EMPLOYMENT AND CONSULTING AGREEMENT
THIS EMPLOYMENT AND CONSULTING AGREEMENT ("Agreement"), effective as of
August 24, 1998 (the "Effective Date"), is by and between SEAGULL ENERGY
CORPORATION, a Texas corporation ("Seagull"), and ▇▇▇▇▇ ▇. ▇▇▇▇, an individual
who resides in Houston, Texas ("Galt").
W I T N E S S E T H :
WHEREAS, Galt is currently employed by Seagull; and
WHEREAS, Seagull and Galt entered into an Employment Agreement dated
December 30, 1983, which has been previously amended in certain minor respects
and is currently in effect (the "Employment Agreement"); and
WHEREAS, Seagull and Galt desire to enter into an agreement that
replaces the Employment Agreement and that reflects their desire for Galt to
perform certain services as a Seagull employee during a transition period
beginning on the Effective Date and subsequently to perform certain services as
a consultant after such transition period;
NOW THEREFORE, the parties, in consideration of the mutual promises,
covenants and obligations contained herein, do hereby agree as follows:
1. Effect of Agreement. Effective as of the Effective Date, this
Agreement supersedes and replaces the Employment Agreement in its entirety and
the Employment Agreement shall be null and void and of no further force and
effect.
2. Employment. Galt has resigned (a) as President and Chief Executive
Officer of Seagull, effective as of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇'▇ first day of employment
with Seagull (the "Resignation Effective Date"), (b) as a member of the
Executive Committee and its Chairman, effective as of the Resignation Effective
Date, (c) as a member of any other committee of Seagull on which Galt serves,
effective as of the Resignation Effective Date, (d) as Chairman of the Board of
Directors of Seagull (the "Board of Directors"), effective as of December 31,
1998, provided that Galt has been designated as Vice Chairman of Seagull
effective as of January, 1, 1999, and continuing through the adjournment of
Seagull's 1999 Annual Meeting of Shareholders (the "1999 Annual Meeting"), (e)
as Chairman of Seagull's ENSTAR Natural Gas Company division and as Chairman of
the ENSTAR Natural Gas Company Advisory Board, effective as of December 31, 1998
(but not as a member of such Advisory Board), and (f) from any other office,
trusteeship or position that Galt holds with
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▇▇▇▇▇▇▇ (other than as a director or employee of Seagull) or any subsidiary or
division of Seagull (other than as a member of the ENSTAR Natural Gas Company
Advisory Board) or any employee benefit plan (other than as a participant or
beneficiary of any employee benefit plan) relating to Seagull, in each case
effective as of the Resignation Effective Date. Effective at the close of
business on May 31, 1999, Galt shall cease to be an employee of Seagull. Galt
acknowledges that, effective as of January 1, 1999, he has been designated as
Vice Chairman of Seagull.
3. Vice Chairman. Effective as of January 1, 1999, the Board of
Directors has elected Galt to serve as Vice Chairman of the Board of Directors.
As Vice Chairman, Galt shall have such powers and duties as designated in
Seagull's bylaws and as from time to time may be assigned to him by the Board of
Directors or the Chairman of the Board of Directors. The designation of Vice
Chairman shall continue through the adjournment of the 1999 Annual Meeting.
4. Directorship. Galt shall serve the remainder of his current term as
a director of Seagull. Any renomination of Galt for a subsequent term as a
director of Seagull shall be considered in the same manner as other directors of
Seagull.
5. Consultancy. Effective June 1, 1999, and continuing for the
remainder of the Term of this Agreement pursuant to Paragraph 7 (the "Period of
Consultancy"), Galt shall serve as a consultant to the management of Seagull
with respect to such areas as are requested by the management of Seagull,
including the prosecution, defense, or other resolution of any litigation, now
pending or future. It is understood that during the Period of Consultancy, Galt
may be rendering services to others and, in using the services of Galt
hereunder, Seagull will exercise due regard for other commitments of Galt. Galt
shall faithfully render his best efforts and professional judgment in
performance of these services consistent with good consulting practice and to
the promotion, advancement and successful conduct of the business of Seagull. In
providing such consultation, Galt shall provide Seagull with such of his ideas,
assessments, and evaluations as Seagull may deem necessary. Galt agrees to be
available for such meetings as Seagull deems necessary for proper communication
of his consultation.
6. Compensation, Benefits and Perquisites. In consideration for the
services to be rendered pursuant to this Agreement, Seagull agrees to the
following:
(a) Compensation and Benefits During Period of Employment.
During the period beginning on the Effective Date and ending on May 31,
1999 (the "Period of Employment"), Seagull shall provide to Galt the
following compensation and benefits:
(i) Signing Bonus. Within five business days after
the date of execution hereof, Seagull shall pay to Galt a lump
sum cash payment in the amount of $1,800,000.
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(ii) Base Salary. Seagull shall pay to Galt a base
salary of $49,166.67 per month ($590,000 annual rate) in
accordance with Seagull's standard policy regarding payment of
compensation to executives, but no less frequently than
monthly.
(iii) Bonuses. For the 1998 performance year, Galt
shall be eligible to receive an annual bonus under the 1998
Seagull Energy Corporation Executive Incentive Plan (the
"EIP"), based on an Incentive Target (as such term is used in
the EIP) of 50% of Galt's annual base salary, with a Maximum
Incentive (as such term is used in the EIP) of 100% of Galt's
annual base salary; provided however, that the amount of such
annual bonus shall not be less than $295,000. In lieu of
participation in the EIP for the 1999 performance year,
Seagull shall pay Galt a lump sum cash payment in the amount
of $122,917 within five business days after May 31, 1999.
(iv) Stock Options. On August 24, 1998, Seagull shall
grant to Galt the option to purchase 100,000 shares of
Seagull's common stock ("Stock") pursuant to the Seagull
Energy Corporation 1998 Omnibus Stock Plan (the "Plan") and
effective as of January 1, 1999, Seagull shall grant to Galt
an option to purchase 50,000 shares of Stock pursuant to the
Plan (jointly, the "Options"). The purchase price for each
share of Stock subject to the Options shall be equal to the
Fair Market Value (as such term is defined in the Plan) of a
share of Stock as of the date of grant thereof. Subject to the
terms of the Plan and the agreements to be executed by Seagull
and Galt evidencing the Options, each Option shall (A) be a
nonqualified stock option, (B) have a term that expires on May
31, 2004 and (C) become fully exercisable as of May 31, 1999
(prior to which date it shall not be exercisable, except to
the extent otherwise provided pursuant to the terms of the
Plan).
(v) Loan. After the Effective Date, Seagull shall
lend, or cause to be lent to Galt (the "Loan"), an amount
sufficient to enable Galt to exercise his option to purchase
192,000 shares of Stock, which expires September 20, 1998 (the
"Expiring Option"), and to pay any applicable taxes imposed on
Galt by reason of the exercise of the Expiring Option. The
loan shall (A) be recourse, (B) be secured by a pledge of the
Stock underlying the Expiring Option, (C) have a term maturing
on May 31, 2002 and (D) bear interest at a rate that is not
less than the applicable Federal rate as such term is defined
in
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section 7872(f)(2) of the Internal Revenue Code of 1986, as
amended (the "Code") at the time thereof.
(vi) Outstanding Stock Options. Effective as of May
31, 1999, Seagull shall cause Galt's options to purchase Stock
outstanding as of such date to be amended to provide that each
such option shall be fully exercisable on such date and shall
continue to be exercisable until May 31, 2004, subject to the
expiration date contained in such options. Galt acknowledges
and agrees that the extension of the such outstanding stock
options may cause any such options intended to be incentive
stock options within the meaning of section 422(b) of the Code
("ISOs") to be treated as options that do not constitute ISOs.
(vii) Executive Supplemental Retirement Plan. Prior
to May 31, 1999, Seagull shall establish a trust (the "Trust")
in connection with the Seagull Executive Supplemental
Retirement Plan (the "ESRP"). The Trust is not intended to
result in the ESRP being treated as funded for purposes of the
Code and Title I of the Employee Retirement Income Security
Act of 1974, as amended, and shall conform to the terms of the
model rabbi trust set forth in Revenue Procedure 92-64, 1992-2
C.B. 422. Prior to May 31, 1999, Seagull shall contribute to
the Trust the Actuarially Equivalent (as such term is defined
in the ESRP) present value of Galt's Accrued Benefit (as such
term is defined in the ESRP) under the ESRP. Further, Seagull
shall cause the ESRP to be amended to expand Section 7.01 to
provide that no amendment to the ESRP shall deprive any Member
(as such term is defined in the ESRP) of any Accrued Benefit
under the ESRP to the extent that such Member has a Vested
Interest (as such term is defined in the ESRP) in such Accrued
Benefit at the time of such amendment.
(viii) Supplemental Benefit Plan. Seagull shall cause
the Seagull Supplemental Benefit Plan (the "SBP") to be
amended to provide that benefits under the SBP shall be paid
upon the later of a Participant's (as such term is defined in
the SBP) termination of employment or termination of service
as a consultant of Seagull.
(ix) Seagull Benefit Plans. Galt and, to the extent
applicable, Galt's spouse, dependents and beneficiaries, shall
be allowed to participate in all benefits, plans and programs,
including
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improvements or modifications of the same, which are now, or
may hereafter be, available to other executive employees of
Seagull. Such benefits, plans and programs shall include,
without limitation, the SBP, any profit sharing plan, thrift
plan, employee stock ownership plan, health insurance or
health care plan, life insurance, disability insurance,
pension plan, supplemental retirement plan, vacation and sick
leave plan, and the like that may be maintained by Seagull.
Seagull shall not, however, by reason of this Paragraph be
obligated to institute, maintain, or refrain from changing,
amending, or discontinuing, any such benefit plan or program,
so long as such changes are similarly applicable to executive
employees generally.
(b) Other Items. Seagull shall reimburse Galt for reasonable
out-of-pocket legal expenses that he has incurred in connection with
the transition of his employment. Such reimbursement shall occur within
five business days after the date of execution hereof or the date that
Galt submits a copies of the invoices for such legal expenses,
whichever is later. Prior to May 31, 1999, Seagull shall cause the
following items to be transferred to Galt, AS IS, WHERE IS, without
warranty (i) the Seagull memberships in the River Oaks Country Club,
the Coronado Club, the Houston Petroleum Club and the Ramada Club and
(ii) Galt's current office furnishings, all of which shall be used in
the office provided pursuant to Paragraph (d)(vi) for as long as Galt
maintains an office at Seagull's offices or otherwise provided by
Seagull.
(c) Compensation and Benefits During Period of Consultancy. During the
Period of Consultancy, Seagull shall provide to Galt the following
compensation and benefits:
(i) Consulting Fees. Within five business days after
the first day of each month during the Period of Consultancy,
Seagull shall pay Galt a monthly consulting fee in the amount
of $35,416.67 ($425,000 annual rate).
(ii) Economic Value of Seagull Benefit Plan
Participation. On January 1, 1999, Seagull shall pay to Galt a
lump sum cash payment in the amount of $400,000, which shall
represent the economic value of participation in Seagull's
benefit plans (based on an annual salary rate of $590,000) for
the Period of Consultancy.
(d) Perquisites During Term of Agreement. During the Term of
this Agreement, Seagull shall provide to Galt the following
perquisites:
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(i) Annual Life Insurance Premiums. On the date and
in the manner designated by Galt, which date shall be within
ninety days of the date specified below, Seagull shall tender
annual premiums in the amounts specified below by check
payable to the insurance company designated by Galt to be
applied by such company to the insurance policy designated by
Galt.
Due Date Amount
2-9-99 $6,355
2-9-00 7,225
2-9-01 8,100
2-9-02 8,990
(ii) Company Automobile. Seagull will provide to Galt
for his personal and business use a top-of-the-line
automobile, and shall provide, or reimburse Galt for,
maintenance and insurance (liability and collision coverage
insuring both Seagull and Galt and covering both business and
personal use) for such automobile. Such automobile shall be
owned or leased by Seagull, or an affiliate of Seagull, and,
if requested by Galt, shall be replaced, provided that more
than three years have elapsed since the last such replacement.
At any time during the term of this Agreement, Galt shall have
the right to purchase the automobile provided by Seagull as of
the date of execution hereof, and any other automobile
subsequently provided by Seagull for an amount equal to
Seagull's book value at the time of any such purchase.
(iii) Business and Entertainment Expenses. Seagull
will reimburse Galt for, or pay on behalf of Galt, reasonable
and appropriate expenses incurred and properly accounted for
by Galt for Seagull business related purposes, including dues
and fees to industry and professional organizations, costs of
entertainment and business development, and costs reasonably
incurred as a result of Galt's spouse accompanying Galt on
business travel.
(iv) Club Dues. In addition to the other business and
entertainment expenses reimbursable pursuant to Paragraph
6(d)(iii), Seagull shall pay the membership fees, dues and
assessments for Galt's memberships in the Eldorado Country
Club, the Castle Pines Golf Club, the River Oaks Country Club,
the Southern Hills Country
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Club, the Coronado Club, the Houston Petroleum Club and the
Ramada Club.
(v) Annual Physical Examination. Seagull shall pay
for the cost of an annual physical examination to be conducted
by a doctor or clinic of Galt's choosing in Houston, Texas.
(vi) Office, Secretary and Parking. Seagull shall
provide Galt with an office and secretary within Seagull's
Houston offices. Further, Seagull shall provide at no expense
to Galt a parking place convenient to Galt's office.
Notwithstanding the foregoing, during the period beginning
June 1, 2002 and ending May 31, 2004, Seagull shall provide
Galt with (A) an office in the same office building, but
outside of Seagull's principal executive offices, (B) Seagull
support services with respect to such office, and (C) at no
expense to Galt a parking place convenient to such office.
(vii) Medicare Supplemental Coverage. In the event
that Seagull amends its health insurance or health care plan
during the Term of this Agreement in order to provide for
Medicare supplemental coverage for retirees, Galt and any of
his eligible dependents shall be allowed to participate in
such coverage; provided, however, that if such amendment
occurs during the Period of Consultancy, and Galt and his
dependents are not otherwise eligible for such coverage, Galt
shall receive, within five business days of the effective date
of such amendment, a lump sum payment in amount equal to the
economic value of such coverage for the remainder of the Term
of this Agreement.
Galt acknowledges and hereby agrees that the compensation payable pursuant to
this Paragraph is for all services rendered pursuant to this Agreement and that
he shall receive no separate fees or other compensation, benefits or perquisites
with respect to his services as a director, Vice Chairman or any other offices
of Seagull.
7. Term and Termination of Agreement. Seagull agrees to retain the
services of Galt and Galt agrees to provide such services pursuant to this
Agreement for a term of beginning on the Effective Date and ending on May 31,
2002 (the "Term"), subject to earlier termination as provided below.
Notwithstanding the foregoing, the parties hereto may terminate Galt's services
prior to the end of such Term pursuant to Paragraphs (a) or (b) below.
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(a) Seagull shall have the right to terminate Galt's services
under this Agreement at any time for any of the following reasons:
(i) Upon Galt's death;
(ii) Upon Galt's becoming incapacitated by
accident, sickness or other circumstance
which renders him mentally or physically
incapable of performing the duties and
services required of him hereunder on a
full-time basis with reasonable
accommodation for a period of at least 120
consecutive days or for a period of 180
business days during any twelve-month
period;
(iii) For cause, which for purposes of this
Agreement shall mean a finding by the Board
of Directors of Galt's gross negligence or
wilful misconduct in the rendering of
services required of him pursuant to this
Agreement or Galt's final conviction of a
felony or of a misdemeanor involving moral
turpitude, excluding misdemeanor convictions
relating to the operation of a motor
vehicle;
(iv) For Galt's material breach of any material
provision of this Agreement, which, if
correctable, remains uncorrected for 30 days
following written notice of such breach to
Galt by Seagull; or
(v) For any other reason whatsoever in the sole
discretion of the Board of Directors.
(b) Galt shall have the right to terminate his services under
this Agreement at any time for any of the following reasons:
(i) For Seagull's material breach of any
material provision of this Agreement, which,
if correctable, remains uncorrected for 30
days following written notice of such breach
to Seagull by Galt; or
(ii) For any other reason whatsoever in the sole
discretion of Galt.
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(c) If Seagull or Galt desires to terminate Galt's services
hereunder at any time prior to the expiration of the Term of this
Agreement, it or he shall do so by giving written notice to the other
party that it or he has elected to terminate Galt's services hereunder
and stating the effective date and reason for such termination;
provided that no such action shall alter or amend any other provisions
hereof or rights arising hereunder.
(d) In the event that Galt's services are terminated by
Seagull as provided in (a) above prior to the expiration of the Term of
this Agreement, then, upon such termination, the compensation, benefits
and perquisites payable pursuant to Paragraph 6 shall terminate
contemporaneously with the termination of such services, except that if
such termination shall be pursuant to (a)(i), (a)(ii) or (a)(v), such
compensation, benefits and perquisites shall continue for the balance
of the Term of this Agreement; provided, however, that (i) if such
termination occurs prior to January 1, 1999, the stock option scheduled
to be granted on such date pursuant to Paragraph 6(a)(iv) shall be
granted outside the Plan and shall be fully exercisable on the date of
grant thereof, and (ii) if such termination occurs prior to May 31,
1999, (A) effective as of the date of such termination, Galt's
outstanding options as of such date shall become fully exercisable and
shall continue to be exercisable until May 31, 2004, subject to the
expiration date contained in such options and (B) Galt shall receive
the Economic Value of participation in the Seagull Benefit Plans for
the period after the date of such termination and before May 31, 1999.
(e) In the event that Galt's services are terminated by Galt
as provided in (b) above prior to the expiration of the Term of this
Agreement, then, upon such termination, the compensation, benefits and
perquisites payable pursuant to Paragraph 6 shall terminate
contemporaneously with the termination of such services, except that if
such termination shall be pursuant to (b)(i), such compensation,
benefits and perquisites shall continue for the balance of the Term of
this Agreement provided, however, that (i) if such termination occurs
prior to January 1, 1999, the stock option scheduled to be granted on
such date pursuant to Paragraph 6(a)(iv) shall be granted outside the
Plan and shall be fully exercisable on the date of grant thereof, and
(ii) if such termination occurs prior May 31, 1999, (A) effective as of
the date of such termination, Galt's outstanding options as of such
date shall become fully exercisable and shall continue to be
exercisable until May 31, 2004, subject to the expiration date
contained in such options and (B) Galt shall receive the Economic Value
of participation in the Seagull Benefit Plans for the period after the
date of such termination and before May 31, 1999.
8. Protection of Information. Galt acknowledges that Seagull's business
is highly competitive and that Seagull's methods, strategies, books, records,
and documents, Seagull's
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technical information concerning its products, equipment, services, and
processes, procurement procedures and pricing techniques, and the names of and
other information (such as credit and financial data) concerning Seagull's
customers, business affiliates, affairs, and operations all comprise
confidential business information and/or trade secrets ("Confidential
Information") of Seagull which are valuable, special, and unique assets of
Seagull which Seagull uses in its business to obtain a competitive advantage
over its competitors which do not know or use this information. Galt further
acknowledges that protection of Seagull's Confidential Information against
unauthorized disclosure and use is of critical importance to Seagull in
maintaining its competitive position. Accordingly, Galt hereby agrees that,
notwithstanding any other provisions of this Agreement other than those
contained in the following sentences, he will not at any time during the Term of
this Agreement make any unauthorized disclosure of any Confidential Information
of Seagull or make any unauthorized use thereof. However, Galt's obligations
under this paragraph shall not extend to:
(a) Information which is or becomes a part of the public domain or
is available to the public by publication or otherwise without
disclosure by Galt;
(b) Information which was within Galt's knowledge or in his
possession prior to his initial employment by Seagull;
(c) Information which, either prior or subsequent to Seagull's
disclosure to Galt, was disclosed to Galt, without an
obligation of confidentiality, by a third party who did not
acquire such information, directly or indirectly from Galt,
Seagull, or from any third party who is under an obligation of
confidentiality; or
(d) Any disclosure of Confidential Information by Galt which is
required by law, including deposition or trial testimony by
Galt pursuant to subpoena. If Galt is requested or
required (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative
demand, or similar process) to disclose any Confidential
Information, Galt will promptly notify Seagull of such request
or requirements so that Seagull may seek an appropriate
protective order or waive compliance with the provisions
of this Agreement.
Galt acknowledges and agrees that money damages would not be sufficient remedy
for any breach of this Paragraph concerning Confidential Information by Galt,
and Seagull shall be entitled to seek specific performance and injunctive relief
as remedies for such breach or threatened breach, as well as reasonable and
necessary attorneys' fees, experts' fees, and costs incurred in the connection
with such breach or threatened breach. Such remedies shall not be deemed the
exclusive remedies for
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such a breach by Galt but shall be in addition to all remedies available at law
or in equity to Seagull, including the recovery of damages from Galt. For
purposes of this Paragraph, Seagull shall be construed to include any parent,
subsidiary, or other affiliate of Seagull.
9. Ownership by Seagull. Seagull shall, without further remuneration to
Galt, own, be entitled to possession of, and have the right to use, publish, and
disclose any results, reports, product, or data developed by Galt during the
course of his services hereunder, but identification of Galt with such results,
reports, or data shall not be made without Galt's express consent.
10. Noncompetition Provisions. As part of the consideration for the
compensation, benefits and perquisites to be paid to Galt pursuant to Paragraph
6 hereunder; to protect the trade secrets and confidential information of
Seagull and its affiliates that have been and will in the future be disclosed or
entrusted to Galt, the business good will of Seagull and its affiliates that has
been and will in the future be developed in Galt, or the business opportunities
that have been and will in the future be disclosed or entrusted to Galt by
Seagull and its affiliates; and as an additional incentive for Seagull to enter
into this Agreement, Seagull and Galt agree to the noncompetition obligations
hereunder. Galt shall not, directly or indirectly for Galt or for others, in any
geographic area or market where Seagull or any of its affiliates are conducting
any business as of the Effective Date or have during the previous twelve months
conducted such business:
(a) engage in any business competitive with the business conducted
by Seagull;
(b) render advice or services to, or otherwise assist, any other
person, association, or entity who is engaged, directly or
indirectly, in any business competitive with the business
conducted by Seagull with respect to such competitive
business; or
(c) induce any employee of Seagull or any of its affiliates to
terminate his or her employment with Seagull or such
affiliates, or hire or assist in the hiring of any such
employee by any person, association, or entity not affiliated
with Seagull.
These noncompetition obligations shall apply during the period that Galt is
employed by Seagull, is a consultant to Seagull or following the termination of
employment or consultancy, is receiving compensation, benefits or perquisites
pursuant to Paragraph 6. Notwithstanding the preceding sentence, these
noncompetition obligations shall not apply after a termination for a reason
encompassed by Paragraph 7(a)(v) or (b)(i). Galt understands that the
restrictions set forth in this Paragraph may limit Galt's ability to engage in
certain businesses anywhere in the world during the period provided for above,
but acknowledges that Galt will receive sufficiently high remuneration under
this Agreement to justify such restriction. Galt acknowledges that money damages
would not be sufficient remedy for any breach of this Paragraph by Galt, and
Seagull shall be entitled to enforce
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the provisions of this Paragraph by terminating any payments then owing to Galt
under this Agreement and/or to specific performance and injunctive relief as
remedies for such breach or any threatened breach; provided, however, that
payments then owing to Galt may not be terminated unless the Board of Directors
determines that such breach by Galt has directly resulted or could reasonably be
expected to result in a material adverse economic impact on Seagull's business.
Such remedies shall not be deemed the exclusive remedies for a breach of this
Paragraph, but shall be in addition to all remedies available at law or in
equity to Seagull, including without limitation, the recovery of damages from
Galt and Galt's agents involved in such breach and remedies available to Seagull
pursuant to other agreements with Galt. It is expressly understood and agreed
that Seagull and Galt consider the restrictions contained in this Paragraph to
be reasonable and necessary to protect the proprietary information of Seagull.
Nevertheless, if any of the aforesaid restrictions are found by a court having
jurisdiction to be unreasonable, or overly broad as to geographic area or time,
or otherwise unenforceable, the parties intend for the restrictions therein set
forth to be modified by such court so as to be reasonable and enforceable and,
as so modified by the court, to be fully enforced.
11. Release. As part of the consideration for the compensation,
benefits and perquisites to be paid to Galt pursuant to Paragraph 6 and as an
additional incentive for Seagull to enter into this Agreement, Galt hereby
agrees to execute a release, at the time and in the form established by Seagull,
releasing Seagull, its shareholders, partners, officers, directors, employees
and agents from any and all claims and from any and all causes of action of any
kind or character, including but not limited to all claims or causes of action
arising out of Galt's employment with Seagull or his separation therefrom, other
than claims or causes of action arising out of the provisions of this Agreement.
12. Withholding of Taxes and Other Employee Deductions. During the
Period of Employment, Seagull may withhold from any benefits and payments made
pursuant to this Agreement all federal, state, city and other taxes as may be
required pursuant to any law or governmental regulation or ruling and all other
normal employee deductions made with respect to Seagull's employees generally.
13. Independent Contractor. During the Period of Consultancy, Galt's
relationship to Seagull hereunder will be that of an independent contractor.
Nothing in this Agreement is intended to create an employer/employee
relationship between Seagull and Galt during the Period of Consultancy or to
allow Seagull to exercise control or direction over the manner or method by
which Galt performs the consulting services which are the subject matter of this
Agreement during such period. Galt shall be responsible for payment of all
income, self-employment, or other taxes attributable to compensation paid
hereunder by Seagull to Galt during the Period of Consultancy, and Galt agrees
to hold Seagull harmless for withholding or payment of such taxes.
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14. Notices. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered or when mailed by United States,
registered or certified mail, return receipt requested, postage prepaid, if
addressed as follows:
If to Seagull, to: Seagull Energy Corporation
1700 First City Tower
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman of
the Board
If to Galt, to: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
or such other addresses as either party may furnish to the other in writing, in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.
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 Agreement.
16. Governing Law. This Agreement is entered into under and shall be
governed for all purposes by the laws of the State of Texas.
17. No Waiver. No failure by either party hereto at any time to give
notice of any breach by the other party of, or to require compliance with, any
condition or provision of this Agreement shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or at any prior or
subsequent time.
18. Severability. If a court of competent jurisdiction determines that
any provision of this Agreement is invalid or unenforceable, then the invalidity
or unenforceability of that provision shall not affect the validity or
enforceability of any other provision of this Agreement, and all other
provisions shall remain in full force and effect.
19. Assignment. This Agreement shall be binding upon and inure to the
benefit of Seagull and any successor of Seagull, by merger or otherwise.
Further, this Agreement shall be binding and inure to the benefit of Galt, his
spouse, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, and his estate. If Galt shall die prior to full payment
of amounts due pursuant to this Agreement, such amounts shall be payable
pursuant to the terms of this Agreement to his spouse, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, if then
living, or if ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ is not then living, to his estate. Except as
provided in the preceding sentences, this
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Agreement and the rights and obligations of the parties hereunder are personal,
and neither this Agreement nor any right, benefit, or obligation of either party
hereto shall be subject to voluntary or involuntary assignment, alienation, or
transfer, whether by operation of law or otherwise, without the prior written
consent of the other party.
20. Entire Agreement. Except as provided in (i) the written benefit
plans and programs referenced in Paragraph 6, (ii) any signed agreement
contemporaneously executed by Seagull and Galt and (iii) the Severance Agreement
dated March 17, 1997, as amended, between Seagull and Galt, this Agreement
represents the entire agreement between the parties hereto with respect to the
matters covered herein and may not be changed, altered, or modified in any
respect except by an instrument in writing signed by both the parties hereto.
IN WITNESS WHEREOF, Seagull has caused this Agreement to be duly
executed by one of its officers thereunto duly authorized and Galt has executed
this Agreement, this 21st day of September, 1998, to be effective as of the
Effective Date.
SEAGULL ENERGY CORPORATION
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President
and Chief Financial Officer
/s/▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
VEHOU02:119746.1
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