EXHIBIT 10.15
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") entered into effective as of
November 6, 2002, by and between Xxxxxx X. 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");
W I T N E S S E T H:
WHEREAS, The Company wishes to employ the Executive as Senior Vice
President - Operations and Exploitation 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 - Operations and Exploitation 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 - Operations and Exploitation of the Company and shall report to, and
be subject to the general direction of the Chairman and Chief Executive Officer
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 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
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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 $250,000 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 6, 2002 an option to
purchase 250,000 shares of common stock of the Company at an exercise price per
share of $.52 ("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 term of this Agreement. Vacation shall
accrue on the first day of each calendar year. The Company shall not pay the
Executive for any accrued but unused portion of vacation and any such unused
portion of vacation shall not be carried forward to the next year.
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(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. If
the Company has previously paid a club initiation fee for the Executive, this
provision will not permit the Executive to obtain a second club membership.
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
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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 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
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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;
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(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 dated October 17, 2002, 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 the excise tax relating to "parachute payments" under Section 280G of
the Code applies to the Payment, 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
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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 13d-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 13d-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 13d-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
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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: Xxxxxx 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
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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. The Employment Agreement dated May 15, 2001 between the
Company and the Executive, and all obligations of the parties thereto, are
hereby terminated in all respects.
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, President & CEO
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxxxx 12/9/02
-----------------------------------------------------
Xxxxxx X. Xxxxxxxx
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EXHIBIT A
GRANT AGREEMENT UNDER
MISSION RESOURCES CORPORATION
1996 STOCK INCENTIVE PLAN
THIS AGREEMENT is entered into this 6th day of November, 2002, between
Mission Resources Corporation, a Delaware corporation (the "Company"), and
Xxxxxx X. Xxxxxxxx, an employee of the Company ("Grantee"), pursuant to the
provisions of the Bellwether Exploration Company 1996 Stock Incentive Plan (the
"Plan").
WHEREAS, the Board of Directors of the Company has authorized and approved
the grant of this stock option to Grantee subject to the terms and conditions
provided herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties do hereby agree as follows:
Section 1. Grant of Options. Subject to all of the terms, conditions and
provisions of the Plan and of this Agreement, the Company hereby grants to
Grantee options under the Plan pursuant to which Grantee shall have the right
and option under the Plan to purchase from the Company all or any part of an
aggregate of 250,000 shares of the common stock of the Company, par value $0.01
per share ("Common Stock"), which shall consist of authorized but unissued
shares or issued shares reacquired by the Company. Subject to the provisions of
the Plan, the options under this grant are intended to be Incentive Stock
Options. To the extent the number of optional shares under this Grant exceeds
the limit in Section 3.5 of the Plan or the optional shares otherwise fail to
qualify as Incentive Stock Options, such optioned shares shall be deemed granted
pursuant to a Stock Option under Article II of the Plan. In such case the Plan
Administrator shall designate which stock will be treated as Incentive Stock
Options by causing the issuance of a separate stock certificate and identifying
such stock as Incentive Stock Option stock on the Company's stock transfer
records.
Section 2. Option Price. The option or purchase price payable by Grantee to
the Company in exercise of these options shall be $0.495 per share (the "Option
Price"), being the closing price on November 6, 2002 and which is 100% of the
Fair Market Value of the Common Stock on the date of this Grant.
Section 3. Exercise Period and Exercise of Option. The options shall vest
and become exercisable as to 33.4% of the Common Stock covered hereby on
November 6, 2002 (the "Grant Date"), as to 66 2/3% one (1) year following the
Grant Date and as to 100% of the Common Stock covered hereby two (2) years
following the Grant Date. None of the vested Options shall become exercisable
until six (6) months following the date on which they are initially granted. Any
options which remain unexercised on the 10th anniversary of the Grant Date shall
expire. Other terms and conditions upon which the options may be exercised are:
(a) Except as provided in the Plan with respect to death, disability
or retirement of Grantee, no option may be exercised at any time unless
Grantee has been continuously employed by the Company, or a parent,
subsidiary or affiliate of those companies, from the Grant Date until the
option is exercised.
(b) In the event that (i) the Company terminates the Grantee's
Employment Agreement with the Company dated effective as of November 6,
2002 (the "Employment Agreement") for any reason other than for Cause (as
defined in the Employment Agreement) or the death or disability (as defined
in the Employment Agreement) of the Executive or (ii) the Executive
terminates the Employment Agreement for Good Reason (as defined in the
Employment Agreement), then the options granted hereby shall vest and be
exercisable in accordance with the terms of Section 5(f) of the Employment
Agreement or in the event that a Change of Control (as defined in the
Employment Agreement) has occurred, in accordance with the terms of Section
5(g) of the Employment Agreement. In all other events of the termination of
the employment of the Executive, the options will vest and be exercisable
in accordance with the terms of the Plan.
(c) The effect of Grantee's termination of employment shall be
controlled by the terms of the Plan unless expressly provided otherwise in
this Agreement.
(d) In no event can the options subject to this Grant be exercised
more than ten (10) years after the date of this Grant.
Section 4. No Employment Commitment. Grantee acknowledges that neither the
grant of the options nor the execution of this Agreement by the Company shall be
interpreted or construed as imposing upon the Company an obligation to retain
his services for any stated period of time, which employment shall continue to
be as provided in the Employment Agreement.
Section 5. Grantee's Agreement. Grantee expressly and specifically agrees
that:
(a) With respect to the calendar year in which options are exercised,
the Grantee shall include in his gross income for federal income tax
purposes the amount, if any, by which the fair market value of the Common
Stock on the date of exercise as determined in Section 6.7(b) of the Plan
exceeds the Option Price;
(b) The grant of the options is special incentive compensation which
shall not be taken into account as "wages" or "salary" in determining the
amount of payment or benefit to the Grantee under any pension, thrift,
stock or deferred compensation plan of the Company, as the case may be; and
(c) On behalf of the Grantee's beneficiary, such grant shall not
affect the amount of any life insurance coverage available to such
beneficiary under any life insurance plan covering employees of the Company
or any subsidiary.
Section 6. Method of Payment. Options under this Grant shall be exercised
by the delivery of a signed written notice of exercise to the Company as of a
date set by the Company in advance of the effective date of the proposed
exercise. The notice shall set forth the number of shares of Common Stock with
respect to which the Option is to be exercised, accompanied by full payment for
the shares.
The option price upon exercise of any option shall be payable to the
Company in full either: (i) in cash or its equivalent, or (ii) subject to prior
approval by the Plan Administrator in
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its discretion, by tendering previously acquired Common Stock having an
aggregate Fair Market Value at the time of exercise equal to the total Option
Price (provided that the Shares which are tendered must have been held by the
Grantee for at least six (6) months prior to their tender to satisfy the Option
Price), or (iii) subject to prior approval by the Plan Administrator in its
discretion, by withholding Common Stock which otherwise would be acquired on
exercise having an aggregate Fair Market Value at the time of exercise equal to
the total Option Price, or (iv) subject to prior approval by the Plan
Administrator in its discretion, by a combination of (i), (ii), and (iii) above.
Any payment in Common Stock shall be effected by the surrender of such Common
Stock to the Company in good form for transfer and shall be valued at their Fair
Market Value on the date when the option Grant is exercised. Unless otherwise
permitted by the Plan Administrator in its discretion, the Grantee shall not
surrender, or attest to the ownership of, Common Stock in payment of the Option
Price if such action would cause the Company to recognize compensation expense
(or additional compensation expense) with respect to the option Grant for
financial reporting purposes.
Upon payment of all amounts due from the Grantee, the Company shall cause
certificates for the optioned Common Stock then being purchased to be delivered
to the Grantee (or the person exercising the Grantee's Option in the event of
his death) at its principal business office within ten (10) business days after
the exercise date. The obligation of the Company to deliver shares of Common
Stock shall, however, be subject to Section 6.1 of the Plan. If the Grantee
fails to pay for any of the optioned Common Stock specified in such notice or
fails to accept delivery thereof, then the option, and right to purchase such
optioned Common Stock may be forfeited by the Company.
Section 7. Other Terms, Conditions and Provisions. As previously provided,
the options herein granted by the Company to Grantee are granted subject to all
of the terms, conditions and provisions of the Plan. Grantee hereby acknowledges
receipt of a copy of the Plan certified by the Secretary of the Company and the
parties agree that the entire text of such Plan be, and it hereby is,
incorporated herein by reference as fully as if here copied in full. Reference
to such Plan is therefore made for a full description of the rights and methods
of exercise of the options, the effect of Grantee's termination of employment,
the adjustments to be made in the event of changes in the capital structure of
the Company, and of all of the other provisions, terms and conditions of the
Plan applicable to the options granted herein. If any of the provisions of this
Agreement shall vary from or be in conflict with the Plan, the provisions of the
Plan shall be controlling.
Section 8. Non-Transferability. The options granted hereunder are not
transferable or assignable by Grantee except by will or by the laws of descent
and distribution.
Section 9. Disqualifying Disposition. In the event that Common Stock
acquired upon exercise of this Grant is disposed of by the Grantee in a
"Disqualifying Disposition," such Grantee shall notify the Company in writing
within thirty (30) days after such disposition of the date and terms of such
disposition. For purposes hereof, "Disqualifying Disposition" shall mean a
disposition of Common Stock that is acquired upon the exercise of this Grant
(and that is not deemed granted pursuant to a nonqualified Stock Option under
Section 1) prior to the expiration of either two years from the date of this
Grant or one year from the transfer of shares to the Grantee pursuant to the
exercise of this stock Grant.
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IN WITNESS WHEREOF, this Agreement is executed and entered into effective
on the day and year first above written.
MISSION RESOURCES
CORPORATION
ATTEST: By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
/s/ Xxxxxx Xxxxx Name: Xxxxxx X. Xxxxxx
----------------------------- Title: Chairman, President & CEO
Xxxxxx Xxxxx, Secretary
/s/ Xxxxxx X. Xxxxxxxx 12/9/02
----------------------------------------
Xxxxxx X. Xxxxxxxx, Grantee
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