EXHIBIT 10.12
EMPLOYMENT AGREEMENT
AGREEMENT (this "Agreement") dated as of February 7,
1997, by and between DEVON ENERGY CORPORATION, an Oklahoma
corporation (the "Company"), and DUKE X. XXXXX (the
"Executive").
W I T N E S S E T H :
WHEREAS, the Company wishes to secure the services of the
Executive pursuant to the terms and conditions hereof and in
order to induce the Executive to enter into this Agreement and
to secure the benefits that accrue from his performance
hereunder, the Company is willing to undertake the obligations
set forth herein; and
WHEREAS, the Executive is desirous of securing such
employment and is willing to accept the terms and conditions
of this Agreement set forth herein.
NOW THEREFORE, in consideration of the premises and
mutual covenants contained herein and for other good and
valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Position and Duties. The Executive shall serve as
General Counsel and Vice President of the Company, or such
higher office to which he may be elected. The Executive's
responsibilities, duties and authorities during the Term of
Employment (as hereinafter defined) shall be those commonly
associated with such position, together with such other duties
consistent therewith and herewith as may be assigned to the
Executive by the President and Chief Executive Officer of the
Company (the "President"). The Executive shall report, during
the Term of Employment, to the President. The Executive's
services hereunder shall be performed at the Company's
principal headquarters located in Oklahoma City, Oklahoma,
except for travel reasonably required to perform such
services. During the Term of Employment, the Executive shall
devote substantially all of his business time and efforts
during the Company's normal business hours to the performance
of his duties and responsibilities on behalf of the Company in
accordance with this Agreement, except for vacations, holidays
and sickness.
2. Term. (a) Term of Employment. The Executive's term
of employment under this Agreement shall commence on February
17, 1997, and shall continue through February 17, 1999 (the
"Initial Term of Employment"). The Executive's term of
employment hereunder shall automatically renew for one two
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(2)-year term (the "Renewal Term") immediately following the
Initial Term of Employment, beginning on February 17, 1999.
The Initial Term of Employment together with the Renewal Term
are referred to in this Agreement as the "Term of Employment."
(b) Termination of Employment. The Term of
Employment shall be terminated: (i) upon the Executive's
death, in which case Section 4.2 hereof shall apply; (ii) upon
the Company's discharge of the Executive for "Cause" (as
hereinafter defined) by giving the Executive a "Notice of
Termination" (as hereinafter defined), or at the option of the
Executive for other than "Good Reason" (as hereinafter
defined), in accordance with Section 5 hereof; (iii) at the
option of the Company in the event of the Executive's
disability, by giving the Executive a Notice of Termination,
and otherwise in accordance with Section 4.3 hereof; or (iv)
at the option of the Company, for reasons other than Cause or
such death or disability, or of the Executive for Good Reason,
by giving the other party a Notice of Termination, in which
case Section 4.1 hereof shall apply. Any termination of the
Term of Employment by the Company (other than by reason of the
Executive's death) or by the Executive for Good Reason shall
be communicated to the other party by a written Notice of
Termination, as defined in the Severance Agreement entered
into between the Executive and the Company, dated February __,
1997 (the "Severance Agreement"), and attached hereto as
Exhibit 1.
3. Compensation and Benefits
3.1 Base Salary. The Company shall pay the Executive a
base salary during the Term of Employment at the annual rate
of two hundred thousand dollars ($200,000) ("Base Salary"), in
accordance with the usual payroll practices of the Company.
The President may increase the Base Salary (and Base Salary
hereunder shall include all such increased amounts), but in no
event shall the Base Salary in effect at a particular time be
reduced without the prior written consent of the Executive.
3.2 Incentive Compensation. For each calendar year of
the Term of Employment, the Executive shall be entitled to
receive an annual or periodic performance-based cash bonus on
terms and conditions applicable to cash bonuses provided by
the Company to its other senior executive officers (which
shall include other Vice Presidents of the Company, but not
the President) (herein, the "Bonus"). The Executive shall be
entitled to participate in any other compensation plans or
arrangements (including, without limitation, any stock option
or other stock-related plans) offered to other senior
executive officers of the Company from time to time, on terms
applicable to such officers.
3.3 Stock Options. The Executive shall be eligible to
participate in the Company's 1993 Stock Option Plan (and any
successor or similar plan thereto; hereinafter, the "Option
Plan"), and the Company shall, as soon as practicable
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following the date hereof, grant the Executive a non-qualified
option to purchase at least 30,000 shares of the Company's
$.10 par value common stock (the "Common Stock") for no more
than the fair market value, as determined in accordance with
the Stock Plan, of such shares on the date the option is
granted. Such stock option granted hereunder shall vest and
become exercisable as to one-third of the total number of
shares of Common Stock subject thereto on the first
anniversary of the date of grant of such option, and shall
vest and become exercisable as to one-third of such total
number of shares on each of the second and third anniversaries
of such grant date, respectively. Each stock option granted
to the Executive under the Option Plan in 1997 and thereafter
shall, in any event, have terms (including, without
limitation, relating to vesting and exercisability) no less
favorable than such terms applicable to stock options granted
under the Option Plan to the Company's other senior executive
officers in any particular year.
3.4 Other Benefits. (a) Employee Benefit Plans. The
Executive shall be entitled to participate, during the Term of
Employment, in all employee pension, retirement, savings,
deferred compensation, welfare, insurance and other benefit
and fringe benefit plans, programs and arrangements provided
by the Company to its employees and senior
executive officers, from time to time, according to the terms
and provisions of such plans, programs and arrangements, but
in no event on terms and conditions less favorable than those
generally applicable to the Company's other senior executive
officers (herein, the "Employee Plans"). The Executive shall
receive those perquisites and other personal benefits made
available to the Company's other senior executive officers
generally from time to time.
(b) Supplemental Retirement Plan. The Executive
shall be entitled to participate, during the Term of
Employment, in the Company's nonqualified deferred
compensation plan, provided to selected key management and
highly compensated employees of the Company, on terms and
conditions of participation at least as favorable as those
accorded the Company's other senior executive officers
(herein, the "Supplemental Plan").
(c) Vacations and Holidays. The Executive shall be
entitled to that number of days of annual paid vacation each
year as the Company makes available generally to its senior
executive officers, as well as such paid holiday and leave
time and sick leave benefits as the Company shall provide
generally to its senior executive officers.
(d) Expenses and Services. The Company shall pay or
reimburse the Executive for all business, travel,
entertainment and other expenses he incurs in the performance
of his duties and responsibilities hereunder, upon the
Executive furnishing appropriate documentation therefor.
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(e) Temporary Housing and Relocation Expenses. The
Company shall pay or reimburse the Executive for (i)
reasonable lodging and incidental expenses incurred by him and
his family until the Executive has sold his principal
residence, or six (6) months after the date hereof, if
earlier, and (ii) the expenses he incurs in moving and
relocating himself and his family, household and personal
effects to the Oklahoma City, Oklahoma, area.
(f) Indemnification. The Company shall indemnify
the Executive consistent with the Company's prior practice.
4. Termination of Employment For Reasons Other Than
Cause, or For Good Reason
4.1 Termination Not For Cause, or For Good Reason. (a)
In general. If (i) the Company terminates the Executive's
employment hereunder, and such termination of employment is
not (A) for Cause, (B) by reason of the Executive's death or
disability (pursuant to Section 4.2 or 4.3 hereof) or (C)
within twenty-four (24) months of the Change of Control Date
or twelve (12) months following the Acquisition Date (each as
defined in the Severance Agreement); or (ii) the Executive
terminates his employment for Good Reason, and such
termination of employment by the Executive is not within
either of the time periods specified in Section 4.1(a)(i)(C)
above, the Company will pay to the Executive, no later than
ten (10) days following the date on which the Notice of
Termination is given, a cash lump-sum payment equal to the
total of: (1) any earned but unpaid Base Salary as of the
date the Notice of Termination is given and (2) his Base
Salary (at the rate in effect immediately prior to the date on
which the Notice of Termination is given) otherwise payable
hereunder for the remaining Initial Term of Employment or
Renewal Term, if the Notice of Termination is given during the
Initial Term of Employment or the Renewal Term, respectively.
The Executive shall also be entitled to receive the amount of
his Bonus for the year within which the Notice of Termination
is given, payable in accordance with terms at least as
favorable as those which would apply to the Executive had he
remained continuously employed by the Company through the end
of any applicable performance period, but nevertheless
calculated as a pro-rata portion thereof through the date the
Notice of Termination is given. Any termination of the
Executive's employment with the Company occurring within the
time period specified in Section 4.1(a)(i)(C) above shall be
subject to and in accordance with the terms and conditions of
the Severance Agreement.
(b) Good Reason. For purposes of this Agreement,
"Good Reason" shall have the meaning given such term in the
Severance Agreement; however, Section 1(c)(iii) of the
Severance Agreement shall, for this purpose, be read as
referring to Section 7(a) hereof, and, in addition, "Good
Reason" for purposes hereof shall also include the occurrence
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of any of the following: (1) any reduction by the Company of
the Executive's Base Salary; (2) any purported termination of
the Executive's employment hereunder by the Company (other
than by reason of his death) that is not effected by a Notice
of Termination in accordance with this Agreement; (3) the
Executive is not granted the stock options in accordance with
Section 3.3 hereof; or (4) any material breach by the Company
of any provision of this Agreement, including the Severance
Agreement.
4.2 Death. The Term of Employment shall end upon the
Executive's death. The Company shall purchase insurance on
the life of the Executive with death benefits of $350,000,
naming such beneficiary as the Executive may designate.
4.3 Disability. The Company may terminate the
Executive's employment hereunder by reason his disability in
accordance with this Section 4.3. For purposes of this
Agreement, the Executive's employment hereunder shall have
been terminated by reason of his disability if (a) as a result
of the Executive's incapacity due to physical or mental
illness, in the reasonable good faith judgment of the Board of
Directors of the Company (the "Board"), the Executive shall
have been unable to substantially perform his duties under
this Agreement for a period of not less than ninety (90) days
and (b) the Company shall give the Executive a Notice of
Termination specifying such termination of employment by
reason of disability and (c) the Executive does not resume
substantially all of his duties hereunder before the
expiration of thirty (30) days following the date the
Executive receives such Notice of Termination. Upon
termination of the Executive's employment pursuant to this
Section 4.3, the Executive shall receive, as soon as
practicable (but in no event later than twenty (20) days)
after the expiration of the thirty-day period referred to in
clause (c) above (his "Disability Termination Date") a cash
lump-sum payment equal to the total of: (i) any earned but
unpaid Base Salary as of his Disability Termination Date and
(ii) his Base Salary (at the rate in effect immediately prior
to date the Notice of Termination is given) otherwise payable
hereunder for the remaining Initial Term of Employment or
Renewal Term, if the Notice of Termination is given during the
Initial Term of Employment or Renewal Term, respectively.
5. Termination For Cause, or For Other Than Good
Reason. In the event the Company, in accordance with this
Agreement, terminates the Executive's employment hereunder for
Cause (as defined in the Severance Agreement), or the
Executive terminates his employment hereunder for reasons
other than Good Reason, the Executive shall receive any earned
but unpaid Base Salary through the date on which the copy of
the duly adopted resolution of the Board finding the matters
referred to in Section 3(b)(2) of the Severance Agreement is
delivered to the Executive in accordance therewith, or the
date as of which the Executive terminates his employment
hereunder for reasons other than Good Reason.
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6. Arbitration. The Company and the Executive agree
that any dispute, controversy or claim arising out of,
relating to or in connection with this Agreement, or the
termination of this Agreement or the termination of the
Executive's employment hereunder that is not amicably resolved
by mutual negotiations shall be finally settled by binding
arbitration proceedings initiated by either party in
accordance with the rules of the American Arbitration
Association and that the results of such proceedings shall be
conclusive on both parties and shall not be subject to
judicial review. Judgment on the award rendered by the
arbitrator or a majority of the panel of arbitrators may be
entered in any court having jurisdiction thereover, or
application may be made to such court for a judicial
acceptance of the award and an order of enforcement.
7. Successors and Binding Effect. (a) Successors of
the Company. The Company will require 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 to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that
the Company would be required to perform this Agreement if no
such succession had taken place, and this Agreement shall
inure to the benefit of and shall be binding upon any such
successor, subject to the other terms and conditions hereof.
If the Company fails to obtain such assumption and agreement
prior to the effectiveness of any such succession, this
Agreement shall nevertheless continue to determine the
Executive's rights and entitlement to receive the
compensation, remuneration and benefits provided for or
referred to herein. As used in this Agreement, "Company"
shall mean the Company, as hereinabove defined, and any
successor to the Company and/or its business and/or assets, as
described in the first sentence of this Section 7(a).
(b) Assignment. This Agreement is personal in
nature and, except as provided in Section 7(a) hereof, neither
of the parties to this Agreement shall, without the prior
written consent of the other, assign or transfer this
Agreement or any right or obligation under this Agreement to
any other person; provided, however, that nothing herein shall
preclude the Executive's beneficiary, legatee or devisee or
the legal representative of the Executive or his estate from
receiving any amount or benefit that may be payable or
provided to or in respect of the Executive hereunder following
his death or legal incompetency.
8. Notices. Any notices required or permitted to be
given hereunder shall be in writing, signed, and shall be
deemed to be given when delivered personally or sent by
certified or registered mail or reputable overnight courier,
postage prepaid, addressed to the party concerned at the
address indicated below (or to such other address as either
party hereto may from time to time in writing specify in the
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manner set forth above to the other party, and which is
actually received by such other party):
If to the Company:
00 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: President and Chief Executive Officer
If to the Executive:
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
9. Survival. The respective rights and obligations of
the parties hereunder shall survive any termination of this
Agreement to the extent necessary to the intended preservation
of such rights and obligations. Notwithstanding any other
provision of this Agreement to the contrary, in the event the
Executive's employment hereunder is terminated by the Company
or the Executive for any reason or no reason, the Company
shall pay or provide to or on behalf of the Executive such
rights and benefits of participation to which the Executive is
entitled, following such termination of the Executive's
employment, under the Employee Plans in which the Executive is
a participant immediately prior to the date on which the
Notice of Termination is given (or the Executive's employment
hereunder otherwise terminates) and the Supplemental Plan, in
accordance with the terms and provisions of such plans.
10. Miscellaneous. This Agreement, including the
Severance Agreement, constitutes the entire agreement between
the parties with respect to the subject matter hereof and
supersedes any and all prior or contemporaneous oral and prior
written agreements and understandings between the parties
hereto concerning such subject matter. No modification or
discharge of this Agreement shall be valid unless made in
writing and executed by the parties hereto. Failure to insist
upon strict compliance with any of the terms, covenants or
conditions hereof shall not be deemed to constitute a waiver
of any such term, covenant or condition. A waiver of any
provision of this Agreement must be made in writing,
designated a waiver, and signed by the party against whom its
enforcement is sought, and shall not be deemed to constitute a
waiver of such provision at any other time, nor of any other
provision hereof. This Agreement has been executed and
delivered in the State of Oklahoma and shall be governed and
construed in accordance with the laws of such State, without
reference to the principles of conflict of laws. A
determination that any provision of this Agreement is invalid
or unenforceable shall not affect the validity or
enforceability of any other provision hereof. This Agreement
may be executed in two or more counterparts, each of which
shall be deemed to be an original but all of which together
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.
DEVON ENERGY CORPORATION
Dated:_________________ By_________________________
Name:
Title:
DUKE X. XXXXX
Dated:_________________ ____________________________
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