EXHIBIT 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement ("Employment Agreement",
effective February 20, 2003 is between Harvest Natural Resources, Inc.
(hereinafter sometimes called the "Company") and Xxxxx X. Xxxx, a resident of
Texas, ("Employee"), the terms and conditions of which are as follows:
WHEREAS, the Company and Employee entered into an employment agreement
on July 10, 2000;
WHEREAS, since July 10, 2000, the Company has experienced significant
changes in its operations and financial condition, including, without
limitation, the relocation of its corporate headquarters, changes in its
management and the effects of the sale of its interest in Arctic Gas Company;
WHEREAS, the Company and Employee entered into a new employment
agreement effective August 1, 2002 (the "Original Employment Agreement") to
increase Employee's base salary and to provide him with the additional benefits
(including without limitation additional severance benefits and extension of the
term of employment) described in the Original Employment Agreement;
WHEREAS, the Company has agreed to increase the maximum amount of
bonuses that Employee may be entitled to and has established (or will establish)
new "performance contract" guidelines applicable to Employee to determine the
amount of his bonuses;
WHEREAS, the Company wishes to provide Employee with certain additional
benefits in the event of a Change of Control in addition to the benefits
described in the Original Employment Agreement; WHEREAS, the Company and
Employee acknowledge that if Employee's employment with the Company terminates
for any reason, Employee may inevitably disclose trade secrets of, and other
proprietary and confidential information about, the Company's business,
operations and prospects;
WHEREAS, Employee wishes to enter into this Amended and Restated
Employment Agreement to receive the benefit of the provisions contained in it;
and
WHEREAS, the Company and Employee wish to amend the Original Employment
Agreement as hereinafter set forth and, for convenience of reference, restate
the Original Employment Agreement except as amended hereby. NOW THEREFORE, for
good and valuable consideration, the sufficiency and receipt of which are
acknowledged, the Company and Employee agree as follows:
1. TERM OF EMPLOYMENT.
Subject to the terms and conditions set forth in this Employment Agreement, the
Company agrees to employ Employee and Employee agrees to be employed by the
Company for the term
-1-
which starts on July 10, 2000 and ends on May 31, 2004. On May 31, 2004, and on
each anniversary thereafter (an "Extension Date") the term of this Employment
Agreement shall automatically be extended for a one-year period unless and until
either party has given written notice to the other at least one year before any
Extension Date that it or he wishes to terminate this Agreement as of such
Extension Date.
2. POSITION AND DUTIES.
(a) Position. Subject to annual election by the Company's Board of
Directors, Employee's position shall be President and Chief
Executive Officer of Harvest Natural Resources, Inc.
(b) Duties and Responsibilities. Employee's duties and
responsibilities initially shall be those normally associated
with Employee's position, plus any additional duties and
responsibilities the Company initially may assign orally or in
writing to Employee. Employee shall undertake to perform all
Employee's duties and responsibilities for the Company and its
affiliates in good faith and on a full-time basis and shall at
all times act in the course of Employee's employment under
this Employment Agreement in the best interest of the Company
and Company's affiliates.
(c) The Company's Right to Change Position or Duties. Subject to
the terms of this Agreement, the Company shall have the right,
to the extent the Company from time to time reasonably deems
necessary or appropriate, to change Employee's position, or to
expand or reduce Employee's duties and responsibilities.
3. COMPENSATION AND BENEFITS.
(a) Base Salary. Beginning August 1, 2002, and during the
remainder of the term of this Employment Agreement, Employee's
yearly base shall be not less than $375,000 US, which yearly
base salary shall be payable from the Company's Houston
offices to Employee in accordance with the Company's standard
payroll practices and policies, and shall be subject to such
withholdings as required by U.S. Federal law and the State of
Texas, or as otherwise permissible under such practices or
policies. Base salary for any partial period of employment
shall be prorated. The Company shall annually review
Employee's base salary.
(b) Annual Bonus. Employee shall be eligible for such annual bonus
as may be determined by the Human Resources Committee of the
Company's Board of Directors and the Company's Board of
Directors, which bonus shall be based on Employee's
performance under the performance contract guidelines adopted
by the Company, the Company's overall performance and any
special circumstances the Human Resources Committee and the
Board deem appropriate. Any such bonus is to be determined at
the discretion of the Company's Human Resources Committee and
the Board of Directors. Employee acknowledges that the Company
is not obligated to award him any bonus in any year.
-2-
(c) Employee Benefit Plans. Employee shall be eligible to
participate in the employee benefit plans, programs and
policies maintained by the Company for similarly situated
employees in accordance with the terms and conditions to
participate in such plans, programs, and policies as in effect
from time to time.
(d) Stock Options. Previously Employee has been granted certain
stock options pursuant to the Company's stock option plans.
This Novation neither increases nor decreases the number of
stock options previously granted, nor does it change the terms
under which they were granted.
(e) Vacation. Employee shall be entitled to four (4) weeks annual
vacation.
(f) Expenses. The Company shall pay or reimburse Employee for all
reasonable expenses actually incurred or paid by the Employee
in the performance of his services hereunder upon the
presentation of expense statements or vouchers or such other
supporting information as the Company may reasonably require
of Employee.
(g) Office Facilities and Services. Employee shall be accorded
such benefits and support services, including without
limitation, office facilities, administrative assistant,
communications, and such other perquisites as would normally
be accorded by a corporation of the size and at the stage of
development in the industry in which the Company is, to its
President and Chief Executive Officer.
(h) U.S. Residency and Relocation Expense. Employee shall be
reimbursed for the reasonable expenses incurred in obtaining
permanent residency status in the U.S. In the event Employee
is unable to obtain such status and is required to leave the
United States as a result, the Company shall reimburse
Employee for the reasonable expenses of moving Employee's
personal and household goods to a country mutually agreed upon
by Employee and the Company.
(i) Indemnification. Employee shall be entitled to the benefit of
the indemnification provisions contained in the bylaws of the
Company as the same may be amended.
4. TERMINATION OF EMPLOYMENT.
(a) Termination By The Company Other Than For Cause Or Disability,
Or By Employee For Good Reason.
(1) The Company shall have the right to terminate
Employee's employment other than for Cause at any
time, and Employee shall have the right to quit or
resign for Good Reason at any time.
(2) If (a) the Company or its successors terminate
Employee's employment with the Company other than (i)
for Cause or (ii) pursuant to a notice of termination
delivered in accordance with Section 1 of this
Employment Agreement or (b) Employee resigns for Good
Reason, then (x) the Company shall pay to Employee
within thirty (30) days after the
-3-
termination or resignation an amount equal to
thirty-six months of Employee's base salary as in
effect immediately before Employee's termination of
employment or resignation and (y) any outstanding
stock option(s) granted by the Company to Employee
shall become fully vested and shall remain
exercisable for twelve (12) months following
Employee's termination pursuant to this section
4(a)(2), or the tenth anniversary of the date(s) of
the grant(s) specified in the relevant option
agreement(s), whichever is the shorter period.
(3) If the termination or resignation described in
Section 4(a)(2) occurs within 730 days after or 240
days before a Change of Control, then, in addition to
the benefits accruing to Employee under Section
4(a)(2), (x) the Company shall pay to Employee,
within thirty (30) days after the termination or
resignation, the Bonus Amount, (y) for a period of
thirty-six months following the termination or
resignation the Company shall continue to provide
Employee and Employee's dependents with the same
level of life, disability, accident, dental and
health insurance benefits Employee and Employee's
dependents were receiving immediately before
Employee's termination or resignation, and (z) the
company will pay Employee, within thirty (30) days
after the termination or resignation, an additional
amount such that the net amount retained by Employee
pursuant to the benefits described in Section 4(a)(2)
and clause (x) of this Section 4(a)(3) after any
federal, state, local and other taxes (including
without limitation any excise tax imposed under
Section 4999 of the Internal Revenue Code of 1986, as
amended from time to time) shall be equal to the
amount that Employee would have received pursuant to
those benefits before payment of any such taxes.
(4) If the Company or its successors terminate Employee's
employment with the Company pursuant to a notice of
termination delivered in accordance with Section 1 of
this Employment Agreement within 730 days after or
240 days before a Change of Control, then (w) the
Company shall pay to Employee, within thirty (30)
days after the termination, an amount equal to
thirty-six months of Employee's base salary as in
effect immediately before Employee's termination of
employment and the Bonus Amount, (x) any outstanding
stock option(s) granted by the Company to Employee
shall become fully vested and shall remain
exercisable for twelve (12) months following
Employee's termination pursuant to this section
4(a)(4), or the tenth anniversary of the date(s) of
the grant(s) specified in the relevant option
agreement(s), whichever is the shorter period, (y)
for a period of thirty-six months following
Employee's termination the Company shall continue to
provide Employee and Employee's dependents with the
same level of life, disability, accident, dental and
health insurance benefits Employee and Employee's
dependents were receiving immediately before
Employee's termination of employment, and (z) the
Company shall pay to Employee, within thirty (30)
days after the termination, an additional amount such
that the net amount retained by
-4-
Employee pursuant to the benefits described in
clauses (w) and (x) of this section 4(a)(4) after any
federal, state, local and other taxes (including
without limitation any excise tax imposed under
Section 4999 of the Internal Revenue Code of 1986, as
amended from time to time) shall be equal to the
amount that Employee would have received pursuant to
such benefits before payment of any such taxes.
(b) Termination By The Company For Cause, Or By Employee Other
Than For Good Reason.
(1) The Company shall have the right to terminate
Employee's employment at any time for Cause, and
Employee shall have the right to quit or resign at
any time other than for Good Reason.
(2) If the Company terminates Employee's employment for
Cause or pursuant to a notice of termination
delivered in accordance with Section 1 of this
Employment Agreement that is not delivered within 730
days after or 240 days before a Change of Control, or
Employee quits or resigns other than for Good Reason,
the Company's only obligation to Employee under this
Employment Agreement shall be to pay Employee's base
salary (including accrued vacation) actually earned
up to the date Employee's employment terminates.
(c) Termination for Disability or Death.
(1) The Company shall have the right to terminate
Employee's employment on or after the date Employee
has a Disability, and Employee's employment shall
terminate at Employee's death.
(2) If Employee's employment terminates under this
section 4(c), the Company shall pay Employee or, if
Employee dies, Employee's estate the amount provided
for under section 4(a)(2) and, in addition, Employee
or, if Employee dies, Employee's estate shall be
entitled to the provisions of section 4(a)(2) with
respect to Employee's stock options.
(d) Bonus Amount. The term "Bonus Amount" means three times the
amount of the higher of (i) the highest annual bonus earned by
Employee for the last three fiscal years ending prior to the
termination date, excluding any bonus payment related to the
sale of Arctic Gas, and (ii) (A) the target bonus percentage
as established by the Company's Board of Directors for the
fiscal year in which the Change of Control occurs, multiplied
by (B) Employee's annual base salary for that fiscal year
(whether or not paid or accrued for the full year at the time
of Employee's termination or resignation.
(e) Cause. The term "Cause" shall mean (1) Employee's final
conviction of a felony by a trial court, (2) Employee's
material breach of this Employment Agreement or
-5-
(3) Employee's material violation of any policy or code of
conduct of the Company, all as reasonably determined by the
Company.
(f) Good Reason. The term "Good Reason" shall mean any of the
following, unless Employee shall have given his express
written consent thereto: (1) a material breach of the terms
and conditions of this Employment Agreement by the Company
which remains uncorrected for thirty (30) days after Employee
delivers written notice of such breach to the Company; (2)
failure to maintain or reelect Employee to the position
described in section 2(a); (3) a significant reduction of
Employee's duties, position or responsibilities relative to
the Employee's duties, position or responsibilities in effect
immediately prior to such reduction, unless Employee is
provided with comparable duties and responsibilities; (4) a
substantial reduction, without good business reasons, of the
facilities and perquisites available to Employee immediately
prior to such reduction; (5) a reduction by the Company of
Employee's monthly base salary in effect immediately prior to
such reduction; (6) the Company fails to continue Employee's
participation in any bonus, incentive, profit sharing,
performance, savings, retirement or pension policy, plan,
program or arrangement on substantially the same or better
basis, both in terms of the amount of benefits provided to
Employee and the level of Employee's participation, relative
to other participants, (7) the relocation of the Employee more
than fifty (50) miles from the location of the Company's
principal office on the date hereof; or (7) the failure of the
Company to obtain a satisfactory agreement from a successor to
assume and agree to perform this Agreement as contemplated by
section 6(d).
(g) Disability. Employee shall have a "disability" under this
Employment Agreement on the date the Company receives written
notice from a physician selected by the Company that Employee
no longer can perform one or more of the essential functions
of Employee's job even with reasonable accommodation.
(h) Change of Control. A "Change of Control" means the occurrence
of any of the following:
(1) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934) (a "Covered
Person") of beneficial ownership (within the meaning
of rule 13d-3 promulgated under the Securities
Exchange Act of 1934) of 50 percent or more of the
combined voting power of the then outstanding voting
securities of the Company entitled to vote generally
in the election of directors (the "Voting
Securities"); provided, however, that for purposes of
this subsection (1) of this Section 4(g) the
following acquisitions shall not constitute a Change
of Control: (i) any acquisition by the Company, (ii)
any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company
or any entity controlled by the Company, or (iii) any
acquisition by any entity pursuant to a transaction
which complied with clauses (i), (ii) and (iii) of
subsection (3) of this Section 4(g); or
-6-
(2) individuals who, as of the date of this Employment
Agreement, constitute the board of directors of the
Company (the "Incumbent Board") cease for any reason
to constitute at least a majority of the board of
directors of the Company; provided, however, that any
individual becoming a director after the date of this
Employment Agreement whose election, or nomination
for election by the Company's stockholders, was
approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall
be considered as though such individual were a member
of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption
of office occurs as a result of an actual or
threatened election contest with respect to the
election or removal of directors; or
(3) the consummation of a reorganization, merger or
consolidation or sale of the Company, or a
disposition of at least 50 percent of the assets of
the Company including goodwill (a "Business
Combination"), provided, however, that for purposes
of this subsection (3), a Business Combination will
not constitute a change of control if the following
three requirements are satisfied:
following such Business Combination, (i) all or
substantially all of the individuals and entities who
were the beneficial owners, respectively, of the
Company's voting securities immediately prior to such
Business Combination beneficially own, directly or
indirectly, more than 50 percent of the ownership
interests of the entity resulting from such Business
Combination (including, without limitation, an entity
which as a result of such transaction owns the
Company or all or substantially all of the Company's
assets either directly or through one or more
subsidiaries or other affiliated entities) in
substantially the same proportions as their ownership
immediately prior to such Business Combination, (ii)
no Covered Person (excluding any employee benefit
plan (or related trust) of the Company or such entity
resulting from such Business Combination)
beneficially owns, directly or indirectly, 50 percent
or more of, respectively, the ownership interests in
the entity resulting from such Business Combination,
except to the extent that such ownership existed
prior to the Business Combination, and (iii) at least
a majority of the members of the board of directors
of the entity resulting from such Business
Combination were members of the Incumbent Board at
the time of the execution of the initial agreement,
or of the action of the board of directors of the
Company, providing for such Business Combination. For
this purpose any individual who becomes a director
after the date of this Employment Agreement, and
whose election or nomination for election by the
Company's stockholders, was approved by a vote of at
least a majority of the directors then comprising the
Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual
whose initial assumption
-7-
of office occurs as a result of an actual or
threatened election contest with respect to the
election or removal of directors.
(i) Benefits. Employee shall have the right to receive any
benefits payable under the Company's employee benefits plans,
programs and policies (other than the Company's change of
Control Severance Plan (the "Change of Control Plan")) which
Employee otherwise has a non-forfeitable right to receive
under the terms of such plans, programs and policies (other
than severance benefits) independent of Employee's rights
under this Employment Agreement upon a termination of
employment in addition to any other benefits under this
section 4 without regard to the reason for such termination of
employment. Employee acknowledges and agrees that until the
termination of this Agreement, he shall not be entitled to
participate in the Change of Control Plan.
(j) Notice of Termination. Any termination by the Company or by
Employee for any reason shall be communicated by a notice of
termination to the other party hereto and shall be given in
accordance with section 6(a). Such notice shall state 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 under
the provision so indicated.
(k) No Mitigation. Employee shall not be required to mitigate the
amount of any severance payment contemplated by this
Agreement, nor shall any such payment be reduced by any
earnings that Employee may receive from any other source.
(l) Stock Option Agreements. In the event of a conflict adverse to
Employee between the terms of this Agreement and the terms of
any agreement granting Employee stock options, the terms of
this Agreement shall govern.
5. COVENANTS BY EMPLOYEE
(a) Property of the Company.
(1) Employee covenants and agrees that upon the
termination of Employee's employment for any reason
or, if earlier, upon the Company's request, Employee
shall promptly return all "Property" which had been
entrusted or made available to Employee by the
Company.
(2) The term "Property" shall mean all records, files,
memoranda, reports, price lists, drawing, plans,
sketches, keys, codes, computer hardware and software
and other property of any kind or description
prepared, used or possessed by Employee during
Employee's employment by the Company (and any
duplicates of any such property) together with any
and all information, ideas, concepts, discoveries,
and inventions and the like conceived, made,
developed or acquired at any time by Employee
individually or with others during Employee's
employment which relate to the Company's business,
products or services.
-8-
(b) Trade Secrets.
(1) In consideration for the promises made in section
5(d) of this Agreement, the Company promises that it
shall provide and make available to Employee certain
confidential, proprietary information and trade
secrets.
(2) Employee covenants and agrees that Employee shall
hold in a fiduciary capacity for the benefit of the
Company and each of its affiliates, and shall not
directly or indirectly use or disclose, any Trade
Secret that Employee may have acquired pursuant to
section 5(b)(1) above during the term of Employee's
employment by the Company for so long as such
information remains a trade secret.
(3) The term "Trade Secret" shall mean information,
including, but not limited to, technical or
non-technical data, a formula, a patent, a
compilation, a program, a device, a method, a
technique, a drawing, a process, financial data,
financial plans, product plans, or that: (a) derives
economic value, actual or potential, from not being
generally known to, and not being generally readily
ascertainable by proper means by other persons who
can obtain economic value from its disclosures or
use, and (b) is the subject of reasonable efforts by
the Company and its affiliates to maintain its
secrecy.
(4) This section 5(b) is intended to provide rights to
the Company which are in addition to those rights the
Company has under the common law or applicable
statutes for the protection of trade secrets.
(c) Confidential Information.
(1) Employee covenants and agrees while employed under
this Employment Agreement and thereafter during the
Restricted Period he shall hold in a fiduciary
capacity for the benefit of the Company and each of
its affiliates, and shall not directly or indirectly
use or disclose, any of the Company's or the
Company's affiliates' Confidential or Proprietary
Information that Employee may have acquired (whether
or not developed or compiled by Employee and whether
or not Employee is authorized to have access to such
information) during the term of, and in the course
of, or as a result of Employee's employment by the
Company or its affiliates.
(2) The term "Confidential or Proprietary Information"
shall mean any secret, confidential or proprietary
information that the Company or an affiliate (not
otherwise included in the definition of a Trade
Secret under this Agreement) that has not become
generally available to the public by the act of one
who has the right to disclose such information
without violation of any right of the Company or its
affiliates.
(d) Non-Competition. During the period of Employee's employment
with the Company and thereafter during the Restricted Period,
the Employee covenants
-9-
and agrees that, in connection with the countries of Russia
and Venezuela, he shall not directly or indirectly own any
interest in, manage, control, participate in, consult with,
render services for, or in any manner engage in any businesses
competing with the Company (unless the Board of Directors
shall have authorized such activity and the Company shall have
consented thereto in writing). Investments in less than 5% of
the outstanding securities of any class of the Company subject
to the reporting requirements of Section 13 or Section 15(d)
of the Securities Exchange Act of 1934, as amended, shall not
be prohibited by this section. For purposes of this section
(d), the term "Company" shall include Harvest Natural
Resources, Inc. and any of its affiliates or subsidiaries or
any company in which it is a minority shareholder or a joint
venture partner. For purposes of this section, the term
"businesses" shall mean any enterprise, commercial venture, or
project involving oil and gas exploration or production
activities in the same geographic areas as the Company's
activities during the period of Employee's employment.
Further, during the period of Employee's employment with the
Company and thereafter during the Restricted Period, the
Employee covenants and agrees that he will not directly or
indirectly through another entity induce or otherwise attempt
to influence any employee of the Company to leave the
Company's employment or in any way interfere with the
relationship between the Company and any employee thereof.
Further, the Employee will not induce or attempt to induce any
customer, supplier, licensee, joint venture partner,
shareholder, licensor or other business relation of the
Company to cease doing business with the Company or in any way
interfere with the relationship between any such customer,
supplier, licensee, joint venture partner, shareholder,
licensor or business relation of the Company.
If (i) pursuant to the arbitration process described in
Section 6(c) of this Employment Agreement (or such other
process as to which the Company and Employee may agree upon in
writing), it is determined that Employee has violated the
provisions of this Section 7(d), and (ii) employee has
received a payment from the Company pursuant to Section
4(a)(2)(x) or Section 4(a)(4)(x) of this Agreement (the "Lump
Sum Severance Amount"), then, in addition to any other
remedies that the Company may have, Employee shall be
obligated, and hereby agrees, to pay the Company, as
liquidated damages, an amount (but not less than zero) equal
to the product of (x) the Lump Sum Severance Amount and (y) a
fraction whose numerator is the excess of thirty-six (36) over
the number of calendar months that have elapsed since the last
day of employee's termination of employment under Section 4 of
this Agreement and whose denominator is thirty-six (36).
(e) Employment Restriction - Conflict of Interest: Employee
covenants and agrees that he will not receive and has not
received any payments, gifts or promises and Employee will not
engage in any employment or business enterprises that in any
way conflict with his service and the interests of the Company
or its affiliates. In addition, Employee agrees to comply with
the laws or regulations of any country,
-10-
including, without limitation, the United States of America,
having jurisdiction over Employee or the Company.
Employee shall not make any payments, loans, gifts or promises
or offers of payments, loans or gifts, directly or indirectly,
to or for the use or benefit of any official or employee of
any government or to any other person if Employee knows, or
has reason to believe, that any part of such payments, loans
or gifts, or promise or offer, would violate the laws or
regulations of any country, including, without limitation, the
United States of America, having jurisdiction over Employee or
the Company.
By signing this Agreement, Employee acknowledges that he has
not made and will not make any payments, loans, gifts,
promises of payments, loans or gifts to or for the use or
benefit of any official or employee of any government or to
any other person which would violate the laws or regulations
of any country, including, without limitation, the United
States of America, having jurisdiction over Employee or the
Company.
(f) Restricted Period. The term "Restricted Period" shall mean the
two-year period which starts on the date Employee's employment
terminates with the Company without regard to whether such
termination comes before or after the end of the term of this
Employment Agreement.
(g) Reasonable and Continuing Obligations. Employee agrees that
Employee's obligations under this section 5 will continue
beyond the date Employee's employment terminates if such
continuance is reasonable and necessary to protect the
Company's legitimate business interests. The Company
additionally shall have the right to take such other action as
the Company deems necessary or appropriate to compel
compliance with the provisions of this section 5.
6. MISCELLANEOUS.
(a) Notices. Notices and all other communications shall be in
writing and shall be deemed to have been duly given when
personally delivered or when mailed by United States
registered or certified mail. Notices to the Company shall be
sent to 00000 Xxxx Xxx Xxxxx Xxxxx, Xxxxxxx, Xxxxx 00000.
Notices and communications to Employee shall be sent to
Employee's home address.
(b) No Waiver. Except for the notice described in section 4(d), no
failure by either the Company or Employee at any time to give
notice of any breach by the other of, or to require compliance
with, any condition or provision of this Employment Agreement
shall be deemed a waiver of any provisions or condition of
this Employment Agreement
(c) Arbitration and Governing Law. ANY UNRESOLVED DISPUTE OR
CONTROVERSY BETWEEN EMPLOYEE AND THE COMPANY ARISING UNDER OR
IN CONNECTION WITH THIS AGREEMENT SHALL BE SETTLED EXCLUSIVELY
BY ARBITRATION, CONDUCTED IN
-11-
ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION THEN IN EFFECT. THE COMPANY WILL BEAR THE
ADMINISTRATIVE COSTS OF ANY ARBITRATION UNDER THIS AGREEMENT,
INCLUDING THE ARBITRATOR'S FEES. THE ARBITRATOR SHALL NOT HAVE
THE AUTHORITY TO ADD TO, DETRACT FROM, OR MODIFY ANY PROVISION
HEREOF. THE ARBITRATOR SHALL HAVE THE AUTHORITY TO ORDER
REMEDIES WHICH EMPLOYEE COULD OBTAIN IN A COURT OF COMPETENT
JURISDICTION, INCLUDING BACK-PAY, SEVERANCE COMPENSATION,
REIMBURSEMENT OF COSTS, INCLUDING THOSE INCURRED TO ENFORCE
THIS AGREEMENT, AND INTEREST THEREON IN THE EVENT THE
ARBITRATOR DETERMINES THAT EMPLOYEE WAS TERMINATED WITHOUT
DISABILITY OR GOOD CAUSE, AS DEFINED HEREIN, OR THAT THE
COMPANY HAS OTHERWISE MATERIALLY BREACHED THIS AGREEMENT. A
DECISION BY THE ARBITRATOR SHALL BE IN WRITING AND WILL BE
FINAL AND BINDING. JUDGMENT MAY BE ENTERED ON THE ARBITRATOR'S
AWARD IN ANY COURT HAVING JURISDICTION. THE ARBITRATION
PROCEEDING SHALL BE HELD IN HOUSTON, TEXAS, UNITED STATES OF
AMERICA. NOTWITHSTANDING THE FOREGOING, THE COMPANY SHALL BE
ENTITLED TO SEEK INJUNCTIVE OR OTHER EQUITABLE RELIEF FROM ANY
COURT OF COMPETENT JURISDICTION, WITHOUT THE NEED TO RESORT TO
ARBITRATION IN THE EVENT THAT EMPLOYEE VIOLATES SECTIONS 5(b),
5(c), 5(d) OR 5(e) OF THIS AGREEMENT. THIS AGREEMENT SHALL IN
ALL RESPECTS BE CONSTRUCTED ACCORDING TO THE LAWS OF THE STATE
OF TEXAS.
(d) Assignment by Company. This Employment Agreement shall be
binding upon and inure to the benefit of the Company and any
successor to all or substantially all of the business or
assets of the Company. The Company may assign this Employment
Agreement to any affiliate or successor, and no such
assignment shall be treated as a termination of Employee's
employment under this Employment Agreement; provided, however,
that in the case of an assignment to an affiliate, the Company
shall not be relieved of its obligations under this Agreement.
The Company will require any successor corporation (whether
direct or indirect, and whether by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business or assets of the Company to expressly assume and to
agree to perform this Agreement in the same manner and to the
same extent as the Company, as if no such succession had taken
place. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession
shall be a material breach of this Agreement. As used in this
Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business or assets as
aforesaid which assumes and agrees to perform this Agreement
by operation of law, or otherwise.
-12-
(e) Assignment by Employee. Employee's rights and obligations
under this Employment Agreement are personal, and they shall
not be assigned or transferred without the Company's prior
written consent.
(f) Other Agreements. With the exceptions of any of the Company's
stock option plans (and related agreements), incentive plans
and change of control plans, and the performance contract
guidelines adopted by the Company, this Employment Agreement
replaces and merges any and all previous agreements and
understandings regarding all the terms and conditions of
Employee's employment relationship with the Company, and this
Employment Agreement constitutes the entire agreement of the
Company and Employee with respect to such terms and
conditions.
(g) Amendment. No amendment to this Employment Agreement shall be
effective unless it is in writing and signed by the Company
and by Employee.
(h) Invalidity. If any part of this Employment Agreement is held
by a court of competent jurisdiction to be invalid or
otherwise unenforceable, the remaining part shall be
unaffected and shall continue in full force and effect, and
the invalid or otherwise unenforceable part shall be deemed
not to be part of this Employment Agreement.
(i) Enforceability by Beneficiaries. This Agreement shall inure to
the benefit of and be enforceable by the parties hereto and
their respective heirs, legal or personal representatives and
successors and if Employee should die while any amount would
still be payable to him hereunder if he had continued to live,
all such amounts shall be paid in accordance with the terms of
this Agreement to Employee's devisee, legatee or other
designee or, if there is no such designee, to his estate.
7. NOVATION.
This Agreement is a novation to that Employment Agreement between the Company
and Employee entered into on July 10, 2000 and August 1, 2002, which are hereby
extinguished. As consideration for this novation, Employee acknowledges the
value of the matters described in the recitals to this Amended and Restated
Employment Agreement and the other terms of this Amended and Restated Employment
Agreement and agrees that they are adequate to make the novation binding in all
respects.
IN WITNESS WHEREOF, the Company and Employee have executed this Amended
and Restated Employment Agreement in multiple originals to be effective as set
out above.
HARVEST NATURAL RESOURCES, INC. XXXXX X. XXXX
By: /s/ XXXXXXX X. XXXXXXXX By: /s/ XXXXX X. XXXX
---------------------------- --------------------------
Xxxxxxx X. Xxxxxxxx
Chairman of the Board
-13-
