SALARY CONTINUATION AGREEMENT
THIS SALARY CONTINUATION AGREEMENT (this "Agreement") is made and
entered into effective as of December 5, 1997, by and between XXXXX
PETROLEUM COMPANY, a Delaware corporation ("Xxxxx"), and XXXXX X. XXXXXXX
("Employee"), with reference to the following facts:
A. Employee is currently serving as the President, Chief
Executive Officer and Chairman of the Board of Directors of Xxxxx (the "Board
of Directors") and is a valuable employee of Xxxxx whose continued employment
is beneficial to Xxxxx.
B. Effective March 20, 1987, Employee and Xxxxx entered into that
certain Salary Continuation Agreement as recommended by the Compensation
Committee of the Board of Directors and adopted by the Board of Directors.
C. The Compensation Committee of the Board of Directors has
reconsidered the terms and conditions of Employee's salary continuation
provision in the event of a Change of Control (as defined below) while Employee
is employed by Xxxxx. The Board of Directors has acted upon the Compensation
Committee's recommendations and on December 5, 1997, approved the salary
continuation provision described in this Agreement which is intended to
replace and supersede in its entirety that certain Salary Continuation
Agreement, dated March 20, 1987, between the parties hereto.
NOW, THEREFORE, in consideration of the mutual promises and
obligations contained herein and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto hereby agree
as follows:
1. Salary Continuation Provision.
(a) In the event of a Change of Control of Berry,
Berry agrees to pay to Employee on the effective date of such Change of
Control a single payment in an amount equal to his Salary (as defined herein)
multiplied by 2.
(b) For purposes of this Agreement, a "Change of
Control" of Xxxxx shall mean and shall be deemed to have occurred if and when
any one of the following four events occurs: (a) within the meaning of Section
13(d) of the Securities Exchange Act of 1934, any person or group becomes a
beneficial owner, directly or indirectly, of securities of Xxxxx representing
20% or more of the combined voting power of Xxxxx'x then outstanding
securities, without the prior approval of Xxxxx; (b) individuals who were
members of the Board of Directors immediately prior to a meeting of the
stockholders of Xxxxx involving a contest for the election of Directors shall
not constitute a majority of the Board of Directors following such election;
(c) the stockholders of Xxxxx approve an agreement to merge or consolidate,
or otherwise reorganize, with or into one or more entities which are not
subsidiaries, as a result of which less than 50% of the outstanding
securities of the surviving or resulting entity are, or are to be, owned by
former stockholders of Xxxxx (excluding from the term "former stockholders"
a stockholder who is, or as a result of the transaction in question, becomes
an "affiliate," as that term is used in the Securities Exchange Act of 1934
and the Rules promulgated thereunder, of any party to such merger,
consolidation or reorganization); or (d) the stockholders of Xxxxx approve
the sale of substantially all of Xxxxx'x business and/or assets (in one
transaction or a series of related transactions) to a person or entity
which is not a subsidiary.
(c) For purposes of this Agreement, Employee's
"Salary" shall mean (i) Employee's regular annual salary in effect as of the
effective date of a Change of Control (as reportable on Employee's
IRS Form W-2, including the amount of any voluntary deferrals of salary, and
excluding any gain from exercise of stock options or any other similar
non-recurring payments), plus (ii) an amount equal to the average of the
cash bonuses received by Employee for the two (2) fiscal years immediately
prior to the Change of Control.
2. Employment Status. No assurance is given to Employee that
after a Change of Control he will in fact be retained by Xxxxx, or its
successor, or that he will have the same job classification. Employee
understands and acknowledges that Xxxxx, or its successor, shall not be
obligated in any way to Employee under the provisions of this Agreement if
Employee resigns or is terminated by Xxxxx, whether with or without cause,
prior to the effective date of a Change of Control so long as employee's
termination immediately prior to a change of control was not motivated by a
bad faith intent to avoid the obligation arising under this agreement.
3. No Contract of Employment. Nothing in this Agreement shall
be construed or interpreted as creating any contract or agreement of
employment or any right to continued employment with Xxxxx. This Agreement
is not intended to confer upon Employee any right to notice of termination
beyond that customarily given by Xxxxx to its employees generally, or as may
be set forth in any written employment agreement. Any successor-in-interest
of Xxxxx shall be free to establish its own policies or procedures for notice
and termination of employment.
4. General Provisions.
(a) Neither this Agreement nor any interest herein
may be assigned by Employee.
(b) This Agreement shall be binding upon and shall
be enforceable against Xxxxx, its successors-in-interest and assigns and the
benefits hereunder shall accrue to Employee, his heirs, executors or
administrators.
(c) This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, whether oral or written,
between them regarding the subject matter hereof. This Agreement is intended
to replace and supersede in its entirety that certain Salary Continuation
Agreement dated March 20, 1987, between the parties hereto.
(d) In the event of any claim, dispute or controversy
arising out of or relating to this Agreement, including an action for
declaratory relief, the prevailing party in such action or proceeding shall be
entitled to recover court costs and reasonable out-of-pocket expenses not
limited to taxable costs, including, but not limited to, phone calls,
photocopies, expert witness, travel, etc., and reasonable attorneys' fees to
be fixed by the court. Such recovery shall include court costs, out-of-pocket
expenses and attorneys' fees on appeal, if any. The court shall determine who
is the "prevailing party" whether or not the dispute or controversy proceeds
to final judgment. If either party is reasonably required to incur such
out-of-pocket expenses and attorneys' fees as a result of any claim arising
out of or concerning this Agreement or any right or obligation derived
hereunder, then the prevailing party shall be entitled to recover such
reasonable out-of-pocket expenses and attorneys' fees whether or not an
action is filed.
(e) This Agreement shall be construed and governed by
the laws, without regard to the laws as to choice or conflict of laws, of the
State of California. The parties hereto acknowledge that this Agreement was
executed in Xxxx County, California. By execution and delivery of this
Agreement, the parties hereto agree and accept that any legal action or
proceeding shall be brought in the federal or state courts for the State of
California, County of Xxxx, and the parties expressly waive any objection to
personal jurisdiction, venue or forum non conveniens.
(f) This Agreement contains the entire agreement and
understanding of the parties and may not be modified except by further written
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement
effective the date and year first above written.
XXXXX PETROLEUM COMPANY,
a Delaware corporation
By: ___________________________
Xxxxxx Xxxxxx, Chairman of the
Compensation Committee of the
Board of Directors
"Xxxxx"
______________________________
XXXXX X. XXXXXXX
"Employee"
EXHIBIT 10.2
