Agreement, together with any amendments
hereto, shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors, assigns, heirs and personal
representatives. The Company may, in its sole discretion, assign this Agreement
or its rights hereunder to any parent, affiliate, shareholder, or successor of
the Company, or to any person or entity which purchases substantially all of the
assets of the Company. Employee may not transfer or assign this Agreement or any
of Employee's rights or obligations under this Agreement.
24. References to Gender and Number Terms. In construing this Agreement,
feminine or number pronouns shall be substituted for those masculine in form and
vice versa, and plural terms shall be substituted for singular and singular for
plural in any place which the context so requires.
25. Headings. The various headings in this Agreement are inserted for
convenience only and are not part of the Agreement.
26. Entire Agreement. This Agreement contains the entire understanding and
agreement between the parties relating to the subject matter hereof.
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Exhibit 10.5
27. Counterparts. This Agreement may be executed in one or more
counterparts, and all such counterparts shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the Company and Employee have duly executed this
Agreement as of the date and year first above written.
COMPANY:
SYNTROLEUM CORPORATION
By: /s/ Mark A. Agee
-----------------------------------
Mark A. Agee, President
Syntroleum Corporation.
400 South Boston, Suite 1000
Tulsa, Oklahoma 74103
EMPLOYEE:
___________________________________
Home address:
___________________________________
___________________________________
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