A. The parties hereto intend that this Agreement shall become effective upon the Effective
B. The Company currently employs Executive in an executive capacity with the Company.
C. The Company desires to continue its employment of Executive in an executive capacity with
the Company, and Executive desires to continue his employment with the Company pursuant to the
terms set forth in this Agreement.
D. The Company and Executive desire to set forth in writing the terms and conditions of their
agreement and understandings with respect to the continued employment of Executive.
E. This Agreement is a condition of Executives continued employment and is ancillary thereto.
NOW, THEREFORE, in consideration of the mutual premises and covenants set forth in this
Agreement and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
(a) Annual Base Salary shall mean Executives gross annual salary before any
deductions, exclusions or any deferrals or contributions under any Company plan or program of the
Company, but excluding bonuses, incentive compensation, employee benefits or any other non-salary
form of compensation.
(b) Cause shall mean (i) Executives commission of a dishonest or fraudulent act in
connection with Executives employment, or the misappropriation of Company property; (ii)
Executives conviction of, or plea of nolo contendere to, a felony or crime involving dishonesty;
(iii) Executives inattention to duties, unsatisfactory performance, or failure to perform
Executive duties hereunder, provided in each case the Company gives Executive written notice and
thirty (30) days to correct Executives performance to the Companys satisfaction; (iv) a
substantial failure to comply with the Companys policies; (v) a material and willful breach of
Executives fiduciary duties in any material respect, provided in each case the Company gives
Executive written notice and thirty (30) days to correct; (vi) Executives failure to comply in any
material respect with any legal written directive of the Board of Directors of the Company (the
Board); or (vii) any act or omission of Executive which is of substantial detriment to
the Company because of Executives intentional failure to
comply with any statute, rule or regulation, except any act or omission believed by Executive
in good faith to have been in or not opposed to the best interest of the Company (without intent of
Executive to gain, directly or indirectly, a profit to which Executive was not legally entitled).
Any determination of whether an Executive should be terminated for Cause pursuant to this Agreement
shall be made in the sole, good faith discretion of the Board of Directors, and shall be binding
upon all parties affected thereby.
(c) Disability shall mean a physical or mental condition which, in the judgment of
the Board (excluding Executive, if applicable) prevents Executive from performing the essential
functions of Executives position with the Company, even with reasonable accommodation, for a
period of not less than ninety (90) consecutive days.
(d) Good Reason shall mean (i) failure to elect or reelect or otherwise to maintain
Executive in the office or the position, or a substantially equivalent office or position, of or
with the Company (or any successor thereto by operation of law or otherwise), as the case may be,
which Executive holds at the Effective Date; (ii) (A) a significant adverse change in the nature or
scope of the authorities, powers, functions, responsibilities or duties attached to the position
with the Company which Executive holds at the Effective Date, or (B) a reduction in Executives
Annual Base Salary set forth in Section 2(b) received from the Company and the annual bonus
opportunity available to Executive for the year in which the termination occurs under the Companys
then existing bonus program applicable to Executive, any of which is not remedied by the Company
within thirty (30) calendar days after receipt by the Company of written notice from Executive of
such change, reduction or termination, as the case may be; (iii) the Company relocates its
principal executive offices (if such offices are the principal location of Executives work), or
requires Executive to have his or her principal location of work changed, to any location that, in
either case, is in excess of twenty-five (25) miles from the location thereof at the Effective
Date; or (iv) without limiting the generality or effect of the foregoing, any material breach of
this Agreement by the Company or any successor thereto which is not remedied by the Company within
thirty (30) calendar days after receipt by the Company of written notice from Executive of such
(e) Subsidiary shall mean an entity in which the Company directly or indirectly
beneficially owns 50% or more of the outstanding voting stock or other voting equity thereof.
(f) Voluntary Resignation shall mean any termination of Executives employment with
the Company upon such Executives own initiative, including Executives retirement other than
termination of Executives employment for Good Reason which shall not be deemed a Voluntary
Resignation for purposes of this Agreement.
COMPENSATION AND BENEFITS
(a) Duties. Executives title is Executive Vice President, Exploration and Production
and Executive will report directly to the President and Chief Executive Officer. Executive shall
faithfully, diligently and to the best of his ability perform such duties as are customarily
performed by such officers of companies of similar size and in the same industry as
the Company, together with such other duties as are mutually agreed by Executive and the
President and Chief Executive Officer of the Company from time to time (which duties shall be
consistent with his titles and positions as set forth above), and shall devote substantially all of
his business time to the management of the business of the Company. Executive shall perform
Executives duties principally at the principal place of business of the Company located in Dallas,
or such other location as is consented to by Executive, with such travel to such other
locations from time to time as the President and Chief Executive Officer may prescribe. Without
limiting the foregoing, such duties shall, at the request of the Board, include serving as an
officer or director of any subsidiary of the Company, without compensation. For services as an
officer and employee of the Company, Executive shall be entitled to the full protection of the
applicable indemnification provisions of the Certificate of Incorporation and Bylaws of the Company
to the fullest extent permitted by law, which indemnification shall remain effective after
termination of the Agreement with respect to Executives actions and inaction during the term
(b) Annual Base Salary. Executives Annual Base Salary is $280,000. This amount will
be subject to applicable deductions and withholding. From time to time, but no less than annually,
the Annual Base Salary shall be subject to review by the Compensation Committee, recommendation
made to the Board and final determination by the Board, and any adjustment shall be subject to the
approval of Executive. In the event the Annual Base Salary is adjusted, such adjusted Annual Base
Salary shall be payable to Executive under this Agreement and in accordance with the pay practices
of the Company for that fiscal year and each subsequent fiscal year (unless adjusted in the future
pursuant to this paragraph), provided that no downward adjustment shall be made without Executives
(c) Vacation. Executive shall be entitled to 20 days of paid time off (paid time off
includes both vacation days and sick days) each year of this Agreement to be taken in accordance
with the Companys policy then in effect. Such vacations shall be taken at such times as are
consistent with the reasonable business needs of the Company.
(d) Bonus Plan. Executive shall be a participant in the Companys annual bonus plan
subject to the attainment of performance objectives and other provisions of such plan in effect
each year of this Agreement.
(e) Benefit Plans. During his employment pursuant to this Agreement, subject to
eligibility requirements and applicable employee contributions, and except as otherwise expressly
provided in this Agreement, Executive shall be entitled to participate in the Company sponsored
employee benefit plans, pension plans, 401(k) plans, medical benefit plans, group life insurance
plans, hospitalization plans, or other employee welfare plans that the Company may adopt for
employees generally from time to time during Executives employment pursuant to this Agreement, and
as such plans may be modified, amended, terminated, or replaced from time to time. In addition,
Executive shall receive such other compensation as the Board of the Company (or a committee thereof
designated by the Board) may from time to time determine to pay Executive whether in the form of
bonuses, stock options, incentive compensation or otherwise. Notwithstanding anything to the
contrary contained herein, the Company retains the right to amend, modify or terminate any of its
employee benefit plans, policies or programs at any time.
(f) Fringe Benefits. During his employment pursuant to this Agreement, and except as
otherwise provided in this Agreement, Executive shall be entitled to participate on substantially
the same terms and conditions in the Company sponsored fringe benefits generally provided to
similarly situated personnel, such as sick pay.
(g) Reimbursement of Expenses. The Company shall reimburse Executive for all
reasonable out-of-pocket expenses incurred by Executive in the course of his duties, upon
presentation of appropriate documentation of such costs as and when required by and to the
satisfaction of the Company, on a basis that is consistent with the Companys past practices.
(h) Withholding and Payroll Taxes. The payment of any Annual Base Salary and bonus or
other amounts to Executive as provided hereunder or otherwise shall be subject to applicable
withholding and payroll taxes and such other deductions as may be required by law or under any of
the Companys policies or plans from time to time in effect.
. Without limiting the rights of Executive at law or in equity, if the
Company fails to make any payment or provide any benefit required to be made or provided under this
on a timely basis, the Company will pay interest on the amount or value thereof
at an annualized rate of interest equal to the so-called composite U.S. prime rate as quoted from
time to time during the relevant period in the Money Rate Section of the edition of The Wall Street
delivered in Dallas, Texas
, plus 2%. Such interest will be payable with the applicable
payment or benefit. Any change in such prime rate will be effective on and as of the date of such
(b) Continued Benefits. A termination of Executives employment with the Company will
not affect the rights that Executive may have pursuant to any agreement, policy, plan, program or
arrangement of the Company or any of their Subsidiaries providing employee benefits, which rights
shall be governed by the terms thereof, except if Executive is entitled to and is receiving the
severance benefits contemplated by this Agreement, Executive shall not be entitled to also receive
severance compensation under any other severance plan or policy of the Company.
(c) Resignation from Positions. Immediately upon Executives termination of
employment with the Company for any reason, Executive will resign as an officer and employee of the
Company and from all other positions with the Company and its Subsidiaries. The Companys
obligations to Executive under this Section 3 are conditioned on Executive furnishing such
resignations and on Executive executing the release in the form attached hereto as Exhibit
(d) Termination of Employment. Either party may terminate Executives employment with
the Company at any time, without notice and for any reason; provided, however:
(i) Termination for Cause or Due to Voluntary Resignation or Disability. If during the
Employment Term, the Company terminates Executives employment
with the Company for Cause or Executive terminates his employment due to his Voluntary Resignation
or Disability, the Company shall have no further obligation to Executive under this Agreement
except to pay his Annual Base Salary and earned but unused vacation through his date of
termination, on or before the next regularly scheduled pay-date after termination and to perform
such other obligations as imposed by law.
(ii) Termination without Cause or for Good Reason. If during the Employment Term, the Company
terminates Executives employment without Cause or Executive terminates his employment with the
Company for Good Reason, then the Company, provided that Executive executes and timely provides a
release and covenant not to sue in a form reasonably satisfactory to the Company (in the form
attached hereto as Exhibit A), shall pay to Executive the following:
A. An amount equal to Executives Annual Base Salary earned through the date of termination of
employment with the Company and a lump sum payment for any accrued and earned, but unused, vacation
shall be paid to Executive on or before the next regularly scheduled pay-date after the effective
date of the termination.
B. Severance payments equal to, in the aggregate, two (2) years of Executives Annual Base
Salary then in effect (reduced by any required withholding) in twenty-four (24) equal installments
on the first pay day of each month following Executives termination (each such date being referred
to herein as a Severance Pay Date), beginning on the first pay day of each month
following the month in which such termination occurs. If Executive is eligible to receive
severance payments under this Section 3(d)(ii), then such severance payments shall continue
to be paid to Executive regardless of the fact that the Agreement terminates following commencement
of such payments; provided, however, that in the event of Executives death prior to the receipt of
all payments, any remaining payments shall be made to Executives estate. Each payment made on a
Severance Pay Date shall be treated as a separate payment for purposes of Section 409A of the
Internal Revenue Code of 1986, as amended (the Code).
C. If, on the date of termination, the Company sponsors a medical plan for the benefit of the
eligible employees and if Executive is eligible for and elects continuation coverage under such
medical plan, then the Company agrees to pay the same portion of Executives individual premiums
for such coverage as the portion of said premiums that the Company paid for Executive immediately
prior to his termination of employment, until the earlier of: (i) the last day of the twenty-fourth
(24th) month following Executives termination of employment or (ii) the date
Executives coverage under the Companys United States medical plan terminates for any reason.
Thereafter, if Executive is eligible and wishes to continue his continuation coverage and the
maximum applicable continuation coverage period has not expired, Executive may continue such
coverage, provided, however, Executive shall be solely responsible for payment of the entire
premium for such coverage. All benefits (other than those with respect to which continuation is
required by law) under this Section 3(d)(ii)C. shall cease no later than the death of both
Executive. To the extent any benefits provided under this Section 3(d)(ii)C. are otherwise
taxable to Executive, such benefits shall, for purposes of Section 409A of the Code, be provided as
separate monthly in-kind payments of those benefits, and to the extent those benefits are subject
to and not otherwise exempt from Section 409A of the Code, the
provision of the in-kind benefits during one calendar year shall not affect the in-kind benefits to
be provided in any other calendar year.
D. The payments provided in this Section 3(d)(ii) shall represent the sole remedy for
any claim Executive may have arising out of termination of this Agreement by the Company without
Cause or by Executive for Good Reason.
(iii) Death. Executives employment under this Agreement shall terminate immediately upon the
death of Executive. If during the Employment Term such termination occurs, Executives designated
beneficiary, or his personal representative, shall receive the payments and benefits described
below from the Company:
A. Executives unpaid Annual Base Salary earned through the date of termination and a lump sum
payment for any earned but unused vacation shall be paid on or before the next regularly scheduled
pay-date after termination.
B. An amount equal to the pro-rata portion of any bonus that would have been payable to
Executive under the Companys annual bonus plan then in effect, as provided in Section
2(d), if Executive had remained employed for the full year, shall be paid within the time
period prescribed by such plan.
C. Benefits will continue for Executives spouse and eligible dependents in accordance with
the Companys policy, the terms of the applicable plans, and as required by law.
SIX MONTH HOLD BACK; TAX DISCLOSURE
(a) To the extent (i) any payments to which Executive becomes entitled under this Agreement,
or any agreement or plan referenced herein, in connection with Executives termination of
employment with the Company constitute deferred compensation subject to Section 409A of the Code,
and (ii) Executive is deemed at the time of such termination of employment to be a specified
employee under Section 409A of the Code, then such payment or payments shall not be made or
commence until the earliest of: (x) the expiration of the six (6) month period measured from the
date of Executives separation from service (as such term is defined in the Final Treasury
Regulations under Section 409A of the Code and any other guidance issued under Section 409A of the
Code) with the Company, and (y) the date of Executives death following such separation from
service. During any period that payment or payments to Executive are deferred pursuant to the
foregoing, Executive shall be entitled to interest on the deferred payment or payments at a per
annum rate equal to the highest rate of interest applicable to six (6) month money market accounts
offered by the following institutions: Citibank N.A., Wells Fargo Bank, N.A., or Bank of America,
on the date of such separation from service. Upon the expiration of the applicable deferral
period, any payments which would have otherwise been made during that period (whether in a single
sum or in installments) in the absence of this Section 4 (together with accrued interest
thereon) shall be paid to Executive or Executives beneficiary in one lump sum.
(b) Executive has reviewed with Executives own tax advisors the tax consequences of this
Agreement and the transactions contemplated hereby. Executive is relying solely on his or her tax
advisors and not on any statements or representations of the Company or any of their agents and
understands that Executive (and not the Company) shall be responsible for Executives own tax
liability that may arise as a result of this Agreement or the transactions contemplated hereby,
except as otherwise specifically provided in this Agreement.
(c) The Company shall include the provisions of this Agreement in its own review of the
applicability of Section 409A of the Code. If, upon review, amendment of this Agreement could
result in Executive not being subject to payment of interest and tax penalty under Section 409A,
the Company will amend this Agreement in order to avoid such interest and tax penalty provided that
the Company determines, in its reasonable discretion, that such amendment can be implemented
without additional cost to the Company, other than immaterial administrative costs.
VESTING OF STOCK OPTIONS
Vesting of any long-term incentive grants and awards resulting from employment terminations,
regardless of the reason for or date of such termination, shall be governed by the Toreador
2005 Long-Term Incentive Plan (or any successor plan thereto) and any grant
or award agreements and shall not be affected by the terms of this Agreement.
The parties hereto acknowledge that Executives employment with the Company is and shall
continue to be at-will, as defined under applicable law. If Executives employment terminates for
any reason, Executive shall not be entitled to any payments or benefits, other than as provided by
this Agreement or as may otherwise be available in accordance with the terms of the Companys
employee plans and written policies in effect at the time of termination.
EXPIRATION OF AGREEMENT
Unless earlier terminated as provided in this Agreement or unless extended as provided in this
Section 7, this Agreement shall terminate one (1) year following the Effective Date (the
Employment Term); provided, however, that except as otherwise set forth in this
Section 7, the parties respective rights and obligations under Sections 3(b), 3(c),
3(d), 7, 9, 10, 11, and 12, as well as any other unpaid obligation (whether such payment is to
be made in cash or securities) of the Company hereunder (including but not limited to sections or
subsections of this Agreement not specifically listed above), will survive any termination or
expiration of this Agreement or the termination of Executives employment for any reason
Upon the expiration of the Employment Term, Executive and the Company may, but shall be under
no obligation to, negotiate terms and conditions of any subsequent term of employment. In the
event, however, that Executive remains in the employ of the Company after the Employment Term
expires, then (i) the terms of this Agreement shall not be applicable, (ii)
Executive shall be an employee-at-will subject to the benefits, programs, and policies of the
Company then in effect, and (iii) either party may terminate the employment relationship at any
time with or without Cause.
NO OBLIGATION TO MITIGATE
(a) Executive is under no obligation to mitigate damages in the amount of any payment provided
herein by seeking other employment or otherwise.
(b) The amount of any payment provided herein shall not be reduced, offset or subject to
recovery by the Company by reason of any compensation earned by Executive as the result of
Executives employment by another employer after the termination date of Executives employment
with the Company. Notwithstanding the foregoing, this Section 8 shall not limit the
Companys ability to enforce any non-competition agreement with Executive.
BREACH OF AGREEMENT
The prevailing party in any legal proceeding based upon this Agreement or the Release
Agreement shall be entitled to reasonable attorneys fees and court costs, in addition to any other
recoveries allowed by law.
(a) Without limiting the rights of Executive as provided in Section 3 hereof, the
Company shall require any successor to or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) of all or substantially all of the business and/or assets of the
Company, by agreement in form and substance reasonably satisfactory to Executive, to expressly and
unconditionally assume and agree to perform this Agreement.
(b) This Agreement shall inure to the benefit of and be enforceable by Executives personal
and legal representatives, executors, administrators, successors, heirs, distributees, devises and
legatees. If Executive dies while any amounts are payable hereunder, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this Agreement to
Executives devisee, legatee, or other designee or, if there is no such designee, to Executives
(c) This Agreement is personal to Executive and without the prior written consent of the Board
shall not be assignable by Executive except by will or the laws of descent and distribution.
Any notices or other communications required or permitted under, or otherwise in connection
with, this Agreement shall be in writing and shall be deemed to have been duly given
when delivered in person or upon confirmation of receipt when transmitted by facsimile
transmission (but only if followed by transmittal by national overnight courier or hand delivery on
the next Business Day) or upon receipt after dispatch by registered or certified mail, postage
prepaid, or on the next Business Day if transmitted by national overnight courier, in each case
addressed as follows:
(i) If to the Company, to:
Toreador Resources Corporation
13760 Noel Road, Suite 1100
Dallas, TX 75240
Telephone No.: (214) 559-3933
Facsimile No.: (214) 559-3945
with a mandated copy to:
Haynes and Boone
901 Main Street, Suite 1300
Attention: Janice V. Sharry
Telephone No.: (214) 651-5000
Facsimile No.: (214) 200-0676
(ii) if to Executive, to the address set forth for Executive on the signature page hereof.
(a) No provisions of this Agreement may be modified, waived or discharged except in a writing
signed and dated by Executive and the Company. No waiver by any party at any time of any breach by
another party of, or compliance with, any condition or provision of this Agreement shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or any prior or subsequent
(b) This Agreement reflects the entire agreement of the parties with respect to its subject
matter, and supersedes all previous agreements, promises, and representations, including, but not
limited to, any terms, conditions or agreements set forth in the Employment Agreement
between the Company and Executive dated as of March 14, 2007. 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.
(c) This Agreement shall be governed and construed in all respects in accordance with the
internal laws of the State of Texas
(without giving effect to principles of conflicts of laws).
All references to sections of the Code or regulations issued thereunder shall be deemed also to
refer to any successor provisions to such sections or regulations.
(d) 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.
(e) This Agreement may be executed in several counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same instrument.
(f) Each party hereto has participated in the preparation and drafting of this Agreement,
which each party acknowledges is the result of extensive negotiations between the parties.
Executive acknowledges that he has read and understands this Agreement, that Executive has had
sufficient time and opportunity to consult with counsel regarding this Agreement, and that
Executive has entered into this Agreement voluntarily and without coercion.
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the
date first above written.
EXECUTIVE: Michael J. FitzGerald
/s/ Michael J. FitzGerald
5581 Buena Vista Drive
Frisco, TX 75034
In consideration of the Severance payments the Company is paying to Executive pursuant to
Section 3 of the Employment Agreement
, by signing below, the undersigned Executive hereby releases
all claims against the Company, as those terms are defined in the Employment Agreement
, and their
affiliates, successors and assigns, and their respective agents, officers, shareholders, directors,
partners, employees, representatives and attorneys, (Releasees
), arising out of
Executives employment with Releasees, and any of them.
Release and Discharge of Claims.
Executive hereby irrevocably and unconditionally
releases and discharges from any and all claims, liabilities, obligations, promises, causes of
actions, actions, suits, or demands, of whatsoever kind or character, known or unknown, suspected
to exist or not suspected to exist, anticipated or not anticipated, arising from or relating to any
agreements or arrangements between Executive and any of the Releasees, whether as an employee,
consultant or otherwise, or the termination of such agreements or arrangements (Claims
Such Claims include, but are not limited to the following: claims based upon employment
discrimination or harassment of any kind or nature; claims based upon any violation of Releasees
policies, procedures or regulations; claims of any kind based upon any actual or implied agreement,
contract, promise, written or oral statement of any kind whatsoever between Executive and any of
the Releasees or the alleged breach thereof; claims based upon alleged violation of the Texas
Code, Title 7 of the Civil Rights Act of 1964 as amended, the United States and/or Texas
Constitutions, the Americans With Disabilities Act, and the Age Discrimination in Employment Act,
the Older Workers Benefits Protection Act; claims based upon Federal and State wage and hour laws;
any State and Federal tort or common law claims; and claims based on any other State and Federal
statutes or laws. Notwithstanding the above, Claims does not include any claims arising out of any
Company sponsored employee benefit plans (other than any severance arrangements (but excluding the
) between the Company and Executive. Executive covenants and agrees not to
file, sue or assert any claims against Releasees in connection with any of the above-mentioned
Claims. Executive acknowledges and agrees that s/he is aware that s/he may hereafter discover
claims which presently exist, but which are presently unknown or unsuspected, or may discover facts
in addition to or different from those which s/he now knows or believes to be true as to the
matters released herein. Nevertheless, it is Executives intention, through this Release, to
fully, finally and forever release all such matters, and all claims related thereto, which do now
exist. In entering into this Release, Executive does not rely upon any statement, representation
or promise of any other party hereto or any other person or entity, except as expressly stated in
No Waiver of Future Claims. Executive acknowledges that this Release does not release
claims which do not exist as of the date of signature hereof.
Release - 1
Review and Revocation Periods.
Executive may take twenty-one (21) days to review and
consider this agreement. Executive has the right to, and is encouraged to, consult with legal
counsel regarding this agreement. Executive has seven (7) days from the date on which Executive
signs this agreement in which to revoke this agreement. To be effective, any such revocation must
be in writing delivered to
at the Company, Toreador Resources
, 13760 Noel Road, Suite 1100, Dallas, TX 75240, before midnight on the seventh
) day after the date of Executives signature on this agreement. The Companys
obligation to provide any benefits pursuant to Section 3
of the Employment Agreement does
not become final and binding until the expiration of the seven (7) day revocation period and so
long as this Release has not been revoked during such period.
Voluntary Agreement. Executive acknowledges that s/he has read and understands this
agreement, has been given a reasonable time to review it, has been advised to and has had the
opportunity to consult with counsel and in fact has consulted counsel regarding this agreement, and
has entered into this agreement voluntarily and without coercion.
[TYPE IN NAME OF EXECUTIVE]
Release - 2