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EXHIBIT 10.1
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this "FIRST AMENDMENT")
dated as of March 8, 2001 (the "AMENDMENT EFFECTIVE DATE") by and between The
Houston Exploration Company, a Delaware corporation (the "COMPANY"), and Xxxxxx
X. Xxxxxx (the "EXECUTIVE").
WITNESSETH:
WHEREAS, the Company and the Executive entered into an Employment
Agreement dated as of July 2, 1996 (the "AGREEMENT") with an Effective Date of
September 19, 1996; and
WHEREAS, the Company and the Executive hereby desire to amend the
Agreement as set forth herein;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Executive hereby agree as follows:
1. The Agreement shall be amended to reflect that the Executive's
position with the Company shall be that of Senior Vice President, Chief
Financial Officer and Treasurer.
2. The Agreement shall be amended by adding the following provisions to
the end of Section 1:
The Executive agrees to continue his employment with the
Company notwithstanding the retirement of Xxxxx X. Xxxxx as
President and Chief Executive Officer of the Company for at
least the period of time described in the next sentence (and
potentially thereafter). This period of continued employment
shall begin on the Amendment Effective Date and expire on
April 1, 2002. On April 1, 2002, the Executive shall have
thirty (30) days within which to provide the Company with a
Notice of Termination pursuant to Section 7 hereof. If the
Executive provides the Company with a Notice of Termination
within this period, the Executive shall be entitled to all
payments, additional compensation and benefits (including, but
not limited to, the payment described in Section 7(e) of 2.99
times Total Compensation, and vesting of stock options and
phantom stock) described in this Agreement as if a Change of
Control had occurred (whether or not a Change of Control
actually occurred or has occurred at such date) upon the
effective date specified in the Notice of Termination, such
effective date to be not more than ninety (90) days after the
date of the Notice of Termination). If the Executive does not
provide a Notice of Termination within the thirty (30) day
period, the Executive's employment with the Company shall
continue and this Agreement shall remain in full force and
effect according to its terms.
3. Effective as of April 1, 2001, the Agreement shall be amended by
changing the salary per year referenced in Section 3 from "$140,000 per year" to
"$250,000 per year."
4. The Agreement shall be amended by deleting the language in Section
7(e) after paragraph (iii) thereof in the definition of the term "Good Reason"
continued in subparts (G)(1)_(4), which formerly required that certain events
also occur before a Change of Control would constitute Good Reason and trigger
the lump sum severance payments provided in Section 7(e). As amended, subpart
(G) of the definition of Good Reason now reads in its entirety as follows:
(G) the occurrence of a Change of Control.
5. The Agreement shall be amended by modifying the second sentence of
Section 6(a) to provide that the termination of the Agreement will also
terminate the non-compete provisions contained therein. As amended, Section 6(a)
now reads in its entirety as follows:
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(a) Noncompetition Activities. The Executive acknowledges
that the nature of the employment under this
Agreement is such as will bring the Executive in
personal contact with patrons or customers of the
Company and will enable him to acquire valuable
information as to the nature and character of the
business of the Company, thereby enabling him, by
engaging in the competing business on his own behalf,
or for another, to take advantage of such knowledge
and thereby gain an unfair advantage. Accordingly,
the Executive covenants and agrees that he will not,
without the prior written consent of the Company
during the Term of Employment, engage directly or
indirectly for himself, or as an agent,
representative, officer, director or employee of
others, in the exploration for or production of
hydrocarbons in waters offshore from the States of
Texas and Louisiana, provided that the foregoing
restriction shall not apply at any time after the
Executive's Term of Employment and, provided further,
that nothing in this Agreement shall prohibit the
Executive from acquiring or holding any issue of
stock or securities of any entity registered under
Section 12 of the Securities and Exchange Act of 1934
(as amended), listed on a national securities
exchange or quoted on the automated quotation system
of the National Association of Securities Dealers,
Inc., so long as the Executive is not deemed to be an
"affiliate" of such entity, as such term is used in
paragraphs (c) and (d) of Rule 145 under the
Securities Act of 1933 (as amended).
6. The Agreement shall be amended to clarify the scope of the term
"total compensation" in Section 7(e). Section 7(e)(i) shall be amended to read
in its entirety as follows:
(i) pay to the Executive, within thirty (30) days after
the date of such termination, a lump sum payment
equal to 2.99 times the Executive's then-current
annual rate of Total Compensation;
The following provision shall be added to the end of Section 7(e):
As used in this Agreement, the term "Total Compensation" shall mean the
sum of the following:
(i) the current annual salary of the Executive referenced
in Section 3;
(ii) the current car allowance provided by the Company to
the Executive referenced in Section 4(c); and
(iii) the Executive's annual bonus, calculated as though
the Company's financial targets had been met at one
hundred percent (100%) referenced in Section 3 and
Exhibit A hereto.
7. Exhibit A to the Agreement shall be amended by changing the
"Percentage of Salary for Target Annual Bonus" for the Executive from 45% to
55%.
8. The Agreement shall be amended by modifying the last sentence of
Section 14 to read in its entirety as follows:
This Agreement, as amended by the First Amendment,
constitutes the sole agreement between the parties
with respect to the employment of the Executive by
the Company and supersedes any and all other
agreements, oral or written, between the parties.
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9. Except as expressly amended hereby, the Company and the Executive
ratify and confirm all terms and conditions of the Agreement as continuing in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have duly executed this First
Amendment as of the date first above written.
THE HOUSTON EXPLORATION COMPANY
Addresses:
By: /s/ Xxxxxx X. Xxxxxx
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0000 Xxxxxxxxx, Xxxxx 0000 Name: Xxxxxx X. Xxxxxx
Xxxxxxx, Xxxxx 00000 Title: Chairman, Compensation Committee
By: /s/ Xxxxxx X. Xxxxxx
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1100 Louisiana, Suite 2000 Xxxxxx X. Xxxxxx
Xxxxxxx, Xxxxx 00000
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