Exhibit 10.1
EMPLOYMENT AGREEMENT
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AGREEMENT, Made as of the 1st day of July, 1988, between PETROLEUM
DEVELOPMENT CORPORATION, a Nevada corporation, having its principal place of
business at 000 Xxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxx Xxxxxxxx 00000, party of the
first part, herein sometimes referred to as the "Company," and XXXXX X. XXXX, of
Bridgeport, West Virginia, party of the second part, herein sometimes
referred to as the "Employee."
1. TERMS OF EMPLOYMENT
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Section 1.01. The Company hereby employees the Employee and the Employee
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hereby accepts employment with the Company for a period of seven (7) years
beginning on the 1st day of July, 1988; subject, however, to provisions for
termination as hereinafter provided.
2. DUTIES
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Section 2.01. The Employee is hereby employed by Company to serve as its
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Chairman and Chief Executive Officer of the Company, in which capacity he shall
perform reasonable duties of such office as shall be appropriate to the office
and as may be determined from time to time by the Board of Directors. The
Employee shall devote so much of his productive time, ability and attention as
may be deemed reasonable or necessary to the business of the Company during the
term of his employment. The Employee shall not directly or indirectly render
any services of a business, commercial or professional nature, to any other
person or organization, whether for compensation or otherwise, without the prior
approval of the Board of Directors, except that Employee may provide services
to exploratory and drilling partnerships and oil and gas xxxxx, to the extent
that such services do not conflict or interfere with the business of the
Company.
Section 2.02. Employee shall not be required to relocate his residence in
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order to perform his obligations under this Agreement, nor shall Employee be
required to travel from his residence materially more than he has in the two
years immediately preceding the commencement of the term of this Agreement.
3. COMPENSATION
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Section 3.01. As compensation for services rendered under this Agreement,
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the Employee shall be entitled to receive from the Company a basic salary of
$135,000 per year payable in equal monthly installments on the final day of each
month during the period of employment. In addition, for each year during the
term of this Agreement in which Company's net pre-tax earnings, as defined
herein exceed the sum of $300,000, the Company shall pay Employee an annual
bonus, based upon the amount of such net earnings in each such year, an amount
equal to two and one-half percent (2.5%) of corporate net pre-tax earnings.
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Net earnings shall be calculated for the purposes of this Agreement by the
independent auditors then retained by the Company and shall be computed without
deduction for depreciation or depletion, and on net income of the Company before
deduction of all income taxes payable.
The basic salary provided herein may be increased, but shall not be reduced
unless dire economic circumstances as declared by the Board requires reduced
salaries for all senior executive employees of the Company. Increases shall be
fixed by the Board of Directors from time to time during the term of this
Agreement to reflect changes in the cost of living, the financial success of
the company, and the performance of the Employee.
Section 3.02. The Company shall reimburse Employee for all reasonable
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out-of-pocket promotional, entertainment, travel and other business expense
incurred by Employee in connection with his conduct of business for the Company.
Such expenses shall be reimbursed regardless of whether or not they are
determined to be deductible to Company for federal and state income tax
purposes. The Company shall provide Employee with the use of an automobile
satisfactory to both the Company and Employee, and the Company shall pay the
necessary expenses of operation of such automobile.
4. BENEFITS
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Section 4.01. The Company agrees that it will include the Employee under
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any hospital, surgical, or medical benefit plan or policy heretofore or
hereafter adopted. The payment of the premiums for the Employee and his
dependents to be determined by the rules and regulations heretofore or hereafter
adopted by the Company for senior corporate executives. At the termination of
Employee's services, the Company agrees to assign such policy to the Employee.
In addition to including Employee and his dependents in such plan, the Company
will pay all reasonable hospital, surgical, medical, (including eye
examinations, treatment and prescriptive lenses), dental expenses and
prescriptions of Employee and his dependents not covered by such plan or policy,
and in the event the Company has adopted no such plan, the Company agrees to pay
all reasonable premiums on any insurance policy obtained by Employee to provide
such coverage(s).
Section 4.02. The Company presently has and pays premiums on key-man life
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insurance on the life of the Employee and shall maintain such insurance in force
during the term of this Agreement in the face amount of Four Million Dollars
($4,000,000.00), with the Company as owner and beneficiary of such policy.
Proceeds of this policy shall first be used to fund the repurchase of the common
stock of the Company from the deceased Employee's estate up to the amount of One
Million Dollars ($1,000,000.00), as more particularly set out in the current
agreement between the Company and the Employee. The balance
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of the proceeds of said policy shall be used for general corporate purposes.
Neither the Employee nor any of his beneficiaries or assigns shall have
any interest in said key-man policy or proceeds of the policy, and such policy
or the proceeds thereof shall at all times remain the property of the
Company. At the termination of the Employee's service with the Company, if
requested by the Employee, the Company shall sell such policy to the Employee at
the then cash sur render value, if any. The Employee shall be required to
submit to a complete physical examination from time to time as required by the
insurance underwriter. Such examination to be at the expense of the Company,
with the results of such examination communicated in full to the Company. The
Company also agrees to reimburse Employee for addi tional life insurance
coverage on the life of Employee in the face amount of One Million Dollars
($1,000,000.00) with a person or persons named by the Employee as either the
owner or the beneficiary as Employee shall direct.
Section 4.03. Employee shall be entitled annually and cumulatively
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to four (4) weeks' vacation with pay.
Section 4.04. The Company shall reimburse the Employee for reasonable
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dues and expenses of membership in such club or clubs as shall be reasonably
necessary for the Employee to entertain on behalf of the Company.
Section 4.05. The Employee shall be entitled to participate in any
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employee stock option plan, employee incentive or other employee benefit to the
degree and in the amount fixed by the Board.
Section 4.06. The Company shall reimburse the Employee for a
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personally owned disability insurance policy in an amount that will return to
the Employee an amount that will monthly equal the basic monthly salary of the
Employee as the same may have been adjusted by the Board of Directors.
5. TRADE SECRETS
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Section 5.01. The Employee acknowledges that he has heretofore
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acquired and hereafter anticipates acquiring detailed knowledge of the Company's
business affairs. In view of the nature of the services the Employee is
capable of performing for the Company, the Employee also acknowledges that
those services will have peculiar value to the Company, the loss of which
cannot be adequately compensated by money damages.
Section 5.02. The Employee therefore shall not, during the term of
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his employment hereunder or thereafter, divulge to any third party information
obtained in the course of his employment including, without limitation, any
information concerning the Company's business, operations, affairs, rates,
investors, customers, geological data, well logs, well locations, acreage,
reserves of gas or oil, finances, plans or policies to the extent the same are
not already matters of public knowledge.
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Section 5.03. All such information shall be regarded as secret,
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confidential, and proprietary to the Company and shall be used by the Employee
for no other purpose than to pursue the Company's business and affairs.
Section 5.04. In view of his unique skills and knowledge, the
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Employee shall not, without the Company's express prior written consent, during
the term hereof or, unless otherwise agreed in writing by the Board of Directors
of the Company, for a period of one year following the termination or
expiration of this Agreement or any renewal or extension hereof engage in any
business (as proprietor, officer, director or shareholder which is competitive
with the Company's oil and gas drilling business in West Virginia;
provided, however, that the foregoing provision shall not prohibit the Employee
from investing in a publicly held company in which he owns less than one percent
(1%) of the equity; and provided further that the foregoing provision shall not
apply in the event the Employee's employment hereunder shall terminate or be
terminated as a result of or in connection with a change of control of the
Company as defined in Paragraph 11 hereof.
Section 5.05. If the Employee competes with the Company in violation
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of Section 5.04 hereof or discloses or threatens to disclose any of the
information described in Section 5.02 concerning the Company, the Company shall
be deemed to be subject to irreparable injury and shall be entitled to immediate
injunctive or other similar equitable relief to restrain the Employee from so
competing with the Company or from so disclosing its proprietary information to
a third party, including any competitor of the Company. The foregoing relief
shall be in addition to any other remedies to which the Company may be entitled
under law.
Section 5.06. In the event the Company prohibits the Employee from
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pursuing activities of the Employee following termination of this Agreement
under the terms of Article 5.04 of this Agreement, then during such period the
Company shall continue to pay the Employee as specified in Section 3.01 during
such period as such prohibition remains in effect.
Section 5.07. In the event of termination under this Section an
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employee owning stock options or warrants under one or more of the company stock
option plans, the company agrees to loan to the employee funds necessary to
exercise such outstanding options. The loan will be repaid to the Company
within nine months and bear interest at the prime rate then in effect at
Pittsburgh National Bank.
6. TERMINATION FOR CAUSE
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Section 6.01. If at any time during the term hereof or any extension
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or renewal hereof, a court of competent jurisdiction shall determine that the
Employee has engaged in willful misfeasance or malfeasance, disregard of his
duties, or negligence related to the performance of his duties, any one of which
conditions shall be deemed
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cause for dismissal, then Board of Directors may by vote of a majority of a
quorum terminate his employment.
7. TERMINATION OTHER THAN FOR CAUSE
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Section 7.01. The Employee recognizes that the Company, acting
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through its Board of Directors, has the legal right to remove him as an officer,
either by termination of his employment or reassignment to another position, if
the best interests of the Company will be so served. Should such a removal
occur for any reason not constituting a termination for cause under the next
preceding Section above and not in connection with death or disability under
Paragraph 12, the Employee shall be entitled to continue in another position of
comparable executive status or as a consultant as designated by the Board of
Directors or appropriate committee thereof for the unexpired portion of the term
of this Agreement or any renewal or extension hereof. In the event that the
Company does not designate an alternative position as previously indicated, it
shall pay to the Employee as liquidated damages, in full satisfaction of its
obligation hereunder (exclusive of any vested rights that may accrue to the
Employee under any profit-sharing, pension or insurance plan that may now or
hereafter be in effect), an amount equal to the balance of the salary that would
otherwise have been paid to the Employee under Section 3.01 during the unexpired
portion of the term hereof, but in any event not less than twelve (12) months'
basic salary. Such amount may be paid at the Company's election in equal
consecutive monthly installments over a period no longer than the remaining term
of this contract.
Section 7.02. In the event of the Employee's death while in the
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employ of the Company, the Company shall pay to Employee's designated
beneficiaries, or if no such designation, then to his spouse or to his estate,
if his spouse has predeceased him, the following: An amount equal to six (6)
months' compensation based on an average of the twelve (12) months' compensation
preceding such death.
8. PARTICIPATION IN DRILLING PROGRAMS
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Section 8.01. If the Company has the right to sell working interests
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in any drilling program, upon the request of the Employee, the Employee shall be
entitled to participate, as an investor, in such oil and gas drilling; provided
that the Board of Directors, shall first approve the terms of any such
participation.
9. ARBITRATION
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Section 9.01. Any controversy or claim arising out of or relating to
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this contract, or the breach thereof, shall be settled by arbitration at
Clarksburg, West Virginia, in accordance with the rules of the American
Arbitration Association, then obtaining, and judgment on the award rendered may
be entered in any court having jurisdiction thereof and will be binding on the
parties.
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10. PARTIAL INVALIDITY
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Section 10.1. If any provision in this Agreement is held by a court
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of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalid thereby
11. CHANGE IN CONTROL
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Section 11.01. If during the term hereof there shall have been a
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change in control of the Company, as set forth in this and the following
paragraph, the Employee may at his election, within six (6) months after such
change of control shall have occurred and without prejudice to any of his rights
theretofore accrued or vested hereunder, voluntarily terminate his employment
hereunder. In such event, the Employee shall receive as severance compensation
an amount he would otherwise received under Section 3.01 hereof, but in any
event not exceeding three (3) years basic salary, paid over a period not to
exceed the lesser of three years as the term of this agreement.
Section 11.02. For the purposes of the preceding paragraph, "change
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in control of the Company shall mean a change in control of the nature that
would be required to be reported in response to Item 5(f) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 0000 (xxx
"Xxxxxxxx Xxx"); provided, however, that, without limitation, such a change in
control shall be deemed to have occurred if, on or after October 1, 1985, any
"person" (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act) is or becomes the beneficial owner, directly or indirectly, of the
securities of the Company representing 30% or more of the combined voting power
of the Company's then outstanding securities.
12. DEATH AND DISABILITY
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Section 12.01. If during the period of employment hereunder the
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Employee shall have become disabled through illness or otherwise from performing
his duties hereunder, the Employee shall be entitled to a leave of absence with
full compensation for the duration of any such disability up to but not
exceeding eight (8) consecutive months.
Section 12.02. If the Employee shall have become permanently
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disabled, as herein defined, or if employment hereunder terminates by reason of
the Employee's death, all future obligations of the Company hereunder,
excluding benefits provided in Section 7.02 hereof, shall, at the Company's
election, cease; provided, however, that benefits and rights theretofore
vested under any pension, profit-sharing, or insurance plan of the Company
shall remain unimpaired thereby
Section 12.03. If the Employee's death shall have occurred after the
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termination of employment hereunder and if, but for his death, the Employee
would have been entitled to receive additional payments hereunder in respect of
his employment, such payments shall
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thereafter be paid as the Employee's last will and testament shall direct, or
failing such direction, to the Employee's estate
13. NO ASSIGNMENT OR ATTACHMENT
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Section 13.01. This Agreement and the rights, interests, and
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benefits hereunder shall not be assigned, transferred, pledged, or hypothecated
in any way by the Employee or by the Company and shall not be subject to
execution, attachment, or similar process. Any attempted assignment,
transfer, pledge or hypothecation or the levy of any execution, attachment or
similar process thereon shall be null and void and without effect.
14. SUCCESSORS AND ASSIGNS
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Section 14.01. This Agreement shall be binding on and inure to the
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benefit of the parties hereto and their respective successors, heirs and
assigns; provided, however, that neither party may assign his or its rights
hereunder without the other's express prior written consent.
15. NOTICES
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Section 15.01. Any notice required to be given hereunder shall be
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sufficient if in writing and submitted by certified mail, return receipt
requested, postage prepaid, if to the Employee to him as follows:
Xxxxx X. Xxxx
000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
and if to the Company, to it at the address first above written.
16. SEVERABILITY
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Section 16.01. Any provision of this Agreement that is invalid,
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illegal, or unenforceable in any respect in any jurisdiction shall be, as to
such jurisdiction, ineffective to the extent of such invalidity, illegality,
or unenforceability without affecting the remaining provisions hereof; and
any such invalidity, illegality, or unenforceability in any such jurisdiction
shall not invalidate or in any way affect the validity, legality or
enforceability of such provision in any other jurisdiction.
17. GOVERNING LAWS
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Section 17.01. This Agreement shall be governed by, construed
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under and enforced in accordance with the laws of the State of West Virginia
applicable to contracts made in that State by residents and intended to be
performed primarily in that State.
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18. BINDING EFFECT
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Section 18.01. This Agreement supersedes any and all other
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agreements, either oral or in writing, between the parties hereto with respect
to the employment of Employee by the Company and contains the covenants and
agreements between the parties with respect to such employment in any manner
whatsoever. Each party to this Agreement acknowledges that no representations,
inducements, promises or agreements, orally or otherwise, have been made by any
party, or anyone acting on behalf of any party, which are not embodied herein,
and that no other agreement, statement or promise not contained in this
Agreement shall be valid or binding. Any modification of this Agreement will be
effective only if it is in writing signed by the party to be charged
19. LEGAL PROCEEDINGS
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Section 19.01. In the event legal proceedings are utilized to enforce
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the provisions of this Agreement, the prevailing party shall be entitled to
payment of all reasonable attorneys' fees and court costs.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first hereinabove written.
EMPLOYER:
PETROLEUM DEVELOPMENT CORPORATION
A Nevada Corporation
By /s/ Xxxxxx X. Xxxxxxxx
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Its President
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ATTEST:
/s/ Xxxxx X. Xxxxxx
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Secretary
EMPLOYEE:
/s/ Xxxxx X. Xxxx
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XXXXX X. XXXX
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STATE OF WEST VIRGINIA
COUNTY OF XXXXXXXX, TO-WIT:
The foregoing instrument was acknowledged before me this 1st day of July ,
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1988, by Xxxxxx X. Xxxxxxx, President of PETROLEUM DEVELOPMENT CORPORATION,
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a Nevada corporation, for and on behalf of the Corporation.
My Commission Expires: January 8, 1990
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/s/ Xxxxx X. Xxxxxxx
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Notary Seal Notary Public
STATE OF WEST VIRGINIA
COUNTY OF XXXXXXXX, TO-WIT:
The foregoing instrument was acknowledged before me this 1st day of July,
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1988, by XXXXX X. XXXX.
My Commission Expires: My Commission Expires Jan. 8, 1990
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/s/ Xxxxx X. Xxxxxxx
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Notary Public
Notary Seal
This instrument was prepared by Xxxxx X. Xxxxxx, Esquire YOUNG, MORGAN & XXXX,
Attorneys at Law Suite Xxx Xxxxxxxx Xxxxxxxx, Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
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MODIFICATIONS TO EMPLOYMENT AGREEMENT
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AGREEMENT, Made as of the 1st day of March, 1991, between PETROLEUM
DEVELOPMENT CORPORATION, a Nevada corporation, having its principal place of
business at 000 Xxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxx Xxxxxxxx 00000, party of the
first part, herein sometimes called the "Employer," and XXXXX X. XXXX,
Bridgeport, West Virginia, party of the second part, herein sometimes called
"Employee."
1. Recitals. (a) Whereas, the Employer employs the Employee
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under the terms of a written Employment Agreement dated as of July 1, 1988, the
terms and conditions of which Agreement are incorporated by reference and
which is hereinafter referred to herein as the "Agreement"; (b) Whereas, the
Agreement calls for a term or period of seven (7) years from July 1, 1988,
terminating on July 30, 1995; and (c) Whereas, the Board of Directors of the
Employer has authorized that the term of the Agreement be extended for three (3)
additional years so that the Agreement would terminate June 30, 1998; and
NOW THEREFORE, in consideration of the foregoing recitals and the parties
intending to be bound, agree as follows:
2. Employment Agreement Modification. Paragraph 1, Section
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1.01 of the Agreement be and is hereby amended and modified by striking the
words "Seven (7) years beginning on the 1st day of July, 1988," and inserting
in place and in lieu thereof the following language "beginning on the
first day of July, 1988, and ending on June 30, 1998."
3. Agreement Confirmed. In all other respects the Agreement
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and all other terms and provisions are hereby approved, ratified and confirmed.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement all as of
the day and year first hereinabove written.
PETROLEUM DEVELOPMENT CORPORATION,
a Nevada corporation
(SEAL)
ATTEST: By /s/ Xxxx X. Xxxxxxxxx
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Its Executive VP
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/s/ Xxxxx X. Xxxxxx
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Its Secretary
/s/ Xxxxx X. Xxxx
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XXXXX X. XXXX
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MODIFICATIONS TO EMPLOYMENT AGREEMENT
(NO. 2)
AGREEMENT, Made as of the 21st day of October, 1994, between PETROLEUM
DEVELOPMENT CORPORATION, A Nevada corporation, having its principal offices and
place of business at 000 Xxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxx Xxxxxxxx 00000,
party of the first part sometimes herein called "the Employer," and XXXXX X.
XXXX, 000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxx Xxxxxxxx 00000, party of the
second part, herein sometimes called "the Employee."
1. RECITAL(S). (a) Whereas, the Employer employs the Employee
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under the terms of a written Employment Agreement dated July 1, 1988, and
amended and modified by a subsequent agreement dated March 1, 1991, the terms
and conditions of which agreement and modification are incorporated by reference
both of which are hereinafter collectively referred to as the "Agreement";
(b) Whereas, the Board of Directors at a meeting held October 21, 1994, adopted
recommendations of the Board's Compensation Committee dated October 21, 1994, a
copy of which is attached to the minutes of said meeting, recommending certain
changes and additions be made to the Agreement; and (c) Whereas, in order to
incorporate said changes and additions into the Agreement, the Board approved
and authorized the following additional modifications to the Agreement.
Now, therefore, in consideration of the recitals herein and the parties
intending to be bound, agree as follows:
2. SUBPARAGRAPH 7.02 of the Agreement under the heading "Termination
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Other Than For Cause" be and is hereby amended to increase the amount of
such payment to the designated beneficiary(ies), his spouse or his estate
from six (6) months to twelve (12) months.
3. SUBPARAGRAPH 11.01 of the Agreement under the heading "Change of
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Control," be and is hereby amended by striking the entire subparagraph and
inserting the following:
Section 11.01. If during the term hereof there shall have been a change
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in control of the company, as described in this and the following
paragraph, the Employee may at his election, within six (6) months after
such change of control shall have occurred and without prejudice to any of
his rights theretofore accrued or vested hereunder voluntarily terminated
his employment hereunder. In such event the Employee shall receive a
severance compensation amounting to the basic compensation plus
an amount equal to the average bonus paid over the preceding three (3)
years as provided herein times the remaining years of this agreement, but
in any event severance compensation of not less than three (3) years basic
compensation plus an amount equal to three (3) times the average bonus
paid over the preceding three (3) year period to be Employee.
4. TERM AMENDED Paragraph 2 of the Modification of the Employment
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Agreement dated February 19, 1991, be and is hereby further modified by striking
language "beginning on the date of this amendment and modification and inserting
in place and in lieu thereof the following language: "beginning on the date of
this agreement and modification and ending December 31, 2000."
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5. DEATH AND DISABILITY In Section 12.01 of the written Employment
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Agreement dated July 1, 1988 extend the term during which an employee will be
entitled to full compensation from eight (8) months to fifteen (15) months.
6. DEFERRED COMPENSATION PLAN. The company will establish a deferred
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compensation plan for the Employee and fund the plan with an annual contribution
of $30,000 commencing in 1994 and each year thereafter, adjusted for inflation.
In all other respects the agreements are ratified and confirmed.
IN WITNESS WHEREOF the parties hereto have set their signatures and seals
the day and year first hereinabove written.
EMPLOYER:
PETROLEUM DEVELOPMENT CORPORATION
a Nevada Corporation
(SEAL) By /s/ Xxxxxx X. Xxxxxxxx
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Its President
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EMPLOYEE:
/s/ Xxxxx X. Xxxx
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XXXXX X. XXXX
