EXHIBIT (e)(4)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of the 10th day of November,
2000 by and between DevX Energy, Inc., having its principal executive offices at
00000 Xxxx Xxxx, Xxxxx 0000, Xxxxxx XX 00000-0000, and Xxxxxx Xxxx having a
mailing address at 0000 Xxxxxxxxx, Xxxxxx, XX 00000.
WHEREAS:
a. The Executive has extensive knowledge of and experience in the oil and
gas industry in the United States and the geographic areas in which the
Company and its subsidiaries carry on business.
b. The Executive is desirous of being employed by the Company and the
Company is desirous of employing the Executive upon the terms herein
provided.
c. The Company has determined that it is in its best interests to provide
the Executive with compensation and benefits under the provisions of a
contract of employment that will assure the Company that it will have
the full attention and dedication of the Executive notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined
below), and that will diminish the inevitable distraction of the
Executive by virtue of the personal uncertainties and risks created by
the absence of a contract of employment.
d. The Company wishes to protect the Executive from loss of compensation
and benefits if his continued employment with the Company is no longer
possible through no fault of the Executive.
NOW, THEREFORE, in consideration of these premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
1. DEFINITIONS. The capitalized terms defined in this Section shall have the
meanings assigned to them in this Section whether the particular term is
used herein in the singular or in the plural.
1.1. "Affiliate" has the meaning set out in Rule 405 promulgated under
the Securities Act of 1933, as amended.
1.2. "Base Salary" has the meaning set in Schedule B as same may be
amended from time to time.
1.3. "Beneficial Ownership" has the meaning set out in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended.
1.4. "Bonus" has the meaning set out in paragraph B of Schedule A
1.5. "Cause" means:
1.5.1. the willful and continued failure by the Executive to
substantially perform his duties with the Company (other
than any such failure resulting from incapacity due to
physical or mental illness), where such failure has not
been remedied within a reasonable time after having
received a written demand for substantial performance from
the Company which specifically identified the manner in
which the Company believed that the Executive had not
substantially performed his duties, provided that no act,
or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done,
by him not in good faith and without reasonable belief
that his action or omission was not in the best interest
of the Company, or
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1.5.2. a good faith determination by the Company that the
Executive is guilty of illegal substance abuse, moral
turpitude, fraud upon the Company or embezzlement provided
that no determination of illegal substance abuse or moral
turpitude may be made against the Executive without giving
the Executive notice of the allegations against him in
reasonable detail and giving him an opportunity to
present, not less than 30 calendar days later, such
evidence or make such submissions in respect thereof to
the Company as the Executive deems advisable.
1.5.3. the final, non-appealable felony conviction of the
Executive.
1.6. "Change of Control" means any of the following:
1.6.1. any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's common stock
would be converted into cash, securities or other
property, other than a merger of the Company in which the
holders of the Company's common stock immediately prior to
the merger have the same proportionate ownership of common
stock of the surviving corporation immediately after the
merger;
1.6.2. any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company;
1.6.3. any approval by the stockholders of the Company of any
plan or proposal for the liquidation or dissolution of the
Company;
1.6.4. the cessation of control (by virtue of their not
constituting a majority of directors) of the Company's
Board of Directors by the Continuing Directors;
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1.6.5. (A) the acquisition of beneficial ownership of an
aggregate of 15% of the voting power of the Company's
outstanding voting securities by any person or group who
Beneficially Owned less than 10% of the voting power of
the Company's outstanding voting securities on the
Effective Date, (B) the acquisition of Beneficial
Ownership of an additional 5% of the voting power of the
Company's outstanding voting securities by any person or
group who Beneficially Owned at least 10% of the voting
power of the Company's outstanding voting securities on
the Effective Date, or (C) the execution by the Company
and a stockholder of a contract that by its terms grants
such stockholder (in its, hers or his capacity as a
stockholder) or such stockholder's Affiliate including,
without limitation, such stockholder's nominee to the
Board of Directors (in its, hers or his capacity as an
Affiliate of such stockholder), the right to veto or block
decisions or actions of the Board of Directors; provided,
however, that notwithstanding the foregoing, the events
described in items (A), (B) or (C) above shall not
constitute a Change in Control hereunder if the acquiring
person or group is (aa) a trustee or other fiduciary
holding securities under an employee benefit plan of the
Company and acting in such capacity, (bb) a corporation
owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their
ownership of voting securities of the Company and,
provided further, that none of the following shall
constitute a Change in Control: (xx) the right of the
holders of any voting securities of the Company to vote as
a class on any matter or (yy) any vote required of
disinterested or unaffiliated directors or stockholders
including, without limitation, pursuant to Section 144 of
the Delaware General Corporation Law or Rule 16b-3
promulgated pursuant to the Securities Exchange Act of
1934; or
1.6.6. subject to applicable law, in a Chapter 11 bankruptcy
proceeding, the appointment of a trustee or the conversion
of a case involving the Company to a case under Chapter 7;
and
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1.6.7. notwithstanding anything in this Agreement to the
contrary, the transactions contemplated by the
Pre-Effective Amendment No. 1 to the Company's
Registration Statement on form S-2 filed with the
Securities & Exchange Commission on October 6, 2000 shall
not be considered a change of control hereunder.
1.7. "Continuing Directors" the individuals who were directors at
Effective Date or become directors thereafter but whose election was
approved by a vote of at least two-thirds of the directors who were
directors as of the Effective Date or whose own election was
previously so approved.
1.8. "Company" means DevX Energy, Inc. a company incorporated under the
laws of the state of Nevada.
1.9. "Company Group" means the Company, DevX Energy, Inc., a Delaware
corporation, DevX Operating Co., Corrida Resources, Inc., and any
other entity that directly or indirectly controls, is controlled by,
or is under common control with the Company or such one or more of
the foregoing as the context may require.
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1.10. "Confidential Information" means all written, computer readable or
other tangible forms of information, documents, memoranda, or other
materials prepared by or on behalf of or pertaining to the Company
Group and the business, properties and assets thereof including,
without limitation, employee lists, production reports, reserve
reports, exploration targets, work-over programs, capital
expenditures, proposed or planned acquisitions or divestments,
performance reports, plans, studies, projections, methods, designs,
investigative or production techniques at any time used, developed,
investigated, made or sold by or on behalf of the Company Group
(whether or not by the Executive), before or during the term of this
Agreement, that are maintained as confidential by the Company Group
or any part thereof but does not include information that is readily
available to the public or that was known to the Executive prior to
his becoming employed by any member of the Company Group (provided
that the onus to establish that the information was not Confidential
Information as defined in this Agreement shall be on the Executive).
1.11. "Date of Termination" means the date on which the Company notifies
the Executive of such termination or the date on which the Executive
notifies the Company that he is terminating the Agreement for Good
Reason as the case may be, provided that if the Executive's
employment is terminated by reason of death, the Date of Termination
shall be the date of death of the Executive and provided further
that if a Change of Control occurs within 30 days of the date on
which the Company notifies the Executive that his employment has
been terminated and the Executive can reasonably demonstrate that
such termination arose in the contemplation of a Change of Control,
then the Date of Termination shall be deemed to be the day following
the Change of Control.
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1.12. "Disability" means a condition of ill health or physical or mental
incapacity, that, in the good faith opinion of the Compensation
Committee of the Company's Board of Directors, and, notwithstanding
the reasonable accommodations made by the Company, renders the
Executive materially unable or unwilling to perform his duties under
this Agreement, and for a cumulative period of not less than 180
days within any 12-month period irrespective of whether or not all
or any such 180 days are consecutive.
1.13. "Effective Date" means November 10, 2000.
1.14. "Employment Period" has the meaning specified in Section 4.
1.15. "Executive" means Xxxxxx Xxxx.
1.16. "Good Reason" means any of the following:
1.16.1. Without his express written consent, the assignment to the
Executive of any duties materially inconsistent with his
positions, duties, responsibilities and status with the
Company as of the Effective Date, a substantial reduction
in his reporting responsibilities, titles or offices as of
the Effective Date as the same may be increased from time
to time, or any removal of the Executive from or any
failure to re-elect the Executive to any of such
positions, except as such removal or failure arises in
connection with the termination of his employment for
Cause, Disability or as a result of his death or by the
Executive other than for Good Reason;
1.16.2. A reduction by the Company in the Executive's Base Salary
as in effect at the time of the reduction where such
reduction is not in proportion to a simultaneous reduction
in the Base Salary of the Executive's peers;
1.16.3. The failure by the Company to continue in effect any
benefit or compensation plan (including but not limited to
any stock option plan,
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pension plan or, health and accident plan) in which the
Executive from time to time participates (or plans
providing substantially similar benefits, and whether by
or through the Company or another member of the Company
Group), the taking of any action by the Company which
would adversely affect the Executive's participation in or
materially reduce his benefits under any of such plans or
deprive him of any material fringe benefit enjoyed by him,
or the failure by the Company to provide the Executive
with the number of paid vacation days to which he is then
entitled on the basis of years of service with the Company
in accordance with the Company's normal vacation policy in
effect immediately prior to the Effective Date except for
such changes in benefits that affect all executive
officers of the Company and do not result in a
proportionately greater reduction in the rights of or
benefits to the Executive as compared with any other
executive officer of the Company;
1.16.4. Any failure of the Company to obtain the assumption of, or
the agreement to perform, this Agreement by any successor
as contemplated in Section 14.1 hereof;
1.16.5. Any purported termination of the Executive's employment by
the Company which is not effected pursuant to Section
6.6.1 hereof;
1.16.6. Neither the decision nor the notification by the Company
that it does not intend to extend the Employment Period
shall be considered to be Good Reason provided that the
decision not to extend was taken in good faith.
1.17. "Notice of Termination" means a written notice which indicates the
specific termination provision in this Agreement relied upon, and,
to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated.
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1.18. "Option Plan" means the 1997 Incentive Equity Plan of the Company as
same may be amended or replaced from time to time.
1.19. "Target Bonus" has the meaning set out in Schedule B as same may be
amended from time to time.
2. EMPLOYMENT. Upon the terms and subject to the conditions contained in this
Agreement, the Executive agrees to provide full-time services for the
Company during the Employment Period. The Executive agrees to devote his
best efforts to the business of the Company, and shall perform his duties
in a diligent, trustworthy and business-like manner, all for the purpose of
advancing the business of the Company.
3. DUTIES. The Executive shall have the position and title of Vice President,
Engineering and shall have the duties customarily attendant to that office
and as may be more particularly set out in Schedule B hereto. During the
Employment Period, the Executive's position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all material respects with the most
significant of those set forth in Schedule B. During the Employment Period,
and excluding any periods of vacation and sick leave to which the Executive
is entitled, the Executive agrees to devote reasonable attention and time
during normal business hours to the business and affairs of the Company
and, to the extent necessary to discharge the responsibilities assigned to
the Executive hereunder, to use the Executive's reasonable best efforts to
perform faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for the
Executive to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or teach at
educational institutions, and (C) manage personal investments, so long as
such activities do not create a conflict of interest with the Company's
affairs or significantly interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance with this
Agreement.
4. EMPLOYMENT PERIOD. The employment of the Executive by the Company as
provided in Paragraph 2 shall be for the period commencing on November 10,
2000 through and ending on the second anniversary of such date (the
"EMPLOYMENT PERIOD") unless earlier terminated
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pursuant to the provisions of Section 6; provided, however, that beginning
on the first anniversary date of the Effective Date of this Agreement and
on each annual anniversary of such date (such date and each annual
anniversary thereof herein referred to as the "RESET DATE"), the Employment
Period shall be automatically extended so as to terminate two years after
such Reset Date, unless at least 60 days prior to the Reset Date the
Company shall give notice to the Executive that the Employment Period shall
not be so extended.
5. SALARY AND BENEFITS. The salary and benefits of the Executive hereunder are
as set forth on Schedules A & B attached hereto.
6. TERMINATION OF EMPLOYMENT. Subject to the terms of this Agreement, the
Company may terminate the employment of the Executive prior to the
expiration of the Employment Period at any time as it deems appropriate.
6.1. Termination Without Cause; Resignation for Good Reason. If during
the Employment Period, the Executive's employment is terminated by
the Company without Cause, or the Executive voluntarily terminates
his employment for Good Reason, the Company shall have no further
obligation to make any payment or extend any benefit to the
Executive, except that Company shall pay to the Executive, in a lump
sum in cash within 30 days after the Date of Termination, an amount
equal to the sum of:
6.1.1. one (1) year's Base Salary at the rate in effect
immediately prior to the termination;
6.1.2. If, at the Date of Termination, no bonus has been declared
by the Board as payable to the Executive in respect of the
fiscal year in which termination occurs, the Target Bonus
established for the Executive with respect to the year in
which the termination occurs, prorated to the Date of
Termination;
6.1.3. any accrued but unpaid salary and bonuses; and
6.1.4. The cash equivalent of unvested options as required by
Section 6.6.3 hereof.
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6.2. Termination After a Change of Control. If, during the Employment
Period, the Executive's employment is terminated pursuant to Section
6.1 and the Date of Termination is within the twelve (12) month
period following a Change of Control, the Company shall pay to the
Executive, instead of the amounts provided in 6.1.1 and 6.1.2, an
amount that is equal to the sum of eighteen (18) month's Base Salary
at the rate in effect immediately prior to the termination plus the
Target Bonus established for the Executive with respect to the year
in which termination occurs.
6.3. Voluntary Resignation or Termination for Cause. If, during the
Employment Period, the Executive shall voluntarily terminate his
employment for other than Good Reason or if the Company shall
discharge the Executive for Cause, the Company shall have no further
obligation to make any payment or extend any benefit to the
Executive except that the Company shall pay the Executive accrued
but unpaid salary, bonuses and benefits payable pursuant to Section
5 hereof through the Date of Termination.
6.4. Termination for Disability. If, during the Employment Period, the
Company terminates this Agreement for Disability, the Company shall
have no further obligation to make any payment or extend any benefit
to the Executive except that the Company shall pay to the Executive,
or his legal representative as the case may be, all accrued but
unpaid salary and bonuses, if any, provided that if at the Date of
Termination for Disability, no bonus has been declared by the Board
as payable to the Executive in respect of the fiscal year in which
such termination occurs, the Company shall pay the Target Bonus
established for the Executive with respect to such year, prorated to
the Date of Termination.
6.5. Death of the Executive. If the Executive dies prior to the end of
Employment Period, the Executive's employment and other obligations
under this Agreement shall automatically terminate and the Company
shall have no further obligation to make any payment or extend any
benefit to the Executive as of the end of the month in which the
Executive's death occurs; provided that the Company shall pay to the
Executive's estate, as soon as practicable, all accrued and unpaid
salary and bonuses, if any, provided further that, if no bonus has
been declared for the year in which death occurred, the Company
shall pay the
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Target Bonus established for the Executive in respect of such year
prorated to the Date of Termination.
6.6. General Termination Provisions.
6.6.1. Notice of Termination. Any termination by the Company or
by the Executive shall be communicated by Notice of
Termination to the other party thereto given in accordance
with Section 14.3 hereof. The failure by the Executive or
the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of
Good Reason, Cause or Disability shall not render the
Notice of Termination ineffective or waive any right of
the Executive or the Company hereunder or preclude the
Executive or the Company from asserting such fact or
circumstance in enforcing the Executive's or the Company's
rights hereunder.
6.6.2. Employee Benefits Payable on Termination. Except in the
case where the Executive's employment is terminated for
Cause or the Executive voluntarily terminates his
employment for other than Good Reason and notwithstanding
anything in this Agreement to the contrary, the Company
shall maintain in full force and effect to the end of the
two year period commencing from the Reset Date immediately
preceding the Date of Termination for the continued
benefit of the Executive and, if applicable, the
Executive's spouse and children, the employee benefits set
forth in Item H of Schedule A attached hereto that he was
entitled to receive immediately prior to the Date of
Termination (subject to the general terms and conditions
applicable at such time and from time to time of the plans
and programs under which he receives such benefits).
6.6.3. Stock Options. Except in the case where the Executive's
employment is terminated for Cause or the Executive
voluntarily terminates his employment for other than Good
Reason and notwithstanding anything in this Agreement to
the contrary, any unvested stock options previously issued
to the Executive shall become vested in the Executive, or
his estate as the case may be, immediately upon receipt of
a
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Notice of Termination provided that, if the Option Plan
under which the options were granted prohibits such
immediate vesting, the Company shall pay the cash
equivalent of the aggregate positive spread between the
exercise price of all such unvested options and the
highest closing price of the Company's common stock during
the 10 trading days preceding the Termination Date.
6.6.4. Mitigation of Amounts Payable Hereunder. The Executive
shall not be required to mitigate the amount of any
payment provided for in this Section 6 by seeking other
employment or otherwise, nor shall the amount of any
payment provided for in this Section 6 be reduced by any
compensation earned by the Executive as the result of
employment by another employer after the Date of
Termination, or otherwise.
6.6.5. Complete Payment. The payments and other benefits to be
made or to be extended to the Executive under the
provisions of this Section 6 upon termination of the
Executive's employment shall be in complete satisfaction
of any and all payments that would otherwise be due to the
Executive had he remained employed by the Company during
the remainder of the Employment Period and the Company
shall have no further obligation to make any payment or
extend any benefit to the Executive under Sections 4, 5
and 6 of this Agreement or otherwise upon or after such
termination other than as provided in this Section 6.
7. INDEMNITY. The Company shall indemnify, to the full extent authorized by
law the Executive and his heirs, executives, administrators and legal
representatives, from any and all suits, claims, actions, demands or
proceedings of any kind to which the Executive is named or in respect of
which he may be or become liable by reason of the fact that he is or was a
director, officer or employee of any member of the Company Group or by
reason of the fact that he is or was, at the Company's request, serving as
the representative of the Company or any member of the Company Group on any
other corporation, trust, joint venture or enterprise not part of the
Company Group.
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8. CONFIDENTIAL INFORMATION. The Executive recognizes and acknowledges that he
requires access to Confidential Information to perform his duties hereunder
and such information constitutes valuable, special and unique property of
the Company Group. The Company agrees to provide Confidential Information
immediately upon the execution of this Agreement and thereafter at such
time or times as are or may become required by the needs of the position of
the Executive and his responsibilities within the Company. The Executive
agrees that he shall not at any time, either during or subsequent to the
term of this Agreement, disclose to others, use, copy or permit to be
copied, except in pursuance of his duties for and on behalf of the Company,
it successors, assigns or nominees, any Confidential Information of any
member of the Company Group (regardless of whether developed by the
Executive) without the prior written consent of the Company, provided
however, that this provision shall not prohibit the Executive from
disclosing Confidential Information in compliance with a court order.
9. DELIVERY OF DOCUMENTS UPON TERMINATION. The Executive shall deliver to the
Company or its designee at the termination of his employment all
correspondence, memoranda, notes, records, drawings, sketches, plans,
customer lists, product compositions, and other documents and all copies
thereof, made, composed or received by the Executive, solely or jointly
with others, that are in the Executive's possession, custody, or control at
termination and that are related in any manner to the past, present, or
anticipated business of any member of the Company Group, except for items
owned by the Executive at the Effective Date. In this regard, the Executive
hereby grants and conveys to the Company all right, title and interest in
and to, including without limitation, the right to possess, print, copy,
and sell or otherwise dispose of, any reports, records, papers, summaries,
photographs, drawings or other documents, and writings, and copies,
abstracts or summaries thereof, that may be prepared by the Executive or
under his direction or that may come into his possession in any way during
the term of his employment with the Company that relate in any manner to
the past, present or anticipated business of any member of the Company
Group.
10. FURTHER ACTS. At the request of the Company (but without additional
compensation from the Company during his employment by the Company) the
Executive shall execute any and all papers and perform all lawful acts that
the Company may deem necessary or appropriate to further evidence or carry
out the transactions contemplated in this Agreement including,
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without limitation, such acts as may be necessary for the preparation,
filing, prosecution, and maintenance of applications for United States
letters patent and foreign letters patent, or for United States and foreign
copyright, with respect to any inventions, works or other matters prepared
or authored by the Executive in the course of his employment.
11. NO COMPETITION. In consideration for being given access to Confidential
Information by the Company upon the execution of this agreement the
Executive acknowledges and agrees that:
11.1. He shall not directly or indirectly engage in the business of
acquiring oil and natural gas reserves and oil and natural gas
production and exploitation; or any other business in which any
member of the Company Group directly or indirectly engages during
the Employment Period. This provision shall apply during the term of
the Agreement and through the first anniversary of the expiration
thereof, provided, however, that the restriction in this Section 11
shall apply only to the reasonable and limited geographic area in
which any member of the Company Group directly or indirectly has
material operations as of the Date of Termination or expiration of
this Agreement whichever comes first. For purposes of this Section
11, the Executive shall be deemed to engage in a business if he
directly or indirectly, engages or invests in, owns, manages,
operates, controls or participates in the ownership, management,
operation or control of, is employed by, associated or in any manner
connected with, or renders services or advice to, any business
engaged in acquiring oil and natural gas reserves or oil and natural
gas production and exploitation; provided, however, that the
Executive may invest in the securities of any enterprise (but
without otherwise participating in the activities of such
enterprise) if (x) such securities are listed on any national or
regional securities exchange or have been registered under Section
12(g) of the Securities Exchange Act of 1934 and (y) the Executive
does not have Beneficial Ownership of more than 5% of the
outstanding capital stock of such enterprise;
11.2. If a court of competent jurisdiction determines that the length of
time or any other restriction, or portion thereof, set forth in this
Section 11 is overly restrictive and unenforceable, the court may
reduce or modify such restrictions to those which it deems
reasonable and enforceable under the circumstances, and as so
reduced or
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modified, the parties hereto agree that the restrictions of this
Section 11 shall remain in full force and effect. The Executive
further agrees that if a court of competent jurisdiction determines
that any provision of this Section 11 is invalid or against public
policy, the remaining provisions of this Section 11 and the
remainder of this Agreement shall not be affected thereby, and shall
remain in full force and effect.
11.3. The geographic area in which the Company Group does business is the
continental United States in scope and that the restrictions imposed
by this Agreement are legitimate, reasonable and necessary to
protect the investment of the Company Group in its business and the
goodwill associated therewith. The Executive acknowledges that the
scope and duration of the restrictions contained herein are
reasonable in light of the time that the Executive has been engaged
in the oil and gas industry, his reputation therein and his
relationship with the suppliers, customers and clients of the
Company Group. The Executive further acknowledges that the
restrictions contained herein are not burdensome to the Executive in
light of the consideration paid therefor and the other opportunities
that remain open to the Executive. Moreover, the Executive
acknowledges that he has other means or opportunities available to
him for the pursuit of his profession or livelihood that will not be
impaired by this Section 11.
12. REMEDIES. The Executive acknowledges that a remedy at law for any breach or
attempted breach of the Executive's obligations under Sections 8 through 11
hereof may be inadequate, and he agrees that the Company may be entitled to
specific performance and injunctive and other equitable remedies in case of
any such breach or attempted breach, and further agrees to waive any
requirement for the securing or posting of any bond in connection with the
obtaining of any such injunctive or other equitable relief. The Company
shall have the right to offset against amounts to be paid to the Executive
pursuant to the terms hereof any amounts from time to time owing by the
Executive to the Company. The termination of the Agreement pursuant to
Section 4, 6.3, or 6.4 hereof shall not be deemed to be a waiver by the
Company of any breach by the Executive of this Agreement or any other
obligation owed the Company, and notwithstanding such a termination the
Executive shall be liable for all damages attributable to such a breach.
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13. DISPUTE RESOLUTION. Subject to the Company's right to seek injunctive
relief in court as provided in Section 12 hereof, any dispute, controversy
or claim arising out of or in relation to or connection to this Agreement,
including without limitation any dispute as to the construction, validity,
interpretation, enforceability or breach of this Agreement, shall be
exclusively and finally settled by arbitration, and any party may submit
such dispute, controversy or claim, including a claim for indemnification
under this Section 13, to arbitration.
13.1. Selection of Arbitrators. The arbitration shall be heard and
determined by one arbitrator, who shall be impartial and who shall
be selected by mutual agreement of the parties. If the parties
cannot agree on the sole arbitrator, then the appointing authority
for the implementation of such procedure shall be the Senior United
States District Judge for the Northern District of Texas, who shall
appoint an independent arbitrator who does not have any financial
interest in the dispute, controversy or claim. If the Senior United
States District Judge for the Northern District of Texas refuses or
fails to act as the appointing authority within ninety (90) days
after being requested to do so, then the appointing authority shall
be the Chief Executive Officer of the American Arbitration
Association, who shall appoint an independent arbitrator who does
not have any financial interest in the dispute, controversy or
claim. All decisions and awards by the arbitration tribunal shall be
made by majority vote.
13.2. Proceedings. Unless otherwise expressly agreed in writing by the
parties to the arbitration proceedings:
13.2.1. The arbitration proceedings shall be held in Dallas,
Texas, at a site chosen by mutual agreement of the
parties, or if the parties cannot reach agreement on a
location within thirty (30) days of the appointment of the
last arbitrator, then at a site chosen by the arbitrators;
13.2.2. The arbitrators shall be and remain at all times wholly
independent and impartial;
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13.2.3. The arbitration proceedings shall be conducted in
accordance with the Commercial Arbitration Rules of the
American Arbitration Association, as amended from time to
time;
13.2.4. Any procedural issues not determined under the arbitral
rules selected pursuant to item 13.2.3 above shall be
determined by the law of the place of arbitration, other
than those laws which would refer the matter to another
jurisdiction;
13.2.5. The decision of the arbitrators shall be: reduced to
writing; final and binding without the right of appeal;
the sole and exclusive remedy regarding any claims,
counterclaims, issues or accounting presented to the
arbitrators; made and promptly paid in United States
dollars free of any deduction or offset other than as
provided in Section 14.11; and any costs or fees incident
to enforcing the award shall, to the maximum extent
permitted by law, be charged against the party resisting
such enforcement;
13.2.6. The award shall include interest from the date of any
breach or violation of this Agreement, as determined by
the arbitral award, and from the date of the award until
paid in full, at the applicable Federal rate provided for
in Section 7872(f)(2)(A) of the Code; and
13.2.7. Judgment upon the award may be entered in any court having
jurisdiction over the person or the assets of the party
owing the judgment or application may be made to such
court for a judicial acceptance of the award and an order
of enforcement, as the case may be.
13.3. Acknowledgment Of Parties. Each party acknowledges that by executing
this Agreement he or it has voluntarily and knowingly entered into
an agreement to arbitrate under this Section.
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14. MISCELLANEOUS PROVISIONS.
14.1. Successors of the Company. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets
of the Company, by agreement in form and substance satisfactory to
the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession had taken
place. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the
Company in the same amount and on the same terms as the Executive
would be entitled to under this Agreement had the Executive
terminated his employment for Good Reason, except that for purposes
of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination. As used
in this Agreement, "COMPANY" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid
which executes and delivers the agreement provided for in this
Section 14.1 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
14.2. Executive's Heirs, etc. The Executive may not assign his rights or
delegate his duties or obligations hereunder without the written
consent of the Company. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die
while any amounts would still be payable to him hereunder as if he
had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement
to his designee or, if there be no such designee, to his estate.
14.3. Notice. For the purposes of this Agreement, notices and all other
communications provide for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by
United States registered or certified mail,
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return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the
attention of the Chief Executive Officer of the Company with a copy
to the Secretary of the Company, or to such other place in respect
of which a party has delivered a written notice of change of address
in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
14.4. Amendment; Waiver. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge
is agreed to in writing signed by the Executive and such officer as
may be specifically designated by the Board of Directors of the
Company. No waiver by either party hereto at any time of any breach
by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement.
14.5. Invalid Provisions. Should any portion of this Agreement be adjudged
or held to be invalid, unenforceable or void, such holding shall not
have the effect of invalidating or voiding the remainder of this
Agreement and the parties hereby agree that the portion so held
invalid, unenforceable or void shall, if possible, be deemed amended
or reduced in scope, or otherwise be stricken from this Agreement to
the extent required for the purposes of validity and enforcement
thereof.
14.6. Survival of the Executive's Obligations. Regardless of whether the
Executive's employment by the Company is terminated, voluntarily or
involuntarily, by the Company or the Executive, with or without
Cause, the Executive's fiduciary obligations arising as a
consequence of his employment and, without limiting the generality
of the foregoing, the provisions of Sections 8 through 11 of this
Agreement shall survive the termination of this Agreement.
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14.7. Counterparts. This Agreement 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.
14.8. Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Texas.
14.9. Captions and Gender. The use of captions and Section headings herein
is for purposes of convenience only and shall not effect the
interpretation or substance of any provisions contained herein.
Similarly, the use of the masculine gender with respect to pronouns
in this Agreement is for purposes of convenience and includes either
sex who may be a signatory.
14.10. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, both written and oral, between
the parties with respect to the subject matter hereof.
14.11. Legal Costs; Payments During Dispute The Company shall pay promptly
as incurred, to the full extent permitted by law but subject always
to a maximum of $25,000, all legal fees and out-of-pocket expenses
which the Executive may reasonably incur as a result of any contest
by the Company, the Executive or his estate or legal representative,
of the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by the Executive about the
amount of any payment pursuant to this Agreement), plus in each case
interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Code. It is further
agreed that in the event that the Executive or his legal
representative is found by the board of arbitration, court or other
body adjudicating the contest to be entitled to less than the amount
of relief originally claimed by the Executive, the Executive shall
reimburse the Company for the amount of legal fees and expenses
incurred by the Company hereunder on behalf of the Executive in
proportion to the extent of
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such shortfall and the Company may deduct such amount from any
amount otherwise payable to the Executive or his legal
representative.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the date first set forth above.
DEVX ENERGY, INC.
By: /s/ XXXXXX X. XXXXXX
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
(EXECUTIVE)
/s/ XXXXXX XXXX
-------------------
Name: Xxxxxx Xxxx
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SCHEDULE A
SALARY AND BENEFITS
A. Base Salary. The Company shall pay the Executive during the Employment
Period the Base Salary as set out in Schedule B as same may be increased
from time to time. The Base Salary shall be paid by the Company in
accordance with its regular payroll practices. The Company may not reduce
the Executive's Base Salary at any time during the Employment Period.
B. Bonus. The Company may, in its sole discretion, pay to the Executive an
annual cash bonus (the "ANNUAL BONUS") of between 0% and 200% of the
Executive's Target Bonus as set out in Schedule B as same may be amended
from time to time. For greater certainty, it is expressly understood and
agreed that the Company may, in its absolute discretion, determine that the
Annual Bonus to be paid to the Executive in any particular fiscal year may
be zero or otherwise less than, equal to or in excess of the Target Bonus
established for such year. Any Annual Bonus that is declared but not paid
by the last business day of the third month following the fiscal year end
in respect of which the bonus was declared shall bear interest thereafter
until paid at the greater of the Prime Rate then in effect or the highest
rate then applicable under any lending agreement to which the Company is
then a party.
C. Annual Review. The Board's Compensation Committee of the Board of Directors
of the Company shall review the Base Salary and Target Bonus annually on or
before the start of each fiscal year during the Employment Period and may
amend same in accordance with this agreement as the Committee deems
appropriate.
D. Stock Options. The Company, may in its sole discretion, grant the Executive
such stock options pursuant to the Company's 1997 Incentive Equity Plan
(the "PLAN") as determined by the Compensation Committee of the Company's
Board of Directors. All such Stock Options shall be subject to the terms
and conditions of the Plan.
E. Directors' and Officers' Insurance. The Executive shall be entitled to the
benefit of such directors and officers insurance coverage as the Company
may put in place from time to time during the Employment Period.
F. Payment and Reimbursement of Expenses. During the Employment Period, the
Company shall pay or reimburse the Executive for all reasonable travel and
other expenses incurred by the Executive in performing his obligations
under this Agreement in accordance with the policies and procedures of the
Company for its senior executive officers, provided that the Executive
properly accounts therefor in accordance with the regular policies of the
Company.
G. Office Space. The Company shall, at its expense, provide an office for the
Executive at the headquarters of the Company. The Company shall furnish and
equip the Executive's office in accordance with the standards commensurate
with a position similar to that of the Executive in a corporation of
equivalent size located in the same area and engaged in the same type of
business as that of the Company.
H. Fringe Benefits and Perquisites. During the Employment Period, the
Executive shall be entitled to participate in or receive the Benefits as
set out in Schedule B and under any other plan or arrangement made
available by the Company to its senior executive officers including
medical, dental and disability insurance, 401K plans and other benefit
plans as and when established by the Company, subject to and on a basis
consistent with the terms, conditions and overall administration of such
plans and arrangements. Nothing paid to the Executive under any plan or
arrangement made available to the Executive shall be deemed to be in lieu
of compensation hereunder. Nothing herein shall obligate the Company to
establish any such plan or arrangement not expressly required in Schedule
B.
I. Tax. The Company may deduct and withhold from any compensation, benefits,
or amounts payable under this Agreement all federal, state, city, or other
taxes as may be required pursuant to any law or governmental regulation or
ruling.
Schedule B
to the Employment Agreement dated November 10, 2000
Between DevX Energy, Inc. (the Company")
and Xxxxxx Xxxx (the "Executive")
Base Salary: $135,000 per annum
Target Bonus: 35% of Base Salary
Duties and Responsibilities: The Executive shall direct and oversee all
engineering aspects of the Company's
operations including drilling and
production, reserves and economics,
acquisitions and asset management and the
supervision of all engineering and
engineering support personnel;
Reporting Relationships: the Chief Operating Officer or his
equivalent.
Benefits:
A. Vacation
During the Employment Term, the Executive shall be
entitled to paid vacation and such other paid
absences, whether for holidays, illness, personal
time, or any similar purposes, as determined by the
Company from time to time provided that the amount of
paid vacation shall not be less than three (3) weeks
(or fifteen (15) business days) during any 12 month
period.
B. Sick Leave During any period of illness, the Company shall
continue to pay the Base Salary to the Executive
until such time as the illness constitutes a
Disability as defined in the Agreement.
C. Vehicle Allowance $450 per month.
