RETENTION AGREEMENT
Exhibit 10.1
THIS RETENTION AGREEMENT (“Agreement”) is made by and between Anadarko Petroleum
Corporation, a Delaware corporation (the “Company”), and Xxxxxxx X. Xxxxx (the “Executive”), as of
August 10, 2006.
WHEREAS, the Company and Xxxx XxXxx Corporation (“KMG”), the current employer of the
Executive, shall consummate a transaction after which KMG shall be wholly owned by the Company (the
“Transaction”);
W I T N E S S E T H:
WHEREAS, after the Transaction, the Company wishes to retain the Executive as an executive of
the Company, and the Executive wishes to be retained;
NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations
contained herein, the Company and the Executive agree as follows:
ARTICLE 1
EMPLOYMENT AND DUTIES
EMPLOYMENT AND DUTIES
1.1 Employment; Effective Date. The Company agrees to employ the Executive and
the Executive agrees to be employed by the Company, beginning as of August 10, 2006 (the
“Effective Date”).
1.2 Position. Effective as of the Effective Date, the Company shall cause the
Executive to be appointed as Senior Vice President, Gulf of Mexico and International
Operations, of the Company.
1.3 Duties and Services. The Executive agrees to serve in the position referred
to in paragraph 1.2 and to perform diligently and to the best of his abilities the duties and
services appertaining to such office. The Executive shall report to the Chief Executive
Officer of the Company (“CEO”) or such other senior officer that reports to the CEO as is
designated by the CEO.
ARTICLE 2
TERM AND TERMINATION OF EMPLOYMENT
TERM AND TERMINATION OF EMPLOYMENT
2.1 Term. The Company agrees to employ the Executive for the period beginning on
the Effective Date. The Executive’s employment shall be “at-will” and may be terminated by the
Executive or the Company at any time, provided that termination is in compliance with paragraph
2.2.
2.2 Notice of Termination. If the either party desires to terminate the
Executive’s employment, it or he shall do so by giving written notice to the other party that
it or he has elected to terminate the Executive’s employment and stating the effective date and
reason for such termination, provided that no such action shall alter or amend any other
provisions hereof or rights arising hereunder, including, without limitation, the provisions of
Articles 4 and 5 hereof.
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ARTICLE 3
COMPENSATION AND BENEFITS
COMPENSATION AND BENEFITS
3.1 Base Salary. During his employment hereunder, the Executive shall receive a
base salary and be eligible for bonuses at the discretion of the Compensation Committee of the
Board (the “Compensation Committee”). The Executive shall be eligible for the same plans as
similarly situated executives provided that the Executive meets each plan’s respective
eligibility requirements.
3.2 Retention Bonus. Except as provided herein and provided that the Executive
remains employed with the Company on each of the 1st and 2nd
anniversaries of the Effective Date, the Executive shall receive on each such anniversary a
cash payment of $575,000 within 10 days of each such anniversary.
3.3 Restricted Stock Award. On the Effective Date, the Company shall grant the
Executive a restricted stock award of 25,000 shares of the Company’s common stock (the “Initial
Grant”) from the Company’s Stock Incentive Plan (“SIP”). This Initial Grant is subject to the
terms, conditions, and provisions of the SIP and Initial Grant agreement. Except as provided
herein, and provided that the Executive remains employed with the Company on each of the
1st and 2nd anniversaries of the Effective Date, the forfeiture
restrictions on 50% of the Initial Grant will lapse on each anniversary date.
3.4 Special Pension Credit.
(i) If the Executive remains employed by the Company or its affiliates at least until
the third anniversary of the Effective Date, the Executive shall be entitled to a special
pension benefit from the Company, such that the aggregate benefits under the qualified
defined benefit pension plan and the applicable restoration plan and any successors thereto
in which the Executive participates (the “Pension Plans”), plus the special benefits under
this paragraph 3.4(i), are equal to the aggregate benefits to which he would have been
entitled under the Pension Plans if his years of service with the Company and his age were
increased by five.
(ii) If the Executive’s employment terminates by reason of the Executive’s death or
Disability, or if the Company terminates the Executive without Cause prior to the third
anniversary of the Effective Date, the Executive shall be entitled to a special pension
benefit from the Company, such that the aggregate benefits under the Pension Plans, plus the
special benefits under this paragraph 3.4(ii) are equal to the aggregate benefits to which he
would have been entitled under the Pension Plans if his years of service and age were
increased by the number that is the difference between 52 and his age on the date of
termination. If the Executive’s employment is terminated without Cause in connection with a
Change of Control, as defined in the form Key Employee Change of Control Contract (the
“Change of Control Contract”) prior to the third anniversary of the Effective Date, the
Executive shall not be entitled to any pension enhancement provided under the Change of
Control Contract and shall only be entitled to the age and service credit under this
paragraph 3.4(ii).
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(iii) The special pension benefit payable under this paragraph 3.4 shall be paid at the
same time or times as the Executive’s benefits under the Pension Plans.
(iv) For purposes of this Agreement, Disability shall mean the absence of the Executive
from the Executive’s duties with the Company on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical illness which is determined
to be total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative.
(v) For purposes of this Agreement, termination for “Cause,” shall mean (A) the willful
and continued failure of the Executive to perform substantially the Executive’s duties with
the Company or one of its affiliates (other than any such failure resulting from incapacity
due to physical or mental illness), after a written demand for substantial performance is
delivered to the Executive by the Board or the CEO which specifically identifies the manner
in which the Board or the CEO believes that the Executive has not substantially performed the
Executive’s duties; or (B) the willful engaging by the Executive in illegal or gross
misconduct which is materially and demonstrably injurious to the Company. For purposes of
this provision, no act or failure to act, on the part of the Executive, shall be considered
“willful” unless it is done, or omitted to be done, by the Executive in bad faith or without
reasonable belief that the Executive’s action or omission was in the best interests of the
Company. Any act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the CEO or a senior officer of the
Company or based upon the advice of counsel for the Company shall be conclusively presumed to
be done, or omitted to be done, by the Executive in good faith and in the best interests of
the Company.
ARTICLE 4
PROTECTION OF INFORMATION
PROTECTION OF INFORMATION
4.1 Confidential Information. The Executive shall hold in a fiduciary capacity
for the benefit of the Company all secret or confidential information, knowledge or data
relating to the Company or any of its affiliates, and their respective businesses, which shall
have been obtained by the Executive during the Executive’s employment by the Company, its
predecessors, or any of its affiliates and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation of this
Agreement) (referred to herein as “Confidential Information”). Following the termination of
the Executive’s employment with the Company for any reason, the Executive shall not, without
the prior written consent of the Company or as may otherwise be required by law or legal
process, communicate or divulge any such Confidential Information to anyone other than the
Company and those designated by it. In no event shall an asserted violation of the provisions
of this paragraph 4.1 constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement. Also, within 5 days after the termination of
Executive’s employment for any reason, the Executive shall return to Company all documents and
other tangible items containing Company information which are in the Executive’s possession,
custody or control.
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4.2 Remedies. The Executive acknowledges that money damages would not be
sufficient remedy for any breach of this Article by the Executive, and the Company shall be
entitled to specific performance and injunctive relief as remedies for such breach or any
threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of
this Article, but shall be in addition to all remedies available at law or in equity to the
Company, including the recovery of damages from the Executive and his agents involved in such
breach and remedies available to the Company pursuant to this and other agreements with the
Executive.
ARTICLE 5
NONSOLICITATION
NONSOLICITATION
5.1 In General. As part of the consideration for the compensation and benefits to
be paid to the Executive hereunder; to protect the trade secrets and confidential information
of the Company and its affiliates that have been and will in the future be disclosed or
entrusted to the Executive, the business good will of the Company and its affiliates that has
been and will in the future be developed in the Executive, or the business opportunities that
have been and will in the future be disclosed or entrusted to the Executive by the Company and
its affiliates; and as an additional incentive for the Company to enter into this Agreement,
the Company and the Executive agree to the nonsolicitation obligations hereunder.
5.2 Nonsolicitation. The Executive shall not, directly or indirectly for the
Executive or for others, in any geographic area or market where the Company or any of its
affiliates are conducting any business or have during the previous twelve months conducted such
business, induce any employee of the Company or any of its affiliates to terminate his or her
employment with the Company or such affiliates, or hire or assist in the hiring of any such
employee by any person, association, or entity not affiliated with the Company, unless such
employee has terminated employment with the Company and its affiliates before such
solicitation. These nonsolicitation obligations shall apply during the period that the
Executive is employed by the Company and during the one-year period commencing on the date of
the Executive’s termination of employment for any reason. Notwithstanding the foregoing, the
provisions of this paragraph 5.2 shall not restrict the ability of the Company to take actions
with respect to the employment or the termination of employment of any of its employees, or for
the Executive to participate in any such actions in his capacity as an officer of the Company.
5.3 Enforcement and Remedies. The Executive acknowledges that money damages would
not be sufficient remedy for any breach of this Article by the Executive, and the Company shall
be entitled to specific performance and injunctive relief as remedies for such breach or any
threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of
this Article, but shall be in addition to all remedies available at law or in equity to the
Company.
5.4 Reformation. It is expressly understood and agreed that the Company and the
Executive consider the restrictions contained in this Article to be reasonable and necessary to
protect the proprietary information of the Company. Nevertheless, if any of the
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aforesaid restrictions are found by a court having jurisdiction to be unreasonable, or
overly broad as to geographic area or time, or otherwise unenforceable, the parties intend for
the restrictions therein set forth to be modified by such court so as to be reasonable and
enforceable and, as so modified by the court, to be fully enforced.
ARTICLE 6
EFFECT OF TERMINATION ON COMPENSATION
EFFECT OF TERMINATION ON COMPENSATION
6.1 Termination Benefits. If the Executive’s employment hereunder shall be
terminated by reason of the Executive’s death or Disability, or by the Company without Cause:
(i) any unvested portion of the Initial Grant shall vest upon the Executive’s termination of
employment and shall be immediately paid to the Executive; (ii) the Executive shall receive any
unpaid portion of the retention bonus provided pursuant to paragraph 3.2 hereof; and (iii) the
Executive shall be entitled to the Special Pension Credit provided pursuant to paragraph 3.4
hereof. For avoidance of doubt, if the Executive terminates his employment voluntarily for any
reason or if the Company terminates the Executive’s employment for Cause, the Executive shall
not receive any unvested benefits provided pursuant to this paragraph 6.1.
ARTICLE 7
MISCELLANEOUS
MISCELLANEOUS
7.1 Notices. For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly given when
personally delivered, when delivered by facsimile with printed confirmation, or when mailed by
United States registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
| If to the Company: | Anadarko Petroleum Corporation 0000 Xxxx Xxxxxxx Xxxxx Xxx Xxxxxxxxx, Xxxxx 00000 |
|||
| Attention: Vice President, General Counsel | ||||
| If to the Executive to: | Xxxxxxx X. Xxxxx | |||
| [ ] | ||||
| [ ] |
or to such other address as either party may furnish to the other in writing in accordance
herewith, except that notices or changes of address shall be effective only upon receipt.
7.2 Applicable Law. This Agreement is entered into under, and shall be governed
for all purposes by, the laws of the State of Texas.
7.3 No Waiver. No failure by either party hereto at any time to give notice of
any breach by the other party of, or to require compliance with, any condition or provision of
this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.
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7.4 Severability. If a court of competent jurisdiction determines that any
provision of this Agreement is invalid or unenforceable, then the invalidity or
unenforceability of that provision shall not affect the validity or enforceability of any other
provision of this Agreement, and all other provisions shall remain in full force and effect.
7.5 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which together will constitute one
and the same Agreement.
7.6 Withholding of Taxes and Other Employee Deductions. The Company may withhold
from any benefits and payments made pursuant to this Agreement all federal, state, city and
other taxes as may be required pursuant to any law or governmental regulation or ruling and all
other normal employee deductions made with respect to the Company’s employees generally.
7.7 Headings. The paragraph headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes.
7.8 Gender and Plurals. Wherever the context so requires, the masculine gender
includes the feminine or neuter, and the singular number includes the plural and conversely.
7.9 Affiliate. As used in this Agreement, the term “affiliate” shall mean any
entity which owns or controls, is owned or controlled by, or is under common ownership or
control with, the Company.
7.10 Assignment. This Agreement shall be binding upon and inure to the benefit of
the Company and any successor of the Company, by merger or otherwise. Except as provided in
the preceding sentence, this Agreement, and the rights and obligations of the parties
hereunder, are personal and neither this Agreement, nor any right, benefit, or obligation of
either party hereto, shall be subject to voluntary or involuntary assignment, alienation or
transfer, whether by operation of law or otherwise, without the prior written consent of the
other party.
7.11 Term. This Agreement has a term co-extensive with the term of employment.
Termination of this Agreement shall not affect any right or obligation of any party which is
accrued or vested prior to such termination. Without limiting the scope of the preceding
sentence, the provisions of Articles 4, 5 and 6 shall survive any termination of the employment
relationship and/or of this Agreement.
7.12 Entire Agreement. Except as provided in the written benefit plans and
programs and agreements referenced in Article 3 or any signed written agreement
contemporaneously or hereafter executed by the Company and the Executive, this Agreement
constitutes the entire agreement of the parties with regard to the subject matter hereof, and
contains all the covenants, promises, representations, warranties and agreements between the
parties with respect to employment of the Executive by the Company. Without limiting the scope
of the preceding sentence, all prior understandings and agreements among the parties hereto
relating to the subject matter hereof are hereby null and void and of no
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further force and effect including, but not limited to, the Continuity Agreement between
KMG and the Executive, dated as of May 22, 2006 (“Continuity Agreement”). Further, in
consideration of the undertakings by Company in this Agreement, the Executive hereby releases
KMG (and KMG’s subsidiaries, affiliates, and benefits plans) of all obligations contained in
the Continuity Agreement and all claims against KMG (and KMG’s subsidiaries, affiliates, and
benefits plans) related to such Continuity Agreement or his employment with KMG prior to the
Effective Date. The foregoing sentence, however, does not apply to Section 6 “Excess Parachute
Payments” of the Continuity Agreement; Employee may seek enforcement of the obligations
contained in Section 6 against KMG or the Company in the event KMG is dissolved.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the year and date
first above written, to be effective as of the Effective Date.
| ANADARKO PETROLEUM CORPORATION |
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| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Vice President, Human Resources | |||
| /s/ Xxxxxxx X. Xxxxx | ||||
| Xxxxxxx X. Xxxxx | ||||
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