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AMENDMENT NO. 1 TO
SEVERANCE PROTECTION AGREEMENT
This Amendment No. 1 (this "Amendment") to that certain Severance
Protection Agreement, dated as of December 20, 1997, by and among United
Meridian Corporation, UMC Petroleum Company (a wholly-owned subsidiary of United
Meridian Corporation ) and Xxxxxxxx X. Xxxxxxxx ("Executive," and such severance
protection agreement, the "Severance Protection Agreement") is entered into as
of November 24, 1998 (the "Amendment Date") between Executive and Ocean Energy,
Inc., a Delaware corporation (the "Company").
WHEREAS, the obligations of the Severance Protection Agreement were
assumed by the Company by operation of law in connection with the merger of the
Company and United Meridian Corporation;
WHEREAS, the Company anticipates entering into an Agreement and Plan of
Merger with Seagull Energy Corporation, a Texas corporation ("Seagull"),
pursuant to which the Company will merge with and into Seagull, with Seagull
being the surviving corporation (the "Merger"); and
WHEREAS, in anticipation of the Merger, the Company and Executive
desire to amend certain provisions of the Severance Protection Agreement, with
all such amendments to be effective as of the consummation of the Merger;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained in this Amendment, and for
other valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
1. Upon the consummation of the Merger, Section 2(b)(3) of the
Severance Protection Agreement is amended so that the number "thirty-six (36)"
replaces the number "twenty-four (24)" in the first line thereof.
2. Upon the consummation of the Merger, the following paragraphs are
added after Section 2(b)(4) and before Section 2(c) of the Severance Protection
Agreement:
"(5) Seagull Energy Corporation, as the surviving
corporation (the "Surviving Company") of the merger of Ocean
Energy, Inc. with and into Seagull Energy Corporation, shall
deem Executive "retired" for the purposes of all options
granted to the Executive under all stock option plans
sponsored by the Company, the Surviving Company or any of
their predecessors in order to permit Executive to have the
maximum term possible under such plans in which to exercise
such options.
(6) The Surviving Company shall pay to Executive a
cash amount equal to $54,000, which amount represents the
total
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cost of continuing Executive's current car allowance for
thirty-six (36) months plus a $3,600 for gasoline costs.
(7) During the term of the Consultancy (as defined
below), the Surviving Company shall continue to pay the same
club dues for which the Company (or the Surviving Company, as
the case may be) is paying on the date of termination of
Executive's employment.
(8) The Surviving Company shall reimburse Executive
in an amount of up to $10,000 for any outplacement costs.
(9) The Surviving Company shall reimburse Executive
in an amount of up to $20,000 for the cost of any financial or
tax consulting.
(10) From and after the date of termination of
employment upon which benefits become payable under this
Section 2(b), the Surviving Company and the Executive agree
that the Executive shall be employed by the Surviving Company
as a consultant reporting to [Chairman/CEO/President/Board]
(the "Consultancy") on a month to month basis for up to twelve
(12) months after which the Consultancy shall end. The
Consultancy may be earlier terminated by Executive with one
month's prior notice at any time during the Consultancy. In
consideration for Executive's employment for each month of the
Consultancy, Executive shall receive one-twelfth (1/12) of the
Base Amount, which shall be payable at the end of each such
month (if any). In addition, during the period of the
Consultancy, the Surviving Company shall provide the Executive
with an allowance for office space, equipment, computers,
parking and secretarial assistance of $6,250 per month.
(11) Any amount payable under this Section 2(b) shall
include an additional amount of cash which will equal any
taxes withheld on the portion not deferred such that the net
amount of the total payment shall equal the result obtained as
if no withholding taxes applied. Should any taxes be due upon
the provision of any benefits hereunder (other than taxes due
under the operation of Section 4999 of the Code which Section
of the Code is addressed in Section 2(d) hereof), the
Surviving Company shall pay Executive an amount equal to such
taxes (and any taxes thereon) so that Executive incurs no
taxes on any benefits received hereunder."
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3. Capitalized terms used in this Amendment, but not otherwise defined,
shall have the meanings ascribed in the Severance Protection Agreement.
4. Unless otherwise expressly modified by this Amendment, all terms and
conditions set forth in the Severance Protection Agreement shall remain in full
force and effect. The parties acknowledge that the only terms and conditions
modified by this Amendment are those expressly set forth herein.
5. The validity, interpretation, construction and performance of this
Amendment shall be governed by the laws of the State of Texas without reference
to rules relating to conflicts of law.
6. This Amendment may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, each party has executed, or has caused a duly
authorized officer to execute, this Amendment as of the Amendment Date.
OCEAN ENERGY, INC.
BY: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Position: Exec. V.P. & General Counsel
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EXECUTIVE
BY: /s/ Xxxxxxxx X. Xxxxxxxx
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XXXXXXXX X. XXXXXXXX
