EXHIBIT 10.18
PIONEER NATURAL RESOURCES COMPANY
SEVERANCE AGREEMENT
This Severance Agreement (this "Agreement") is entered into, effective
December 1, 2000, between Pioneer Natural Resources Company ("Parent"), a
Delaware corporation, and Xxxxx X. Xxxxxxxxx (the "Officer"). As used in this
Agreement, the term "Company" shall be deemed to include Parent and its direct
or indirect wholly-owned subsidiaries.
Recitals
A. Company acknowledges that Officer is a significant employee of the
Company, possessing skills and knowledge instrumental to the successful conduct
of the Company's business. Company is willing to enter into a severance
arrangement with Officer in order to better ensure itself of the continued
management services of Officer for itself and its subsidiaries and, in part, to
induce Officer to continue to provide those services and subject himself to
certain restrictions regarding the use of Company information.
B. Officer is willing to subject himself to the restrictions mentioned
above in part to induce Company to enter into a compensation arrangement that
provides for, among other things, the payment of certain benefits upon the
termination of Officer's employment under certain circumstances.
Now, therefore, for and in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Agreement hereby agree as follows:
1. Position and Duties. Officer shall initially serve Company as Senior
Vice President - Exploration, and, in so doing, shall report to Company's Board
of Directors (the "Board"), Company's Chief Executive Officer (the "Chief
Executive Officer") or such officers of Company as is prescribed by Company's
bylaws, by resolutions of the Board or by direction of the Chief Executive
Officer. Officer shall have supervision and control over, and responsibility
for, such management and operational functions of the Company currently assigned
to such position, and shall have such other or different functions, powers,
duties and responsibilities (including holding officer positions with one or
more subsidiaries of Parent), as may from time to time be prescribed by the
Board or the Chief Executive Officer, or any other Company officer to whom
Officer reports, so long as such functions, powers and duties are reasonable and
customary for a Senior Vice President - Exploration serving an enterprise
comparable to Company. Employee's failure to accept and perform such other or
different functions, powers or duties shall be deemed to be a Termination of
Employment by voluntary action of Employee, and shall not constitute a
Termination for Good Reason.
2. Devotion of Efforts. So long as Officer is serving the Company in the
capacities described in Section 1, he/she shall devote his/her full time, skill
and attention and his/her best efforts during normal business hours to the
business and affairs of the Company to the extent necessary to discharge
faithfully and efficiently his/her duties and responsibilities, except for
usual, ordinary and customary periods of vacation and absence due to illness or
other disability or such periods of leave as are approved in writing by the
Board or the Chief Executive Officer. The provisions of this Section shall not
be construed to prevent Officer from making investments in other businesses or
enterprises, so long as such investments do not violate the Company's conflict
of interest policies or require the provision of services by Officer to such
businesses or enterprises to an extent that would interfere in any material
respect with the performance of Officer's duties and responsibilities to the
Company.
3. Compensation.
(a) Base Salary. As compensation for Officer's services, the Company
shall pay Officer an annualized base salary of a specified amount per annum (the
"Base Salary"). The Base Salary shall be payable in substantially equal
semi-monthly installments. The Compensation Committee of the Board (the
"Compensation Committee") may review the Base Salary periodically and may grant
such increases, or effect such reductions, in the Base Salary as the
Compensation Committee considers appropriate in accordance with such
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compensation guidelines and policies as it may establish from time to time. The
Base Salary applicable from time to time for any period of Officer's employment
with the Company, commencing on the effective date of this Agreement, shall be
identified on Schedule A attached hereto, which shall be amended periodically to
reflect any increases or reductions effected by the Compensation Committee.
(b) Bonuses. Officer shall be entitled to receive (in addition
to the Base Salary) such annual or other periodic bonus as the Compensation
Committee may award in accordance with such compensation guidelines and policies
as it may establish from time to time.
(c) Other Benefits. Officer shall be entitled to participate
in, or receive benefits under, any employee benefit plan or other arrangement
made available now or in the future by the Company to the officers of Company (a
"Benefit Plan"), subject to the terms, conditions and overall administration of
such Benefit Plan. Officer's participation in, or receipt of benefits under, any
Benefit Plan shall be in addition to (and not in lieu of) the Base Salary.
(d) Vacations and Holidays. Officer shall be entitled to the
number of paid vacation days in each calendar year determined by Company from
time to time for its officers and shall be entitled to all paid holidays given
by the Company to its employees in general.
4. Relocation. Officer shall initially be required to perform his/her
duties and responsibilities hereunder at Company's offices located in Irving,
Texas. If the Company requires Officer to perform his/her duties and
responsibilities at any location that is more than 50 miles from the nearest
border of Irving, Texas (a "New Location") and, within 30 days after receiving
notice thereof, Officer accepts such relocation rather than terminating his/her
employment with the Company pursuant to Section 5(a), the Company shall pay to
Officer, or shall reimburse Officer for (upon submission of reasonably detailed
evidence thereof), such sums as are provided for under the Relocation Policy for
Exempt Employees as established by Company. Officer's failure to accept such
relocation within 30 days after receiving notice thereof, shall be deemed to be
a Termination of Employment by voluntary action of Officer, and shall not
constitute a Termination for Good Reason.
5. Termination of Employment.
(a) Right to Terminate. Officer's employment with the Company
(including his/her officer position with Company) shall be terminated upon the
death, Disability (as defined in subsection (f)(3) of this Section) or Normal
Retirement (as defined in subsection (f)(5) of this Section) of Officer. In
addition, Officer's employment with the Company (including his/her officer
position with Company) may be terminated at any time and for any reason as a
result of a dismissal by the Company or as a result of a voluntary action by
Officer. Any such termination of employment is referred to herein as a
"Termination of Employment."
(b) Notice of Termination.
(1) Any Termination of Employment that is the result of Officer's
Disability shall be communicated by the Company to Officer in a written
notice thereof. Such notice shall state that, in the opinion of the
Board, Officer is suffering from a Disability and such Disability is
the reason for the Termination of Employment.
(2) Any Termination of Employment that is the result of Officer's
Normal Retirement shall be communicated by Officer to Company by a
written notice thereof. Such notice shall state that Officer is
retiring and shall specify the date of such Termination of Employment,
which shall be not less than 30 days following the date such notice is
received by Company.
(3) Any Termination of Employment that is the result of a dismissal
by the Company (but is not the result of Officer's Disability) shall be
communicated by the Company to Officer by a written notice thereof.
Such notice shall state whether or not (in the Company's opinion) the
Termination of Employment constitutes a Termination for Cause (as
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defined in subsection (f)(6) of this Section) and, if so, shall set
forth in reasonable detail facts and circumstances constituting a basis
for such Termination for Cause.
(4) Any Termination of Employment that is the result of a voluntary
action by Officer (but is not the result of Officer's Normal
Retirement) shall be communicated by Officer to Company by written
notice thereof. Such notice shall state whether or not (in Officer's
opinion) the Termination of Employment constitutes a Termination for
Good Reason (as defined in subsection (f)(7) of this Section) and, if
so, shall set forth in reasonable detail the facts and circumstances
claimed as the basis for such Termination for Good Reason. Such notice
shall also specify the date of such Termination of Employment, which
(if the Termination of Employment does not constitute a Termination for
Good Reason) shall be not less than 30 days following the date such
notice is received by Company.
(c) Date of Termination of Employment. For purposes of this
Agreement, the date of a Termination of Employment shall be (1) if the
Termination of Employment is the result of Officer's death, the date of such
death, (2) if the Termination of Employment is the result of Officer's
Disability, the date on which the notice described in subsection (b)(1) of this
Section is received by Officer, (3) if the Termination of Employment is the
result of Officer's Normal Retirement, the date specified in the notice
described in subsection (b)(2) of this Section, (4) if the Termination of
Employment is the result of a dismissal by the Company (but is not the result of
Officer's Disability), the date on which the notice described in subsection
(b)(3) of this Section is received by the Officer, or such later date as may be
specified by the Company in such notice, and (5) if the Termination of
Employment is the result of a voluntary action by Officer (but is not the result
of Officer's Normal Retirement), the date specified in the notice described in
subsection (b)(4) of this Section, or such earlier date as the Company may
specify, provided that if such date specified by Company is less than 30 days
following the date Company received notice from Employee, then Company agrees to
pay officer an amount equal to one-twelfth (1/12) of Officer's Base Salary,
which amount shall be paid in cash on the date of such Termination of
Employment.
(d) Payments Due Upon Termination of Employment. The
provisions of subsections (d)(1) and (d)(3) of this Section shall apply to any
such Termination of Employment, whether occurring prior to, at the time of or at
any time following a Change in Control (as defined in subsection (f)(2) of this
Section); and the provisions of subsection (d)(2) of this Section shall apply
only if such Termination of Employment is prior to a Change in Control.
(1) Death, Disability or Normal Retirement. If the
Termination of Employment is the result of Officer's death, Disability
or Normal Retirement, the Company shall pay the following amounts to
Officer (or his/her estate or personal representative):
(A) The Base Salary (at the rate in effect
on the date of such Termination of Employment, as identified
on Schedule A) pro-rated through and including the date of
such Termination of Employment, to the extent not already
paid, which amount shall be paid in cash on the first normal
semi-monthly Base Salary payment date immediately succeeding
the date of such Termination of Employment;
(B) Any amounts arising from Officer's
participation in, or benefits under, any Benefit Plan through
and including the date of such Termination of Employment,
which amounts shall be payable in accordance with the terms
and conditions of such Benefit Plan; and
(C) An amount equal to one full year's Base
Salary (at the rate in effect on the date of such Termination
of Employment, as identified on Schedule A), which amount
shall be paid in cash within 30 days following the date of
such Termination of Employment.
(2) Termination for Good Reason or Not for Cause. If
the Termination of Employment (i) is the result of a dismissal by the
Company (but is not the result of Officer's Disability) and does not
constitute a Termination for Cause or (ii) is the result of a voluntary
action by Officer (but is not the result of Officer's Normal
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Retirement) and constitutes a Termination for Good Reason, the Company
shall pay the following amounts, and provide the following benefits to
Officer:
(A) The Base Salary (at the rate in effect
on the date of such Termination of Employment, as identified
on Schedule A) pro-rated through and including the date of
such Termination of Employment, to the extent not already
paid, which amount shall be paid in cash on the date of such
Termination of Employment;
(B) Any amount arising from Officer's
participation in, or benefits under, any Benefit Plan through
and including the date of such Termination of Employment,
which amounts shall be payable in accordance with the terms
and conditions of such Benefit Plan;
(C) A lump sum amount equal to one full
year's Base Salary (at the rate in effect on the date of such
Termination of Employment, as identified on Schedule A), which
amount shall be paid in cash on the date of such Termination
of Employment;
(D) For a period of one year following the
date of such Termination of Employment, a continuation of all
health insurance coverage applicable at the time of such
Termination of Employment to Officer and Officer's immediate
family under any Benefit Plan; and
(E) With respect to a Termination of
Employment described in subsection (d)(2)(i) of this Section,
if the date of Termination of Employment is less than thirty
(30) days after the date of notice thereof, an amount equal to
one-twelfth (1/12) of the Officer's Base Salary, which amount
shall be paid in cash on the date of such Termination of
Employment.
(3) Termination for Cause or Not for Good Reason. If
the Termination of Employment (i) is the result of a dismissal by the
Company (but is not the result of Officer's Disability) and constitutes
a Termination for Cause or (ii) is the result of a voluntary action by
Officer (but is not the result of Officer's Normal Retirement) and does
not constitute a Termination for Good Reason, the Company shall pay the
following amounts to Officer:
(A) The Base Salary (at the rate in effect
on the date of such Termination of Employment, as identified
on Schedule A) pro-rated through and including the date of
such Termination of Employment, to the extent not already
paid, which amount shall be paid in cash on the first normal
semi-monthly Base Salary payment date immediately succeeding
the date of such Termination of Employment; and
(B) Any amounts arising from Officer's
participation in, or benefits under, any Benefit Plan through
and including the date of such Termination of Employment,
which amounts shall be payable in accordance with the terms
and conditions of such Benefit Plan.
(4) Payment Contingent on Release. If Officer's
Termination of Employment is prior to a Change in Control (and only in
that event), and Officer is otherwise entitled to the payment provided
in subsection (d)(2) of this Section, then such payment shall be
subject to, and contingent upon, Officer's execution of a General
Release Agreement in favor of the Company in substantially the form and
substance as the one attached hereto as Schedule B.
(e) Additional Provisions Applicable Upon Termination of
Employment Concurrent with or Following Change in Control. The following
provisions shall apply to any such Termination of Employment occurring at the
time of, or at any time within one year following, a Change in Control.
(1) Termination for Good Reason or Not for Cause. If
the Termination of Employment (i) is the result of a dismissal by the
Company (but is not the result of Officer's Disability) and does not
constitute a Termination for Cause, or (ii) is the result of a
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voluntary action by Officer (but is not the result of Officer's Normal
Retirement) and constitutes a Termination for Good Reason, the Company
shall pay the following amounts, and provide the following benefits, to
Officer:
(A) The Base Salary (at the rate in effect
on the date of such Termination of Employment, as identified
on Schedule A) pro-rated through and including the date of
such Termination of Employment, to the extent not already
paid, which amount shall be paid in cash on the date of such
Termination of Employment;
(B) A lump sum in cash equal to 2.99 times
the sum of (i) Officer's Base Salary (at the rate in effect on
the date of such Termination of Employment, as identified on
Schedule A), plus (ii) the greater of the then current year's
targeted bonus or actual bonus award (if applicable) for
Officer, which amount shall be paid in cash on the date of
such Termination of Employment;
(C) Any amount arising from Officer's
participation in, or benefits under, any employee Benefit Plan
or other arrangement made available now or in the future by
the Company to its employees, through and including the date
of such Termination of Employment, which amounts shall be
payable in accordance with the terms and conditions of such
Benefit Plan;
(D) For a period of one year following the
date of such Termination of Employment, a continuation of all
health insurance coverage applicable at the time of such
Termination of Employment to Officer and his/her immediate
family under any Benefit Plan; and
(E) With respect to a Termination of
Employment described in subsection (e)(1)(i) of this Section,
if the date of Termination of Employment is less than thirty
(30) days after the date of notice thereof, an amount equal to
one-twelfth (1/12) of the Officer's Base Salary, which amount
shall be paid in cash on the date of such Termination of
Employment.
(2) Voluntary Termination Not for Good Reason or for
Failure to Relocate. Notwithstanding any other provision of this
subsection (e) to the contrary, if the Termination of Employment (i) is
the result of a voluntary action by Officer, does not constitute a
Termination for Good Reason, and occurs at least six months, but not
more than one year, following a Change in Control, or (ii) whether
voluntary or involuntary, occurs at the time of, or at any time within
one year following, a Change in Control and following the Company's
requiring the Officer to perform his/her duties and responsibilities
hereunder at a New Location, which relocation is not accepted by
Officer within 30 days after receiving notice thereof, then the Company
shall pay to Officer all amounts that would be payable pursuant to
subsection (d)(2) of this Section had such Termination of Employment
occurred prior to the Change in Control and constituted a Termination
for Good Reason.
(3) Excise Tax and Gross-Up Payment.
(A) If any portion of such compensation
constitutes a parachute payment (a "Payment") and is subject
to the Excise Tax (hereinafter defined), then Company shall,
in addition to providing such compensation, pay the Gross-Up
Payment (hereinafter defined) to Officer in the manner
described below. For purposes of this Agreement, (i) "Excise
Tax" shall mean the tax imposed pursuant to section 4999 of
the Code and any interest or penalties incurred by the Officer
with respect to such Excise Tax, and (ii) "Gross-Up Payment"
shall mean, with respect to any compensation provided to the
Officer by Company (including without limitation the payments
provided for under this Agreement and any payments to the
Officer under any employee benefit plan, including without
limitation the Company's Long-term Incentive Plan, or other
arrangement) that is subject to the Excise Tax, an amount
that, after reduction of the amount of such Gross-Up Payment
for all federal, state, and local tax (including any interest
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or penalties imposed with respect to such taxes) to which the
Gross-Up Payment is subject (including the Excise Tax to which
the Gross-Up Payment is subject), is equal to the amount of
the Excise Tax to which such compensation is subject. For
purposes of determining the amount of any Gross-Up Payment,
Officer shall be deemed to pay federal income taxes at the
highest marginal rate of taxation and state and local taxes,
if applicable, at the highest marginal rate of taxation in the
state and locality of residence of the Officer on the Date of
Termination, net of the maximum reduction in federal income
taxes that could be obtained from deduction of such state and
local taxes, if any.
(B) Subject to the provisions of subsection
5(e)(3)(C), all determinations required to be made under this
subsection 5(e)(3), including whether and when a Gross-Up
Payment is required, the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such
determination, shall be made by the accounting firm which
performed the audit of the Company for the year preceding the
year in which the Change in Control occurred (the "Accounting
Firm") which shall provide detailed supporting calculations
both to the Company and the Officer within 15 business days of
the receipt of notice from the Officer that there has been a
Payment, or such earlier time as is requested by the Company.
In the event that the Accounting Firm is serving as accountant
or auditor for the individual, entity or group effecting the
Change in Control, the Officer shall appoint another
nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely
by the Company. Any Gross-Up Payment, as determined pursuant
to this subsection 5(e)(3), shall be paid by the Company to
the Officer within five days of the receipt of the Accounting
Firm's determination. If the Accounting Firm determines that
no Excise Tax is payable by the Officer, it shall furnish the
Officer with a written opinion that failure to report the
Excise Tax on the Officer's applicable federal income or
excise tax return would not result in the imposition of a
negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and the
Officer.
(C) The Officer shall notify the Company in
writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of the
Gross-Up Payment. Such notification shall be given no later
than ten business days after the Officer is informed in
writing of such claim. The Officer shall not pay such claim
prior to the expiration of the 30-day period following the
date on which it gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies
the Officer in writing prior to the expiration of such period
that it desires to contest such claim, (i) the Officer shall
accept legal representation with respect to such claim by an
attorney reasonably selected by the Company, (ii) cooperate
with the Company in good faith in order to effectively contest
such claim, and (iii) permit the Company to participate in any
proceedings relating to such claim; provided, however, the
Company shall bear and pay directly all costs and expenses
(including legal and accounting fees and 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 or income tax (including interest
and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses. The
Company shall control all proceedings taken in connection with
such contest to the extent relating to issues impacting
whether a Gross-Up Payment is payable hereunder. 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 in connection with such contest.
(D) If any such claim referred to in
subsection 5(e)(3)(C) is made by the Internal Revenue Service
and the Company does not request the Officer to contest the
claim within the 30-day period following notice of the claim,
the Company shall pay to the Officer the amount of any
Gross-Up Payment owed to the Officer, but not previously paid
pursuant to subsection 5(e)(3)(B), immediately upon the
expiration of such 30-day period. If any such claim is made by
the Internal Revenue Service and the Company requests the
Officer to contest such claim, the Company shall pay to the
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Officer the amount of any Gross-Up Payment owed to the
Officer, but not previously paid under the provisions of
subsection 5(e)(3)(B), within five days of a Final
Determination of the liability of the Officer for such Excise
Tax. For purposes of this Agreement, a "Final Determination"
shall be deemed to occur with respect to a claim when (i)
there is a decision, judgment, decree or other order by any
court of competent jurisdiction, which decision, judgment,
decree or other order has become final, i.e., all allowable
appeals have been exhausted by either party to the action,
(ii) there is a closing agreement made under Section 7121 of
the Code, or (iii) the time for instituting a claim for refund
has expired, or if a claim was filed, the time for instituting
suit with respect thereto has expired.
(4) Letter of Credit. Following a Change in Control,
Parent (within 10 days following receipt of Officer's written request
therefor), at its sole cost and expense, shall post an irrevocable
letter of credit with a banking institution reasonably acceptable to
Officer in an amount equal to the maximum amount of the aggregate cash
payments that would be made to Officer pursuant to the provisions of
paragraph (1) of this subsection if the provisions of paragraph (1) of
this subsection were to become applicable. Such letter of credit shall
contain provisions making the funds available thereunder to Officer by
Officer's drafts drawn at sight at any time and from time to time. Such
provisions shall permit Officer to present drafts (including drafts for
partial draws) drawn at sight by presentation by Officer to the
applicable banking institution of a written statement to the effect
that the Company is in default on a payment to be made to Officer
pursuant to the terms of this Agreement (setting forth the amount of
such payment in default) and that Officer is not in default under, and
has not breached the terms of, this Agreement. Parent shall continue to
keep such letter of credit in place until the expiration of at least 60
days following the date of a Termination of Employment occurring after
the Change in Control.
(5) Retirement Benefits Funded. Upon a Change in Control, any
accrued but unfunded retirement benefit obligations to Officer under
any then existing retirement plan shall be fully funded to a Rabbi
Trust for the benefit of such Officer, which amount shall be paid in
cash on the date of such Change in Control.
(f) Certain Definitions. As used in the Section and elsewhere
in this Agreement, the following terms shall have the respective meanings
indicated:
(1) "Across-the-Board Salary Reduction" shall mean a
reduction in the Base Salary that is a part of, and is at a rate
consistent with, a reduction in the base salaries paid to substantially
all officers of Company.
(2) "Change in Control" shall mean the occurrence,
following the Effective Date hereof, of either of the following events:
(i) an event that would constitute a Change in control as that term is
defined in the Company's Long-Term Incentive Plan, or any successor
plan thereto, or (ii) Consummation of a Business Combination not
otherwise constituting a Change in Control but, pursuant to which the
Person serving as Chief Executive Officer at the time of the execution
of the initial agreement is removed from, or replaced in, such capacity
with respect to the corporation resulting from such Business
Combination.
(3) "Disability" shall mean Officer's physical or
mental impairment or incapacity of sufficient severity that, in the
opinion of the Board, either (A) Officer is unable to continue to
perform his/her duties and responsibilities hereunder or (B) Officer's
condition entitles him to disability benefits under any Benefit Plan
providing for the payment thereof.
(4) "Excessive Salary Reduction" shall mean (A) a
reduction in the Base Salary that is not an Across-the-Board Salary
Reduction (as defined in paragraph (1) of this subsection) and that,
when combined with the net effect of all prior increases and reductions
in the Base Salary (other than prior reductions that were
Across-the-Board Salary Reductions), results in the Base Salary being
less than 80% of the highest Base Salary to which Officer has ever been
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subject pursuant to this Agreement (as identified on Schedule A) or (B)
a reduction in the Base Salary (whether or nor an Across-the-Board
Salary Reduction) that, when combined with the net effect of all prior
increases and reductions in the Base Salary (whether or not
Across-the-Board Salary Reductions), results in the Base Salary being
less than 65% of the highest Base Salary to which Officer has ever been
subject pursuant to this Agreement (as identified on Schedule A).
(5) "Normal Retirement" shall have the meaning given to such term
in Section 1.29 of the Long-term Incentive Plan.
(6) "Termination for Cause" shall mean a Termination of Employment
as a result of a dismissal by the Company following (A) Officer's
continued failure to substantially perform his/her duties and
responsibilities (other than any such failure resulting from Officer's
physical or mental impairment or incapacity) after written demand for
substantial performance is delivered by the Company specifically
identifying the manner in which the Company believes Officer has not
substantially performed his/her duties and responsibilities, (B)
Officer's engaging in fraud or other misconduct that is injurious to
the Company, monetarily or otherwise, (C) Officer's engaging in
insubordination, (D) Officer's violation of, or failure to comply with,
any written policy, guideline, rule or regulation of the Company which
specifically provides that Officer may be dismissed (or his/her
employment terminated) as a consequence of any such violation or
failure to comply, (E) Officer's conviction of (or plea of guilty or
nolo contendere to a charge of) any felony, or any crime or misdemeanor
involving moral turpitude or financial misconduct, or (F) a material
violation by Officer of the provisions of Section 6. For purposes of
clause (B) above, an act, or failure to act, on Officer's part shall be
considered "misconduct" if done, or omitted, by Officer not in good
faith and without reasonable belief that such act, or failure to act,
was in the best interest of the Company.
(7) "Termination for Good Reason" shall mean a Termination of
Employment as a result of voluntary action by Officer within 30 days
after receiving notice of (A) the demotion of the Officer to an officer
position junior to the officer position specified in Section 1 or to a
non-officer position, (B) an Excessive Salary Reduction (as defined in
paragraph (4) of this subsection), or (C) the failure by Parent to
obtain the assumption agreement described in Section 7(h) on or prior
to a succession described in Section 7(h).
6. Nonpublic Information.
(a) Officer hereby acknowledges that, in connection with
his/her employment with the Company, he has received, and will continue to
receive, various information regarding the Company and its business, operations
and affairs. All such information, to the extent not publicly available other
than as a result of a disclosure by Officer in violation of this Agreement, is
referred to herein as the "Nonpublic Information."
(b) Officer hereby agrees that, from and after the date hereof
and continuing until three (3) years following a Termination of Employment, he
will keep all Nonpublic Information confidential and will not, without the prior
written consent of the Board or the Chief Executive Officer, disclose any
Nonpublic Information in any manner whatsoever or use any Nonpublic Information
other than in connection with the performance of his/her services to the Company
hereunder; provided, however, that the provisions of this subsection shall not
prevent Officer from (1) disclosing any Nonpublic Information to any other
employee of the Company or to any representative or agent of the Company (such
as an independent accountant, engineer, attorney or financial advisor) when such
disclosure is reasonably necessary or appropriate (in Officer's judgment) in
connection with the performance by Officer of his/her duties and
responsibilities hereunder or (2) disclosing any Nonpublic Information as
required by applicable law, rule, regulation or legal process (but only after
compliance with the provisions of subsection (c) of this Section).
(c) If Officer is requested pursuant to, or required by,
applicable law, rule, regulation or legal process to disclose any Nonpublic
Information, Officer will notify Parent promptly so that the Company may seek a
protective order or other appropriate remedy or, in the Company's sole
discretion, waive compliance with the terms of this Section, and Officer will
fully cooperate in any attempt by the Company to obtain any such protective
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order or other remedy. If no such protective order or other remedy is obtained,
or the Company waives compliance with the terms of this Section, Officer will
furnish or disclose only that portion of the Nonpublic Information as is legally
required and will exercise all reasonable efforts to obtain reliable assurance
that confidential treatment will be accorded the Nonpublic Information that is
so disclosed.
7. Miscellaneous Provisions.
(a) Mitigation. Officer shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise, and the amount of any payment provided for in this Agreement shall
not be reduced by any compensation earned by Officer as the result of employment
by another employer after the date of any Termination of Employment or
otherwise.
(b) Interest. Until paid, all past due amounts required to be
paid by the Company to Officer under any provision of this Agreement shall bear
interest at the per annum rate equal to the higher of (1) twelve percent (12%),
or (2) the prime rate announced from time to time by the Company's primary bank
lender, plus three percent (3%).
(c) Equitable Relief Available. Officer acknowledges that
remedies at law may be inadequate to protect the Company against any actual or
threatened breach of the provisions of Section 6 by Officer. Accordingly,
without prejudice to any other rights or remedies otherwise available to the
Company, Officer agrees that the Company shall have the right to equitable and
injunctive relief to prevent any breach of the provisions of Section 6, as well
as to such damages or other relief as may be available to the Company by reason
of any such breach as does occur.
(d) At-Will Employment. Officer acknowledges that his/her
employment with the Company is strictly "at-will", and that nothing contained in
this Agreement shall confer upon Officer the right to continue in the employ of
the Company, or interfere in any way with the rights of the Company to terminate
his/her employment at any time for any reason. Officer further acknowledges that
this Agreement is not an "employment agreement" or "employment contract"
(written or otherwise), as either term is used or defined in, or contemplated by
or under, (i) the Company's Long-Term Incentive Plan, (ii) any other plan or
agreement to which the Company is a party, or (iii) applicable statutory, common
or case law.
(e) Breach Not a Defense. The representations and covenants on
the part of Officer contained in Section 6 shall be construed as ancillary to
and independent of any other provision of this Agreement, and the existence of
any claim or cause of action of Officer against the Company or any officer,
director, stockholder or representative of the Company, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of the covenants on the part of Officer contained in Section 6.
(f) Notices. Any notice or other communication called for by
the terms of this Agreement shall be in writing and either delivered personally
or by registered or certified mail (postage prepaid and return receipt
requested) and shall be deemed given when received at the following addresses
(or at such other address for a party as shall be specified by like notice):
(1) If to Parent or the Company, 0000 Xxxxxxxx Xxxxxx West, 0000
Xxxxx X'Xxxxxx Xxxxxxxxx, Xxxxxx, Xxxxx 00000, Attention: General
Counsel.
(2) If to Officer, the address of Officer set forth below Officer's
signature on the signature page of this Agreement.
(g) Assumption by Successor of Parent. Parent shall require
any successor (whether direct or indirect) to all or substantially all of the
business or assets of Parent (whether by purchase of securities, merger,
consolidation, sale of assets or otherwise), by a written agreement in form and
substance satisfactory to Officer, to expressly assume and agree to perform the
obligations to be performed by Parent or the Company under this Agreement in the
same manner and to the same extent that Parent or the Company would be required
to perform if no such succession had taken place.
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(h) Assignment.
(1) Except pursuant to an assumption by a successor
described in subsection (h) of this Section, the rights and obligations
of the Company pursuant to this Agreement may not be assigned, in whole
or in part, by the Company to any other person or entity without the
express written consent of Officer.
(2) The rights and obligations of Officer pursuant to
this Agreement may not be assigned, in whole or in part, by Officer to
any other person or entity without the express written consent of the
Board.
(i) Successors. This Agreement shall be binding on, and shall
inure to the benefit of, the Company, Officer and their respective successors,
permitted assigns, personal and legal representatives, executors,
administrators, heirs, distributees, devisees and legatees, as applicable.
(j) Amendment and Waivers. Except as hereinafter provided, no
provision of this Agreement may be amended or otherwise modified, and no right
of any party to this Agreement may be waived, unless such amendment,
modification or waiver is agreed to in a written instrument signed by Officer
and Parent (and any dated and signed Schedule A, as described in subsection (p)
of this Section, shall constitute such an instrument). Unless a Change of
Control shall have occurred or be pending or under consideration, Parent may
amend, modify, or waive any provision of, or terminate, this Agreement upon
sixty (60) days notice without the consent of Officer; provided that any such
amendment, modification, waiver or termination shall be made to all severance
agreements of Parent covering all officers of Parent similarly situated to
Officer. No waiver by either party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by the other party hereto shall
be deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.
(k) Complete Agreement. This Agreement replaces and supersedes
all prior agreements, if any, among the parties with respect to the subject
matter hereof, and the provisions of this Agreement constitute the complete
understanding and agreement among the parties with respect to the subject matter
hereof, and no agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
(l) Governing Law. THIS AGREEMENT IS BEING MADE AND EXECUTED
IN, AND IS INTENDED TO BE PERFORMED IN, THE STATE OF TEXAS AND SHALL BE
GOVERNED, CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS OF THE STATE OF TEXAS.
(m) Attorney Fees. All legal fees and other costs incurred by
Officer in connection with the resolution of any dispute or controversy under or
in connection with this Agreement shall be reimbursed by the Company to Officer,
if such dispute or controversy is resolved in favor of Officer. The Company
shall be responsible for, and shall pay, all legal fees and other costs incurred
by the Company in connection with the resolution of any dispute or controversy
under or in connection with this Agreement, regardless of whether such dispute
or controversy is resolved in favor of the Company or Officer.
(n) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same agreement.
(o) Construction. The captions of the Sections, subsections
and paragraphs of this Agreement have been inserted as a matter of convenience
of reference only and shall not affect the meaning or construction of any of the
terms or provisions of this Agreement. Unless otherwise specified, references in
this Agreement to a "Section," "subsection," "paragraph," "subparagraph" or
"Schedule" shall be considered to be references to the appropriate Section,
subsection, paragraph, subparagraph or Schedule, respectively, of this
Agreement. Unless the context otherwise requires, all words used in this
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Agreement in any gender shall include the masculine, feminine and neuter gender,
all singular words shall include the plural and all plural words shall include
the singular. As used in this Agreement, the term "including" shall mean
"including, but not limited to."
(p) Schedule A. Schedule A may be replaced at any time and
from time to time to reflect a change in the Base Salary; provided, however,
that no Schedule A attached hereto shall be effective unless it contains a date
and bears a signature of approval on behalf of Officer and a signature of
approval on behalf of Company; and provided further, however, that if at any
time two or more dated and signed copies of Schedule A conflict with each other,
the later dated of such copies shall control.
(q) Validity and Severability. If any term or provision of
this Agreement is held to be illegal, invalid or unenforceable under the present
or future laws effective during the term of this Agreement, (1) such term or
provision shall be fully severable, (2) this Agreement shall be construed and
enforced as if such term or provision had never comprised a part of this
Agreement and (3) the remaining terms and provisions of this Agreement shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable term or provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable term
or provision, there shall be added automatically as a part of this Agreement, a
term or provision as similar to such illegal, invalid or unenforceable term or
provision as may be possible and be legal, valid and enforceable.
(r) Execution by Company. The execution of this Agreement by
Company shall constitute an acceptance of, and an agreement to be bound by, the
terms and provisions of this Agreement by Company and each of its direct and
indirect wholly-owned subsidiaries, and Company hereby agrees to cause each of
its direct and indirect wholly-owned subsidiaries, now and in the future, to
fully comply with all obligations applicable to the Company pursuant to the
terms of this Agreement.
(SIGNATURE PAGE ATTACHED)
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In witness whereof, the parties have executed this Agreement effective as
of the date first written above.
PIONEER NATURAL RESOURCES COMPANY
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
OFFICER:
/s/ Xxxxx X. Xxxxxxxxx
--------------------------------------
Xxxxx X. Xxxxxxxxx
Address:
--------------------------------------
--------------------------------------
[Signature Page - Severance Agreement - Page 1 of 1]
Schedule A
Attached to Severance Agreement between
Pioneer Natural Resources Company and
Xxxxx X. Xxxxxxxxx
BASE Salary:
Effective Date Amount
January 1, 2005 $330,000.00
Dated and Approved as of _______________:
PIONEER NATURAL RESOURCES COMPANY OFFICER:
By: /s/ Xxxxx X. Xxxxxxxxx /s/ Xxxxx X. Xxxxxxxxx
--------------------------------- ---------------------------------
Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Chief Executive Officer and Chairman
Schedule B
GENERAL RELEASE AGREEMENT
NOTICE: Various state and federal laws and regulations prohibit employment
discrimination based on age, race, color, religion, sex, national origin,
disability, citizenship, and membership or application for membership in a
uniformed service. These laws are enforced through the Equal Employment
Opportunity Commission, U.S. Department of Labor, Texas Commission on Human
Rights, and other federal and state agencies. You are advised to discuss this
release with your attorney. In any event, you should thoroughly review and
understand the effect of this document before signing it. Therefore, please take
this General Release Agreement home and carefully consider it for at least five
days before signing it. In accordance with the requirements of the Older Workers
Benefit Protection Act, you are allowed at least 45 days from the date of your
receipt of this document and the accompanying explanatory letter to consider the
offer made to you and to return an executed copy of this form to the Vice
President Administration. Additionally, after you have executed this form, you
have seven days to reconsider and revoke your agreement.
GENERAL RELEASE: In consideration of my acceptance of the payments and benefits
offered to me under Section 5(d)(2)(C) of the Severance Agreement, I hereby
release and discharge Pioneer Natural Resources Company and its subsidiaries and
affiliates (the "Company"), and the officers, directors, employees, agents,
successors, and assigns of such entities (collectively the "Released Parties")
from any and all claims, liabilities, demands, and causes of action, known or
unknown, fixed or contingent, which I have or claim against them as a result of
the termination of my employment, including but not limited to claims arising
under federal, state, or local laws prohibiting employment discrimination,
including the Age Discrimination in Employment Act, or claims growing out of any
legal restrictions, contractual or otherwise, on the Company's right to
terminate the employment of its employees, and I do hereby agree not to file a
lawsuit to assert such claims. I further acknowledge and agree that by accepting
the Severance Agreement benefits, I have given up my right to file any
complaint, lawsuit, or other legal action against any of the Released Parties
growing out of, connected with, or relating in any way to my employment or the
termination of my employment with the Company. Further in consideration of the
payments and benefits offered to me under the Severance Agreement, I acknowledge
and agree that the Released Parties may recover from me any loss, including
attorney's fees and costs of defending against any claim brought by me, that
they may suffer arising out of my breach of this General Release Agreement.
I understand that this General Release Agreement is final and binding, and
I agree not to challenge its enforceability. If I do challenge the
enforceability of this General Release Agreement, I agree initially to tender to
the Company all money received pursuant to the Severance Agreement, and invite
the Company to retain such money and agree with me to cancel this General
Release Agreement. In the event the Company accepts this offer, the Company
shall retain such money and this General Release Agreement will be void. In the
event the Company does not accept such offer, the Company shall so notify me,
and shall place such money in an interest-bearing escrow account pending the
resolution of any dispute as to whether this General Release Agreement shall be
set aside and/or otherwise be rendered unenforceable.
I acknowledge and agree that the Company has no legal obligation to provide
the payment offered to me under Section 5(d)(2)(C) of the Severance Agreement,
and my acceptance of the obligations and attendant additional payment as
described therein constitutes my agreement to all terms and conditions set forth
in this General Release Agreement, and are in consideration of the promises and
undertakings of the Company pursuant to the Severance Agreement. I further
acknowledge and agree that for unemployment compensation purposes, the payments
I receive under the Severance Agreement shall be considered additional wages in
lieu of notice; and that, accordingly, I may be ineligible to receive
unemployment compensation benefits for an equivalent period of time.
This General Release Agreement does not have any effect on any claim I may
have against the Released Parties unrelated to the termination of my employment
or with respect to any rights or claims that may arise after the date this
General Release Agreement is executed.
I have carefully read and fully understand all of the provisions of this
General Release. I further acknowledge that entering into this General Release
Agreement is knowing and voluntary on my part, that I have had a reasonable time
to deliberate regarding its terms, and that I have had the right to consult with
an attorney if I so desired.
Date signed:
----------------------- ---------------------------
Signature of Officer
Date signed:
----------------------- ---------------------------
Signature of Officer
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