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Exhibit 10.3
EMPLOYMENT AGREEMENT
Between
Home-Stake Oil & Gas Company
and
Xxxxx X. Xxxxxxxx
Effective as of November 4, 1999
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EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into this 30th day
of November, 1999, by and between Home-Stake Oil & Gas Company, an Oklahoma
corporation (the "Company"), and Xxxxx X. Xxxxxxxx (the "Executive"), effective
as of November 4, 1999.
1. Introduction. The Executive is currently the Executive Vice President,
Chief Financial Officer and Secretary of the Company. The Company believes that
retaining the Executive's services as an employee of the Company and the benefit
of his business experience are of material importance. The Company desires to
encourage the Executive to continue in the employ of the Company for the benefit
of the Company and its stockholders. Therefore, the Company and the Executive
intend by this Agreement to specify the terms and conditions of the Executive's
employment relationship with the Company.
2. Employment. The Company hereby employs the Executive and the Executive
hereby accepts employment with the Company upon the terms and subject to the
conditions set forth herein.
3. Term. This Agreement shall commence on the effective date of this
Agreement and shall continue until terminated.
4. Duties and Responsibilities.
(a) The Executive shall serve the Company as Executive Vice President,
Chief Financial Officer and Secretary and shall perform, faithfully and
diligently, the services and functions relating to such offices.
(b) The Executive shall devote such of his entire time, attention,
energies and business efforts to his duties as an executive of the Company
as are reasonably necessary to carry out his duties specified in Section
4(a). The Executive shall not engage in any other business activity
(regardless of whether such business activity is pursued for gain, profit
or other pecuniary advantage) if such business activity would impair the
Executive's ability to carry out his duties hereunder. This Section 4(b),
however, shall not be construed to prevent the Executive from (i) investing
his personal assets as a passive investor in such form or manner as will
not contravene the best interests of the Company, (ii) participating in
various charitable efforts, or (iii) serving as a director or member of a
committee of any organization when such position has previously been
approved in writing by the Board of Directors.
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5. Compensation and other Employee Benefits.
As compensation for his services under the terms of this Agreement:
(a) the Executive shall be paid an annual salary of not less than
$150,000, payable in accordance with the then current payroll policies
of the Company. Such annual salary is herein referred to as the "Base
Salary". The Base Salary shall be reviewed annually by the Board of
Directors and shall be subject to increase in the sole discretion of
the Board of Directors.
(b) subject to the right of the Company to amend or terminate any
employee and/or group or executive benefit plan, the Executive shall
be entitled to receive the following employee benefits:
(i) The Executive shall have the right to participate in all
current or future employee and/or group benefit plans of the
Company that are available to its salaried employees generally
(including, without limitation, disability, accident, medical,
life insurance, parking and hospitalization plans);
(ii) The Executive shall have the right to participate in
all current executive benefit plans of the Company, including but
not limited to the Company's Key Employee Incentive Bonus Plan
and Home-Stake Oil & Gas Company Profit Sharing 401(k) Plan, all
in accordance with the Company's regular practices with respect
to its executive officers;
(iii) The Executive shall be entitled to reimbursement from
the Company for reasonable out-of-pocket expenses incurred by him
in the course of the performance of his duties hereunder;
(iv) The Executive shall have the right to participate in
any Company oil, gas or mineral property acquisition in
accordance with the Company's policy as it may exist from time to
time regarding employee participation in such acquisitions; and
(v) The Executive shall be entitled to such vacation,
holidays and other paid or unpaid leaves of absence as are
consistent with the Company's normal policies or as are otherwise
approved by the Board of Directors.
6. Termination of Employment.
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(a) Due Cause. Nothing herein shall prevent the Company from
terminating the Executive for "Due Cause" (as hereinafter defined), in
which event the Executive shall be entitled to receive his Base Salary on a
pro rata basis to the date of termination. In the event of such termination
for Due Cause, all other rights and benefits the Executive may have under
the employee and/or group or executive benefit plans and programs of the
Company, generally, shall be determined in accordance with the terms and
conditions of such plans and programs. The term "Due Cause" shall mean (i)
the Executive has committed a willful criminal act, such as embezzlement,
against the Company intending to enrich himself at the expense of the
Company, (ii) the Executive has engaged in conduct that has caused serious
injury, monetary or otherwise, to the Company as evidenced by a binding and
final judgment, order or decree of a court or administrative agency of
competent jurisdiction in effect after exhaustion of all rights of appeal
of the action, suit or proceeding, (iii) the Executive, in carrying out his
duties hereunder, has been guilty of gross neglect or gross misconduct,
resulting in either case in material harm to the Company, or (iv) the
Executive fails to carry out his duties in gross dereliction of duty and,
after receiving notice to such effect from the Board of Directors, the
Executive fails to cure the existing problem within 30 days.
(b) Death. In the event of the death of the Executive, this Agreement
[other than this Section 6(b)] shall terminate on the date of death and the
estate of the Executive shall be entitled to (i) the Executive's Base
Salary through the end of the month in which he died, (ii) a cash payment
equal to the pro rata portion (calculated through the end of the month in
which he died) of the annual bonus, if any, due the Executive in respect of
the calendar year in which his death occurs, and (iii) a continuation, for
one year, of the Executive's most recent Base Salary. In the event of such
termination due to death, all other rights and benefits the Executive (or
his estate) may have under the employee and/or group or executive benefit
plans and programs of the Company, generally, as permitted by law, shall be
determined in accordance with the terms and conditions of such plans and
programs.
(c) Disability.
(1) For purposes of this Agreement, "Disability" shall mean the
inability or incapacity of the Executive for six months to perform the
duties and responsibilities related to the job or position with the
Company described in Section 4(a), and "the date on which the
Disability occurs" shall mean the first day following such six month
period. Such inability or incapacity shall be documented to the
reasonable satisfaction of the Board of Directors by appropriate
correspondence from registered physicians reasonably satisfactory to
the Board of Directors.
(2) In the event the Executive suffers a Disability, this
Agreement (other than this Section 6(c) and Sections 8 and 9) shall
terminate on the date on which the Disability occurs and the Executive
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shall be entitled to (i) his Base Salary through the end of the month
in which his employment is terminated due to the Disability, (ii) a
cash payment equal to the pro rata portion (calculated through the end
of the month in which his employment is terminated due to Disability)
of the annual bonus, if any, due the Executive in respect of the
calendar year in which his Disability occurs, and (iii) a
continuation, for one year, of the Executive's most recent Base
Salary.
(d) Voluntary Termination. The Executive may voluntarily
terminate his employment under this Agreement at any time by providing
at least 90 days' prior written notice to the Company. In such event,
the Executive shall be entitled to receive his Base Salary until the
date his employment terminates and all other rights and benefits the
Executive may have under the employee and/or group or executive
benefit plans and programs of the Company, generally, shall be
determined in accordance with the terms and conditions of such plans
and programs.
(e) Constructive Termination.
(1) If the Company (i) terminates the employment of the
Executive other than for Due Cause or because of a Disability,
(ii) materially changes the Executive's function, duties, or
responsibilities, which change would cause the Executive's
position with the Company to become of less dignity,
responsibility, importance or scope than the position and
responsibilities held by the Executive immediately prior to such
change, or (iii) decreases the Executive's Base Salary below the
level provided for by the terms of Section 5(a) or reduces the
employee benefits and perquisites below the level provided for by
the terms of Section 5(b) (other than as a result of any
amendment or termination of any employee and/or group or
executive benefit plan, which amendment or termination is
applicable to all executives of the Company), then any such
action by the Company, unless consented to in writing by the
Executive, shall be deemed to be a constructive termination by
the Company of the Executive's employment ("Constructive
Termination").
(2) In the event of a Constructive Termination, this
Agreement (other than this Section 6(e) and Section 8) shall
terminate on the date of Constructive Termination and the
Executive shall be entitled to (i) his Base Salary through the
end of the month in which the Constructive Termination occurs,
(ii) an amount equal to twice the Executive's most recent Base
Salary, and (iii) an amount equal to the sum of the annual
bonuses paid the Executive in each of the three calendar years
prior to the calendar year in which the Constructive Termination
occurs divided by three.
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(3) Any amount payable to the Executive pursuant to section
6(e)(2)(i) above shall be paid on the last day of the month in
which the Constructive Termination occurs. Any amounts payable to
the Executive pursuant to Sections 6(e)(2)(ii) or 6(e)(2)(iii)
above shall be paid in one cash payment within 30 days after the
Constructive Termination occurs.
7. Change in Control.
(a) In the event any of the following occurs with respect to the
Company: (i) any individual, corporation, partnership, group, association
or other entity or "person", as such term is defined in Section 14(d) of
the Securities Exchange Act of 1934 (the "Exchange Act"), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), directly or indirectly, of outstanding
securities of the Company having fifty percent (50%) or more of the voting
power of all classes of securities of the Company having the right to vote
at elections of directors, (ii) the membership of the Board of Directors of
the Company is changed as a result of a contested election for Directors so
that the nominees for Directors in such election designated by the then
existing Board of Directors of the Company together with the members of the
existing Board of Directors previously proposed by Management but not up
for re-election fail to constitute a majority of the persons comprising the
Board of Directors following such election, or (iii) merger, liquidation,
dissolution, consolidation, reorganization or reverse stock split (as a
result of any of which there is a material change in the control of the
Company), then any such event shall be deemed to be a "Change in Control."
(b) In the event of a Change in Control, this Agreement (other than
this Section 7) shall terminate on the date of a Change in Control and the
Executive shall be entitled to: (i) an amount equal to thirty-six (36)
times the highest monthly salary paid the Executive during the twelve month
period immediately preceding the date of a Change in Control, and (ii) an
amount equal to the sum of the annual bonuses paid the Executive in each of
the three calendar years prior to the calendar year in which a Change in
Control occurs. All amounts payable to the Executive pursuant to this
Section 7(b) shall be paid in one cash payment on or before the date of a
Change in Control and shall be in lieu of any amounts to which the
Executive may be entitled pursuant to Section 6(e).
8. Effect of Death after Disability or Constructive Termination. In the
event of the death of the Executive following Disability or Constructive
Termination, any amounts owed pursuant to Sections 6(c)(2) and 6(e)(2) to the
Executive prior to his death shall continue to be owing and shall be paid to the
estate of the Executive.
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9. Continuation of Rights under Plans. In the event of the Executive's
Disability, all rights and benefits the Executive may have under the employee
and/or group or executive benefit plans and programs of the Company, generally,
as permitted by law, shall be determined in accordance with the terms and
conditions of such plans and programs as though the Executive were still an
employee of the Company until the end of the period of continuation of the Base
Salary.
10. Notices. All notices, requests, demands and other communications given
under or by reason of this Agreement shall be in writing and shall be deemed
sufficiently given if delivered in person, sent by certified mail (return
receipt requested), postage prepaid, or delivered by a recognized commercial
courier to the following addresses (or to such other address as a party may
specify by notice pursuant to this provision):
(a) To the Company:
Home-Stake Oil & Gas Company
00 Xxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
President
(b) To the Executive:
Xxxxx X. Xxxxxxxx
0000 X. Xxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
11. Controlling Law and Performability. The execution, validity,
interpretation and performance of this Agreement shall be governed by and
construed in accordance with the laws of the State of Oklahoma.
12. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled by arbitration in Tulsa, Oklahoma. In the
proceeding, the Executive shall select one arbitrator, the Company shall select
one arbitrator and the two arbitrators so selected shall select a third
arbitrator. The decision of a majority of the arbitrators shall be binding on
the Executive and the Company. Should one party fail to select an arbitrator
within five days after notice of the appointment of an arbitrator by the other
party or should the two arbitrators selected by the Executive and the Company
fail to select an arbitrator within ten days after the date of the appointment
of the last of such two arbitrators, any person sitting as a Judge of the United
States District Court for the Northern District of Oklahoma, upon application of
the Executive or the Company, shall appoint an arbitrator to fill such space
with the same force and effect as though such arbitrator had been appointed in
accordance with the second sentence of this Section 12. Any arbitration
proceeding pursuant to this Section 12 shall be conducted in accordance with the
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rules of the American Arbitration Association. Judgment may be entered on the
arbitrators' award in any court having jurisdiction.
13. Expenses. The Company shall pay or reimburse the Executive (or his
estate, as the case may be) for all costs and expenses (including arbitration
and court costs and attorneys fees) incurred by the Executive as a result of any
successful claim, action or proceeding arising out of, or challenging the
validity, advisability or enforceability of, this Agreement or any provision
hereof.
14. Entire Agreement and Amendments. This Agreement contains the entire
agreement of the Executive and the Company relating to the matters contained
herein and supersedes all prior agreements and understandings, oral or written,
between the Executive and the Company with respect to the subject matter hereof.
This Agreement may be changed only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
15. Separability. If any provision of this Agreement is rendered or
declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by the decision of any arbitrator or by decree of a court
of last resort, the Executive and the Company shall promptly meet and negotiate
substitute provisions for those rendered or declared illegal or unenforceable to
preserve the original intent of this Agreement to the extent legally possible,
but all other provisions of this Agreement shall remain in full force and
effect.
16. Effect of Agreement. This Agreement shall be binding upon the Executive
and his heirs, executors, administrators, legal representatives and assigns and
upon the Company and its respective successors and assigns.
17. Waiver of Breach. The waiver by either party to this Agreement of a
breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver by such party of any subsequent breach by such other
party.
IN WITNESS WHEREOF, the Executive and the Company have executed this
Agreement on the date first above written.
"EXECUTIVE" "COMPANY"
HOME-STAKE OIL & GAS COMPANY
/s/ Xxxxx X. Xxxxxxxx By /s/ Xxxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxx
President
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