EXHIBIT 10.28
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") entered into effective as
of November 1, 2004, by and between Xxx Xxxxxxxx (the "Executive"), and Mission
Resources Corporation, a Delaware corporation having its principal place of
business at 0000 Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000-0000 (the "Company");
WITNESSETH:
WHEREAS, The Company wishes to employ the Executive as Senior Vice
President - General Counsel and to perform services incident to such position
for the Company, and the Executive wishes to be so employed by the Company, all
upon the terms and conditions hereinafter set forth:
NOW THEREFORE, in consideration of the premises and mutual covenants
and obligations herein set forth and for other good and valuable consideration,
the receipt sufficiency and adequacy of which is hereby acknowledged, accepted
and agreed to, the parties hereto, intending to be legally bound, hereby agree
as follows:
1. EMPLOYMENT AND TERM. The Company hereby employs the Executive to
serve as Senior Vice President - General Counsel of the Company. The term of
this Agreement (the "Term of this Agreement") shall be effective as of the date
first above written and shall terminate thirty-six (36) months from the date
hereof (the "Termination Date"), unless earlier terminated by either party
hereto in accordance with the provisions of Section 5 hereof; provided, however,
that beginning on the first anniversary date of the date hereof and on each
anniversary date of the date hereof thereafter, the Term of this Agreement shall
be automatically extended one additional year unless either party give written
notice to the other at least six months prior to such anniversary of the date
hereof that the Term of this Agreement shall cease to be so extended. During the
Term of this Agreement, the terms of employment shall be as set forth herein
unless modified by the Executive and the Company in accordance with the
provisions of Section 12 hereof. The Executive hereby agrees to accept such
employment and to perform the services specified herein, all upon the terms and
conditions hereinafter set forth.
2. POSITION AND RESPONSIBILITIES. The Executive shall serve as Senior
Vice President - General Counsel of the Company and shall report to, and be
subject to the general direction of the Chairman, President and Chief Executive
Officer or the Executive Vice President of the Company. The Executive shall have
other obligations, duties, authority and power to do all acts and things as are
customarily done by a person holding the same or equivalent position or
performing duties similar to those to be performed by executives in corporations
of similar size to the Company and shall perform such managerial duties and
responsibilities for the Company which are not inconsistent with his position as
may reasonably be assigned to him by the Chairman, President and Chief Executive
Officer and/or the Board of Directors of the Company (or a committee thereof).
Unless otherwise agreed to by the Executive, the Executive shall be based at the
Company's principal executive offices located in the greater Houston, Texas
metropolitan area.
3. EXTENT OF SERVICE. The Executive shall devote his full business time
and attention to the business of the Company. During the Term of this Agreement,
Executive shall devote his best efforts and skills to the business and interests
of Company, do his utmost to
further enhance and develop Company's best interests and welfare, and endeavor
to improve his ability and knowledge of Company's business, in an effort to
increase the value of his services for the mutual benefit of the parties hereto.
During the Term of this Agreement, it shall not be a violation of this Agreement
for Executive to (i) serve on any corporate board or committee thereof with the
approval of the Board, (ii) serve on any civic or charitable boards or
committees (except for boards or committees of a competing business unless
approved by the Board), (iii) deliver lectures, fulfill teaching or speaking
engagements, (iv) testify as a witness in litigation involving a former employer
or (v) manage personal investments; provided, however, any such activities must
not materially interfere with performance of Executive's responsibilities under
this Agreement.
4. COMPENSATION.
(a) In consideration of the services to be rendered by the Executive to
the Company, the Company will pay the Executive a salary ("Salary") of $225,000
per year during the Term of this Agreement. Such Salary will be payable in
conformity with the Company's prevailing practice for executives' compensation
as such practice shall be established or modified from time to time. Salary
payments shall be subject to all applicable federal and state withholding,
payroll and other taxes. From time to time during the Term of this Agreement,
the amount of the Executive's Salary may be increased by, and at the sole
discretion of, the Compensation Committee of the Company's Board of Directors
(the "Compensation Committee"), which shall review the Executive's Salary no
less regularly than annually.
(b) The Company has granted the Executive on November 1, 2004 an option
to purchase 300,000 shares of common stock of the Company at an exercise price
per share of $6.225 ("Option"). Such Option shall vest 33.4% on the date of
grant and 33.3% on each of the first and second anniversary date of grant. The
term of the Option shall be ten years from the date of grant subject to the
provisions of paragraphs 5(f)(i) and 5(g) hereof. Additional grants of options
will be considered by the Compensation Committee on an annual basis based on a
review of the Executive's performance.
(c) The Executive will be considered for an annual cash and/or stock
bonus based on an evaluation of his performance by the Compensation Committee.
Any such bonus will be at the sole discretion of the Compensation Committee.
(d) During the term of this Agreement, the Company shall pay or
reimburse the Executive for all reasonable out-of-pocket expenses for travel,
meals, hotel accommodations, entertainment and the like incurred by him in
connection with the business of the Company upon submission by him and approval
of an appropriate statement documenting such expenses as required by the
Company's policy and the Internal Revenue Code of 1986, as amended (the "Code").
In addition, the Audit Committee of the Board of Directors shall review all such
expense reports on a quarterly basis.
(e) The Executive shall be entitled to four (4) weeks of paid vacation
during each calendar year during the terms of this agreement. Vacation shall
accrue on the first day of each calendar year. The use of such vacation shall be
governed by and administered in accordance with the Company's vacation policy as
in effect from time to time.
(f) During the term of this Agreement, the Executive shall be entitled to
participate in and to receive all rights and benefits under any life,
disability, medical and dental, health and accident and profit sharing or
deferred compensation plans and such other plan or plans as may be implemented
by the Company during the term of this Agreement. The Executive shall also be
entitled to participate in and to receive all rights and benefits under any plan
or program adopted by the Company for any other or group of other executive
employees of the Company, including without limitation, the rights and benefits
under the directors' and officers' liability insurance in place from time to
time under the Company's insurance program for the directors and officers of the
Company.
(g) During the term of this agreement, the Executive shall be entitled to
receive a car allowance of $500.00 per month, and one parking space shall be
provided to the Executive by the Company.
(h) The Company shall pay one club initiation fee of up to $25,000.00 and
the base monthly dues applicable thereto, not to exceed $400.00 per month.
5. TERMINATION.
(a) Termination by Company; Discharge for Cause. The Company shall be
entitled to terminate this Agreement and the Executive's employment with the
Company at any time and for whatever reason; or at any time for "Cause" (as
defined below) by written notice to the Executive. Termination of the
Executive's employment by the Company shall constitute a termination for "Cause"
if such termination is for one or more of the following reasons: (i) the willful
failure or refusal of the Executive to render services to the Company in
accordance with his obligations under this Agreement, including, without
limitation, the willful failure or refusal of the Executive to comply with the
work rules, policies, procedures, and directives as established by the Chairman
and Chief Executive Officer and the Board of Directors and consistent with this
Agreement; such failure or refusal to be uncured and continuing for a period of
not less than fifteen (15) days after notice outlining the situation is given by
the Company to the Executive; (ii) the commission by the Executive of an act of
fraud or embezzlement; (iii) the commission by the Executive of any other action
with the intent to injure the Company; (iv) the Executive having been convicted
of a felony or a crime involving moral turpitude; (v) the Executive having
misappropriated the property of the Company; (vi) the Executive having engaged
in personal misconduct which materially injures the Company; or (vii) the
Executive having willfully violated any law or regulation relating to the
business of the Company which results in material injury to the Company. In the
event of the Executive's termination by the Company for Cause hereunder, the
Executive shall be entitled to no severance or other termination benefits except
for any unpaid Salary accrued through the date of termination. A termination of
this Agreement by the Company without Cause pursuant to this Section 5(a) (which
shall include the decision by the Company to not renew the Term of this
Agreement for any additional one year periods as provided in Section 1 above)
shall entitle the Executive to the Severance Payment and other benefits
specified in Section 5(f) or (g), hereof, as the case may be.
(b) Death. If the Executive dies during the term of this Agreement and
while in the employ of the Company, this Agreement shall automatically terminate
and the Company shall have no further obligation to the Executive or his estate
except that the Company shall pay to the Executive's estate that portion of his
Salary and benefits accrued through the date of death. All
such payments to the Executive's estate shall be made in the same manner and at
the same time as the Executive's Salary.
(c) Disability. If during the term of this Agreement, the Executive
shall be prevented from performing his duties hereunder for a period of 90 days
by reason of disability, then the Company, on 30 days' prior notice to the
Executive, may terminate this Agreement. For purposes of this Agreement, the
Executive shall be deemed to have become disabled when the Board of Directors of
the Company, upon verification by a physician designated by the Company, shall
have determined that the Executive has become physically or mentally unable
(excluding infrequent and temporary absences due to ordinary illness) to perform
the essential functions of his duties under this Agreement with reasonable
accommodation. In the event of a termination pursuant to this paragraph (c), the
Company shall be relieved of all its obligations under this Agreement, except
that the Company shall pay to the Executive or his estate in the event of his
subsequent death, that portion of the Executive's Salary and benefits accrued
through the date of such termination. All such payments to the Executive or his
estate shall be made in the same manner and at the same time as his Salary would
have been paid to him had he not become disabled.
(d) Termination for Good Reason. The Executive shall be entitled to
terminate this Agreement and his employment with the Company at any time upon
thirty (30) days written notice to the Company for "Good Reason" (as defined
below). The Executive's termination of employment shall be for "Good Reason" if
such termination is a result of any of the following events:
(i) The Executive is assigned any responsibilities or duties
materially inconsistent with his position, duties, responsibilities and
status with the Company as in effect at the date of this Agreement or
as may be assigned to the Executive pursuant to Section 2 hereof; or
his title or offices as in effect at the date of this Agreement or as
the Executive may be appointed or elected to in accordance with Section
2 are changed, or the Executive is required to report to or be directed
by any person other than the Chairman and Chief Executive Officer or
the Executive Vice President and the Board of Directors of the Company;
(ii) there is a reduction in the Salary (as such Salary shall
have been increased from time to time) payable to the Executive
pursuant to Section 4(a) hereof unless such reduction is applicable to
all senior executives of the Company;
(iii) failure by the Company or any successor to the Company
or its assets to continue to provide to the Executive any material
benefit, bonus, profit sharing, incentive, remuneration or compensation
plan, stock ownership or purchase plan, stock option plan, life
insurance, disability plan, pension plan or retirement plan in which
the Executive was entitled to participate in as at the date of this
Agreement or subsequent thereto, or the taking by the Company of any
action that materially and adversely affects the Executive's
participation in or materially reduces his rights or benefits under or
pursuant to any such plan or the failure by the Company to increase or
improve such rights or benefits on a basis consistent with practices in
effect prior to the date of this Agreement or with practices
implemented and subsequent to the date of this Agreement with respect
to the
executive employees of the Company generally, which ever is more favorable
to the Executive, but excluding such action that is required by law;
(iv) without Executive's consent, the Company requires the executive to
relocate to any city or community other than one within a fifty (50) mile
radius of the greater Houston, Texas metropolitan area, except for required
travel on the Company's business to an extent substantially consistent with
the Executive's business obligations under this Agreement; or
(v) there is any material breach by the Company of any provision of
this Agreement.
(vi) Upon the Executive's termination of this Agreement for Good
Reason, the Executive shall be entitled to the Severance Payment and other
benefits specified in Section 5(f) hereof.
(e) Voluntary Termination. Notwithstanding anything to the contrary herein,
the Executive shall be entitled to voluntarily terminate this Agreement and his
employment with the Company at his pleasure upon sixty (60) days written notice
to such effect. In such event, the Executive shall not be entitled to any
further compensation other than any unpaid Salary and benefits accrued through
the date of termination. At the Company's option, the Company may pay to the
Executive the salary and benefits that the Executive would have received during
such sixty (60) day period in lieu of requiring the Executive to remain in the
employment of the Company for such sixty (60) day period.
(f) Termination Benefits Upon Involuntary Termination or Termination for
Good Reason. In the event that (i) the Company terminates this Agreement and the
Executive's employment with the Company for any reason other than for Cause (as
defined in Section 5(a) hereof) or the death or disability (as defined in
Section 5(c) hereof) of the Executive, or (ii) the Executive terminates this
Agreement and his employment with the Company for Good Reason (as set forth in
Section 5(d) hereof), then the Company shall pay the Executive, within thirty
(30) days after the date of termination, an amount (the "Severance Payment")
equal to (x) two (2) times the Executive's highest annual Salary in existence at
any time during the last two (2) years of employment immediately preceding the
date of termination, and (y) a prorata portion (based on the portion of the
calendar year that the Executive served hereunder prior to such termination) of
the annual bonus which would have been paid to the Executive for the full year
during which such termination occurred, minus applicable withholding and
authorized salary reductions (the "Severance Payment"). In addition, following
other such termination, the Executive shall be entitled to the following
benefits (collectively, the "Additional Benefits");
(i) immediate vesting of any of the Executive's outstanding options to
purchase securities of the Company which were not vested by their own terms
on the date of termination and the extension of the Executive's right to
exercise all the Executive's options to purchase securities of the Company
for a period equal to the lesser of (A) one (1) year following the date of
termination or (B) the remaining term of the applicable option;
(ii) continued coverage, at the Company's cost, under the Company's
group health plan for the applicable coverage period under the Consolidated
Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA") but only if Executive
elects such COBRA continuation in accordance with the time limits and in
the applicable COBRA regulations; and
(iii) an amount, in cash, equal to the sum of (A) any unreimbursed
expenses incurred by the Executive in the performance of his duties
hereunder and in compliance with Company policy through the date of
termination, plus (B) any accrued and unused vacation time or other unpaid
benefits as of the date of termination; and
(iv) Company shall cause Executive to be covered by any policy or
contract of insurance obtained by it to insure its directors and officers
against personal liability for acts or omissions in connection with
service as an officer or director of Company or service in other capacities
at the request of the company. The coverage provided to Executive pursuant
to this paragraph shall be of a scope and on terms and conditions at least
as favorable as the most favorable coverage provided to any other officer
or director of Company (or any successor). In addition, the Company agrees
that the Indemnification Agreement entered into by and between the Company
and the Executive, as well as all other rights to which Executive is
entitled with regard to indemnification and advancement of expenses,
whether by virtue of the Company's certificate of incorporation, bylaws or
otherwise, will remain in full force and effect, in accordance with its
terms.
The parties agree that, because there can be no exact measure of the
damages which would occur to the Executive as a result of termination of
employment, such payments contemplated in this Section 5(f) shall be deemed to
constitute liquidated damages and not a penalty and the Company agrees that the
Executive shall not be required to mitigate his damages. The termination
compensation in this Section 5(f) shall be paid only if the Executive executes
a termination agreement releasing all legally waivable claims arising from the
Executive's employment.
(g) Termination and Benefits upon a Change in Control. In the event of a
Change in Control, as defined in this Section 5(g), then in lieu of the
Severance Payment contained in Section 5(f) hereof, if the Executive is
terminated without Cause or the Executive terminates his employment for Good
Reason within the twelve (12) month period immediately following a Change in
Control the Company shall pay to the Executive a lump sum amount equal to: (x)
two (2) times the Executive's highest annual salary paid during the last two (2)
years immediately preceding the date of termination, and (y) a prorata portion
(based on the portion of the calendar year that the Executive served hereunder
prior to such termination) of the annual bonus which would have been paid to the
Executive for the full year during which such termination occurred, which in no
event will be less than one-half of the Executive's then current Salary, minus
applicable withholding and authorized salary reductions (the "Payment"). In the
event that excise tax relating to "parachute payments" under Section 280G of the
Code applies to the Payment or any payment by the Company to the Executive or
other transaction entered into by the Executive pursuant to this Agreement or
any other agreement, plan, instrument or obligation, in whatever form, then the
Company shall pay the Executive an additional payment in an amount such that,
after payment of federal income taxes (but not the excise tax) on such
additional payment, the Executive receives an additional amount equal to the
excise tax originally imposed on the Payment. The Executive shall also be
entitled to receive the Additional Benefits. "Change
of Control" means or shall be deemed to have occurred if and when: (i)
any "person" or "group" (as such terms are used in Section 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner (as defined in Rule l3d-3
under the Exchange Act), directly or indirectly, of more than 50% of the total
voting power of the outstanding voting stock of the Company; (ii) the Company is
merged with or into or consolidated with another Person and, immediately after
giving effect to the merger or consolidation, (a) less than 50% of the total
voting power of the outstanding voting stock of the surviving or resulting
Person is then "beneficially owned (within the meaning of Rule l3d-3 under the
Exchange Act) in the aggregate by the stockholders of the Company immediately
prior to such merger or consolidation, and (b) any "person" or "group" (as
defined in Section 13(d)(3) or 14(d)(2) of the Exchange Act) has become the
direct or indirect "beneficial owner" (as defined in Rule l3d-3 under the
Exchange Act) of more than 50% of the total voting power of the voting stock of
the surviving or resulting Person; (iii),the Company sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of the
Company assets (either in one transaction or a series of related transactions);
(iv) the liquidation or dissolution of the Company; or (v) during any
consecutive two-year period individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination by the
Board of Directors for election by the stockholders of the Company was approved
by a vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office.
(h) Survival. Notwithstanding the termination of this Agreement under
this Section 5, the provisions of Sections 7 and 8 of this Agreement, and all
other provisions hereof which by their terms are to be performed following the
termination hereof shall survive such termination and be continuing obligations.
6. CONSENT AND WAIVER BY THIRD PARTIES. The Executive hereby represents
and warrants that he has obtained all necessary waivers and/or consents from
third parties as to enable him to accept employment with the Company on the
terms and conditions set forth herein and to execute and perform this Agreement
without being in conflict with any other agreement, obligations or understanding
with any such third party.
7. CONFIDENTIAL INFORMATION. The Executive acknowledges that in the
course of his employment with the Company, he has received and will receive
access to confidential information of a special and unique value concerning the
Company and its business, including, without limitation, trade secrets,
know-how, lists of customers, employee records, books and records relating to
operations, costs or providing service and equipment, operating and maintenance
costs, pricing criteria and other confidential information and knowledge
concerning the business of the Company and its affiliates (hereinafter
collectively referred to as "information") which the Company desires to protect.
The Executive acknowledges that such information is confidential and the
protection of such confidential information against unauthorized use or
disclosure is of critical importance to the Company. The Executive agrees that
he will not reveal such information to any one outside the Company. The
Executive further agrees that during the term of this Agreement and thereafter
he will not use or disclose such information. Upon termination of his employment
hereunder, the Executive shall surrender to the Company all papers, documents,
writings and other property produced by him or coming into his
possession by or through his employment hereunder and relating to the
information referred to in this Section 7, and the Executive agrees that all
such materials will at all times remain the property of the Company. The
obligation of confidentiality, non-use and non-disclosure of know-how set forth
in this Section 7 shall not extend to know-how (i) which was in the public
domain prior to disclosure by the disclosing party, (ii) which comes into the
public domain other than through a breach of this Agreement, (iii) which is
disclosed to the Executive after the termination of this Agreement by a third
party having legitimate possession thereof and the unrestricted right to make
such disclosure, or (iv) which is necessarily disclosed in the course of the
Executive's performance of his duties to the Company as contemplated in this
Agreement. The agreements in this Section 7 shall survive the termination of
this Agreement.
8. NO SOLICITATION. To support the agreements contained in Section 7
hereof, from the date hereof and for a period twelve (12) months after the
Executive's employment with the Company is terminated for any reason, the
Executive shall not, either directly or indirectly, through any person, firm,
association or corporation with which the Executive is now or may hereafter
become associated, (i) solicit any then current employee of the Company or its
affiliates (except through ads or notices offering employment that are published
or otherwise made publicly available), or (ii) use in any competition,
solicitation or marketing effort any information as to which the Executive has a
duty of confidential treatment under paragraph 7 above.
9. NOTICES. All notices, requests, consents and other communications under
this Agreement shall be in writing and shall be deemed to have been delivered on
the date personally delivered or on the date mailed, postage prepaid, by
certified mail, return receipt requested, or telegraphed and confirmed if
addressed to the respective parties as follows:
If to the Executive: Xxx X. Xxxxxxxx
c/o Mission Resources Corporation
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
If to the Company: Mission Resources Corporation
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Chairman, Compensation Committee
Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto.
10. SPECIFIC PERFORMANCE. The Executive acknowledges that a remedy at law
for any breach or attempted breach of Section 7 or 8 of this Agreement will be
inadequate, agrees that the Company shall be entitled to specific performance
and injunctive and other equitable relief in case of any such a breach or
attempted breach, and further agrees to waive any requirement of the securing or
posting of any bond in connection with the obtaining of any such injunctive or
any other equitable relief.
11. WAIVERS AND MODIFICATIONS. This Agreement may be modified, and the
rights and remedies of any provision hereof may be waived, only in accordance
with this Section 11. No modifications or waiver by the Company shall be
effective without the consent of
at least a majority of the Compensation Committee of the Board of Directors then
in office at the time of such modification or waiver. No waiver by either party
of any breach by the other or any provision hereof shall be deemed to be a
waiver of any later or other breach thereof or as a waiver of any other
provision of this Agreement. This Agreement sets forth all the terms of the
understandings between the parties with reference to the subject matter set
forth herein and may not be waived, changed, discharged or terminated orally or
by any course of dealing between the parties, but only by an instrument in
writing signed by the party against whom any waiver, change, discharge or
termination is sought.
12. GOVERNING LAW. This Agreement shall be construed in accordance with the laws
of the State of Texas.
13. SEVERABILITY. In case of one or more of the provisions contained in this
Agreement for any reason shall be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement, but this Agreement shall be construed
as if such invalid, illegal or unenforceable provisions had never contained
herein.
14. ARBITRATION. In the event that a dispute or controversy should arise between
the Executive and the Company as to the meaning or application of any provision,
term or condition of this Agreement, such dispute or controversy shall be
settled by binding arbitration in Houston, Texas and for said purpose each of
the parties hereto hereby expressly consents to such arbitration in such place.
Such arbitration shall be conducted in accordance with the existing rules and
regulations of the American Arbitration Association governing commercial
transactions. The expense of the arbitrator shall be borne by the Company.
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the date and year first above written.
COMPANY:
MISSION RESOURCES CORPORATION
By: /S/ XXXXXX X. XXXXXX
-------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board, President & CEO
EXECUTIVE:
/S/ XXX X. XXXXXXXX
-----------------------------------------------
Xxx X. Xxxxxxxx
