EXHIBIT 10.71
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement"), made and entered into as of the
15th day of July, 1998, by and among TRITON EXPLORATION SERVICES, INC. (the
"Employer"), having a business address at 0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000, Xxxxxx X. Xxxxxxx, III ("Employee"), having a mailing
address at 0000 Xxxxxx Xxxx., Xxxxxx,Xxxxx 00000, and Triton Energy Limited, a
Cayman Islands company (the "Company"), to the limited extent provided herein,
W I T N E S S E T H:
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WHEREAS, the Employer is a direct or indirect wholly owned subsidiary of
the Company;
WHEREAS, the Employer and the Company consider the establishment and
maintenance of a sound and vital management to be essential to protecting and
enhancing their best interests and the best interests of their respective
shareholders;
WHEREAS, the Employer and the Company recognize that, because the Company
is a publicly held company and as is the case with many such companies, the
possibility of a change in control may exist and that such possibility, and the
uncertainty and questions which it may raise among management, may result in the
departure or distraction of management personnel to the detriment of the
Employer and the Company and their respective shareholders;
WHEREAS, the Boards of Directors of the Employer and the Company have
determined that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of the Employer's management,
including Employee, to their assigned duties without distraction in the face of
the potentially disturbing circumstances arising from the possibility of a
change in control of the Company;
WHEREAS, in order to induce Employee to remain in the employ of the
Employer and in the service of the Company as an officer, the Employer entered
into an Amended and Restated Employment Agreement (the "Employment Agreement")
as of January 13, 1998 with Employee that provides certain severance benefits to
Employee in the event Employee's employment is terminated or changed under the
circumstances described below and the Company is willing to guarantee the
performance of the Employer's obligations hereunder;
WHEREAS, the Employer has requested Employee, and Employee has agreed, to
act as President and Chief Executive Officer for the lesser of one year or until
the Company has appointed another individual as Chief Executive Officer on the
terms and conditions described in this Agreement;
WHEREAS, the Employer, the Company and Employee wish to amend and restate
the Employment Agreement;
NOW, THEREFORE, in consideration of the mutual premises and conditions
contained herein, the parties hereto agree as follows:
1. TERMINATION OF EMPLOYMENT FOLLOWING CHANGE IN CONTROL. If, while
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Employee is employed by Employer, the Company or any subsidiary of the Company,
a change in control of the Company (as defined in Section 1.6 below) occurs,
Employee shall be entitled to the benefits provided in Section 2 hereof upon the
subsequent termination of his employment, provided that such termination (a)
occurs within two (2) years following the change in control of the Company and
(b) is not (i) because of his death, "Disability" or "Retirement" (as defined in
Section 1.1 below), (ii) by the Employer for "Cause" (as defined in Section 1.2
below), or (iii) by Employee other than for "Good Reason" (as defined in Section
1.3 hereof). In addition, if within eighteen months following the termination of
Employee's employment with Employer, the Company or any subsidiary of the
Company, a change in control of the Company occurs, Employee shall be entitled
to the benefits provided in Section 2 hereof upon the occurrence of such change
in control, provided that the termination of his employment was not (i) because
of his death, "Disability" or "Retirement", (ii) by the Employer for "Cause", or
(iii) by Employee other than for "Good Reason".
1.1 Disability; Retirement
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1.1-1 If, as a result of Employee's incapacity due to physical
or mental illness, Employee shall have been absent from his duties with the
Employer on a full-time basis for 120 consecutive business days, and within
thirty (30) days after written notice of termination is given Employee shall not
have returned to the full-time performance of his duties, the Employer may
terminate this Agreement for "Disability."
1.1-2 Termination by the Employer or Employee of his employment
based on "Retirement" shall mean termination in accordance with the Employer's
retirement policy, including early retirement, generally applicable to its
salaried employees or in accordance with any retirement arrangement established
with Employee's consent with respect to him.
1.2 Cause. The Employer may terminate Employee's employment for
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"Cause." For the purposes of this Agreement, the Employer shall have "Cause" to
terminate Employee's employment hereunder upon (A) the willful and continued
failure by Employee to perform his duties with the Employer (other than any such
failure resulting from incapacity due to physical or mental illness), after a
demand for substantial performance is delivered to Employee by the Board which
specifically identifies the manner in which the Board believes that he has not
substantially performed his duties, or (B) the willful engaging by Employee in
gross misconduct materially and demonstrably injurious to the Company. For
purposes of this paragraph, an act, or failure to act, on Employee's part shall
not be considered "willful" if done, or omitted to be done, by him (A) in good
faith and (B) with reasonable belief that his action or omission was not opposed
to the best interests of the Company. Notwithstanding the foregoing, Employee
shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to him a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds (2/3d's) of the entire authorized
membership of the Board at a meeting of the Board called and held for the
purpose (after reasonable notice and an opportunity for Employee, together with
counsel, to be heard before the Board), finding that in the good faith opinion
of the Board he was guilty of conduct set forth above in clauses (A) or (B) of
the second sentence of this paragraph and specifying the particulars thereof in
detail.
1.3 Good Reason. Employee may terminate his employment for Good
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Reason. For purposes of this Agreement, "Good Reason" shall mean:
1.3-1 Without his express written consent, the assignment to
Employee of any duties inconsistent with his positions, duties, responsibilities
and status with the Employer and the Company immediately prior to a change in
control of the Company, or a change in his reporting responsibilities, titles or
offices with the Employer or the Company as in effect immediately prior to a
change in control of the Company, including, without limitation, the appointment
of another individual as President or Chief Executive Officer of the Company, or
any removal of Employee from or any failure to re-elect Employee to any of such
positions, except in connection with the termination of his employment for
Cause, Disability or Retirement or as a result of his death or by Employee other
than for Good Reason;
1.3-2 A reduction by the Employer in Employee's base salary as
in effect on the date hereof or as the same may be increased from time to time;
1.3-3 The Employer's requiring Employee to be based anywhere
other than the Employer's offices at which he was based immediately prior to a
change in control of the Company except for required travel on the Employer's
business to an extent substantially consistent with his present business travel
obligations, or, in the event Employee consents to any relocation, the failure
by the Employer to pay (or reimburse Employee) for all reasonable moving
expenses incurred by him relating to a change of his principal residence in
connection with such relocation and to indemnify Employee against any loss
(defined as the difference between the actual sale price of such residence and
the higher of (a) his aggregate investment in such residence or (b) the fair
market value of such residence as determined by a real estate appraiser
designated by Employee and reasonably satisfactory to the Employer) realized on
the sale of Employee's principal residence in connection with any such change of
residence;
1.3-4 The failure by the Employer or the Company to continue in
effect any benefit or compensation plan (including but not limited to any stock
option plans, convertible debenture plan, pension plan, life insurance plan,
health and accident plan or disability plan) in which Employee is participating
at the time of a change in control of the Company (or plans providing
substantially similar benefits), the taking of any action by the Employer or the
Company which would adversely affect Employee's participation in or materially
reduce his benefits under any of such plans or deprive him of any material
fringe benefit enjoyed by him at the time of the change in control of the
Company, or the failure by the Employer to provide Employee with the number of
paid vacation days to which he is then entitled on the basis of years of service
with the Employer in accordance with the Employer's normal vacation policy in
effect on the date hereof;
1.3-5 Any failure of the Employer or the Company to obtain the
assumption of and the agreement to perform this Agreement by any successor as
contemplated in Section 6 hereof; or
1.3-6 Any purported termination of Employee's employment which
is not effected pursuant to a Notice of Termination satisfying the requirements
of Section 1.4 below (and, if applicable, Section 1.2 above); and for purposes
of this Agreement, no such purported termination shall be effective.
1.4 Notice of Termination. Any termination by the Employer
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pursuant to Sections 1.1 and 1.2 above or by Employee pursuant to Section 1.3
above shall be communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Employee's employment under the
provision so indicated. In the event that Employee seeks to terminate his
employment with the Employer pursuant to Section 1.3 above, he must communicate
his written Notice of Termination to the Employer within sixty (60) days of
being notified of such action or actions by the Employer or the Company which
constitute Good Reason for termination.
1.5 Date of Termination. "Date of Termination" shall mean (i) if
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this Agreement is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that Employee shall not have returned to the
performance of his duties on a full-time basis during such thirty (30) day
period); (ii) if Employee's employment is terminated for Cause, the date on
which a Notice of Termination is given or the date on which there shall have
been delivered to Employee the resolution specified in Section 1.2, whichever is
later; (iii) if Employee's employment is terminated with Good Reason or with
Justification, the date that is specified in the Notice of Termination; and (iv)
if Employee's employment is terminated for any other reason, the date on which a
Notice of Termination is given; provided that, if within thirty (30) days after
any Notice of Termination is given the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties, by a
binding and final arbitration award or by a final judgment, order or decree of a
court of competent jurisdiction (the time for appeal therefrom having expired
and no appeal having been perfected).
1.6 Change in Control Defined. For purposes of this Agreement, a
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"change in control of the Company" shall mean the occurrence of any of the
following events: (i) there shall be consummated (x) any consolidation,
amalgamation or merger of the Company in which the Company is not the continuing
or surviving corporation or pursuant to which shares of the Company's Ordinary
Shares would be converted into cash, securities or other property, other than a
consolidation, amalgamation or merger of the Company in which the holders of the
Company's Ordinary Shares immediately prior to the consolidation, amalgamation
or merger have the same proportionate ownership of ordinary shares or common
stock of the surviving corporation immediately after the consolidation,
amalgamation or merger, or (y) any sale, lease, exchange or other transfer
(excluding transfer by way of pledge or hypothecation), in one transaction or a
series of related transactions, of all, or substantially all, of the assets of
the Company, (ii) the shareholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company, (iii) any "person" (as such
term is defined in Section 3(a)(9) or Section 13(d)(3) under the Securities
Exchange Act of 1934, as amended (the "1934 Act)) or any "group" (as such term
is used in Rule 13d-5 promulgated under the 1934 Act), other than the Company or
any successor of the Company or any subsidiary of the Company or any employee
benefit plan of the Company or any subsidiary (including such plan's trustee),
becomes a beneficial owner for purposes of Rule 13d-3 promulgated under the 1934
Act, directly or indirectly, of securities of the Company representing 15.0% or
more of the Company's then outstanding securities having the right to vote in
the election of Directors of the Company, or (iv) during any period of two
consecutive years, individuals who, at the beginning of such period constituted
the entire Board of Directors of the Company (the "Board", and such individuals
being referred to as the "Incumbent Directors"), cease for any reason (other
than death) to constitute a majority of the Directors of the Company, unless the
election, or the nomination for election, by the Company's shareholders, of each
new Director of the Company was approved by a vote of at least two-thirds of the
Incumbent Directors (so long as such new Director was not nominated by a person
who expressed an intent to effect a change in control of the Company or engage
in a proxy or other control contest) in which case such new Director shall be
considered an Incumbent Director.
2. COMPENSATION FOLLOWING A CHANGE IN CONTROL. If a change in control
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of the Company shall have occurred and the other conditions in the first
paragraph of Section 1 are met, Employee shall be entitled to the following:
2.1 Disability. During any period that Employee fails to perform his
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duties hereunder as a result of incapacity due to physical or mental illness, he
shall continue to receive his full base salary at the rate then in effect and
any installments of deferred portions of awards under any applicable incentive,
bonus or other plans paid during such period until this Agreement is terminated
pursuant to Section 1 hereof. Thereafter, Employee's benefits in respect of his
disability shall be determined in accordance with the Employer's Long-Term
Disability Income Insurance Plan, or a substitute plan, and any other plans
providing for the disability of a participant then in effect.
2.2 Termination for Cause. If Employee's employment shall be
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terminated for Cause, the Employer shall pay Employee his full base salary
through the Date of Termination at the rate in effect at the time Notice of
Termination is given and the Employer shall have no further obligations to
Employee to make any payments under this Agreement.
2.3 Termination Without Cause; Termination for Good Reason. If the
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Employer shall terminate Employee's employment other than pursuant to Sections
1.1 or 1.2 hereof or if Employee shall terminate his employment for Good Reason,
then the Employer shall pay to Employee as severance pay in a lump sum in cash
not later than the tenth (10th) day following the Date of Termination, the
following amounts:
2.3-1 Employee's full base salary through the Date of
Termination at the rate in effect at the time of Notice of Termination is given;
2.3-2 In lieu of any further salary or bonus payments to
Employee for periods subsequent to the Date of Termination, an amount equal to
the product of (a) the sum of (i) the highest of Employee's annual base salary
in effect at any time from the three years prior to, through and including, the
Date of Termination plus (ii) the highest of the aggregate bonuses paid to
Employee during any fiscal year all or a part of which was included in the
foregoing three year period (which shall include, without limitation, for fiscal
1998, the $200,000 forgivable advance paid to Employee in August 1998 as an
incentive to continue to serve as an officer of the Company (the "Retention
Bonus") plus (iii) the highest of the aggregate contributions made by the
Employer on Employee's behalf in respect of Employee's participation in any
401(k) plan or plans of the Employer during any fiscal year all or a part of
which was included in the foregoing three year period multiplied by (b) the
number three (3);
2.3-3 In lieu of further payments to Employee under the
Company's Supplemental Executive Retirement Plan (the "SERP"), an amount equal
to the lump sum payment to which the Employee would be entitled under the SERP
had a change in control as defined in the SERP occurred simultaneously with the
change in control as defined in this Agreement;
2.3-4 If the Employer shall terminate Employee's employment
other than pursuant to Section 1.1 or 1.2 hereof or if Employee shall terminate
his employment for Good Reason, then Employee shall be entitled to exercise all
options ("Options"), if any, then held by Employee under the Company's stock
option plans for a period of twelve (12) months following the Date of
Termination; and
2.3-5 All relocation and indemnity payments as set forth in
Section 1.3-4 hereof, and all legal fees and expenses incurred by Employee as a
result of such termination (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in seeking to obtain
or enforce any right or benefit provided by this Agreement).
2.4 Benefit Plans. Unless Employee is terminated for Cause, the
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Employer shall maintain in full force and effect for the continued benefit of
Employee, for a two year period after the Date of Termination, all employee
benefit plans and programs or arrangements in which Employee was entitled to
participate immediately prior to the Date of Termination (at no greater cost or
expense to Employee than was the case immediately prior to the change in control
of the Company), including without limitation plans providing medical, dental,
life and disability insurance coverage, provided that Employee's continued
participation is possible under the general terms and provisions of such plans
and programs. In the event that Employee's participation in any such plan or
program is not possible, the Employer shall arrange to provide Employee, at the
Employer's cost and expense, with benefits substantially similar to those which
Employee is entitled to receive under such plans and programs. At the end of
the period of coverage, Employee shall have the option to have assigned to him
at no cost and with no appointment of prepaid premiums, any assignable insurance
policy owned by the Employer or the Company and relating specifically to him.
2.5 Additional Benefits. If the Employer shall terminate
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Employee's employment other than pursuant to Section 1.1 or 1.2 hereof or if
Employee shall terminate his employment for Good Reason, then in addition to the
benefits to which Employee is entitled under the retirement plans or programs in
which Employee participates or any successor plans or programs in effect on the
Date of Termination of his employment hereunder (but not in addition to the
payment required by Section 2.3-3 hereof), the Employer shall pay Employee, not
later than the tenth (10th) day following the Date of Termination, in cash an
amount equal to the difference between (a) the present value of the most
valuable retirement pension to which Employee would have been entitled under the
terms of the retirement plans or programs in which Employee participates (or any
successor plans or programs in effect on the Date of Termination hereunder)
without regard to "vesting" thereunder, if he would have accumulated three (3)
additional years of continuous credited service after the Date of Termination
under such retirement plans or programs and (b) the present value of the most
valuable retirement pension which he is actually entitled to receive pursuant to
the provisions of said retirement plans and programs. For purposes of this
Section 2.5, "present value" shall be determined using the same methods and
assumptions (including compensation increase assumptions during such additional
three year period) utilized under the Employer's retirement plans and programs
immediately prior to the change in control of the Company.
2.6 Automobiles. Upon Employee's termination for any reason, the
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Employer shall enable Employee to purchase the automobile, if any, which the
Employer or the Company was providing for Employee's use at the time Notice of
Termination was given at the wholesale value of such automobile at such time.
2.7 Mitigation of Amounts Payable Hereunder. Employee shall not
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be required to mitigate the amount of any payment provided for in this Section 2
by seeking other employment or otherwise, nor shall the amount of any payment
provided for in this Section 2 be reduced by any compensation earned by Employee
as the result of employment by another employer after the Date of Termination,
or otherwise.
3. COMPENSATION NOT CONTINGENT UPON A CHANGE IN CONTROL.
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3.1 Termination Benefits. If Employee's employment is terminated,
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other than due to Employee's death, Disability or Retirement, (i) by the
Employer without Cause (as defined in Section 1.2) or (ii) by Employee with
Justification (as defined below), then Employee shall be entitled to the
benefits set forth in Section 3.1. If there shall occur a change in control of
the Company while Employee is employed by the Company, Employee shall have the
option to have either the provisions of this Section 3 control or the provisions
of Sections 1 and 2 control.
3.1-1 Following the Date of Termination, Employee shall
continue to be compensated in accordance with the payroll practices of the
Employer, at the highest rate of compensation in effect in the twelve-month
period prior to the Date of Termination, for the period ending on the pay period
that next follows the 18-month anniversary of the Date of Termination of
employment pursuant to this Section 3, subject to any holdbacks or deductions
required as a matter of law. During this period, Employee shall be treated as an
employee for purposes of all employee benefit plans and programs or arrangements
in which Employee is entitled to participate immediately prior to the Date of
Termination (at no greater cost or expense to Employee than was the case
immediately prior to the termination), including without limitation plans
providing medical, dental, life and disability insurance coverage. Employee's
participation in the Supplemental Executive Retirement Plan, as it may be
amended through the date prior to the Date of Termination, shall continue until
the anniversary date of Employee's commencement of employment that next follows
the 18-month anniversary of the Date of Termination of employment pursuant to
this Section 4.
3.1-2 Any Options, if any, then held by Employee shall become
fully vested and exercisable and shall remain exercisable until the earlier to
occur of their expiration date set forth in the agreements pursuant to which
they were issued (without regard to the effect of termination of employment), as
such agreements may be amended pursuant to this Agreement or otherwise, or the
twelve (12) month anniversary of the Date of Termination.
3.1-3 If, prior to the eighteen (18) month anniversary of the
Date of Termination there shall occur a change in control of the Company,
Employee shall be entitled to receive the benefits provided in Section 2 above
assuming that the change in control of the Company occurred immediately prior to
the termination of employment pursuant to this Section 3 and Employee were
terminated without Cause following such change in control of the Company.
3.1-4 Employee shall be entitled to receive all relocation and
indemnity payments as set forth in Section 2.3-4 hereof, and all legal fees and
expenses incurred by Employee as a result of such termination (including all
such fees and expenses, if any, incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any right or benefit provided by
this Agreement).
3.2 Termination by Employee with Justification. Employee shall be
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entitled to terminate his employment with "Justification" and shall be entitled
to the benefits set forth in Section 3.1 if any of the following conditions
pertain:
3.2-1 Without his express written consent, the assignment to
Employee of any duties inconsistent with his positions, duties, responsibilities
and status with the Employer and the Company as of the date hereof, or a change
in his reporting responsibilities, titles or offices with the Employer or the
Company as in effect as of the date hereof, including, without limitation, the
appointment of another individual as President or Chief Executive Officer of the
Company, or any removal of Employee from or any failure to re-elect Employee to
any of such positions, except in connection with the termination of his
employment for Cause, Disability or Retirement or as a result of his death.
4.2-2 A reduction by the Employer in Employee's base salary as
the same hereafter may be increased from time to time.
4.2-3 The Employer's requiring Employee to be based anywhere
other than the Employer's offices in Dallas, Texas, except for required travel
on the Employer's business to an extent substantially consistent with his
present business travel obligations, or, in the event Employee consents to any
relocation, the failure by the Employer to pay (or reimburse Employee) for all
reasonable moving expenses incurred by him relating to a change of his principal
residence in connection with such relocation and to indemnify Employee against
any loss (defined as the difference between the actual sale price of such
residence and the higher of (a) his aggregate investment in such residence or
(b) the fair market value of such residence as determined by a real estate
appraiser designated by Employee and reasonably satisfactory to the Employer)
realized on the sale of Employee's principal residence in connection with any
such change of residence.
4.3 Mitigation of Amounts Payable Hereunder. Employee shall not be
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required to mitigate the amount of any payment provided for in this Section 4 by
seeking other employment or otherwise, nor shall the amount of any payment
provided for in this Section 4 be reduced by any compensation earned by Employee
as the result of employment by another employer after the Date of Termination,
or otherwise.
4.4 Outstanding Options. Any Options, if any, held as of the date
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hereof by Employee having an exercise price greater than $39.00 are hereby
amended so that they shall terminate and cease to be exercisable on December 1,
1998.
5. EXCISE TAXES.
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5.1 In the event that any payment or benefit received or to be
received by Employee pursuant to the terms of this Agreement (the "Contract
Payments") or in connection with Employee's termination of employment or
contingent upon a change in control of the Company pursuant to any plan or
arrangement or other agreement with the Employer or the Company (or any
affiliate) ("Other Payments" and, together with the Contract Payments, the
"Payments"), would be subject to the excise tax (the "Excise Tax"), imposed by
Section 4999 of the Code, as determined as provided below, the Employer shall
pay to Employee, at the time specified in Section 5.2 below, an additional
amount (the "Gross-Up Payment") such that the net amount retained by Employee,
after deduction of the Excise Tax on Contract Payments and Other Payments and
any federal, state and local income or other tax and Excise Tax upon the payment
provided for by this Section 5.1, and any interest, penalties or additions to
tax payable by Employee with respect thereto, shall be equal to the total
present value of the Contract Payments and Other Payments at the time such
Payments are to be made. For purposes of determining whether any of the
Payments will be subject to the Excise Tax and the amounts of such Excise Tax,
(1) the total amount of the Payments shall be treated as "parachute payments"
within the meaning of Section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b)(1) of the Code shall be treated
as subject to the Excise Tax, except to the extent that, in the opinion of
independent tax counsel selected by the Employer's independent auditors and
reasonably acceptable to Employee ("Tax Counsel"), a Payment (in whole or in
part) does not constitute a "parachute payment" within the meaning of Section
280G(b)(2) of the Code, or such "excess parachute payments" (in whole or in
part) are not subject to the Excise Tax, (2) the amount of the Payments that
shall be treated as subject to the Excise Tax shall be equal to the lesser of
(A) the total amount of the Payments or (B) the amount of "excess parachute
payments" within the meaning of Section 280G(b)(1) of the Code (after applying
clause (1) hereof), and (3) the value of any noncash benefits or any deferred
payment or benefit shall be determined by Tax Counsel in accordance with the
principles of Section 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, Employee shall be deemed to pay
federal income tax at the highest marginal rates of federal income taxation
applicable to individuals in the calendar year in which the Gross-Up Payment is
to be made and state and local income taxes at the highest effective rates of
taxation applicable to Employee in the calendar year in which the Gross-Up
Payment is to be made, net of the maximum reduction in federal income taxes that
can be obtained from deduction of such state and local taxes, taking into
account any limitations applicable to individuals subject to federal income tax
at the highest marginal rates.
5.2 Gross-Up Payments provided for in Section 5.1 hereof shall be
made upon the earlier of (i) the payment to Employee of any Contract Payment or
Other Payment or (ii) the imposition upon Employee or payment by Employee of any
Excise Tax.
5.3 The Employee shall notify the Employer in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Employer of a Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than 20 business days after the Employee is informed
in writing of such claim and shall apprise the Employer of the nature of such
claim and the date on which such claim is requested to be paid. The Employee
shall not pay such claim prior to expiration of the 30 day period following the
date on which the Employee gives such notice to the Employer (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Employer notifies the Employee in writing prior to the
expiration of such period that it desires to contest such claim the Employee
shall:
i) give the Employer any information reasonably requested by the
Employer relating to such claim;
ii) take such action in connection with contesting such claim as
the Employer shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Employer and reasonably satisfactory to
the Employee;
iii) cooperate with the Employer in good faith in order to
effectively contest such claim; and
iv) permit the Employer to participate in any proceedings relating
to such claim;
provided, however, that the Employer shall bear and pay directly all
costs and expenses (including, but not limited to, additional interest and
penalties and related legal, consulting or other similar fees) incurred in
connection with such contest, and shall indemnify and hold the Employee
harmless, on an after-tax basis, for any Excise Tax or other tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses.
5.4 The Employer shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Employee to pay the tax claimed and xxx for a refund or contest the claim in
any permissible manner, and the Employee agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Employer shall
reasonably determine; provided, however, that if the Employer directs the
Employee to pay such claim and xxx for a refund, the Employer shall advance the
amount of such payment to the Employee on a interest-free basis, and shall
indemnify and hold the Employee harmless, on an after-tax basis, from any Excise
Tax or other tax (including interest or penalties with respect thereto) imposed
with respect to such advance or with respect to any imputed income with respect
to such advance; and provided, further, that if the Employee is required to
extend the statute of limitations to enable the Employer to contest such claim,
the Employee may limit this extension solely to such contested amount. The
Employer's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Employee 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 addition, no
position may be taken nor any final resolution be agreed to by the Employer
without the Employee's consent if such position or resolution could reasonably
be expected to adversely affect the Employee (including any other tax position
of the Employee unrelated to the matters covered hereby).
5.5 As a result of the uncertainty in the application of Section
4999 of the Code at the time of the initial determination by the Employer or the
Tax Counsel hereunder, it is possible that Gross-Up Payments which will not have
been made by the Employer should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder In the event that the
Employer exhausts its remedies and the Employee thereafter is required to pay to
the Internal Revenue Service an additional amount in respect of any Excise Tax,
the Employer or the Tax Counsel shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall promptly be paid by the
Employer to or for the benefit of the Employee.
5.6 If, after the receipt by Employee of the Gross-Up Payment or
an amount advanced by the Employer in connection with the contest of an Excise
Tax claim, the Employee becomes entitled to receive any refund with respect to
such claim, the Employee shall promptly pay to the Employer the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Employee of an amount
advanced by the Employer in connection with an Excise Tax claim, a determination
is made that Employee shall not be entitled to any refund with respect to such
claim and the Employer does not notify the Employee in writing of its intent to
contest the denial of such refund prior to the expiration of 30 days after such
determination, such advance shall be forgiven and shall not be required to be
repaid.
6. SUCCESSORS; BINDING AGREEMENT.
-------------------------------
6.1 Successors of the Company. The Employer and the Company will
----------------------------
require any successor (whether direct or indirect, by purchase, amalgamation,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Employer and/or the Company, by agreement in form and
substance satisfactory to Employee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Employer and
the Company would be required to perform it if no such succession had taken
place. Failure of the Employer and the Company to obtain such agreement prior
to the effectiveness of any such succession shall be a breach of this Agreement
and shall entitle Employee to compensation from the Employer in the same amount
and on the same terms as Employee would be entitled hereunder if Employee
terminated his employment for Good Reason, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in this Agreement,
the terms, "Employer" and "Company" shall include any successor to the business
and/or assets of the Employer and/or the Company as aforesaid which executes and
delivers the agreement provided for in this Section 6 or which otherwise becomes
bound by all the terms and provisions of this Agreement by operation of law.
6.2 Employee's Heirs, etc. This Agreement shall inure to the benefit
----------------------
of and be enforceable by Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Employee should die while any amounts would still be payable to
him hereunder as if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
his devisee, legatee, or other designee or, if there be no such designee, to his
estate.
7. NOTICE. For the purposes of this Agreement, notices and all other
------
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, or by overnight
courier service, addressed to the respective addresses set forth on the first
page of this Agreement, provided that all notices to the Employer shall be
directed to the attention of the Chief Executive Officer of the Employer with a
copy to the Secretary of the Employer, and all notices to the Company shall be
directed to c/o Triton Exploration Services, Inc., 0000 X. Xxxxxxx Xxxxxxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx 00000 attention: President, or to such other address
as any party may hereafter specify in writing in accordance herewith, except
that notices of change of address shall be effective only upon receipt.
8. MISCELLANEOUS. No provisions of this Agreement may be modified,
-------------
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by Employee, the Employer and the Company (in whose case such
signatory shall be such officer as may be specifically designated by the Board
(which shall in any event include the Company's Chief Executive Officer)). No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. 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. This Agreement constitutes the
entire agreement of the parties regarding the subject matter hereof, and
supersedes all prior agreements and understandings, both written and oral, among
the parties, or any of them, with respect to the subject matter hereof.
9. VALIDITY. The invalidity or unenforceability of any provisions of
--------
this Agreement shall not effect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
10. COUNTERPARTS. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
11. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by
-----------------------------
and construed under the laws of the State of Texas. The Employer and the Company
hereby irrevocably submit to the jurisdiction of any Texas State or Federal
court sitting in the Northern District of Texas, and the jurisdiction of any
arbitration panel constituted pursuant to Section 12 hereof, over any action,
proceeding or arbitration arising out of or relating to this Agreement and the
Employer and the Company hereby irrevocably agree that all claims in respect of
such action or proceeding may be heard and determined in such Texas State or
Federal court or arbitration proceeding.
12. ARBITRATION. Any dispute or controversy arising under or in
-----------
connection with this Agreement shall be settled exclusively by arbitration in
Dallas, Texas (in accordance with the rules of the American Arbitration
Association then in effect). Notwithstanding the pendency of any such dispute
or controversy, the Employer will continue to pay Employee his full compensation
in effect when the notice giving rise to the dispute was given (including, but
not limited to, base salary and installments under incentive, bonus or other
plans) and continue Employee as a participant in all compensation, benefit and
insurance plans in which he was participating when the notice giving rise to the
dispute was given, until the dispute is finally resolved in accordance with
Section 2.5 hereof. Amounts paid under this paragraph are in addition to all
other amounts due under this Agreement and shall not be offset against or reduce
any other amounts due under this Agreement. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that
Employee shall be entitled to seek specific performance of his right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
13. CAPTIONS AND GENDER. The use of captions and Section headings herein
--------------------
is for the purposes of convenience only and shall not effect the interpretation
or substance of any provisions contained herein. Similarly, the use of the
masculine gender with respect to pronouns in this Agreement is for purposes of
convenience and includes either sex who may be a signatory.
14. LEGAL FEES. The Employer shall pay Employee, no less frequently than
-----------
monthly, all legal fees and expenses reasonably incurred by Employee in
connection with this Agreement (including all such fees and expenses, if any,
incurred in contesting or disputing the nature of any such termination for
purposes of this Agreement or in seeking to obtain or enforce any right or
benefit provided by this Agreement, but excluding any legal fees and expenses
relating to a claim brought be Employee that a court has determined (in a final,
non-appealable judgment) to be brought in bad faith).
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
date and year first above written.
TRITON EXPLORATION SERVICES, INC.
By: /s/ Xxxxx Xxxx
-------------------------------------
Xxxxx Xxxx, Senior Vice President
/s/ Xxxxxx X. Xxxxxxx, III
-------------------------------------
Xxxxxx X. Xxxxxxx, III
JOINDER OF THE COMPANY
The Company hereby joins in this Agreement for the purpose of guaranteeing,
and the Company does hereby unconditionally guarantee, to Employee the due and
prompt performance by the Employer, or its successors and assigns as provided
herein (the "Obligor") of the Obligor's obligations hereunder and covenanting,
and the Company does hereby covenant, with Employee to be bound by the
agreements of the Company as set forth herein. In case of the failure of the
Obligor to punctually perform any obligation under this Agreement, including the
making of any payment hereunder, the Company hereby agrees to cause any such
obligation to be promptly performed when and as the same shall be due. The
Company hereby agrees that its obligations hereunder shall be as if it were
principal obligor and not merely surety, and shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of any provision of this Agreement, any failure
to enforce the provisions of this Agreement, or any waiver, modification or
indulgence granted to the Obligor with respect thereto, by the Employee, or any
other circumstance which may otherwise constitute a legal or equitable discharge
of a surety or guarantor. The Company hereby waives diligence, presentment,
demand, any right to require a proceeding first against the Obligor, and all
demands whatsoever, and covenants that its obligations under this Agreement will
not be discharged except by performance in full of the Obligor's obligations
hereunder. The agreements of the Company hereunder shall inure to the benefit of
and be enforceable by Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
TRITON ENERGY LIMITED
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx, Chairman
