Exhibit 10.14
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") by and between Plains Exploration &
Production Company, a Delaware corporation ("Company"), and Xxxx X. Xxxxxxx
("Employee") is entered into as of September 19, 2002, but, other than Section
4(d) hereof, shall not be effective until the date (the "Effective Date") on
which all the shares of the common stock of Company held by its parent
corporation, Plains Resources Inc. ("PLX") are distributed to PLX's stockholders
(the "Distribution"); provided, however, that if the Distribution does not take
place on or before May 23, 2003, this Agreement shall not become effective.
WHEREAS, Company desires to employ Employee and Employee desires to be
employed by Company;
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties, and agreements contained herein, and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
1. Employment. Contingent on the Distribution occurring no later than
May 23, 2003, Company agrees to employ Employee, and Employee hereby agrees to
be employed by Company, on the terms and conditions set forth in this Agreement.
2. Term of Employment. Subject to the provisions for earlier termination
provided in the Agreement, the term of this Agreement (the "Term") shall
commence on the Effective Date and shall terminate on the fifth anniversary of
the Effective Date; provided, however, that following the fifth anniversary of
the Effective Date, the Term shall automatically be extended one year and again
for successive one-year periods on each anniversary thereof, if Employee and
Company shall have agreed to new compensation terms at least ninety days prior
to the end of the initial five-year period and any additional one-year
extensions. Notwithstanding any provision of this Agreement to the contrary,
termination of this Agreement shall not alter or impair any rights or benefits
of Employee (or Employee's estate or beneficiaries) that have arisen under this
Agreement on or prior to such termination.
3. Employee's Duties. During the Term, Employee shall serve as the
President and Chief Operating Officer of Company, with such customary duties and
responsibilities as may from time to time be assigned to him by the Board,
provided that such duties are at all times consistent with the duties of such
positions. Employee shall report to the Chief Executive Officer. Employee agrees
to serve without additional compensation, if elected or appointed thereto, in
one or more offices or a director of any of Company's Subsidiaries. For purposes
of this Agreement, a "Subsidiary" shall mean any entity in which Company owns a
majority of the voting stock of the class of securities (or other interests in
the case of a limited liability company or partnership) that may vote in the
election of the members of the governing body of such entity.
Employee agrees to use reasonable best efforts to perform faithfully and
efficiently his duties and responsibilities hereunder. Company understands and
acknowledges that Employee shall be an employee and executive officer of PLX,
and therefore, Employee will not be able to devote all of his attention and time
during normal business hours to Company. Accordingly, Company agrees that the
performance of Employee's duties on behalf of PLX shall not be a breach of this
Agreement. Notwithstanding the foregoing, during the Term, Employee may engage
in the following activities so long as they do not interfere in any material
respect with the performance of Employee's duties and responsibilities
hereunder: (i) serve on corporate, civic or charitable boards or committees,
(ii) deliver lectures, fulfill speaking engagements or teach on a part-time
basis at educational institutions but not more than 20 hours per month, and
(iii) manage his personal investments; provided, however, that in no event shall
the conduct of any such activities by Employee be deemed to materially interfere
with Employee's duties hereunder until Employee has been notified in writing
thereof by the Board and given a reasonable period in which to cure such
interference; and further provided that Employee shall notify and obtain
approval of the Board prior to accepting any of the positions described in
clause (i) above, which approval shall not be unreasonably withheld. In
addition, Employee shall be permitted to manage his personal investments
described in clause (iii) above in accordance with the preceding sentence
provided that (a) such management shall not interfere in any material respect
with the performance of Employee's duties and responsibilities hereunder or
violate Company's conflicts policy as in effect from time to time, (b) Employee
informs the Board of any conflicts of interest (whether actual or apparent) with
Company and any of its Subsidiaries, including any event reasonably likely to
raise the appearance of conflicts, and (c) Employee notifies the Board of, and
discuss with the Board with respect to, any opportunities presented to Employee
or any of the entities in which Employee owns a majority interest in connection
with such continued ownership and management that should be offered to Company
or its Subsidiaries. Notwithstanding the foregoing, Company agrees that
Employee's management of his current personal investments, as disclosed to
Company prior to the Effective Date, shall not be deemed to materially interfere
with his duties hereunder.
4. Compensation.
(a) Base Compensation. For services rendered by Employee under this
Agreement Company shall pay to Employee a base salary ("Base Compensation")
of $350,000 per annum payable in accordance with Company's customary
payroll practice for its senior executive officers. The amount of Base
Compensation shall be reviewed periodically by the Board and may be
increased from time to time as the Board may deem appropriate. Base
Compensation, as in effect at any time, may not be decreased without the
prior written consent of Employee.
(b) Annual Bonus. In addition to his Base Compensation, Employee shall
be eligible to receive each year during the Term, a cash incentive payment
in an amount equal to 100% of Employee's Base Compensation (the "Target
Bonus"). The amount of the Target Bonus earned for any year shall be
determined by the Compensation
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Committee of the Board based on Employee's individual performance and the
performance of Company.
(c) SARs. In accordance with the Performance Stock Option Agreement
dated June 7, 2001 between PLX and Employee (the "Option Agreement"), the
Incentive Stock Option and Nonqualified Stock Option Agreement dated June
7, 2001 between PLX and Employee (the "Second Option Agreement"), the
Incentive Stock Option and Nonqualified Stock Option Agreement dated
February 20, 2002 between PLX and Employee (the "Third Option Agreement")
and, along with the Second Option Agreement, the "Other Option
Agreements"), the Amended and Restated Employment Agreement entered into on
the date hereof between PLX and Employee (the "Restated Agreement"), the
Employee Matters Agreement dated July 3, 2002, between the Company and PLX,
as amended (the "Employee Matters Agreement"), the Company 2002 stock
incentive plan, and the PLX 2001 stock incentive plan, the Company shall
issue certain stock appreciation rights to Employee (the "Performance
SARs") to effect an adjustment to certain performance options (the
"Performance Options") granted to Employee by PLX under the Option
Agreement, which adjustment results from the Distribution, and certain
stock appreciation rights to Employee ("Other SARs") to effect an
adjustment to the remaining stock options (the "Other Options") granted to
Employee by PLX under the Other Option Agreements. The Performance SARs and
Other SARs shall have the same terms and conditions as the Performance
Options and Other Options, as the case may be, with a strike price and a
number of Performance SARs and Other SARs, as the case may be, calculated
in accordance with the Employee Matters Agreement. The Company and Employee
shall execute an agreement reflecting the Performance SARs and Other SARs.
(d) New Grant. On the effective date of an initial public offering of
Company common stock by the Company, Company will grant Employee 60,000
restricted shares of Company common stock with respect to which
restrictions will lapse pro rata over a three-year period beginning on the
first anniversary of such effective date and under such other terms and
conditions as provided in the agreement evidencing such award.
5. Other Benefits; Business Expenses.
(a) Employee shall be entitled to participate in all incentive
compensation plans and to receive all fringe benefits and perquisites
offered by Company to any of its senior executive officers, including,
without limitation, participation in the various health, retirement, life
insurance, disability insurance and other employee benefit plans or
programs provided to the employees of Company in general, subject to the
regular eligibility requirements with respect to each of such benefit plans
or programs, and such other benefits or perquisites as may be approved by
the Board during the Term, all on a basis at least as favorable to Employee
as may be provided to similarly situated senior executive officers of
Company. Employee shall be entitled to take appropriate and
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reasonable annual vacation time provided that such vacation time does not
interfere with his duties hereunder.
(b) Company shall reimburse Employee for all reasonable business
expenses incurred by Employee in the performance of his duties; which
expenses will be subject to the oversight of Company's audit committee in
the normal course. It is understood that Employee is authorized to incur
reasonable business expenses for promoting the business of Company,
including reasonable expenditures for travel, lodging, meals and client or
business associate entertainment. Request for reimbursement for such
expenses must be accompanied by appropriate documentation.
(c) Company shall reimburse Employee for his monthly country club
fees.
6. Termination. This Agreement may be terminated prior to the end of its
Term as set forth below.
(a) Resignation. Employee may resign his position at any time. In the
event of such resignation, except in the case of resignation for Good
Reason (as defined below), Employee shall not be entitled to further
compensation pursuant to this Agreement except as may be provided by the
terms of any benefit plans of Company in which Employee may be a
participant and the terms of any outstanding equity grants, and for salary
accrued but unpaid through the date of resignation and reimbursement of
expenses prior to such date.
(b) Death. If Employee's employment is terminated due to his death,
this Agreement shall terminate and Company shall have no obligations to his
legal representatives with respect to this Agreement other than the payment
of benefits as described in Section 6(c)(i) below, salary accrued but
unpaid through the date of termination, reimbursement of expenses prior to
such date and benefits under the terms of any outstanding equity grants.
(c) Discharge.
(i) Company may terminate this Agreement and Employee's employment
for any reason deemed sufficient by Company upon notice as provided in
Section 10. However, in the event that Employee's employment is terminated
during the Term by Company for any reason other than Cause, in the event of
Employee's death or Disability, or if Employee's employment is terminated
for Good Reason, then: (A) Company shall pay Employee immediately upon
termination of Employee's employment a lump sum equal to two times the sum
of the Base Compensation and last earned annual bonus (provided, however,
that if the Date of Termination (as defined below) occurs before a bonus
amount has been determined for the first calendar year of Employee's
employment hereunder, the bonus amount shall be the Target Bonus); (B) for
the 36-month
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period after the Date of Termination, Company shall provide or arrange
to provide Employee (and Employee's dependents) with health insurance
benefits no less favorable than the health plan benefits provided by
Company (or any successor) during such 36-month period to any senior
executive officer of Company; provided, further, to the extent the
coverage or benefits received are taxable to Employee, Company shall
make Employee "whole" on a net after tax basis; and provided, however,
that such coverage shall cease if Employee obtains comparable
replacement coverage (although Employee shall have no obligation to
pursue such coverage); (C) on the Date of Termination all then
outstanding Company stock-based awards of Employee, whether under this
Agreement, a Company stock plan or otherwise, shall become immediately
exercisable and payable in full, as the case may be, with any
performance goals associated therewith being deemed to have been
achieved at the maximum levels and all restrictions removed with
respect thereto (including without limitation with respect to any
options that would otherwise vest in accordance with performance goals
and any grants of restricted stock that shall have been granted prior
to the Effective Date); and (D) Company shall reimburse Employee for
expenses incurred prior to the Date of Termination.
(ii) Notwithstanding the foregoing provisions of this Section 6,
in the event Employee is terminated because of Cause, Company shall
have no obligations pursuant to this Agreement after the Date of
Termination other than reimbursement of expenses incurred prior to
such date. For purposes herein, "Cause" means (A) the failure by
Employee to perform reasonably assigned duties with Company, (B) the
engaging by Employee in conduct which is demonstrably and materially
injurious to Company and its Subsidiaries taken as a whole, (C)
Employee's having been convicted of, or entered a plea of nolo
contendere to burglary, larceny, murder or arson or a crime involving
deceit, fraud, perjury or embezzlement, or (D) failure to notify
Company of any actual or apparent conflicts of interest relating to
Employee's management of personal investments in accordance with
Section 3 of this Agreement. Notwithstanding the foregoing, prior to
any termination for Cause under clauses (A), (B) or (D) of the
preceding sentence, (X) Company must provide Employee with reasonable
notice detailing the failure or conduct which the Board believes to
constitute Cause, (Y) Company must provide Employee a reasonable
opportunity to cure such failure or conduct, and (Z) after such notice
and an opportunity to cure, a majority of the Board must reasonably
determine that Employee has not cured such failure or conduct.
Notwithstanding the foregoing provisions, Employee shall not be deemed
to have been terminated for Cause unless and until Employee shall have
been provided an opportunity to be heard in person by the Board (with
the assistance of Employee's counsel if Employee so desires).
(d) Disability. If Employee shall have been absent from the full-time
performance of Employee's duties with Company for six consecutive months as
a result
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of Employee's incapacity due to physical or mental illness as determined by
Employee's physician ("Disability"), Employee's employment may be
terminated by Company for Disability. If Employee's employment is
terminated for Disability, Employee shall be entitled to the compensation
and benefits provided in Section 6(c)(i) hereof. If Employee fails during
any period during the Term to perform Employee's full-time duties with
Company as a result of incapacity due to physical or mental illness, as
determined by Employee's physician, Employee shall continue to receive his
benefits under this Agreement during such period until this Agreement is
terminated for Disability by Company.
(e) Resignation for Good Reason. Employee shall be entitled to
terminate his employment for Good Reason as defined herein. If Employee
terminates his employment for Good Reason, Employee shall be entitled to
the compensation and benefits provided in Section 6(c)(i) hereof. "Good
Reason" shall mean (1) the material breach of any of Company's obligations
under this Agreement without Employee's written consent or (2) the
occurrence of any of the following circumstances, as the case may be,
without Employee's written consent:
(i) the assignment by the Board to Employee of any duties that
materially adversely alter the nature or status of Employee's office,
title, responsibilities, including reporting responsibilities, from
those in effect immediately prior to such assignment;
(ii) the failure by Company to continue in effect any
compensation plan in which Employee participates that is material to
Employee's total compensation unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made
with respect to such plan, or the failure by Company to continue
Employee's participation therein (or in such substitute or alternative
plan) on a basis not materially less favorable to Employee, unless any
such failure to continue in effect any compensation plan or
participation relates to a discontinuance of such plans or
participation on a management-wide or Company-wide basis;
(iii) the taking of any action by Company which would directly or
indirectly materially reduce or deprive Employee of any material
pension, welfare or fringe benefit then enjoyed by Employee, unless
such action relates to a discontinuance of benefits on a
management-wide or Company-wide basis;
(iv) the failure of Company to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Section 12 hereof;
(v) the relocation of Company's principal executive offices
outside the greater Houston, Texas metropolitan area, or Company's
requiring Employee to
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relocate anywhere other than the location of Company's principal
executive offices, except for required travel on Company's business to
an extent substantially consistent with Employee's obligations under
this Agreement; or
(vi) the Employee's termination of his employment with Company
or any successor who has assumed this Agreement in accordance with
Section 12 hereof within the 30-day period following the first
anniversary of a Change in Control of Company.
Employee's right to terminate employment pursuant to this subsection shall
not be affected by Employee's incapacity due to physical or mental illness. In
addition, Employee's continued employment following any event, act or omission,
regardless of the length of such continued employment, shall not constitute
Employee's consent to, or a waiver of Employee's rights with respect to, such
event, act or omission constituting a Good Reason circumstance hereunder.
(f) Notice of Termination. Any purported termination of Employee's
employment by Company or by Employee shall be communicated by written
Notice of Termination to the other party hereto in accordance with Section
10 hereof. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice which shall set forth in reasonable detail the reason for
termination of Employee's employment, or in the case of resignation for
Good Reason, said notice must specify in reasonable detail the basis for
such resignation. No purported termination which is not effected pursuant
to this Section 6(f) shall be effective.
(g) Date of Termination, Etc. "Date of Termination" shall mean in the
case of Employee's death, his date of death, and in all other cases, the
date specified in the Notice of Termination. If no notice is given by
Employee, termination shall be effective on the last date Employee reported
for work with Company, and shall be deemed to be a voluntary termination
without Good Reason.
(h) Mitigation. Employee shall not be required to mitigate the amount
of any payment or benefit provided for in this Section 6 by seeking other
employment or otherwise, nor, except as provided in clause (B) of Section
6(c)(1), shall the amount of any payment or benefit provided for in this
Agreement be reduced by any compensation or benefit earned by Employee as a
result of employment by another employer, self-employment earnings, by
retirement benefits, by offset against any amount claimed to be owing by
Employee to Company, or otherwise.
(i) Full Tax Gross-Up of Parachute Payments. (i) In the event that
any payment, award, benefit or distribution (or any acceleration of any
payment, award, benefit or distribution) made or provided to or for the
benefit of Employee in connection with this Agreement, or Employee's
employment with Company or the termination thereof (the "Payments") are
determined to be subject to the excise tax imposed by
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Section 4999 of the Code or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest and penalties,
are collectively referred to as the "Excise Tax"), then the Employee shall
be entitled to receive an additional payment (a "Gross-Up Payment") from
Company in an amount equal to the Excise Tax (excluding any income tax or
employment tax imposed upon the Gross Up Payment). The determination of
whether the Payments are subject to the Excise Tax and, if so, the amount
of the Gross-Up Payment, shall be made by a nationally recognized United
States public accounting firm that has not, during the two years preceding
the date of its selection, acted in any way on behalf of Company or any of
its affiliates; provided, however, that if the accounting firm has
determined that Section 4999 does not apply, and the Internal Revenue
Service claims that Section 4999 applies to the Payments (or any portion
thereof), then paragraph (ii) below of this Section 6(i) shall be
applicable.
(ii) Employee shall notify Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the
payment by Company of a Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten (10) business days
after Employee is informed in writing of such claim and shall apprise
Company of the nature of such claim and the date on which such claim
is requested to be paid. Employee shall not pay such claim prior to
the expiration of the thirty (30) day period following the date on
which he gives such notice to Company (or such shorter period ending
on the date that any payment of taxes with respect to such claim is
due). If Company notifies Employee in writing prior to the expiration
of such period that it desires to contest such claim, Employee shall:
(A) give Company any information reasonably requested by
Company relating to such claim,
(B) take such action in connection with contesting such
claim as Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by Company,
(C) cooperate with Company in good faith in order
effectively to contest such claim, and
(D) permit Company to participate in any proceedings
relating to such claim;
provided, however, that Company shall bear and pay directly all costs and
expenses (including additional interest, penalties, accountant's and legal fees)
incurred in connection with such contest and shall indemnify and hold Employee
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
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foregoing provisions of this subsection, Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at its sole option,
either direct Employee to pay the tax claimed and commence a proceeding to
obtain a refund or contest the claim in any permissible manner, and Employee
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as Company shall determine; provided, however, that if Company directs
Employee to pay such claim and seek a refund, Company shall advance the amount
of such payment to Employee, on an interest-free basis, and shall indemnify and
hold Employee harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of Employee with respect to which such
contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder, and
Employee shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.
(iii) If, after the receipt by Employee of an amount advanced by
Company pursuant to the foregoing, Employee becomes entitled to
receive any refund with respect to such claim, Employee shall (subject
to Company's complying with the requirements of the foregoing)
promptly pay to Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by Employee of an amount advanced by Company
pursuant to the previous subsection, a determination is made that
Employee shall not be entitled to any refund with respect to such
claim and Company does not notify Employee in writing of its intent to
contest such denial of refund prior to the expiration of thirty (30)
days after such determination, such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
(j) Change in Control. For purposes of this Agreement, a Change in
Control shall mean an occurrence of the following during the Term:
(i) The "acquisition" by any "Person" (as the term person is
used for purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) of "Beneficial Ownership"
(within the meaning of Rule 13d-3 promulgated under the 0000 Xxx) of
any securities of Company which generally entitles the holder thereof
to vote for the election of directors of Company (the "Voting
Securities") which, when added to the Voting Securities then
"Beneficially Owned" by such Person, would result in such Person
either "Beneficially Owning" fifty percent (50%) or more of the
combined voting power
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of Company's then outstanding Voting Securities or having the ability
to elect fifty percent (50%) or more of Company's directors; provided,
however, that for purposes of this paragraph (i) of Section 6(j), a
Person shall not be deemed to have made an acquisition of Voting
Securities if such Person: (a) becomes the Beneficial Owner of more
than the permitted percentage of Voting Securities solely as a result
of open market acquisition of Voting Securities by Company which, by
reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by such Person; (b)
is Company or any corporation or other Person of which a majority of
its voting power or its equity securities or equity interest is owned
directly or indirectly by Company (a "Controlled Entity"); (c)
acquires Voting Securities in connection with a "Non-Control
Transaction" (as defined in paragraph (iii) of this Section 6(j)); or
(d) becomes the Beneficial Owner of more than the permitted percentage
of Voting Securities as a result of a transaction approved by a
majority of the Incumbent Board (as defined in paragraph (ii) below);
or
(ii) The individuals who, as of the Effective Date, are members
of the Board (the "Incumbent Board"), cease for any reason to
constitute at least a majority of the Board; provided, however, that
if either the election of any new director or the nomination for
election of any new director by Company's stockholders was approved by
a vote of at least a majority of the Incumbent Board, such new
director shall be considered as a member of the Incumbent Board;
provided further, however, that no individual shall be considered a
member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 promulgated under the 0000 Xxx)
or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board (a "Proxy Contest")
including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(iii) The consummation of a merger, consolidation or
reorganization involving Company (a "Business Combination"), unless
(1) the stockholders of Company, immediately before the Business
Combination, own, directly or indirectly immediately following the
Business Combination, at least fifty percent (50%) of the combined
voting power of the outstanding voting securities of the corporation
resulting from the Business Combination (the "Surviving Corporation")
in substantially the same proportion as their ownership of the Voting
Securities immediately before the Business Combination, and (2) the
individuals who were members of the Incumbent Board immediately prior
to the execution of the agreement providing for the Business
Combination constitute at least a majority of the members of the Board
of Directors of the Surviving Corporation, and (3) no Person (other
than (x) Company or any Controlled Entity, (y) a trustee or other
fiduciary holding securities under one or more employee benefit plans
or arrangements (or any trust forming a part thereof) maintained by
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Company, the Surviving Corporation or any Controlled Entity, or (z)
any Person who, immediately prior to the Business Combination, had
Beneficial Ownership of fifty percent (50%) or more of the then
outstanding Voting Securities) has Beneficial Ownership of fifty
percent (50%) or more of the combined voting power of the Surviving
Corporation's then outstanding voting securities (a Business
Combination described in clauses (1), (2) and (3) of this paragraph
shall be referred to as a "Non-Control Transaction");
(iv) A complete liquidation or dissolution of Company; or
(v) The sale or other disposition of all or substantially all of
the assets of Company to any Person (other than a transfer to a
Controlled Entity).
Notwithstanding the foregoing, if Employee's employment is terminated and
Employee reasonably demonstrates that such termination (x) was at the request of
a third party who has indicated an intention or has taken steps reasonably
calculated to effect a Change in Control and who effectuates a Change in Control
or (y) otherwise occurred in connection with, or in anticipation of, a Change in
Control which actually occurs, then for all purposes hereof, the date of a
Change in Control with respect to Employee shall mean the date immediately prior
to the date of such termination of employment.
A Change in Control shall not be deemed to occur solely because fifty
percent (50%) or more of the then outstanding Voting Securities is Beneficially
Owned by (x) a trustee or other fiduciary holding securities under one or more
employee benefit plans or arrangements (or any trust forming a part thereof)
maintained by Company or any Controlled Entity or (y) any corporation which,
immediately prior to its acquisition of such interest, is owned directly or
indirectly by the stockholders of Company in substantially the same proportion
as their ownership of stock in Company immediately prior to such acquisition.
7. Restrictive Covenants.
(a) Employer Covenants. Company agrees that during the Term, Company
shall disclose to Employee or provide Employee with access to trade secrets
or confidential information of Company or its Subsidiaries; or place
Employee in a position to develop business goodwill on behalf of Company or
its Subsidiaries; or entrust Employee with business opportunities of
Company or its Subsidiaries.
(b) Confidential Information; Unauthorized Disclosure. During the
period of his employment hereunder and for any period following the
termination of employment, the Employee shall not, whether during the
period of his employment hereunder or thereafter, without the written
consent of the Board or a person authorized thereby, disclose to any
person, other than an employee of Company or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by
the Employee of his duties as an executive of Company, any confidential
information
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obtained by him while in the employ of Company with respect to Company's
business, including but not limited to technology, know-how, processes,
maps, geological and geophysical data, other proprietary information and
any information whatsoever of a confidential nature, the disclosure of
which he knows or should know will be damaging to Company; provided,
however, that confidential information shall not include any information
known generally to the public (other than as a result of unauthorized
disclosure by the Employee) or any information which the Employee may be
required to disclose by any applicable law, order, or judicial or
administrative proceeding.
(c) Non-Competition. As part of the consideration for the
compensation and benefits to be paid to Employee hereunder; to protect the
trade secrets and confidential information of Company or its Subsidiaries
that have been and will in the future be disclosed or entrusted to
Employee, the business good will of Company or its Subsidiaries that has
been and will in the future be developed by Employee or the business
opportunities that have been and will in the future be disclosed or
entrusted to Employee by Company or its Subsidiaries, and as an additional
incentive for Company to enter into this Agreement, Company and Employee
agree to the following competition provisions:
During the Term and for a period of one year thereafter, Employee shall not
in North America, directly or indirectly engage in or become interested
financially in as a principal, employee, partner, shareholder, agent,
manager, owner, advisor, lender, guarantor of any person engaged in any
business substantially identical to the Business (defined below); provided,
however, that (a) Employee may invest in stock, bonds or other securities
in any such business (without participating in such business) if: (i)(A)
such stock, bonds or other securities are listed on any United States
securities exchange or are publicly traded in an over the counter market
and (B) its investment does not exceed, in the case of any capital stock of
any one issuer, 5% of the issued and outstanding capital stock, or in the
case of bonds or other securities, 5% of the aggregate principal amount
thereof issued and outstanding, or (ii) such investment is completely
passive and no control or influence over the management or policies of such
business is exercised, or (b) any such business shall be deemed to exclude
ownership by Employee or any affiliated entity of interests in PLX, Plains
All American GP LLC, Plains AAP LP, Plains All American Pipeline, L.P., and
any of their respective subsidiaries and any board positions with respect
to such entities. The term "Business" shall mean the exploration,
development and production of crude petroleum and natural gas.
Notwithstanding the foregoing provisions of this Section 7(c), in the event
of a termination of Employee's employment by Company without Cause or in
the event of Employee's resignation for Good Reason, Employee shall have no
further obligations under this Section 7(c).
(d) Non-Solicitation. Employee undertakes toward Company and is
obligated, during the Term and for a period of one year thereafter, not to
solicit or hire, directly or indirectly, in any manner whatsoever (except
in response to a general solicitation), in the capacity of employee,
consultant or in any other capacity whatsoever, one or more of the
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employees, directors or officers or other persons (hereinafter collectively
referred to as "Employees") who at the time of solicitation or hire, or in
the 90-day period prior thereto, are working full-time or part-time for
Company or any of its Subsidiaries and not to endeavour, directly or
indirectly, in any manner whatsoever, to encourage any of said Employees to
leave his or her job with Company or any of its Subsidiaries and not to
endeavour, directly or indirectly, and in any manner whatsoever, to incite
or induce any client of Company or any of its Subsidiaries to terminate, in
whole or in part, its business relations with Company or any of its
Subsidiaries.
(e) Enforcement. It is the desire and intent of the parties that the
provisions of this Section 7 shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction
in which enforcement is sought. Accordingly, if any particular provision of
this Section 7 shall be adjudicated to be invalid or unenforceable, such
provision shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable. Such deletion shall apply only
with respect to the operation of such provisions of this Section 7 in the
particular jurisdiction in which such adjudication is made. In addition, if
the scope of any restriction contained in this Section 7 is too broad to
permit enforcement thereof to its fullest extent, then such restriction
shall be enforced to the maximum extent permitted by law, and the Executive
hereby consents and agrees that such scope may be judicially modified in
any proceeding brought to enforce such restriction.
(f) Remedies. In the event of a breach or threatened breach by the
Executive of the provisions of this Section 7, Company shall be entitled to
an injunction and such other equitable relief as may be necessary or
desirable to enforce the restrictions contained herein. Nothing herein
contained shall be construed as prohibiting Company from pursuing any other
remedies available for such breach or threatened breach or any other breach
of this Agreement.
(g) The parties hereto understand and acknowledge that Employee will
serve in various capacities (including, without limitation, stockholder,
employee, executive officer and director) of PLX. Company acknowledges that
no actions by Employee in any or all of his capacities with PLX shall be a
violation of the provisions of this Section 7.
8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit Employee's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by Company or any of its affiliated
companies and for which Employee may qualify, nor shall anything herein limit or
otherwise adversely affect such rights as Employee may have under any stock
option or other agreements with Company or any of its affiliated companies.
9. Assignability. The obligations of Employee hereunder are personal and
may not be assigned or delegated by him or transferred in any manner whatsoever,
nor are such
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obligations subject to involuntary alienation, assignment or transfer, except by
will or the laws of descent and distribution.
10. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered, sent by overnight
courier or by facsimile with confirmation of receipt or on the third business
day after being mailed by United States registered mail, return receipt
requested, postage prepaid, addressed to Company at its principal office address
and facsimile number, directed to the attention of the Board with a copy to the
Secretary of Company, and to Employee at Employee's residence address and
facsimile number on the records of Company or to such other address as either
party may have furnished to the other in writing in accordance herewith except
that notice of change of address shall be effective only upon receipt.
11. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
12. Successors; Binding Agreement.
(a) Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially
all of the business and assets of Company ("Successor") or any corporation
which becomes the ultimate parent corporation of Company or any such
Successor ("Ultimate Parent") to expressly assume and agree in writing
satisfactory to the Employee to perform this Agreement in the same manner
and to the same extent that Company would be required to perform it if no
such succession had taken place; provided, however, that express assumption
shall not be required where this agreement is assumed by operation of law.
As used in this Agreement, including, without limitation, in Section 3, the
term "Company" shall include any Successor and Ultimate Parent which
executes and delivers the Agreement as provided for in this Section 12 or
which otherwise becomes bound by all terms and provisions of this Agreement
by operation of law.
(b) After the death or Disability of Employee, this Agreement and all
rights of Employee hereunder shall inure to the benefit of and be
enforceable by Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
13. Indemnification. During the Term and for a period of six years
thereafter, Company shall cause Employee to be covered by and named as an
insured under any policy or contract of insurance obtained by it to insure its
directors and officers against personal liability for acts or omissions in
connection with service as an officer or director of Company or service in other
capacities at the request of Company. The coverage provided to Employee pursuant
to this Section 13 shall be of a scope and on terms and conditions at least as
favorable as the most favorable coverage provided to any other officer or
director of Company (or any successor). In
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addition, to the maximum extent permitted by the by-laws of Company in effect
from time to time and applicable law, during the Term and for a period of six
years thereafter, Company shall indemnify Employee against and hold Employee
harmless from any costs, liabilities, losses and exposures for Employee's
services as an employee, officer and director of Company (or any successor).
14. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by Employee and such officer as may be specifically
authorized by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or in compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. This Agreement is an integration of the parties'
agreement; no agreement or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. Employee represents
and warrants that the execution of this Agreement will not result in any breach
of any prior or existing agreement executed by Employee with respect to any
third party. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Texas.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
16. Entire Agreement. This Agreement contains the entire understanding of
the parties in respect of the subject matter and supersedes and replaces in full
all prior written or oral agreements and understandings between the parties with
respect to such subject matters.
- SIGNATURE PAGE FOLLOWS -
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
September 19, 2002 effective for all purposes as provided above on the
Effective Date.
PLAINS EXPLORATION & PRODUCTION
COMPANY
/s/ Xxxxx X. Xxxxxx
By:_____________________________________
Xxxxx X. Xxxxxx
Chairman and Chief Executive Officer
EMPLOYEE
/s/ Xxxx X. Xxxxxxx
________________________________________
Xxxx X. Xxxxxxx
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