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EXHIBIT 10.31
EMPLOYMENT AND UNITED STATES OF AMERICA
STOCK OWNERSHIP
AGREEMENT STATE OF LOUISIANA
BY AND BETWEEN PARISH OF ORLEANS
ENERGY PARTNERS, LTD.
AND
XXXXXXX O'XXXXXX XXXXXXXX
THIS EMPLOYMENT AND STOCK OWNERSHIP AGREEMENT (the "Agreement"),
entered into in New Orleans, Louisiana on this 2nd day of October, 2000 by and
between Xxxxxxx O'Xxxxxx Xxxxxxxx, an individual of the full age of majority
domiciled in the Parish of Orleans, State of Louisiana (hereinafter called
"Employee") and Energy Partners, Ltd., a corporation organized and existing
under the laws of the State of Delaware (hereinafter called "Company"),
represented herein by its duly authorized President, Xxxxxxx X. Xxxxxxxx.
1.0 TERMS AND CONDITIONS OF EMPLOYMENT.
1.1 Length of Employment. In consideration for the compensation
set forth in Section 1.2, Employee shall be employed as
Company's Vice President, General Counsel and Secretary for a
period of three (3) years from the date of execution of this
Agreement (the "Term"). Company may terminate Employee's
employment at any time for "Cause". "Cause" as used herein
shall consist of the following: (a) willful refusal to perform
assigned functions; (b) insubordination; (c) embezzlement; (d)
intoxication or drug abuse which interferes with job
performance; (e) wrongful disclosure of confidential Company
information; (f) conflict of interest which is undisclosed and
not Board approved; (g) conviction of a felony; (h) engaging,
directly or indirectly, in a business which is competitive to
the business of Company, as an employee, officer, director,
shareholder, partner, agent or independent contractor which is
undisclosed and not Board approved; and (i) incompetence.
Within thirty (30) days of execution of this Agreement,
Employee shall prepare a written disclosure statement of all
business relationships in which she may continue to be an
employee, officer, director, shareholder, partner, agent or
independent contractor. A Cause determination shall be in
Company's sole discretion.
1.2 Consideration. As compensation, Employee shall receive a
minimum annual salary of $175,000 payable in accordance with
the normal payroll practices of Company. Employee will receive
annual salary reviews. Company will reimburse Employee for
rea-
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sonable moving expenses in connection with Employee's
relocation to New Orleans. In addition, Employee will
participate with other senior executives of Company in
compensation and benefit plans in effect from time to time,
including the 401(k) plan and bonus program, and health and
dental benefits.
1.3 Vacation Time. Employee shall be entitled to six (6) weeks of
paid vacation per calendar year, which shall be taken at times
mutually agreeable to Employee and Company; provided, however,
that for calendar year 2000, Employee's vacation time shall be
eight (8) days. The Company, in its discretion, may advance
vacation days as requested by Employee. The vacation time must
be used in each calendar year and will not be carried forward
to succeeding years.
1.4 Indemnity. Company shall indemnify and hold harmless Employee
from and against any and all claims and liabilities to which
Employee may be or become subject by reason of Employee now or
hereafter being an employee, officer and/or director of the
Company and/or by reason of Employee's alleged acts or
omissions, whether or not Employee continues to be such
employee, officer and/or director at the time when any such
claim or liability is asserted, to the fullest extent
permitted by Delaware law and Company's charter documents and
by-laws as in effect from time to time, and shall reimburse
Employee for all legal and other expenses reasonably incurred
by Employee in connection therewith to the extent permitted.
1.5 Non-Competition Agreement. Company and Employee acknowledge
that Company is engaged in the business of owning, operating,
producing and exploring for mineral interests, and other
related activities. For a period of two (2) years following
termination of employment (the last day on which Employee is
actively engaged in employment on Company's behalf), Employee
will not compete directly or indirectly with Company as to any
existing contract to which Company is a party, and/or as to
any business of Company evidenced by contracts, agreements,
letters of intent, confidentiality agreements, or written
proposals in existence on the date of termination of
employment. The parties acknowledge that the remedy at law for
any breach, whether jointly or severally, of this
non-competition clause of this Agreement, all of which is
deemed material, will be inadequate and the parties hereby
agree that Company shall be entitled to injunctive relief by a
court of competent jurisdiction enjoining and restraining her
from the continuance of any such act which constitutes a
breach hereof. In addition to injunctive relief, Company
reserves the right to seek any damages to which it may be
entitled as a consequence of Employee's breach of this
Agreement.
2.0 SHARES.
2.1 Receipt of Shares. Subject to the terms and conditions of this
Agreement, Employee will receive on the date of the initial
public offering of Company's common stock (the "IPO") a number
of shares of restricted common stock of the Company determined
by dividing $350,000 by the per share offering price in the
IPO (rounding upward to the
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nearest whole share). Such shares will vest as follows: 10/35
on the second anniversary of the date of this Agreement and
the remaining 25/35 on the third anniversary of the date of
this Agreement.
2.2 Receipt of Options. Subject to the terms and conditions of
this Agreement and the terms and conditions of Company's 2000
Long Term Stock Incentive Plan ("Stock Incentive Plan"),
Employee will receive on the date of the IPO an option to
purchase 20,000 shares of common stock of the Company at a per
share exercise price equal to the per share offering price in
the IPO. Such option shall vest and become exercisable in
three installments as follows: one-third on the first
anniversary of the date of this Agreement, one-third on the
second anniversary of the date of this Agreement, and the
remaining one-third on the third anniversary of the date of
this Agreement. Employee must exercise each option within ten
(10) years from the date of this Agreement or the option will
lapse. Employee shall be eligible to receive additional option
grants under the Stock Incentive Plan beginning in 2001.
2.3 Transfer of Shares. No shares may be sold, assigned, pledged,
transferred or otherwise alienated (each, "Transferred")
except in accordance with and pursuant to the terms and
conditions of this Agreement, including without limitation
Section 3.4 of this Agreement.
2.4 Restrictions on Transfer. Any Transfer or attempted Transfer
by Employee in violation of this Agreement shall be null and
void and of no force or effect whatever. Any purported
transferee shall not be deemed to be a shareholder of Company
and shall not be entitled to receive a new certificate or any
distributions on or with respect to the shares owned by
Employee. Employee hereby acknowledges the reasonableness of
the restrictions on Transfer imposed by this Agreement in view
of Company's purposes and the relationship of Employee with
Company. Accordingly, the restrictions on Transfer contained
herein shall be specifically enforceable. Employee hereby
further agrees to hold Company and each other shareholder
(each shareholder's successors and assigns) wholly and
completely harmless from any cost, liability or damage
(including, without limitation, liabilities for income taxes
and costs of enforcing this indemnity) incurred by any of such
indemnified persons as a result of a Transfer or attempted
Transfer in violation of this Agreement.
2.5 Legend. In addition to other legends required under applicable
securities laws, the shares which are subject to this
Agreement shall contain the following legend:
"The shares represented by this certificate may not be
sold or otherwise transferred except pursuant to the
Employment and Stock Ownership Agreement, dated
October 2, 2000, by and between the shareholder to
whom this certificate was issued, the shareholder's
spouse and Energy Partners, Ltd., a copy of which is
on file in the office of the corporate Secretary of
the Company."
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All shares of common stock hereafter issued to Employee or to
Employee's beneficiaries, heirs, successors in interest,
representatives or assigns with respect to any shares subject
to this Agreement, whether by stock split, stock dividend or
otherwise, shall bear the same endorsement and be subject to
all the terms and conditions hereof.
2.6 Shareholder Rights Upon Judgment of Separation or Divorce. In
the event of a judgment of separation or divorce involving
Employee in which all or any portion of Employee's shares are
transferred to Employee's spouse/ex-spouse, Employee shall
have sixty (60) days from the date of such transfer to
purchase said shares from the spouse/ex-spouse. If the Shares
are owned as community property or in joint ownership,
Employee's spouse shall execute this Agreement in
acknowledgment and agreement to such sale of shares. The
spouse, by executing this Agreement, shall also acknowledge
and agree that following such sale of their shares, the spouse
will have no further interest whatsoever in this Agreement or
any claims under it. This provision shall be inapplicable if
any Employee's spouse/ex-spouse is also an employee of the
Company and holds shares in his own name.
2.7 Interests of Employee Spouse Upon Death. By executing this
Agreement, the spouse of Employee agrees to execute within
sixty (60) days hereof, a valid last will and testament
containing a legacy to Employee consisting of all interests in
the shares that Employee owns jointly or through a community
property regime. The last will and testament shall also
contain a provision that should such disposition impinge upon
the legitime of the spouse's forced heirs, that Employee shall
have the right within six (6) months of the spouse's death to
purchase such shares.
2.8 Employee's For Cause Termination. Company may terminate
Employee's employment and all of the Company's obligations
under this Agreement at any time for Cause as defined in
Section 1.1 above upon written notice. If Employee is
terminated for Cause, all stock received pursuant to Section
2.1 and vested as set forth in Section 2.1 or Section 2.11
shall be the property of Employee, but any stock that has not
vested as set forth in Section 2.1 or Section 2.11 on the
termination date for Cause will be forfeited. Similarly, if
Employee is terminated for Cause, all options described in
Section 2.2 which have vested as set forth in Section 2.2 or
2.11 prior to termination for Cause shall be the property of
and exercisable by Employee for a 30 day period following
termination, but any option rights which have not vested prior
to termination for Cause will be forfeited.
2.9 Employee's Termination Upon Death or Disability. Employee's
employment and Company's obligations under this Agreement
shall terminate automatically, effective immediately and
without any notice, upon Employee's death or a determination
of Disability of Employee. For purposes of this Agreement,
"Disability" means the inability of Employee, due to a
physical or mental impairment, for 90 days (whether or not
consecutive) during any period of 360 days to perform the
duties and functions contemplated by this Agreement. A
determination of Disability shall be made by the Board of
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Directors in consultation with a physician satisfactory to
Company, and Employee shall cooperate with the efforts to make
such determination. Any such determination shall be conclusive
and binding on the parties. Any determination of Disability
under this Section 2.9 is not intended to alter any benefits
any party may be entitled to receive under any long-term
disability insurance policy maintained by either Company or
Employee with respect to Employee, which benefits shall be
governed solely by the terms of any such insurance policy. If
Employee is terminated due to death or disability, as defined
above, (i) all stock which has vested prior to termination
shall be the property of Employee and any stock which has not
vested prior to termination will be forfeited, and (ii) all
stock options will be governed by the terms of the Stock
Incentive Plan and all vested stock options will remain
exercisable for 36 months following the date of death or
disability.
2.10 Employee's Termination Without Cause. Company may terminate
Employee's employment and all of Company's obligations under
this Agreement without Cause at any time by ninety (90) days
written notice to Employee. If Employee is terminated without
Cause, all stock, options, bonuses and other incentive awards
granted to Employee pursuant to this Agreement or otherwise
(i) which have not vested prior to such termination and (ii)
as to which there are no conditions for vesting other than
continued employment with Company, shall upon such notice of
termination become fully vested, shall (in the case of
options) become fully exercisable and (in the case of all such
stock, options, bonuses and other incentive awards) all
restrictions shall lapse. In such event, all such options
shall remain exercisable for the remainder of their term.
2.11 Change of Control. If a Change of Control (as defined in the
Stock Incentive Plan) occurs, all stock, options, bonuses and
other incentive awards granted to Employee pursuant to this
Agreement or otherwise (i) which have not vested prior to such
Change of Control and (ii) as to which there are no conditions
for vesting other than continued employment with Company,
shall upon such Change of Control become fully vested, shall
(in the case of options) become fully exercisable and (in the
case of all such stock, options, bonuses and other incentive
awards) all restrictions shall lapse. In such event, all such
options shall remain exercisable for the remainder of their
term.
2.12 Voluntary Termination by Employee. If Employee voluntarily
terminates her employment with Company, all of Company's
obligations under this Agreement shall terminate. If Employee
voluntarily terminates her employment with Company, all stock
vested as set forth in Section 2.1 or Section 2.11 shall be
the property of Employee, but any stock that has not vested as
set forth in Section 2.1 or Section 2.11 on the termination
date shall be forfeited. Similarly, if Employee voluntarily
terminates her employment with Company, all options described
in Section 2.2 which have vested as set forth in Section 2.2
or 2.11 prior to termination shall be the property of and
exercisable by Employee for a 30 day period following
termination, but any options which have not vested will be
forfeited.
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3.0 MISCELLANEOUS.
3.1 Entire Agreement. Employee acknowledges that she has
concurrently executed the Registration Rights Agreement (as
set forth on Exhibit A attached hereto). Without limiting the
generality of the foregoing, this Agreement embodies the
entire agreement between the parties hereto regarding the
subject matter hereof, and shall supersede any and all prior
agreements whether written or oral relating to employment
and/or shares of Company owned by Employee, and shall be
binding upon Employee and Employee's heirs, legatees, legal
representatives, successors, donees, transferees and assigns,
and Employee does hereby authorize and obligate Employee's
executors, heirs and legatees to comply with the terms of this
Agreement. The parties shall not be bound by or be liable for
any statement, representation, promise, inducement or
understanding of any kind or nature regarding the subject
matter hereof which is not set forth herein. No changes,
amendments or modifications of any of the terms or conditions
of this document shall be valid unless reduced to writing and
signed by all parties hereto, Company being represented by its
President or his designee.
3.2 Registration Rights Agreement. The Registration Rights
Agreement is hereby acknowledged and accepted as binding upon
Employee and Company as though employee was an original
signatory of such agreement.
3.3 Compliance with Applicable Law. The completion of any transfer
or sale of any shares of Company's capital stock (or any
rights to acquire such shares or securities convertible into,
or exchangeable for, such shares) by Employee shall be subject
to compliance with any applicable statute, law, regulation,
ordinance, rule, judgment, rule of common law, order, decree,
award, governmental approval, concession, grant, franchise,
license, agreements, directive, guideline, policy,
requirement, or other governmental restriction or any similar
form of decision of, or determination by, or any
interpretation or administration of any of the foregoing by,
any governmental authority (collectively, "Applicable Law").
Company and Employee shall cooperate with each other and shall
take all such action, including without limitation obtaining
all governmental approvals required to comply with Applicable
Law in connection with the sale or transfer of any shares of
capital stock of Company (or any rights to acquire such shares
or securities convertible into, or exchangeable for, such
shares). Company, Employee and each of the other shareholders
of Company shall bear their own costs and expenses in
connection with obtaining any such governmental approvals.
3.4 Restrictions on Transfer. Employee agrees that any shares of
Company's Common Stock held by Employee shall be subject to
the transfer restrictions set forth in Section 2.1(c) of the
Stockholder Agreement dated as of November 17, 1999 as amended
by the First Amendment thereto (as set forth in Exhibit B
attached hereto) and as the same may hereafter be amended in
accordance with the terms of said Stockholder Agreement, to
the same extent as if Employee were a Management Shareholder
within the meaning of said Stockholder Agreement and as if all
such shares were owned on the date of the
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First Amendment; provided, however, that this Section 3.4
shall cease to apply in the event said Stockholder Agreement
is no longer in effect.
3.5 Severability. If any provision of this Agreement shall be
declared unlawful or incapable of execution, such facts shall
in no way affect the validity of any other portion hereof
which can be given reasonable effect without the provision
declared invalid or incapable of execution; nor shall such
fact operate to nullify or rescind this Agreement, but shall
only serve to render ineffective the provisions declared
invalid of the remainder, or the intent of the Agreement as a
whole.
3.6 Applicable Law. This document shall be construed for all
purposes as a Louisiana document and shall be interpreted and
enforced in accordance with the laws of the State of
Louisiana; provided however, that the non-compete provisions
set forth in Subparagraph 1.5 hereof shall governed by the law
of the state where the alleged competition occurs, whether in
Louisiana or some other state.
3.7 Number and Gender. As used herein, the singular shall include
the plural and vice versa and words used in one gender shall
include all others as appropriate.
3.8 Additional Documents. The parties hereto agree to execute
whatever documents or instruments and to perform whatever acts
may be reasonably required to fulfill the requirements and/or
intents hereof.
3.9 Legal Assistance. The parties hereto have each consulted with
legal counsel or have had the opportunity to consult with
legal counsel regarding the terms and conditions of this
Agreement.
3.10 Initial Public Offering. The parties agree that they will
re-negotiate the terms of this Agreement in good faith if
Company's initial public offering has not been consummated by
May 1, 2001.
IN WITNESS WHEREOF, the parties hereto have set forth their hand and
seal on the day, month and year first above written in multiple originals, each
of which shall have the same force and effect as if it were the sole original.
WITNESSES: ENERGY PARTNERS, LTD.
/s/ WITNESS By: /s/ XXXXXXX X. XXXXXXXX
Xxxxxxx X. Xxxxxxxx
/s/ WITNESS President and Chief Executive Officer
/s/ XXXXXXX X'XXXXXX XXXXXXXX
Xxxxxxx O'Xxxxxx Xxxxxxxx
