EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into effective as of
July 20, 2000 (the "Effective Date"), by and between Ocean Energy, Inc., a Texas
corporation (the "Company"), and Xxxx X. Xxxxxxxx ("Employee").
WHEREAS, the Company employs Employee and desires to continue such
employment relationship and Employee desires to continue such employment; and
WHEREAS, the Company and Employee entered into a Severance Agreement
effective as of June 22, 1999, which is currently in effect (the "Severance
Agreement"); and
WHEREAS, the Company and Employee desire to enter into an agreement
reflecting the terms of the employment relationship, including the termination
thereof, that replaces the Severance Agreement;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties, and agreements contained herein, and for other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
1. Effect of Agreement. Effective as of the Effective Date, this
Agreement supersedes and replaces the Severance Agreement in its
entirety and the Severance Agreement shall be null and void and of no
further force and effect.
2. Employment. The Company hereby employs Employee, and Employee hereby
accepts employment by the Company, on the terms and conditions set
forth in this Agreement.
3. Term of Employment. Subject to the provisions for earlier termination
provided in this Agreement, this Agreement shall expire on July 20,
2005.
4. Employee's Duties. During the Term of this Agreement, Employee shall
serve as Executive Vice President - Operations of the Company, with
such duties and responsibilities as may from time to time be assigned
to him by the board of directors of the Company (the "Board"),
provided that such duties are consistent with the customary duties of
such position.
Employee agrees to devote his full attention and time during normal
business hours to the business and affairs of the Company and to use reasonable
best efforts to perform faithfully and efficiently his duties and
responsibilities. Employee shall not, either directly or indirectly, enter into
any business or employment with or for any person, firm, association or
corporation other than the Company during the Term of this Agreement; provided,
however, that Employee shall not be prohibited from making financial investments
in any other company or business or from serving on the board of directors of
any other company. Employee shall at all times observe and comply with all
lawful directions and instructions of the Board.
5. Base Compensation. For services rendered by Employee under this
Agreement, the Company shall pay to Employee a base salary ("Base
Compensation") of $350,000 per annum payable in accordance with the
Company's customary pay periods and subject to customary withholdings.
The amount of Base Compensation shall be reviewed by the Board on an
annual basis as of the close of each fiscal year of the Company and
may be increased, as the Board may deem appropriate. In the event the
Board deems it appropriate to increase Employee's annual base salary,
said increased amount shall thereafter be the "Base Compensation."
Employee's Base Compensation, as increased from time to time, may not
thereafter be decreased unless agreed to by Employee. Nothing
contained herein shall prevent the Board from paying additional
compensation to Employee in the form of bonuses or otherwise during
the Term of this Agreement.
6. Additional Benefits. In addition to the Base Compensation provided for
in Section 5 herein, Employee shall be entitled to the following:
(a) Expenses. The Company shall, in accordance with any rules and policies
that it may establish from time to time for executive officers,
reimburse Employee for business expenses reasonably incurred in the
performance of his duties. It is understood that Employee is
authorized to incur reasonable business expenses for promoting the
business of the Company, including reasonable expenditures for travel,
lodging, meals and client or business associate entertainment. Request
for reimbursement for such expenses must be accompanied by appropriate
documentation.
(b) Vacation. Employee shall be entitled to five (5) weeks of vacation per
year, without any loss of compensation or benefits. Employee shall not
be entitled to compensation for, or to carry forward, any unused
vacation time.
(c) General Benefits. Employee shall be entitled to participate in the
various employee benefit plans or programs provided to the employees
of the company in general, including but not limited to, health,
dental, disability and life insurance plans, subject to the
eligibility requirements with respect to each of such benefit plans or
programs, and such other benefits or perquisites as may be approved by
the Board during the Term of this Agreement. Nothing in this paragraph
shall be deemed to prohibit the Company from making any changes in any
of the plans, programs or benefits described in this Section 6,
provided the change similarly affects all executive officers of the
Company similarly situated.
(d) Options. Upon the occurrence of a "Corporate Change" as hereinafter
defined, Employee shall be considered as immediately and totally
vested in any and all stock options or other similar awards previously
made to Employee by the Company or its subsidiaries under a "Long Term
Incentive Plan" duly adopted by the Board (such
options or similar awards are hereinafter collectively referred to as
"Options"). For purposes of this Agreement, a "Corporate Change" shall
occur if (i) the Company (A) shall not be the surviving entity in any
merger, consolidation or other reorganization (or survives only as a
subsidiary of an entity other than a previously wholly-owned
subsidiary of the Company) or (B) is to be dissolved and liquidated,
and as a result of or in connection with such transaction, the persons
who were directors of the Company before such transaction shall cease
to constitute a majority of the Board, (ii) any person or entity,
including a "group" as contemplated by Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, acquires or gains
ownership or control (including, without limitation, power to vote) of
20% or more of the outstanding shares of the Company's voting stock
(based upon voting power), and as a result of or in connection with
such transaction, the persons who were directors of the Company before
such transaction shall cease to constitute a majority of the Board, or
(iii) the Company sells all or substantially all of the assets of the
Company to any other person or entity (other than a wholly-owned
subsidiary of the Company) in a transaction that requires shareholder
approval pursuant to the Texas Business Corporation Act.
7. Confidential Information. Employee, during the Term, may have access
to and become familiar with confidential information, secrets and
proprietary information concerning the business and affairs of the
Company. As to such confidential information, Employee agrees as
follows: (a) During the employment of Employee with the Company and
thereafter Employee will not, either directly or indirectly, disclose
to any third party without the written permission of the Company, nor
use in any way (except as required in the course of his employment
with the Company) any confidential information, secret or proprietary
information of the Company. In the event of a breach or threatened
breach of the provisions of this Section 7(a), the Company shall be
entitled, in addition to any other remedies available to the Company,
to an injunction restraining Employee from disclosing such
confidential information. (b) Upon termination of employment of
Employee, for whatever reason, Employee shall surrender to the Company
any and all documents, manuals, correspondence, reports, records and
similar items then or thereafter coming into the possession of
Employee which contain any confidential, secret or proprietary
information of the Company.
8. Termination. This Agreement may be terminated prior to the end of its
Term as set forth below:
(a) Resignation (other than for Good Reason). Employee may resign,
including by reason of retirement, his position at any time by
providing written notice of resignation to the Company in accordance
with Section 11 hereof. In the event of such resignation, except in
the case of resignation for Good Reason (as defined below), this
Agreement shall terminate and Employee shall not be entitled to
further compensation pursuant to this Agreement other than the payment
of any unpaid Base Compensation accrued hereunder as of the date of
Employee's resignation.
(b) Death. If Employee's employment is terminated due to his death, this
Agreement shall terminate and the Company shall have no obligations to
Employee or his legal representatives with respect to this Agreement
other than the payment of any unpaid Base Compensation previously
accrued hereunder.
(c) Discharge.(i) The Company may terminate Employee's employment for any
reason at any time upon written notice thereof delivered to Employee
in accordance with Section 11 hereof. In the event that Employee's
employment is terminated during the Term by the Company for any reason
other than his Misconduct or Disability (both as defined below), then
(A) the Company shall pay in lump sum in cash to Employee, within
fifteen (15) days following the date of termination, an amount equal
to the product of (i) Employee's Base Compensation as in effect
immediately prior to Employee's termination, multiplied by (ii) three,
(B) for three years following the date of termination, the Company, at
its cost, shall provide or arrange to provide Employee (and, as
applicable, Employee's dependents) with accident and group health
insurance benefits substantially similar to those which Employee (and
Employee's dependents) were receiving immediately prior to Employee's
termination; however, the welfare benefits otherwise receivable by
Employee pursuant to this clause (B) shall be reduced to the extent
comparable welfare benefits are actually received by Employee (and/or
Employee's dependents) during such period under any other employer's
welfare plan(s) or program(s), with Employee being obligated to
promptly disclose to the Company any such comparable welfare benefits,
(C) in addition to the aforementioned compensation and benefits, the
Company shall pay in lump sum in cash to Employee within fifteen (15)
days following the date of termination an amount equal to the product
of (i) Employee's average bonus paid by the Company during the most
recent two (2) years immediately prior to the date of termination,
provided, however, that for purposes of computing such average bonus,
Employee shall be deemed to have
received a bonus payment equal to 45% of Employee's annual salary at
the time he commenced employment with the Company for the 1998 fiscal
year of the Company and any bonus payments actually received by
Employee for such fiscal year shall be disregarded, multiplied by (ii)
three and (D) Employee shall be considered as immediately and totally
vested in any and all Options previously made to Employee by Company
or its subsidiaries. (ii) Notwithstanding the foregoing provisions of
this Section 8, in the event Employee is terminated because of
Misconduct, the Company shall have no obligations pursuant to this
Agreement after the Date of Termination other than the payment of any
unpaid Base Compensation accrued through the Date of Termination. As
used herein, "Misconduct" means (A) the continued failure by Employee
to substantially perform his duties with the Company (other than any
such failure resulting from Employee's incapacity due to physical or
mental illness or any such actual or anticipated failure after the
issuance of a Notice of Termination by Employee for Good Reason),
after a written demand for substantial performance is delivered to
Employee by the Board, which demand specifically identifies the manner
in which the Board believes that Employee has not substantially
performed his duties, (B) the engaging by Employee in conduct which is
demonstrably and materially injurious to the Company, monetarily or
otherwise (other than such conduct resulting from Employee's
incapacity due to physical or mental illness or any such actual or
anticipated conduct after the issuance of a Notice of Termination by
Employee for Good Reason), or (C) Employee's conviction for the
commission of a felony. Anything contained in this Agreement to the
contrary notwithstanding, the Chief Executive Officer of the Company
shall have the sole power and authority to terminate the employment of
Employee on behalf of the Company.
(d) Disability. If Employee shall have been absent from the full-time
performance of Employee's duties with the Company for ninety (90)
consecutive calendar days as a result of Employee's incapacity due to
physical or mental illness, Employee's employment may be terminated by
the Company for "Disability" and Employee shall not be entitled to
further compensation pursuant to this Agreement, except that Employee
shall be considered as immediately and totally vested in any and all
Options previously granted to Employee by Company or its subsidiaries.
(e) Resignation for Good Reason. Employee shall be entitled to terminate
his employment for Good Reason as defined herein. If Employee
terminates his employment for Good Reason he shall be entitled to the
compensation and benefits provided in
Paragraph 8(c)(i) hereof. "Good Reason" shall mean the occurrence of any of
the following circumstances without Employee's express written consent
unless such breach or circumstances are fully corrected prior to the Date
of Termination specified in the Notice of Termination given in respect
hereof: (i) the material breach of any of the Company's obligations under
this Agreement without Employee's express written consent; (ii) the
continued assignment to Employee of any duties inconsistent with the office
of Executive Vice President - Operations; (iii) the failure by the Company
to pay to Employee any portion of Employee's compensation on the date such
compensation is due; (iv) the failure by the Company to continue to provide
Employee with benefits substantially similar to those enjoyed by other
executive officers who have entered into similar employment agreements with
Employer under any of the Company's medical, health, accident, and/or
disability plans in which Employee was participating immediately prior to
such time; (v) a change in the location of Employee's principal place of
employment by the Company by more than 50 miles from the location where he
was principally employed immediately prior to the date of such change; or
(vi) the failure of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated in
Section 13 hereof. In addition, the occurrence of a Corporate Change other
than as described in Section 6(d)(i)(A), shall constitute "Good Reason"
hereunder, but only if Employee terminates his employment within ninety
(90) days following the effective date of such Corporate Change.
(f) Notice of Termination. Any purported termination of Employee's
employment by the Company under Sections 8(c)(ii) or 8(d), or by
Employee under Section 8(e), shall be communicated by written Notice
of Termination to the other party hereto in accordance with Section 11
hereof. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which, if by the Company and is for Misconduct or
Disability, shall set forth in reasonable detail the reason for such
termination of Employee's employment, or in the case of resignation by
Employee for Good Reason, said notice must specify in reasonable
detail the basis for such resignation. A Notice of Termination given
by Employee pursuant to Section 8(e) shall be effective even if given
after the receipt by Employee of notice that the Board has set a
meeting to consider terminating Employee for Misconduct. Any purported
termination for which a Notice of
Termination is required which is not effected pursuant to this Section
8(f) shall not be effective.
(g) Date of Termination. "Date of Termination" shall mean the date
specified in the Notice of Termination, provided that the Date of
Termination shall be at least 15 days following the date the Notice of
Termination is given. Notwithstanding the foregoing, in the event
Employee is terminated for Misconduct, the Company may refuse to allow
Employee access to the Company's offices (other than to allow Employee
to collect his personal belongings under the Company's supervision)
prior to the Date of Termination.
(h) Mitigation. Employee shall not be required to mitigate the amount of
any payment provided for in this Section 8 by seeking other employment
or otherwise, nor shall the amount of any payment provided for in this
Agreement be reduced by any compensation earned by Employee as a
result of employment by another employer, except that any severance
amounts payable to Employee pursuant to the Company's severance plan
or policy for employees in general shall reduce the amount otherwise
payable pursuant to Sections 8(c)(i) or 8(e).
(i) Excess Parachute Payments. Notwithstanding anything in this Agreement
to the contrary, to the extent that any payment or benefit received or
to be received by Employee hereunder in connection with the
termination of Employee's employment would, as determined by tax
counsel selected by the Company, constitute an "Excess Parachute
Payment" (as defined in Section 280G of the Internal Revenue Code),
the Company shall fully "gross-up" such payment so that Employee is in
the same "net" after-tax position he would have been if such payment
and gross-up payments had not constituted Excess Parachute Payments.
(j) Resignation from Board. In the event Employee is a member of the board
of directors of the Company or any of its subsidiaries, and Employee's
employment by the Company is terminated for any reason (other than
Employee's death), Employee shall immediately resign as a member of
such board of directors upon the written request of the Chairman of
the Board. Nothing herein shall be deemed to limit the power of the
shareholders of the Company to at any time remove any director,
including, without limitation, Employee, in accordance with applicable
law.
9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit Employee's continuing or future participation in any benefit,
bonus, incentive, or other plan or program provided by the Company or
any of its affiliated companies and for which Employee may qualify,
nor shall anything herein limit or otherwise adversely affect such
rights as Employee may have under any Options with the Company or any
of its affiliated companies.
10. Assignability. The obligations of Employee hereunder are personal and
may not be assigned or delegated by him or transferred in any manner
whatsoever, nor are such obligations subject to involuntary
alienation, assignment or transfer. The Company shall have the right
to assign this Agreement and to delegate all rights, duties and
obligations hereunder, either in whole or in part, to any parent,
affiliate, successor or subsidiary organization or company of the
Company, so long as the obligations of the Company under this
Agreement remain the obligations of the Company.
11. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by
United States registered mail, return receipt requested, postage
prepaid, addressed to the Company at its principal office address,
directed to the attention of the Board with a copy to the Secretary of
the Company, and to Employee at Employee's residence address on the
records of the Company or to such other address as either party may
have furnished to the other in writing in accordance herewith except
that notice of change of address shall be effective only upon receipt.
12. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and
effect.
13. Successors; Binding Agreement. (a) The Company will require any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle Employee to compensation from the Company
in the same amount and on the same terms as he would be entitled to
hereunder if he terminated his employment for Good Reason, except that
for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination.
As used herein, the term "Company" shall include any successor to its
business and/or assets as aforesaid which executes and delivers the
Agreement provided for in this Section 13 or which otherwise becomes
bound by all terms and provisions of this Agreement by operation of
law. (b) This Agreement and all rights of Employee hereunder shall
inure to the benefit of and be enforceable by Employee's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Employee should
die while any amounts would be payable
to him hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms
of this Agreement to Employee's devisee, legatee, or other designee or,
if there be no such designee, to Employee's estate.
14. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed
to in writing and signed by Employee and such officer as may be
specifically authorized by the Board. No waiver by either party hereto
at any time of any breach by the other party hereto of, or in
compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. This Agreement is an integration of the parties
agreement; no agreement or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made
by either party, except those which are set forth expressly in this
Agreement. THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE
OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS.
15. Counterparts. This Agreement 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.
16. Arbitration. Either party may elect that any dispute or controversy
arising under or in connection with this Agreement be settled by
arbitration in Houston, Texas in accordance with the rules of the
American Arbitration Association then in effect. If the parties cannot
mutually agree on an arbitrator, then the arbitration shall be
conducted by a three arbitrator panel, with each party selecting one
arbitrator and the two arbitrators so selected selecting a third
arbitrator. The findings of the arbitrator(s) shall be final and
binding, and judgment may be entered thereon in any court having
jurisdiction. The findings of the arbitrator(s) shall not be subject
to appeal to any court, except as otherwise provided by applicable
law. The arbitrator(s) may, in his or her (or their) own discretion,
award legal fees and costs to the prevailing party.
IN WITNESS WHEREOF, the parties have executed this Agreement on July
20, 2000, effective for all purposes as provided above.
OCEAN ENERGY, INC.
By: ____________________________
Name: Xxxxx X. d'Hemecourt
Title: Vice President - Human Resources
EMPLOYEE:
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