PRODUCTION PARTICIPATION PLAN SUPPLEMENTAL PAYMENT AGREEMENT
Exhibit 10.8
This PRODUCTION PARTICIPATION PLAN SUPPLEMENTAL PAYMENT AGREEMENT (the “Agreement”) is made as
of the 23rd day of February, 2007, by and between XXXXXXX PETROLEUM CORPORATION, a Delaware
corporation (the “Company”), and J. XXXXXXX XXXX (the “Executive”).
WITNESSETH:
WHEREAS, the Company maintains the Xxxxxxx Petroleum Corporation Production Participation
Plan, as amended and restated from time to time (the “Plan”), and the Executive is a participant in
the Plan.
WHEREAS, in order to provide the Executive with greater incentive to increase the
profitability of the Company, the Company has previously made payments to the Executive based on
payments to other executive officers of the Company pursuant to the Plan that are in addition to
the payments the Executive would otherwise receive from the Company pursuant to the Plan.
WHEREAS, the Company and the Executive desire to formalize the arrangement pursuant to which
the Company makes such additional payments to the Executive.
WHEREAS, capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Plan.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set
forth herein, the parties hereto, intending to be legally bounds, hereby agree as follows:
1. Annual Supplemental Payment. As long as the Executive is an Employee, the Company
shall make a payment in cash to the Executive equal to the Supplemental Annual Amount (as defined
below), less any required withholding of income or employment taxes or other authorized deductions
or amounts applicable to payments made to Employees of the Company, after the end of each Plan Year
at such time as the Company distributes Net Income and Net Proceeds to the other Participants
pursuant to Section 5.3 of the Plan. The “Supplemental Annual Amount” for any Plan Year shall mean
the amount, if any, by which (a) the average of (i) the amount of the Company’s distributions of
Net Income and Net Proceeds to the Company’s Vice President of Operations pursuant to Section 5.3
of the Plan for that Plan Year and (ii) the amount of the Company’s distributions of Net Income and
Net Proceeds to the Company’s Chief Financial Officer pursuant to Section 5.3 of the Plan for that
Plan Year exceeds (b) the amount of the Company’s distributions of Net Income and Net Proceeds to
the Executive pursuant to Section 5.3 of the Plan for that Plan Year.
2. Supplemental Payment upon Termination of the Plan or Change in Control. As long as
the Executive is eligible under the Plan to receive a distribution of vested interests pursuant to
Section 7.2(a) or Section 7.2(b) of the Plan, upon voluntary termination of the Plan by the Company
or a Change in Control, the Company shall make a payment in cash to the Executive equal to the
Supplemental Termination/Change in Control Amount (as defined below), less any required withholding
of income or employment taxes or other authorized deductions or amounts applicable to payments made
to Employees of the Company, at such time as the Company distributes the value of the vested
interests of each Employee Participant pursuant to Section 7.2(a) of the Plan in the case of a
voluntary termination of the Plan or Section 7.2(b) of the Plan in the case of a Change in Control.
The “Supplemental Termination/Change in Control Amount” shall mean the amount if any, by which (a)
the average of (i) the value of vested interests distributed by the Company to the Company’s Vice
President of Operations pursuant to Section 7.2(a) or Section 7.2(b), as the case may be,
of the Plan and (ii) the value of vested interests distributed by the Company to the Company’s
Chief Financial Officer pursuant to Section 7.2(a) or Section 7.2(b), as the case may be, of the
Plan exceeds (b) the value of vested interests distributed by the Company to the Executive pursuant
to Section 7.2(a) or Section 7.2(b), as the case may be, of the Plan. Notwithstanding the
foregoing, this Section 2 shall not be applicable if, in the Plan Year prior to the voluntary
termination of the Plan or Change in Control, (a) the amount of the Company’s distributions of Net
Income and Net Proceeds to the Executive pursuant to Section 5.3 of the Plan for that Plan Year was
equal to or greater than (b) the average of (i) the amount of the Company’s distributions of Net
Income and Net Proceeds to the Company’s Vice President of Operations pursuant to Section 5.3 of
the Plan for that Plan Year and (ii) the amount of the Company’s distributions of Net Income and
Net Proceeds to the Company’s Chief Financial Officer pursuant to Section 5.3 of the Plan for that
Plan Year.
3. No Right to Employment. The Company may terminate the employment of the Executive
as freely and with the same effect as if this Agreement were not in existence.
4. No Impact on Production Participation Plan. Except as expressly set forth herein,
the Executive shall not have any additional rights under the Plan. To the extent there is a
conflict between the terms of this Agreement and the terms of the Plan (it being understood the
provision of the additional payments expressly set forth in this Agreement shall not constitute
such a conflict), the terms of the Plan shall control.
5. Entire Agreement. Other than as expressly set forth in the Plan, this Agreement
contains the entire understanding between the Company and the Executive with respect to the subject
matter hereof and supersedes any other oral or written understandings.
IN WITNESS WHEREOF, the parties have cause this Agreement to be duly executed as of the day
and year first above written.
| XXXXXXX PETROLEUM CORPORATION | ||||
| By: J. Xxxxxxx Xxxx | ||||
| Its: Vice President — Reservoir Engineering/Acquisitions | ||||
| /s/ J. Xxxxxxx Xxxx
|
