ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT (this "Agreement") is entered into effective as
of May 1, 1997, by and between Xxxxxx Oil Corporation, a Delaware corporation
(the "Company"), and Xxxxxx X. Xxxxxxx ("Advisor" or "Xx. Xxxxxxx");
WITNESSETH:
WHEREAS, the Company wishes to continue to benefit from the advice,
experience and knowledge of Xx. Xxxxxxx; and
WHEREAS, Advisor is willing to advise the Company, upon the terms and
conditions contained herein;
NOW, THEREFORE, for and in consideration of the compensation to be paid
Xx. Xxxxxxx under this Agreement and the mutual promises, covenants, and
undertakings contained herein, the Company and Advisor agree as follows:
1. Independent Contractor: There shall be created pursuant to this
Agreement an independent contractor relationship between the Company and Advisor
whereby Xx. Xxxxxxx shall supply advisory services to the Company in accordance
with and subject to the terms and conditions set forth herein.
2. Term: The term of this Agreement shall be for a three-year period
ending April 30, 2000, unless earlier terminated pursuant to its provisions.
3. Services: During the term of this Agreement, and subject to his
reasonable availability, Xx. Xxxxxxx shall provide such advisory services as the
Board of Directors of the Company (the "Board") or the Chief Executive Officer
of the Company (the "CEO") may reasonably request or that Xx. Xxxxxxx believes
might be valuable to the Company, including assisting the Board and the CEO in
such strategic and financial matters, acquisition strategy or other projects as
the Board or the CEO deems appropriate. Advisor agrees to make all reasonable
efforts to attend Board meetings at the request of the Chairman of the
Governance Committee of the Board. The method of performance, hours utilized and
other details of Advisor's services hereunder shall be within Xx. Xxxxxxx'x sole
control. While retained as an advisor by the Company, Advisor shall have the
right to devote his time and efforts to whatever other business, professional,
public service, or community pursuits as he may elect. The Company recognizes
that Xx. Xxxxxxx currently is an officer and director of Patina Oil & Gas
Corporation and Lomak Petroleum, Inc., is a director of certain other public
companies and may have similar business relationships in the future.
Consequently, except to the extent specifically provided for in a separate
agreement, Advisor has no obligation to offer the Company any opportunities of
which he becomes aware.
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4. Compensation and Expense Reimbursement:
A. General Services Fee: As compensation for his services
during the term of this Agreement, Xx. Xxxxxxx shall receive a monthly fee,
payable on the 15th of each month beginning May 15, 1997, in the amount of
$10,000.
B. Additional Fees: In addition, the Company shall pay Advisor
such amounts as the parties may mutually agree from time to time and reflect in
one or more separate agreements with respect to Xx. Xxxxxxx'x performance of any
services outside the scope of this Agreement. Specifically, the Company and
Advisor may from time to time enter into fee agreements relating to transactions
which Advisor brings to the attention of the Company or on which the Company
requests Xx. Xxxxxxx'x assistance. If Advisor becomes entitled to any amount
under any such separate agreement during any calendar year, then (1) the amount
payable thereunder shall be reduced by one-half of the fees paid pursuant to
paragraph 4A of this Agreement during such calendar year and on or before the
date of payment of such amount and (2) the fees payable pursuant to paragraph 4A
hereof from and after the date of payment under such separate agreement shall be
reduced by one-half until the earlier of (a) the end of such calendar year and
(b) the time the reductions under the preceding clauses (1) and (2) equal the
amount payable under such separate agreement. The fee payable under paragraph 4A
of this Agreement shall not be reduced below $5,000 for any month as the result
of the foregoing sentence.
C. Expenses: The Company shall promptly reimburse Advisor for
all reasonable out-of-pocket expenses incurred by him in performance of his
services hereunder, provided that such expenses are in line with the Company's
policies and are submitted to the Company (with proper supporting documentation)
in accordance with the Company's policy then in effect for employee expense
reports. Such expenses shall include, but are not limited to, transportation,
hotel accommodations, and such other expenses as might be incurred by Advisor in
furtherance of the Company's business.
5. Confidential Information: Advisor and the Company acknowledge that
the Company's and Advisor's businesses are highly competitive and that they may,
from time to time, provide each other with access to confidential information.
Both parties agree that they will not make any unauthorized disclosure of
confidential business information obtained from each other ("Confidential
Information"), or make any unauthorized use thereof. However, each party shall
be permitted to disclose Confidential Information as is required by law,
including deposition or trial testimony pursuant to subpoena, provided that if
they are requested or required (by oral question, interrogatories, request for
information or documents, subpoena, civil investigative demand or similar
process) to disclose any Confidential Information, if reasonably possible under
the circumstances as determined in good faith, they will promptly notify the
other party of such request or requirement so that the other party may seek an
appropriate protective order or waive compliance with the provisions of this
Agreement.
In the absence of a protective order or the receipt of a waiver
hereunder, or in the good faith determination of Advisor that time is of the
essence, Advisor shall obtain legal counsel, and if Advisor and/or his counsel
in good faith believe that Advisor is compelled to disclose the
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Confidential Information or be exposed to liability for contempt or suffer other
censure or penalty, Advisor may disclose only such Confidential Information to
the party compelling disclosure as is required by law, as determined by Advisor
on advice of counsel. Advisor further agrees that he will cooperate with the
Company in its efforts to obtain a protective order or other reliable assurance
that confidential treatment will be accorded the Confidential Information. All
reasonable legal fees, costs and expenses incurred by Xx. Xxxxxxx in obtaining
legal representation pursuant to his obligations under this paragraph shall be
paid by the Company.
The obligations of the parties set forth in this paragraph 5 shall
apply during the term of this Agreement and shall survive for one year following
the termination of this Agreement for any reason whatsoever.
6. Capacity and Benefits: At all times while serving under this
Agreement, Advisor shall be an independent contractor and not a common-law
employee. Therefore, except to the extent provided in any other agreement
between Advisor and the Company, Advisor shall not, during the term of this
Agreement, be entitled to participate in the Company's benefit plans and
programs for its employees. Further, Advisor will in no way be considered to be
an agent, employee, or servant of the Company. Advisor shall have no authority
to bind the Company without receiving specific written authority to do so. It is
not the purpose or intention of this Agreement or the parties to create, and the
same shall not be construed as creating, any partnership, partnership relation,
joint venture, agency, or employment relationship.
7. Termination:
A. Disability: If Advisor becomes unable to provide advisory
services hereunder during the term of this Agreement by reason of illness or
incapacity, then this Agreement shall terminate, and Advisor shall be entitled
to the entire monthly fee provided under paragraph 4A hereof for the month in
which such termination occurs.
B. Death: If Advisor dies during the term of this Agreement,
then this Agreement shall terminate, and Advisor shall be entitled to the entire
monthly fee provided under paragraph 4A hereof for the month in which Advisor's
death occurs.
C. Termination by the Company or Advisor: This Agreement may
be terminated at any time on or after April 30, 1998, by either party for any
reason whatsoever, with or without cause, upon 30 days' prior written notice to
the other party. In such event, Advisor shall be entitled to pro-rata
compensation under paragraph 4A hereof through the effective date of such
termination.
D. Expiration of the Term: This Agreement shall terminate
automatically and without notice upon the expiration of the three-year term
provided in paragraph 2 hereof.
E. Other Agreements: If Advisor revokes any portion of the
release provided for in that certain Separation Agreement of even date herewith
between the Company and Advisor, or if Advisor breaches such Separation
Agreement or any other agreement with the Company, then this
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Agreement shall automatically terminate effective as of the date of such
revocation or breach, as applicable.
F. Effect of Termination: Upon termination of this Agreement,
all of the parties' obligations, other than the confidentiality obligations
under paragraph 5 hereof and the Company's obligation to pay any unpaid fees or
unreimbursed expenses under this Agreement, shall terminate. The confidentiality
obligations under paragraph 5 hereof and the Company's indemnification of the
Advisor, a copy of which is attached to this Agreement as an Exhibit, shall
survive termination of this Agreement as set forth in such paragraph and
Exhibit.
8. Notices: For purposes of this Agreement, notice, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered by United States
certified or registered mail, return receipt requested, addressed as follows:
If to Advisor:
Xx. Xxxxxx X. Xxxxxxx
000 Xxxx Xxxxxx, Xxx. 0X
Xxx Xxxx, Xxx Xxxx 00000
If to the Company:
Xx. Xxxx X. Xxxxxx
Chairman
Xxxxxx Oil Corporation
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
or to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
9. Successor Obligations and Assignment: The rights and obligations of
the Company under this Agreement shall inure to the benefit of and be binding
upon its successors and assigns. Advisor may assign any rights accruing to him
under this Agreement to any affiliated entity with the consent of the Company,
which consent shall not be unreasonably withheld.
10. Amendment: This Agreement may not be modified except by an
agreement in writing executed by both the Company and Advisor.
11. Governing Laws: This Agreement shall be subject to and governed by
the laws of the State of Texas, without giving effect to principles of conflicts
of law.
12. Validity: In the event that any portion or provision of this
Agreement is found to be invalid or unenforceable, the other portions or
provisions hereof shall not be affected thereby.
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13. 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 shall constitute one and the same instrument.
14. Effect of Agreement: The terms of this Agreement shall supersede
any obligations and rights of the Company and Advisor respecting advisory
services. Nothing in this Agreement shall be construed as permitting either
party hereto to directly or indirectly benefit from any confidential business
information obtained from the other party during the period that Xx. Xxxxxxx was
an employee, officer or director of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
17 day of April,1997, to be effective as of May 1,1997.
XXXXXX OIL CORPORATION
By: /s/ Xxxx X. Xxxxxx
------------------------------
Xxxx X. Xxxxxx
Chairman
/s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx
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EXHIBIT TO
ADVISORY AGREEMENT
May 1, 1997
Xxxxxx X. Xxxxxxx
000 Xxxx Xxxxxx, Xxx. 0X
Xxx Xxxx, Xxx Xxxx 00000
Dear Xx. Xxxxxxx:
In connection with your engagement to advise and assist us pursuant to
the Advisory Agreement dated the date hereof, Xxxxxx Oil Corporation (the
"Company") hereby agrees to indemnify and hold harmless Xxxxxx X. Xxxxxxx (the
"Advisor" or "Xx. Xxxxxxx") and his affiliates, to the full extent lawful from
against all losses, claims, damages, liabilities and expenses incurred by him
(including fees and disbursements of counsel) which (A) are related to or arise
out of (i) actions taken or omitted to be taken (including any untrue statements
made or any statements omitted to be made) by the Company or (ii) actions taken
or omitted to be taken by an indemnified person with our consent or in
conformity with our actions or omissions or (B) are otherwise related to or
arising out of Xx. Xxxxxxx'x activities on our behalf under his engagement, and
we will reimburse Xx. Xxxxxxx or his affiliates indemnified hereunder for all
expenses (including fees and disbursements of counsel) as they are incurred by
him or such other indemnified person in connection with investigating, preparing
or defending any such action or claim, whether or not in connection with pending
or threatened litigation in which Xx. Xxxxxxx or any other indemnified person is
a party. We will not be responsible, however, for any losses, claims, damages,
liabilities or expenses pursuant to clause (B) of the preceding sentence which
are finally judicially determined to have resulted primarily from the bad faith
or gross negligence of the person seeking indemnification hereunder. We also
agree that Xx. Xxxxxxx or his affiliates, shall have no liability to us for or
in connection with such engagement except for such liability for losses, claims,
damages, liabilities or expenses incurred by us which is finally judicially
determined to have resulted primarily from Xx. Xxxxxxx'x bad faith or gross
negligence. We also agree that we will not, without the prior written consent of
Xx. Xxxxxxx, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not Xx. Xxxxxxx or any other
indemnified person is an actual or potential party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of Xx. Xxxxxxx and each other indemnified person hereunder
from all liability arising out of such claim, action, suit or proceeding. The
foregoing agreement shall be in addition to any rights that Xx. Xxxxxxx or any
other indemnified person may have at common law or otherwise, including, but not
limited to, any right to contribution. We hereby consent to personal
jurisdiction and service and venue in any court in which any claim which is
subject to this agreement is brought against Xx. Xxxxxxx or any other
indemnified person.
Exhibit - 1
It is understood that, in connection with Xx. Xxxxxxx'x above-mentioned
Advisory Agreement, Xx. Xxxxxxx may also be engaged to act for us in one or more
additional capacities, and that the terms of the original Advisory Agreement or
any such additional Agreement may be embodied in one or more separate written
agreements. This indemnification shall apply to the original Advisory Agreement,
any such additional Agreement and any modification of the original Advisory
Agreement or such additional Agreement and shall remain in full force and effect
following the completion or termination of Xx. Xxxxxxx'x Agreement(s).
We further understand that if Xx. Xxxxxxx is asked to act for us in any
other formal capacity, such further action may be subject to a separate
agreement containing provisions and terms to be mutually agreed upon.
Very truly yours,
XXXXXX OIL CORPORATION
By:/s/ Xxxx X. Xxxxxx
-----------------------------
Xxxx X. Xxxxxx
Chairman
Agreed and Accepted:
By:/s/ Xxxxxx X. Xxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxx
Exhibit - 2
