AMENDMENT TO
EMPLOYMENT AGREEMENT
WHEREAS, SEAGULL ENERGY CORPORATION ("Company") and XXXXX X.
XXXXXXX ("Executive") have heretofore entered into an Employment Agreement (the
"Agreement"), which was effective as of September 16, 1998; and
WHEREAS, Company and Executive desire to amend the Agreement in certain
respects, contingent on, and effective upon, the consummation of the
transactions (the "Merger") contemplated by the Agreement and Plan of Merger
between Company and Ocean Energy, Inc. dated as of November 24, 1998, as the
same may be amended from time to time (the "Merger Agreement");
NOW, THEREFORE, Company and Executive agree that the Agreement shall be
amended as follows, effective as of the Merger Effective Time (which shall have
the same meaning as the term "Effective Time" in the Merger Agreement):
1. The second sentence of paragraph 1.2 of the Agreement shall be
deleted; provided, however, that if Executive is not elected as Chairman of the
Board of Directors of Company (or a successor to Company or any publicly-traded
parent (as such term is hereinafter defined) of Company or any successor of
Company) prior to the date that is eighteen months after the Merger Effective
Time, the failure to elect Executive to such position or the failure to reelect
Executive to such position or the removal of Executive from such position shall
be deemed to constitute a failure described in paragraph 2.3(i)(C) of the
Agreement and an Involuntary Termination (as such term is defined in the
Severance Agreement dated August 25, 1998 between Company and Executive). The
term "parent" shall mean any corporation, partnership, limited liability company
or other entity that owns shares of the capital stock of Company with at least a
majority of the voting power of Company's outstanding shares of capital stock.
2. A new paragraph 3.10 shall be added to Article III of the Agreement:
"3.10 Effect of Merger. Notwithstanding any provision in this
Agreement to the contrary, the consummation of the transactions (the
"Merger") contemplated by the Agreement and Plan of Merger between
Company and Ocean Energy, Inc. dated as of November 24, 1998, as the
same may be amended from time to time (the "Merger Agreement"), shall
be deemed to be a "change of control" with respect to Executive for all
purposes under this Agreement, the Severance Agreement, the 1995 Plan
and the 1998 Plan."
3. Paragraph 5.2 of the Agreement shall be deleted and the following
shall be substituted therefor:
"5.2 Noncompetition. Executive shall not, directly or
indirectly for Executive or for others, in any
geographic area or market where Company or any of
-1-
its affiliates are conducting any business or have during the previous
twelve months conducted such business:
(i) engage in any business competitive with the
business conducted by Company; or
(ii) render advice or services to, or otherwise
assist, any other person, association, or entity who is
engaged, directly or indirectly, in any business competitive
with the business conducted by Company with respect to such
competitive business.
These noncompetition obligations shall apply (A) during the period that
Executive is employed by Company, (B) during any period after
Executive's termination of employment by Company for a reason
encompassed by paragraph 2.2(ii) when Company is providing Executive
with Termination Benefits pursuant to Article 7, and (C) if Executive
terminates his employment with Company for a reason encompassed by
paragraph 2.3(ii) prior to the earlier of (1) the second anniversary of
the Effective Date or (2) the date that is eighteen months after the
Merger Effective Time, during the two-year period commencing on the
date of Executive's termination of employment."
4. As amended hereby, the Agreement is specifically ratified and
reaffirmed. If the Merger Agreement is terminated without the consummation of
the transactions contemplated thereby, this Amendment shall be null and void and
of no effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the 24th day of November, 1998 to be effective as of the Merger Effective Time.
SEAGULL ENERGY CORPORATION
By:____________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
"COMPANY"
-------------------------------------------
Xxxxx X. Xxxxxxx
"EXECUTIVE"
-2-
