EXHIBIT (e)(11)
AGREEMENT REGARDING
AMENDED AND RESTATED PHANTOM WORKING INTEREST
INCENTIVE PLAN OF HALLWOOD ENERGY CORPORATION
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THIS AGREEMENT is made and executed by and between Hallwood Energy
Corporation ("HEC") and __________________________ ("Participant"),
W I T N E S S E T H:
WHEREAS, HEC maintains the Amended and Restated Phantom Working Interest
Incentive Plan of Hallwood Energy Corporation (the "Plan") and Participant is a
participant in the Plan; and
WHEREAS, HEC, Pure Resources, Inc. ("Pure") and Pure's indirect subsidiary,
Pure Resources II, Inc. ("Pure II"), propose to enter into an Agreement and Plan
of Merger pursuant to which Pure II will make a tender offer to purchase all the
outstanding shares of common and preferred stock of HEC (the "Tender Offer");
and
WHEREAS, upon the acceptance for payment of, and payment by Pure II for,
any shares of common and preferred stock pursuant to the Tender Offer (the
"Tender Offer Closing Date"), a Change of Control will occur pursuant to the
Plan; and
WHEREAS, to resolve any uncertainty regarding the amount of benefits due to
Participant under the Plan as a result of a Change of Control resulting from the
Tender Offer, the parties wish to enter into this Agreement, which will specify
the amount of benefits payable to Participant as a result of such Change of
Control, provide for early payment of a portion of such benefits and release HEC
and its affiliates, successors and certain other persons from any and all
liability related to the Plan;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the parties hereto agree as follows:
1. Agreement Regarding Plan Benefits.
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(a) Participant and HEC agree that (i) if Participant is both an
employee of HEC or a subsidiary of HEC and a participant in the Plan as of
the date of a Change of Control (as defined in the Plan) directly resulting
from the acceptance for payment of, and payment by Pure II for, any shares
of common and preferred stock pursuant to the Tender Offer (a "Pure Change
of Control") or (ii) if, after the date of this Agreement and prior to a
Pure Change of Control, Participant's employment with HEC or a subsidiary
of HEC is involuntarily terminated other than for Cause (as defined below),
then subject to Section 1(b) hereof, Participant shall become entitled to
receive from HEC an amount equal
to $___________ (the "Agreed Termination Value"). Participant agrees that
he/she shall be entitled to receive no payments or benefits under the Plan,
including but not limited to distributions pursuant to Sections 3.1 or 4.1
of the Plan or payment of any buy-out value pursuant to Section 3.2 of the
Plan, other than the Agreed Termination Value. The Agreed Termination Value
shall be paid in accordance with Section 1(b). For purposes of this
Section, "Cause" shall mean (i) the continued failure by Participant to
devote time and effort to the performance of Participant's duties as an
employee consistent with his/her performance prior to the date of this
Agreement, after written demand for improved performance has been delivered
to Participant by HEC which specifically identifies how Participant has not
devoted such consistent time and effort to the performance of his/her
duties; or (ii) the willful engaging by Participant in misconduct which is
materially injurious to HEC, monetarily or otherwise.
(b) Fifty percent of the Agreed Termination Value shall be paid to
Participant on the Tender Offer Closing Date. The remaining fifty percent
of the Agreed Termination Value shall be paid to Participant on the 60th
day following the Tender Offer Closing Date, provided Participant does not
voluntarily terminate employment with HEC or an affiliate of HEC prior to
such date other than by reason of death or disability (within the meaning
of Section 22(e)(3) of the Internal Revenue Code), or unless such voluntary
termination occurs within five days after an event giving rise to Just
Cause. For this purpose, "Just Cause" shall mean a material reduction in
Participant's salary from the level in effect immediately prior to a Change
of Control or a change in the location of Participant's principal place of
employment by HEC or an affiliate by more than 25 miles from the location
where Participant was principally employed immediately prior to the date on
which a Change of Control occurs.
2. Release of Claims.
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(a) General Release. In consideration for the payment of the Agreed
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Termination Value and the mutual promises and undertakings in this
Agreement, Participant and Participant's family members, heirs, successors,
and assigns (collectively the "Releasing Parties") hereby release, acquit,
and forever discharge any and all claims and demands of whatever kind or
character, whether vicarious, derivative, or direct, that Participant or
the other Releasing Parties, individually, collectively, or otherwise, may
now or hereafter have or assert against (i) HEC, Pure, and Pure II; (ii)
any corporation, general or limited partnership, or other entity affiliated
with HEC, Pure, Pure II through common ownership; (iii) any officer,
director, partner, trustee, fiduciary, agent, employee, representative,
insurer, attorney, or any successors and assigns of the persons or entities
just named; and (iv) the Plan (collectively the "Released Parties") related
to or arising under the Plan or with respect to Participant's participation
therein, including without limitation
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any right to participate in or profit from any and all existing or future
oil and gas reserves and production from existing or future xxxxx of any of
the Released Parties.
(b) Authority to Execute and Indemnification from Claims. Participant
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represents and warrants that Participant has the authority to execute this
Agreement on behalf of all the Releasing Parties. Participant further
agrees to indemnify fully and hold harmless HEC and any of the other
Released Parties from any and all claims brought by the Releasing Parties
or derivative of Participant's own relating in any manner to Participant's
rights under the Plan, including the amount of any such claims HEC or any
of the other Released Parties are compelled to pay, and the costs and
attorney's fees incurred in defending against all such claims.
3. Effective Date and Term. Participant understands that this Agreement
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will become effective and enforceable upon execution of this Agreement. This
Agreement shall terminate, and none of the Released Parties nor Participant
shall have any rights or obligations hereunder and this Agreement shall become
null and void and have no effect if the Tender Offer Closing Date does not occur
in accordance with the Agreement and Plan of Merger by and among HEC, Pure and
Pure II.
4. Voluntary Agreement and Time for Consideration. Participant
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acknowledges that Participant has read and fully understands all of the
provisions of this Agreement. Participant further acknowledges that
Participant's execution of this Agreement is knowing and voluntary, and that
Participant has had a reasonable time to consider its terms.
5. Severability. Any provision in this Agreement which is prohibited or
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unenforceable in any jurisdiction by reason of applicable law shall, as to such
jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating or affecting the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
6. Controlling Law. This Agreement shall be governed by, and construed
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in accordance with, the internal laws (and not the principles relating to
conflicts of laws) of the State of Colorado.
7. Entire Agreement. Participant acknowledges that none of the Released
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Parties has made any promise or representation to Participant in consideration
for Participant's execution of this Agreement that is not set out in this
Agreement, and that in executing this Agreement Participant is not relying on
any such promise or representation but instead is relying solely on
Participant's own judgment.
8. Successors. This Agreement shall be binding upon and shall inure to
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the benefit of HEC, any successor of HEC, and HEC's assigns.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the ___ day of March, 2001.
"PARTICIPANT"
__________________________________________
Name:__________________________
HALLWOOD ENERGY CORPORATION
By_______________________________________
Name:___________________________
Title:__________________________
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SCHEDULE 1
List of Participants Executing this Form of Agreement
Xxxxxxx X. Xxxxxxxxxxx
Xxxxxx X. Xxxxxxxxxx
Xxxxx X. XxXxx
Xxxx X. Genziano
Xxxxxx X. Xxxx
Xxxxxx X. Xxxxx
Xxx Inks
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxx
Xxxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
Xxxx X. Xxxxxx
Xxxxxx X. Xxx Xxxxxxx
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