EXHIBIT 10.10
EMPLOYMENT AGREEMENT
This Employment Agreement, effective August 1, 2002 is between Harvest Natural
Resources, Inc. (hereinafter sometimes called the "Company") and Xxxxx X. Xxxx,
a resident of Texas, ("Employee"), the terms and conditions of which are as
follows:
WHEREAS, the Company and Employee entered into an employment agreement
on July 10, 2000;
WHEREAS, since July 10, 2000, the Company has experienced significant
changes in its operations and financial condition, including, without
limitation, the relocation of its corporate headquarters, changes in its
management and the effects of the sale of its interest in Arctic Gas Company;
WHEREAS, the Company has agreed to increase Employee's base salary and
to provide him with the additional benefits (including without limitation
additional severance benefits and extension of the term of employment) described
in this Employment Agreement;
WHEREAS, the Company has agreed to increase the maximum amount of
bonuses that Employee may be entitled to and has established (or will establish)
new "performance contract" guidelines applicable to Employee to determine the
amount of his bonuses;
WHEREAS, the Company and Employee acknowledge that if Employee's
employment with the Company terminates for any reason, Employee may inevitably
disclose trade secrets of, and other proprietary and confidential information
about, the Company's business, operations and prospects; and
WHEREAS, Employee wishes to enter into this Employment Agreement to
receive the benefit of the provisions contained in it;
NOW THEREFORE, for good and valuable consideration, the sufficiency and
receipt of which are acknowledged, the Company and Employee agree as follows:
1. TERM OF EMPLOYMENT.
Subject to the terms and conditions set forth in this Employment Agreement, the
Company agrees to employ Employee and Employee agrees to be employed by the
Company for the term which starts on July 10, 2000 and ends on May 31, 2004. On
May 31, 2004, and on each anniversary thereafter (an "Extension Date") the term
of this Employment Agreement shall automatically be extended for a one-year
period unless and until either party has given written notice to the other at
least one year before any Extension Date that it or he wishes to terminate this
Agreement as of such Extension Date.
-1-
2. POSITION AND DUTIES.
(a) Position. Subject to annual election by the Company's Board of
Directors, Employee's position shall be President and Chief
Executive Officer of Harvest Natural Resources, Inc.
(b) Duties and Responsibilities. Employee's duties and
responsibilities initially shall be those normally associated
with Employee's position, plus any additional duties and
responsibilities the Company initially may assign orally or in
writing to Employee. Employee shall undertake to perform all
Employee's duties and responsibilities for the Company and its
affiliates in good faith and on a full-time basis and shall at
all times act in the course of Employee's employment under
this Employment Agreement in the best interest of the Company
and Company's affiliates.
(c) The Company's Right to Change Position or Duties. Subject to
the terms of this Agreement, the Company shall have the right,
to the extent the Company from time to time reasonably deems
necessary or appropriate, to change Employee's position, or to
expand or reduce Employee's duties and responsibilities.
3. COMPENSATION AND BENEFITS.
(a) Base Salary. Beginning August 1, 2004, and during the
remainder of the term of this Employment Agreement, Employee's
yearly base shall be not less than $375,000 US, which yearly
base salary shall be payable from the Company's Houston
offices to Employee in accordance with the Company's standard
payroll practices and policies, and shall be subject to such
withholdings as required by U.S. Federal law and the State of
Texas, or as otherwise permissible under such practices or
policies. Base salary for any partial period of employment
shall be prorated. The Company shall annually review
Employee's base salary.
(b) Annual Bonus. Employee shall be eligible for such annual bonus
as may be determined by the Human Resources Committee of the
Company's Board of Directors and the Company's Board of
Directors, which bonus shall be based on Employee's
performance under the performance contract guidelines adopted
by the Company, the Company's overall performance and any
special circumstances the Human Resources Committee and the
Board deem appropriate. Any such bonus is to be determined at
the discretion of the Company's Human Resources Committee and
the Board of Directors. Employee acknowledges that the Company
is not obligated to award him any bonus in any year.
(c) Employee Benefit Plans. Employee shall be eligible to
participate in the employee benefit plans, programs and
policies maintained by the Company for similarly situated
employees in accordance with the terms and conditions to
participate in such plans, programs, and policies as in effect
from time to time.
(d) Stock Options. Previously Employee has been granted certain
stock options pursuant to the Company's stock option plans.
This Novation neither increases
-2-
nor decreases the number of stock options previously granted,
nor does it change the terms under which they were granted.
(e) Vacation. Employee shall be entitled to four (4) weeks annual
vacation.
(f) Expenses. The Company shall pay or reimburse Employee for all
reasonable expenses actually incurred or paid by Employee in
the performance of his services hereunder upon the
presentation of expense statements or vouchers or such other
supporting information as the Company may reasonably require
of Employee.
(g) Office Facilities and Services. Employee shall be accorded
such benefits and support services, including without
limitation, office facilities, administrative assistant,
communications, and such other perquisites as would normally
be accorded by a corporation of the size and at the stage of
development in the industry in which the Company is, to its
President and Chief Executive Officer.
(h) U.S. Residency and Relocation Expense. Employee shall be
reimbursed for the reasonable expenses incurred in obtaining
permanent residency status in the U.S. In the event Employee
is unable to obtain such status and is required to leave the
United States as a result, the Company shall reimburse
Employee for the reasonable expenses of moving Employee's
personal and household goods to a country mutually agreed upon
by Employee and the Company.
(i) Indemnification. Employee shall be entitled to the benefit of
the indemnification provisions contained in the bylaws of the
Company as the same may be amended.
4. TERMINATION OF EMPLOYMENT.
(a) Termination By The Company Other Than For Cause Or Disability,
Or By Employee For Good Reason.
(1) The Company shall have the right to terminate
Employee's employment other than for Cause at any
time, and Employee shall have the right to quit or
resign for Good Reason at any time.
(2) If (a) the Company or its successors terminate
Employee's employment with the Company other than (i)
for Cause or (ii) pursuant to a notice of termination
delivered in accordance with Section 1 of this
Employment Agreement or (b) Employee resigns for Good
Reason, then (x) the Company shall pay to Employee
within thirty (30) days after the termination or
resignation an amount equal to thirty-six months of
Employee's base salary as in effect immediately
before Employee's termination of employment or
resignation and (y) any outstanding stock option(s)
granted by the Company to Employee shall become fully
vested and shall remain exercisable for twelve (12)
months following Employee's termination pursuant to
this section 4(a)(2), or the tenth anniversary of the
date(s) of the grant(s) specified in the relevant
option agreement(s), whichever is the shorter period.
-3-
(3) If the termination or resignation described in
Section 4(a)(2) occurs within 730 days after or 240
days before a Change of Control, then, in addition to
the benefits accruing to Employee under Section
4(a)(2), the company will pay Employee, within thirty
(30) days after the termination or resignation, an
additional amount such that the net amount retained
by employee pursuant to those benefits after any
federal, state, local and other taxes (including
without limitation any excise tax imposed under
Section 4999 of the Internal Revenue Code of 1986, as
amended from time to time) shall be equal to the
amount that Employee would have received pursuant to
those benefits before payment of any such taxes.
(4) If the Company or its successors terminate Employee's
employment with the Company pursuant to a notice of
termination delivered in accordance with Section 1 of
this Employment Agreement within 730 days after or
240 days before a Change of Control, then (x) the
Company shall pay to Employee, within thirty (30)
days after the termination, an amount equal to
thirty-six months of Employee's base salary as in
effect immediately before Employee's termination of
employment, (y) any outstanding stock option(s)
granted by the Company to Employee shall become fully
vested and shall remain exercisable for twelve (12)
months following Employee's termination pursuant to
this section 4(a)(4), or the tenth anniversary of the
date(s) of the grant(s) specified in the relevant
option agreement(s), whichever is the shorter period,
and (z) the Company shall pay to Employee, within
thirty (30) days after the termination, an additional
amount such that the net amount retained by Employee
pursuant to the benefits described in clauses (x) and
(y) of this section 4(a)(4) after any federal, state,
local and other taxes (including without limitation
any excise tax imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended from time
to time) shall be equal to the amount that Employee
would have received pursuant to such benefits before
payment of any such taxes.
(b) Termination By The Company For Cause, Or By Employee Other
Than For Good Reason.
(1) The Company shall have the right to terminate
Employee's employment at any time for Cause, and
Employee shall have the right to quit or resign at
any time other than for Good Reason.
(2) If the Company terminates Employee's employment for
Cause or pursuant to a notice of termination
delivered in accordance with Section 1 of this
Employment Agreement that is not delivered within 730
days after or 240 days before a Change of Control, or
Employee quits or resigns other than for Good Reason,
the Company's only obligation to Employee under this
Employment Agreement shall be to pay Employee's base
salary (including accrued vacation) actually earned
up to the date Employee's employment terminates.
-4-
(c) Termination for Disability or Death.
(1) The Company shall have the right to terminate
Employee's employment on or after the date Employee
has a Disability, and Employee's employment shall
terminate at Employee's death.
(2) If Employee's employment terminates under this
section 4(c), the Company shall pay Employee or, if
Employee dies, Employee's estate the amount provided
for under section 4(a)(2) and, in addition, Employee
or, if Employee dies, Employee's estate shall be
entitled to the provisions of section 4(a)(2) with
respect to Employee's stock options.
(d) Cause. The term "Cause" shall mean (1) Employee's final
conviction of a felony by a trial court, (2) Employee's
material breach of this Employment Agreement or (3) Employee's
material violation of any policy or code of conduct of the
Company, all as reasonably determined by the Company.
(e) Good Reason. The term "Good Reason" shall mean any of the
following, unless Employee shall have given his express
written consent thereto: (1) a material breach of the terms
and conditions of this Employment Agreement by the Company
which remains uncorrected for thirty (30) days after Employee
delivers written notice of such breach to the Company; (2)
failure to maintain or reelect Employee to the position
described in section 2(a); (3) a significant reduction of
Employee's duties, position or responsibilities relative to
Employee's duties, position or responsibilities in effect
immediately prior to such reduction, unless Employee is
provided with comparable duties and responsibilities; (4) a
substantial reduction, without good business reasons, of the
facilities and perquisites available to Employee immediately
prior to such reduction; (5) a reduction by the Company of
Employee's monthly base salary in effect immediately prior to
such reduction; (6) the relocation of the Employee more than
fifty (50) miles from the location of the Company's principal
office on the date hereof; or (7) the failure of the Company
to obtain a satisfactory agreement from a successor to assume
and agree to perform this Agreement as contemplated by section
6(d).
(f) Disability. Employee shall have a "disability" under this
Employment Agreement on the date the Company receives written
notice from a physician selected by the Company that Employee
no longer can perform one or more of the essential functions
of Employee's job even with reasonable accommodation.
(g) Change of Control. A "Change of Control" means the occurrence
of any of the following:
(1) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934) (a "Covered
Person") of beneficial ownership (within the meaning
of rule 13d-3 promulgated under the Securities
Exchange Act of 1934) of 50
-5-
percent or more of the combined voting power of the
then outstanding voting securities of the Company
entitled to vote generally in the election of
directors (the "Voting Securities"); provided,
however, that for purposes of this subsection (1) of
this Section 4(g) the following acquisitions shall
not constitute a Change of Control: (i) any
acquisition by the Company, (ii) any acquisition by
any employee benefit plan (or related trust)
sponsored or maintained by the Company or any entity
controlled by the Company, or (iii) any acquisition
by any entity pursuant to a transaction which
complied with clauses (i), (ii) and (iii) of
subsection (3) of this Section 4(g); or
(2) individuals who, as of the date of this Employment
Agreement, constitute the board of directors of the
Company (the "Incumbent Board") cease for any reason
to constitute at least a majority of the board of
directors of the Company; provided, however, that any
individual becoming a director after the date of this
Employment Agreement whose election, or nomination
for election by the Company's stockholders, was
approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall
be considered as though such individual were a member
of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption
of office occurs as a result of an actual or
threatened election contest with respect to the
election or removal of directors; or
(3) the consummation of a reorganization, merger or
consolidation or sale of the Company, or a
disposition of at least 50 percent of the assets of
the Company including goodwill (a "Business
Combination"), provided, however, that for purposes
of this subsection (3), a Business Combination will
not constitute a change of control if the following
three requirements are satisfied:
following such Business Combination, (i) all or
substantially all of the individuals and entities who
were the beneficial owners, respectively, of the
Company's voting securities immediately prior to such
Business Combination beneficially own, directly or
indirectly, more than 50 percent of the ownership
interests of the entity resulting from such Business
Combination (including, without limitation, an entity
which as a result of such transaction owns the
Company or all or substantially all of the Company's
assets either directly or through one or more
subsidiaries or other affiliated entities) in
substantially the same proportions as their ownership
immediately prior to such Business Combination, (ii)
no Covered Person (excluding any employee benefit
plan (or related trust) of the Company or such entity
resulting from such Business Combination)
beneficially owns, directly or indirectly, 50 percent
or more of, respectively, the ownership interests in
the entity resulting from such Business Combination,
except to the extent that such ownership existed
prior to the Business Combination, and (iii) at least
a majority of the
-6-
members of the board of directors of the entity
resulting from such Business Combination were members
of the Incumbent Board at the time of the execution
of the initial agreement, or of the action of the
board of directors of the Company, providing for such
Business Combination. For this purpose any individual
who becomes a director after the date of this
Employment Agreement, and whose election or
nomination for election by the Company's
stockholders, was approved by a vote of at least a
majority of the directors then comprising the
Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result
of an actual or threatened election contest with
respect to the election or removal of directors.
(h) Benefits. Employee shall have the right to receive any
benefits payable under the Company's employee benefits plans,
programs and policies (other than the Company's change of
Control Severance Plan (the "Change of Control Plan")) which
Employee otherwise has a non-forfeitable right to receive
under the terms of such plans, programs and policies (other
than severance benefits) independent of Employee's rights
under this Employment Agreement upon a termination of
employment in addition to any other benefits under this
section 4 without regard to the reason for such termination of
employment. Employee acknowledges and agrees that until the
termination of this Agreement, he shall not be entitled to
participate in the Change of Control Plan.
(i) Notice of Termination. Any termination by the Company or by
Employee for any reason shall be communicated by a notice of
termination to the other party hereto and shall be given in
accordance with section 6(a). Such notice shall state the
specific termination provision in this Agreement relied upon,
and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination under
the provision so indicated.
(j) No Mitigation. Employee shall not be required to mitigate the
amount of any severance payment contemplated by this
Agreement, nor shall any such payment be reduced by any
earnings that Employee may receive from any other source.
5. COVENANTS BY EMPLOYEE
(a) Property of the Company.
(1) Employee covenants and agrees that upon the
termination of Employee's employment for any reason
or, if earlier, upon the Company's request, Employee
shall promptly return all "Property" which had been
entrusted or made available to Employee by the
Company.
(2) The term "Property" shall mean all records, files,
memoranda, reports, price lists, drawing, plans,
sketches, keys, codes, computer hardware and software
and other property of any kind or description
prepared, used or
-7-
possessed by Employee during Employee's employment by
the Company (and any duplicates of any such property)
together with any and all information, ideas,
concepts, discoveries, and inventions and the like
conceived, made, developed or acquired at any time by
Employee individually or with others during
Employee's employment which relate to the Company's
business, products or services.
(b) Trade Secrets.
(1) In consideration for the promises made in section
5(d) of this Agreement, the Company promises that it
shall provide and make available to Employee certain
confidential, proprietary information and trade
secrets.
(2) Employee covenants and agrees that Employee shall
hold in a fiduciary capacity for the benefit of the
Company and each of its affiliates, and shall not
directly or indirectly use or disclose, any Trade
Secret that Employee may have acquired pursuant to
section 5(b)(1) above during the term of Employee's
employment by the Company for so long as such
information remains a trade secret.
(3) The term "Trade Secret" shall mean information,
including, but not limited to, technical or
non-technical data, a formula, a patent, a
compilation, a program, a device, a method, a
technique, a drawing, a process, financial data,
financial plans, product plans, or that: (a) derives
economic value, actual or potential, from not being
generally known to, and not being generally readily
ascertainable by proper means by other persons who
can obtain economic value from its disclosures or
use, and (b) is the subject of reasonable efforts by
the Company and its affiliates to maintain its
secrecy.
(4) This section 5(b) is intended to provide rights to
the Company which are in addition to those rights the
Company has under the common law or applicable
statutes for the protection of trade secrets.
(c) Confidential Information.
(1) Employee covenants and agrees while employed under
this Employment Agreement and thereafter during the
Restricted Period he shall hold in a fiduciary
capacity for the benefit of the Company and each of
its affiliates, and shall not directly or indirectly
use or disclose, any of the Company's or the
Company's affiliates' Confidential or Proprietary
Information that Employee may have acquired (whether
or not developed or compiled by Employee and whether
or not Employee is authorized to have access to such
information) during the term of, and in the course
of, or as a result of Employee's employment by the
Company or its affiliates.
(2) The term "Confidential or Proprietary Information"
shall mean any secret, confidential or proprietary
information that the Company or an affiliate
-8-
(not otherwise included in the definition of a Trade
Secret under this Agreement) that has not become
generally available to the public by the act of one
who has the right to disclose such information
without violation of any right of the Company or its
affiliates.
(d) Non-Competition. During the period of Employee's employment
with the Company and thereafter during the Restricted Period,
the Employee covenants and agrees that, in connection with the
countries of Russia and Venezuela, he shall not directly or
indirectly own any interest in, manage, control, participate
in, consult with, render services for, or in any manner engage
in any businesses competing with the Company (unless the Board
of Directors shall have authorized such activity and the
Company shall have consented thereto in writing). Investments
in less than 5% of the outstanding securities of any class of
the Company subject to the reporting requirements of Section
13 or Section 15(d) of the Securities Exchange Act of 1934, as
amended, shall not be prohibited by this section. For purposes
of this section (d), the term "Company" shall include Harvest
Natural Resources, Inc. and any of its affiliates or
subsidiaries or any company in which it is a minority
shareholder or a joint venture partner. For purposes of this
section, the term "businesses" shall mean any enterprise,
commercial venture, or project involving oil and gas
exploration or production activities in the same geographic
areas as the Company's activities during the period of
Employee's employment.
Further, during the period of Employee's employment with the
Company and thereafter during the Restricted Period, the
Employee covenants and agrees that he will not directly or
indirectly through another entity induce or otherwise attempt
to influence any employee of the Company to leave the
Company's employment or in any way interfere with the
relationship between the Company and any employee thereof.
Further, the Employee will not induce or attempt to induce any
customer, supplier, licensee, joint venture partner,
shareholder, licensor or other business relation of the
Company to cease doing business with the Company or in any way
interfere with the relationship between any such customer,
supplier, licensee, joint venture partner, shareholder,
licensor or business relation of the Company.
If (i) pursuant to the arbitration process described in
Section 6(c) of this Employment Agreement (or such other
process as to which the Company and Employee may agree upon in
writing), it is determined that Employee has violated the
provisions of this Section 7(d), and (ii) employee has
received a payment from the Company pursuant to Section
4(a)(2)(x) or Section 4(a)(4)(x) of this Agreement (the "Lump
Sum Severance Amount"), then, in addition to any other
remedies that the Company may have, Employee shall be
obligated, and hereby agrees, to pay the Company, as
liquidated damages, an amount (but not less than zero) equal
to the product of (x) the Lump Sum Severance Amount and (y) a
fraction whose numerator is the excess of thirty-six (36) over
the number of calendar months that have elapsed since the last
day of employee's termination of
-9-
employment under Section 4 of this Agreement and whose
denominator is thirty-six (36).
(e) Employment Restriction - Conflict of Interest: Employee
covenants and agrees that he will not receive and has not
received any payments, gifts or promises and Employee will not
engage in any employment or business enterprises that in any
way conflict with his service and the interests of the Company
or its affiliates. In addition, Employee agrees to comply with
the laws or regulations of any country, including, without
limitation, the United States of America, having jurisdiction
over Employee or the Company.
Employee shall not make any payments, loans, gifts or promises
or offers of payments, loans or gifts, directly or indirectly,
to or for the use or benefit of any official or employee of
any government or to any other person if Employee knows, or
has reason to believe, that any part of such payments, loans
or gifts, or promise or offer, would violate the laws or
regulations of any country, including, without limitation, the
United States of America, having jurisdiction over Employee or
the Company.
By signing this Agreement, Employee acknowledges that he has
not made and will not make any payments, loans, gifts,
promises of payments, loans or gifts to or for the use or
benefit of any official or employee of any government or to
any other person which would violate the laws or regulations
of any country, including, without limitation, the United
States of America, having jurisdiction over Employee or the
Company.
(f) Restricted Period. The term "Restricted Period" shall mean the
two-year period which starts on the date Employee's employment
terminates with the Company without regard to whether such
termination comes before or after the end of the term of this
Employment Agreement.
(g) Reasonable and Continuing Obligations. Employee agrees that
Employee's obligations under this section 5 will continue
beyond the date Employee's employment terminates if such
continuance is reasonable and necessary to protect the
Company's legitimate business interests. The Company
additionally shall have the right to take such other action as
the Company deems necessary or appropriate to compel
compliance with the provisions of this section 5.
6. MISCELLANEOUS.
(a) Notices. Notices and all other communications shall be in
writing and shall be deemed to have been duly given when
personally delivered or when mailed by United States
registered or certified mail. Notices to the Company shall be
sent to 00000 Xxxx Xxx Xxxxx Xxxxx, Xxxxxxx, Xxxxx 00000.
Notices and communications to Employee shall be sent to
Employee's home address.
(b) No Waiver. Except for the notice described in section 4(d), no
failure by either the Company or Employee at any time to give
notice of any breach by the other
-10-
of, or to require compliance with, any condition or provision
of this Employment Agreement shall be deemed a waiver of any
provisions or condition of this Employment Agreement
(c) Arbitration and Governing Law. ANY UNRESOLVED DISPUTE OR
CONTROVERSY BETWEEN EMPLOYEE AND THE COMPANY ARISING UNDER OR
IN CONNECTION WITH THIS AGREEMENT SHALL BE SETTLED EXCLUSIVELY
BY ARBITRATION, CONDUCTED IN ACCORDANCE WITH THE RULES OF THE
AMERICAN ARBITRATION ASSOCIATION THEN IN EFFECT. THE COMPANY
WILL BEAR THE ADMINISTRATIVE COSTS OF ANY ARBITRATION UNDER
THIS AGREEMENT, INCLUDING THE ARBITRATOR'S FEES. THE
ARBITRATOR SHALL NOT HAVE THE AUTHORITY TO ADD TO, DETRACT
FROM, OR MODIFY ANY PROVISION HEREOF. THE ARBITRATOR SHALL
HAVE THE AUTHORITY TO ORDER REMEDIES WHICH EMPLOYEE COULD
OBTAIN IN A COURT OF COMPETENT JURISDICTION, INCLUDING
BACK-PAY, SEVERANCE COMPENSATION, REIMBURSEMENT OF COSTS,
INCLUDING THOSE INCURRED TO ENFORCE THIS AGREEMENT, AND
INTEREST THEREON IN THE EVENT THE ARBITRATOR DETERMINES THAT
EMPLOYEE WAS TERMINATED WITHOUT DISABILITY OR GOOD CAUSE, AS
DEFINED HEREIN, OR THAT THE COMPANY HAS OTHERWISE MATERIALLY
BREACHED THIS AGREEMENT. A DECISION BY THE ARBITRATOR SHALL BE
IN WRITING AND WILL BE FINAL AND BINDING. JUDGMENT MAY BE
ENTERED ON THE ARBITRATOR'S AWARD IN ANY COURT HAVING
JURISDICTION. THE ARBITRATION PROCEEDING SHALL BE HELD IN
HOUSTON, TEXAS, UNITED STATES OF AMERICA. NOTWITHSTANDING THE
FOREGOING, THE COMPANY SHALL BE ENTITLED TO SEEK INJUNCTIVE OR
OTHER EQUITABLE RELIEF FROM ANY COURT OF COMPETENT
JURISDICTION, WITHOUT THE NEED TO RESORT TO ARBITRATION IN THE
EVENT THAT EMPLOYEE VIOLATES SECTIONS 5(b), 5(c), 5(d) OR 5(e)
OF THIS AGREEMENT. THIS AGREEMENT SHALL IN ALL RESPECTS BE
CONSTRUCTED ACCORDING TO THE LAWS OF THE STATE OF TEXAS.
(d) Assignment by Company. This Employment Agreement shall be
binding upon and inure to the benefit of the Company and any
successor to all or substantially all of the business or
assets of the Company. The Company may assign this Employment
Agreement to any affiliate or successor, and no such
assignment shall be treated as a termination of Employee's
employment under this Employment Agreement; provided, however,
that in the case of an assignment to an affiliate, the Company
shall not be relieved of its obligations under this Agreement.
The Company will require any successor corporation (whether
direct or indirect, and whether by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business or assets of the Company to expressly assume and to
agree to perform this Agreement in the same manner and to the
same extent as the Company, as if no such succession had taken
place. Failure of the Company
-11-
to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a material
breach of this Agreement. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any
successor to its business or assets as aforesaid which assumes
and agrees to perform this Agreement by operation of law, or
otherwise.
(e) Assignment by Employee. Employee's rights and obligations
under this Employment Agreement are personal, and they shall
not be assigned or transferred without the Company's prior
written consent.
(f) Other Agreements. With the exceptions of any of the Company's
stock option plans (and related agreements), incentive plans
and change of control plans and the performance contract
guidelines adopted by the Company, this Employment Agreement
replaces and merges any and all previous agreements and
understandings regarding all the terms and conditions of
Employee's employment relationship with the Company, and this
Employment Agreement constitutes the entire agreement of the
Company and Employee with respect to such terms and
conditions.
(g) Amendment. No amendment to this Employment Agreement shall be
effective unless it is in writing and signed by the Company
and by Employee.
(h) Invalidity. If any part of this Employment Agreement is held
by a court of competent jurisdiction to be invalid or
otherwise unenforceable, the remaining part shall be
unaffected and shall continue in full force and effect, and
the invalid or otherwise unenforceable part shall be deemed
not to be part of this Employment Agreement.
(i) Enforceability by Beneficiaries. This Agreement shall inure to
the benefit of and be enforceable by the parties hereto and
their respective heirs, legal or personal representatives and
successors and if Employee should die while any amount would
still be payable to him hereunder if he had continued to live,
all such amounts shall be paid in accordance with the terms of
this Agreement to Employee's devisee, legatee or other
designee or, if there is no such designee, to his estate.
7. NOVATION.
This Agreement is a novation to that Employment Agreement between the Company
and Employee entered into on July 10, 2000, which hereby is extinguished. As
consideration for this novation, Employee acknowledges the value of the matters
described in the recitals to this Employment Agreement and the other terms of
this Employment Agreement and agrees that they are adequate to make the novation
binding in all respects.
IN WITNESS WHEREOF, the Company and Employee have executed this
Employment Agreement in multiple originals to be effective as set out above.
-12-
HARVEST NATURAL RESOURCES, INC. XXXXX X. XXXX
By: /s/ Xxxxxxx X. Xxxxxxxx' By: /s/ Xxxxx X. Xxxx
---------------------------------- ------------------------------
Xxxxxxx X. Xxxxxxxx'
Chairman of the Board
-13-
