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EXHIBIT 10.9
EMPLOYMENT AGREEMENT
This Agreement, made this 1st day of August, 1999, by and between
Contour Energy Co., a Delaware corporation (the "Company"), and Xxxxxxx X.
Xxxxxxx ("Executive").
WITNESSETH:
WHEREAS, the Company desires to employ Executive as Senior Vice
President - Exploration and Production on the terms set forth below, and
Executive is willing to accept such employment on such terms.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the parties hereto do hereby agree:
1. DEFINITIONS
As used in this Agreement, defined words and phrases have the meaning
first ascribed to them herein whenever the first letter of each word is
capitalized. Words used in the masculine apply equally to the feminine,
and wherever the context dictates, the plural should be read as the
singular and the singular as the plural. References to Sections are to
Sections of this Agreement. The headings at the beginning of each
section are inserted for convenience only and are not intended to
describe, interpret, define, or limit the scope, extent, or intent of
this Agreement.
a. "Board" means the Company's board of directors.
b. "Cause" shall be deemed to exist if, and only if:
i. Executive is convicted in a court of law of any crime (i) that
constitutes a felony relating to the Company or any other
business endeavor or (ii) that constitutes a felony which
involves moral turpitude; or
ii. Executive engages in willful misconduct or any material breach of
or willful material failure to perform his duties and
responsibilities hereunder, which misconduct, breach, or failure
shall continue after the Company, by action of the Board, shall
have advised Executive thereof in writing and shall have afforded
Executive a reasonable opportunity (which shall be at least 30
days from the date of such written advice or knowledge thereof)
to correct the acts or omissions complained of, and which
Executive shall have so failed to take action to correct within
such period.
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c. "Disability" means Executive's inability to fully and competently
perform the duties hereunder for a period of at least three
consecutive months by reason of mental or physical illness or other
incapacity. The Company and Executive or his attorney-in-fact shall,
based on competent medical advice, determine whether Executive is and
continues to be disabled. If the Company and Executive or his
attorney-in-fact disagree with the determination of disability, then
each of them shall appoint a doctor and the two doctors shall select
a third independent doctor whose decision as to whether Executive has
been unable to perform the duties of the nature contemplated
hereunder for a three-consecutive-month period shall be binding on
the parties.
The doctor advising the Company with regard to the Company's initial
determination of whether Executive has been disabled within the
foregoing meaning and the independent doctor selected by the two
doctors designated by the Company and Executive or his
attorney-in-fact shall be given full access to Executive's medical
records and shall be afforded a reasonable opportunity to examine
Executive. The Company agrees to instruct such doctors to maintain
all information reflected in Executive's records in full confidence
and not to disclose such information to any person (including the
Company) except as may be necessary for the determination described
above. All references to doctor in this paragraph 1.d shall mean a
practicing doctor of medicine.
d. "Executive Officer" means Senior Vice President - Exploration and
Production.
e. "Notice of Termination" means a notice that sets forth the date of
termination and, in the event of termination for Cause, the facts and
circumstances claimed to provide a basis for termination of
Executive's employment.
f. "Change of Control" means if (i) the Company is merged or
consolidated with another corporation and as a result of such merger
or consolidation less than 50% of the outstanding voting securities
of the surviving or resulting corporation are owned in the aggregate
by the former shareholders of the Company; (ii) the Company sells all
or substantially all of its assets to another corporation, which is
not a wholly-owned subsidiary of the Company; (iii) any person or
group within the meaning of the Securities Exchange Act of 1934, as
amended, acquires (together with voting securities of the Company
held by such person or group) 30% or more of the outstanding voting
securities of the Company (whether directly, indirectly, beneficially
or of record) pursuant to any transaction or combination of
transactions; (iv) there is a change of control of the Company of a
nature that would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended, whether or not the Company is then
subject to such reporting requirements; or (v) the individuals who,
at the beginning of any period of twelve consecutive months,
constituted the Board of Directors cease, for any reason, to
constitute at least a majority thereof, unless the nomination for
election or election by the Company's shareholders of each new
director of the Company was approved by a vote of at least two-thirds
of the directors then still in office who either were directors at
the
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beginning of such period or whose election or nomination for election
was previously so approved. Notwithstanding the foregoing, however, a
Change of Control shall not be deemed to have occurred upon issuance
of capital stock by the Company approved by a vote of at least
two-thirds of the directors then in office.
2. TERM
This Agreement commences effective as of August 1, 1999 (the
"Commencement Date"), shall continue for 12 months from the Commencement
Date, unless sooner terminated by a Notice of Termination under the
provisions of this Agreement, and each year thereafter, unless either of
the parties gives thirty (30) days written notice that the Agreement
shall not be extended for the ensuing year, which notice shall not be
deemed to be a Notice of Termination under the provisions of this
Agreement.
3. DUTIES
During the term of his employment as provided in Section 2 above, the
Company will employ Executive in a senior executive capacity, with such
responsibilities as the Company may from time to time determine during
the term of this Agreement, which shall include the engineering and
development functions. Executive will comply with all applicable laws,
with all corporate documents governing the conduct of the Company's
business and affairs, and with the Company's policies.
Executive agrees to devote substantially all of his business time to the
performance of his duties hereunder.
4. COMPENSATION
a. The Company shall pay Executive for all services to be performed
hereunder during the term of this Agreement. The Company agrees to
pay to Executive an annual salary of $190,000.00, payable in
semimonthly installments in arrears on the fifteenth and last day of
each calendar month, the first such installment to be payable for the
period ended August 15, 1999.
b. The Executive shall participate in the Company's 1997 Annual and
Long-Term Incentive-Performance Plan (the "1997 Plan"), in accordance
with the terms and provisions of the Plan, (i) as to annual
performance awards, commencing as of August 1, 1999 to the extent in
1999 his participation award exceeds $50,000, and annually thereafter
as provided in the 1997 Plan so long as the 1997 Plan remains in
effect, and Executive is employed by the Company annually thereafter,
and (ii) as to stock options, the Company shall grant Executive a
total of 25,000 options to purchase shares of the Company's common
stock for a purchase price as determined under the Plan (the "1997
Plan Options"), which shall vest in cumulative annual installments as
follows: (i) 25% of such 1997 Plan Options on the first anniversary
of the Commencement Date, or 33 1/3% upon termination of employment
by the Company if employment is terminated by
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the Company before the second anniversary and not terminated for
Cause or a Change of Control, (ii) 50% of such 1997 Plan Options on
the second anniversary of the Commencement Date, (iii) 75% of such
1997 Plan Options on the third anniversary of the Commencement Date
and (iv) 100% of such 1997 Plan Options on the fourth anniversary of
the Commencement Date.
c. In addition to the Options granted under the 1997 Plan, the Company
shall, effective the Commencement Date, grant Executive a total of
37,500 options to purchase shares of the Company's common stock for a
purchase price of $10.00 per share (the "1996 Plan Options"), which
shall vest in cumulative annual installments as follows: (i) 33 1/3%
of such 1996 Plan Options on the first anniversary of the
Commencement Date, (ii) 66 2/3% of such 1996 Plan Options on the
second anniversary of the Commencement Date, and (iii) 100% of such
1996 Plan Options on the third anniversary of the Commencement Date.
d. The Company agrees to pay Executive in addition to payments and
awards set forth in paragraphs a, b and c above, an initial bonus of
$50,000.00 payable within ten (10) business days of the Commencement
Date.
e. In addition to the payments and awards set forth in paragraphs a, b,
c and d above:
i. During the term of this Agreement, upon submission of a
reasonable accounting, the Company shall reimburse Executive for
all reasonable travel, entertainment, and other business
expenses that are in compliance with company policy related to
his employment hereunder.
ii. During the term of this Agreement, Executive shall be eligible
for the Company's employee benefit programs on the terms on
which the same are extended to the Company's executives
generally, including but not limited to the Company's Section
401(k) plan, a health care plan, five weeks vacation and
reimbursement for unreserved parking expenses.
iii. During the term of this Agreement, Executive shall be entitled
to reimbursement for membership fees and dues for a business
club (luncheon or athletic) and a country club (to include
initiation fees of approximately $5,000.00).
The Company shall have the right to deduct from all payments to be made
under this Agreement any federal, state, or local taxes required by law
to be withheld from such payments.
5. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
Executive agrees that, during his employment by the Company and for 1
year thereafter, he will not use or disclose to others, directly or
indirectly, any confidential information relating
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to the business, prospects, or plans of the Company or its subsidiaries.
Notwithstanding the previous sentence, Executive shall not be in
violation of this section in the event of a disclosure pursuant to a
court action or governmental rule, regulation, or proceeding
(hereinafter referred to as an "Ordered Disclosure") provided Executive
has notified the Company of such Ordered Disclosure within five business
days of being personally served with such Ordered Disclosure. Executive
agrees to cooperate in good faith with the Company in responding to such
Ordered Disclosure in order to prevent, limit or impose restrictions on
such Ordered Disclosure. In no event, however, shall this section
require Executive to take action or otherwise cause Executive to be in
violation of any law or result in contempt of such Ordered Disclosure.
Upon termination of his employment with the Company, Executive shall
surrender to the Company any and all work papers, reports, manuals,
documents, and the like (including all originals and copies thereof) in
his possession which contain confidential information relating to the
business, prospects, or plans of the Company or its affiliates.
Executive agrees that following any termination of his employment with
the Company, he will endorse strategies of the Company, and will not
disclose or cause to be disclosed any negative, adverse or derogatory
comments or information of a substantial nature about the Company or its
management, or about any product or service provided by the Company, or
about the Company's prospects for the future. The Company may seek the
assistance, cooperation or testimony of Executive following any such
termination in connection with any investigation, litigation or
proceeding arising out of matters within the knowledge of Executive and
related to his position as an officer or employee of the Company, and in
any instance, Executive shall provide such assistance, cooperation or
testimony and the Company shall pay Executive's reasonable costs and
expenses in connection therewith. In addition, if such assistance,
cooperation or testimony requires more than a nominal commitment of
Executive's time, the Company will compensate Executive for such time at
a per diem rate derived from Executive's salary from the Company at the
time of Executive's termination.
6. TERMINATION
a. This Agreement shall automatically terminate upon Executive's death
or Disability. In addition, this Agreement may be terminated by the
Company or Executive at any time for any reason whatsoever. Any
termination of Executive's employment by the Company or by Executive
(other than termination pursuant to the first sentence of this
subsection a.) shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 15.
b. Upon termination of this Agreement for any reason, Executive shall be
entitled to receive, and the Company shall pay Executive (or, if such
termination is caused by Executive's death, his estate or as may be
directed by the legal representatives of such estate) within 30 days
of the termination date, any unpaid amounts earned by or payable to
Executive through the date of termination under Sections 4.a. and
4.e. (if any).
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c. In addition to the amounts to which Executive is entitled under
Section 6.b., if this Agreement is terminated by the Company other
than for Cause or other than a Change of Control, the Company shall
pay Executive in a single lump-sum payment an amount equal to the
compensation that would have been payable under Section 4.a. over the
next twelve (12) months plus any vested options, in any event not
less than 1/3 of the Initial Grant under the 1997 Plan had this
Agreement not otherwise been terminated. The amounts payable under
this Section 6.c. shall be paid no later than 30 days after the date
of termination.
d. In addition to the amounts to which Executive is entitled under
Section 6.b., if this Agreement is terminated by the Company because
of a Change of Control, the Company shall pay Executive in a single
lump-sum payment an amount equal to (i) the compensation that would
have been payable under Section 4.a. over the next twenty-four (24)
months had this Agreement not otherwise been terminated, and (ii) all
unvested options accelerated to 100% vesting. Such compensation shall
be the only compensation payable as a result of such termination
because of a Change of Control. The amounts payable under this
Section 6.d. shall be paid no later than 30 days after the date of
termination.
7. RESTRICTIVE COVENANT
During the term of Executive's employment with the Company, and (except
as provided in clause (c) below) for a period of one year following the
termination of Executive's employment with the Company for any reason,
including termination occasioned by the expiration of this Agreement,
Executive shall not:
a. interfere with the relationship of the Company or any of its
employees, agents or representatives;
b. directly or indirectly divert or attempt to divert from the Company
any property acquisition in which the Company has been actively
engaged during the term hereof; or
c. directly or indirectly render financial or other services of the
nature of those provided to the Company to any person, company or
entity other than the Company, provided, this clause (c) shall
terminate upon the termination of Executive's employment with the
Company.
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8. INDEMNIFICATION
Except to the extent attributable to Executive's willful misconduct or
actions leading to the Company's termination of this Agreement for
Cause, the Company shall indemnify Executive against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him in connection with any action,
suit, or proceeding to which Executive has been made a party by reason
of his capacity as Executive Officer of the Company if Executive acted
in good faith and in a manner Executive reasonably believed to be in or
not opposed to the best interest of the Company and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
Executive's conduct was unlawful. The termination of any action, suit,
or proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself, create a
presumption that Executive did not act in good faith and in a manner
which Executive reasonably believed to be in or not opposed to the best
interest of the Company, and with respect to any criminal action or
proceeding, had reasonable cause to believe that Executive's conduct was
unlawful.
9. ADDITIONAL REMEDIES
In the event of a breach or a threatened breach of the terms of Section
5 or 7 by Executive, the Company shall, in addition to all other
remedies, be entitled to a temporary or permanent injunction and/or a
decree for specific performance, in accordance with the provisions
hereof, without showing any actual damage or that monetary damages would
not provide an adequate remedy and without any bond or other security
being required.
10. NONASSIGNMENT
This Agreement is personal to Executive and shall not be assigned by
him. Executive shall not hypothecate, delegate, encumber, alienate,
transfer, or otherwise dispose of his rights and duties hereunder. The
Company may assign this Agreement without Executive's consent to any
other entity who, in connection with such assignment, acquires all or
substantially all of the Company's assets, or into or with which the
Company is merged or consolidated.
11. WAIVER
The waiver by the Company of a breach by Executive of any provision of
this Agreement shall not be construed as a waiver of any subsequent
breach by Executive.
12. SEVERABILITY
If any clause, phrase, provision, or portion of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable under any applicable law, such event shall not affect or
render invalid or unenforceable the remainder of this Agreement and
shall not affect the application of any clause, provision, or portion
hereof to other persons or circumstances.
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13. DISPUTES
Each of the parties hereto hereby irrevocably agrees that any legal
action or proceeding arising out of this Agreement shall be brought only
in the state or federal courts located in the state of Texas. Each party
hereto hereby irrevocably consents to the service or process outside the
territorial jurisdiction of such courts in any such action or proceeding
by the mailing of such documents by registered United States mail,
postage prepaid, if to the Company to the address of its principal place
of business and if to Executive to the address listed in the Company's
books and records.
14. RELEVANT LAW
This Agreement shall be construed by, subject to, and governed in
accordance with the internal laws of the State of Texas.
15. NOTICES
All notices, requests, demands, and other communications in connection
with this Agreement shall be made in writing and shall be deemed to have
been given when delivered by hand or 48 hours after mailing at any
general or branch United States post office by registered or certified
mail, postage prepaid, addressed as follows, or to such other address as
shall have been designated in writing by the addressee:
a. If to the Company:
Contour Energy Co.
Suite 1100
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Corporate Secretary
b. If to Executive:
Xxxxxxx X. Xxxxxxx
Contour Energy Co.
Suite 1100
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
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16. Entire Agreement
This Agreement sets forth the entire understanding of the parties and
supersedes all prior agreements, arrangements, and communications,
whether oral or written, and this Agreement shall not be modified or
amended except by written agreement of the Company and Executive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
COMPANY:
CONTOUR ENERGY CO.
By /s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
President and Chief Executive Officer
EXECUTIVE:
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