EMPLOYMENT AGREEMENT
This
Employment Agreement (this “Agreement”), effective as of November 1, 2007 (the
“Effective Date”), is between Rosetta Resources Inc., a Delaware corporation
(“Employer”), and Xxxxx X. Xxxxxxxxx (“Executive”).
WHEREAS,
Employer wishes to employ Executive as its President and Chief Executive Officer
and Executive wishes to accept such employment; and
WHEREAS,
the parties wish to set forth the terms and conditions of such
employment;
NOW,
THEREFORE, the parties hereto agree as follows:
1. Definitions. As
used in this Agreement, the following terms have the following
meanings:
(a) “Affiliate”
means, with respect to any entity, any other corporation, organization,
association, partnership, sole proprietorship or other type of entity, whether
incorporated or unincorporated, directly or indirectly controlling or controlled
by or under direct or indirect common control with such entity.
(b) “Annual
Period” means the time period of each year beginning on the first day of the
Employment Term and ending on the day before the anniversary of that
date.
(c) “Board”
means the Board of Directors of Employer.
(d) “Cause”
means a finding by the Board of acts or omissions constituting, in the Board’s
reasonable judgment, any of the following occurring during the Employment
Term:
(i)
a
material breach of duty by Executive in the course of his employment with
Employer or its Affiliates involving fraud, acts of dishonesty (other than
inadvertent acts or omissions), disloyalty to Employer or its Affiliates or
moral turpitude constituting criminal felony; (ii) conduct by Executive that
is
materially detrimental to Employer, monetarily or otherwise, or that reflects
unfavorably on Employer or Executive to such an extent that Employer’s best
interests reasonably require the termination of Executive’s employment; (iii)
acts or omissions of Executive materially in violation of his obligations under
this Agreement or at law; (iv) Executive’s material failure to comply with or
enforce the personnel policies of Employer or its Affiliates,
specifically including those concerning equal employment
opportunity
and those related to harassing conduct; (v) Executive’s material insubordination
to the Board; (vi) subject to the details of Paragraph 4(b), Executive’s failure
to devote his full working time and best efforts to the performance of his
responsibilities to Employer or its Affiliates; (vii) Executive’s conviction of,
or entry of a plea agreement or consent decree or similar arrangement with
respect to a felony or any material violation of federal or state securities
laws, in either case, having a material adverse effect on Employer or its
Affiliates; or (viii) Executive’s material failure to cooperate with any
investigation or inquiry authorized by the Board or conducted by a governmental
authority related to Employer’s or an Affiliate’s business or Executive’s
conduct related to Employer or an Affiliate.
(e) “Competitor”
means any person or entity that is engaged in the acquisition, exploration,
development and production of oil and gas properties in competition with the
activities of Employer or an Affiliate.
(f) “Confidential
Information” means, without limitation, all documents or information, in
whatever form or medium, concerning or evidencing sales; costs; pricing;
strategies; forecasts and long range plans; financial and tax information;
personnel information; business, marketing and operational projections, plans
and opportunities; customer, vendor, and supplier information; geological and
geophysical maps, data, interpretations, and analyses; project and prospect
locations and leads; well logs, interpretations, and analyses; and production
information; but excluding any such information that is or becomes generally
available to the public other than as a result of any breach of this Agreement
or other unauthorized disclosure by Executive.
(g) “Corporate
Change” means (i) the dissolution or liquidation of Employer; (ii) a
reorganization, merger or consolidation of Employer with one or more
corporations (other than a merger or consolidation effecting a reincorporation
of Employer in another state or any other merger or consolidation in which
the
shareholders of the surviving corporation and their proportionate interests
therein immediately after the merger or consolidation are substantially
identical to the shareholders of Employer and their proportionate interests
therein immediately prior to the merger or consolidation) (collectively, a
“Corporate Change Merger”); (iii) the sale of all or substantially all of the
assets of Employer or an Affiliate as defined in the Rosetta Resources, Inc.
2005 Long-Term Incentive Plan; or (iv) the occurrence of a Change in Control.
A
“Change in Control” shall be deemed to have occurred if (x) individuals who were
directors of Employer immediately prior to a Control Transaction shall cease,
within two years of such Control Transaction to constitute a majority of the
Board of Directors of Employer (or of the Board of Directors of any successor
to
Employer or to a company which has acquired all or substantially all its assets)
other than by reason of an increase in the size of the membership of the
applicable Board that is approved by at least a majority of the individuals
who
were directors of Employer immediately prior to such Control Transaction or
(y)
any entity, person or Group acquires shares of Employer in a transaction or
series of transactions that result in such entity, person or Group directly
or
indirectly owning beneficially 50% or more of the outstanding shares of Common
Stock. As used herein, “Control Transaction” means (A) any tender offer for or
acquisition of capital stock of Employer pursuant to which any person, entity,
or Group directly or indirectly acquires beneficial ownership of 20% or more
of
the outstanding shares of Common Stock; (B) any Corporate Change Merger of
Employer; (C) any contested election of directors of Employer; or (D) any
combination of the foregoing, any one of which results in a change in voting
power sufficient to elect a majority of the Board of Directors of Employer.
As
used herein, “Group” means persons who act “in concert” as described in Sections
13(d)(3) and/or 14(d)(2) of the Securities Exchange Act of 1934, as
amended. Notwithstanding the foregoing, “Corporate Change” shall not
include the Acquisition, the Offering or any public offering of equity of
Employer pursuant to a registration that is effective under the Securities
Act
of 1933, as amended. As used herein, “Acquisition” and “Offering” shall have the
same meaning given to those terms in the Rosetta Resources Inc. 2005 Long-Term
Incentive Plan.
(h) “Employment
Termination Date” means the effective date of termination of Executive’s
employment as established under Paragraph 6(g).
(i) “Good
Reason” means any of the following actions if taken without Executive’s prior
written consent: (i) any material diminution in Executive’s authority,
responsibilities or duties; (ii) any material diminution in Executive’s base
compensation; (iii) any permanent relocation of Executive’s regular place of
business to a location 50 miles or more from the location of Employer’s
executive offices on the Effective Date; or (iv) any other action or inaction
by
Employer that constitutes a material breach by Employer of its obligations
under
this Agreement. Neither a transfer of employment among Employer and any of
its
Affiliates nor a change in the co-employment relationship, standing alone,
constitutes “Good Reason.”
(j) “Inability
to Perform” means and shall be deemed to have occurred if Executive has been
determined under Employer’s long-term disability plan to be eligible for
long-term disability benefits. In the absence of Executive’s participation in,
application for benefits under, or existence of such a plan, “Inability to
Perform” means Executive’s inability to perform the essential functions of his
position because of an illness or injury for (i) a period
of six
consecutive months or (ii) an aggregate of six months within any period of
12
consecutive months.
(k) “Work
Product” means all ideas, works of authorship, inventions, and other creations,
whether or not patentable, copyrightable, or subject to other
intellectual-property protection, that are made, conceived, developed or worked
on in whole or in part by Executive while employed by Employer and/or any of
its
Affiliates, that relate in any manner whatsoever to the business, existing
or
then-proposed, of Employer and/or any of its Affiliates, or any other business
or research or development effort in which Employer and/or any of its Affiliates
engages during Executive’s employment.
2. Employment. Employer
agrees to employ Executive (directly or through an Affiliate), and Executive
agrees to be employed, for the period set forth in Paragraph 3. Executive will
be employed in the position and with the duties and responsibilities set forth
in Paragraph 4(a) and upon the other terms and conditions set out in this
Agreement. Employer and Executive agree that such employment may be through
a
co-employment relationship with a professional employer organization, subject
to
the requirements of Paragraph 4(a).
3. Term. Executive’s
employment shall commence on the Effective Date and shall be for an initial
term
of one Annual Period (the “Employment Term”), unless sooner terminated as
provided in this Agreement. Subject to earlier termination as provided in this
Agreement, the Employment Term shall be automatically extended for an additional
Annual Period (not to exceed nine additional Annual Periods) unless either
Executive or Employer gives written notice to the other six months or more
prior
to the end of the initial term or, if the Agreement has been automatically
extended beyond the initial term, six months or more prior to the end of the
additional Annual Period. In the event of such an automatic extension, each
additional Annual Period shall be part of the “Employment Term.” Upon
such timely written notice or at the end of the nine additional periods
contemplated above, Executive’s employment will end upon the expiration of the
Employment Term.
4. Position
and Duties.
(a) During
the Employment Term, Executive shall be employed as President and Chief
Executive Officer of Employer, under the direction and subject to the control
of
the Board (which direction shall be such as is customarily exercised over a
chief executive officer), and Executive shall be responsible for the business,
affairs, properties and operations of Employer and shall have general executive
charge, management and control of Employer, with all such powers and authority
with respect to such business, affairs, properties and operations as may be
reasonably incident to such duties and responsibilities. In addition,
Executive shall have such other duties, functions, responsibilities, and
authority as are from time to time delegated to Executive by the Board;
provided, however, that such duties, functions, responsibilities, and authority
are reasonable and customary for a person serving in the same or similar
capacity of an enterprise comparable to Employer.
(b) During
the Employment Term, Executive shall devote his full business time, skill,
and
attention and his best efforts to the business and affairs of Employer to the
extent necessary to discharge fully, faithfully, and efficiently the duties
and
responsibilities delegated and assigned to Executive in or pursuant to this
Agreement, except for usual, ordinary, and customary periods of vacation and
absence due to illness or other disability and as otherwise specified in this
paragraph. Employer agrees that it shall not be a violation of this
paragraph for Executive to (i) serve on corporate, civic or charitable boards
or
committees, (ii) deliver lectures, fulfill speaking engagements or teach at
educational institutions, and (iii) manage personal investments, so long as
in
the case of (i), (ii) and (iii) above such activities do not significantly
interfere or conflict with the performance of Executive’s responsibilities under
this Agreement or the interests of Employer. Specifically, Employer
acknowledges that Executive currently serves on the Board of Directors of CARBO
Ceramics, Inc. and currently serves as the Chairman of Junior Achievement for
Southeast Texas and represents that such service shall not be considered a
violation of this paragraph unless such activities significantly interfere
with
Executive’s performance of his responsibilities under this
Agreement. Executive shall not become a member of the board of
directors or committees of any other business organization without
the prior written consent
of the Board.
(c) In
connection with Executive’s employment under this Agreement, Executive shall be
based in Houston, Texas, or at any other place where the principal executive
offices of Employer may be located during the Employment Term, subject to the
provisions of Paragraph 1(i)(iii). Executive also will engage in such travel
as
the performance of Executive’s duties in the business of Employer may
require.
(d) All
services that Executive may render to Employer or any of its Affiliates in
any
capacity during the Employment Term shall be deemed to be services required
by
this Agreement and the consideration for such services is that provided for
in
this Agreement.
(e) Executive
hereby acknowledges that he has read and is familiar with Employer’s policies
regarding business ethics and conduct, and will comply with all such provisions,
and any amendments thereto, during the Employment Term.
5. Compensation
and Related Matters.
(a) Base
Salary and Sign-On Bonus.
(i) Base
Salary. During each Annual Period of the Employment Term, Employer shall pay
to Executive for his services under this Agreement an annual base salary (“Base
Salary”). The Base Salary on the Effective Date shall be $625,000. The Base
Salary is subject to annual adjustments beginning in January 2009, at the
discretion of the Board, but in no event shall Employer pay Executive a Base
Salary less than that set forth above, or any increased Base Salary later in
effect, without the consent of Executive. The Base Salary shall be payable
in
installments in accordance with the general payroll practices of Employer,
or as
otherwise mutually agreed upon.
(ii) Sign-On
Bonus. No later than ten (10) business days following the Effective Date,
Employer will pay to Executive a sign-on bonus in the amount of $1,000,000.
If
Executive’s employment is terminated before the end of the initial term by the
Employee pursuant to Paragraph 6(e) or by Employer pursuant to Paragraph 6(c),
Executive agrees to repay to Employer the amount of the sign-on bonus received
from Employer less amounts deducted or withheld pursuant to applicable law
within 30 days of such termination.
(b) Annual
Incentives. Beginning in calendar year 2008 and during the
Employment Term, Executive will participate in any incentive compensation plan
(ICP) applicable to Executive’s position, as may be adopted by Employer from
time to time and in accordance with the terms of such
plan(s). Executive’s target award opportunity under the ICP will be
100% of Executive’s Base Salary, and shall be subject to such other terms,
conditions and restrictions as may be established by the Board or the ICP
committee.
(c) Long-Term
Incentives. During the Employment Term, Executive will
participate in Employer’s 2005 Long-Term Incentive Plan (“LTI Plan”) applicable
to Executive’s position, or any successor plan as may be adopted by Employer
from time to time, in accordance with the terms of such plan(s). Except as
provided in Paragraph 5(d), Executive will participate in such long term
incentive opportunities (“LTI opportunities”) as may be determined by the Board
or the LTI Plan committee, as applicable; provided that, in no event shall
the
LTI opportunities provided to Executive ever be less than the LTI opportunities
then provided to other senior executives of Employer without the consent of
Executive
(d) Equity
Grants Related to Initial Employment. Executive shall be granted
the following awards pursuant to the terms of the LTI Plan:
(i) On
the
Effective Date, a nonqualified stock option to purchase 102,100 shares of
Employer’s common stock at an exercise price equal to the Fair Market Value (as
defined in the LTI Plan) of Employer’s common stock on the Effective Date, which
option will have a ten year term and be 100% vested on the date of
grant.
(ii) On
the
Effective Date, 102,100 shares of restricted common stock in Employer, which
will vest as follows: (A) 25% of such shares (if a fractional number, then
the
next lower whole number) will vest on the first anniversary of the Effective
Date, provided Executive is in the continuous service of Employer or an
Affiliate until and on such vesting date; (B) an additional 25% of such shares
(if a fractional number, then the next lower whole number) will vest on the
second anniversary of the Effective Date, provided Executive is in the
continuous service of Employer or an Affiliate until and on such vesting date;
and (C) the remaining shares will vest on the third anniversary of the Effective
Date, provided Executive is in the continuous service of Employer or an
Affiliate until and on such vesting date.
(iii) On
January 1, 2008 (if Executive is employed by Employer on such date), $3,500,000
in value of sign-on restricted common stock in Employer, which will vest in
full
on the fifth anniversary of the Effective Date, provided that Executive is
in
the continuous service of Employer or an Affiliate until and on such vesting
date. The number of shares of restricted common stock to be granted to Executive
in respect of the $3,500,000 in value shall be determined by dividing $3,500,000
by the Fair Market Value (as defined in the LTI Plan) of Employer’s common stock
on the Effective Date; provided, however, that no more than 200,000 shares
of
restricted common stock shall be granted to Executive pursuant to this Paragraph
5(d)(iii).
Notwithstanding
the foregoing, the percentage indicated below of the total number of shares
of
restricted common stock granted Executive under this Paragraph 5(d)(iii) will
vest on the date on which the Fair Market Value per share of Employer’s common
stock has reached a level indicated below (each a “Target Level”) and remained
at or above such Target Level for 30 consecutive trading days, provided that
Executive is in the continuous service of Employer or an Affiliate until and
on
the applicable vesting date:
$22
per
share 15%
$25
per
share 20%
$30
per
share 30%
$35
per
share 20%
$40
per
share 15%
To
the
extent that a specified percentage of shares vests based on a particular Target
Level, and the shares associated with any lower Target Level have not previously
vested, the shares associated with that lower Target Level shall vest on the
same date.
The
equity award grants provided for in this Paragraph 5(d) shall be subject to
the
terms and conditions of the LTI Plan and the award agreements covering such
awards, which shall be substantially in the forms collectively attached hereto
as Exhibit A, but only to the extent that such forms are not inconsistent with
the terms and conditions of this Agreement. In the event of an
inconsistency between this Agreement and any such award, the terms of this
Agreement shall govern (including, for example, the definitions of “Cause” and
“Good Reason”).
(e) Employee
Benefits. During the Employment Term, Executive shall be entitled
to participate in all employee benefit plans, programs, and arrangements that
are generally made available by Employer to its similarly situated employees,
including without limitation Employer’s life insurance, long-term disability,
and health plans. Executive acknowledges and agrees that cooperation and
participation in medical or physical examinations may be required by one or
more
insurance companies in connection with the applications for such life and/or
disability insurance policies.
(f) Expenses. Executive
shall be entitled to receive reimbursement for all reasonable expenses incurred
by Executive during the Employment Term in performing his duties and
responsibilities under this Agreement, consistent with Employer’s policies or
practices for reimbursement of expenses incurred by other senior executives
of
Employer (“Business Expenses”). Notwithstanding the foregoing, (i) the amount of
expenses eligible for reimbursement during a calendar year may not affect the
expenses eligible for reimbursement in any other calendar year, (ii) the
reimbursement must be made on or before the last day of the calendar year
following the calendar year in which the expense was incurred and (iii) the
right to reimbursement shall not be subject to liquidation or exchange for
any
other benefit.
(g) Vacations. During
each Annual Period of the Employment Term, Executive shall be eligible for
four
weeks’ paid vacation, as well as sick pay and other paid and unpaid time off in
accordance with the policies and practices of Employer. Executive agrees to
use
his vacation and other paid time off at such times that are (i) consistent
with
the proper performance of his duties and responsibilities and (ii) mutually
convenient for Employer and Executive.
(h) Fringe
Benefits. During the Employment Term, Executive shall be entitled
to the perquisites and other fringe benefits that are made available by Employer
to its senior executives generally and to such perquisites and fringe benefits
that are made available by Employer to Executive in particular, subject to
any
applicable terms and conditions of any specific perquisite or other fringe
benefit.
6. Termination
of Employment.
(a) Death. Executive’s
employment shall terminate automatically upon his death.
(b) Inability
to Perform. Employer may terminate Executive’s employment for
Inability to Perform.
(c) Termination
by Employer for Cause. Employer may terminate Executive’s
employment for Cause by providing Executive with a Notice of Termination as
set
out in Paragraph 6(f). Before terminating Executive’s employment for Cause,
Employer must provide Executive with written notice of its intent to do so,
which notice must specify the particular circumstances or events that Employer
contends gives rise to the existence of Cause; provided, however, that if
Employer intends to exercise its right to terminate Executive’s employment in
whole or part under provisions (iii), (iv), (v), (vi) or (viii) of the
definition of Cause, Employer must first provide Executive with a reasonable
period of time to correct those circumstances or events Employer contends give
rise to the existence of Cause under such provision(s) (the “Correction
Period”), but not to the extent the Board makes a
reasonable, good faith determination that those circumstances or events cannot
reasonably be corrected. A 30-day Correction Period shall be presumptively
reasonable. Executive will be given the opportunity within 30 calendar days
of
his receipt of Employer’s written notice of its intent to terminate Executive’s
employment for Cause to defend himself with respect to the circumstances or
events specified in such notice and in a manner and under such procedures as
the
Board may establish. Nothing in this Paragraph 6(c) precludes informal
discussions between Executive and any member of the Board regarding such
circumstances or events.
(d) Termination
by Executive for Good Reason. Executive may terminate his
employment for Good Reason. To exercise his right to terminate for Good Reason,
Executive must provide written notice to Employer of his belief that Good Reason
exists within 60 days of the date he first becomes aware of the condition(s)
giving rise to the Good Reason, and that notice shall describe the condition(s)
believed to constitute Good Reason. Employer shall have 30 days to remedy the
Good Reason condition(s). If not remedied within that 30-day period, Executive
may submit a Notice of Termination; provided, however, that the Notice of
Termination invoking Executive’s right to terminate his employment for Good
Reason must be given no later than 100 days after the date Executive first
became aware of the condition(s) giving rise to the Good Reason; otherwise,
Executive is deemed to have accepted the condition(s), or Employer’s correction
of such condition(s), that may have given rise to the existence of Good
Reason.
(e) Termination
by Either Party Without Cause or Without Good Reason. Either
Employer or Executive may terminate Executive’s employment without Cause or
without Good Reason upon at least 60 days’ prior written notice to the other
party.
(f) Notice
of Termination. Any termination of Executive’s employment by
Employer or by Executive (other than a termination pursuant to Paragraph 6(a))
shall be communicated by a Notice of Termination. A “Notice of Termination” is a
written notice that must (i) indicate the specific termination provision in
this
Agreement relied upon; (ii) in the case of a termination for Inability to
Perform, Cause, or Good Reason, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s
employment under the provision invoked; and (iii) if the termination is by
Executive under Paragraph 6(e), or by Employer for any reason, specify the
Employment Termination Date. The failure by Employer or Executive to
set forth in the Notice of Termination any fact or circumstance that contributes
to a showing of Cause or Good Reason shall not waive any right of Employer
or
Executive or preclude either of them from asserting such fact or circumstance
in
enforcing or defending their rights.
(g) Employment
Termination Date. The Employment Termination Date, whether
occurring before or after a Corporate Change, shall be as follows: (i) if
Executive’s employment is terminated by his death, the date of his death; (ii)
if Executive’s employment is terminated by Employer because of his Inability to
Perform or for Cause, the date specified in the Notice of Termination, which
date shall be no earlier than the date such notice is given; (iii) if
Executive’s employment is terminated by Executive for Good Reason, the date on
which the Notice of Termination is given; (iv) if the termination is under
Paragraph 6(e), the date specified in the Notice of Termination, which date
shall be no earlier than 60 days after the date such notice is given, or (v)
if
Executive’s employment is terminated by expiration of the Employment Term, or
Executive or Employer gives timely notice pursuant to Paragraph 3, the date
the
Employment Term expires.
(h) Deemed
Resignation. In the event of termination of Executive’s
employment, Executive agrees that if at such time he is a member of the Board
or
is an officer of Employer or a director or officer of any of its Affiliates,
he
shall be deemed to have resigned from such position(s) effective on the
Employment Termination Date, unless the Board and Executive agree in writing
prior to the Employment Termination Date that Executive shall remain a member
of
the Board, in which case Executive shall not be deemed to have resigned his
position as a member of the Board merely by virtue of the termination of his
employment. Executive agrees to execute and deliver any documents evidencing
his
resignation from such positions that Employer may reasonably request; provided,
however, that no such document shall affect the date that Executive ceased
to be
a Board member as described above such that Executive continues to have duties
as a Board member beyond the date specified in the preceding
sentence.
(i) Investigation;
Suspension. Employer may suspend Executive with pay pending (a)
an investigation as described in Paragraph 1(d)(viii), or (b) a determination
by
the Board whether Executive has engaged in acts or omissions constituting
Cause. Such a paid suspension shall not constitute a termination of
Executive’s employment, or Good Reason. Executive agrees to cooperate
with Employer in connection with any such investigation.
7. Compensation
Upon Termination of Employment.
(a) Death. If
Executive’s employment is terminated by reason of Executive’s death, Employer
shall pay to such person as Executive shall designate in a written notice to
Employer (or, if no such person is designated, to his estate) any unpaid portion
of Executive’s Base Salary through the Employment Termination Date (the
“Compensation Payment”), any earned but unused vacation (the “Vacation
Payment”), and any unreimbursed Business Expenses, at the time and in the manner
required by applicable law but in no event later than 30 business days after
the
Employment Termination Date.
(b) Inability
to Perform. If Executive’s employment is terminated by reason of
Executive’s Inability to Perform, Employer shall pay to Executive the
Compensation Payment, the Vacation Payment, and any unreimbursed Business
Expenses at the time and in the manner required by applicable law but in no
event later than 30 business days after the Employment Termination
Date.
(c) Termination
by Executive Without Good Reason. If Executive’s employment is
terminated by Executive pursuant to and in compliance with Paragraph 6(e),
Employer shall pay to Executive the Compensation Payment, the Vacation Payment,
and any unreimbursed Business Expenses, at the time and in the manner required
by applicable law but in no event later than 30 business days after the
Employment Termination Date.
(d) Termination
for Cause. If Executive’s employment is terminated by Employer
for Cause, Employer shall pay to Executive the Compensation Payment, the
Vacation Payment, and any unreimbursed Business Expenses, at the time and in
the
manner required by applicable law but in no event later than 30 business days
after the Employment Termination Date.
(e) Termination
Without Cause or With Good Reason or Upon Expiration of Employment
Term.
(i) If
Executive’s employment is terminated by Employer for any reason other than
death, Inability to Perform, or Cause, or is terminated by Executive for Good
Reason during the Employment Term, or if Executive’s employment ends upon the
expiration of the Employment Term, Employer shall pay to Executive the
Compensation Payment, the Vacation Payment, and any unreimbursed Business
Expenses, at the time and in the manner required by applicable law but in no
event later than 30 business days after the Employment Termination
Date.
(ii) In
addition, if Executive’s employment is terminated by Employer for any reason
other than death, Inability to Perform, or Cause, or is terminated by Executive
for Good Reason during the Employment Term, or if Employer gives timely notice
pursuant to Paragraph 3 and Executive’s employment therefore ends upon the
expiration of the Employment Term, Employer shall pay or provide to Executive
in
lieu of any other severance or separation benefits, at the time and in the
manner provided in Paragraph 7(e)(iii), the following if, within 45 days after
the Employment Termination Date, Executive has signed a general release
agreement substantially in the form attached hereto as Exhibit B and Executive
does not revoke such release:
(A) Executive’s
Base Salary as in effect on the Employment Termination Date (but in no event
less than the Base Salary on the Effective Date), multiplied by
three;
(B) Executive’s
ICP award at the target level for the performance period in effect on the
Employment Termination Date (but in no event less than the target level
specified in Paragraph 5(b)), multiplied by three;
(C) Immediate
grant, and full and immediate vesting, of the restricted stock grant described
Paragraph 5(d)(iii) if not previously granted;
(D) Full
and
immediate vesting of all Employer stock options and restricted stock awards
held
by Executive as of the Employment Termination Date;
(E) Executive
will have twelve months after the Employment Termination Date, to exercise
all
Employer stock options, provided that in no event may such stock options be
exercised after the latest date upon which the options would have expired by
their original terms.
Notwithstanding
the foregoing, Employer’s obligation under this Paragraph 7(e)(ii) is limited as
follows:
(X) If
Executive engages in any conduct that materially violates Paragraph 8 or engages
in any of the Restricted Activities described in Paragraph 9, Employer’s
obligation to make payments to Executive under this Paragraph 7(e)(ii), if
any
such obligation remains, shall end as of the date Employer so notifies Executive
in writing; and
(Y) If
Executive is found guilty or enters into a plea agreement, consent decree,
or
similar arrangement with respect to any felony criminal offense or any material
violation of federal or state securities laws, or has a cease-and-desist order,
injunction, or other penalty or judgment issued or entered in any material
civil
enforcement action brought against him by any United States regulatory agency
or
by a court of competent jurisdiction in a proceeding commenced by such a
regulatory agency (in either case, regardless of whether Executive admits or
denies the substantive allegations, and in each case for actions or omissions
related to his employment with Employer or any of its Affiliates), (1)
Employer’s obligation to make payments to Executive under this Paragraph
7(e)(ii) shall end as of the date that Employer so notifies Executive in
writing, and (2) Executive shall repay to Employer any amounts paid to him
pursuant to this Paragraph 7(e)(ii) within 30 days after receipt of a written
request to do so by Employer.
(iii) The
amounts provided for under Paragraphs 7(e)(ii)(A) and 7(e)(ii)(B) shall be
paid
as follows:
(A) An
amount
equal to (1) 50% of the amount provided for under Paragraph 7(e)(ii)(A) plus
(2)
the sum (to the extent that such sum exceeds zero) of the amounts provided
for
under Paragraphs 7(e)(ii)(A) and 7(e)(ii)(B) less the payment under Paragraph
7(e)(iii)(A)(1) less the Section 000X Xxxxxx Xxxxxx, shall be paid in a single
lump sum no later than 60 days after the Employment Termination Date, provided
that the Employment Termination Date, constitutes a separation from service
for
purposes of Code Section 409A. For purposes of this Agreement, the “Section 409A
Exempt Amount” is two times the lesser of (x) Executive’s annualized
compensation based upon the annual rate of pay for services provided to Employer
for the calendar year preceding the calendar year in which Executive has a
separation from service (as defined in the Code and the final regulations and
other guidance thereunder (“Code Section 409A”)) with Employer (adjusted for any
increase during that year that was expected to continue indefinitely if the
service provider had not separated from service) or (y) the maximum amount
that
may be taken into account under a qualified plan pursuant to Section 401(a)(17)
of the Code for the year in which Executive has a separation from
service.
(B) The
Section 409A Exempt Amount or, if less, the excess of the amount provided for
under Paragraphs 7(e)(ii)(A) and 7(e)(ii)(B) over the amount paid under
Paragraph 7(e)(iii)(A), shall be paid in equal monthly installments over a
period of 18 months commencing on the first day of the sixth month following
the
Employment Termination Date, provided that the Employment Termination Date
constitutes a separation from service for purposes of Code Section
409A.
(f) Termination
of Employment Following Corporate Change.
(i) If,
within the two-year period following a Corporate Change, Executive’s employment
with Employer or an Affiliate or successor of Employer is terminated for any
reason other than death, Inability to Perform, or Cause, is terminated by
Executive for Good Reason, or if Employer or an Affiliate or successor of
Employer gives timely notice pursuant to Paragraph 3 and Executive’s employment
therefore ends upon the expiration of the Employment Term, Executive will be
paid the Compensation Payment, the Vacation Payment and any unreimbursed
Business Expenses, at the time and in the manner required by applicable law
but
in no event later than 30 business days after the Employment Termination
Date. In addition, if, within 45 days after the Employment
Termination Date, Executive has signed a general release agreement substantially
in the form attached hereto as Exhibit B and Executive does not revoke such
release, in lieu of any other payments under Paragraph 7(e)(ii), Employer shall
(A) pay Executive a lump-sum amount equivalent to the sum of the amounts
specified in Paragraph 7(e)(ii)(A) and 7(e)(ii)(B), and (B) provide Executive
the benefits described in Paragraph 7(e)(ii)(C), 7(e)(ii)(D) and
7(e)(ii)(E). The provisions of Paragraph 7(e)(ii)(X) and 7(e)(ii)(Y)
shall not apply to this Paragraph 7(f).
(ii) The
payment provided for in Paragraph 7(f)(i)(A) shall be paid in a single lump
sum
payment on the 60th business day after the Employment Termination
Date.
(iii) In
the
event that it is determined that any payment (other than the Gross-Up payment
provided for in this Paragraph 7(f)(iii)) or distribution by Employer or any
of
its Affiliates to or for the benefit of Executive, whether paid or payable
or
distributed or distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan, program
or arrangement, including without limitation any stock option or similar right,
or the lapse or termination of any restriction on or the vesting or
exercisability of any of the foregoing (a “Payment”), would be subject to the
excise tax imposed by Section 4999 of the Code (or any successor provision
thereto) by reason of being considered “contingent on a change in ownership or
control” of Employer, within the meaning of Section 280G of the Code or any
successor provision thereto (such tax being hereafter referred to as the “Excise
Tax”), then Executive will be entitled to receive an additional payment or
payments (a “Gross-Up Payment”). The Gross-Up Payment will be in an amount such
that, after payment by Executive of all taxes, including any Excise Tax imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payment. For purposes of determining
the amount of the Gross-Up Payment, Executive will be considered to pay (x)
federal income taxes at the highest rate in effect in the year in which the
Gross-Up Payment will be made and (y) state and local income taxes at the
highest rate in effect in the state or locality in which the Gross-Up Payment
would be subject to state or local tax, net of the maximum reduction in federal
income tax that could be obtained from deduction of such state and local taxes.
The determination of whether an Excise Tax would be imposed, the amount of
such
Excise Tax, and the calculation of the amounts referred to in this Paragraph
7(f)(iii) will be made at the expense of Employer by Employer’s regular
independent accounting firm (the “Accounting Firm”), which shall provide
detailed supporting calculations. Any determination by the Accounting Firm
will
be binding upon Employer and Executive. The Gross-Up Payment will be paid to
Executive as soon as administratively practicable following, but no later than
the end of the calendar year in which falls the date on which Executive remits
the related taxes.
(g) Health
Insurance. In addition, if Executive’s employment with Employer
or an Affiliate or successor of Employer is terminated or ends under the
circumstances set forth in Paragraph 7(f), Executive will receive, in addition
to any other payments due under this Agreement, the following benefit: if,
at
the time of the Employment Termination Date, Executive participates in one
or
more health plans offered or made available by Employer and Executive is
eligible for and elects to receive continued coverage under such plans in
accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”) or any successor law, Employer will reimburse Executive during the
18-month period following the Employment Termination Date, for the difference
between the total amount of the monthly COBRA premiums for the same coverage
as
in effect on the Employment Termination Date, that are actually paid by
Executive for such continued health plan benefits and the total monthly amount
of the same premiums charged to active senior executives of Employer for health
insurance coverage. Such reimbursement shall be made within the 90-day period
following Executive’s payment of each monthly COBRA premium. Provided, however,
that Employer’s reimbursement obligation under this Paragraph 7(g) shall
terminate upon the earlier of (i) the expiration of the time period described
above or (ii) the date Executive becomes eligible for health insurance coverage
under a subsequent employer’s plan without being subject to any
preexisting-condition exclusion under that plan, which occurrence Executive
shall promptly report to Employer.
(h) Exclusive
Compensation and Benefits. The compensation and benefits
described in this Paragraph 7, along with the associated terms for payment,
constitute all of Employer’s obligations to Executive with respect to the ending
of Executive’s employment with Employer and/or its Affiliates, subject to
Paragraph 24 and the remainder of this Paragraph 7(h). Accordingly,
Executive and Employer expressly acknowledge and agree that, following the
Employment Termination Date, Executive shall have no rights to any employment
by
Employer or its Affiliates (including employment as described in Paragraphs
2, 3
and 4 of this Agreement), and no rights to any further compensation or benefits
under Paragraph 5 of this Agreement. Executive and Employer further
acknowledge and agree that nothing in this Agreement is intended to limit or
terminate (i) any obligations of Employer or Executive under the other terms
of
this Agreement, including, but not limited to, with respect to Employer, its
obligations under Paragraphs 12 and 20, and, with respect to Executive, his
obligations under Paragraphs 6(h), 0, 0, 00, 00, 00, xxx 00, xx (xx) any earned,
vested benefits (other than any entitlement to severance or separation pay,
if
any) that Executive may have under the applicable provisions of any benefit
plan
of Employer in which Executive is participating at the time of the termination
of employment.
(i) Code
Section 409A Matters. This Agreement is intended to comply with
Code Section 409A and any ambiguous provisions will be construed in a manner
that is compliant with or exempt from the application of Code Section
409A. If a provision of the Agreement would result in the imposition
of an applicable tax under Code Section 409A, the parties agree that such
provision shall be reformed to avoid imposition of the applicable tax, with
such
reformation effected in a manner that has the most favorable result to
Executive.
For
purposes of Code Section 409A, each payment or amount due under this Agreement
shall be considered a separate payment, and Executive’s entitlement to a series
of payments under this Agreement is to be treated as an entitlement to a series
of separate payments.
If
(x)
Executive is a “specified employee,” as such term is defined in Code Section
409A and determined as described below in this Paragraph 7(i), and (y) any
payment due under this Agreement is subject to Code Section 409A and is required
to be delayed under Code Section 409A because Executive is a specified employee,
that payment shall be payable on the earlier of (A) the first business day
that
is six months after Executive’s separation from service, as such term is defined
in Code Section 409A, (B) the date of Executive’s death, or (C) the date that
otherwise complies with the requirements of Section 409A. This
Paragraph 7(i) shall be applied by accumulating all payments that otherwise
would have been paid within six months of Executive’s separation and paying such
accumulated amounts on the earliest business day which complies with the
requirements of Code Section 409A. For purposes of determining the
identity of specified employees, the Board may establish procedures as it deems
appropriate in accordance with Code Section 409A.
(j) Payment
after Executive’s Death. In the event of Executive’s death after
he becomes entitled to a payment or payments pursuant to this Paragraph 7,
any
remaining unpaid amounts shall be paid, at the time and in the manner such
payments otherwise would have been paid to Executive, to such person as
Executive shall designate in a written notice to Employer (or, if no such person
is designated, to his estate).
(k) Offset. Executive
agrees that Employer may set off against, and Executive authorizes Employer
to
deduct from, any payments due to Executive, or to his heirs, legal
representatives, or successors, as a result of the termination of Executive’s
employment any amounts which may be due and owing to Employer or any of its
Affiliates by Executive, whether arising under this Agreement or otherwise;
provided, however, that any such set off and deduction shall be made in a manner
that complies with Code Section 409A to the extent applicable.
8. Confidential
Information.
(a) Executive
acknowledges and agrees that (i) Employer and its Affiliates are engaged in
a
highly competitive business; (ii) Employer and its Affiliates have expended
considerable time and resources to develop goodwill with their customers,
vendors, and others, and to create, protect, and exploit Confidential
Information; (iii) Employer must continue to prevent the dilution of its and
its
Affiliates’ goodwill and unauthorized use or disclosure of its Confidential
Information to avoid irreparable harm to its legitimate business interests;
(iv)
in the oil and gas acquisition, exploration, development and production
business, his participation in or direction of Employer’s or its Affiliates’
day-to-day operations and strategic planning are an integral part of Employer’s
continued success and goodwill; (v) given his position and responsibilities,
he
necessarily will be creating Confidential Information that belongs to Employer
and enhances Employer’s goodwill, and in carrying out his responsibilities he in
turn will be relying on Employer’s goodwill and the disclosure by Employer to
him of Confidential Information; and (vi) he will have access to Confidential
Information that could be used by any Competitor of Employer in a manner that
would irreparably harm Employer’s competitive position in the marketplace and
dilute its goodwill. Employer acknowledges and agrees that nothing in
this Agreement precludes Executive from accepting employment from any third
party employer after termination of employment with Employer and its Affiliates
for whatever reason, provided that Executive complies with his obligations
under
Paragraph 8(d) and at law with respect to the Confidential
Information.
(b) Employer
acknowledges and agrees that Executive must have and continue to have throughout
his employment the benefits and use of its and its Affiliates’ goodwill and
Confidential Information in order to properly carry out his responsibilities.
Employer accordingly promises upon execution and delivery of this Agreement
to
provide Executive immediate and continuing access to Confidential Information
and to authorize him to engage in activities that will create new and additional
Confidential Information.
(c) Employer
and Executive thus acknowledge and agree that during Executive’s employment with
Employer, and upon execution and delivery of this Agreement, he (i) will receive
Confidential Information that is unique, proprietary, and valuable to Employer
and/or its Affiliates; (ii) will create Confidential Information that is unique,
proprietary, and valuable to Employer and/or its Affiliates; and (iii) will
benefit, including without limitation by way of increased earnings and earning
capacity, from the goodwill Employer and its Affiliates have generated and
from
the Confidential Information.
(d) Accordingly,
Executive acknowledges and agrees that at all times during his employment by
Employer and/or any of its Affiliates and thereafter:
(i) all
Confidential Information shall remain and be the sole and exclusive property
of
Employer and/or its Affiliates;
(ii) he
will
protect and safeguard all Confidential Information;
(iii) he
will
hold all Confidential Information in strictest confidence and not, directly
or
indirectly, disclose or divulge any Confidential Information to any person
other
than an officer, director, or employee of, or legal counsel for, Employer or
its
Affiliates, to the extent necessary for the proper performance of his
responsibilities unless authorized to do so by Employer or compelled to do
so by
law or valid legal process;
(iv) if
he
believes he is compelled by law or valid legal process to disclose or divulge
any Confidential Information, he will notify Employer in writing sufficiently
in
advance of any such disclosure to allow Employer the opportunity to defend,
limit, or otherwise protect its interests against such disclosure;
(v) at
the
end of his employment with Employer for any reason or at the request of Employer
at any time, he will return to Employer all Confidential Information and all
copies thereof, in whatever tangible form or medium, including electronic;
and
(vi) absent
the promises and representations of Executive in this Paragraph 8 and in
Paragraph 9, Employer would require him immediately to return any tangible
Confidential Information in his possession, would not provide Executive with
new
and additional Confidential Information, would not authorize Executive to engage
in activities that will create new and additional Confidential Information,
and
would not enter or have entered into this Agreement.
9. Nonsolicitation
Obligations. In consideration of Employer’s promises to provide
Executive with Confidential Information and to authorize him to engage in
activities that will create new and additional Confidential Information upon
execution and delivery of this Agreement, and the other promises and
undertakings of Employer in this Agreement, Executive agrees that, while he
is
employed by Employer and/or any of its Affiliates and for a 2-year period
following the end of that employment for any reason, he shall not engage in
any
of the following activities (the “Restricted Activities”):
(a) He
will
not, whether on his own behalf or on behalf of any other individual,
partnership, firm, corporation or business organization, either directly or
indirectly solicit, induce, persuade, or entice, or endeavor to solicit, induce,
persuade, or entice, any person who is then employed by or otherwise engaged
to
perform services for Employer or its Affiliates to leave that employment or
cease performing those services; and
(b) He
will
not, whether on his own behalf or on behalf of any other individual,
partnership, firm, corporation or business organization, either directly or
indirectly solicit, induce, persuade, or entice, or endeavor to solicit, induce,
persuade, or entice, any person who is then a customer, supplier, or vendor
of
Employer or any of its Affiliates to cease being a customer, supplier, or vendor
of Employer or any of its Affiliates or to divert all or any part of such
person’s or entity’s business from Employer or any of its
Affiliates.
Executive
acknowledges and agrees that the restrictions contained in this Paragraph 9
are
ancillary to an otherwise enforceable agreement, including without limitation
the mutual promises and undertakings set forth in Paragraph 8; that Employer’s
promises and undertakings set forth in Paragraph 8 and Executive’s position and
responsibilities with Employer give rise to Employer’s interest in restricting
Executive’s post-employment activities; that such restrictions are designed to
enforce Executive’s promises and undertakings set forth in this Paragraph 9 and
his common-law obligations and duties owed to Employer and its Affiliates;
that
the restrictions are reasonable and necessary, are valid and enforceable under
Texas law, and do not impose a greater restraint than necessary to protect
Employer’s goodwill, Confidential Information, and other legitimate business
interests; that he will immediately notify Employer in writing should he believe
or be advised that the restrictions are not, or likely are not, valid or
enforceable under Texas law or the law of any other state that he contends
or is
advised is applicable; that the mutual promises and undertakings of Employer
and
Executive under Paragraphs 8 and 9 are not contingent on the duration of
Executive’s employment with Employer; that absent the promises and
representations made by Executive in this Paragraph 9 and Paragraph 8, Employer
would require him to return any Confidential Information in his possession,
would not provide Executive with new and additional Confidential Information,
would not authorize Executive to engage in activities that will create new
and
additional Confidential Information, and would not enter or have entered into
this Agreement; and that his obligations under Paragraphs 8 and 9 supplement,
rather than supplant, his common-law duties of confidentiality and loyalty
owed
to Employer.
Employer
agrees that any action that is undertaken by a subsequent employer of Executive
will not be treated as an action by Executive for purposes of the foregoing
provisions of this Paragraph 9 unless Executive personally engages in a
Restricted Activity, whether directly or indirectly.
10. Intellectual
Property.
(a) In
consideration of Employer’s promises and undertakings in this Agreement,
Executive agrees that all Work Product will be disclosed promptly by Executive
to Employer, shall be the sole and exclusive property of Employer, and is hereby
assigned to Employer, regardless of whether (i) such Work Product was conceived,
made, developed or worked on during regular hours of his employment or his
time
away from his employment, (ii) the Work Product was made at the suggestion
of
Employer; or (iii) the Work Product was reduced to drawing, written description,
documentation, models or other tangible form. Without limiting the foregoing,
Executive acknowledges that all original works of authorship that are made
by
Executive, solely or jointly with others, within the scope of his employment
and
that are protectable by copyright are “works made for hire,” as that term is
defined in the United States Copyright Act (17 U.S.C., Section 101), and are
therefore owned by Employer from the time of creation.
(b) Executive
agrees to assign, transfer, and set over, and Executive does hereby assign,
transfer, and set over to Employer, all of his right, title and interest in
and
to all Work Product, without the necessity of any further compensation, and
agrees that Employer is entitled to obtain and hold in its own name all patents,
copyrights, and other rights in respect of all Work Product. Executive agrees
to
(i) cooperate with Employer during and after his employment with Employer in
obtaining patents or copyrights or other intellectual-property protection for
all Work Product; (ii) execute, acknowledge, seal, and deliver all documents
tendered by Employer to evidence its ownership thereof throughout the world;
and
(iii) cooperate with Employer in obtaining, defending, and enforcing its rights
therein.
(c) Executive
represents that there are no other contracts to assign inventions or other
intellectual property that are now in existence between Executive and any other
person or entity. Executive further represents that he has no other employment
or undertakings that might restrict or impair his performance of this Agreement.
Executive will not in connection with his employment by Employer, use or
disclose to Employer any confidential, trade secret, or other proprietary
information of any previous employer or other person that Executive is not
lawfully entitled to disclose.
11. Reformation. If
the provisions of Paragraphs 8, 9, or 10 are ever deemed by a court to exceed
the limitations permitted by applicable law, Executive and Employer agree that
such provisions shall be, and are, automatically reformed to the maximum
limitations permitted by such law.
12. Indemnification
and Insurance. Employer shall indemnify Executive both (i) to the
fullest extent permitted by the laws of the State of Delaware, and (ii) in
accordance with the more favorable of Employer’s certificate of incorporation,
bylaws and standard indemnification agreement as in effect on the Effective
Date
or as in effect on the date as of which the indemnification is
owed. In addition, Employer shall provide Executive with coverage
under directors’ and officers’ liability insurance policies on terms not less
favorable than those provided to any of its other directors and officers as
in
effect from time to time.
13. Assistance
in Litigation. During the Employment Term and thereafter for the
lifetime of Executive, Executive shall, upon reasonable notice, furnish such
information and proper assistance to Employer or any of its Affiliates as may
reasonably be required by Employer in connection with any litigation,
investigations, arbitrations, and/or any other fact-finding or adjudicative
proceedings involving Employer or any of its Affiliates. This obligation shall
include, without limitation, to promptly upon request meet with counsel for
Employer or any of its Affiliates and provide truthful testimony at the request
of Employer or as otherwise required by law or valid legal process. Following
the Employment Term, Employer shall reimburse Executive for all reasonable
out-of-pocket expenses incurred by Executive and approved in advance by Employer
in rendering such assistance (such as travel, parking, and meals but not
attorney’s fees), but shall have no obligation to compensate Executive for his
time in providing information and assistance in accordance with this Paragraph
13, provided that such reimbursement shall be made on or before the last day
of
the calendar year following the calendar year in which the expense is incurred,
and provided further that Executive’s obligations under this Paragraph 13
following the Employment Termination Date shall not unreasonably interfere
with
Executive’s employment or other activities and endeavors.
14. No
Obligation to Pay. With regard to any payment due to Executive under this
Agreement, it shall not be a breach of any provision of this Agreement for
Employer to fail to make such payment to Executive if (i) Employer is prohibited
from making the payment; (ii) Employer would be obligated to recover the payment
if it was made; or (iii) Executive would be obligated to repay the payment
if it
was made; provided, however, that this Paragraph 14 shall only apply if such
prohibition or obligation is legally imposed by statute or
regulation.
15. Deductions
and Withholdings. With respect to any payment to be made to Executive,
Employer shall deduct, where applicable, any amounts authorized by Employee,
and
shall withhold and report all amounts required to be withheld and reported
by
applicable law.
16. Notices. All
notices, requests, demands, and other communications required or permitted
to be
given or made by either party shall be in writing and shall be deemed to have
been duly given or made (a) when delivered personally, or (b) when deposited
in
the United States mail, first class registered or certified mail, postage
prepaid, return receipt requested, to the party for which intended at the
following addresses (or at such other addresses as shall be specified by the
parties by like notice, except that notices of change of address shall be
effective only upon receipt):
(i) If
to
Employer, at:
Attn:
General Counsel
000
Xxxxx
Xxxxx
0000
Xxxxxxx,
Xxxxx 00000
(ii) If
to
Executive, at Executive’s then-current home address on file with
Employer.
17. Injunctive
Relief. Executive acknowledges and agrees that Employer would not
have an adequate remedy at law and would be irreparably harmed in the event
that
any of the provisions of Paragraphs 8, 9, and 10 were not performed in
accordance with their specific terms or were otherwise breached. Accordingly,
Executive agrees that Employer shall be entitled to equitable relief, including
preliminary and permanent injunctions and specific performance, in the event
Executive breaches or threatens to breach any of the provisions of such
Paragraphs, without the necessity of posting any bond or proving special damages
or irreparable injury. Such remedies shall not be deemed to be the exclusive
remedies for a breach or threatened breach of this Agreement by Executive,
but
shall be in addition to all other remedies available to Employer at law or
equity.
18. Mitigation. Executive
shall not be required to mitigate the amount of any payment provided for in
this
Agreement 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
Executive as the result of employment by another employer after the date of
termination of Executive’s employment with Employer, or otherwise.
19. Binding
Effect; No Assignment by Executive; No Third Party Benefit. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective heirs, legal representatives, successors, and assigns;
provided, however, that Executive shall not assign or otherwise transfer this
Agreement or any of his rights or obligations under this Agreement. Subject
to
Paragraph 20, Employer is authorized to assign or otherwise transfer this
Agreement or any of its rights or obligations under this Agreement only to
an
Affiliate of Employer. Executive shall not have any right to pledge,
hypothecate, anticipate, or in any way create a lien upon any payments or other
benefits provided under this Agreement; and no benefits payable under this
Agreement shall be assignable in anticipation of payment either by voluntary
or
involuntary acts, or by operation of law, except by will or pursuant to the
laws
of descent and distribution. Nothing in this Agreement, express or implied,
is
intended to or shall confer upon any person other than the parties, and their
respective heirs, legal representatives, successors, and permitted assigns,
any
rights, benefits, or remedies of any nature whatsoever under or by reason of
this Agreement.
20. Assumption
by Successor. Employer shall ensure that any successor or
assignee (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all the business and/or assets of Employer
or
the oil and gas acquisition, exploration, development and production business
of
Employer, either by operation of law or written agreement, assumes the
obligations of this Agreement (the “Assumption Obligation”). If Employer fails
to fulfill the Assumption Obligation, such failure shall be considered Good
Reason; provided, however, that the compensation to which Executive would be
entitled to upon a termination for Good Reason pursuant to Paragraph 7(f) shall
be the sole remedy of Executive for any failure by Employer to fulfill the
Assumption Obligation. As used in this Agreement, “Employer” shall include any
successor or assignee (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all the business and/or
assets of Employer or the oil and gas exploration, development and production
business of Employer that executes and delivers the agreement provided for
in
this Paragraph 20 or that otherwise becomes obligated under this Agreement
by
operation of law.
21. Legal
Fees and Expenses. Employer will reimburse Executive for all
reasonable legal fees and expenses incurred by Executive in connection with
the
preparation, review, and negotiation of this Agreement prior to its execution,
provided that any such reimbursement shall be made within the same calendar
year
in which falls the Effective Date.
22. Governing
Law; Venue. This Agreement and the employment of Executive shall
be governed by the laws of the State of Texas except for its laws with respect
to conflict of laws. The exclusive forum for any lawsuit arising from or related
to Executive’s employment or this Agreement shall be a state or federal court in
Xxxxxx County, Texas. This provision does not prevent Employer from removing
to
an appropriate federal court any action brought in state court.
EXECUTIVE HEREBY CONSENTS TO, AND WAIVES ANY OBJECTIONS TO, REMOVAL
TO
FEDERAL COURT BY EMPLOYER OF ANY ACTION BROUGHT AGAINST IT BY
EXECUTIVE.
23. JURY
TRIAL WAIVER. IN THE EVENT THAT ANY DISPUTE ARISING FROM OR
RELATED TO THIS AGREEMENT OR EXECUTIVE’S EMPLOYMENT WITH EMPLOYER RESULTS IN A
LAWSUIT, BOTH EMPLOYER AND EXECUTIVE MUTUALLY WAIVE ANY RIGHT THEY MAY OTHERWISE
HAVE FOR A JURY TO DECIDE THE ISSUES IN THE LAWSUIT, REGARDLESS OF THE PARTY
OR
PARTIES ASSERTING CLAIMS IN THE LAWSUIT OR THE NATURE OF SUCH CLAIMS. EMPLOYER
AND EXECUTIVE IRREVOCABLY AGREE THAT ALL ISSUES IN SUCH A LAWSUIT SHALL BE
DECIDED BY A JUDGE RATHER THAN A JURY.
24. Entire
Agreement. This Agreement contains the entire agreement between
the parties concerning the subject matter expressly addressed herein and
supersedes all prior agreements and understandings, written and oral, between
the parties with respect to such subject matter. However, nothing in
this Paragraph 24 is intended to limit any obligations of the parties under
any
other agreement that Employer may enter into with Executive after the earlier
of
the Effective Date or the execution of this Agreement by Executive.
25. Modification;
Waiver. No person, other than pursuant to a resolution duly
adopted by the members of the Board, shall have authority on behalf of Employer
to agree to modify, amend, or waive any provision of this Agreement. Further,
this Agreement may not be changed orally, but only by a written agreement signed
by the party against whom any waiver, change, amendment, modification or
discharge is sought to be enforced. Executive acknowledges and agrees that
no
breach by Employer of this Agreement or failure to enforce or insist on its
rights under this Agreement shall constitute a waiver or abandonment of any
such
rights or defense to enforcement of such rights.
26. Construction. This
Agreement is to be construed as a whole, according to its fair meaning, and
not
strictly for or against any of the parties.
27. Severability. If
any provision of this Agreement shall be determined by a court to be invalid
or
unenforceable, the remaining provisions of this Agreement shall not be affected
thereby, shall remain in full force and effect, and shall be enforceable to
the
fullest extent permitted by applicable law.
28. Counterparts. This
Agreement may be executed by the parties in any number of counterparts, each
of
which shall be deemed an original, but all of which shall constitute one and
the
same agreement.
IN
WITNESS WHEREOF, Employer has caused this Agreement to be executed on its behalf
by its duly authorized officer, and Executive has executed this Agreement,
effective as of the date first set forth above.
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EMPLOYER
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EXECUTIVE
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By:
/s/ D.
Xxxxx Xxxxxxx
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By:
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/s/
Xxxxx X. Xxxxxxxxx
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D. XXXXX XXXXXXX
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XXXXX
X. XXXXXXXXX
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CHAIRMAN, BOARD OF DIRECTORS
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