EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into
May 2, 2001, by and between Xxxxxxxx X. Xxxxxxxx (the "Executive"), and
Bellwether Exploration Company, a Delaware corporation (the "Company"), and the
effective date of which shall be the date (the "Effective Date") on which the
Effective Time occurs, as such term is defined in the Agreement and Plan of
Merger dated as of January 24, 2001 between Xxxxx Energy Company and the Company
(the "Merger Agreement").
W I T N E S S E T H:
WHEREAS, in connection with the merger by and between Xxxxx Energy
Company and the Company, the Company wishes to employ the Executive as its
President and Chief Financial Officer and to perform services incident to such
position for the Company, and the Executive wishes to be so employed by the
Company, all upon the terms and conditions hereinafter set forth:
NOW THEREFORE, in consideration of the premises and mutual covenants and
obligations herein set forth and for other good and valuable consideration, the
receipt, sufficiency and adequacy of which is hereby acknowledged, accepted and
agreed to, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. EMPLOYMENT AND TERM. The Company hereby employs the Executive to
serve as its President and Chief Financial Officer. The term of this Agreement
(the "Term of this Agreement") shall be effective as of the Effective Date and
shall terminate thirty-six (36) months from the date thereof (the "Termination
Date"), unless earlier terminated by either party hereto in accordance with the
provisions of Section 5 hereof; provided, however, that beginning on the first
anniversary date of the Effective Date and on each anniversary date of the
Effective Date thereafter, the Term of this Agreement shall be automatically
extended one additional year unless either party shall give written notice to
the other at least six months prior to such anniversary of the Effective Date
that the Term of this Agreement shall cease to be so extended. During the Term
of this Agreement, the terms of employment shall be as set forth herein unless
modified by the Executive and the Company in accordance with the provisions of
Section 12 hereof. The Executive hereby agrees to accept such employment and to
perform the services specified herein, all upon the terms and conditions
hereinafter set forth.
2. POSITION AND RESPONSIBILITIES. The Executive shall serve as the
President and Chief Financial Officer of the Company and shall report to, and be
subject to the general direction of the Chief Executive Officer and the Board of
Directors of the Company (the "Board"). During the Term of this Agreement, the
Executive shall be nominated to serve as a member of the Board with respect to
each meeting, or consent in lieu of meeting, of stockholders of the Company at
which directors are to be elected. The Executive shall have other obligations,
duties, authority and power to do all acts and things as are customarily done by
a person holding the same or equivalent position or performing duties similar to
those to be performed by executives in corporations of similar size to the
Company and shall perform such managerial duties and responsibilities for the
Company as may reasonably be assigned to him by the Chief
Executive Officer and the Board. Unless otherwise agreed to by the Executive,
the Executive shall be based at the Company's principal executive offices
located in the greater Houston, Texas metropolitan area.
3. EXTENT OF SERVICE. The Executive shall devote his full business
time and attention to the business of the Company.
4. COMPENSATION.
(a) In consideration of the services to be rendered by the
Executive to the Company, the Company will pay the Executive a salary ("Salary")
of $325,000.00 per year during the Term of this Agreement. Such Salary will be
payable in conformity with the Company's prevailing practice for executives'
compensation as such practice shall be established or modified from time to
time. Salary payments shall be subject to all applicable federal and state
withholding, payroll and other taxes. From time to time during the Term of this
Agreement, the amount of the Executive's Salary may be increased by, and at the
sole discretion of, the Compensation Committee of the Board, which shall review
the Executive's Salary no less regularly than annually.
(b) The Company shall grant the Executive an option to
purchase 300,000 shares of common stock of the Company at an exercise price per
share equal to the closing price of a share of Company common stock on the
Effective Date. Such Option shall vest 33.4% on the Effective Date of this
Agreement and on each of the first and second anniversary dates of the Effective
Date. The term of the Option shall be ten years from the date of grant.
(c) Any annual cash and/or stock bonuses paid to the
Executive shall be based on performance and be at the sole discretion of the
Compensation Committee of the Board; provided, however, in the event such cash
and/or stock bonuses shall be paid to the Executive, it shall be no less than
50% of Executive's then existing current Salary.
(d) During the Term of this Agreement, the Company shall pay
or reimburse the Executive for all reasonable out-of-pocket expenses for travel,
meals, hotel accommodations, entertainment and the like incurred by him in
connection with the business of the Company upon submission by him of an
appropriate statement documenting such expenses as required by the Internal
Revenue Code of 1986, as amended (the "Code").
(e) The Executive shall be entitled to four (4) weeks of
paid vacation during each calendar year during the Term of this Agreement.
Vacation shall accrue commencing on the first day of each calendar year or such
proportionate part of such year computed from the date first above written. The
Company shall pay the Executive for any accrued but unused portion of vacation
and any such unused vacation shall not be carried forward to the next year.
(f) During the Term of this Agreement, the Executive shall
be entitled to participate in and to receive all rights and benefits under any
life, disability, medical and dental, health and accident and profit sharing or
deferred compensation plans and such other plan or plans as may be implemented
by the Company during the Term of this Agreement. The
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Executive shall also be entitled to participate in and to receive all rights and
benefits under any plan or program adopted by the Company for any other or group
of other executive employees of the Company, including without limitation, the
rights and benefits under the directors' and officers' liability insurance
currently in place under the Company's insurance program for the directors and
officers of the Company.
(g) During the Term of this Agreement, the Executive shall
be entitled to receive a car allowance of $500.00 per month and one parking
space shall be provided to the Executive by the Company.
(h) The Company shall pay one club initiation fee of up to
$25,000.00 and the base monthly dues applicable thereto, not to exceed $400.00
per month.
5. TERMINATION.
(a) Termination by Company; Discharge for Cause. The Company
shall be entitled to terminate this Agreement and the Executive's employment
with the Company at any time and for whatever reason; or at any time for "Cause"
(as defined below) by written notice to the Executive. Termination of the
Executive's employment by the Company shall constitute a termination for "Cause"
if the termination is evidenced by a resolution adopted in good faith by
two-thirds of the Board that the Executive:
(i) intentionally and continually failed materially
in the aggregate to perform his reasonably assigned duties with the Company
(other than a failure resulting from the Executive's incapacity due to physical
or mental illness or from the assignment to the Executive of duties that would
constitute Good Reason) which failure continued for a period of at least thirty
(30) days after a written notice of demand for substantial performance, signed
by a duly authorized officer of the Company, has been delivered to the Executive
specifying the manner in which the Executive has failed materially in the
aggregate to perform, or
(ii) intentionally engaged in conduct which is
demonstrably and materially injurious to the Company; provided, however, that no
termination of the Executive's employment shall be for Cause as set forth in
this Section 5(a) until (A) there shall have been delivered to the Executive a
copy of a written notice, signed by a duly authorized officer of the Company,
setting forth that the Executive was guilty of the conduct set forth in this
Section 5(a) and specifying the particulars thereof in reasonable detail, and
(B) the Executive shall have been provided an opportunity to be heard in person
by the Board (with the assistance of the Executive's counsel if the Executive so
desires).
No act, nor failure to act, on the Executive's part, shall be considered
"intentional" unless the Executive has acted, or failed to act, with a lack of
good faith and with a lack of reasonable belief that the Executive's action or
failure to act was in the best interest of the Company. Notwithstanding anything
contained in this Agreement to the contrary, no failure to perform by the
Executive shall constitute Cause for purposes of this Agreement after a "Notice
of Termination" (as defined in Section 9) is given to the Company by Executive.
In the event of the Executive's termination by the Company for Cause hereunder,
the Executive shall be entitled to
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no severance or other termination benefits except for his "Accrued Compensation"
(as defined below) and vested options which must be exercised within ninety (90)
days of Executive's date of termination. A termination of this Agreement by the
Company without Cause pursuant to this Section 5(a) shall entitle the Executive
to the Severance Payment and other benefits specified in Section 5(f) hereof.
For the purposes of this Agreement, "Accrued Compensation" shall mean all
amounts of compensation for services rendered to the Company that have been
earned or accrued through the date of termination but that have not been paid as
of the date of termination including (i) base Salary, (ii) reimbursement for
business expenses incurred by the Executive on behalf of the Company during the
period ending on the termination date, (iii) vacation pay and (iv) bonuses and
incentive compensation; provided, however, that Accrued Compensation shall not
include (A) any amounts described in clause (i) or clause (iv) that have been
deferred pursuant to any salary reduction or deferred compensation elections
made by the Executive or (B) any unvested stock options to purchase securities
of the Company. Notwithstanding anything to the contrary contained in this
Agreement and regardless of the reason of the termination hereof and Executive's
employment hereunder, Company shall remain obligated to pay Executive such
deferred compensation in accordance with the plans relating thereto.
(b) Death. If the Executive dies during the Term of this
Agreement and while in the employ of the Company, this Agreement shall
automatically terminate and the Company shall have no further obligation to the
Executive or his estate except that the Company shall pay to the Executive's
estate that portion of his Accrued Compensation accrued through the date of
death. All such payments to the Executive's estate shall be made in the same
manner and at the same time as the Executive's Salary. All of the Executive's
outstanding stock options to purchase securities of the Company which were not
vested on the date of death shall become immediately vested and shall be
exercisable for the remaining term of the applicable option or a period of two
(2) years from such date, whichever is the lesser, notwithstanding any
provisions to the contrary in the option agreement relating to such options.
(c) Disability.
(i) If during the Term of this Agreement, Executive
shall have been absent from the full-time performance of Executive's duties with
the Company for six consecutive months as a result of Executive's incapacity due
to physical or mental illness, as determined by a physician selected by the
Company and reasonably acceptable to the Executive, and within thirty (30) days
after written Notice of Termination is given by the Company Executive shall not
have returned to the full-time performance of Executive's duties, Executive's
employment may be terminated by the Company for "Disability", provided Executive
is entitled to and is receiving benefits under an insured long term disability
plan of the Company, and Executive is paid his Accrued Compensation. Thereafter,
Executive shall not be entitled to further compensation pursuant to this
Agreement. All of the Executive's outstanding stock options to purchase
securities of the Company which were not vested on the date of termination for
Disability shall become immediately vested and shall be exercisable for the
remaining term of the applicable option or a period of two (2) years from such
date, whichever is the lesser, notwithstanding any provisions to the contrary
in the option agreement relating to such options;
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(ii) If Executive fails during any period during the
Term of this Agreement to perform Executive's full-time duties with the Company
as a result of incapacity due to physical or mental illness, as determined by
Executive's physician, Executive shall continue to receive his Salary, less any
amount payable to Executive under a Company disability plan, and all other
compensation and benefits during such period until this Agreement is terminated.
(d) Termination for Good Reason. The Executive shall be
entitled to terminate this Agreement and his employment with the Company under
this Agreement at any time upon thirty (30) days written notice to the Company
for "Good Reason" (as defined below). The Executive's termination of employment
shall be for "Good Reason" if such termination is a result of any of the
following events:
(i) The Executive is assigned any responsibilities
or duties materially inconsistent with his position, duties, responsibilities
and status with the Company as in effect at the Effective Date or as may be
assigned to the Executive pursuant to Section 2 hereof; the Executive's title or
offices as in effect at the Effective Date or as the Executive may be appointed
or elected to in accordance with Section 2 are changed, including, but not
limited to, the failure to elect Executive to the Board or the removal of
Executive from the Board during the Term of this Agreement; the Executive is
required to report to or be directed by any person other than the Chief
Executive Officer and the Board; or the Executive is not assigned or offered a
position, duties or responsibilities with a successor of the Company;
(ii) there is a reduction in the Salary (as such
Salary shall have been increased from time to time) payable to the Executive
pursuant to Section 4(a) hereof;
(iii) failure by the Company or any successor to the
Company or its assets to continue to provide to the Executive any material
benefit, bonus, profit sharing, incentive, remuneration or compensation plan,
stock ownership or purchase plan, stock option plan, life insurance, disability
plan, pension plan or retirement plan in which the Executive was entitled to
participate in as of the Effective Date of this Agreement or subsequent thereto,
or the taking by the Company of any action that materially and adversely affects
the Executive's participation in or materially reduces his rights or benefits
under or pursuant to any such plan or the failure by the Company to increase or
improve such rights or benefits on a basis consistent with practices in effect
prior to the date of this Agreement or with practices implemented and subsequent
to the date of this Agreement with respect to the executive employees of the
Company generally, whichever is more favorable to the Executive, but excluding
such action that is required by law;
(iv) without Executive's consent, the Company
requires the Executive to relocate to any city or community other than the
Houston, Texas metropolitan area, except for required travel on the Company's
business to an extent substantially consistent with the Executive's business
obligations this Agreement;
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(v) there is any material breach by the Company of
any provision of this Agreement; or
(vi) any attempted termination of Executive's
employment by the Company which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 9 (and, if applicable,
Section 5(a)); and for purposes hereof, no such attempted termination shall be
effective.
Upon the Executive's termination of this Agreement for Good Reason, the
Executive shall be entitled to the Severance Payment and other benefits
specified in Section 5(f) hereof.
(e) Voluntary Termination. Notwithstanding anything to the
contrary herein, the Executive shall be entitled to voluntarily terminate this
Agreement and his employment with the Company at his discretion upon thirty (30)
days written notice to such effect. In such event, the Executive shall not be
entitled to any further compensation other than his Accrued Compensation. At the
Company's option, the Company may pay to the Executive the Salary and benefits
that the Executive would have received during such thirty (30) day period in
lieu of requiring the Executive to remain in the employment of the Company for
such thirty (30) day period.
(f) Termination Benefits Upon Involuntary Termination or
Termination for Good Reason. In the event that the Company terminates this
Agreement and the Executive's employment with the Company for any reason other
than for Cause (as defined in Section 5(a) hereof) or the death or Disability
(as defined in Section 5(c) hereof) of the Executive, or the Executive
terminates this Agreement and his employment with the Company for Good Reason
(as set forth in Section 5(d) hereof), then the Company shall pay the Executive,
in addition to his Accrued Compensation, an amount equal to (x) three (3) times
the Executive's highest annual Salary in existence at any time during the last
two (2) years of employment immediately preceding the date of termination, plus
(y) three (3) times the highest annual bonus paid or payable to the Executive
while employed by the Company or any predecessor thereto (including, but not
limited to, Xxxxx Energy Company), minus applicable withholding and authorized
salary reductions, if any (the "Severance Payment"). The amounts required to be
paid to the Executive pursuant to this Section 5(f) shall be within thirty (30)
days of the Termination Date. In addition, following such termination, the
Executive shall be entitled to the following benefits (collectively, the
"Additional Benefits");
(i) all then outstanding Company stock-based awards
of Executive, whether under this Agreement, a Company stock plan, stock option
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 the Executive shall have the right
to exercise all of Executive's options to purchase securities of the Company for
the remaining term of the applicable option or a period of two (2) years from
such date, whichever is the lesser. Notwithstanding anything in this Agreement
to the contrary, if any payment to Executive in respect of a Company stock-based
award would give rise to a short-swing profit liability to Executive under
Section 16(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), then
both the payment and the entitlement to payment thereof shall
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automatically be deferred until the earliest date at which the payment of such
benefit would not result in a short-swing profit liability to Executive;
(ii) for the twenty-four (24) month period after such
date of termination the Company, at its sole expense, shall continue to provide
or arrange to provide Executive (and Executive's dependents) with health
insurance benefits no less favorable than the health plan benefits provided by
the Company (or any successor) during such twenty-four (24) month period to any
senior executive officer of the Company; provided, further, to the extent the
coverage or benefits received are taxable to Executive, the Company shall make
Executive "whole" on a net after tax basis.
The parties agree that, because there can be no exact measure of the damages
which would occur to the Executive as a result of termination of employment,
such payments contemplated in this Section 5(f) shall be deemed to constitute
liquidated damages and not a penalty and the Company agrees that the Executive
shall not be required to mitigate his damages. The termination compensation in
this Section 5(f) shall be paid only if the Executive and the Company each
executes a termination agreement releasing all legally waivable claims of each
other arising from the Executive's employment; provided, however, such waiver
shall not include the waiver of the Company's obligations to pay Executive
deferred compensation in accordance with the plans relating thereto.
(g) Termination and Benefits upon a Change in Control. In
the event of a Change in Control, as defined in this Section 5(g), in lieu of
the Severance Payment contained in Section 5(f) hereof, if the Executive is
terminated without Cause or the Executive terminates his employment for Good
Reason within the twelve (12) month period immediately following a Change in
Control, the Company shall pay to the Executive, in addition to his Accrued
Compensation, a lump sum amount equal to: (x) three (3) times the Executive's
highest annual Salary in existence at any time during the last two (2) years
immediately preceding the date of termination, plus (y) three (3) times the
highest annual bonus paid or payable to the Executive while employed by the
Company or any predecessor thereto (including, but not limited to, Xxxxx Energy
Company), minus applicable withholding and authorized salary reductions, if any
( the "Payment"). The amounts required to be paid to the Executive pursuant to
this Section 5(g) shall be paid immediately upon the date of termination. The
Executive shall also be entitled to receive the Additional Benefits listed in
Section 5(f)(i) and (ii). "Change in Control" means or shall be deemed to have
occurred if and when: (i) any "person" or "group" (as such terms are used in
Section 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, or more than 35% of the total voting power of the outstanding voting
stock of the Company; (ii) the Company shall consolidate with or merge into any
other person or any other person shall consolidate with or merge into the
Company, other than any consolidation or merger where persons who are beneficial
owners of the Company's stock having the right to elect directors in ordinary
circumstances immediately prior thereto become the beneficial owners or shares
of stock of the surviving corporation entitling such persons to exercise more
than 50% of the aggregate voting power of all classes of such corporation's
stock having the right to elect directors in ordinary circumstances; (iii)
during any two (2) year period individuals who at the beginning of such period
constituted the Board, together with any new directors whose election by such
Board or whose nomination by the
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Board of Directors for election by the stockholders of the Company was approved
by a majority of the directors at the beginning of such period or whose election
or nomination for election was previously approved, cease for any reason to
constitute a majority of the Board then in office; (iv) the Company sells,
assigns, conveys, transfers, leases or otherwise disposes of 51% or more (by
book value) of the Company assets (either in one transaction or a series of
related transactions); (v) the liquidation of dissolution of the Company; or
(vi) the Board adopts a resolution to the effect that, for purposes of this
Agreement, a Change in Control has occurred.
(h) Survival. Notwithstanding the termination of this
Agreement under this Section 5, the provisions of Sections 7, 8, 10, 14, 15 and
16 of this Agreement, and all other provisions hereof which by their terms are
to be performed following the termination hereof shall survive such termination
and be continuing obligations.
(i) Mitigation. Executive shall not be required to mitigate
the amount of any payment or benefit provided for in this Agreement by seeking
other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Agreement be reduced by any compensation or benefit earned
by Executive as a result of employment by another employer, self-employment
earnings, by retirement benefits, by offset against any amount claimed to be
owing by Executive to the Company, or otherwise.
(j) Excise Taxes. If the excise tax relating to "parachute
payments" under Section 280G of the Code applies to any payment made to
Executive pursuant to the terms of this Agreement, then the Company shall pay
the Executive an additional payment in an amount such that, after payment of
federal income taxes (but not the excise tax) on such additional payment, the
Executive retains an amount equal to the excise tax originally imposed on the
payment.
6. CONSENT AND WAIVER BY THIRD PARTIES. The Executive hereby
represents and warrants that he has obtained all necessary waivers and/or
consent from third parties as to enable him to accept employment with the
Company on the terms and conditions set forth herein and to executed and perform
this Agreement without being in conflict with any other agreement, obligations
or understanding with any such third party.
7. CONFIDENTIAL INFORMATION. The Executive acknowledges that in the
course of his employment with the Company, he has received and will receive
access to confidential information of a special and unique value concerning the
Company and its business, including, without limitation, trade secrets,
know-how, lists of customers, employee records, books and records relating to
operations, costs or providing service and equipment, operating and maintenance
costs, pricing criteria and other confidential information and knowledge
concerning the business of the Company and its affiliates (hereinafter
collectively referred to as "information") which the Company desires to protect.
The Executive acknowledges that such information is confidential and the
protection of such confidential information against unauthorized use or
disclosure is of critical importance to the Company. The Executive agrees that
he will not reveal such information to any one outside the Company. The
Executive further agrees that during the Term of this Agreement and thereafter
he will not use or disclose such information. Upon termination of his employment
hereunder, the Executive shall surrender to the
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Company all papers, documents, writings and other property produced by him or
coming into his possession by or through his employment hereunder and relating
to the information referred to in this Section 7, and the Executive agrees that
all such materials will at all times remain the property of the Company. The
obligation of confidentiality, non-use and non-disclosure of know-how set forth
in this Section 7 shall not extend to know-how (i) which was in the public
domain prior to disclosure by the disclosing party, (ii) which comes into the
public domain other than through a breach of this Agreement, (iii) which is
disclosed to the Executive after the termination of this Agreement by a third
party having legitimate possession thereof and the unrestricted right to make
such disclosure, or (iv) which is necessarily disclosed in the course of the
Executive's performance of his duties to the Company as contemplated in this
Agreement. The agreements in this Section 7 shall survive the termination of
this Agreement.
8. NO SOLICITATION. To support the agreements contained in Section
7 hereof, from the Effective Date and for a period of twelve (12) months after
the Executive's employment with the Company is terminated voluntarily (including
retirement) or for Cause, the Executive shall not, either directly or
indirectly, through any person, firm, association or corporation with which the
Executive is now or may hereafter become associated, (i) hire, employ, solicit
or engage any then current employee of the Company or its affiliates, or (ii)
use in any competition, solicitation or marketing effort any information as to
which the Executive has a duty of confidential treatment under Section 7 above,
unless agreed to by the Company.
9. NOTICES. All notices, requests, consents and other
communications under this Agreement shall be in writing and shall be deemed to
have been delivered on the date personally delivered or three days from the date
mailed, postage prepaid, by certified mail, return receipt requested, or by
facsimile if addressed to the respective parties as follows:
If to the Executive: Xxxxxxxx X. Xxxxxxxx
000 Xxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
If to the Company: Bellwether Exploration Company
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxxxx Manner, Chief Executive Officer
Any termination pursuant to the terms of this Agreement shall be communicated by
written Notice of Termination to the other party hereto. For purposes hereof, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision herein relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated.
Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto.
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10. SUCCESSORS; BINDING AGREEMENT.
(a) The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidated or otherwise) to all or
substantially all of the business and assets of the Company ("Successor") or any
corporation which becomes the ultimate parent corporation of the Company or any
such Successor ("Ultimate Parent") to expressly assume and agree in writing
reasonably satisfactory to the Executive 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
written agreement prior to the effectiveness of any such succession or creation
of the parent corporation relationship shall be a breach of this Agreement and
shall entitle Executive to Accrued Compensation, Additional Benefits and
benefits from the Company in the same amount and on the same terms as he would
be entitled to hereunder if he terminated his employment for Good Reason,
provided, however, the date on which any such succession (or creation of the
parent corporation relationship) becomes effective shall be deemed the date of
termination for the purposes of implementing the foregoing. As used in this
Agreement, including, without limitation, in Section 2, the term "Company" shall
include any Successor and Ultimate Parent which executes and delivers the
Agreement as provided for in this Section 10 or which otherwise becomes bound by
all terms and provisions of this Agreement by operation of law.
(b) This Agreement and all rights of Executive hereunder
shall inure to the benefit of and be enforceable by Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
11. SPECIFIC PERFORMANCE. The Executive acknowledges that a remedy
at law for any breach or attempted breach of Section 7 of this Agreement will be
inadequate, agrees that the Company shall be entitled to specific performance
and injunctive and other equitable relief in case of any such a breach or
attempted breach, and further agrees to waive any requirement of the securing or
posting of any bond in connection with the obtaining of any such injunctive or
any other equitable relief.
12. WAIVERS AND MODIFICATIONS. This Agreement may be modified, and
the rights and remedies of any provision hereof may be waived, only in
accordance with this Section 12. No modifications or waiver by the Company shall
be effective without the consent of at least a majority of the Compensation
Committee of the Board then in office at the time of such modification or
waiver. No waiver by either party of any breach by the other or any provision
hereof shall be deemed to be a waiver of any later or other breach thereof or as
a waiver of any other provision of this Agreement. This Agreement sets forth all
the terms of the understandings between the parties with reference to the
subject matter set forth herein and may be amended only by an instrument in
writing signed by both parties.
13. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Texas.
14. SEVERABILITY. In case one or more of the provisions contained in
this Agreement for any reason shall be held to be invalid, illegal or
unenforceable in any respect,
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such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
15. ARBITRATION. In the event that a dispute or controversy should
arise between the Executive and the Company as to the meaning or application of
any provision, term or condition of this Agreement, such dispute or controversy
shall be settled by binding arbitration in Houston, Texas and for said purpose
each of the parties hereto hereby expressly consents to such arbitration in such
place. Such arbitration shall be conducted in accordance with the existing rules
and regulations of the American Arbitration Association governing commercial
transactions. The expense of the arbitrator shall be borne by the Company.
16. INDEMNIFICATION. During the Term of this Agreement and for a
period of six years thereafter, the Company shall cause Executive 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 the Company or
service in other capacities at the request of the Company. The coverage provided
to Executive pursuant to this section 16 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 the Company (or any successor). In addition, to the
maximum extent permitted under applicable, law, during the Term of this
Agreement and for a period of six years thereafter, the Company shall indemnify
Executive against and hold Executive harmless from any costs, liabilities,
losses and exposures for Executive's services as an employee, officer and
director of the Company (or any successor), except in such circumstances where
liabilities are the direct result of Executive's gross negligence or willful
misconduct.
17. Executive waives any right to recover punitive, special,
exemplary and consequential damages arising in connection with or with respect
to any term or provision contained in this Agreement.
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In WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date and year first above written.
COMPANY:
BELLWETHER EXPLORATION COMPANY
By: /s/ Xxxxxxx X. Manner
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Xxxxxxx X. Manner,
Chief Executive Officer
EXECUTIVE:
By: /s/ Xxxxxxxx X. Xxxxxxxx
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Xxxxxxxx X. Xxxxxxxx
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