**Exhibit 10.39****3. Other Activities.**Except for activities approved by the Board of Directors, during theperiod of Executive’s employment, the Executive will not: (a) engage in activities whichrequire such substantial services on the part of the Executive that the Executive is unableto perform the duties assigned to the Executive in accordance with this Agreement; (b) serveas an officer or director of any publicly held entity; or (c) directly or indirectly investin, participate in or acquire an interest in any Competing Business as defined in Paragraph8(a)(i). The limitations in this paragraph 3 will not prohibit an investment by theExecutive in publicly traded securities as allowed in Paragraph 8(a)(i). The Executive isnot restricted from maintaining or making investments, or engaging in other businesses,enterprises or civic, charitable or public service functions if such activities,investments, businesses or enterprises do not result in a violation of clauses (a) through(c) of this paragraph 3.**4. Executive’s Compensation.**The Company agrees to compensate the Executive as follows:**4.1 Base Salary.**A base salary (the **“Base Salary”**), in an annual rate of not less than OneHundred Seventy-Five Thousand Dollars ($175,000.00), will be paid to the Executive ininstallments consistent with the Company’s customary payroll practices, during the term ofthis Agreement.**4.2 Bonus.**In addition to the Base Salary the Executive will participate in the CorporateOfficer Incentive Plan (“COIP”). Executive’s incentive target expressed as a percentage ofBase Salary for the COIP initially shall be twenty-five percent (25%), proportionatelyreduced as to any pro-rated performance period during which Executive is employed.**4.3 Equity Compensation.**In addition to the compensation set forth in paragraphs 4.1 and4.2 of this Agreement, the Executive will be allowed to participate in grants of stockoptions, restricted stock or other equity related awards from the Company’s stockcompensation plans put into effect from time to time, subject to the terms and conditions ofsuch plans.**4.4 Benefits.**The Company agrees to extend to the Executive retirement benefits, deferredcompensation, reimbursement of reasonable expenditures for dues, travel and entertainmentand any other benefits the Company provides to other executives or officers from time totime on the same general terms as such benefits are provided to such individuals. TheCompany will also provide the Executive the opportunity to apply for coverage under theCompany’s medical, life and disability plans, if any. If the Executive is accepted forcoverage under such plans, the Company will provide such coverage on the same terms as iscustomarily provided by the Company to the plan participants as modified from time to time.The following specific benefits will also be provided to the Executive at the expense of theCompany.**4.4.1 Vacation.**The Executive will be entitled to take paid vacation (as approved)each calendar year during the term of this Agreement in accordance with Companypolicy, subject to proration for any portion of a calendar year under thisAgreement. No additional compensation will be paid for failure to take vacation andno vacation may be carried forward from one calendar year to another.   **Employment Agreement — Scott Voth** **2**
 
 

 
**Exhibit 10.39****4.5 Gross-Up Payment.**In the event it is determined that any payment or distribution by theCompany or the Company’s subsidiaries or affiliates to or for the benefit of theExecutive (whether paid or payable or distributed or distributable pursuant to the terms ofthis Agreement or otherwise, but determined without regard to any additional paymentsrequired under this paragraph 4.5) (a **“Payment”**) is subject to the excise tax imposed bySection 4999 of the Internal Revenue Code (the **“Code”**) or any interest or penalties relatedto such excise tax (collectively, the **“Excise Tax”**), the Executive will be entitled toreceive an additional payment (a **“Gross-Up Payment”**) from the Company. The Gross-Up Paymentwill be equal to the amount such that after payment by the Executive of all taxes (includingthe Excise Tax, income taxes, interest and penalties imposed with respect to such taxes) onthe Gross-Up Payment, the Executive will retain an amount of the Gross-Up Payment equal tothe Excise Tax imposed on the Payment.**4.5.1 Determination.**Subject to the provisions of paragraph 4.5.2 alldeterminations required to be made under this paragraph 4.5 (including whether andwhen a Gross-Up Payment is required, the amount of such Gross-Up Payment and theassumptions to be utilized) will be made by a nationally recognized certified publicaccounting firm designated by the Executive (the **“Accounting Firm”**). The AccountingFirm will provide detailed supporting calculations both to the Company and theExecutive within fifteen (15) business days of the receipt of notice from theExecutive that there has been a Payment, or such earlier time as is reasonablyrequested by the Company. In the event that the Accounting Firm is serving asaccountant or auditor for the individual, entity or group effecting a Change ofControl (as hereinafter defined), the Executive will be entitled to appoint anothernationally recognized accounting firm to make the determinations required under thisparagraph (which accounting firm will then be referred to as the Accounting Firmhereunder). All fees and expenses of the Accounting Firm will be paid by theCompany. Any Gross-Up Payment required to be paid under this paragraph 4.5 will bepaid by the Company to the Executive within five (5) days of the receipt of theAccounting Firm’s determination. Any determination by the Accounting Firm will bebinding on the Company and the Executive. As a result of the uncertainty in theapplication of Section 4999 of the Code at the time of the initial determination bythe Accounting Firm, the Gross-Up Payment made by the Company may be less thanactually required (an **“Underpayment”**) consistent with the calculations required tobe made hereunder. In the event that the Company exhausts its remedies pursuant toparagraph 4.5.2 below and the Executive thereafter is required to make a payment ofany Excise Tax, the Accounting Firm will determine the amount of the Underpaymentthat has occurred and any such Underpayment will be promptly paid by the Company toor for the benefit of the Executive.**4.5.2 Contest of Claims.**The Executive will notify the Company in writing of anyclaim by the Internal Revenue Service that, if successful, would require the paymentby the Company of a Gross-Up Payment. Such notification will be given as soon aspracticable but no later than ten (10) business days after the Executive is informedin writing of such claim and will apprise the Company of the nature of such claimand the date on which such claim is requested to be paid. The Executive will not paysuch claim prior to the expiration of the thirty (30) day period following the dateon which the Executive notifies the Company (or such shorter period ending on thedate that any payment of taxes with respect to such claim is due). If the Companynotifies the Executive in writing prior to the expiration of such thirty (30) dayperiod that the Company desires to contest such claim, the Executive will: (a)provide to the Company any information reasonably requested by the Company relatingto such claim; (b) take such action in connection with contesting such claim as theCompany reasonably requests in writing including, without limitation, acceptinglegal representation with respect to   **Employment Agreement — Scott Voth** **3**
 
 

 
**Exhibit 10.39**such claim by an attorney reasonably selected by the Company; (c) cooperate with theCompany in good faith as necessary to effectively contest such claim; and (d) permitthe Company to participate in any proceedings relating to such claim. The Companywill bear and pay directly all costs and expenses (including additional interest andpenalties) incurred in connection with the contest of the claim and agrees toindemnify and hold the Executive harmless, on an after-tax basis, for any Excise Taxor income tax (including interest and penalties with respect thereto) imposed as aresult of such protest (including payment of costs and expenses as providedhereunder). Without limitation on the foregoing provisions, the Company will controlall proceedings related to such contested claim, may at its sole option pursue orforgo any and all administrative appeals, proceedings, hearings and conferences withthe taxing authority in respect of such claim and may at its sole option eitherdirect the Executive to pay the tax claimed and sue for a refund or contest theclaim in any permissible manner. The Executive agrees to prosecute such contest to adetermination before any administrative tribunal, in a court of initial jurisdictionand in one or more appellate courts, as the Company reasonably determines. If theCompany directs the Executive to pay a claim and sue for a refund, the Company willbe required to advance the amount of such payment to the Executive on aninterest-free basis and agrees to indemnify and hold the Executive harmless, on anafter-tax basis, from any Excise Tax or income tax (including interest or penaltieswith respect thereto) imposed with respect to such advance or with respect to anyimputed income with respect to such advance, provided that any extension of thestatute of limitations relating to payment of taxes for the taxable year of theExecutive with respect to which such contested amount is claimed to be due islimited solely to such contested amount. Furthermore, the Company’s control of thecontested claim will be limited to issues with respect to which a Gross-Up Paymentwould be payable hereunder and the Executive will be entitled to settle or contest,as the case may be, any other issue raised by the Internal Revenue Service or anyother taxing authority.**4.5.3 Refunds.**If, after the receipt by the Executive of an amount advanced by theCompany pursuant to paragraph 4.5.2, the Executive becomes entitled to receive anyrefund with respect to such claim the Executive will (subject to the Company’scomplying with the requirements of paragraph 4.5.2) promptly pay to the Company theamount of such refund (together with any interest paid or credited thereon aftertaxes applicable thereto). If, after the receipt by the Executive of an amountadvanced by the Company pursuant to paragraph 4.5.2, a determination is made thatthe Executive will not be entitled to any refund with respect to such claim and theCompany does not notify the Executive in writing of its intent to contest suchdenial of refund prior to the expiration of (30) days after such determination, thenthe advance will be forgiven and will not be required to be repaid and the amount ofsuch advance will offset, to the extent thereof, the amount of Gross-Up Paymentrequired to be paid.**4.6 Compensation Review.**The compensation of the Executive will be reviewed on a regularbasis by the Board of Directors of the Company (or a Compensation Committee thereof) andshall be reviewed annually if the compensation of other executive officers of the Company isreviewed at such frequency. The compensation of the Executive prescribed in paragraph 4 ofthis Agreement (including benefits) may be increased at the discretion of the Board ofDirectors of the Company or the Compensation Committee.   **Employment Agreement — Scott Voth** **4**
 
 

 
**Exhibit 10.39****5. Term.**In the absence of an earlier termination as set forth in paragraph 6 below, thisAgreement will extend for a term commencing on the Effective Date, and ending on the final day ofthe current fiscal year of the Company (the **“Expiration Date”**). However, unless the Companyprovideswritten notice of non-extension to the Executive on or before December 1st during the term of thisAgreement, the term and the Expiration Date will be automatically extended for one (1) additionalyear.**6. Termination.**The Executive’s employment will continue in effect until the expiration of theterm set forth in paragraph 5 of this Agreement unless earlier terminated pursuant to thisparagraph 6.**6.1 Termination by Company.**The Company will have the following rights to terminateExecutive’s employment:**6.1.1 Termination without Cause.**(a) The Company may terminate Executive’semployment without Cause at any time by the service of written notice of terminationto the Executive specifying an effective date of such termination not sooner thanten (10) days after the date of such notice (the **“Termination Date”**). In the eventthe Executive is terminated without Cause (other than a CC Termination underparagraph 5.3 of this Agreement), the Executive will receive as terminationcompensation: (i) for a period of 18 months his Base Salary (as in effect on theTermination Date) plus bonus payable under COIP (based upon the incentive targetpercentage in effect on the Termination Date and assuming Company performance at100% of target); and (ii) any vacation pay accrued through the Termination Date. Thepayment of such amounts shall be made during the remaining term of the Agreement ininstallments consistent with the Company’s normal payroll practices (includingproration of bonus and payment of bonus when normally paid by the Company) but, ifon the Termination Date, the Executive is a “specified employee” as defined inregulations under Section 409A of the Code, such payments will commence on the firstpayroll payment date which is more than six (6) months following the TerminationDate and the first payment shall include any amounts that would have otherwise beenpayable during the six month period.(b) In the event Executive becomes employed, either full or part-time andwhether as an employee, consultant or otherwise, during the term payments are duepursuant to this paragraph 6.1.1(a), payments due Executive under Section 6.1.1(a)shall be reduced by the amount of compensation received by Executive as a result ofsuch other employment. In no event shall payments due under Section 6.3 be reducedas a result of Executive’s employment. In all events, Executive shall retain anyrights to continue medical insurance coverage under the COBRA continuationprovisions of the group medical insurance plan by paying the applicable premiumtherefor.**6.1.2 Termination for Cause.**The Company may terminate Executive’s employment forCause. For purposes of this Agreement, **“Cause”**means either of the following:(a) the engagement by the Executive in illegal conduct, gross misconduct or aclearly established material violation of the Company’s written policies andprocedures; or(b) the failure of the Executive to perform substantially the Executive’sduties with the Company or its subsidiaries or affiliates (other than a failureresulting from incapacity due to physical or mental illness), after a written demandfor substantial performance is delivered to the Executive by the Chief ExecutiveOfficer which identifies the manner in which the Chief Executive Officer believesthat the Executive has not substantially performed the Executive’s duties.   **Employment Agreement — Scott Voth** **5**
 
 

 
**Exhibit 10.39**For purposes of paragraph 6.1.2(a) of this Agreement, “gross misconduct” meansconduct evidencing a willful or wanton disregard for the legitimate businessinterests of the Company, deliberate violations of Company policy or flagrantdisregard for standards of behavior the Company has a right to expect from one ofits corporate officers, to the extent such policy or standards of behavior do notviolate any law or regulation.Any act, or failure to act, based on authority given pursuant to a resolutionduly adopted by the Board of Directors or based on the advice of counsel for theCompany will be conclusively presumed to be done, or omitted to be done, by theExecutive in good faith and in the best interests of the Company. In the eventExecutive’s employment is terminated for Cause, the Company will not have anyobligation to provide any further payments or benefits to the Executive after theeffective date of such termination, except for prorated bonus, vacation and anyother amounts required by applicable law or policy.**6.2 Termination by Executive.**The Executive may voluntarily terminate his employment withor without Cause by the service of written notice of such termination to the Companyspecifying an effective date of such termination thirty (30) days after the date of suchnotice, during which time the Executive may use remaining accrued vacation days, or at theCompany’s option, be paid for such days. In the event his employment is terminated by theExecutive, neither the Company nor the Executive will have any further obligationshereunder, except for any obligations which expressly survive termination of employmentincluding, without limitation, any obligation of the Company to provide any further paymentsor benefits to the Executive after the effective date of such termination.**6.3 Termination After Change in Control.**If during the term of this Agreement there is a**“Change of Control”**and within twenty-four (24) months thereafter notwithstanding anytermination pursuant to Section 5, there is a CC Termination (as hereafter defined), thenthe Executive will be entitled to a severance payment (in addition to any other rights andother amounts payable to the Executive or under Company plans in which Executive is aparticipant) payable in a lump sum in cash within 10 days following the CC Termination in anamount equal to the sum of the following: (a) the Executive’s Base Salary for the lasteighteen (18) calendar months ending immediately prior to the CC Termination and bonus paidpursuant to Section 4.2 (based on the average of the last three years annual bonuses or suchlesser number of years as Executive may have been employed); plus (b) any applicableGross-Up Payment. If the foregoing amount is not paid within ten (10) days after the CCTermination, the unpaid amount will bear interest at the per annum rate of 12%, but in noevent higher than the highest rate allowed by applicable law. Notwithstanding theforegoing, if at the time of a CC Termination, the Executive is a “specified employee” asdefined in regulations under Section 409A of the Code, such payment will be made on thefirst day which is more than six months following the CC Termination. In connection with anyChange of Control, the Company shall obtain the assumption of this Agreement, withoutlimitation or reduction, by any successor to the Company or any parent corporation of theCompany.   **Employment Agreement — Scott Voth** **6**
 
 

 
**Exhibit 10.39****6.3.1 Change of Control.**For the purpose of this Agreement, a **“Change of Control”**means the occurrence of any of the following:(a) The acquisition by any individual, entity or group (within the meaning ofSection 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the**“Exchange Act”**)) (a **“Person”**), other than John H. Marmaduke or his affiliates (the“**Exempt Persons**”), of beneficial ownership (within the meaning of Rule 13d-3promulgated under the Exchange Act) of 40% or more of either (i) the thenoutstanding shares of common stock of the Company (the **“Outstanding CompanyCommon Stock”**) or (ii) the combined voting power of the then outstanding votingsecurities of the Company entitled to vote generally in the election of directors(the **“Outstanding Company Voting Securities”**). For purposes of this paragraph (a)the following acquisitions by a Person will not constitute a Change of Control: (i)any acquisition directly from the Company; (ii) any acquisition by the Company;(iii) any acquisition by any employee benefit plan (or related trust) sponsored ormaintained by the Company or any corporation controlled by the Company; or (iv) anyacquisition by any corporation pursuant to a transaction which complies with clauses(i), (ii) and (iii) of paragraph (c) of this paragraph 6.3.1.(b) The individuals who, as of the date hereof, constitute the Board ofDirectors (the **“Incumbent Board”**) cease for any reason to constitute at least amajority of the Board of Directors. Any individual becoming a director subsequent tothe date hereof whose election, or nomination for election by the Company’sshareholders, is approved by a vote of at least a majority of the directors thencomprising the Incumbent Board will be considered a member of the Incumbent Board asof the date hereof, but any such individual whose initial assumption of officeoccurs as a result of an actual or threatened election contest with respect to theelection or removal of directors or other actual or threatened solicitation ofproxies or consents by or on behalf of a Person other than the Incumbent Board willnot be deemed a member of the Incumbent Board as of the date hereof.(c) The consummation of a reorganization, merger, consolidation or sale orother disposition of all or substantially all of the assets of the Company (a**“Business Combination”**), unless following such Business Combination: (i) theindividuals and entities who were the beneficial owners, respectively, of theOutstanding Company Common Stock and Outstanding Company Voting Securitiesimmediately prior to such Business Combination beneficially own, directly orindirectly, more than 60% of, respectively, the then outstanding shares of commonstock and the combined voting power of the then outstanding voting securitiesentitled to vote generally in the election of directors, as the case may be, of thecorporation resulting from such Business Combination (including, without limitation,a corporation which as a result of such transaction owns the Company or all orsubstantially all of the Company’s assets either directly or through one or moresubsidiaries) in substantially the same proportions as their ownership, immediatelyprior to such Business Combination of the Outstanding Company Common Stock andOutstanding Company Voting Securities, as the case may be, (ii) no Person (excludingany corporation resulting from such Business Combination or any employee benefitplan (or related trust) of the Company or such corporation resulting from suchBusiness Combination) other than one or more of the Exempt Persons beneficiallyowns, directly or indirectly, 40% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combinationor the combined voting power of the then outstanding voting securities of suchcorporation except to the extent that such ownership existed prior to the BusinessCombination and (iii) at least a majority of the members of the board of directorsof the corporation resulting from such Business Combination were members of theIncumbent Board at the time of the execution of the initial agreement, or of theaction of the Board, providing for such Business Combination.(d) The approval by the shareholders of the Company of a complete liquidationor dissolution of the Company.   **Employment Agreement — Scott Voth** **7**
 
 

 
**Exhibit 10.39****6.3.2 CC Termination.**The term “CC Termination” means any of the following: (a) theExecutive’s employment is terminated by the Company other than under paragraphs6.1.2, 6.4 or 6.5; or (b) the Executive resigns as a result of change in theExecutive’s duties or title, a reduction in the Executive’s then current Base Salarythat is not generally applicable to all or substantially all of the Company’sexecutives or a significant reduction in the Executive’s then current benefits asprovided in Section 4, a relocation of more than 25 miles from the Executive’s thencurrent place of employment being required by the Board of Directors or a default bythe Company under this Agreement**6.4 Incapacity of Executive.**If the Executive suffers from a medically diagnosed physicalor mental condition, which in the reasonable business judgment of the Company’s Board ofDirectors, prevents the Executive (in whole or in part) from performing the duties specifiedherein for a period of four (4) consecutive months, the Executive’s employment may beterminated by the Company, in which event, the Company will pay Executive his Base Salaryand Bonus (computed at up to 100% of plan based on actual performance, but in no event morethan 100% of plan regardless of actual performance) in effect on the date of terminationthrough the lesser of (i) the death of Executive; or (ii) the remaining term of thisAgreement, but in any event through the Expiration Date, reduced by any disability paymentsreceived by Executive from any third party. The payment of such amounts shall be made duringthe remaining term of the Agreement in installments consistent with the Company’s normalpayroll practices, but, if on the termination date, the Executive is a “specified employee”as defined in regulations under Section 409A of the Code, such payments will commence on thefirst payroll payment date which is more than six months following the termination date andthe first payment shall include any amounts that would have otherwise been payable duringthe six (6) month period. Notwithstanding the foregoing, the amount payable hereunder willbe reduced by any benefits payable under any disability plans provided by the Company underparagraph 4.4 of this Agreement. Nothing in paragraph will be interpreted or applied so asto lessen the Executive’s rights under state or federal disability or medical leave laws.**6.5 Death of Executive.**If the Executive dies during the term of this Agreement,Executive’s employment will terminate without compensation to the Executive’s estate except:(a) the obligation to continue the Base Salary payments under paragraph 4.1 of thisAgreement for twelve (12) months after the date of death of the Executive, and (b) thebenefits described in paragraph 4.4 of this Agreement accrued through the date of death ofthe Executive, including a pro-ration of accrued bonus.**6.6 Resignation Following Constructive Discharge.**If at any time, except in connectionwith a termination otherwise pursuant to this Agreement, Executive is ConstructivelyDischarged (as that term is defined in this Section 6) then Executive shall have the right,by written notice to Company within sixty (60) days of such Constructive Discharge, toterminate his services hereunder, effective as of thirty (30) days after such notice.Executive shall in such event be entitled to the compensation and benefits as if suchemployment were terminated pursuant to Section 6.1.1.For purposes of this Agreement, Executive shall be “Constructively Discharged” upon theoccurrence of any one of the following events:(a) Executive is removed from his position with the Company other than as a result ofExecutive’s appointment to a position of equal or superior scope and responsibility; or   **Employment Agreement — Scott Voth** **8**
 
 

 
**Exhibit 10.39**(b) Executive’s targeted total compensation is reduced by more than 20% (other thanacross-the-board reductions similarly affecting all executive officers of Company).**6.7 Effect of Termination.**The termination of Executive’s employment will terminate allobligations of the Executive to render services on behalf of the Company. The Executivewill maintain the confidentiality of all information acquired by the Executive during theterm of his employment in accordance with paragraph 7 of this Agreement and the covenantsset forth in paragraph 8 of this Agreement. Except as otherwise provided in this paragraph6, no accrued bonus, severance pay or other form of compensation will be payable by theCompany to the Executive by reason of the termination of his employment. In the event thatpayments are required to be made by the Company under this paragraph 6, the Executive willnot be required to seek other employment as a means of mitigating the Company’s obligationshereunder resulting from termination of the Executive’s employment and the Company’sobligations hereunder (including payment of severance benefits) will not be terminated,reduced or modified as a result of the Executive’s earnings from other employment orself-employment. All keys, entry cards, credit cards, files, records, financial information,furniture, furnishings, equipment, supplies and other items relating to the Company willremain the property of the Company. The Executive will have the right to retain and removeall personal property and effects that are owned by the Executive and located in the officesof the Company, subject to inspection by the Company. All such personal items will beremoved from such offices no later than ten (10) days after the effective date oftermination, and the Company is hereby authorized to discard any items remaining and toreassign the Executive’s office space after such date. Prior to the effective date oftermination, the Executive will cooperate with the Company to provide for the orderlytermination of the Executive’s employment.**7. Confidentiality.**The Executive recognizes that the nature of the Executive’s services aresuch that the Executive is being provided and will have access to information which constitutestrade secrets, is of a confidential nature, is of great value to the Company or is the foundationon which the business of the Company is predicated. The Executive agrees not to disclose to anyperson other than the Company’s employees or the Company’s legal counsel or other partiesauthorized by the Company to receive confidential information (**“Confidential Information”**) nor usefor any purpose, other than the performance of this Agreement, any Confidential Information.Confidential Information includes data or material (regardless of form) which is: (a) a tradesecret; (b) provided, disclosed or delivered to Executive by the Company, any officer, director,employee, agent, attorney, accountant, consultant, or other person or entity employed by theCompany in any capacity, any customer, borrower or business associate of the Company or any publicauthority having jurisdiction over the Company of any business activity conducted by the Company;or (c) produced, developed, obtained or prepared by or on behalf of Executive or the Company(whether or not such information was developed in the performance of this Agreement) with respectto the Company or any assets oil and gas prospects, business activities, officers, directors,employees, borrowers or customers of the foregoing. However, Confidential Information will notinclude any information, data or material which at the time of disclosure or use was generallyavailable to the public other than by a breach of this Agreement, was available to the party towhom disclosed on a non-confidential basis by disclosure or access provided by the Company or athird party, or was otherwise developed or obtained independently by the person to whom disclosedwithout a breach of this Agreement. On request by the Company, the Company will be entitled to acopy of any Confidential Information in the possession of the Executive. The provisions of thisparagraph 7 will survive the termination, expiration or cancellation of Executive’s employment fora period of eighteen (18) months after the date of termination. The Executive will deliver to theCompany all originals and copies of the documents or materials containing Confidential Information.For purposes of paragraphs 7, 8, and 9 of this Agreement, the Company expressly includes any of theCompany’s subsidiaries or affiliates.   **Employment Agreement — Scott Voth** **9**
 
 

 
**Exhibit 10.39****8. ****Non-Competition.**(a) Scope. During the effectiveness of this Agreement (the “**Term**”), Executive shall devotesubstantially all of his business, time, attention and energies to the business and interests ofCompany, and except as otherwise provided herein, shall not be engaged (whether or not duringnormal business hours) in any other business or professional activity (whether or not such activityis pursued for gain, profit or other pecuniary advantage) without first obtaining the writtenconsent of the Board of Directors of Company. In return for Company’s disclosure of ConfidentialInformation and trade secrets in paragraph 7, above, and Company’s provision of specializedtraining related to Company’s products, services, business model, and operations, during the Termof and for a period of eighteen (18) months after the expiration or termination of this Agreement,for any reason or for no reason at all, Executive agrees that she will not directly or indirectly:(i) Own, have any interest in or be, serve or act as an individual proprietor, partner,agent, stock holder, officer, employee, consultant, director, joint venturer, investor, lender, orin any other capacity whatsoever (other than as the holder of not more than one percent (1%) of thetotal outstanding stock of a publicly held company) of or with, or assist in any way, anycorporation, partnership, firm or business enterprise at least 20% of whose sales (in dollarvolume) are books, music or video sales or rentals (whether such book, music or video [includinggames] is new or pre-owned) (individually or in the aggregate with all affiliates thereof) andwhich does business in any state in which Company does business on the date Executive ceases to beemployed (a “**Competing Business**”);(ii) Solicit or induce, or attempt to induce, any employee or independent contractor ofCompany or any other person who shall be in the service of Company to terminate his employment withor otherwise cease his relationship with Company; or(iii) Solicit, divert or take away, or attempt to solicit, divert or take away, the businessor patronage of any of the clients, customers (whether any such customer has done business once ormore than once), suppliers or accounts, or prospective clients, customers or accounts, or suppliersto Company, but Executive shall not be prevented from doing business with such persons or entities.(b) It is hereby expressly agreed that if any portion of this paragraph 8 or any of thecovenants and provisions set forth in this Agreement regarding restrictions on competition,confidentiality or solicitation is held to be unreasonable, arbitrary, against public policy orotherwise unenforceable for any reason, then each such covenant or provision shall be considereddivisible as to scope, time and geographical area, with each month of a specified period beingdeemed a separate period of time and each county within any geographical area being deemed aseparate geographic area. The parties to this agreement also expressly agree that notwithstandingtheir mutual expectation that the covenants and restrictions contained herein will be enforceableand enforced, a lesser scope, period of time or geographic area shall be enforced to the extentthat the covenants contained herein may be unenforceable as written.**9. Proprietary Matters.**The Executive expressly understands and agrees that any and allimprovements, inventions, discoveries, processes or know-how that are generated or conceived by theExecutive during the term of this Agreement, whether generated or conceived during the Executive’sregular working hours or otherwise, will be the sole and exclusive property of the Company.Whenever requested by the Company (either during the term of this Agreement or thereafter), theExecutive will assign or execute any and all applications, assignments and or other instruments anddo all things which the Company deems necessary or appropriate in order to permit the Company to:(a) assign and convey or otherwise make available to the Company the sole and exclusive right,title, and interest in and to said improvements, inventions, discoveries, processes, know-how,applications, patents, copyrights, trade   **Employment Agreement — Scott Voth** **10**
 
 

 
**Exhibit 10.39**names or trademarks; or (b) apply for, obtain, maintain, enforce and defend patents, copyrights,trade names, or trademarks of the United States or of foreign countries for said improvements,inventions, discoveries, processes or know-how. However, the improvements, inventions, discoveries,processes or know-how generated or conceived by the Executive and referred to above (except as theymay be included in the patents, copyrights or registered trade names or trademarks of the Company,or corporations, partnerships or other entities which may be affiliated with the Company) will notbe exclusive property of the Company at any time after having been disclosed or revealed or haveotherwise become available to the public or to a third party on a non-confidential basis other thanby a breach of this Agreement, or after they have been independently developed or discussed withouta breach of this Agreement by a third party who has no obligation to the Company or the CompanyEntities.**10. Arbitration.**The parties will attempt to promptly resolve any dispute or controversy arisingout of or relating to this Agreement or termination of the Executive by the Company. Anynegotiations pursuant to this paragraph 10 are confidential and will be treated as compromise andsettlement negotiations for all purposes. If the parties are unable to reach a settlement amicably,the dispute will be submitted to binding arbitration before a single arbitrator in accordance withthe Employment Dispute Resolution Rules of the American Arbitration Association. The arbitratorwill be instructed and empowered to take reasonable steps to expedite the arbitration and thearbitrator’s judgment will be final and binding upon the parties subject solely to challenge on thegrounds of fraud or gross misconduct. Except for damages arising out of a breach of paragraphs 6,7, 8 or 9 of this Agreement, the arbitrator is not empowered to award total damages (includingcompensatory damages) that exceed 300% of compensatory damages and each party hereby irrevocablywaives any damages in excess of that amount. The arbitration will be held in Potter County, Texas.Judgment upon any verdict in arbitration may be entered in any court of competent jurisdiction andthe parties hereby consent to the jurisdiction of, and proper venue in, the federal and statecourts located in Potter County, Texas. The Company will pay the costs and expenses of thearbitration including, without implied limitation, the fees for the arbitrators. Subject to theprovisions of Section 11.7, Executive shall pay for the fees and expenses of his counsel, expertsand any other advisors. Unless otherwise expressly set forth in this Agreement, the proceduresspecified in this paragraph 10 will be the sole and exclusive procedures for the resolution ofdisputes and controversies between the parties arising out of or relating to this Agreement.Notwithstanding the foregoing, a party may seek a preliminary injunction or other provisionaljudicial relief if in such party’s judgment such action is necessary to avoid irreparable damage orto preserve the status quo.**11. Miscellaneous.**The parties further agree as follows:**11.1 Time.**Time is of the essence of each provision of this Agreement.**11.2 Notices.**Any notice, payment, demand or communication required or permitted to begiven by any provision of this Agreement will be in writing and will be deemed to have beengiven when received by personal delivery, by facsimile, by overnight courier, or bycertified mail, postage and charges prepaid, directed to the following address or to suchother or additional addresses as any party might designate by written notice to the otherparty:       To the Company: Hastings Entertainment, Inc.