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EXHIBIT 10.6
THIRD AMENDMENT
TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
BETWEEN
MARINER ENERGY, INC.
AND
XXXXXXX X. XXXXXXX
THIS THIRD AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this
"Third Amendment") is made and entered into by and between MARINER ENERGY, INC.
(the "Company") and XXXXXXX X. XXXXXXX ("Employee").
W I T N E S S E T H :
WHEREAS, (i) the Company and Employee entered into that certain Amended
and Restated Employment Agreement dated effective as of June 27, 1996 (the
"Original Employment Agreement"), and (ii) the Original Employment Agreement was
amended pursuant to (A) that certain First Amendment to Amended and Restated
Employment Agreement executed as of March 18, 1997 (the "First Amendment"), by
and between the Company and Employee, and (B) that certain Second Amendment to
Amended and Restated Employment Agreement effective as of January 1, 1998 (the
"Second Amendment"), by and between the Company and Employee (the Original
Employment Agreement as amended by the First Amendment and the Second Amendment
is referred to herein as the "Employment Agreement"); and
WHEREAS, the Company and Employee desire to further amend the
Employment Agreement as hereinafter provided;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. Paragraph 2 of the Employment Agreement is hereby amended to
read in its entirety as follows:
"2. Term.
The term of employment shall be for a term of four
and one-half (4 1/2) years beginning on the Effective
Date, subject, however, to the provisions of
paragraph 3."
2. The Employment Agreement is hereby amended to add a new
paragraph 9.8 which reads in its entirety as follows:
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"9.8 Substitution of Other Incentive Compensation.
9.8.1 Notwithstanding anything contained herein to the contrary, but
subject to the provisions of this paragraph 9.8, if:
(a) the Board of Directors of the Company approves an
incentive compensation program providing for annual
incentive compensation and long-term, equity-based
incentive compensation (through, for example and not
for purposes of limitation, the use of stock options)
(the "New Program"), and
(b) a majority of the "Executives" (as defined in
paragraph 9.8.3) have each entered into one or more
written agreements with the Company (including, but
not limited to, a written amendment to and/or
restatement of an existing written employment
agreement) (such agreements entered into by such
majority of the Executives being collectively
referred to herein as the "Executive Amendments")
providing for:
(i) such Executive's participation in the New
Program; and
(ii) termination of such Executive's future
participation in incentive compensation in
the form of assignments of overriding oil
and gas royalty interests ("ORRI Incentive
Compensation"), and
(c) the Company has offered Employee the opportunity to
participate in the New Program on a basis at least as
favorable as the most favorable participation
provided to other participants in the New Program who
are or were in the same position within the same
grade level as Employee at any time during the period
beginning 90 days before the "Triggering Date" (as
hereinafter defined) and ending on the date Employee
and the Company enter into the "Amendment" (as
hereinafter defined) (participation in the New
Program that is offered to Employee and satisfies the
terms of this clause (c) is referred to herein as
"Qualifying Participation");
then Employee and the Company shall enter into a written
amendment to this Agreement (the "Amendment") which:
(x) shall provide for Employee's participation in the New
Program on a basis no less favorable than the
Qualifying Participation;
(y) shall provide for the termination of Employee's
participation in the incentive compensation program
described in this paragraph 9 for periods after a
date (the "Termination Date") that is no earlier than
the latest date (the "Triggering Date") on which any
of the Executives terminated his participation in
ORRI Incentive Compensation under the Executive
Amendments; and
(z) except as otherwise provided in clauses (x) and (y)
of this sentence, shall otherwise be in substantially
the same form, and contain substantially the same
terms and conditions, as the Executive Amendments.
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9.8.2 For purposes of clause (y) of paragraph 9.8.1, the Company and
Employee acknowledge and agree that under the Amendment, (i)
Employee will be entitled under this paragraph 9 to receive an
Overriding Royalty Interest equal to an undivided percentage
(as specified in paragraph 9.2.1 of this Agreement) of the
Company's Working Interest in each well on any Prospect
acquired, or deemed to have been acquired under this paragraph
9, by the Company on or before the Termination Date, and the
lease or leases allocated thereto (collectively, the "Earned
ORIs"), (ii) Employee will not be entitled to receive any
Overriding Royalty Interest or other interest in or benefits
with respect to any Prospect or Prospects acquired, or deemed
to have been acquired under this paragraph 9, by the Company
after the Termination Date, or in the lease or leases
allocated thereto, and (iii) the provisions of this Agreement
that state they survive, by their terms survive, or are
otherwise designed to survive the Termination Date and/or the
termination of Employee's participation in the incentive
compensation program described in this paragraph 9, and the
respective rights and obligations of the Company and Employee
under such provisions with respect to the Existing ORIs in the
Existing Prospects and the Earned ORIs, shall survive the
Termination Date and/or such termination of Employee's
participation in the incentive compensation program described
in this paragraph 9 for the period or periods provided for in
this Agreement.
9.8.3 For purposes of this paragraph 9.8, the term "Executives"
means the following employees of the Company: Xxxxxx X.
Xxxxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxxxxxx and Xxxxx X.
Xxxx; provided, however, that the term "Executives" shall not
include any such individual to the extent he is no longer an
employee of the Company at the time the Company has offered
Qualifying Participation to Employee; provided further,
however, that if all of such individuals have ceased to be an
employee of the Company prior to the time the Company has
offered Qualifying Participation to Employee, then Employee
shall have no obligation whatsoever (whether under this
Paragraph 9.8 or otherwise) to enter into the Amendment.
9.8.4 For purposes of clause (b) of paragraph 9.8.1, the phrase "a
majority of the Executives" shall have the following meaning,
as applicable:
(a) if there are four (4) Executives employed by the
Company at the time the Company offers Qualifying
Participation to Employee, the phrase "a majority of
the Executives" shall mean three (3) of the
Executives;
(b) if there are three (3) Executives employed by the
Company at the time the Company offers Qualifying
Participation to Employee, the phrase "a majority of
the Executives" shall mean two (2) of the Executives;
(c) if there are two (2) Executives employed by the
Company at the time the Company offers Qualifying
Participation to Employee, the phrase "a majority of
the Executives" shall mean all of the Executives; and
(d) if there is one (1) Executive employed by the Company
at the time the Company offers Qualifying
Participation to Employee, the phrase "a majority of
the Executives" shall mean such Executive."
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3. All references to "this Agreement" contained in the Employment
Agreement shall be deemed to be a reference to the Employment
Agreement, as amended by this Third Amendment.
4. This Third Amendment is made and will be performed under, and shall be
governed by and construed in accordance with, the law of the State of
Texas.
5. Except as amended by this Third Amendment, the Employment Agreement
shall remain in full force and effect.
6. This Third Amendment may be executed in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original but all of which shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the Company and Employee have executed this Third
Amendment to be effective as December 27, 1998.
Acknowledged by: MARINER ENERGY, INC.
By:
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X. Xxxx Xxxxx Xxxxxx X. Xxxxxxxxx
Vice President - Administration President and
Chief Executive Officer
"COMPANY"
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Xxxxxxx X. Xxxxxxx
"EMPLOYEE"
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