EXHIBIT 10.2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (this "Agreement") by and
between Plains Resources Inc., a Delaware corporation ("Company"), and Xxxx X.
Xxxxxxx ("Employee") is entered into as of September 19, 2002, but shall not be
effective until the date (the "Effective Date") on which all the shares of the
common stock of Plains Exploration & Production Company, a company to be formed
by the conversion of Plains Exploration & Production Company, L.P. into a
Delaware corporation ("PXP"), held by Company are distributed to Company's
stockholders (the "Distribution"); provided, however, that if the Distribution
does not take place on or before May 23, 2003, this Agreement shall not become
effective and the Agreement between Company and Employee effective as of May 17,
2001 (the "Original Agreement") shall remain in full force and effect.
WHEREAS, Company desires to employ Employee in a different capacity and
Employee desires to be employed by Company in such capacity;
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties, and agreements contained herein, and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
1. Employment. Contingent on the Distribution occurring no later than
May 23, 2003, Company agrees to employ Employee, and Employee hereby agrees
to be employed by Company, on the terms and conditions set forth in this
Agreement.
2. Term of Employment. Subject to the provisions for earlier
termination provided in the Agreement, the term of this Agreement (the
"Term") shall commence on the Effective Date and shall terminate on the
fifth anniversary of the Effective Date; provided, however, that following
the fifth anniversary of the Effective Date, the Term shall automatically
be extended one year and again for successive one-year periods on each
anniversary thereof, if Employee and Company shall have agreed to new
compensation terms at least ninety days prior to the end of the initial
five-year period and any additional one-year extensions. Notwithstanding
any provision of this Agreement to the contrary, termination of this
Agreement shall not alter or impair any rights or benefits of Employee (or
Employee's estate or beneficiaries) that have arisen under this Agreement
on or prior to such termination.
3. Employee's Duties. During the Term, Employee shall serve as the
Chief Executive Officer of Company, with such customary duties and
responsibilities as may from time to time be assigned to him by the Board,
provided that such duties are at all times consistent with the duties of
such positions. Employee shall report directly to the Board. All other
employees of Company, other than the Chairman of the Board, shall report to
Employee. Employee agrees to serve without additional compensation, if
elected or appointed thereto, in one or more offices or a director of any
of Company's Subsidiaries. For purposes of this Agreement, a "Subsidiary"
shall mean any entity in which Company owns a majority of the voting stock
of the class of
securities (or other interests in the case of a limited liability company or
partnership) that may vote in the election of the members of the governing body
of such entity.
Employee agrees to use reasonable best efforts to perform faithfully and
efficiently his duties and responsibilities hereunder. Company understands and
acknowledges that Employee shall be an employee and executive officer of PXP,
and therefore, Employee will not be able to devote all of his attention and time
during normal business hours to Company. Accordingly, Company agrees that the
performance of Employee's duties on behalf of PXP shall not be a breach of this
Agreement or the Original Agreement. Notwithstanding the foregoing, during the
Term, Employee may engage in the following activities so long as they do not
interfere in any material respect with the performance of Employee's duties and
responsibilities hereunder: (i) serve on corporate, civic or charitable boards
or committees, (ii) deliver lectures, fulfill speaking engagements or teach on a
part-time basis at educational institutions but not more than 20 hours per
month, and (iii) manage his personal investments; provided, however, that in no
event shall the conduct of any such activities by Employee be deemed to
materially interfere with Employee's duties hereunder until Employee has been
notified in writing thereof by the Board and given a reasonable period in which
to cure such interference; and further provided that Employee shall notify and
obtain approval of the Board prior to accepting any of the positions described
in clause (i) above, which approval shall not be unreasonably withheld. In
addition, Employee shall be permitted to manage his personal investments
described in clause (iii) above in accordance with the preceding sentence
provided that (a) such management shall not interfere in any material respect
with the performance of Employee's duties and responsibilities hereunder or
violate Company's conflicts policy as in effect from time to time, (b) Employee
informs the Board of any conflicts of interest (whether actual or apparent) with
Company and any of its Subsidiaries, including any event reasonably likely to
raise the appearance of conflicts, and (c) Employee notifies the Board of, and
discuss with the Board with respect to, any opportunities presented to Employee
or any of the entities in which Employee owns a majority interest in connection
with such continued ownership and management that should be offered to Company
or its Subsidiaries. Notwithstanding the foregoing, Company agrees that
Employee's management of his current personal investments, as disclosed to
Company prior to the Effective Date, shall not be deemed to materially interfere
with his duties hereunder.
4. Compensation.
(a) Base Compensation. For services rendered by Employee under this
Agreement Company shall pay to Employee a base salary ("Base Compensation") of
$150,000 per annum payable in accordance with Company's customary payroll
practice for its senior executive officers. The amount of Base Compensation
shall be reviewed periodically by the Board and may be increased from time to
time as the Board may deem appropriate. Base Compensation, as in effect at any
time, may not be decreased without the prior written consent of Employee.
(b) Annual Bonus. In addition to his Base Compensation, Employee shall be
eligible to receive each year during the Term, a cash incentive payment in an
amount
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equal to 100% of Employee's Base Compensation (the "Target Bonus"). The amount
of the Target Bonus earned for any year shall be determined by the Compensation
Committee of the Board based on Employee's individual performance and the
performance of Company.
(c) Performance Option and Second Options. The terms of the performance
option (the "Performance Option") granted to Employee, as adjusted for the
Distribution as of the Effective Date, and the stock options covering 200,000
shares of Company common stock granted to Employee in June 2001 and 175,000
shares of Company common stock granted to Employee in February 2002
(collectively, the "Second Options") shall remain in full force and effect in
accordance with the terms of the agreements evidencing the Performance Option
and the Second Options, as the case may be, except for appropriate adjustments
that shall be made due to the Distribution in accordance with the Employee
Matters Agreement dated July 3, 2002, between the Company and PXP, as amended
(the "Employee Matters Agreement"), including, without limitation, adjusting the
exercise prices for the Performance Option and the Second Options and the
issuance by PXP of stock appreciation rights (the "PXP SARs") having the same
terms and conditions as the Performance Option and the Second Options, as the
case may be, with a strike price and a number of PXP SARs calculated in
accordance with the Employee Matters Agreement. The agreement representing the
Performance Option shall be amended to reflect these adjustments, and PXP and
Employee shall execute an agreement reflecting the PXP SARs. Notwithstanding
anything contained in this Agreement or otherwise, the parties hereto agree that
no actions under this Agreement or related hereto shall be deemed to be a
termination of Employee or deemed to result in satisfaction of any of the
performance goals related to the Performance Option and the Distribution shall
not be a Change in Control.
(d) New Grants. On the trading day following the Effective Date, Company
will grant Employee 75,000 restricted shares of Company common stock with
respect to which restrictions will lapse pro rata over a three-year period
beginning on the first anniversary of the Effective Date and under such other
terms and conditions as provided in the agreement evidencing such award and an
option covering 250,000 shares of Company common stock having an exercise price
equal to the closing price of Company common stock on the trading day following
the Effective Date, vesting pro rata over five years beginning on the first
anniversary of the Effective Date with a ten-year term, and under such other
terms and conditions as provided in the agreement evidencing such option.
5. Other Benefits; Business Expenses.
(a) Employee shall be entitled to participate in all incentive compensation
plans and to receive all fringe benefits and perquisites offered by Company to
any of its senior executive officers, including, without limitation,
participation in the various health,
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retirement, life insurance, disability insurance and other employee benefit
plans or programs provided to the employees of Company in general, subject to
the regular eligibility requirements with respect to each of such benefit plans
or programs, and such other benefits or perquisites as may be approved by the
Board during the Term, all on a basis at least as favorable to Employee as may
be provided to similarly situated senior executive officers of Company. Employee
shall be entitled to take appropriate and reasonable annual vacation time
provided that such vacation time does not interfere with his duties hereunder.
(b) Company shall reimburse Employee for all reasonable business expenses
incurred by Employee in the performance of his duties; which expenses will be
subject to the oversight of Company's audit committee in the normal course. It
is understood that Employee is authorized to incur reasonable business expenses
for promoting the business of Company, including reasonable expenditures for
travel, lodging, meals and client or business associate entertainment. Request
for reimbursement for such expenses must be accompanied by appropriate
documentation.
6. Termination. This Agreement may be terminated prior to the end of its
Term as set forth below.
(a) Resignation. Employee may resign his position at any time. In the event
of such resignation, except in the case of resignation for Good Reason (as
defined below), Employee shall not be entitled to further compensation pursuant
to this Agreement except as may be provided by the terms of any benefit plans of
Company in which Employee may be a participant and the terms of any outstanding
equity grants, and for salary accrued but unpaid through the date of resignation
and reimbursement of expenses incurred prior to such date.
(b) Death. If Employee's employment is terminated due to his death, this
Agreement shall terminate and Company shall have no obligations to his legal
representatives with respect to this Agreement other than the payment of
benefits as described in Section 6(c)(i) below, salary accrued but unpaid
through the date of termination, reimbursement of expenses incurred prior to
such date, and benefits under the terms of any outstanding equity grants.
(c) Discharge.
(i) Company may terminate this Agreement and Employee's employment for
any reason deemed sufficient by Company upon notice as provided in Section
10. However, in the event that Employee's employment is terminated during
the Term by Company for any reason other than Cause, in the event of
Employee's death or Disability, or if Employee's employment is terminated
for Good Reason, then: (A) Company shall pay Employee immediately upon
termination of Employee's employment a lump sum equal to $2,500,000;
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(B) for the 36-month period after the Date of Termination (as defined
below), Company shall provide or arrange to provide Employee (and
Employee's dependents) with health insurance benefits no less favorable
than the health plan benefits provided by Company (or any successor) during
such 36-month period to any senior executive officer of Company; provided,
further, to the extent the coverage or benefits received are taxable to
Employee, Company shall make Employee "whole" on a net after tax basis; and
provided, however, that such coverage shall cease if Employee obtains
comparable replacement coverage (although Employee shall have no obligation
to pursue such coverage); and (C) on the Date of Termination all then
outstanding Company stock-based awards of Employee, whether under this
Agreement, a Company stock plan or otherwise, shall become immediately
exercisable and payable in full, as the case may be, with any performance
goals associated therewith being deemed to have been achieved at the
maximum levels and all restrictions removed with respect thereto (including
without limitation with respect to the Performance Option); and (D) Company
shall reimburse Employee for expenses incurred prior to the Date of
Termination.
(ii) Notwithstanding the foregoing provisions of this Section 6, in
the event Employee is terminated because of Cause, Company shall have no
obligations pursuant to this Agreement after the Date of Termination other
than reimbursement of expenses incurred prior to such date. For purposes
herein, "Cause" means (A) the failure by Employee to perform reasonably
assigned duties with Company, (B) the engaging by Employee in conduct which
is demonstrably and materially injurious to Company and its Subsidiaries
taken as a whole, (C) Employee's having been convicted of, or entered a
plea of nolo contendere to burglary, larceny, murder or arson or a crime
involving deceit, fraud, perjury or embezzlement, or (D) failure to notify
Company of any actual or apparent conflicts of interest relating to
Employee's management of personal investments in accordance with Section 3
of this Agreement. Notwithstanding the foregoing, prior to any termination
for Cause under clauses (A), (B) or (D) of the preceding sentence, (X)
Company must provide Employee with reasonable notice detailing the failure
or conduct which the Board believes to constitute Cause, (Y) Company must
provide Employee a reasonable opportunity to cure such failure or conduct,
and (Z) after such notice and an opportunity to cure, a majority of the
Board must reasonably determine that Employee has not cured such failure or
conduct. Notwithstanding the foregoing provisions, Employee shall not be
deemed to have been terminated for Cause unless and until Employee shall
have been provided an opportunity to be heard in person by the Board (with
the assistance of Employee's counsel if Employee so desires).
(d) Disability. If Employee shall have been absent from the full-time
performance of Employee's duties with Company for six consecutive months as a
result of Employee's incapacity due to physical or mental illness as determined
by Employee's
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physician ("Disability"), Employee's employment may be terminated by Company for
Disability. If Employee's employment is terminated for Disability, Employee
shall be entitled to the compensation and benefits provided in Section 6(c)(i)
hereof. If Employee fails during any period during the Term to perform
Employee's full-time duties with Company as a result of incapacity due to
physical or mental illness, as determined by Employee's physician, Employee
shall continue to receive his benefits under this Agreement during such period
until this Agreement is terminated for Disability by Company.
(e) Resignation for Good Reason. Employee shall be entitled to terminate
his employment for Good Reason as defined herein. If Employee terminates his
employment for Good Reason, Employee shall be entitled to the compensation and
benefits provided in Section 6(c)(i) hereof. "Good Reason" shall mean (1) the
material breach of any of Company's obligations under this Agreement without
Employee's written consent or (2) the occurrence of any of the following
circumstances, as the case may be, without Employee's written consent:
(i) the assignment by the Board to Employee of any duties that
materially adversely alter the nature or status of Employee's office,
title, responsibilities, including reporting responsibilities, from those
in effect immediately prior to such assignment;
(ii) the failure by Company to continue in effect any compensation
plan in which Employee participates that is material to Employee's total
compensation unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan, or
the failure by Company to continue Employee's participation therein (or in
such substitute or alternative plan) on a basis not materially less
favorable to Employee, unless any such failure to continue in effect any
compensation plan or participation relates to a discontinuance of such
plans or participation on a management-wide or Company-wide basis;
(iii) the taking of any action by Company which would directly or
indirectly materially reduce or deprive Employee of any material pension,
welfare or fringe benefit then enjoyed by Employee, unless such action
relates to a discontinuance of benefits on a management-wide or
Company-wide basis;
(iv) the failure of Company to obtain a satisfactory agreement from
any successor to assume and agree to perform this Agreement, as
contemplated in Section 12 hereof;
(v) the relocation of Company's principal executive offices outside
the greater Houston, Texas metropolitan area, or Company's requiring
Employee to relocate anywhere other than the location of Company's
principal executive
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offices, except for required travel on Company's business to an extent
substantially consistent with Employee's obligations under this Agreement;
or
(vi) the Employee's termination of his employment with Company or any
successor who has assumed this Agreement in accordance with Section 12
hereof within the 30-day period following the first anniversary of a Change
in Control of Company.
Employee's right to terminate employment pursuant to this subsection shall
not be affected by Employee's incapacity due to physical or mental illness. In
addition, Employee's continued employment following any event, act or omission,
regardless of the length of such continued employment, shall not constitute
Employee's consent to, or a waiver of Employee's rights with respect to, such
event, act or omission constituting a Good Reason circumstance hereunder.
(f) Notice of Termination. Any purported termination of Employee's
employment by Company or by Employee shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 10 hereof. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall set forth in reasonable detail the reason for termination of Employee's
employment, or in the case of resignation for Good Reason, said notice must
specify in reasonable detail the basis for such resignation. No purported
termination which is not effected pursuant to this Section 6(f) shall be
effective.
(g) Date of Termination, Etc. "Date of Termination" shall mean in the case
of Employee's death, his date of death, and in all other cases, the date
specified in the Notice of Termination. If no notice is given by Employee,
termination shall be effective on the last date Employee reported for work with
Company, and shall be deemed to be a voluntary termination without Good Reason.
(h) Mitigation. Employee shall not be required to mitigate the amount of
any payment or benefit provided for in this Section 6 by seeking other
employment or otherwise, nor, except as provided in clause (B) of Section
6(c)(1), shall the amount of any payment or benefit provided for in this
Agreement be reduced by any compensation or benefit earned by Employee as a
result of employment by another employer, self-employment earnings, by
retirement benefits, by offset against any amount claimed to be owing by
Employee to Company, or otherwise.
(i) Full Tax Gross-Up of Parachute Payments. (i) In the event that any
payment, award, benefit or distribution (or any acceleration of any payment,
award, benefit or distribution) made or provided to or for the benefit of
Employee in connection with this Agreement, or Employee's employment with
Company or the termination thereof (the "Payments") are determined to be subject
to the excise tax imposed by Section 4999 of the Code or any interest or
penalties with respect to such excise tax (such
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excise tax, together with any such interest and penalties, are collectively
referred to as the "Excise Tax"), then the Employee shall be entitled to receive
an additional payment (a "Gross-Up Payment") from Company in an amount equal to
the Excise Tax (excluding any income tax or employment tax imposed upon the
Gross Up Payment). The determination of whether the Payments are subject to the
Excise Tax and, if so, the amount of the Gross-Up Payment, shall be made by a
nationally recognized United States public accounting firm that has not, during
the two years preceding the date of its selection, acted in any way on behalf of
Company or any of its affiliates; provided, however, that if the accounting firm
has determined that Section 4999 does not apply, and the Internal Revenue
Service claims that Section 4999 applies to the Payments (or any portion
thereof), then paragraph (ii) below of this Section 6(i) shall be applicable.
(ii) Employee shall notify Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by
Company of a Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after Employee is
informed in writing of such claim and shall apprise Company of the nature
of such claim and the date on which such claim is requested to be paid.
Employee shall not pay such claim prior to the expiration of the thirty
(30) day period following the date on which he gives such notice to Company
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If Company notifies Employee in writing
prior to the expiration of such period that it desires to contest such
claim, Employee shall:
(A) give Company any information reasonably requested by Company
relating to such claim,
(B) take such action in connection with contesting such claim as
Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by Company,
(C) cooperate with Company in good faith in order effectively to
contest such claim, and
(D) permit Company to participate in any proceedings relating to
such claim;
provided, however, that Company shall bear and pay directly all costs
and expenses (including additional interest, penalties, accountant's and
legal fees) incurred in connection with such contest and shall indemnify
and hold Employee harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto) imposed
as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this subsection, Company
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shall control all proceedings taken in connection with such contest and, at
its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect
of such claim and may, at its sole option, either direct Employee to pay
the tax claimed and commence a proceeding to obtain a refund or contest the
claim in any permissible manner, and Employee agrees to prosecute such
contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as Company
shall determine; provided, however, that if Company directs Employee to pay
such claim and seek a refund, Company shall advance the amount of such
payment to Employee, on an interest-free basis, and shall indemnify and
hold Employee harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed
with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for the taxable year of
Employee with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. Furthermore, Company's control
of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder, and Employee shall be entitled to
settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(iii) If, after the receipt by Employee of an amount advanced by
Company pursuant to the foregoing, Employee becomes entitled to receive any
refund with respect to such claim, Employee shall (subject to Company's
complying with the requirements of the foregoing) promptly pay to Company
the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by Employee
of an amount advanced by Company pursuant to the previous subsection, a
determination is made that Employee shall not be entitled to any refund
with respect to such claim and Company does not notify Employee in writing
of its intent to contest such denial of refund prior to the expiration of
thirty (30) days after such determination, such advance shall be forgiven
and shall not be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
(j) Change in Control. For purposes of this Agreement, a Change in Control
shall mean an occurrence of the following during the Term:
(i) The "acquisition" by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act")) of "Beneficial Ownership" (within the meaning
of Rule 13d-3 promulgated under the 0000 Xxx) of any securities of Company
which generally entitles the holder thereof to vote for the election of
directors of Company (the "Voting Securities") which, when added to the
Voting Securities then "Beneficially Owned" by such Person, would result in
such Person either
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"Beneficially Owning" fifty percent (50%) or more of the combined voting
power of Company's then outstanding Voting Securities or having the ability
to elect fifty percent (50%) or more of Company's directors; provided,
however, that for purposes of this paragraph (i) of Section 6(j), a Person
shall not be deemed to have made an acquisition of Voting Securities if
such Person: (a) becomes the Beneficial Owner of more than the permitted
percentage of Voting Securities solely as a result of open market
acquisition of Voting Securities by Company which, by reducing the number
of Voting Securities outstanding, increases the proportional number of
shares Beneficially Owned by such Person; (b) is Company or any corporation
or other Person of which a majority of its voting power or its equity
securities or equity interest is owned directly or indirectly by Company (a
"Controlled Entity"); (c) acquires Voting Securities in connection with a
"Non-Control Transaction" (as defined in paragraph (iii) of this Section
6(j)); or (d) becomes the Beneficial Owner of more than the permitted
percentage of Voting Securities as a result of a transaction approved by a
majority of the Incumbent Board (as defined in paragraph (ii) below); or
(ii) The individuals who, as of the Effective Date, are members of the
Board (the "Incumbent Board"), cease for any reason to constitute at least
a majority of the Board; provided, however, that if either the election of
any new director or the nomination for election of any new director by
Company's stockholders was approved by a vote of at least a majority of the
Incumbent Board, such new director shall be considered as a member of the
Incumbent Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 promulgated under the 0000 Xxx) or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board (a "Proxy Contest") including by
reason of any agreement intended to avoid or settle any Election Contest or
Proxy Contest; or
(iii) The consummation of a merger, consolidation or reorganization
involving Company (a "Business Combination"), unless (1) the stockholders
of Company, immediately before the Business Combination, own, directly or
indirectly immediately following the Business Combination, at least fifty
percent (50%) of the combined voting power of the outstanding voting
securities of the corporation resulting from the Business Combination (the
"Surviving Corporation") in substantially the same proportion as their
ownership of the Voting Securities immediately before the Business
Combination, and (2) the individuals who were members of the Incumbent
Board immediately prior to the execution of the agreement providing for the
Business Combination constitute at least a majority of the members of the
Board of Directors of the Surviving Corporation, and (3) no Person (other
than (x) Company or any Controlled Entity, (y) a trustee or other fiduciary
holding securities under one or more employee
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benefit plans or arrangements (or any trust forming a part thereof)
maintained by Company, the Surviving Corporation or any Controlled Entity,
or (z) any Person who, immediately prior to the Business Combination, had
Beneficial Ownership of fifty percent (50%) or more of the then outstanding
Voting Securities) has Beneficial Ownership of fifty percent (50%) or more
of the combined voting power of the Surviving Corporation's then
outstanding voting securities (a Business Combination described in clauses
(1), (2) and (3) of this paragraph shall be referred to as a "Non-Control
Transaction");
(iv) A complete liquidation or dissolution of Company; or
(v) The sale or other disposition of all or substantially all of the
assets of Company to any Person (other than a transfer to a Controlled
Entity).
Notwithstanding the foregoing, if Employee's employment is terminated and
Employee reasonably demonstrates that such termination (x) was at the request of
a third party who has indicated an intention or has taken steps reasonably
calculated to effect a Change in Control and who effectuates a Change in Control
or (y) otherwise occurred in connection with, or in anticipation of, a Change in
Control which actually occurs, then for all purposes hereof, the date of a
Change in Control with respect to Employee shall mean the date immediately prior
to the date of such termination of employment.
A Change in Control shall not be deemed to occur solely because fifty
percent (50%) or more of the then outstanding Voting Securities is Beneficially
Owned by (x) a trustee or other fiduciary holding securities under one or more
employee benefit plans or arrangements (or any trust forming a part thereof)
maintained by Company or any Controlled Entity or (y) any corporation which,
immediately prior to its acquisition of such interest, is owned directly or
indirectly by the stockholders of Company in substantially the same proportion
as their ownership of stock in Company immediately prior to such acquisition.
7. Restrictive Covenants.
(a) Employer Covenants. Company agrees that during the Term, Company shall
disclose to Employee or provide Employee with access to trade secrets or
confidential information of Company or its Subsidiaries; or place Employee in a
position to develop business goodwill on behalf of Company or its Subsidiaries;
or entrust Employee with business opportunities of Company or its Subsidiaries.
(b) Confidential Information; Unauthorized Disclosure. During the period of
his employment hereunder and for any period following the termination of
employment, the Employee shall not, whether during the period of his employment
hereunder or thereafter, without the written consent of the Board or a person
authorized thereby, disclose to any person, other than an employee of Company or
a person to whom disclosure is reasonably necessary or appropriate in connection
with the performance by
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the Employee of his duties as an executive of Company, any confidential
information obtained by him while in the employ of Company with respect to
Company's business, including but not limited to technology, know-how,
processes, maps, geological and geophysical data, other proprietary information
and any information whatsoever of a confidential nature, the disclosure of which
he knows or should know will be damaging to Company; provided, however, that
confidential information shall not include any information known generally to
the public (other than as a result of unauthorized disclosure by the Employee)
or any information which the Employee may be required to disclose by any
applicable law, order, or judicial or administrative proceeding.
(c) Non-Competition. As part of the consideration for the compensation and
benefits to be paid to Employee hereunder; to protect the trade secrets and
confidential information of Company or its Subsidiaries that have been and will
in the future be disclosed or entrusted to Employee, the business good will of
Company or its Subsidiaries that has been and will in the future be developed by
Employee or the business opportunities that have been and will in the future be
disclosed or entrusted to Employee by Company or its Subsidiaries, and as an
additional incentive for Company to enter into this Agreement, Company and
Employee agree to the following competition provisions:
During the Term and for a period of one year thereafter, Employee shall not in
North America, directly or indirectly engage in or become interested financially
in as a principal, employee, partner, shareholder, agent, manager, owner,
advisor, lender, guarantor of any person engaged in any business substantially
identical to the Business (defined below); provided, however, that (a) Employee
may invest in stock, bonds or other securities in any such business (without
participating in such business) if: (i)(A) such stock, bonds or other securities
are listed on any United States securities exchange or are publicly traded in an
over the counter market and (B) its investment does not exceed, in the case of
any capital stock of any one issuer, 5% of the issued and outstanding capital
stock, or in the case of bonds or other securities, 5% of the aggregate
principal amount thereof issued and outstanding, or (ii) such investment is
completely passive and no control or influence over the management or policies
of such business is exercised, or (b) any such business shall be deemed to
exclude ownership by Employee or any affiliated entity of interests in PXP,
Plains All American GP LLC, Plains AAP LP, Plains All American Pipeline, L.P.,
and any of their respective subsidiaries and any board positions with respect to
such entities. The term "Business" shall mean the marketing, gathering,
transporting, terminalling and storing of crude oil and natural gas.
Notwithstanding the foregoing provisions of this Section 7(c), in the event of a
termination of Employee's employment by Company without Cause or in the event of
Employee's resignation for Good Reason, Employee shall have no further
obligations under this Section 7(c).
(d) Non-Solicitation. Employee undertakes toward Company and is obligated,
during the Term and for a period of one year thereafter, not to solicit or hire,
directly or
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indirectly, in any manner whatsoever (except in response to a general
solicitation), in the capacity of employee, consultant or in any other capacity
whatsoever, one or more of the employees, directors or officers or other persons
(hereinafter collectively referred to as "Employees") who at the time of
solicitation or hire, or in the 90-day period prior thereto, are working
full-time or part-time for Company or any of its Subsidiaries and not to
endeavour, directly or indirectly, in any manner whatsoever, to encourage any of
said Employees to leave his or her job with Company or any of its Subsidiaries
and not to endeavour, directly or indirectly, and in any manner whatsoever, to
incite or induce any client of Company or any of its Subsidiaries to terminate,
in whole or in part, its business relations with Company or any of its
Subsidiaries.
(e) Enforcement. It is the desire and intent of the parties that the
provisions of this Section 7 shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of this Section
7 shall be adjudicated to be invalid or unenforceable, such provision shall be
deemed amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable. Such deletion shall apply only with respect to the operation of
such provisions of this Section 7 in the particular jurisdiction in which such
adjudication is made. In addition, if the scope of any restriction contained in
this Section 7 is too broad to permit enforcement thereof to its fullest extent,
then such restriction shall be enforced to the maximum extent permitted by law,
and the Executive hereby consents and agrees that such scope may be judicially
modified in any proceeding brought to enforce such restriction.
(f) Remedies. In the event of a breach or threatened breach by the
Executive of the provisions of this Section 7, Company shall be entitled to an
injunction and such other equitable relief as may be necessary or desirable to
enforce the restrictions contained herein. Nothing herein contained shall be
construed as prohibiting Company from pursuing any other remedies available for
such breach or threatened breach or any other breach of this Agreement.
(g) The parties hereto understand and acknowledge that Employee will serve
in various capacities (including, without limitation, stockholder, employee,
executive officer and director) of PXP. Company acknowledges that no actions by
Employee in any or all of his capacities with PXP shall be a violation of the
provisions of this Section 7.
8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit Employee's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by Company or any of its affiliated
companies and for which Employee may qualify, nor shall anything herein limit or
otherwise adversely affect such rights as Employee may have under any stock
option or other agreements with Company or any of its affiliated companies.
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9. Assignability. The obligations of Employee hereunder are personal and
may not be assigned or delegated by him or transferred in any manner whatsoever,
nor are such obligations subject to involuntary alienation, assignment or
transfer, except by will or the laws of descent and distribution.
10. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered, sent by overnight
courier or by facsimile with confirmation of receipt or on the third business
day after being mailed by United States registered mail, return receipt
requested, postage prepaid, addressed to Company at its principal office address
and facsimile number, directed to the attention of the Board with a copy to the
Secretary of Company, and to Employee at Employee's residence address and
facsimile number on the records of Company or to such other address as either
party may have furnished to the other in writing in accordance herewith except
that notice of change of address shall be effective only upon receipt.
11. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
12. Successors; Binding Agreement.
(a) Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and assets of Company ("Successor") or any corporation which becomes
the ultimate parent corporation of Company or any such Successor ("Ultimate
Parent") to expressly assume and agree in writing satisfactory to the Employee
to perform this Agreement in the same manner and to the same extent that Company
would be required to perform it if no such succession had taken place; provided,
however, that express assumption shall not be required where this agreement is
assumed by operation of law. As used in this Agreement, including, without
limitation, in Section 3, the term "Company" shall include any Successor and
Ultimate Parent which executes and delivers the Agreement as provided for in
this Section 12 or which otherwise becomes bound by all terms and provisions of
this Agreement by operation of law.
(b) After the death or Disability of Employee, this Agreement and all
rights of Employee hereunder shall inure to the benefit of and be enforceable by
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
13. Indemnification. During the Term and for a period of six years
thereafter, Company shall cause Employee to be covered by and named as an
insured under any policy or contract of insurance obtained by it to insure its
directors and officers against personal liability for acts or omissions in
connection with service as an officer or director of Company or service in other
capacities at the request of Company. The coverage provided to Employee pursuant
to
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this Section 13 shall be of a scope and on terms and conditions at least as
favorable as the most favorable coverage provided to any other officer or
director of Company (or any successor). In addition, to the maximum extent
permitted by the by-laws of Company in effect from time to time and applicable
law, during the Term and for a period of six years thereafter, Company shall
indemnify Employee against and hold Employee harmless from any costs,
liabilities, losses and exposures for Employee's services as an employee,
officer and director of Company (or any successor).
14. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by Employee and such officer as may be specifically
authorized by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or in 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. This Agreement is an integration of the parties'
agreement; no agreement 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. Employee represents
and warrants that the execution of this Agreement will not result in any breach
of any prior or existing agreement executed by Employee with respect to any
third party. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Texas.
15. 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.
16. Entire Agreement. This Agreement contains the entire understanding of
the parties in respect of the subject matter and supersedes and replaces in full
all prior written or oral agreements and understandings between the parties with
respect to such subject matters including but not limited to the Original
Agreement.
- SIGNATURE PAGE FOLLOWS -
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
September ___, 2002 effective for all purposes as provided above on the
Effective Date.
PLAINS RESOURCES INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------
Xxxxx X. Xxxxxx
Chairman and Chief Executive Officer
EMPLOYEE
/s/ Xxxx X. Xxxxxxx
--------------------------------------------
Xxxx X. Xxxxxxx
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