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EXHIBIT 10.50
PIONEER NATURAL RESOURCES COMPANY
SEVERANCE AGREEMENT
This Severance Agreement (this "AGREEMENT") is entered into, effective
_____________, 1997, between Pioneer Natural Resources Company, a Delaware
corporation ("PARENT"), and ______________ (the "OFFICER"). As used in this
Agreement, the term "COMPANY" shall be deemed to include Parent and its direct
or indirect wholly-owned subsidiaries.
RECITALS
A. Officer is currently serving as an officer of Parent. Parent
and Officer desire to enter into an agreement governing certain matters
relating to Officer's employment with the Company, including compensation
arrangements and restrictions on Officer's use of Company information.
B. Parent acknowledges that Officer is a significant employee of
the Company, possessing skills and knowledge instrumental to the successful
conduct of the Company's business. Parent is willing to enter into a severance
arrangement with Officer in order to better ensure itself of the continued
management services of Officer for itself and its subsidiaries and, in part, to
induce Officer to continue to provide those services and subject himself to
certain restrictions regarding the use of Company information.
C. Officer is willing to subject himself to the restrictions
mentioned above in part to induce Parent to enter into a compensation
arrangement that provides for, among other things, the payment of certain
benefits upon the termination of Officer's employment under certain
circumstances.
Now, therefore, for and in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Agreement hereby agree as follows:
1. POSITION AND DUTIES. Officer shall serve Parent as __________,
and, in so doing, shall report to Parent's Board of Directors (the "BOARD"),
Parent's Chief Executive Officer (the "CHIEF EXECUTIVE OFFICER") or such
officers of Parent as is prescribed by Parent's bylaws, by resolutions of the
Board or by direction of the Chief Executive Officer. Officer shall have
supervision and control over, and responsibility for, such management and
operational functions of the Company currently assigned to such position, and
shall have such other or different powers and duties (including holding officer
positions with one or more subsidiaries of Parent), as may from time to time be
prescribed by the Board or the Chief Executive Officer, so long as such
functions, powers and duties are reasonable and customary for a Vice President
serving an enterprise comparable to Parent.
2. DEVOTION OF EFFORTS. So long as Officer is serving the
Company in the capacities described in Section 1, he shall devote his full time,
skill and attention and his best efforts during normal business hours to the
business and affairs of the Company to the extent necessary to discharge
faithfully and efficiently his duties and responsibilities described in Section
1, except for usual, ordinary and customary periods of vacation and absence due
to illness or other disability or such periods of leave as are approved in
writing by the Board or the Chief Executive Officer. The provisions of this
Section shall not be construed to prevent Officer from making investments in
other businesses or enterprises, so long as such investments do not violate the
Company's conflict of interest policies or require the provision of services by
Officer to such businesses or enterprises to an extent that would interfere in
any material respect with the performance of Officer's duties and
responsibilities to the Company.
3. COMPENSATION.
(a) BASE SALARY. As compensation for Officer's services,
the Company shall pay Officer an annualized base salary of a specified amount
per annum (the "BASE SALARY"). The Base Salary shall be
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payable in substantially equal semi-monthly installments. The Compensation
Committee of the Board (the "COMPENSATION COMMITTEE") may review the Base
Salary periodically and may grant such increases, or effect such reductions, in
the Base Salary as the Compensation Committee considers appropriate in
accordance with such compensation guidelines and policies as it may establish
from time to time. The Base Salary applicable from time to time for any period
of Officer's employment with the Company, commencing on the effective date of
this Agreement, shall be identified on Schedule A attached hereto, which shall
be amended periodically to reflect any increases or reductions effected by the
Compensation Committee.
(b) BONUSES. Officer shall be entitled to receive (in
addition to the Base Salary) such annual or other periodic bonus as the
Compensation Committee may award in accordance with such compensation guidelines
and policies as it may establish from time to time.
(c) OTHER BENEFITS. Officer shall be entitled to
participate in, or receive benefits under, any employee benefit plan or other
arrangement made available now or in the future by the Company to the officers
of Parent (a "BENEFIT PLAN"), subject to the terms, conditions and overall
administration of such Benefit Plan. Officer's participation in, or receipt of
benefits under, any Benefit Plan shall be in addition to (and not in lieu of)
the Base Salary.
(d) VACATIONS AND HOLIDAYS. Officer shall be entitled to
the number of paid vacation days in each calendar year determined by Parent from
time to time for its officers and shall be entitled to all paid holidays given
by the Company to its employees in general.
4. RELOCATION. Officer shall be required to perform his duties
and responsibilities hereunder at Parent's offices located in _____________,
Texas. If the Company requires Officer to perform his duties and
responsibilities at any location that is more than 50 miles from the nearest
border of ______________, Texas (a "NEW LOCATION") and, within 30 days after
receiving notice thereof, Officer accepts such relocation rather than
terminating his employment with the Company pursuant to Section 5(a), the
Company shall pay to Officer, or shall reimburse Officer for (upon submission of
reasonably detailed evidence thereof), such sums as are provided for under the
Relocation Policy for Exempt Employees as established by Parent.
5. TERMINATION OF EMPLOYMENT.
(a) RIGHT TO TERMINATE. Officer's employment with the
Company (including his officer position with Parent) shall be terminated upon
the death, Disability (as defined in subsection (f)(3) of this Section) or
Normal Retirement (as defined in subsection (f)(5) of this Section) of Officer.
In addition, Officer's employment with the Company (including his officer
position with Parent) may be terminated at any time and for any reason as a
result of a dismissal or other action by the Company or as a result of a
voluntary action by Officer. Any such termination of employment is referred to
herein as a "TERMINATION OF EMPLOYMENT."
(b) NOTICE OF TERMINATION.
(1) Any Termination of Employment that is the
result of Officer's Disability shall be communicated by the Company to
Officer in a written notice thereof. Such notice shall state that, in
the opinion of the Board, Officer is suffering from a Disability and
such Disability is the reason for the Termination of Employment.
(2) Any Termination of Employment that is the
result of Officer's Normal Retirement shall be communicated by Officer
to Parent by a written notice thereof. Such notice shall state that
Officer is retiring and shall specify the date of such Termination of
Employment, which shall be not less than 30 days following the date
such notice is received by Parent.
(3) Any Termination of Employment that is the
result of a dismissal or other action by the Company (but is not the
result of Officer's Disability) shall be communicated by the Company to
Officer by a written notice thereof. Such notice shall state whether
or not (in the Company's opinion) the Termination of Employment
constitutes a Termination for Cause (as defined
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in subsection (f)(6) of this Section) and, if so, shall set forth in
reasonable detail facts and circumstances constituting a basis for such
Termination for Cause.
(4) Any Termination of Employment that is the
result of a voluntary action by Officer (but is not the result of
Officer's Normal Retirement) shall be communicated by Officer to Parent
by written notice thereof. Such notice shall state whether or not (in
Officer's opinion) the Termination of Employment constitutes a
Termination for Good Reason (as defined in subsection (f)(7) of this
Section) and, if so, shall set forth in reasonable detail the facts and
circumstances claimed as the basis for such Termination for Good
Reason. Such notice shall also specify the date of such Termination of
Employment, which (if the Termination of Employment does not constitute
a Termination for Good Reason) shall be not less than 30 days following
the date such notice is received by Parent.
(c) DATE OF TERMINATION OF EMPLOYMENT. For purposes of
this Agreement, the date of a Termination of Employment shall be (1) if the
Termination of Employment is the result of Officer's death, the date of such
death, (2) if the Termination of Employment is the result of Officer's
Disability, the date on which the notice described in subsection (b)(1) of this
Section is received by Officer, (3) if the Termination of Employment is the
result of Officer's Normal Retirement, the date specified in the notice
described in subsection (b)(2) of this Section, (4) if the Termination of
Employment is the result of a dismissal or other action by the Company (but is
not the result of Officer's Disability), the date on which the notice described
in subsection (b)(3) of this Section is received by the Officer, and (5) if the
Termination of Employment is the result of a voluntary action by Officer (but is
not the result of Officer's Normal Retirement), the date specified in the notice
described in subsection (b)(4) of this Section.
(d) PAYMENTS DUE UPON TERMINATION OF EMPLOYMENT. The
provisions of subsections (d)(1) and (d)(3) of this Section shall apply to any
Termination of Employment, whether occurring prior to, at the time of or at any
time following a Change in Control (as defined in subsection (f)(2) of this
Section); and the provisions of subsection (d)(2) of this Section shall apply
only to any Termination of Employment prior to a Change in Control.
(1) DEATH, DISABILITY OR NORMAL RETIREMENT. If
the Termination of Employment is the result of Officer's death,
Disability or Normal Retirement, the Company shall pay the following
amounts to Officer (or his estate or personal representative):
(A) The Base Salary (at the rate in
effect on the date of such Termination of Employment, as
identified on Schedule A) through and including the date of
such Termination of Employment, to the extent not already paid,
which amount shall be paid in cash on the first normal
semi-monthly Base Salary payment date immediately succeeding
the date of such Termination of Employment;
(B) Any amounts arising from Officer's
participation in, or benefits under, any Benefit Plan through
and including the date of such Termination of Employment, which
amounts shall be payable in accordance with the terms and
conditions of such Benefit Plan; and
(C) An amount equal to one full year's
Base Salary (at the rate in effect on the date of such
Termination of Employment, as identified on Schedule A), which
amount shall be paid in cash within 30 days following the date
of such Termination of Employment.
(2) TERMINATION FOR GOOD REASON OR NOT FOR CAUSE.
If the Termination of Employment (i) is the result of a dismissal or
other action by the Company (but is not the result of Officer's
Disability) and does not constitute a Termination for Cause or (ii) is
the result of a voluntary action by Officer (but is not the result of
Officer's Normal Retirement) and constitutes a Termination for Good
Reason, the Company shall pay the following amounts, and provide the
following benefits to Officer:
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(A) The Base Salary (at the rate in
effect on the date of such Termination of Employment, as
identified on Schedule A) through and including the date of
such Termination of Employment, which amount shall be paid in
cash on the date of such Termination of Employment;
(B) Any amount arising from Officer's
participation in, or benefits under, any Benefit Plan through
and including the date of such Termination of Employment, which
amounts shall be payable in accordance with the terms and
conditions of such Benefit Plan;
(C) An amount equal to one full year's
Base Salary (at the rate in effect on the date of such
Termination of Employment, as identified on Schedule A), which
amount shall be paid in cash on the date of such Termination of
Employment;
(D) For a period of one year following
the date of such Termination of Employment, a continuation of
all health insurance coverage applicable at the time of such
Termination of Employment to Officer and his immediate family
under any Benefit Plan; and
(E) With respect to a Termination of
Employment described in Section 5(d)(2)(i), an amount equal to
one-twelfth (1/12) of the Officer's Base Salary, which amount
shall be paid in cash on the date of such Termination of
Employment.
(3) TERMINATION FOR CAUSE OR NOT FOR GOOD REASON.
If the Termination of Employment (i) is the result of a dismissal or
other action by the Company (but is not the result of Officer's
Disability) and constitutes a Termination for Cause or (ii) is the
result of a voluntary action by Officer (but is not the result of
Officer's Normal Retirement) and does not constitute a Termination for
Good Reason, the Company shall pay the following amounts to Officer:
(A) Base Salary (at the rate in effect
on the date of such Termination of Employment, as identified
on Schedule A) through and including the date of such
Termination of Employment, which amount shall be paid in cash
on the first normal semi-monthly Base Salary payment date
immediately succeeding the date of such Termination of
Employment; and
(B) Any amounts arising from Officer's
participation in, or benefits under, any Benefit Plan through
and including the date of such Termination of Employment, which
amounts shall be payable in accordance with the terms and
conditions of such Benefit Plan.
(4) PAYMENT CONTINGENT ON RELEASE. If Officer's
Termination of Employment is prior to a Change in Control (and only in
that event), and Officer is otherwise entitled to the payment provided
in subsection (d)(2) of this Section, then such payment shall be
subject to, and contingent upon, Officer's execution of a General
Release Agreement in favor of the Company in substantially the form and
substance as the one attached hereto as Schedule B.
(e) ADDITIONAL PROVISIONS APPLICABLE UPON TERMINATION OF
EMPLOYMENT CONCURRENT WITH OR FOLLOWING CHANGE IN CONTROL. The following
provisions shall apply to any Termination of Employment occurring at the time
of, or at any time within one year following, a Change in Control.
(1) TERMINATION FOR GOOD REASON OR NOT FOR CAUSE.
If the Termination of Employment (i) is the result of a dismissal or
other action by the Company (but is not the result of Officer's
Disability) and does not constitute a Termination for Cause, or (ii) is
the result of a voluntary action by Officer (but is not the result of
Officer's Normal Retirement) and constitutes a Termination for Good
Reason, the Company shall pay the following amounts, and provide the
following benefits, to Officer:
(A) The Base Salary (at the rate in effect
on the date of such Termination of Employment, as identified
on Schedule A) through and including the date of
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such Termination of Employment, which amount shall be paid in
cash on the date of such Termination of Employment;
(B) A lump sum in cash equal to 2.99
times the sum of (i) Officer's Base Salary (at the rate in
effect on the date of such Termination of Employment, as
identified on Schedule A), plus (ii) the greater of the then
current year's targeted bonus or actual bonus award (if
applicable) for Officer, which amount shall be paid in cash on
the date of such Termination of Employment;
(C) Any amount arising from Officer's
participation in, or benefits under, any Benefit Plan through
and including the date of such Termination of Employment, which
amounts shall be payable in accordance with the terms and
conditions of such Benefit Plan;
(D) For a period of one year following
the date of such Termination of Employment, a continuation of
all health insurance coverage applicable at the time of such
Termination of Employment to Officer and his immediate family
under any Benefit Plan; and
(E) With respect to a Termination of
Employment described in Section 5(e)(1)(i), an amount equal to
one-twelfth (1/12) of the Officer's Base Salary, which amount
shall be paid in cash on the date of such Termination of
Employment.
(2) VOLUNTARY TERMINATION NOT FOR GOOD REASON. If
the Termination of Employment is the result of a voluntary action by
Officer, does not constitute a Termination for Good Reason and either
(A) occurs at least six months, but not more than one year, following a
Change in Control or (B) occurs at the time of, or at any time within
one year following, a Change in Control and following the Company's
requiring the Officer to perform his duties and responsibilities
hereunder at a New Location, which relocation is not accepted by
Officer within 30 days after receiving notice thereof, then the Company
shall pay to Officer all amounts that would be payable pursuant to
subsection (d)(2) of this Section had such Termination of Employment
occurred prior to the Change in Control and constituted a Termination
for Good Reason.
(3) EXCISE TAX AND GROSS-UP PAYMENT.
(A) If any portion of such compensation
constitutes a parachute payment (a "Payment") and is subject to
the Excise Tax (hereinafter defined), then Company shall, in
addition to providing such compensation, pay the Gross-Up
Payment (hereinafter defined) to Officer in the manner
described below. For purposes of this Agreement, (i) "Excise
Tax" shall mean the tax imposed pursuant to section 4999 of the
Code and any interest or penalties incurred by the Officer with
respect to such Excise Tax, and (ii) "Gross-Up Payment" shall
mean, with respect to any compensation provided to the Officer
by Company (including without limitation the payments provided
for under this Agreement and any payments to the Officer under
any employee benefit plan, including without limitation the
Company's Long-term Incentive Plan, or other arrangement) that
is subject to the Excise Tax, an amount that, after reduction
of the amount of such Gross-Up Payment for all federal, state,
and local tax (including any interest or penalties imposed with
respect to such taxes) to which the Gross-Up Payment is subject
(including the Excise Tax to which the Gross-Up Payment is
subject), is equal to the amount of the Excise Tax to which
such compensation is subject. For purposes of determining the
amount of any Gross-Up Payment, Officer shall be deemed to pay
federal income taxes at the highest marginal rate of taxation
and state and local taxes, if applicable, at the highest
marginal rate of taxation in the state and locality of
residence of the Officer on the Date of Termination, net of the
maximum reduction in federal income taxes that could be
obtained from deduction of such state and local taxes, if
any.
(B) Subject to the provisions of
subsection 5(e)(3)(C), all determinations required to be made
under this subsection 5(e)(3), including whether and when a
Gross-Up Payment is required, the amount of such Gross-Up
Payment and the assumptions to be
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utilized in arriving at such determination, shall be made by
the accounting firm which performed the audit of the Company
for the year preceding the year in which the Change in Control
occurred (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Officer
within 15 business days of the receipt of notice from the
Officer that there has been a Payment, or such earlier time as
is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, the Officer
shall appoint another nationally recognized accounting firm to
make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm
hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this subsection 5(e)(3), shall be paid
by the Company to the Officer within five days of the receipt
of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by the Officer, it
shall furnish the Officer with a written opinion that failure
to report the Excise Tax on the Officer's applicable federal
income or excise tax return would not result in the imposition
of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company
and the Officer.
(C) The Officer shall notify the
Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company
of the Gross- Up Payment. Such notification shall be given no
later than ten business days after the Officer is informed in
writing of such claim. The Officer shall not pay such claim
prior to the expiration of the 30-day period following the date
on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the
Officer in writing prior to the expiration of such period that
it desires to contest such claim, (i) the Officer shall accept
legal representation with respect to such claim by an attorney
reasonably selected by the Company, (ii) cooperate with the
Company in good faith in order to effectively contest such
claim, and (iii) permit the Company to participate in any
proceedings relating to such claim; provided, however, the
Company shall bear and pay directly all costs and expenses
(including legal and accounting fees and additional interest
and penalties) incurred in connection with such contest and
shall indemnify and hold the Officer harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. The Company
shall control all proceedings taken in connection with such
contest to the extent relating to issues impacting whether a
Gross-Up Payment is payable hereunder. The Officer shall be
entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other
taxing authority in connection with such contest.
(D) If any such claim referred to in
subsection 5(e)(3)(C) is made by the Internal Revenue Service
and the Company does not request the Officer to contest the
claim within the 30-day period following notice of the claim,
the Company shall pay to the Officer the amount of any Gross-Up
Payment owed to the Officer, but not previously paid pursuant
to subsection 5(e)(3)(B), immediately upon the expiration of
such 30-day period. If any such claim is made by the Internal
Revenue Service and the Company requests the Officer to contest
such claim, the Company shall pay to the Officer the amount of
any Gross-Up Payment owed to the Officer, but not previously
paid under the provisions of subsection 5(e)(3)(B), within five
days of a Final Determination of the liability of the Officer
for such Excise Tax. For purposes of this Agreement, a "Final
Determination" shall be deemed to occur with respect to a claim
when (i) there is a decision, judgment, decree or other order
by any court of competent jurisdiction, which decision,
judgment, decree or other order has become final, i.e., all
allowable appeals have been exhausted by either party to the
action, (ii) there is a closing agreement made under Section
7121 of the Code, or (iii) the time for instituting a claim for
refund has expired, or if a claim was filed, the time for
instituting suit with respect thereto has expired.
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(4) LETTER OF CREDIT. Following a Change in
Control, Parent (within 10 days following receipt of Officer's written
request therefor), at its sole cost and expense, shall post an
irrevocable letter of credit with a banking institution reasonably
acceptable to Officer in an amount equal to the maximum amount of the
aggregate cash payments that would be made to Officer pursuant to the
provisions of paragraph (1) of this subsection if the provisions of
paragraph (1) of this subsection were to become applicable. Such
letter of credit shall contain provisions making the funds available
thereunder to Officer by Officer's drafts drawn at sight at any time
and from time to time. Such provisions shall permit Officer to present
drafts (including drafts for partial draws) drawn at sight by
presentation by Officer to the applicable banking institution of a
written statement to the effect that the Company is in default on a
payment to be made to Officer pursuant to the terms of this Agreement
(setting forth the amount of such payment in default) and that Officer
is not in default under, and has not breached the terms of, this
Agreement. Parent shall continue to keep such letter of credit in place
until the expiration of at least 60 days following the date of a
Termination of Employment occurring after the Change in Control.
(5) RETIREMENT BENEFITS FUNDED. Upon a Change in
Control, any accrued but unfunded retirement benefit obligations to
Officer under any then existing retirement plan shall be fully funded
to a Rabbi Trust for the benefit of such Officer, which amount shall be
paid in cash on the date of such Change in Control.
(f) CERTAIN DEFINITIONS. As used in the Section and
elsewhere in this Agreement, the following terms shall have the respective
meanings indicated:
(1) "ACROSS-THE-BOARD SALARY REDUCTION" shall
mean a reduction in the Base Salary that is a part of, and is at a rate
consistent with, a reduction in the base salaries paid to substantially
all officers of Parent.
(2) "CHANGE IN CONTROL" shall mean the occurrence
of any of the following events:
(A) The acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT")) (a "PERSON") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (x) the then outstanding
shares of common stock of Parent (the "OUTSTANDING PARENT
COMMON STOCK") or (y) the combined voting power of the then
outstanding voting securities of Parent entitled to vote
generally in the election of directors (the "OUTSTANDING PARENT
VOTING SECURITIES"); provided, however, that for purposes of
this subsection (A), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly
from Parent, (ii) any acquisition by Parent, (iii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by Parent or any corporation controlled
by Parent or (iv) any acquisition by any corporation pursuant
to a transaction which complies with clauses (i), (ii) and
(iii) of paragraph (C) below; or
(B) Individuals who, as of the date of
this Agreement, constitute the Board (the "INCUMBENT BOARD")
cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a
director subsequent to the date of this Agreement whose
election, or nomination for election by Parent's shareholders,
was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than
the Board; or
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(C) Consummation of a reorganization,
merger or consolidation or sale or other disposition of all or
substantially all of the assets of Parent or an acquisition of
substantially all of the assets of another corporation (a
"BUSINESS COMBINATION"), in each case, unless, following such
Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Parent Common Stock and
Outstanding Parent Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly,
more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction
owns Parent or all or substantially all of Parent's assets
either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Business Combination of the
Outstanding Parent Common Stock and Outstanding Parent Voting
Securities, as the case may be, (ii) no Person (excluding any
corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of Parent or such
corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities
of such corporation except to the extent that such ownership
existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the
corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing
for such Business Combination; or
(D) Approval by the shareholders of
Parent of a complete liquidation or dissolution of Parent; or
(E) Consummation of a Business
Combination not otherwise constituting a Change of Control but,
pursuant to which the Person serving as Chief Executive Officer
at the time of the execution of the initial agreement is
removed from, or replaced in, such capacity with respect to the
corporation resulting from such Business Combination.
(3) "DISABILITY" shall mean Officer's physical
or mental impairment or incapacity of sufficient severity that, in the
opinion of the Board, either (A) Officer is unable to continue to
perform his duties and responsibilities hereunder or (B) Officer's
condition entitles him to disability benefits under any Benefit Plan
providing for the payment thereof.
(4) "EXCESSIVE SALARY REDUCTION" shall mean (A)
a reduction in the Base Salary that is not an Across-the-Board Salary
Reduction (as defined in paragraph (1) of this subsection) and that,
when combined with the net effect of all prior increases and reductions
in the Base Salary (other than prior reductions that were
Across-the-Board Salary Reductions), results in the Base Salary being
less than 80% of the highest Base Salary to which Officer has ever been
subject pursuant to this Agreement (as identified on Schedule A) or (B)
a reduction in the Base Salary (whether or nor an Across-the- Board
Salary Reduction) that, when combined with the net effect of all prior
increases and reductions in the Base Salary (whether or not
Across-the-Board Salary Reductions), results in the Base Salary being
less than 65% of the highest Base Salary to which Officer has ever been
subject pursuant to this Agreement (as identified on Schedule A).
(5) "NORMAL RETIREMENT" shall have the meaning
given to such term in Section 1.27 of the Long-term Incentive Plan.
(6) "TERMINATION FOR CAUSE" shall mean a
Termination of Employment as a result of a dismissal or other action by
the Company following (A) Officer's continued failure to substantially
perform his duties and responsibilities as described in Section 1
(other than any such
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failure resulting from Officer's physical or mental impairment or
incapacity) after written demand for substantial performance is
delivered by the Board or the Chief Executive Officer specifically
identifying the manner in which the Board or the Chief Executive
Officer, as the case may be, believes Officer has not substantially
performed such duties and responsibilities, (B) Officer's engaging in
misconduct that is materially injurious to the Company, monetarily or
otherwise, or (C) a material violation by Officer of the provisions of
Section 6. For purposes of clause (B) of this paragraph, an act, or
failure to act, on Officer's part shall be considered "misconduct" if
done, or omitted, by Officer not in good faith and without reasonable
belief that such act, or failure to act, was in the best interest of
the Company.
(7) "TERMINATION FOR GOOD REASON" shall mean a
Termination of Employment as a result of voluntary action by Officer
within 30 days after receiving notice of (A) the demotion of the
Officer to an officer position junior to the officer position specified
in Section 1 or to a non-officers position, (B) an Excessive Salary
Reduction (as defined in paragraph (4) of this subsection), or (C) the
failure by Parent to obtain the assumption agreement described in
Section 7(f) on or prior to a succession described in Section 7(f).
6. NONPUBLIC INFORMATION.
(a) Officer hereby acknowledges that, in connection with
his employment with the Company, he has received, and will continue to receive,
various information regarding the Company and its business, operations and
affairs. All such information, to the extent not publicly available other than
as a result of a disclosure by Officer in violation of this Agreement, is
referred to herein as the "NONPUBLIC INFORMATION."
(b) Officer hereby agrees that, from and after the date
hereof and continuing until three (3) years following a Termination of
Employment, he will keep all Nonpublic Information confidential and will not,
without the prior written consent of the Board or the Chief Executive Officer,
disclose any Nonpublic Information in any manner whatsoever or use any Nonpublic
Information other than in connection with the performance of his services to the
Company hereunder; provided, however, that the provisions of this subsection
shall not prevent Officer from (1) disclosing any Nonpublic Information to any
other employee of the Company or to any representative or agent of the Company
(such as an independent accountant, engineer, attorney or financial advisor)
when such disclosure is reasonably necessary or appropriate (in Officer's
judgment) in connection with the performance by Officer of his duties and
responsibilities hereunder or (2) disclosing any Nonpublic Information as
required by applicable law, rule, regulation or legal process (but only after
compliance with the provisions of subsection (c) of this Section).
(c) If Officer is requested pursuant to, or required by,
applicable law, rule, regulation or legal process to disclose any Nonpublic
Information, Officer will notify Parent promptly so that the Company may seek a
protective order or other appropriate remedy or, in the Company's sole
discretion, waive compliance with the terms of this Section, and Officer will
fully cooperate in any attempt by the Company to obtain any such protective
order or other remedy. If no such protective order or other remedy is obtained,
or the Company waives compliance with the terms of this Section, Officer will
furnish or disclose only that portion of the Nonpublic Information as is legally
required and will exercise all reasonable efforts to obtain reliable assurance
that confidential treatment will be accorded the Nonpublic Information that is
so disclosed.
7. MISCELLANEOUS PROVISIONS.
(a) MITIGATION. Officer shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise, and the amount of any payment provided for in
this Agreement shall not be reduced by any compensation earned by Officer as the
result of employment by another employer after the date of any Termination of
Employment or otherwise.
(b) INTEREST. Until paid, all past due amounts required
to be paid by the Company to Officer under any provision of this Agreement shall
bear interest at the highest non-usurious rate permitted by applicable federal,
state or local law.
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(c) EQUITABLE RELIEF AVAILABLE. Officer acknowledges that
remedies at law may be inadequate to protect the Company against any actual or
threatened breach of the provisions of Section 6 by Officer. Accordingly,
without prejudice to any other rights or remedies otherwise available to the
Company, Officer agrees that the Company shall have the right to equitable and
injunctive relief to prevent any breach of the provisions of Section 6, as well
as to such damages or other relief as may be available to the Company by reason
of any such breach as does occur.
(d) BREACH NOT A DEFENSE. The representations and
covenants on the part of Officer contained in Section 6 shall be construed as
ancillary to and independent of any other provision of this Agreement, and the
existence of any claim or cause of action of Officer against the Company or any
officer, director, stockholder or representative of the Company, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of the covenants on the part of Officer contained in
Section 6.
(e) NOTICES. Any notice or other communication called
for by the terms of this Agreement shall be in writing and either delivered
personally or by registered or certified mail (postage prepaid and return
receipt requested) and shall be deemed given when received at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(1) If to Parent or the Company, _______________,
_______________________, Texas ________ Attention: General Counsel.
(2) If to Officer, the address of Officer set
forth below Officer's signature on the signature page of this
Agreement, and marked "Confidential."
(f) ASSUMPTION BY SUCCESSOR OF PARENT. Parent shall
require any successor (whether direct or indirect) to all or substantially all
of the business or assets of Parent (whether by purchase of securities, merger,
consolidation, sale of assets or otherwise), by a written agreement in form and
substance satisfactory to Officer, to expressly assume and agree to perform the
obligations to be performed by Parent or the Company under this Agreement in the
same manner and to the same extent that Parent or the Company would be required
to perform if no such succession had taken place.
(g) ASSIGNMENT.
(1) Except pursuant to an assumption by a
successor described in subsection (f) of this Section, the rights and
obligations of the Company pursuant to this Agreement may not be
assigned, in whole or in part, by the Company to any other person or
entity without the express written consent of Officer.
(2) The rights and obligations of Officer
pursuant to this Agreement may not be assigned, in whole or in part, by
Officer to any other person or entity without the express written
consent of the Board.
(h) SUCCESSORS. This Agreement shall be binding on, and
shall inure to the benefit of, the Company, Officer and their respective
successors, permitted assigns, personal and legal representatives, executors,
administrators, heirs, distributees, devisees and legatees, as applicable.
(i) AMENDMENT AND WAIVERS. Except as hereinafter provided,
no provision of this Agreement may be amended or otherwise modified, and no
right of any party to this Agreement may be waived, unless such amendment,
modification or waiver is agreed to in a written instrument signed by Officer
and Parent (and any dated and signed Schedule A, as described in subsection (o)
of this Section, shall constitute such an instrument). Beginning on the fifth
anniversary of the date hereof, unless a Change of Control shall have occurred
or be pending or contemplated, Parent may amend, modify, or waive any provision
of, or terminate, this Agreement upon sixty (60) days notice without the consent
of Officer; PROVIDED that any such amendment, modification, waiver or
termination shall be made to all severance agreements of
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Parent covering all officers of Parent similarly situated to Officer. No waiver
by either party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by the other party hereto shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.
(j) COMPLETE AGREEMENT. The provisions of this Agreement
constitute the complete understanding and agreement among the parties with
respect to the subject matter hereof, and no agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
(k) GOVERNING LAW. THIS AGREEMENT IS BEING MADE AND
EXECUTED IN, AND IS INTENDED TO BE PERFORMED IN, THE STATE OF TEXAS AND SHALL BE
GOVERNED, CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS OF THE STATE OF TEXAS.
(l) ATTORNEY FEES. All legal fees and other costs
incurred by Officer in connection with the resolution of any dispute or
controversy under or in connection with this Agreement shall be reimbursed by
the Company to Officer, if such dispute or controversy is resolved in favor of
Officer. The Company shall be responsible for, and shall pay, all legal fees
and other costs incurred by the Company in connection with the resolution of any
dispute or controversy under or in connection with this Agreement, regardless of
whether such dispute or controversy is resolved in favor of the Company or
Officer.
(m) COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original, but all
of which together will constitute one and the same agreement.
(n) CONSTRUCTION. The captions of the Sections,
subsections and paragraphs of this Agreement have been inserted as a matter of
convenience of reference only and shall not affect the meaning or construction
of any of the terms or provisions of this Agreement. Unless otherwise specified,
references in this Agreement to a "Section," "subsection," "paragraph,"
"subparagraph" or "Schedule" shall be considered to be references to the
appropriate Section, subsection, paragraph, subparagraph or Schedule,
respectively, of this Agreement. Unless the context otherwise requires, all
words used in this Agreement in any gender shall include the masculine, feminine
and neuter gender, all singular words shall include the plural and all plural
words shall include the singular. As used in this Agreement, the term
"including" shall mean "including, but not limited to."
(o) SCHEDULE A. Schedule A may be replaced at any time
and from time to time to reflect a change in the Base Salary; provided, however,
that no Schedule A attached hereto shall be effective unless it contains a date
and bears a signature of approval on behalf of Officer and a signature of
approval on behalf of Parent; and provided further, however, that if at any time
two or more dated and signed copies of Schedule A conflict with each other, the
later dated of such copies shall control.
(p) VALIDITY AND SEVERABILITY. If any term or provision
of this Agreement is held to be illegal, invalid or unenforceable under the
present or future laws effective during the term of this Agreement, (1) such
term or provision shall be fully severable, (2) this Agreement shall be
construed and enforced as if such term or provision had never comprised a part
of this Agreement and (3) the remaining terms and provisions of this Agreement
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable term or provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable term
or provision, there shall be added automatically as a part of this Agreement, a
term or provision as similar to such illegal, invalid or unenforceable term or
provision as may be possible and be legal, valid and enforceable.
(q) EXECUTION BY PARENT. The execution of this Agreement
by Parent shall constitute an acceptance of, and an agreement to be bound by,
the terms and provisions of this Agreement by Parent and each of its direct and
indirect wholly-owned subsidiaries, and Parent hereby agrees to cause each of
its direct and indirect wholly-owned subsidiaries, now and in the future, to
fully comply with all obligations applicable to the Company pursuant to the
terms of this Agreement.
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In witness whereof, the parties have executed this Agreement effective
as of the date first written above.
PIONEER NATURAL RESOURCES COMPANY
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
OFFICER:
------------------------------------------
Printed Name:
-----------------------------
Address:
------------------------------------------
------------------------------------------
[Signature Page - Severance Agreement - Page of 1 of 1]
13
SCHEDULE A
ATTACHED TO SEVERANCE AGREEMENT BETWEEN
____________________________________ AND
____________________________________
BASE SALARY:
EFFECTIVE DATE AMOUNT
____________ $______
Dated and Approved as of _______________:
PIONEER NATURAL RESOURCES OFFICER:
COMPANY
By:
----------------------------------
Name: Printed Name:
-------------------------------- ------------------------
Title:
-------------------------------
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14
SCHEDULE B
GENERAL RELEASE AGREEMENT
NOTICE: VARIOUS STATE AND FEDERAL LAWS AND REGULATIONS PROHIBIT EMPLOYMENT
DISCRIMINATION BASED ON AGE, RACE, COLOR, RELIGION, SEX, NATIONAL ORIGIN,
DISABILITY, CITIZENSHIP, AND MEMBERSHIP OR APPLICATION FOR MEMBERSHIP IN A
UNIFORMED SERVICE. THESE LAWS ARE ENFORCED THROUGH THE EQUAL EMPLOYMENT
OPPORTUNITY COMMISSION, U.S. DEPARTMENT OF LABOR, TEXAS COMMISSION ON HUMAN
RIGHTS, AND OTHER FEDERAL AND STATE AGENCIES. YOU ARE ADVISED TO DISCUSS THIS
RELEASE WITH YOUR ATTORNEY. IN ANY EVENT, YOU SHOULD THOROUGHLY REVIEW AND
UNDERSTAND THE EFFECT OF THIS DOCUMENT BEFORE SIGNING IT. THEREFORE, PLEASE
TAKE THIS GENERAL RELEASE AGREEMENT HOME AND CAREFULLY CONSIDER IT FOR AT LEAST
FIVE DAYS BEFORE SIGNING IT. IN ACCORDANCE WITH THE REQUIREMENTS OF THE OLDER
WORKERS BENEFIT PROTECTION ACT, YOU ARE ALLOWED AT LEAST 45 DAYS FROM THE DATE
OF YOUR RECEIPT OF THIS DOCUMENT AND THE ACCOMPANYING EXPLANATORY LETTER TO
CONSIDER THE OFFER MADE TO YOU AND TO RETURN AN EXECUTED COPY OF THIS FORM TO
THE VICE PRESIDENT ADMINISTRATION. ADDITIONALLY, AFTER YOU HAVE EXECUTED THIS
FORM, YOU HAVE SEVEN DAYS TO RECONSIDER AND REVOKE YOUR AGREEMENT.
GENERAL RELEASE: IN CONSIDERATION OF MY ACCEPTANCE OF THE PAYMENTS AND
BENEFITS OFFERED TO ME UNDER SECTION 5(D)(2)(C) OF THE SEVERANCE AGREEMENT, I
HEREBY RELEASE AND DISCHARGE PIONEER NATURAL RESOURCES COMPANY AND ITS
SUBSIDIARIES AND AFFILIATES (THE "COMPANY"), AND THE OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, SUCCESSORS, AND ASSIGNS OF SUCH ENTITIES (COLLECTIVELY THE
"RELEASED PARTIES") FROM ANY AND ALL CLAIMS, LIABILITIES, DEMANDS, AND CAUSES
OF ACTION, KNOWN OR UNKNOWN, FIXED OR CONTINGENT, WHICH I HAVE OR CLAIM AGAINST
THEM AS A RESULT OF THE TERMINATION OF MY EMPLOYMENT, INCLUDING BUT NOT LIMITED
TO CLAIMS ARISING UNDER FEDERAL, STATE, OR LOCAL LAWS PROHIBITING EMPLOYMENT
DISCRIMINATION, INCLUDING THE AGE DISCRIMINATION IN EMPLOYMENT ACT, OR CLAIMS
GROWING OUT OF ANY LEGAL RESTRICTIONS, CONTRACTUAL OR OTHERWISE, ON THE
COMPANY'S RIGHT TO TERMINATE THE EMPLOYMENT OF ITS EMPLOYEES, AND I DO HEREBY
AGREE NOT TO FILE A LAWSUIT TO ASSERT SUCH CLAIMS. I FURTHER ACKNOWLEDGE AND
AGREE THAT BY ACCEPTING THE SEVERANCE AGREEMENT BENEFITS, I HAVE GIVEN UP MY
RIGHT TO FILE ANY COMPLAINT, LAWSUIT, OR OTHER LEGAL ACTION AGAINST ANY OF THE
RELEASED PARTIES GROWING OUT OF, CONNECTED WITH, OR RELATING IN ANY WAY TO MY
EMPLOYMENT OR THE TERMINATION OF MY EMPLOYMENT WITH THE COMPANY. FURTHER IN
CONSIDERATION OF THE PAYMENTS AND BENEFITS OFFERED TO ME UNDER THE SEVERANCE
AGREEMENT, I ACKNOWLEDGE AND AGREE THAT THE RELEASED PARTIES MAY RECOVER FROM
ME ANY LOSS, INCLUDING ATTORNEY'S FEES AND COSTS OF DEFENDING AGAINST ANY CLAIM
BROUGHT BY ME, THAT THEY MAY SUFFER ARISING OUT OF MY BREACH OF THIS GENERAL
RELEASE AGREEMENT.
I understand that this General Release Agreement is final and binding,
and I agree not to challenge its enforceability. If I do challenge the
enforceability of this General Release Agreement, I agree initially to tender
to the Company all money received pursuant to the Severance Agreement, and
invite the Company to retain such money and agree with me to cancel this
General Release Agreement. In the event the Company accepts this offer, the
Company shall retain such money and this General Release Agreement will be
void. In the event the Company does not accept such offer, the Company shall
so notify me, and shall place such money in an interest-bearing escrow account
pending the resolution of any dispute as to whether this General Release
Agreement shall be set aside and/or otherwise be rendered unenforceable.
I acknowledge and agree that the Company has no legal obligation to
provide the payment under Section 5(d)(2)(c) of the Severance Agreement offered
to me, and my acceptance of the obligations and attendant additional payment as
described therein constitutes my agreement to all terms and conditions set
forth in this General Release Agreement, and are in consideration of the
promises and undertakings of the Company pursuant to the Severance Agreement.
I further acknowledge and agree that for unemployment compensation purposes,
the payments I receive under the Severance Agreement shall be considered
additional wages in lieu of notice; and that, accordingly, I may be ineligible
to receive unemployment compensation benefits for an equivalent period of time.
This General Release Agreement does not have any effect on any claim I
may have against the Released Parties unrelated to the termination of my
employment or with respect to any rights or claims that may arise after the
date this General Release Agreement is executed.
I have carefully read and fully understand all of the provisions of
this General Release. I further acknowledge that entering into this General
Release Agreement is knowing and voluntary on my part, that I have had a
reasonable time to deliberate regarding its terms, and that I have had the
right to consult with an attorney if I so desired.
I acknowledge that I initially executed a General Release Agreement,
containing the same terms and conditions as this General Release Agreement,
more than seven days prior to the date appearing below and placed the General
Release Agreement in the mail addressed to the Company. I further acknowledge
that I have had at least seven days since the date of execution of the
originally executed General Release Agreement in which to reconsider and revoke
my agreement to the terms and conditions set forth in this General Release
Agreement.
Date signed:
---------------------- --------------------------------------
Signature of Officer
Date signed:
---------------------- --------------------------------------
Signature of Officer
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