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Exhibit 99.5
CONFIDENTIALITY, NON-SOLICITATION
AND NON-COMPETITION AGREEMENT
This
Confidentiality, Non-Solicitation and Non-Competition
Agreement
(this
“
Agreement ”),
is made and entered into as of June 23, 2008, between South Texas
Oil Company, a Nevada corporation (the “
Company ”),
and Wayne Psencik (
“
Psencik ”).
WHEREAS ,
Company desires to employ Psencik and Psencik wishes to be employed
by Company;
WHEREAS ,
concurrently with their entering into this Agreement, Company and
Psencik are entering into an Employment Agreement of even date
herewith (the “
Employment Agreement ”),
setting forth the terms of Psencik’s employment by
Company;
WHEREAS ,
Company and Psencik desire that this Agreement take effect only if
the Employment Agreement has not been, in accordance with the
procedures set forth in Article XII of Company’s By-Laws,
duly approved by the Board of Directors of Company and duly
ratified by the required vote of Company’s stockholders prior
to the close of business on the ninetieth (90th) day after the date
hereof (the “
Ninetieth Day ”);
WHEREAS ,
as a material inducement to Company to enter into the Employment
Agreement and in order to protect the value and goodwill of
Company’s business, Psencik has agreed to enter into this
Agreement, which is a material condition of Company’s entry
into, and a required delivery under, the Employment
Agreement;
WHEREAS ,
in the course of his employment by Company and/or other Affiliate
Companies (as defined below), Psencik will have access to, and
Psencik will become familiar with, acquire knowledge of, and
develop or maintain, Company’s Confidential Information (as
defined below) and business relationships, whether currently
existing or to be developed in the future, which Psencik recognizes
permits Company to enjoy a competitive advantage, and disclosure
and/or use thereof by competitors, potential competitors and/or any
third-party would cause irreparable harm to Company.
NOW THEREFORE ,
in consideration of Psencik’s employment with Company and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties, the parties hereto
agree as follows:
1.
EFFECTIVE DATE
. This
Agreement shall become effective, if at all, at the close of
business on the Ninetieth Day;
provided that ,
this Agreement shall not become effective and shall be void ab
initio and neither Company nor Psencik shall have any obligations
hereunder, if, in accordance with the procedures set forth in
Article XII of the Company’s By-Laws, the Employment
Agreement is ratified by the required vote of the Company’s
stockholders on or prior to the Ninetieth Day, as provided
therein.
South Texas Oil Company
Psencik Non-Comp Agreement
June 2008
2.
CONFIDENTIAL INFORMATION
.
(a)
Psencik
acknowledges that during his employment with Company, Psencik
will have access to and possession of trade secret,
confidential information, and proprietary information
(collectively, as defined more extensively below,
“
Confidential Information ”)
of Company, its parents, subsidiaries and affiliates and their
respective customers, suppliers and other third party that do
business with them. Psencik recognizes and acknowledges that this
Confidential Information is valuable, special and unique to
Company’s business, is owned solely by and is the exclusive
property of Company, is to be used only for Company’s
benefit, and that access to and knowledge thereof are essential to
the performance of Psencik’s duties to Company. During his
employment with Company and thereafter, Psencik shall keep secret
and shall not use or disclose, reveal, transfer, reproduce, sell,
capitalize upon or take advantage of such Confidential Information
relating to Company, its subsidiaries, affiliates, customers,
suppliers or other third party that do business with it except at
the request of Company, and in addition, Psencik shall exercise all
reasonable efforts and precautions to prevent such disclosure,
breach of confidentiality, or other conduct or action inconsistent
herewith;
provided ,
however ,
that Confidential Information may be disclosed to the extent (i)
required by law or court order or (ii) generally available to the
public other than by unauthorized disclosure.
(b)
The
term “
Confidential Information ,”
means information in whatever form be it written, digital, graphic,
electronically stored, orally transmitted or memorized
concerning:
(i)
Company’s
business or operations plans, strategies, portfolio, prospects
or objectives;
(ii)
Company’s
structure, products, product development, technology,
distribution, sales, services, support and marketing plans,
practices, and operations;
(iii)
the
prices, costs, and details of Company’s
services;
(iv)
research
and development, new products, licenses, operations or
plans;
(v)
trade
secrets, proprietary information, trade and service marks,
inventions, mask works, ideas, processes, formulas, source and
object codes, data, programs, other works of authorship,
know-how, discoveries, developments, designs, schematics,
manuals, drawings, computer disks and programs, techniques,
Psencik suggestions, development tools, computer printouts and
improvements (hereinafter referred to as “
Inventions ”);
(vi)
customers
and customer lists, including (A) present customers, customer
files and records, (B) potential customers, and (C) present
and potential prospects or targets (including without
limitation, the identities of customers, names, addresses,
contact, persons and the customers’ business status or
needs) that the Company has identified as potential customers,
prospects or targets prior to the termination of
Psencik’s employment with Company;
(vii)
information
regarding the skills, compensation and benefits of other
employees of Company;
South Texas Oil Company
Psencik Non-Comp Agreement
June 2008
(viii)
non-publicly
reported financial matters, financial records, unpublished
financial statements, financial condition, results of
Company’s operations and related information about
Company;
(ix)
any
other financial, commercial, business or technical information
related to any of the products or services made, developed or
sold by Company or its customers.
(c)
Psencik does not have an obligation to treat any information
as Confidential Information that is: (A) in the public domain
through no act, omission or fault of Psencik; (B) within the
legitimate possession of Psencik prior to the date hereof,
with no confidentiality obligations to a third party; (C)
lawfully received from a third party having rights in the
information without restriction, and without notice of any
restriction against its further disclosure or use; (D)
independently developed by Psencik without breaching this
Agreement; or (E) disclosed or used by Psencik with the prior
written consent of the Company. If Confidential Information is
required or requested to be produced by law
, court
order, governmental authority or other third party,
Psencik
shall immediately notify the Company of that requirement or request
and shall assist the Company in obtaining a protective order or
other appropriate relief to prevent such production.
The
burden of establishing the existence of these exceptions shall be
Psencik’s.
(d)
Psencik further recognizes that Company has received and in
the future may receive from third parties confidential or
proprietary information (“
Third
Party Information ”)
subject to a duty on Company’s part to maintain the
confidentiality of such information and to use it only for certain
limited purposes, and Psencik shall disclose all such Third Party
Information to Company. During his employment with Company and
thereafter, Psencik shall hold Third Party Information in the
strictest confidence and shall not disclose to anyone (other than
Company personnel who need to know such information in connection
with their work for Company) or use, except in connection with work
for Company, Third Party Information unless expressly authorized by
Company in writing.
(e)
Psencik further agrees to store and maintain all Confidential
Information and Third Party Information in a secure place. On
the termination of his employment with Company, Psencik agrees
to deliver all records, data, information, and other documents
produced or acquired during his employment with Company, and
all copies thereof, to Company. Such material at all times
shall remain the exclusive property of Company, unless
otherwise agreed to in writing by Company. Upon termination of
the employment, Psencik agrees to make no further use of any
Confidential Information on his or her own behalf or on behalf
of any other person or entity other than Company.
(f)
During his employment with Company and thereafter, Psencik
shall not improperly use or disclose any confidential
information or trade secrets, if any, of any former employer
or any other person to whom Psencik has an obligation of
confidentiality, and shall not bring onto the premises of
Company any unpublished documents or any property belonging to
any former employer or any other person to whom Psencik has an
obligation of confidentiality unless consented to in writing
by that former employer or person.
(g)
In the event that Psencik is required to disclose any
Confidential Information pursuant to an order, regulation,
ruling, governmental request, summons or subpoena, Psencik
shall promptly notify Company of such pending disclosure and
assist Company (at Company’s expense) in seeking a
protective order or in objecting to such request, summons or
subpoena with regard to the Confidential
Information.
South Texas Oil Company
Psencik Non-Comp Agreement
June 2008
(h)
Psencik agrees to cooperate with Company, whether during
Psencik’s employment with Company or thereafter, in the
prosecution or defense of all threatened claims or actual
litigation in which Company or any other Affiliate Companies
or other of its affiliates is or may become a party, whether
now pending or hereafter brought, in which Psencik has
knowledge of relevant facts or issues. Psencik shall be
promptly reimbursed reasonable out-of-pocket expenses
(including legal fees) incurred by him due to his cooperating
with the prosecution or defense of any litigation for the
Company any other Affiliate Companies or other of its
affiliates provided that he provides Company Affiliate
Companies or other of its affiliates, as applicable, with
reasonable documentation of such expenses.
3.
NON-COMPETE AND NON-SOLICITATION
.
(a)
Non-Competition
. Psencik
will, as a result of his employment with Company, be involved with
and exposed to substantial business resources and assets of Company
and certain other Affiliate Companies and will develop additional
contacts and relationships with numerous individuals and companies,
which are also involved in the business of Company or businesses
related thereto. Such individuals and organizations will have
business and contractual relationships with Company and/or certain
other Affiliate Companies and other of its affiliates that will be
a valuable asset thereof. Psencik also re
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