EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
April 1, 2002 by and between WESTPORT RESOURCES CORPORATION, a Nevada
corporation, whose address is Xxxxx 0000, 000 00xx Xxxxxx, Xxxxxx, Xxxxxxxx
00000 (the "Westport"), and XXXXXX X. XXXX, whose address is 00000 Xxxxx Xxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000 ("Officer").
RECITALS
WHEREAS, the Officer is a key employee of Westport and serves as
Westport's Chairman of the Board and Chief Executive Officer, and Westport and
the Officer desire to set forth herein the terms and conditions of the Officer's
employment and his compensation in the event of a termination of the Officer's
employment in connection with a Change in Control or otherwise.
WHEREAS, in the event of a Change in Control, the Officer may be
vulnerable to dismissal without regard to quality of the Officer's service, and
Westport believes that it is in the best interests of Westport to enter into
this Agreement in order to ensure fair treatment of the Officer and to reduce
the distractions and other adverse effects upon such the Officer's performance
which are inherent in such a Change in Control.
NOW, THEREFORE, for and in consideration of the foregoing, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
1. Definitions. For purposes hereof, the following terms shall have the
following meanings:
(a) "Affiliate" shall mean, with respect to any Person (as defined
herein), any other Person directly or indirectly controlling, controlled by or
under direct or indirect common control with such Person. A Person shall be
deemed to control another Person for purposes of this definition if such Person
possesses, directly or indirectly, the power (i) to vote the securities or other
ownership interests having ordinary voting power to elect a majority of the
Board of Directors of a corporation or other Persons performing similar
functions for any other type of Person, or (ii) to direct or cause the direction
of the management and policies of such Person, whether through the ownership of
voting securities, by contract, as general partner, as trustee or otherwise.
(b) "Bonus Amount" shall mean the average of the annual bonuses
earned by the Officer for the three calendar years in which bonuses were paid
preceding the year of Officer's termination, or if the Officer has been employed
by the Westport for less than three calendar years prior to termination, the
average for such lesser period of time (excluding years in which bonuses
were not paid). The Board of Directors shall determine, taking into
consideration Westport performance, target bonus amounts and other factors, the
Bonus Amount of the Officer if the Officer has not been employed by the Westport
for a period of time during which bonuses have been paid.
(c) "Cause" shall mean: (i) the Officer's material breach of any
terms of this Agreement; (ii) the Officer's willful and continued failure to
perform his or her job duties and responsibilities; (iii) the Officer's
dishonesty towards, fraud upon, crime against, deliberate or attempted injury or
bad faith action with respect to Westport or any of its Affiliates; or (iv) the
Officer's conviction for any felony crime (whether in connection with Westport's
or any of its Affiliates' affairs or otherwise); provided, however, that with
respect to clauses (i) and (ii), no such breach or failure shall constitute
Cause unless such breach or failure continues after 30 days following written
notice by Westport the Officer of such breach or failure setting forth with
specificity the nature of such breach or failure.
(d) "Change in Control" shall have occurred if (a) any "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934 (the "1934 Act")), other than a trustee or other fiduciary
holding securities under an Officer benefit plan of Westport or the current
beneficial owners or their Affiliates (as defined herein) are or become the
"beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, of more than one-half of the then outstanding voting stock of
Westport; or (b) there occurs a merger or consolidation of Westport with any
other corporation, other than a merger of consolidation which would result in
the voting securities of Westport outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least a majority of the
combined voting power of the voting securities of Westport or such surviving
entity outstanding immediately after such merger or consolidation, or the
stockholders approve a plan of complete liquidation of Westport or an agreement
for the sale or disposition by Westport of all or substantially all of
Westport's assets.
(e) "Disability" shall mean a physical or mental infirmity which
impairs the Officer's ability to perform substantially his or her duties for a
period of one hundred eighty (180) consecutive days.
(f) "Good Reason" shall include any of the following:
(i) Westport's assignment to the Officer of duties
inconsistent with, or a substantial alteration in the nature of, the
Officer's responsibilities in effect immediately prior to the Change
in Control;
(ii) (A) a reduction in either the Officer's salary or
target bonus (if a target bonus has been established for the
Officer) as each is in effect on the date of a Change in Control, or
(B) the discontinuance or material adverse alteration of any
material pension, welfare or fringe benefit enjoyed by Officer on
the date of a Change in Control, unless such action relates to a
discontinuance of benefits on a management-wide or company-wide
basis;
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(iii) Westport's relocation of the Officer to any place
in excess of 50 miles from the Officer's place of employment
immediately prior to the Change in Control without the Officer's
written consent, except for reasonably required travel by the
Officer on Westport's business;
(iv) any material breach by Westport of any provision of
this Agreement, if such material breach has not been cured within 30
days following written notice by the Officer to Westport of such
breach setting forth with specificity the nature of the breach; or
(v) any failure by Westport to obtain the assumption of
this Agreement by any successor (by merger, consolidation or
otherwise) or assign of Westport.
(g) "Person" shall mean any individual, partnership, joint venture,
firm, Westport, corporation, association, trust or other enterprise or any
government or political subdivision or any agent, department or instrumentality
thereof.
(h) "Qualifying Termination" shall mean (i) a termination by the
Officer of the Officer's employment with Westport for Good Reason within one
year after the occurrence of a Change in Control or (ii) a termination of
Officer's employment without Cause by Westport within one year after the
occurrence of a Change in Control, or (iii) a termination of Officer's
employment without Cause by Westport within six (6) months prior to the date of
a Change in Control if the Officer reasonably demonstrates that such termination
(A) was at the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change in Control or (B) otherwise arose
in connection with, or in anticipation of, a Change in Control which has been
threatened or proposed provided that, in either case, a Change in Control shall
actually have occurred. Neither a termination of Officer's employment due to
Disability nor a termination of Officer's employment due to death shall
constitute a Qualifying Termination.
(i) "Voluntary Termination" shall mean termination by Officer of
Officer's employment with Westport, but shall not include constructive
termination by Westport by reason of material breach of this Agreement by
Westport. Voluntary Termination shall include a termination of Officer by
Westport after its receipt of a notice of an otherwise Voluntary Termination
from Officer.
2. Service.
(a) Position. Officer agrees to be employed by and to serve Westport
as Chairman and Chief Executive Officer, and Westport agrees to employ and
retain Officer in such capacity in accordance with the terms of this Agreement.
Officer shall have powers as determined by Westport's Board of Directors and
duties commensurate with his position as Chairman and Chief Executive Officer of
Westport.
(b) Duties. The Officer shall assume and discharge the
responsibilities of the Chairman and Chief Executive Officer (as set forth in
the Bylaws of Westport), as well as such other responsibilities as may be
assigned to him by the Board of Directors of Westport. Officer
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shall perform his responsibilities to the best of his abilities, shall comply
with the general management policies of Westport as announced by the Board of
Directors from time to time and shall devote all of his business time, skill and
attention to the good faith best efforts performance of his responsibilities and
the affairs of Westport. The Officer will engage in no other business or
activity for compensation during the term of this Agreement except with the
prior written consent of Westport. The Officer shall always be subject to the
directions of the Board of Directors, to whom Officer shall report directly, in
the performance of his responsibilities, and nothing herein shall affect the
power of the Board of Directors to limit, alter, restrict, or remove the
authority of the Officer. Officer's principal place of business with respect to
his services to Westport shall be at its offices located in the Denver, Colorado
metropolitan area or other location reasonably acceptable to Officer. Officer
shall be required at various times to travel as part of his duties.
3. Term of Employment.
(a) Basic Term. The initial term of employment of Officer by
Westport shall be from the date hereof through May 31, 2005 (the "Term") unless
terminated earlier pursuant to this Agreement. If a Change in Control has not
occurred within the Term of this Agreement, this Agreement shall automatically
expire. Following the Term, this Agreement may be renewed only by written
agreement of the parties for successive one-year periods.
(b) Change of Control. If a Qualifying Termination occurs during the
Term, this Agreement shall continue in full force and effect and shall not
terminate until the Officer shall have received the severance compensation
provided hereunder.
4. Salary, Benefits and Bonus Compensation.
(a) Base Salary. Commencing January 1, 2002, Westport agrees to pay
to Officer a "Base Salary" of $381,516.96 per annum, payable on Westport's
regularly established payroll payment dates. The Base Salary shall be subject to
modification for each calendar year or portion thereof determined in the sole
discretion of the Board of Directors. In the absence of and until any salary
determination by the Board, Officer's Base Salary for a particular calendar year
shall be identical to Officer's Base Salary in effect on December 31st of the
immediately preceding calendar year.
(b) Benefits.
(i) Officer Benefits. Officer shall be eligible to participate
in such of Westport's benefit and compensation plans as may be generally
available to employees of Westport, including participation in Westport's health
insurance plan, bonus plan, and its 401(k) program. All such benefit plans may
be amended or discontinued in the sole discretion of Westport.
(ii) Business Expenses. Westport shall reimburse Officer for all
reasonable and necessary expenses incurred in carrying out his duties under this
Agreement, including travel and entertainment expenses. Officer shall present
monthly to Westport an
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itemized account of such expenses in such form as may be required by Westport.
(iii) Auto. Officer shall be provided with an appropriate
Westport automobile to be used for business purposes in the course of performing
his duties described in Section 1(b). The automobile may also be used by the
Officer for personal travel, and, in such event, the Officer shall maintain
records regarding automobile use as required by federal tax regulations. The
Officer's records of automobile use shall be available to Westport upon request.
(iv) Vacation and Health Club. Officer shall be entitled to
vacation time generally available to executive employees of Westport (but no
less than four weeks per year), during which vacation time his compensation
shall be paid in full. Officer shall be eligible to use Westport's health club
membership and Petroleum Club membership.
(v) Stock Option. In addition to the stock options previously
granted to Officer by Westport, Officer shall be granted stock options in such
amounts and for such vesting periods as shall be determined by the Compensation
Committee of the Board of Directors of Westport pursuant to Westport's Stock
Incentive Plan (the "Plan"). Such grants shall be evidenced by stock option
agreements to be entered into by and between Westport and Officer pursuant to
the Plan.
(vi) Severance. If, prior to May 31, [2005], Officer is subject
to a termination of his employment by Westport other than for Cause, Westport
shall pay Officer a sum equal to three times Officer's then applicable annual
Base Salary and three times the average of the last three years' bonuses.
(c) Other Benefits. Nothing in this Article 4 shall be deemed to limit
or restrict any right or benefit of Officer under Westport's Certificate of
Incorporation, Bylaws or other documents or agreements of Westport applicable to
Officer.
5. Termination of Employment.
(a) Termination for Cause. Termination for Cause of Officer's
employment may be effected by Westport at any time without liability except as
specifically set forth in this Section 5(a). The termination shall be effected
by written notification to Officer and shall be effective as of the time set
forth in such notice. At the effective time of a termination for Cause, Officer
immediately shall be paid all accrued Base Salary and any reasonable and
necessary business expenses incurred by Officer in connection with his duties
hereunder, all to the effective date of termination. In addition, Officer shall
be entitled to benefits under any benefit plans of Westport in which Officer is
a participant to the full extent of Officer's rights under such plans.
(b) Termination Other Than for Cause. Westport may effect a
termination of the Officer's employment other than for Cause at any time for any
or no reason upon giving written notice to Officer of such termination and
without liability except as specifically set forth in this Section 5(b).
Expiration of the Term of this Agreement shall not be deemed a termination other
than for Cause within the meaning of this paragraph. The termination shall be
effective as
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of the time set forth in such notice. At the effective date of any termination
other than for Cause, upon the Officer's execution of a "Release and
Confidentiality Agreement" substantially in the form attached hereto as Exhibit
A, Officer shall immediately be paid all accrued Base Salary, severance payments
pursuant to Section 4(b)(vi) and any reasonable and necessary business expenses
incurred by Officer in connection with his duties hereunder, all to the
effective date of termination. In addition, Officer shall be entitled to
benefits under any benefit plans of Westport in which Officer is a participant
to the full extent of Officer's rights under such plans.
(c) Disability. If, during the term of this Agreement, Officer, in
the reasonable judgment of the Board of Directors of Westport, has failed to
perform his duties under this Agreement on account of illness or physical or
mental disability, which condition renders Officer incapable of performing the
duties of this office, and such condition continues for a period of more than
three (3) months, Westport shall have the right to terminate Officer's
employment hereunder by written notification to Officer. In the event of such
termination, Westport shall pay to Officer all accrued Base Salary and any
reasonable and necessary business expenses incurred by Officer in connection
with his duties hereunder, all to the effective date of termination, and
severance payments pursuant to Section 4(b)(vi). In addition, Officer shall be
entitled to benefits under any benefit plans of Westport in which Officer is a
participant to the full extent of Officer's rights under such plans.
(d) Death. In the event of Officer's death during the Term of this
Agreement, Officer's employment shall be deemed to have terminated as of the
last day of the month during which his death occurs, and Westport shall pay
promptly to his estate all accrued Base Salary and any reasonable and necessary
business expenses incurred by Officer in connection with his duties hereunder,
all to the effective date of termination. Officer's estate shall also be
entitled to benefits under any benefit plans of Westport in which Officer is a
participant to the full extent of Officer's rights under such plans.
(e) Voluntary Termination. In the event of a Voluntary Termination
by Officer, Westport shall immediately pay all accrued Base Salary and any
reasonable and necessary business expenses incurred by Officer in connection
with his duties hereunder, all to the effective date of termination. In
addition, Officer shall be entitled to benefits under any benefit plans of
Westport in which Officer is a participant to the full extent of Officer's
rights under such plans.
(f) Qualifying Termination. If a Qualifying Termination occurs, the
Officer shall immediately be paid all earned and accrued salary due and owing to
the Officer, any bonus compensation to the extent earned, vested deferred
compensation (other than pension plan or profit sharing plan benefits, which
will be paid in accordance with the applicable plan), any benefits then due
under any plans of Westport in which the Officer is a participant, any accrued
and unpaid vacation pay and any appropriate business expenses incurred by the
Officer in connection with his duties, all to the date of termination
(collectively, "Accrued Compensation"). The Officer shall also be entitled to
the severance compensation described in Section 6.
6. Severance Compensation Upon a Qualifying Termination. The Officer
shall be entitled to the following upon a Qualifying Termination under the
conditions set forth below:
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(a) Condition to Payment of Severance Compensation. Upon the
Officer's execution of a "Release and Confidentiality Agreement" substantially
in the form attached hereto as Exhibit A, Westport shall pay to the Officer
severance compensation in an aggregate amount equal to three times the sum of
the Officer's Base Salary and the Bonus Amount (the "Severance Amount").
(b) Computation and Payment of Severance Amount. The Severance
Amount shall be computed by using the higher of the salary paid to the Officer:
(a) immediately preceding the Change in Control, or (b) immediately preceding
the Officer's Qualifying Termination. The Severance Amount shall be paid without
prejudice to the Officer's right to receive all Accrued Compensation. The
Severance Amount shall be paid to the Officer in a lump sum within thirty (30)
days of the execution of the Release and Confidentiality Agreement. The
Severance Amount shall be paid irrespective of the Officer's employment status
with any other organization or self-employment; provided, however, that if the
Officer should violate the terms of the Release and Confidentiality Agreement,
Westport shall be under no further obligation to continue the payments or
benefits hereunder.
(c) Certain Welfare Benefits. For a number of months equal to
thirty-six (36) (the "Continuation Period"), Westport shall at its expense
continue on behalf of the Officer and his or her dependents and beneficiaries
the life insurance, disability, medical, dental and hospitalization coverages
and benefits provided to the Officer immediately prior to the Change in Control
or, if greater, the coverages and benefits provided at any time thereafter. The
coverages and benefits (including deductibles and costs) provided in this
Section 4(c) during the Continuation Period shall be no less favorable to the
Officer and his or her dependents and beneficiaries, than the most favorable of
such coverages and benefits referred to above. Westport's obligation hereunder
with respect to the foregoing coverages and benefits shall be reduced to the
extent that the Officer obtains any such coverages and benefits pursuant to a
subsequent employer's benefit plans, in which case Westport may reduce any of
the coverages or benefits it is required to provide the Officer hereunder so
long as the aggregate coverages and benefits of the combined benefit plans is no
less favorable to the Officer than the coverages and benefits required to be
provided hereunder. Neither this Section 6(c) nor any other provision of this
Agreement shall be interpreted so as to reduce any amounts otherwise payable, or
in any way diminish the Officer's rights as an Officer of Westport, whether
existing now or hereafter, under any benefit, incentive, retirement, stock
option, stock bonus, stock purchase plan, or any employment agreement or other
plan or arrangement.
(d) Equity Grants. Immediately prior to a Change in Control, (i) all
options granted by Westport to the Officer shall be 100% vested and immediately
exercisable, and the exercise term thereof shall end upon the earlier of: the
first anniversary of the date of termination of employment and the end of the
original exercise term, and (ii) all restrictions shall lapse with respect to
all grants of restricted stock held by Officer.
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7. Excise Tax Limitation.
(a) Gross-Up Payment. In the event it shall be determined that any
payment or distribution of any type to or for the benefit of the Officer, by
Westport, any Affiliate, any person who acquires ownership or effective control
of Westport or ownership of a substantial portion of Westport's assets (within
the meaning of Section 280G of the Code and the regulations thereunder) or any
affiliate of such Person, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (the "Total
Payments"), is or will be subject to the excise tax imposed by Section 4999 of
the Code or any interest or penalties with respect to such excise tax (such
excise tax, together with any such interest and penalties, are collectively
referred to as the "Excise Tax"), then the Officer shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount such that after
payment by the Officer of all taxes (including any interest or penalties imposed
with respect to such taxes), including any income tax, employment tax or Excise
Tax, imposed upon the Gross-Up Payment, the Officer retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.
Notwithstanding the foregoing provisions of this Section 7(a), if it shall be
determined that the Officer is entitled to a Gross-Up Payment, but that the
Total Payments would not be subject to the Excise Tax if the Total Payments were
reduced by an amount that is less than 10% of the portion of the Total Payments
that would be treated as "parachute payments" under Section 280G of the Code,
then the amounts payable to the Officer under this Agreement shall be reduced to
the maximum amount that could be paid to the Officer without giving rise to the
Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to the
Officer. The reduction of the amounts payable hereunder, if applicable, shall be
made by reducing first the payment under Section 6(a), unless an alternative
method of reduction is elected by the Officer. For purposes of reducing the
Total Payments to the Safe Harbor Cap, only amounts payable under this Agreement
(and no other amounts) shall be reduced.
(b) Determination by Accountant. All mathematical determinations,
and all determinations as to whether any of the Total Payments are "parachute
payments" (within the meaning of Section 280G of the Code), that are required to
be made under this Section, including determinations as to whether a Gross-Up
Payment is required, the amount of such Gross-Up Payment, the reduction of the
Total Payments to the Safe Harbor Cap, amounts relevant to the last sentence of
this Section 7(b), and the assumptions to be utilized in arriving at such
determinations, shall be made at Westport's expense by an independent nationally
recognized accounting firm selected by Westport (the "Accounting Firm"). The
Accounting Firm shall provide its determination (the "Determination"), together
with detailed supporting calculations and documentation to Westport and the
Officer by no later than ten (10) days following the Termination Date, if
applicable, or such earlier time as is requested by Westport or the Officer (if
the Officer reasonably believes that any of the Total Payments may be subject to
the Excise Tax). If the Accounting Firm determines that no Excise Tax is payable
by the Officer, it shall furnish the Officer and Westport with a written
statement that such Accounting Firm has concluded that no Excise Tax is payable
(including the reasons therefor) and that the Officer has substantial authority
not to report any Excise Tax on his or her federal income tax return. If a
Gross-Up Payment is determined to be payable, it shall be paid to the Officer
within twenty (20) days after the Determination (and all accounting calculations
and other material supporting the Determination) is delivered to Westport by the
Accounting Firm. Any determination by the Accounting Firm shall be binding upon
Westport and the Officer, absent manifest error. As a result of uncertainty in
the application of Section 4999 of the Code at the time of the Determination
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by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made
by Westport should have been made ("Underpayment"), or that Gross-Up Payments
will have been made by Westport which should not have been made
("Overpayments"). In either such event, the Accounting Firm shall determine the
amount of the Underpayment or Overpayment that has occurred. In the case of an
Underpayment, the amount of such Underpayment shall be promptly paid by Westport
to or for the benefit of the Officer. In the case of an Overpayment, the Officer
shall, at the direction and expense of Westport, take such steps as are
reasonably necessary (including the filing of returns and claims for refund),
follow reasonable instructions from, and procedures established by, Westport,
and otherwise reasonably cooperate with Westport to correct such Overpayment,
provided, however, that (i) the Officer shall not in any event be obligated to
return to Westport an amount greater than the net after-tax portion of the
Overpayment that he or she has retained or has recovered as a refund from the
applicable taxing authorities and (ii) this provision shall be interpreted in a
manner consistent with the intent to make the Officer whole, on an after-tax
basis, from the application of the Excise Tax, it being understood that the
correction of an Overpayment may result in the Officer repaying to Westport an
amount which is less than the Overpayment.
(c) Internal Revenue Service Claims. The Officer shall notify
Westport in writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by Westport of the Gross-up Payment. Such
notification shall be given as soon as practicable but no later than 10 business
days after the Officer is informed in writing of such claim and shall apprise
Westport of the nature of such claim and the date on which such claim is
requested to be paid. The Officer shall not pay such claim prior to the
expiration of the 30-day period following the date on which he or she gives such
notice to Westport (or such shorter period ending on the date that any payment
of taxes with respect to such claim is due). If Westport notifies the Officer in
writing prior to the expiration of such period that it desires to contest such
claim, the Officer shall:
(i) give Westport any information reasonably requested
by Westport relating to such claim,
(ii) take such action in connection with contesting such
claim as Westport shall reasonably request in writing from time to
time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by
Westport,
(iii) cooperate with Westport in good faith in order
effectively to contest such claim, and
(iv) permit Westport to participate in any proceedings
relating to such claim;
provided, however, that Westport shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Officer harmless, on an
after-tax basis, for any Excise Tax, income tax or employment tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limiting the foregoing
provisions of this Section 7(c),
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Westport shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Officer to pay the tax
claimed and xxx for a refund or contest the claim in any permissible manner, and
the Officer agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as Westport shall determine; provided, however, that if
Westport directs the Officer to pay such claim and xxx for a refund, Westport
shall advance the amount of such payment to the Officer, on an interest-free
basis, and shall indemnify and hold the Officer harmless, on an after-tax basis,
from any Excise Tax, income tax or employment tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitation relating to payment of taxes for
the taxable year of the Officer with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore,
Westport's control of the contest shall be limited solely to such contested
amount. Furthermore, Westport's control of the contest shall be limited to
issues with respect to which a Gross-up Payment would be payable hereunder and
the Officer shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.
8. Nature of Rights. The Officer shall have the status of a mere
unsecured creditor of Westport with respect to his right to receive any payment
under this Agreement. This Agreement shall constitute a mere promise by the
Westport to make payments in the future of the benefits provided for herein. It
is the intention of the parties hereto that the arrangements reflected in this
Agreement shall be treated as unfunded for tax purposes and, if it should be
determined that Title I of ERISA is applicable to this Agreement, for purposes
of Title I of ERISA. Nothing in this Agreement shall prevent or limit the
Officer's continuing or future participation in any benefit, bonus, incentive or
other plan or program provided by Westport and for which the Officer may
qualify, nor shall anything herein limit or reduce such rights as the Officer
may have under any other agreements with Westport. Amounts which are vested
benefits or which the Officer is otherwise entitled to receive under any plan or
program of Westport shall be payable in accordance with such plan or program,
except as explicitly modified by this Agreement.
9. Full Settlement. Westport's obligation to provide the payments and
benefits provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which Westport may have against the
Officer or others. In no event shall the Officer be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Officer under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Officer obtains other employment except
as set forth in Section 6(c) with respect to certain welfare benefits. Westport
agrees to pay as incurred, to the full extent permitted by law, all legal fees
and expenses (collectively, "Legal Fees") which the Officer may reasonably incur
as a result of any contest (including as a result of any contest by the Officer
about the amount of any payment pursuant to this Agreement) by Westport, the
Officer or others of the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance thereof, plus in
each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the
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Internal Revenue Code of 1986, as amended (the "Code"); provided, however, that
Westport shall not pay the Legal Fees: (A) to the extent they were incurred with
respect to a claim brought by the Officer in bad faith and/or (B) to the extent
they were incurred where a determination has been made (either by a court or as
part of a settlement agreement) that the Officer is not entitled to
substantially all the amounts claimed by Officer whether or not such claims were
made in bad faith.
10. Protection of Westport's Business.
(a) No Competition. Officer shall not, for twelve (12) months
following the Voluntary Termination of his employment, work as an employee or
independent contractor or become an investor or owner in or lender to any
business, corporation, partnership or other entity (a "Competing Business")
where such employment with, investment in or service to the Competing Business
would aid, entail or result in such Competing Business' competition with
Westport in any project or transaction of Westport of which Officer was aware or
should have been aware during the term of his employment with Westport.
(b) No Hire of Other Officers or Contractors. Officer agrees that
for a period of twelve (12) months from and after the date following the
termination of his employment, whether for Cause or by Voluntary Termination or
by expiration of the Term or by Qualifying Termination or otherwise, he shall
not, directly or indirectly, as an employee of or consultant to any Person, or
for himself or on behalf of, or in connection with, any Person, solicit or
attempt to solicit, direct or take away any Person who was an employee, agent,
or contractor of Westport at any time during the twelve-month period prior to
the termination of Officer's employment or who is an employee, agent or
contractor for Westport during the twelve-month period following the termination
of Officer's employment; provided, however, that this provision shall not apply
to the solicitation or attempted solicitation of any Person known in the
industry in which Westport is engaged to have performed services in the industry
generally and not as an employee of any single entity in the industry. Westport
may waive the restriction contained in this Section 10(b) as to any employee at
any time, but any such waiver shall not be considered a waiver of the future
application of this provision nor shall it be considered a waiver as to any
employee other than the one to whom it applies.
11. Confidentiality.
(a) Confidential Information and Materials. All of the Confidential
Information and Materials, as defined herein, are and shall continue to be the
exclusive confidential property and trade secrets of Westport. Such Confidential
Information and Materials shall include only such information that is
proprietary to Westport and shall not include any information that becomes part
of the public domain through no fault of Officer. Confidential Information and
Materials have been or will be disclosed to Officer solely by virtue of his
employment with Westport and solely for the purpose of assisting him in
performing his duties for Westport. "Confidential Information and Materials"
refers to the non-public organization structure and ownership of Westport, its
shareholders, its advisors and advisors to its shareholders, its affiliates and
the affiliates of any of its shareholders and their advisors and all information
belonging to or used by Westport or Westport's clients or associates relating to
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internal operations, procedures and policies, finances, income, profits,
business strategies, pricing, billing information, compensation and other
personnel information, client contacts, sales lists, employee lists,
geotechnical information of every sort and character, technology, land status,
exploration and acquisition plans and programs, costs, marketing plans,
developmental plans, drilling plans, inventions, computer program manuals,
computer programs, and computer system designs (to the extent such manuals,
programs and designs are created by or for Westport and are not off-the-shelf
manuals, programs and designs) and trade secrets of every kind and character,
whether or not they constitute a trade secret under applicable law and whether
developed by Officer during or after business hours.
(b) Non-disclosure and Non-use. Officer may use Confidential
Information and Material while an employee of Westport and in the course of that
employment to the extent deemed necessary by the Board of Directors for the
performance of Officer's responsibilities or as otherwise required by law. Such
permission expires upon termination of his employment with the Company or on
notice from Westport. Officer shall not, either during or after his employment
with Westport, disclose any Confidential Information or Materials to any person,
firm, corporation, association or other entity for any reason or purpose unless
expressly permitted by Westport in writing or unless required by law to be
disclosed. Officer shall not use, in any manner other than to further Westport's
business, any Confidential Information or Materials. Upon termination of his
employment, Officer shall immediately return all Confidential Information or
Materials or other property of Westport, its associates or its potential
associates in his possession or control.
12. Remedies.
(a) Equitable Remedies. The service rendered by Officer to Westport
and the information disclosed to Officer during his employment are of a unique
and special character, and any breach of Sections 10 or 11 hereof will cause
Westport irreparable injury and damage which will be extremely difficult to
quantify. The parties agree that because of unquantified risks and intangibles
which are impossible to measure, Westport will be entitled to, in addition to
all other remedies available to it, injunctive relief to prevent a breach and to
secure the enforcement of all provisions of Sections 10 and 11. Injunctive
relief may be granted immediately upon the commencement of any such action
without notice to Officer, which notice Officer hereby specifically waives.
(b) Arbitration. In the event any controversy arises with respect
to this Agreement, it shall be arbitrated in accordance with the rules and
procedures of the American Arbitration Association with the following
limitations:
(i) The laws of the State of Colorado shall be applied to the
interpretation and resolution of the controversy. The location of the
arbitration shall be in the Denver Metropolitan Area of Colorado.
(ii) The parties shall be entitled to conduct expedited
discovery proceedings in accordance with the Colorado Rules of Civil Procedure
and such rights of
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discovery may be enforced by the appropriate court by filing a petition for
compliance, in regard to which the parties hereto agree to abide timely and
fully. The discovery period shall in no event exceed a period of sixty (60) days
from the date the arbitration response is filed by the responding party.
(iii) Arbitration procedures shall be conducted substantially
in accordance with the Rules of Civil Procedure in the State of Colorado and the
Rules of Evidence of said State.
(iv) The award of arbitration may be reduced to judgment in
accordance with the rules of Civil Procedure of the State of Colorado and/or the
rules or laws of any other jurisdiction and the Colorado Uniform Arbitration
Act.
(v) In the event one party willfully, after ten (10) days
notice of his failure or refusal, fails or refuses to comply timely with the
arbitration procedure, that party shall be deemed to have conclusively waived
its right to participate in the arbitration and the nondefaulting party may
either proceed to arbitration, the decision of which shall be binding upon the
defaulting party, or may proceed in an action in court.
(vi) The prevailing party in any arbitration may be entitled to
an award of attorneys' fees and all costs to be paid by the losing party in the
arbitration as determined by the arbitrators.
(vii) In the event a court of competent jurisdiction or panel
of arbitrators finds any of the provisions of this section 12(b) to be so
overbroad as to be unenforceable, it is the parties' intent that with respect to
such jurisdiction such provision be reduced in scope by the Court, but only to
the extent deemed necessary by the Court or arbitrators to render the provision
reasonable and enforceable, keeping in mind that it is the parties' intent to
give the Company the broadest possible legal protection.
(viii) In no event shall any monetary dispute between the
parties be arbitrated or litigated until there is an aggregated dollar amount of
not less than $10,000.00 in dispute.
13. Miscellaneous.
(a) Severability. Should a court or other body of competent
jurisdiction determine that any provision of this Agreement is excessive in
scope or otherwise invalid or unenforceable, such provision shall be adjusted
rather than voided, if possible, so that it is enforceable to the maximum extent
possible.
(b) Withholding. All compensation and benefits to the Officer
hereunder shall be reduced by all federal, state, local and other withholdings
and similar taxes and payments required by applicable law. Westport may withhold
amounts due it from Officer from amounts due under this Agreement to Officer.
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(c) Entire Agreement; Modification; Waiver. This Agreement
represents the entire agreement between the parties and supersedes any prior
agreements between the parties, written or oral, with respect to the subject
matter covered hereby, including without limitation the Employment Agreement
between the Officer and Westport dated as of May 8, 2000. This Agreement may be
amended, modified, superseded or canceled, and any of the terms hereof may be
waived, only by a written instrument executed by each party hereto or, in the
case of a waiver, by the party waiving compliance. The failure of any party at
any time or times to require performance of any provision hereof shall not
affect such party's right at a latter time to enforce the same. No waiver by any
party of the breach of any provision contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such breach or of any other
term of this Agreement.
(d) Applicable Law. This Agreement shall be construed under and
governed by the laws of the State of Colorado.
(e) Successors and Assigns. This Agreement shall be binding upon,
and shall issue to the benefit of, Westport's successors and assigns and the
Officer's heirs and assigns.
(f) Nontransferability by Officer. Neither this Agreement nor any
right or interest hereunder shall be assignable or transferable by the Officer,
his or her beneficiaries or legal representatives, except by will or by the laws
of descent and distribution.
(g) Notices. All notices and other communications under this
Agreement shall be in writing and shall be given by hand delivery, or
first-class mail, certified or registered with return receipt requested, or by
commercial overnight courier or by facsimile and shall be deemed to have been
duly given upon hand delivery, three (3) days after mailing, the first business
day following delivery to a commercial overnight courier or upon receipt of a
facsimile, addressed as follows
If to the Company:
Westport Resources Corporation.
000 Xxxxxxxxxxx Xxxxxx, #0000
Xxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Xx. Xxxxxxx X. Xxxx Partners
Attention: Mr. Xxxxxxx Xxxxxxx
Xxxxx Court
00 Xxxx Xxxxxx Xx. Xxxxx
Xxxxxx XX XX0X 0XX
Facsimile: 011-44-207-321-5242
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Equitable Resources Energy Co.
Xxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxx
Facsimile: (000) 000-0000
Belfer Management, LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
If to Officer:
Xxxxxx X. Xxxx
00000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Any party may change such party's address for notices by notice given pursuant
to this Section 13(g).
(h) Survival of Westport's Obligation. Westport's obligations
hereunder shall not be terminated by reason of any liquidation, dissolution,
bankruptcy, cessation of business or similar event relating to Westport. This
Agreement shall not be terminated by any merger or consolidation or other
reorganization of Westport. In the event any such merger, consolidation or
reorganization shall be accomplished by transfer of stock or by transfer of
assets or otherwise, the provisions of this Agreement shall be binding upon and
insure to the benefit of the surviving or resulting corporation or person. This
Agreement shall be binding upon and inure to the benefit of the executors,
administrators, heirs, successors and assigns of the parties; provided, however,
that except as provided in this Section, this Agreement shall not be assignable
either by Westport or by Officer.
(i) Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one and the same
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
April 1, 2002.
WESTPORT RESOURCES CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
OFFICER:
/s/ Xxxxxx X. Xxxx
---------------------------------
Name: Xxxxxx X. Xxxx
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