MAGELLAN PETROLEUM CORPORATION
EMPLOYMENT AGREEMENT
Employment Agreement dated as of January 1, 2000 by and between
Magellan Petroleum Corporation, a Delaware corporation (the "Company") and Xxxxx
X. Xxxxx, an individual residing in Madison, Connecticut (the "Executive").
1. Employment. Executive shall be employed as President and
Chief Executive Officer of Magellan Petroleum Corporation effective as of
January 1, 2000, (the "Effective Date") and shall report only to the Board of
Directors of the Company. The term (the "Term") of Executive's employment shall
be three years from the Effective Date. Executive shall give notice to the
Company of his desire to continue employment beyond the Term on or before
December 31, 2001. Executive shall devote as much of his business time,
energies, attention and ability to the business of the Company as shall be
reasonably necessary to fulfill his duties as chief executive officer of the
Company. The Executive may continue to be employed by G&O'D Inc. ("G&O'D") and
may continue to provide services to other companies. The Executive shall not be
required to relocate during the Term from the Madison, Connecticut area.
2. Salary. Executive shall receive a base salary of $150,000 for 2000,
$155,000 for 2001 and $160,000 for 2002, to be paid in equal monthly
installments in advance not later than the sixth day of each month. This base
salary may be supplemented by any merit increase, bonuses or additional
compensation approved by the Company's Board of Directors.
3. Pension Plan. The Company shall adopt a SEP/XXX plan and
shall make an annual contribution of 15% of Executive's total compensation to
the plan.
4. Insurance Coverage. The Company shall reimburse G&O'D at the rate
of $500 per month for a share of Executive's medical premiums.
The Company shall purchase a disability income policy on the Executive
which will provide for a monthly disability benefit of $8,200 per month until
the Executive reaches age 65. 5. Reimbursements and G&O'D Fees.
(a) Business Expenses. The Company shall pay or reimburse
Executive for expenses reasonably incurred in the performance of his duties on
behalf of the Company upon presentation of appropriate documentation thereof and
in accordance with established Company policy;
(b) Rent. The Company shall reimburse G&O'D INC for a share
of the cost of maintaining and operating Executive's office. The amount
shall be set at $1,666.67 per month until it is changed by mutual
agreement;
(c) G&O'D Fees. The Company shall continue to pay G&O'D fees
computed in the same manner as previously billed for the staff personnel
(excluding Executive) who directly provide services to the Company.
6. Termination; Rights Upon Termination.
6.1 Termination. Executive's employment with the Company shall
be terminated upon the occurrence of any of the
following:
(a) On December 31, 2002, unless it is extended by mutual agreement of
the parties; (b) Executive's resignation, death or Disability; (c) A
Change in Control (as defined hereafter) of the Company; (d) Three
months' written notice by the Company to Executive terminating his
employment without Cause. (e) Termination of Executive's employment by
the Company with Cause.
6.2 Rights Upon Termination. In the event that:
(a) the employment of the Executive is terminated by reason of
the Executive's resignation or Disability, then the Company
shall pay and provide to the Executive at the time otherwise
due under this agreement all amounts through the end of the
month in which the termination occurs, but reduced by any
payments received by Executive under any insurance plan,
program or policy paid for by the Company;
(b) The employment of the Executive is terminated by reason of
the Executive's death, then the Company shall pay and provide
to the Executive's designated beneficiary, at the time
otherwise due under this agreement, one year's base salary at
the rate then in effect;
(c) The employment of the Executive is terminated by the Company
for Cause, then the Company shall pay to the Executive at the
time otherwise due all compensation and benefits accrued
through the time of termination;
(d) The employment of the Executive is terminated without Cause,
or by reason of a Change in Control, then the Company shall
pay the Executive within ten business days of such
termination the balance of his salary for the remainder of
the Term.
7. Definitions.
7.1 "Cause" shall be limited to and mean only the following:
(a) Misappropriating any funds or property of the Company;
(b) Attempting to obtain any personal profit from any transaction in
which the Executive has an interest which is adverse to the interest of the
Company, unless Executive shall have first obtained the consent of the Board of
Directors;
(c) Neglect or unreasonable refusal to perform the duties assigned
to Executive under or pursuant to this Agreement;
(d) Being convicted of any felony or an offense involving moral
turpitude.
7.2 "Disability" shall be deemed to have occurred when Executive
shall be unable to perform the duties of his employment with the Company
for an aggregate period of more than 90 days in a consecutive period of 52
weeks, due to physical or mental impairment (other than as a result of
addiction to alcohol or any drug) as determined by a physician acceptable
to the Company and Executive.
7.3 "Change of Control." For the purpose of this Agreement,
a Change of Control shall mean:
(a) 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,
as amended (the "Exchange Act"))(a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (iv)
any acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (c) of this Section 7.3; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
shareholders, 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 other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation 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) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company (or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation 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 corporation 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, providing for such Business
Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company. Anything herein to the contrary
notwithstanding, if the Incumbent Board (as defined in Section 7.3(b)
hereof, including the provided however clause) by a majority vote of
directors then in office, consents in advance to any action, event, or
occurrence set forth in Sections 7.3(a), (b), (c) or (d) hereof which would
otherwise be deemed to be a Change in Control, such action, event, or
occurrence shall not be deemed to be a Change in Control.
8. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit to the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by act
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it.
9. Successors.
(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
10. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
-------------------
Xxxxx X. Xxxxx
c/o G&O'D Inc.
000 Xxxxxx Xxxx
Xxx Xxxx - Xxxx 00
Xxxxxxx, Xxxxxxxxxxx 00000
If to the Company:
-----------------
Magellan Petroleum Corporation
c/o Murtha, Cullina, Xxxxxxx and Xxxxxx LLP
CityPlace I
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder shall not be deemed to be
a waiver of such provision or right or any other provision or right of this
Agreement.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but
all of which together will constitute on and the same instrument.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ Xxxxx X. Xxxxx
Executive
MAGELLAN PETROLEUM CORPORATION
By /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Secretary
