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EXHIBIT 10.33
AMENDMENT NO. 1 TO
EMPLOYMENT AGREEMENT
This Amendment No. 1 (this "Amendment") to that certain Employment
Agreement entered into effective as of March 27, 1998, by and between Ocean
Energy, Inc., a Delaware corporation ("Company"), and Xxxx X. Xxxxx ("Employee,"
and such employment agreement, the "Employment Agreement") is entered into as of
November 24, 1998 (the "Amendment Date") between the Company and Employee.
WHEREAS, the Company anticipates entering into an Agreement and Plan of
Merger with Seagull Energy Corporation, a Texas corporation ("Seagull"),
pursuant to which the Company will merge with and into Seagull, with Seagull
being the surviving corporation (the "Merger"); and
WHEREAS, in anticipation of the Merger, the Company and Employee desire
to amend certain provisions of the Employment Agreement, with all such
amendments to be effective as of the consummation of the Merger, except the
amendment to Section 7(b) of the Employment Agreement which shall be effective
as of the Amendment Date;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained in this Amendment, and for
other valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
1. Upon the consummation of the Merger, Section 2 of the Employment
Agreement shall be amended by adding the following sentence at the end of such
section:
"Furthermore, notwithstanding any other sentence of this
Section 2, Employee shall retire as an employee of the Company
(the "Retirement") effective as of the consummation of the
merger of the Company with and into Seagull Energy Corporation
("Seagull"), with Seagull being the surviving corporation (the
"Surviving Company," and the transaction being referred to as
the "Merger") at which time the retirement shall be treated as
a resignation for Good Reason pursuant to Section 7(e)
hereof."
2. Upon the consummation of the Merger, Section 3 of the Employment
Agreement shall be amended by adding the following sentence at the end of such
section:
"Subject to any retirement requirements for members of the
Board of Directors of the Surviving Company, upon the
expiration of Employee's term as member of the Board of
Directors of the Surviving Company, a position to which he is
to be elected effective as of the consummation of the Merger,
the Surviving Company agrees to use its reasonable best
efforts to cause Employee to be re-elected or re-appointed as
member of the Board of Directors of the Surviving Company for
a three year term."
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3. Upon the consummation of the Merger, Section 6 of the Employment
Agreement shall be amended by adding the following sentence at the end of such
section:
"The Surviving Company agrees to amend the Company's
Supplemental Benefit Plan (the "SBP") to permit up to
twenty-two percent (22%) of any payments made under clause (A)
of Section 7(c) hereof to be deferrable under the SBP. In the
event of a Termination, the Company agrees, if necessary, to
provide for the establishment of a rabbi trust for the
accounts covered by the SBP in the event of a change in
control. In addition, the Surviving Company also agrees to
amend the SBP to provide for the establishment of a rabbi
trust for the accounts covered by the SBP in the event of a
Change in Control. A "Change in Control" for purposes of the
preceding sentence shall occur if (i) the Surviving Company
shall not be the surviving entity in any merger or
consolidation (or survives only as a subsidiary of another
entity), (ii) the Surviving Company sells all or substantially
all of its assets to any other person or entity (other than a
wholly-owned subsidiary), (iii) the Surviving Company is to be
dissolved and liquidated, or (iv) as a result of or in
connection with a contested election for the members of the
Board of Directors of the Surviving Company such that the
members constituting the Board of Directors of the Surviving
Company immediately following the consummation of the Merger
shall cease to constitute a majority of the Board of Directors
of the Surviving Company."
4. As of the Amendment Date, Section 7(b) of the Employment Agreement
is deleted in its entirety and replaced with the following:
"(b) Death. If Employee's employment is terminated due to his
death, Employee's spouse or estate, as the case may be, shall
receive the same compensation and benefits set forth in
Section 7(c)(i)."
5. Upon the consummation of the Merger, Section 7(c)(i) of the
Employment Agreement is deleted in its entirety and replaced with the following:
"(i) The Surviving Company may terminate this Agreement and
Employee's employment for any reason deemed sufficient by the
Surviving Company upon notice as provided in Section 10.
However, in the event that Employee's employment is terminated
during the Term by the Surviving Company for any reason other
than his Misconduct or Disability (as such terms are defined
below), then, subject to Section 7(h) below: (A) within five
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business days of the Date of Termination, the Surviving
Company shall pay to Employee a lump sum amount in cash equal
to three times the sum of (1) Employee's Base Compensation and
(2) Employee's Target Bonus; (B) for the 36-month period after
such Date of Termination, the Surviving Company, at its sole
expense, shall continue to provide or arrange to provide
Employee (and Employee's dependents) with health insurance
benefits no less favorable than the health plan benefits
provided by the Surviving Company (or any successor) during
such 36-month period to any senior executive officer of the
Surviving Company (including after Employee's death if it
occurs at the beginning of or during the 36-month period);
provided, further, to the extent the coverage or benefits
received are taxable to Employee, the Surviving Company shall
make Employee "whole" on a net after tax basis; (C) on the
Date of Termination all then outstanding Company or Surviving
Company stock-based awards of Employee, whether under this
Agreement, a Company or Surviving Company stock plan or
otherwise, shall become immediately exercisable and payable in
full, as the case may be, with any performance goals
associated therewith being deemed to have been achieved at the
maximum levels; (D) for the 36-month period after the Date of
Termination, the Surviving Company shall pay, at a monthly
rate of $6,250 for Employee's office rent, expenses,
secretarial assistance, computers, and parking; (E) for the
36-month period after the Date of Termination, the Surviving
Company shall continue to pay for the same club dues and
Company related expenses of Employee for which the Surviving
Company is paying on the Date of Termination, and, (F) in the
case of Retirement only, and contingent upon continued service
on the Board of Directors of the Surviving Company or the
Surviving Company's successor, the Surviving Company shall
grant Employee a stock option covering 25,000 shares of
Surviving Company stock on terms and conditions substantially
similar to those granted to outside directors on March 27,
1998 under the Company's 1998 Long Term Incentive Plan.
Notwithstanding anything in this Agreement to the contrary, if
any payment to Employee in respect of a Company or Surviving
Company stock-based award would give rise to a short-swing
profit liability to Employee under Section 16(b) of the
Securities Exchange Act of 1934, then both the payment and the
entitlement to payment thereof shall automatically be deferred
until the earliest date at which the payment of such benefit
would not result in a short-swing profit liability to
Employee. The Surviving Company shall deem Employee "retired"
for the purposes of all options granted to the Employee under
all stock option plans sponsored by the Surviving Company or
its-predecessors in order to permit Employee to have the
maximum term possible under such plans in which to exercise
such options."
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6. Capitalized terms used in this Amendment, but not otherwise defined,
shall have the meanings ascribed in the Employment Agreement.
7. Unless otherwise expressly modified by this Amendment, all terms and
conditions set forth in the Employment Agreement shall remain in full force and
effect. The parties acknowledge that the only terms and conditions modified by
this Amendment are those expressly set forth herein.
8. The validity, interpretation, construction and performance of this
Amendment shall be governed by the laws of the State of Texas without reference
to rules relating to conflicts of law.
9. This Amendment may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, each party has executed, or has caused a duly
authorized officer to execute, this Amendment as of the Amendment Date.
OCEAN ENERGY, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Position: Exec. V.P. & General Counsel
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EMPLOYEE
By: /s/ Xxxx X. Xxxxx
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XXXX X. XXXXX
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