COMPENSATION AGREEMENT
FOR
XXXXXXX X. XXXXXXXX
WITH HALLWOOD PETROLEUM, INC.
This Compensation Agreement ("Agreement"), is made and entered into as of
August 1, 1994 by and between Hallwood Petroleum, Inc. ("HPI"), and Xxxxxxx X.
Xxxxxxxx ("Xxxxxxxx").
RECITALS
HPI, through its affiliates, is actively engaged in oil and gas activities
in the countries of Indonesia, Azerbaijan and Peru and may become actively
involved in similar activities in other countries.
Xxxxxxxx is the Chairman of the Board of HPI and the parties have agreed
that his duties in such office shall be those described in this Agreement and
shall be performed outside the United States and the United Kingdom.
HPI and Xxxxxxxx wish to promote their mutual best interests by
establishing rights and obligations with respect to Xxxxxxxx'x employment
relationship with HPI and they desire to set forth in writing their mutual
understanding and agreement with respect to the conditions, covenants and
agreements regarding the employment of Xxxxxxxx by HPI.
HPI and Xxxxxxxx previously entered into an agreement dated as of April 1,
1992, which incorrectly reflected the terms of their relationship.
AGREEMENT
In consideration of the mutual benefits to be derived from this Agreement
and the covenants and agreements set forth herein, the receipt and sufficiency
of which are acknowledged by the execution and delivery hereof, the parties
agree as follows:
1. Engagement. HPI agrees to compensate Xxxxxxxx for his activities
outside of the United States and Xxxxxxxx agrees to perform these activities
outside of the United States upon the terms and conditions set forth in this
Agreement.
2. Duties of Xxxxxxxx. Xxxxxxxx'x duties and obligations hereunder shall
include: (a) consulting with and assisting HPI in maintaining its relationships
with officials in Indonesia, Azerbaijan and Peru and other countries outside the
United States and the United Kingdom in which HPI or its affiliates may in the
future enter into agreements with respect to oil and gas activities; (b)
assisting HPI in negotiating such agreements with the governments or state oil
companies of these countries as may be necessary or appropriate to implement the
initial agreement HPI or its affiliates entered into in those countries; (c)
assist and consult with HPI in structuring and obtaining financing for the
activities of its affiliates; (d) reporting to the Boards of Directors of HPI
and its affiliates (the "Boards") and any other person designated by the Boards;
and (d) observing and complying with all resolutions, regulations and directions
from time to time made or given by the Boards.
3. Nondisclosure and Confidentiality. Xxxxxxxx understands that he has
developed and been exposed to, or may develop or be exposed to highly
confidential information and trade secrets of HPI and its parent, subsidiaries
or associated companies ("Confidential Information"), and that maintenance by
HPI of its proprietary Confidential Information to the fullest extent possible
is extremely important. Except as required during the performance of his duties
for HPI or otherwise permitted by HPI, Xxxxxxxx agrees never to disclose or use
any Confidential Information either during or after the term of this Agreement
and to take all reasonable precautions to prevent inadvertent disclosure, use or
transfer of any Confidential Information.
4. Term. This Agreement shall be effective from August 1, 1994 (the
"Commencement Date") and shall continue in effect until terminated by either
party giving to the other not less than six calendar month's notice in writing.
5. Compensation. As compensation for services rendered by Xxxxxxxx
hereunder, HPI shall pay to Xxxxxxxx annual compensation of Two Hundred Fifty
Thousand Dollars ($250,000) payable in installments quarterly in advance on the
first day of each of February, May, August and November each year beginning
August 1, 1994.
6. Expenses. HPI shall within a reasonable time after the occurrence of
same, reimburse Xxxxxxxx for reasonable, ordinary business expenses reasonably
incurred by him in the performance of his duties for HPI, provided that Xxxxxxxx
shall maintain an accurate record of such expenses and shall provide HPI with
evidence thereof.
7. Termination. HPI may terminate this Agreement at any time upon the
following events: (i) any act of dishonesty on the part of Xxxxxxxx resulting
or intended to result directly or indirectly in personal gain or benefit at the
expense of HPI or material damage of or to property of HPI; (ii) any act of
fraud, misappropriation, embezzlement or willful misconduct by Xxxxxxxx or (iii)
the willful breach or repeated, habitual neglect by Xxxxxxxx of his duties under
this Agreement to HPI. Upon such termination HPI shall pay to Xxxxxxxx the pro-
rata portion of the annual compensation to the date of termination, and he shall
be entitled to no other compensation or benefits hereunder, including, without
limitation, any other compensation, bonuses or commissions.
8. Disability or Death. If as a result of illness, injury or other
disability, Xxxxxxxx shall be unable to perform his duties hereunder on a
substantially full-time basis for any period of 30 days or more, HPI may at its
option terminate Xxxxxxxx'x employment hereunder and shall pay to Xxxxxxxx the
pro-rata portion of annual compensation to the date of termination. If Xxxxxxxx
shall die during the term of his employment by HPI, HPI shall pay to Xxxxxxxx'x
estate the pro-rata portion of annual compensation to the date of Xxxxxxxx'x
death.
9. Certain Payments. Xxxxxxxx acknowledges that he is aware of the
provision of United States law relating to prohibitions of any person
representing a United States company from, directly or indirectly, giving
anything of value to any foreign official to influence the foreign official in
directing or agreeing to do business with the United States firm. In addition,
Xxxxxxxx acknowledges that he has read the Statement of Company Policy of the
Hallwood Entities regarding payment of gifts to foreign officials that has
previously been supplied to him. Xxxxxxxx hereby undertakes to abide by such
laws and policy and will not use any part of the amounts paid under this
Agreement or any payments that are prohibited under such laws or policy.
10. Relationship of the Parties. In performing his services under this
Agreement, Xxxxxxxx shall be an independent contractor and, as between HPI and
Xxxxxxxx, neither HPI nor any of its affiliates shall be responsible for
withholding, collection or payment of income taxes or for other taxes of any
nature on behalf of Xxxxxxxx.
11. Miscellaneous.
(a) Notices. Any notice to be given hereunder is to be given in writing
by either party to the other and delivered or sent by prepaid airmail post or
facsimile transmission addressed to the address shown next to each party's
signature to this agreement or such other address as may be notified by one
party to the other for such purposes and shall be deemed to be served in the
case of airmail post three days after posting and in the case of facsimile
transmission immediately upon successfully transmission.
(b) Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.
(c) Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of Monaco and the parties agree to submit
themselves to the jurisdiction of Monaco.
(d) Counterparts. This Agreement may be executed in multiple
counterparts, all of which shall be deemed originals, but which counterparts
shall constitute one and the same instrument.
(e) Entire Agreement. This Agreement contains the entire agreement
between the parties hereto with respect to the subject matter hereof. No
variations, modifications or changes herein or hereof shall be binded upon any
party unless set forth in a document duly executed by or on behalf of such
party.
(f) Supersedes Prior Agreement. This Agreement replaces and supersedes in
its entirety the Compensation Agreement for Xxxxxxx X. Xxxxxxxx with Xxxxxxxx
Petroleum, Inc. dated as of April 1, 1992.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and date above first written.
HPI:
0000 Xxxxx Xxxxxx Xxxxxx Parkway HALLWOOD PETROLEUM, INC.
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000 By: /s/Xxxxxxx X. Xxxxxxxx
------------------------
Xxxxxxx X. Xxxxxxxx
President
00, Xxxxxx Xxxxxxxxx Xxxxx XXXXXXXX:
Xxxxx-Xxxxx MC98000
Principality of Monaco /s/Xxxxxxx X. Xxxxxxxx
----------------------------
XXXXXXX X. XXXXXXXX
