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EXHIBIT 10.3
EXECUTION COPY
CONSULTING AND TERMINATION AGREEMENT
THIS CONSULTING AND TERMINATION AGREEMENT (this "Agreement"), dated as of
October 8, 1999, is made and entered into by and among Prize Energy Corp., a
Delaware corporation ("Prize"), Vista Energy Resources, Inc., a Delaware
corporation (the "Company"), and Xxxxxx X. Xxxx ("Executive").
W I T N E S S E T H:
WHEREAS, concurrently herewith, Prize, the Company and PEC Acquisition
Corp., a Delaware corporation ("Sub"), are entering into an Agreement and Plan
of Merger (as such agreement may hereafter be amended from time to time, the
"Merger Agreement"; capitalized terms used and not otherwise defined herein have
the respective meanings ascribed to them in the Merger Agreement), pursuant to
which Sub will be merged with and into Prize and Prize will become a
wholly-owned subsidiary of the Company (the "Merger");
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Prize has required that Executive agree, and Executive has agreed, to
enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. TERMINATION OF EMPLOYMENT ARRANGEMENT. Effective as of the Effective
Time, (a) Executive hereby tenders his resignation as an officer and director of
the Company and each of its subsidiaries and affiliates, and (b) his employment
arrangement with the Company and its subsidiaries (the "Employment Arrangement")
shall be terminated in full without any further action on the part of the
Company, any of its subsidiaries or Executive. Except as expressly provided for
in this Agreement, from and after the date of termination of the Employment
Arrangement, Executive shall not be entitled to receive any further wages,
compensation, stock options or benefits arising pursuant to the Employment
Arrangement (other than the compensation, amounts and benefits to be received by
Executive under Section 5 of this Agreement or otherwise not released by
Executive pursuant to Section 2(a) of this Agreement) or his employment
relationship with the Company or any of its subsidiaries, and Executive shall
not be entitled to any post-termination wages, compensation or benefits
(including, without limitation, severance pay, vacation pay or sick pay), except
as expressly provided in Sections 2(a) and 5 of this Agreement.
2. RELEASE OF CLAIMS.
(a) RELEASE BY EXECUTIVE. Effective as of the Effective Time, Executive
hereby releases and discharges the Released Parties from all Claims and Damages
(as those terms are defined in Section 2(c) below), including, without
limitation, those related to, arising from, or attributed to (i) Executive's
employment with, and membership on the Boards of Directors and committees of,
the Company and its subsidiaries and affiliates and resignations therefrom, (ii)
the
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Employment Arrangement (including, without limitation, any right to receive
options for shares of Common Stock under the terms of the Company's 1998 Key
Employee Stock Option Plan), and (iii) any and all other acts or omissions
related to any matter at any time prior to and including the date of termination
of the Employment Arrangement; except that this release shall not include
Executive's (A) entitlement to continued group medical coverage in accordance
with the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), (B)
vested account balances in the Company's employee benefit plans or warrants
outstanding as of the date hereof, (C) rights with respect to shares of capital
stock of the Company owned or held by Executive, (D) rights of Executive arising
under this Agreement, (E) rights of Executive arising under any agreement
granting Executive the right to have any securities of the Company now or
hereafter owned by Executive registered under the Securities Act of 1933,
including that certain Registration Rights Agreement dated as of October 28,
1998, as such may be superseded by that certain Amended and Restated
Registration Rights Agreement dated as of the Effective Time, in each case
between the Company, certain security holders of the Company and (in the case of
the latter Agreement) Prize, (F) rights of Executive arising under the Merger
Agreement, or (G) accrued and unpaid salary and reimbursement of reasonable
business expenses attributable to the period prior to the Effective Time.
Notwithstanding the foregoing, Executive does not release or discharge the
Company and its subsidiaries from any Claims or Damages related to or arising
from Executive's capacity as an officer or director of the Company or its
subsidiaries to which Executive is entitled to be indemnified against or
reimbursed by the Company or its subsidiaries, whether by statute, contract or
otherwise, including, without limitation, his rights under that certain
Indemnification Agreement dated as of October 28, 1998, by and between the
Company and Executive.
(b) RELEASE BY THE COMPANY. Effective as of the Effective Time, the
Company hereby releases and discharges Executive from all Claims and Damages
related to, arising from or attributed to lawful acts or omissions of Executive
in the course of Executive's employment with, and membership on the Boards of
Directors of, the Company and its subsidiaries and resignations therefrom,
except that this release shall not include rights of the Company arising under
this Agreement or any illegal or fraudulent act or omission.
(c) DEFINITIONS. As used in this Section 2, the following terms shall
have meanings set forth below:
(i) "Claims" means all theories of recovery of whatever nature,
whether known or unknown, at law or in equity, of any jurisdiction,
based on acts, omissions or other matters occurring on or before the
Effective Time. This term includes, without limitation, lawsuits,
petitions, complaints, causes of action, charges, indebtedness, losses,
claims, liabilities and demands, whether arising in equity or under the
common law or under any contract, statute, regulation or ordinance. This
term also includes, without limitation, any claim of discrimination
(based on age or any other factor) under any statute or law (including,
without limitation, the Age Discrimination in Employment Act, 29 U.S.C.
Section 621, et seq.; Title VII of the Civil Rights Act of 1964, 42
U.S.C. Section 2000e, et seq.; and the Americans with Disabilities Act,
42 U.S.C. Section 12101, et seq.), and all claims asserted by Executive,
in writing or otherwise, or which could be asserted by Executive.
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(ii) "Damages" means all elements of relief or recovery of whatever
nature, whether known or unknown, which are recognized by the law or
equity of any jurisdiction. This term includes, without limitation,
actual, incidental, indirect, consequential, special, compensatory,
liquidated, contingent, exemplary, and punitive damages; rescission;
attorneys' fees; interest; costs; equitable relief; and expenses.
(iii) "Released Parties" means and includes the Company, Prize and
their subsidiaries and affiliates, and all of the foregoing entities'
past, present and future stockholders, directors, officers, employees,
agents, insurance carriers, employee benefit plans (and such plans'
fiduciaries, trustees, administrators and representatives),
predecessors, successors, assigns, executors, administrators, attorneys
and representatives, in both their corporate and individual capacities.
3. CONSULTING ARRANGEMENT.
(a) CONSULTING SERVICES. Effective as of the Effective Time, the Company
hereby retains Executive to render such consulting and advisory services (the
"Consulting Services") as the Company may reasonably request from time to time
during the Consultation Period (as defined in subsection (c) of this Section 3).
Executive hereby accepts such engagement and agrees to perform such services for
the Company upon the terms and conditions set forth in this Agreement. Executive
will perform the Consulting Services at such times and places as the Company,
from time to time, shall reasonably request; provided, however, that, unless
Executive agrees in advance, he shall not be required to provide more than 180
hours of Consulting Services in any calendar month. Consulting and advising via
telephone, facsimile transmission, Internet transmission and correspondence, as
well as in person, shall constitute performance of Executive's services
hereunder. The Company will reimburse Executive for reasonable out-of-pocket
expenses which Executive incurs in the course of providing the Consulting
Services. The Company shall reimburse Executive for the cost of his and his
dependants' continued medical and dental coverage incurred by Executive under
COBRA during the Consultation Period. Such reimbursement shall be contingent on
Executive electing such continued coverage in accordance with COBRA, remaining
eligible for such continued coverage and making the payments required for such
continued coverage. Notwithstanding anything in this Agreement, Executive shall
be an independent contractor with authority to select the means and method of
performing the Consulting Services. Executive shall not be an employee or agent
of the Company, Prize or any of their subsidiaries or affiliates and any action
taken by Executive which is not authorized by this Agreement or any other
agreement between the Company and Executive will not bind the Company, Prize or
any of their subsidiaries or affiliates or create any claim against the Company,
Prize or any of their subsidiaries or affiliates. Unless otherwise specifically
authorized by this Agreement or any other agreement between the Company and
Executive, Executive has no authority to transact any business or make any
representations or promises in the name of the Company, Prize or any of their
subsidiaries or affiliates.
(b) CONSIDERATION. During the Consultation Period, the Company shall pay
Executive a consulting fee of $13,750 per month, which fee shall be payable in
accordance with standard payroll practices of the Company. The above consulting
fee shall be payable on a pro rata basis for any partial month occurring during
the Consultation Period.
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(c) CONSULTATION PERIOD. Unless terminated at an earlier date in
accordance with subsection (d) of this Section 3, the term of the consulting
arrangement shall commence at the Effective Time and expire as of February 28,
2000 (the "Consultation Period").
(d) TERMINATION OF CONSULTING ARRANGEMENT. Notwithstanding any contrary
provision contained elsewhere in this Agreement, this Section 3, the
Consultation Period and the consulting arrangement created hereunder between the
Company and Executive may be terminated at any time prior to the expiration of
the term set forth in subsection (c) of this Section 3 by either the Company or
Executive.
4. TAX RETURN. The Company shall use its best efforts to provide to
Executive his 1999 Form W2 no later than January 31, 2000.
5. SEVERANCE. On the later of January 3, 2000, or the date that is five
days after the Effective Time, the Company shall pay Executive by wire transfer
of immediately available funds $333,333 as severance compensation.
6. SURVIVAL. The provisions of this Agreement (other than Section 3) shall
survive any termination of the consulting arrangement created pursuant to
Section 3 of this Agreement.
7. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral, between
Executive and any of the Company, Prize or any of their subsidiaries or
affiliates with respect to the subject matter hereof.
(b) BINDING EFFECT. This Agreement and the obligations hereunder shall
be binding upon and inure to the benefit of Executive and his heirs, guardians,
administrators and successors and the Company, Prize and their successors and
permitted assigns. No party hereto may assign any of its rights or obligations
hereunder without the prior written consent of the others.
(c) AMENDMENTS, WAIVERS, ETC. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the parties
hereto.
(d) NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
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If to Executive: Xxxxxx X. Xxxx
0000 Xxxx Xxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
If to the Company: Vista Energy Resources, Inc.
Chief Executive Officer
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Prize: Prize Energy Corp.
00 Xxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Attention: Chairman
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(e) SEVERABILITY. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(f) REMEDIES CUMULATIVE. All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise of any such right,
power or remedy by any party shall not preclude the simultaneous or later
exercise of any other right, power or remedy by such party.
(g) NO WAIVER. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
(h) NO THIRD PARTY BENEFICIARIES. This Agreement is not intended to be
for the benefit of, and shall not be enforceable by, any person or entity who or
which is not a party hereto.
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(i) GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Texas, without giving effect to the
principles of conflicts of law thereof.
(j) DESCRIPTIVE HEADINGS. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
(k) COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which, taken together,
shall constitute one and the same Agreement.
(l) WITHHOLDINGS. The Company may withhold from any amounts payable to
Executive under this Agreement any applicable federal, state, and local taxes,
and social security, medicare tax, FUTA and any other applicable payroll
withholding which the Company is required to withhold pursuant to any law or
government regulation or ruling.
(m) TAXES. Executive agrees to comply, on a timely basis, with all tax
reporting requirements applicable to the receipt of the payments and other
compensation received hereunder and to timely pay all taxes due with respect to
such amounts.
8. TERMINATION. This Agreement shall terminate upon the termination of the
Merger Agreement without any further action on the part of any party hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
/s/ XXXXXX X. XXXX
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XXXXXX X. XXXX
VISTA ENERGY RESOURCES, INC.
By: /s/ C. XXXXXXX XXXX
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Name: C. Xxxxxxx Xxxx
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Title: CEO
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PRIZE ENERGY CORP.
By: /s/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx
Chairman and CEO
