Exhibit 10.20
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") entered into effective as of
May 15, 2000, by and between Xxxxxxx X. Manner (the "Executive"), and Bellwether
Exploration Company, a Delaware corporation having its principal place of
business at 0000 Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000-0000 (the "Company");
W I T N E S S E T H:
WHEREAS, The Company wishes to employ the Executive as the Chief Executive
Officer and President 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 the Chief Executive Officer and President of the Company. The term of this
Agreement (the "Term of this Agreement") shall be effective as of the date first
above written and shall terminate thirty-six (36) months from the date hereof
(the "Termination Date"), unless earlier terminated by either party hereto in
accordance with the provisions of Section 5 hereof. 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 11
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 Chief
Executive Officer and President of the Company and shall report to, and be
subject to the general direction of the Chairman of the Board of the Company.
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 Chairman of the Board of the Company. 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 (i) a one-time signing bonus of
$150,000.00 upon the execution of this Agreement by Executive, and (ii) a salary
("Salary") of $350,000 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 Company's Board of
Directors, which shall review the Executive's Salary no less regularly than
annually.
(b) The Company shall grant the Executive an option to purchase 500,000
shares of common stock of the Company at an exercise price per share of $6.29,
which is equal to the average of the closing price of such common stock for the
thirty (30) business days preceding the date of this Agreement ("Option"). Such
Option shall vest 33.4% on the execution date of this Agreement and on each of
the first and second anniversary dates of this Agreement. The term of the Option
shall be ten years from the date of grant subject to the provisions of paragraph
5(f)(i) hereof.
(c) Any annual cash bonus paid to the Executive shall be based on
performance and be at the sole discretion of the Compensation Committee of the
Company's Board of Directors; provided, however, in the event such cash bonus
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 on the first day of each calendar year. The Company shall not pay the
Executive for any accrued but unused portion of vacation and any such unused
portion of 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 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
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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 $250.00 per month.
(i) Upon presentation by Executive to Bellwether of acceptable
documentation of such expenditures, Bellwether shall reimburse Executive for any
loss incurred by Executive, if any, resulting from the sale of his residence in
Xxxxxxx, Xxxxxxx, Xxxxxx, in addition to all real estate fees, commissions and
closing costs ("Fees") on the sale of such residence as well as those Fees
related to the residence purchased by Executive in Houston.
(j) Upon presentation by Executive to Bellwether of acceptable
documentation of such expenditures, Bellwether shall reimburse Executive for all
moving, travel, lodging and other expenses related to the process of identifying
a residence in Houston.
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 such termination is for one or more of the following reasons: (i) the willful
failure or refusal of the Executive to render services to the Company in
accordance with his obligations under this Agreement, including, without
limitation, the willful failure or refusal of the Executive to comply with the
work rules, policies, procedures, and directives as established by the Board of
Directors and consistent with this Agreement; such failure or refusal to be
uncured and continuing for a period of not less than fifteen (15) days after
notice outlining the situation is given by the Company to the Executive; (ii)
the commission by the Executive of an act of fraud or embezzlement; (iii) the
commission by the Executive of any other action with the intent to injure the
Company; (iv) the Executive having been convicted of a felony or a crime
involving moral turpitude; (v) the Executive having misappropriate the property
of the Company; (vi) the Executive having engaged in personal misconduct which
materially injures the Company; or (vii) the Executive having willfully violated
any law or regulation relating to the business of the company which results in
material injury to the Company. In the event of the Executive's termination by
the Company for Cause hereunder, the Executive shall be entitled to no severance
or other termination benefits except for any unpaid Salary accrued through the
date of termination. A termination of this Agreement by the Company without
Cause pursuant to this
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Section 5(a) shall entitle the Executive to the Severance Payment and other
benefits specified in Section 5(f) hereof.
(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
Salary and benefits 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.
(c) Disability. If during the term of this Agreement, the Executive shall
be prevented from performing his duties hereunder for a period of 60 days by
reason of disability, then the Company, on 30 days' prior notice to the
Executive, may terminate this Agreement. For purposes of this Agreement, the
Executive shall be deemed to have become disabled when the Board of Directors of
the Company, upon verification by a physician designated by the Company, shall
have determined that the Executive has become physically or mentally unable
(excluding infrequent and temporary absences due to ordinary illness) to perform
the essential functions of his duties under this Agreement with reasonable
accommodation. In the event of a termination pursuant to this paragraph (c), the
Company shall be relieved of all its obligations under this Agreement, except
that the Company shall pay to the Executive or his estate in the event of his
subsequent death, that portion of the Executive's Salary and benefits accrued
through the date of such termination. All such payments to the Executive or his
estate shall be made in the same manner and at the same time as his Salary would
have been paid to him had he not become disabled.
(d) Termination for Good Reason. The Executive shall be entitled to
terminate this Agreement and his employment with the Company 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 date of this Agreement or as may be
assigned to the Executive pursuant to Section 2 hereof; or his title or offices
as in effect at the date of this Agreement or as the Executive may be appointed
or elected to in accordance with Section 2 are changed; or the Executive is
required to report to or be directed by any person other than the Chairman of
the Board 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
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plan, life insurance, disability plan, pension plan or retirement plan in which
the Executive was entitled to participate in as at the 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, which ever 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 one within a fifty (50) mile
radius of the greater Houston, Texas metropolitan area, except for required
travel on the Company's business to an extent substantially consistent with the
Executive's business obligations under this Agreement; or
(v) there is any material breach by the Company of any provision of
this Agreement.
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 pleasure upon sixty (60) days written notice
to such effect. In such event, the Executive shall not be entitled to any
further compensation other than any unpaid Salary and benefits accrued through
the date of termination. At the Company's option, the Company may pay to the
Executive the salary and benefits that the Executive would have received during
such sixty (60) day period in lieu of requiring the Executive to remain in the
employment of the Company for such sixty (60) day period.
(f) Termination Benefits Upon Involuntary Termination or Termination for
Good Reason. In the event that (i) 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 (ii) 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, within thirty
(30) days after the date of termination, an amount (the "Severance Payment")
equal to (x) two (2) 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, and (y) two (2) times the highest annual bonus paid to the
Executive during such two-year period, minus applicable withholding and
authorized salary reductions (the "Severance Payment"). In addition, following
other such termination, the Executive shall be entitled to the following
benefits (collectively, the "Additional Benefits");
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(i) immediate vesting of any of the Executive's outstanding options to
purchase securities of the Company which were not vested by their own terms on
the date of termination and the extension of the Executive's right to exercise
all the Executive's options to purchase securities of the Company for a period
equal to the lesser of (A) one (1) year following the date of termination or (B)
the remaining term of the applicable option;
(ii) continued coverage, at the Executive's cost, under the Company's
group health plan for the applicable coverage period under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA") but only if
Executive elects such COBRA continuation in accordance with the time limits and
in the applicable COBRA regulations; and
(iii) an amount, in cash, equal to the sum of (A) any unreimbursed
expenses incurred by the Executive in the performance of his duties hereunder
through the date of termination, plus (B) any accrued and unused vacation time
or other unpaid benefits as of the date of termination.
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 executes a
termination agreement releasing all legally waivable claims arising from the
Executive's employment.
(g) Termination and Benefits upon a Change in Control. In the event of a
Change in Control, as defined in this Section 5(g), then 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 a lump sum amount equal to: (x)
two (2) times the Executive's highest annual salary paid during the last two (2)
years immediately preceding the date of termination, and (y) two (2) times the
highest annual bonus paid to the Executive while employed by the Company, minus
applicable withholding and authorized salary reductions (the "Payment"). In the
event that the excise tax relating to "parachute payments" under Section 280G of
the Code applies to the Payment, 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. The Executive
shall also are entitled to receive the Additional Benefits. "Change of 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, of more than 50% of the total voting
power of the outstanding voting stock of the Company; (ii) the Company is merged
with or into or consolidated with another Person and, immediately after giving
effect to the merger or
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consolidation, (a) less than 50% of the total voting power of the outstanding
voting stock of the surviving or resulting Person is then "beneficially owned"
(within the meaning of Rule 13d-3 under the Exchange Act) in the aggregate by
the stockholders of the Company immediately prior to such merger or
consolidation, and (b) any "person" or "group" (as defined in Section 13(d)(3)
or 14(d)(2) of the Exchange Act) has become the direct or indirect "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) of more than 50% of the
total voting power of the voting stock of the surviving or resulting Person;
(iii) the Company sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of the Company assets (either in one
transaction or a series of related transactions); or (iv) the liquidation or
dissolution of the Company.
(h) Survival. Notwithstanding the termination of this Agreement under
this Section 5, the provisions of Sections 7 and 8 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.
6. Consent and Waiver by Third Parties. The Executive hereby represents and
warrants that he has obtained all necessary waivers and/or consents from third
parties as to enable him to accept employment with the Company on the terms and
conditions set forth herein and to execute 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 an 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 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 therof and the
unrestricted right to make such disclosure, or (iv) which is necessarily
disclosed in the course of
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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 date hereof and for a period twelve (12) months after the
Executive's employment with the Company is terminated for any reason, 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 paragraph 7 above.
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 on the date mailed, postage prepaid, by
certified mail, return receipt requested, or telegraphed and confirmed if
addressed to the respective parties as follows:
If to the Executive: Xxxxxxx X. Manner
c/o Bellwether Exploration Company
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
If to the Company: Bellwether Exploration Company
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Chairman, Compensation Committee
Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto.
10. SPECIFIC PERFORMANCE. The Executive acknowledges that a remedy at law
for any breach or attempted breach of Section 7 or 8 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.
11. 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 11. 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 of Directors 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
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understandings between the parties with reference to the subject matter set
forth herein and may not be waived, changed, discharged or terminated orally or
by any course of dealing between the parties, but only by an instrument in
writing signed by the party against whom any waiver, change, discharge or
termination is sought.
12. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Texas.
13. SEVERABILITY. In case of 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, 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 provisions had never
contained herein.
14. 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.
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/ X. X. XXXXX
-----------------------------------
X. X. Xxxxx, Chief Executive Officer
EXECUTIVE:
/s/ XXXXXXX X. MANNER
--------------------------------------
Xxxxxxx X. Manner
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