Exhibit 10.3
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 XXXX X.
XXXXXXXXX, 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
Section 2.01. The Employee is hereby employed by Company to serve as its
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Executive Vice President - Finance and Treasurer 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
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Agreement, the employee shall be entitled to receive from the Company a basic
salary of $93,600 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,
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an amount equal to two and one-half percent (2.5%) of corporate net pre-tax
earnings.
Net earnings will be pro-rated for any year during which the contract was
in effect for a partial year
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 out-
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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 Employee shall be required to submit to a complete physical
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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 agrees to
reimburse Employee for life insur-
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ance 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 dues
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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 personally
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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 acquired
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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 his
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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.
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 Employee
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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 of this Agreement or
any renewal or exten-
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sion 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 of
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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 employee
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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 or
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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 cause for dismissal, then the Board of Directors may
by the 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 through its
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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
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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
not in any event 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 employ of
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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 in
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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 this
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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.
10. PARTIAL INVALIDITY
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Section 10.1. If any provision in this Agreement is held by a court of
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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 change in
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control of the Company, as set forth in this and the
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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 here-under, 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 in
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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 Employee
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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 disabled, as
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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 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 benefits
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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
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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 benefit
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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 it in writing and submitted by certified mail, return receipt
requested, postage prepaid, if to the Employee to him as follows:
Xxxx X. Xxxxxxxxx
000 Xxxxxxxxx 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, illegal,
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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 under and
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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.
18. BINDING EFFECT
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Section 18.01. This Agreement supersedes any and all other agreements,
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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
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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 the
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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 /s/ President
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ATTEST:
/s/ Xxxxx X. Xxxxxx
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Secretary
EMPLOYEE:
/s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
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STATE OF WEST VIRGINIA
COUNTY OF XXXXXXXX, TO-WIT:
The foregoing instrument was acknowledge before me this 1st day of July , 1988,
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by Xxxxxx X. Xxxxxxxx , President of PETROLEUM DEVELOPMENT CORPORATION, a
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Nevada corporation, for on behalf of the Corporation.
My Commission Expires: August 23, 1994
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Notary Seal /s/ Xxxxx X. Xxxxxx
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STATE OF WEST VIRGINIA
COUNTY OF XXXXXXXX, TO-WIT:
The foregoing instrument was acknowledged before me this 1st day of
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July , 1988, by XXXX X. XXXXXXXXX.
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My Commission Expires: August 23, 1994
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Notary Seal /s/ Xxxxx X. Xxxxxx
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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 XXXX X. XXXXXXXXX,
Bridgeport, West Virginia, party of the second part, herein sometimes called
"Employee."
1. Recitals. (a) Whereas, the Employer employs the Employee under the
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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 1.01 of the
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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 and all other
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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
By /s/ Xxxxxx X. Xxxxxxxx
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Its President
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(SEAL)
ATTEST:
/s/ Xxxxx X. Xxxxxx
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Secretary
/s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
MODIFICATION 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 XXXX X.
XXXXXXXXX, 000 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxx Xxxxxxxx 00000, party of the
second part, herein sometimes called "the Employee".
1. RECITAL(S). (a) Whereas, the Employer employs the Employee under
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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 Other
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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 in
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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 Agreement
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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
By /s/ Xxxxx X. Xxxx
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Its CEO
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(SEAL)
EMPLOYEE:
/s/ Xxxx X. Xxxxxxxxx
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XXXX X. XXXXXXXXX
