Document:

Prepared by MERRILL CORPORATION

Exhibit 10.9

September 19, 2001

 

Al Ellsworth

1100 W. Crescent

Park Ridge, IL  60068

 

Re:          Retention

Plan

 

Dear Al:

 

                As you may be aware the BP 13D

filing indicates that multiple options for the divestiture of BP’s holdings in

Vysis will be reviewed. Such options may include a merger or sale of the

business.  Therefore, in order to help

encourage your continued focused attention on the on-going success of Vysis,

Inc (“Vysis”) and its affiliates (“the Company”) and to encourage you to remain

employed by the Company during a potential period of transition which may

result in a change in control of Vysis, the Board of Directors of Vysis has

authorized the establishment of a Retention Plan which will include payment to

you of a “Retention Bonus”.  This

Retention Bonus will be payable in the event a Change in Control (as defined

below) occurs and if certain other minimal terms and conditions are met.  The following describes your Retention Bonus

Plan and the terms and conditions relating to the Retention Bonus payment:

 

                1.             If you satisfy the terms and conditions described below,

the Company will pay you a Retention

Bonus in an amount equal to 6 (six) months of your annual base salary (not

including any bonus or incentive payments or other types of compensation whatsoever)

in effect immediately prior to the closing date of a Change in Control, as

defined in the Vysis, Inc. Severance Program adopted by Vysis, Inc. on August

17, 2001 (the “Transaction Closing Date”).

 

                2.             In order to receive payment of the Retention Bonus, you

must remain employed by the Company for ninety (90) days after the Transaction

Closing Date (the “Payment Date”); provided, however, that if your employment

is terminated (i) by the Company for reasons other than Cause or (ii) by death

or disability, after the Transaction Closing Date but before the Payment Date,

you will nonetheless receive payment of the Retention Bonus.  For this purpose, the term “Cause” shall

mean any of the following:  (A) you have

engaged in willful conduct involving misappropriation, dishonesty, or serious

moral turpitude which is demonstrably and materially injurious to the Company

or (B) you are convicted of a felony.

 

                3.             The Retention Bonus shall be paid to you on the Payment

Date, provided that you remain employed on that date.  If your employment is terminated by the Company before the

Payment Date for reasons of death or disability or for reasons other than

Cause, the Retention Bonus shall be paid to you on the day your employment is

terminated.

 

                4.             The Retention Bonus will be subject to such deductions

as may be required to be made pursuant to law, government regulations or order

or by agreement with you.

 

                5.             If you find it necessary to bring any legal action for

the enforcement of this agreement, or because of an alleged dispute, breach or

default in connection with any of the provisions of this agreement, and if you

are the prevailing party in such action, Vysis shall reimburse you for your

reasonable attorneys' fees and any other costs that you incur in connection

with such action.  Any payments pursuant

to this paragraph 5 shall be in addition to any other relief to which you may

be entitled as a result of such action.

 

6.             The

parties hereto agree to maintain the existence of this Agreement and the terms

thereof confidential and shall not disclose them to any third parties (other

than Vysis management officials and administrative personnel necessary to

effectuate the terms of this Agreement and/or counsel for the parties, their

respective tax advisors and accountants and Employee’s immediate family),

except as required by law.

 

                7.             The Company’s obligations under this Agreement shall be

governed by the laws of the State of Illinois. 

If a Change of Control has not occurred by August 17, 2002, this

Agreement shall automatically terminate as of such date.

 

                If

you have any questions regarding the foregoing, please contact Bill Murray.

 

Sincerely,

 

	

   

  	

   

  	

   

  	

   

  	

  /s/ John L. Bishop

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  John

  L. Bishop

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  President

  and CEO

  	

   

  	

   

  	

   

  

 

JLB/ld

 

 

	

  Agreed:  /s/ Al Ellsworth

  
	

   

  
	

  Employee

  Name: Al Ellsworth

  
	

   

  
	

  Date:  September 25, 2001Prepared by MERRILL CORPORATION

 

Director’s Agreement

 

This Director’s

Agreement between Vysis, Inc. ("Vysis"), a Delaware corporation, and

Dr. Walter R. Quanstrom is effective April 1, 2000.

 

WHEREAS, Vysis

and Dr. Quanstrom wish to set out the terms of compensation for Dr. Quanstrom’s

service on Vysis’ Board of Directors after his retirement from employment with

BP Amoco p.l.c.

 

Therefore,

Vysis and Dr. Quanstrom agree to the following Director’s Agreement.

 

(1) Vysis

agrees to pay Dr. Quanstrom a monthly Director’s retainer fee of $2,000 per

month, for each month or part thereof in which he serves as a member of Vysis’

Board of Directors.

 

(2) Vysis

agrees to pay Dr. Quanstrom for each Vysis Board of Directors meeting that he

attends in person $2,000 and for attendance by teleconference $400 for up to

one hour and $750 for teleconferences over 1 hour.  Vysis further agrees to reimburse all reasonable travel and other

expenses Dr. Quanstrom incurs for attendance at a Board of Directors meeting.  Vysis shall pay the Board meeting fee promptly

after each meeting and shall reimburse the expenses promptly after receipt from

Dr. Quanstrom of an invoice therefor.

 

(3) Dr.

Quanstrom will also participate in Vysis’ 1999 Outside Directors Stock Option

Plan ("Plan") according to the terms of the Plan.  Vysis agrees that Dr. Quanstrom will be

granted an initial option for 10,000 shares as specified in the Plan, with the

grant to be made as of April 1, 2000. 

Dr. Quanstrom’s participation in the Plan is subject to the Plan and to

his acceptance and execution of Vysis' standard stock option agreement for the

Plan.

 

(4) Vysis shall

indemnify Dr. Quanstrom for his service as a member of Vysis' Board of

Directors to the fullest extent permitted under Delaware law.

 

(5) Dr.

Quanstrom agrees that Vysis shall have the right to make disclosures of

information concerning Dr. Quanstrom as a member of Vysis' Board of Directors

which are required by applicable law.

 

Accepted and

agreed to:

 

	

  VYSIS,

  INC.

  	

  DR.

  WALTER R. QUANSTROM

  
	

   

  	

   

  
	

   

  	

   

  
	

  /s/  John L. Bishop

  	

   

  	

  /s/

  Walter R. Quanstrom

  
	

  John

  L. Bishop

  	

   

  
	

  President

  & CEOPrepared by MERRILL CORPORATION

EMPLOYMENT

AGREEMENT

 

                This Employment

Agreement is entered into as of the 1st day of July, 2001, by and between

Gateway Energy Corporation, a Delaware corporation, with its principal place of

business at 500 Dallas Street, Suite 2615, Houston, Texas  77002 (hereinafter the “Company”), subject

to the further definition set forth in Section 7.1, and Michael T. Fadden,

whose address is 1701 Hermann Drive, Houston, Texas 77004 (hereinafter

“Executive”).

 

                WHEREAS, the

Company considers the establishment and maintenance of a sound and vital

management to be essential to protecting and enhancing the best interests of

the Company and its shareholders; and

 

                WHEREAS, the Board

of Directors of the Company has determined that appropriate steps should be

taken to reinforce and encourage the continued attention and dedication of

members of the Company's management, including Executive, to their assigned

duties without distraction.

 

                NOW, THEREFORE, in

consideration of the mutual covenants and agreements of the parties set forth

herein, and for other good and valuable consideration, the parties agree as

follows:

 

Section

1.  Employment.

 

                The Company and

Executive agree that Executive shall serve as President and Chief Executive

Officer of the Company.  Executive shall

perform such duties and exercise such powers pertaining to the management and

operations of the Company as may be determined from time to time by the

Company.  Such duties and powers shall

be consistent with those normally expected of persons holding similar

positions.  Executive’s duties, however,

are subject to reasonable modifications based on future developments in the

Company’s business.

 

Section

2. Term of Agreement.

 

                This Agreement

will be effective as of July 1, 2001, and, except as otherwise provided in this

Agreement, will continue in effect until October 31, 2004 and shall be

renewable for additional one (1) year terms at the option of the Company.  If either party chooses not to renew this

Agreement for a successive one year term, the party making that choice must

provide the other party with notice of the intent not to renew at least 180

days prior to the expiration of the then current term.  If a Change in Control occurs prior to the

expiration of the initial term of this Agreement, this Agreement will continue

in effect for three (3) years from the Change in Control.  If a Change in Control occurs during a one

(1) year renewal term, this Agreement will continue in effect for one (1) year

from the Change in Control.  Executive’s

base salary while employed will be determined from year to year in accordance

with the Company’s Executive Compensation Plan (the “Plan”), but shall be no

less than $175,000 annually.

 

Section

3. Change in Control.

 

                The Company

recognizes that, as is the case with many publicly held corporations, the

possibility of a change in control exists, and that possibility, along with the

uncertainty and questions which may arise among management, may result in the

departure or distraction of management personnel to the detriment of the

Company and its shareholders.  In order

to induce Executive to remain in its employ, the Company agrees to provide

Executive the payments and benefits described in this Agreement if Executive's

employment with the Company is terminated subsequent to a “Change in Control”

of the Company as defined in Section 4, under the circumstances described in

Section 5.

 

Section

4. Definition of Change in Control.

 

                For purposes of

this Agreement, a Change in Control of the Company means the occurrence of any

of the following events during the period in which this Agreement remains in

effect.  A Change in Control will be

deemed to occur on the date the event occurs:

 

4.1           Change in Voting Power. Any

person or persons acting together which would constitute a “group” for purposes

of Section 13(d) of the Exchange Act (other than the Company, or any

Subsidiary, or any entity beneficially owned by any of the foregoing)

beneficially own (as defined in Rule 13(d)-3 under the Exchange Act) without

Board approval or consent, directly or indirectly, at least thirty percent

(30%) of the total voting power of the Company entitled to vote generally in

the election of the Board;

 

4.2           Change in Board of Directors.

Either:

 

(a)           the Current Directors (as hereinafter

defined) cease for any reason to constitute at least a majority of the members

of the Board (for these purposes, a “Current Director” means any member of the

Board as of the date of this Agreement, and any successor of a Current Director

whose election or nomination for election by the Company's stockholders was

approved by at least a majority of the current Directors then on the Board); or

 

(b)           at any meeting of the stockholders of

the Company called for the purpose of electing directors, a majority of the

persons nominated by the Board for election as directors fail to be elected; or

 

4.3           Liquidation, Merger or

Consolidation. The stockholders of the Company approve:

 

(a)           a plan of complete liquidation of the

Company; or

 

(b)           an agreement providing for the merger

or consolidation of the Company (i) in which the Company is not the continuing

or surviving corporation (other than consolidation or merger with a wholly

owned subsidiary of the Company in which all shares outstanding immediately

prior to the effectiveness thereof are changed into or exchanged for the same

consideration) or (ii) pursuant to which the shares are converted into

cash, securities or other property, except a consolidation or merger of the

Company in which the holders of the shares immediately prior to the

consolidation or merger have, directly or indirectly, at least a majority of

the common stock of the continuing or surviving corporation immediately after

such consolidation or merger, or in which the Board immediately prior to the

merger or consolidation would, immediately after the merger or consolidation,

constitute a majority of the board of directors of the continuing or surviving

corporation; or

 

4.4           Sale of Assets. The

stockholders of the Company approve an agreement (or agreements) providing for

the sale or other disposition (in one transaction or a series of transactions)

of all or substantially all of the assets of the Company.

 

Section

5.  Termination Following Change in

Control.

 

If any of the events

described in Section 4 constituting a Change in Control occur, Executive will

be entitled to the payments and benefits provided for in Section 6 if a

subsequent termination of Executive's employment occurs within three (3) years

from the date of that Change in Control, unless that termination is:

 

(a)           because

of Executive's death;

 

(b)           by

the Company for Cause or Disability; or

 

(c)           by

Executive other than for Good Reason.

 

Those payments and benefits will be in lieu of any

severance payments Executive would otherwise receive in accordance with Section

19 of this Agreement.

 

5.1           Cause. Termination by the

Company of Executive's employment for “Cause” means Executive has materially

breached this Agreement or has engaged in action or misconduct in connection

with the performance of his duties that is injurious to the business of the

Company, or is convicted of a felony or commits an act of gross, flagrant, and

willful misconduct relating to his employment or the Company’s business,

including, but not limited to, theft or embezzlement of the Company’s property

or money, or an act of fraud against the Company.  If Company believes Cause exists, as defined herein, a written

notice will be delivered to Executive by the Chief Executive Officer of the

Company (or if Executive is the Chief Executive Officer, the Chairman of

the  Compensation and Stock Option

Committee) that specifically identifies the manner in which the Chief Executive

Officer (or the Chairman of the Committee) believes that Executive has given

the Company Cause for termination of Executive's employment, and giving

Executive an opportunity for Executive, together with Executive's counsel, to

be heard before the Board of Directors of the Company.  The Board of Directors of the Company may

then make a finding that, in the good faith opinion of two-thirds of the Board

of Directors (excluding the Executive), Executive acted (or failed to act when

he should have acted) in a manner constituting Cause as defined herein, and

specifying the particulars of that finding in detail. For purposes of this

subsection 5.1, no act, or failure to act, on Executive's part will be

considered “willful” unless done, or omitted to be done, by Executive not in

good faith and without reasonable belief that Executive's action or omission

was in the best interest of the Company. 

Following the opportunity for the Executive, together with the

Executive’s counsel, to be heard, the Board of Directors may excuse the

Executive from any further Board of Directors’ proceeding where the finding is

discussed or made.

 

5.2           Disability. Termination by the

Company of Executive's employment for “Disability” means termination of

Executive’s employment following and because of Executive's failure to perform

substantially all of the material duties of his position for a period of at

least one hundred eighty (180) consecutive calendar days due to physical or

mental illness or injury.  Executive

will continue to receive Executive's full base salary at the rate in effect and

any bonus payments under the Plan payable during the one hundred eighty (180)

day qualification period until termination of Executive's employment for

Disability. After that termination, Executive's benefit will be determined in

accordance with the Company's other benefit plans and practices then in effect

that apply to Executive.  The Company

will have no further obligation to Executive under this Agreement and all

supplemental benefits will be terminated. 

If the Company and Executive disagree as to Executive's incapacity, each

may appoint a medical doctor to certify his opinion as to Executive's

incapacity, and if the doctors do not agree as to Executive's incapacity, then

the two doctors will appoint a third medical doctor to certify his opinion as

to Executive's incapacity, and the decision of a majority of the three doctors will

prevail.  The Company will bear the

costs of the doctors’ opinions.

 

5.3           Good Reason. Termination by

Executive of Executive's employment for “Good Reason” means termination by

Executive of Executive's employment based on:

 

(a)           The

assignment to Executive of duties inconsistent with his position and status

with the Company as they existed immediately prior to a Change in Control, or a

substantial change in Executive's title, offices or authority, or in the nature

of his responsibilities, as they existed immediately prior to a Change in

Control, except in connection with the termination of his employment for Cause

or Disability or as a result of his death or by Executive other than for Good

Reason;

 

(b)           A

reduction in Executive's base salary as in effect on the date of this Agreement

or as his salary may be increased from time to time;

 

(c)           A

failure to continue the Company's Plan, as it may be modified from time to

time, substantially in the form in effect immediately prior to a Change in

Control, or a failure to continue Executive as a participant in the Plan on a

basis substantially similar to his participation immediately prior to a Change

in Control, or to pay Executive the amounts that Executive would be entitled to

receive in accordance with the Plan;

 

(d)           Requiring

Executive to be based more than fifty (50) miles from the location where

Executive is based immediately prior to a Change in Control, except for

required travel on business to an extent substantially consistent with

Executive’s business travel obligations prior to the Change in Control, or if

Executive is agreeable to relocating, then the Company agrees to reimburse

Executive for all reasonable moving expenses incurred by Executive or to

indemnify Executive against any loss realized in the sale of his principal

residence in connection with that relocation;

 

(e)           The

failure to continue in effect any retirement plan, life insurance plan, medical

insurance plan, disability plan or any other benefit plan in which Executive is

participating immediately prior to a Change in Control (or provide plans

providing Executive with substantially similar benefits), the taking of any

action by the Company that would adversely affect Executive's participation or

materially reduce his benefits under any of those plans or deprive Executive of

any material fringe benefit enjoyed by Executive immediately prior to a Change

in Control; or

 

(f)            The

failure by the Company to obtain the assumption of this Agreement by any

successor, as contemplated in Section 7.

 

5.4           Notice

of Termination. Any purported termination by the Company pursuant to

subsections 5.1 or 5.2 or by Executive pursuant to subsection 5.3 will be

communicated by written Notice of Termination to the other party. For purposes

of this Agreement, a “Notice of Termination” means a notice that indicates the

specific termination provision in this Agreement relied upon and setting forth

in reasonable detail the facts and circumstances claimed to provide a basis for

termination of Executive's employment under the provision so indicated. Any

purported termination not effected pursuant to a Notice of Termination meeting

the requirements set forth in this Agreement will not be effective.

 

5.5           Date

of Termination.  For purposes of

this Agreement, the date of the termination of Executive’s employment (“Date of

Termination”) will be:

 

(a)           if

Executive’s employment is terminated by his death, the end of the month in

which his death occurs;

 

(b)           if

Executive’s employment is terminated for Disability, thirty (30) days after

Notice of Termination is given; or

 

(c)           if

Executive’s employment is terminated by Executive or by the Company for any

other reason, the date specified in the Notice of Termination.

 

Section

6.  Payments and Benefits Upon

Certain Terminations Following a Change in Control.

 

If within three (3) years

following the Change in Control, Executive's employment is terminated other

than for Death, Disability or Cause, or if Executive terminates his employment

for Good Reason, then the following provisions will apply:

 

6.1           Compensation

Through Date of Termination. The Company will pay Executive within thirty

(30) days after termination:

 

(a)           Any

unpaid amount of Executive’s base salary through the Date of Termination;

 

(b)           With

respect to any year then completed, any unpaid amount accrued to Executive

pursuant to the Plan; and

 

(c)           With

respect to any year then partially completed, a pro rata portion through the

Date of Termination of Executive’s annual bonus under the Plan, based upon the

amount of his bonus for the previous year.

 

6.2           Additional

Severance. In lieu of any further salary and bonus payments to Executive

for periods subsequent to the Date of Termination, or other severance payments,

the Company will pay as severance pay to Executive two times the sum of:

 

(a)           Executive's

annual base salary as of the date of Change in Control, or as of the Date of

Termination, whichever is greater; and

 

(b)           Executive's

annual bonus under the Plan. 

Executive's annual bonus amount is to be based on the greater of:

 

(1)           the

average of Executive's bonus for the two fiscal years of the Company preceding

the year in which the Change in Control occurs; or

 

(2)           the

average of Executive's bonus for the two fiscal years of the Company preceding

the year in which the termination of employment occurs.

 

The severance pay

provided for in this Section 6.2 shall be transferred to a “Rabbi Trust,”

effective as of the Date of Termination, and paid to Executive in twenty-four

(24) equal monthly installments commencing on the first day of the next month

following the Date of Termination, and on the first day of each subsequent

month, until fully paid.

 

6.3           Benefit

Plans.  In the event of a Change in

Control, unless Executive's employment is terminated for Cause, the Company

will, at the Company expense, maintain in full force and effect for Executive's

continued benefit, for a period of four (4) years following the Date of

Termination, the health, dental, disability and other welfare benefits, plan,

programs and arrangements substantially equivalent to the most valuable

coverage provided under any plan maintained by the Company from time to time

during such period.  In addition,

Executive will continue to be provided during the four (4) years following the

Date of Termination, with the same life insurance coverage maintained on his

life immediately prior to the Date of Termination.  These benefits shall be reduced by the amount of similar benefits

provided to Executive during such period by a subsequent employer, as

determined solely by the Board.  For the

purposes of enforcing this offset provision, Executive shall notify the Board

as to the terms and conditions of any subsequent employment and the

corresponding benefits received pursuant thereto, and shall provide, or cause

to provide the Board, correct, complete, and timely information concerning the

same.

 

6.4           No

Mitigation Required.  Executive will

not be required to mitigate the amount of any payment provided for in this

Section 6 by seeking other employment or otherwise, nor will the amount of any

payment provided for in this Section 6 be reduced by any compensation earned by

Executive as the result of employment with another employer after the Date of

Termination or otherwise, except for a reduction in benefits as set forth in

subsection 6.3.

 

6.5           Tax

Gross-up Payment.  If any payments

or benefits provided pursuant to this Section 6 are subject to an excise tax on

an “excess parachute payment” under Section 4999 of the Internal Revenue Code

of 1986 (the “Code”), or any successor provision of the Code, or are subject to

an excise or penalty tax under any similar provision of any other revenue

system to which Executive may be subject, the Company will provide a gross-up

payment to Executive in order to place Executive in the same after-tax position

Executive would have been in had no excise or penalty tax become due and

payable under Code Section 4999 (or any successor provision) or any similar

provision of another revenue system.  No

gross-up payment will be made for any excise or penalty tax attributable to any

stock options granted to Executive, or for any other payments or benefits

provided to Executive under other sections of this Agreement.

 

Section

7. Successors; Binding Agreement.

 

7.1           Assumption

by Company’s Successor.  The Company

will request any successor (whether direct or indirect, by purchase, merger,

consolidation or otherwise) to all or substantially all of the business and/or

assets of the Company, by agreement in form and substance reasonably

satisfactory to Executive, to expressly assume and agree to perform this

Agreement.  Failure of the Company to

obtain that agreement prior to the effectiveness of any succession will be a

breach of this Agreement and will entitle Executive to payments and benefits

from the Company in the same amount and on the same terms to which Executive

would be entitled under this Agreement if Executive terminated Executive's

employment for Good Reason within three (3) years following a Change in

Control, except that for purposes of implementing the foregoing, the date on

which that succession becomes effective will be deemed the Date of

Termination.  As used in this Agreement,

“Company” means Gateway Energy Corporation and any successor to its business

and/or assets, regardless of whether such successor specifically assumes and

agrees to perform this Agreement.

 

7.2           Enforcement

by Executive’s Successor. This Agreement will inure to the benefit of and

be enforceable by Executive's personal or legal representatives, executors,

administrators, successors, heirs, distributees, devisees and legatees.  If Executive dies subsequent to the

termination of Executive's employment while any amount would still be payable

to Executive pursuant to this Agreement if Executive had continued to live, all

those amounts, will be paid in accordance with the terms of this Agreement to

Executive's devisee, legatee or other designee or, if there be no designee, to

Executive's estate. The foregoing payment will be made in a lump sum within

sixty (60) days following the date of Executive's death.

 

Section

8.  Working Facility.

 

Executive will perform

his services hereunder at the principal office of the Company, located in

Houston, Texas, except as travel to other locations is warranted by the

business of the Company.  The Company

shall provide Executive with such office space, secretarial help, and other

facilities and services as may be suitable to his position and appropriate for

the performance of his duties.

 

Section

9.  Expenses and Benefits.

 

The Company shall pay or

reimburse Executive for any expenses reasonably incurred by him in furtherance

of his duties hereunder, including, but not limited to, reasonable expenses for

traveling, meals and hotel accommodations, upon submission by Executive of

vouchers or itemized statements therefor, prepared in compliance with such

rules and policies as the Company may from time to time adopt and as may be

required in order to permit such payments as proper deductions by the Company

under the Internal Revenue Code and the rules and regulations adopted pursuant

thereto, now or hereafter in effect.

 

Executive shall have made

available to him, on substantially the same terms as other management level

employees of the Company, group insurance, retirement plans, and other benefit

programs in effect from time to time during the term of Executive’s

employment.  Executive’s participation

under any group insurance programs, retirement plans or other benefit programs

shall be subject to the applicable terms and conditions of the same.  This paragraph shall not be construed as a

commitment on the part of the Company to establish, maintain, or continue any

such plans or programs.

 

Section

10. Notice.

 

For purposes of this

Agreement, notices and all other communications provided for in this Agreement

will be in writing and will be deemed to have been duly given when delivered or

mailed by United States registered mail, return receipt requested, postage

prepaid, addressed to the respective addresses set forth on the first page of

this Agreement, provided that all notices to the Company will be directed to

the attention of the Chief Executive Officer of the Company (or if the notice

is from the Chief Executive Officer, to the Secretary of the Company), or to

such other address as either party may have furnished to the other in writing

in accordance with this Section 10, except that notice of change of address

will be effective only upon receipt.

 

Section

11. Modification and Waiver.

 

No provision of this

Agreement may be modified, waived or discharged unless that waiver,

modification or discharge is agreed to in writing by Executive and such officer

as may be specifically designated by the Board of Directors of the Company. No

waiver by either party at any time of any breach by the other party of, or compliance

with, any condition or provision of this Agreement to be performed by that

other party will be deemed a waiver of similar or dissimilar provisions or

conditions at the time or at any prior or subsequent time.

 

Section

12. Construction.

 

This Agreement supersedes

any oral agreement between Executive and the Company and any oral

representation by the Company to Executive with respect to the subject matter

of this Agreement.  The validity,

interpretation, construction and performance of this Agreement will be governed

by the laws of the State of Texas.

 

Section

13. Severability.

 

If any one or more of the

provisions of this Agreement, including but not limited to Section 18 hereof,

or any word, phrase, clause, sentence or other portion of a provision is deemed

illegal or unenforceable for any reason, that provision or portion will be

modified or deleted in such a manner as to make this Agreement as modified

legal and enforceable to the fullest extent permitted under applicable laws.

The validity and enforceability of the remaining provisions or portions will

remain in full force and effect.

 

Section

14. Counterparts.

 

This Agreement may be

executed in two or more identical counterparts, each of which will take effect

as an original and all of which will evidence one and the same agreement.

 

Section 15. Legal Fees.

 

If the Company breaches

this Agreement or if, within three (3) years following a Change in Control, (a)

Executive's employment is terminated by the Company other than for Cause or

Disability; or (b) Executive terminates Executive's employment for Good Reason,

the Company will reimburse Executive for all legal fees and expenses reasonably

incurred by Executive as a result of that termination (including all those fees

and expenses, if any, incurred in contesting or disputing the termination or in

seeking to obtain or enforce any right or benefit provided by this Agreement,

unless the Company is the prevailing party in such contest or dispute).

 

Section

16. Employment by a Subsidiary.

 

Either the Company or a

Subsidiary may be Executive's legal employer. For purposes of this Agreement,

any reference to Executive's termination of employment with the Company means

termination of employment with the Company and all Subsidiaries, and does not

include a transfer of employment between any of them. The actions referred to

under the definition of “Good Reason” in subsection 5.3 include the actions of

the Company or Executive's employing Subsidiary, as applicable. The obligations

created under this Agreement are obligations of the Company. A change in

control of a Subsidiary will not constitute a Change in Control for purposes of

this Agreement unless there is also a contemporaneous Change in Control of the

Company. For purposes of this Agreement, a “Subsidiary” means an entity more

than fifty percent (50%) of whose equity interests are owned directly or

indirectly by the Company.

 

Section

17.  Arbitration.

 

Except for the rights and

duties of the parties set forth in Section 18 of this Agreement, any dispute or

controversy arising under or in connection with this Agreement shall be settled

exclusively by arbitration in Houston, Texas, according to the rules of the

American Arbitration Association then in effect. Judgment may be entered on the

arbitrator's award in any court having jurisdiction; provided, however, that

Executive shall be entitled to seek specific performance of his right to be

paid for all periods up to the Date of Termination during the pendency of any

dispute or controversy arising under or in connection with this Agreement.

 

Section

18.  Restrictive Covenant.

 

18.1         Need

for Protection.  Executive

acknowledges that, because of his senior executive position with the Company,

his knowledge of the affairs of the Company and his relations with its suppliers

and customers, he could do serious damage to the financial welfare of the

Company, should he compete or assist others in competing with the business of

the Company.  Accordingly, the parties

agree as follows:

 

18.2         Confidential Information.

 

(a)           Non-Disclosure.  Except as the Company may permit or direct

in writing, during the term of this Agreement and thereafter, Executive agrees

that he will never disclose to any person or entity any confidential or

proprietary information, knowledge, or data of the Company, which he may have

obtained while in the employ of the Company, relating to any customers,

customer lists, methods of distribution, sales, prices, profits, costs,

contracts, inventories, suppliers, dealers, distributors, business prospects, business

methods, manufacturing ideas, formulas, plans or techniques, research, trade

secrets, or know how of the Company.

 

(b)           Return

of Records.  All records, documents,

software, computer disks, and any other form of information relating to the

business of the Company, which are or were prepared or created by Executive, or

which may or did come into his possession during the term of his employment

with the Company, including any and all copies thereof, shall be returned to

the Company, or as the case may be, shall remain in the possession of the

Company, upon termination of employment for any reason.

 

(c)           Future

Employment.  Nothing in this section

shall limit the Executive’s right to carry Executive’s accumulated career

knowledge and professional skills to any future employment, subject to the

specific limitations of the foregoing provisions of this section and the

covenants set forth below.

 

18.3         Non-Competition.

 

(a)           Scope

of Operations.  The parties hereto

acknowledge that the Company’s operations are within the continental United

States, and that it conducts business throughout the continental United States,

thus, the Company’s need for protection against unfair competition is

throughout the continental United States.

 

(b)           Covenant

Not To Compete.  Executive agrees

that he will not, during the term of this Agreement and for a period of six (6)

months after his employment with the Company has terminated:

 

(1)           engage

directly or indirectly, for his own personal benefit or the benefit of any

person or entity other than the Company, in bidding on any projects which would

result in direct competition with the Company, anywhere in the continental

United States; or

 

(2)           develop,

promote, invest in, provide financing for, be employed by, or operate any

business on his own behalf, or for any other person or entity, which bids or

solicits on any projects which would result in direct competition with the

Company, or, assist any other person in doing so; and

 

(3)           in

addition to the foregoing, Executive further agrees that during the term of

this Agreement and for a period of two (2) years after his employment with the

Company has terminated, he will not engage directly or indirectly, in any

manner with any business or company engaged in the on purpose removal of nitrogen

from natural gas streams.

 

(c)           Covenant

Not To Solicit.  Executive agrees

that he will not for a period of two (2) years after his employment with the

Company has terminated:

 

(1)           directly

or indirectly request or advise any of the Company’s customers or suppliers to

curtail their business with the Company or to patronize another business which

is in competition with the Company; or

 

(2)           directly

or indirectly, on behalf of himself or any other person or entity, request,

advise, or solicit any employee of the Company to leave that employment in

order to engage in, or assist any other person or entity to engage in,

competition with the Company.

 

18.4         Termination

Without Cause.  It is understood and

agreed that in the event the Company terminates Executive’s employment without

Cause, subsection 18.3 hereof shall be null and void.  Notwithstanding the foregoing provision, however, if Executive’s

employment is terminated under circumstances which entitle him to receive the

payments and benefits provided in Section 6 of this Agreement, then in such

event, the provisions of Section 18.3 hereof shall remain in full force and

effect.

 

18.5         Judicial

Modification.  In the event that any

court of law or equity shall consider or hold any aspect of this Section 18 to

be unreasonable or otherwise unenforceable, the parties hereto agree that the

aspects of this section so found may be reduced, reformed or modified by

appropriate order of the court, and shall thereafter continue, as so modified,

in full force and effect.

 

18.6         Injunctive

Relief.  The parties hereto

acknowledge that the remedies at law for breach of this section will be

inadequate, and the Company shall be entitled to injunctive relief for

violation thereof; provided, however, that nothing herein shall be construed as

prohibiting the Company from pursing any other remedies available for such

breach or threatened breach, including the recovery of damages from Executive.

 

Section 19.  Termination and Severance; No Change in Control.

 

Executive’s employment under

this Agreement may be terminated, separate and apart from the occurrence of a

Change in Control, in one of the following ways:

 

19.1         Mutual

Agreement.  At any time by mutual

written agreement of both parties to this Agreement, subject to any terms and conditions

specified in such mutual written agreement; or

 

19.2         For

Cause.  At any time by the Company,

by written notice to Executive, terminating this Agreement and discharging

Executive for Cause, as defined in Section 5.1 of this Agreement; or

 

19.3         Automatically.  Automatically and immediately should one of

the following events occur:

 

(a)           Executive

dies; or

 

(b)           Executive’s

Disability, as defined in Section 5.2 of this Agreement.

 

19.4         Severance.  In addition to the foregoing, Company may at

any time, upon thirty (30) days’ written notice, terminate this Agreement

without Cause.  If termination occurs

during the initial term of this Agreement, Executive shall be entitled to

severance pay in an amount equal to (including amounts paid during the 30-day

notice period) one (1) years’ base salary at the rate then in effect, or the

base salary attributable to the remaining months of the term of this Agreement

at the rate then in effect, whichever is greater.  If termination occurs during a one (1) year renewal period under

this Agreement, Executive shall be entitled to severance pay in an amount equal

to (including amounts paid during the 30-day notice period) the base salary

attributable to the remaining months of the one (1) year term at the rate then

in effect.  In either event, Executive

shall also receive a pro rata share of any cash bonus paid for the year,

attributable to that portion of the year during which Executive was employed,

and will also receive any unpaid bonus attributable to the previous year of

employment.  The base salary portion of

the severance shall be payable, at the Company’s option, in a lump sum or in

equal monthly installments consistent with the Company’s ordinary payroll

practices.  The cash bonus portion of

the severance shall be paid in accordance with the schedule set forth in the

Plan.  Executive shall also be entitled

to continuation of benefits, at the expense of the Company, then in effect

under this Agreement (i) thru October 31, 2004 if the Company elects to

terminate this Agreement under this provision prior to that date; (ii) through

the end of the applicable renewal term if termination occurs after October 31,

2004; or (iii) if sooner, until such time as he secures alternative employment

which provides him with comparable benefits. 

If the Company terminates this Agreement without Cause, the Company

shall have the right at its option, to require Executive to immediately leave

the Company’s premises; provided, that the Company shall be obligated to pay

(as part of the severance) Executive’s base salary during the 30-day notice

period.

 

Section

20.  Exclusivity of Services.

 

Executive agrees that his

employment with the Company will be full time, and that he will devote his best

efforts and attention to the business of the Company.  The Company agrees that Executive will serve as a member of the

Board of Directors of the Company.  In

the event of his election to the Board, Executive will receive no additional

compensation for his services as a Board member.  The Company, through the Board of Directors, agrees to nominate

the Executive to serve as a member of the Board of Directors of the Company.

 

IN WITNESS WHEREOF, the

parties have executed this Agreement as of the date first above written.

 

	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  GATEWAY ENERGY CORPORATION, INC.

  

 

	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  John B. Ewing, Chairman

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Compensation and Stock Option

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Committee

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Michael T. Fadden

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}]]