EMPLOYMENT AGREEMENT
dated as of August 21, 1996,
between
MESA INC., a Texas corporation (the "Company"),
and
XXX XXX XXXXXXX (the "Employee"), a Texas resident.
WHEREAS, the Company has determined that the Employee's
services are important to it and it therefor wishes to provide for the
secure continued employment of the Employee and to formalize its agreements
with the Employee on the scope of his duties, his compensation and the
obligations of the Company and the Employee should the Company cease to
employ the Employee;
NOW, THEREFORE, the Company agrees to employ the Employee,
and the Employee agrees to be employed, upon the following terms and
conditions:
1. The Company shall employ the Employee as Chief Executive
Officer and Chairman of the Board for the Term (as hereinafter defined),
with such duties, commensurate with such offices, as shall be reasonably
assigned to him by the Board of Directors of the Company (the "Board").
During the Term, the Employee shall devote substantially all of his
attention, knowledge, skill and working time to the business of the Company
and to the promotion of its interests (with the exception of absences
because of vacations or illness). During the Term, the Employee will not
engage in, be employed by, be a director of (excluding service as a
director of North Central Oil) or otherwise directly or indirectly be
interested in (other than Employee's ownership of equity securities of Cross
Timbers Oil Company and Cross Timbers Royalty Trust, Employee's indirect
interest in DNR-MESA Holdings, L.P., and other than through ownership of not
more than one percent of any other entity's publicly traded equity interests),
any business or activity competing with or of a nature similar to the business
of the Company and will not take part in any activities materially
detrimental to the best interests of the Company. During the Term,
Employee's principal business office shall be located at the Company's
office at 0000 Xxxxxxxx Xxxxxx West, 0000 X. X'Xxxxxx Xxxxxxxxx, Xxxxxx,
Xxxxx 00000, with appropriate secretarial and other support services, but
Employee, at his option, may also maintain an office in Fort Worth, Texas,
or work from his home, from time to time, it being understood that Employee
is not required to be at the Company's offices in Irving, Texas, each
working day.
2. During the first year of the Term, the Company shall pay the
Employee a base salary of $500,000 per year (payable periodically in
accordance with the Company's regular payroll practices), subject to any
required deductions or withholdings. During the second year of the Term,
Employee's base salary shall be increased, but not decreased, in the
discretion of the Board, but not less than the percentage increase in the
cost of living for the year 1996.
3. The Employee shall be entitled to such reasonable vacations
during each year of his employment hereunder as may be allowed by the Board
in accordance with its general practices applicable to the Company's senior
executives.
4. The Company shall reimburse the Employee for all reasonable
and necessary travel and other business expenses (properly documented) that
he incurs in the course of his duties during the Term. Such reimbursable
expenses shall include those incurred by Employee's spouse when she
accompanies him on business travel. The Company shall also provide a
suitable automobile and driver for Employee's commute to and from the
Company's offices and local business travel.
5. (a) The term of the Employee's employment pursuant to this
Agreement (the "Term") shall be from the date hereof to the earliest of (i)
the second anniversary of the date hereof, (ii) the Employee's voluntary
termination of employment, (iii) the death of the Employee or (iv) the
termination of his employment by the Company pursuant to Paragraph 6.
(b) In addition to the payment of Employee's salary
pursuant to Paragraph 2, if the Employee's employment is terminated by the
Company prior to the expiration of the Term, other than under circumstances
described in Paragraph 6, or if Employee terminates his employment for good
reason, as provided in Paragraph 7, Employee shall be entitled to a
severance payment in accordance with the following schedule:
Termination Occurring Amount of Payment
Within 1 year of date hereof $1,600,000
More than 1 year, but less than 18 months $1,200,000
At least 18 months $ 800,000
6. The Company may terminate the employment of the Employee at
any time for "cause," which shall mean (i) the willful and continued failure
by Employee to attempt to perform substantially his duties with the Company
(other than such failure resulting from Employee's incapacity due to
physical or mental illness), (ii) commission of a material willful breach of
the terms of this Agreement, (iii) gross negligence or willful misconduct in
the performance of assigned duties or (iv) conviction of a felony or other
crime involving fraud or moral turpitude. Any such termination shall occur
only after at least 90 days' written notice by the Board of Directors of the
Company to the Employee, which notice shall specifically identify the cause
for termination and shall include, in any instance other than under clause
(iv) above, a demand for cure by the Employee. If Employee fails to
eliminate the cause for termination within the 90-day period, his
termination shall then be effective.
7. At any time during the Term, Employee shall be entitled to
terminate his employment for "good reason" which for the purposes of this
Agreement shall mean (i) a reduction or diminution of his position, titles,
offices, duties, responsibilities or status with the Company without cause
and without the Employee's express written consent, (ii) a reduction by the
Company in the Employee's base salary in effect at the time in accordance
with Paragraph 2 hereof, (iii) relocation of the Company's executive offices
to a site outside Dallas County or Tarrant County, Texas or (iv) any other
breach by the Company of its obligations under this Agreement, which the
Company fails to cure within a reasonable period of time after receipt of
written notice of such breach, which period is not to exceed 90 days unless
agreed upon in writing by both parties. Any amount owing to Employee in
such case pursuant to Paragraph 5(b) shall be paid to Employee within 10
business days following his termination of employment.
8. The Employee shall be entitled to participate in such
insurance, pension, profit-sharing and other benefits as are or may become
available generally to executive officers and/or other employees of the
Company on a basis comparable to that of such other executive officers and
employees of the Company to the extent permitted by applicable laws or
governmental regulations. Employee shall be entitled to participate in the
Company's Stock Option Plan in accordance with the agreement entered into
between Employee and the Company under that Plan. Employee shall be
entitled to participate in the Company's retiree medical program without
regard to any length of service requirement.
9. The Employee shall be, and he represents that he is, free to
enter into this Agreement with the Company, and not under any contractual
restraint that would prohibit him from satisfactorily performing his duties
to the Company hereunder.
10. This Agreement shall inure to the benefit of and shall bind
all successors to the Company by merger, consolidation or sale of all or
substantially all of the Company's present principal business. This
Agreement is personal to both parties and may not be assigned by either of
them.
11. Notice shall be given to the Company in writing at the office
of the Company where the chief executive officer is located, with a copy of
such notice to be sent to:
MESA Inc.
0000 Xxxxxxxx Xxxxxx Xxxx
0000 X. X'Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Associate General Counsel
Notice shall be given to Employee in writing at the office
of the Company where the chief executive officer is located, with a copy of
such notice to be sent to Employee at his residence and a second copy sent
to:
Xx. Xxx X. Xxxxxxxxxx
Xxxxx, Xxxx & Xxxxxxx, P.C.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
12. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
13. This Agreement constitutes the full and complete
understanding and agreement of the parties, supersedes all prior
understandings and agreements between the Company and the Employee as to the
employment of the Employee by the Company and cannot be amended, changed,
modified or terminated in any respect, without the written consent of the
parties hereto.
14. This Agreement may be signed on more than one counterpart and
by the different parties on separate counterparts and shall be binding as
though signed on a single counterpart.
IN WITNESS WHEREOF, the Company and the Employee have caused
this Agreement to be executed and delivered, all as of the date first above
written.
MESA INC.
By: \s\ Xxxxx Xxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
\s\ I. Xxx Xxxxxxx
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Employee
