EXHIBIT 10.23
EMPLOYMENT AGREEMENT
This Agreement is effective as of August 14, 1997 and is between Xxxxxxx X.
Xxxxxx ("Xxxxxx") and Nuevo Energy Company, a Delaware corporation having its
principal place of business at 0000 Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000
(the "Company").
WHEREAS, Xxxxxx is being employed as the President and Chief Executive
Officer of the Company; and
WHEREAS, the Company believes it to be to its advantage to insure that
Xxxxxx continues to render services as hereinafter provided for the Company;
NOW THEREFORE, in consideration of the mutual covenants and obligations
herein contained, it is mutually agreed between the parties hereto as follows:
1. Employment and Term. The Company hereby employs Xxxxxx and Xxxxxx
hereby agrees to serve as the President and Chief Executive Officer of the
Company. The term of this Employment Agreement shall be effective as of the
date first above written and shall terminate two (2) years from the date hereof,
unless earlier terminated as hereinafter provided. After the initial term of
Xxxxxx'x employment, such employment shall be automatically extended for
successive one-year periods, unless earlier terminated as hereinafter provided
or upon ninety (90) days' advance notice by the Board of Directors to Xxxxxx of
its intention to not renew. For each such extension, the terms of employment
shall be subject to approval by the Compensation Committee of the Board of
Directors and agreed to by Xxxxxx. If agreement cannot be reached, or in the
event that the Company decides not to renew this Employment Agreement at any
time, the Company agrees to pay Xxxxxx in accordance with the provisions of
Section 4.B.
2. Position and Responsibilities. Xxxxxx shall serve as President and
Chief Executive Officer of the Company. Xxxxxx shall have the authority, power
and duty to manage the business and affairs of the Company (subject to the
provisions of applicable corporate law) and, without limitation, shall have such
other obligations duties, authority and power to do all acts and things as are
customarily done by a person holding the same or equivalent position or
performing duties similar to those to be performed by Xxxxxx in corporations of
similar size to the Company and shall perform such managerial duties and
responsibilities for the Company as may be assigned to him by the Board of
Directors of the Company and, at no additional remuneration, shall serve in such
other comparable positions with Affiliates and Associates of the Company as the
Board of Directors of the Corporation may from time to time determine. Xxxxxx
shall be based at the Company's principal executive offices located in Houston,
Texas.
3. Compensation.
A. In consideration of the services to be rendered by Xxxxxx to the
Company, the Company will pay Xxxxxx a salary of $375,000.00 per annum for the
year beginning August 14, 1997 and the year ending August 14, 1999. Such salary
shall be payable in conformity with the Company's prevailing practice for
executives' compensation as such practice shall be established or modified from
time to time. Salary payments shall be subject to all applicable federal and
state withholding, payroll and other taxes. The Company also hereby agrees to
pay Xxxxxx an initial bonus in the amount of $187,500.00 to secure the execution
of this Agreement by Xxxxxx.
B. All subsequent cash bonuses shall be based on performance and be at the
sole discretion of the Board's Compensation Committee.
C. The Company agrees to reimburse Xxxxxx for the reasonable expenses
incurred by him in obtaining and maintaining a membership in the Houston Center
Club, the Petroleum Club, and the Young Presidents Organization (the "YPO").
D. The Compensation Committee of the Board of Directors shall consider the
grant of options to Xxxxxx based upon his performance. The exercise price for
such option shall be the fair market value of the Company's Common Stock as of
the date of such option grant. The shares subject to such option will vest six
(6) months after the grant date. As of the date of this Agreement, the
Compensation Committee hereby grants to Xxxxxx a total of 300,000 options to
purchase shares of the Company, in accordance with the terms of the Option Grant
attached to this Agreement. An additional 100,000 stock options will be granted
to Xxxxxx on August 14, 1998 at a strike price equal to the closing price of the
Company's stock on that date. Stock splits of the Company's stock, if any, will
be proportionately reflected in the August 14, 1998 grant of options.
X. Xxxxxx shall be entitled to participate in and to receive all rights
and benefits under any life insurance, disability, medical and dental, health
and accident and profit sharing or deferred compensation plans and such other
plan or plans as may be implemented by the Company during the term of this
Agreement. Xxxxxx shall also be entitled to participate in and to receive all
rights and benefits under any plan or program adopted by the Company for any
other or group of other senior employees of the Company, including without
limitation, the rights and benefits under the directors' and officers' liability
insurance currently in place under the Company's insurance program for the
directors and officers of the Company.
4. Termination. The Company shall be entitled to terminate this Agreement
and Xxxxxx'x employment with the Company subject to Section 4.B at any time and
for whatever reason; or at any time for just cause by written notice to Xxxxxx.
Termination of Xxxxxx'x employment by the Company shall constitute a termination
"for just cause" if
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such termination is for one or more of the following reasons: (i) the willful
failure or refusal of Xxxxxx to render services to the Company in accordance
with his obligations under this Employment Agreement; such failure or refusal to
be uncured and continuing for a period of not less than fifteen (15) days after
notice outlining the situation is given by the Company to Xxxxxx; (ii) the
commission by Xxxxxx of an act of fraud or embezzlement against the Company or
the commission by Xxxxxx or any other action with the intent to injure the
Company or (iii) Xxxxxx having been convicted of a felony. In such event, Xxxxxx
shall be entitled to no severance or other termination benefits.
X. Xxxxxx shall be entitled to terminate this Agreement and his employment
with the Company within, but not after six (6) months following any of the
following events (a "Terminating Event" or, collectively, the "Terminating
Events"); (i) Xxxxxx is assigned any responsibilities or duties materially
inconsistent with his position, duties, responsibilities and status with the
Company as in effect at the date of this Agreement or as may be assigned to
Xxxxxx pursuant to Section 2 hereof, or his title or offices as in effect at the
date of this Agreement or as Xxxxxx may be appointed or elected to in accordance
with Section 2 are materially changed; (ii) the Company enters into an
amalgamation, plan of arrangement, consolidation, merger or other form of
reorganization; (iii) the Company sells all or substantially all of the assets
of the Company (other than to a wholly-owned subsidiary of the Company); (iv)
there is a Change of Control of the Company. ["Change of Control" means or
shall be deemed to have occurred if and when: (a) the acquisition, by whatever
means (including without limitation, amalgamation, consolidation, liquidation,
arrangement or merger), by a person (or two or more persons who in such
acquisition have acted jointly or in concert or intend to exercise jointly or in
concert any voting rights attaching to the securities acquired), directly or
indirectly, of the beneficial ownership of such number of voting securities or
rights to voting securities of the Company, which together with such person's
then owned voting securities and rights to voting securities, if any, represent
(assuming the full exercise of such rights to voting securities) more than 20%
of the combined voting power of the Company's then outstanding voting
securities, together with the voting securities that would be outstanding on the
full exercise of the rights to voting securities acquired and such person's
previously owned rights to voting securities; or (b) individuals who were
members of the board of directors of the Company immediately prior to a meeting
of the shareholders of the Company involving a contest for or on an item of
business relating to the election of directors shall not constitute a majority
of the board of directors following such election.]; (v) there is a reduction in
the salary payable to Xxxxxx pursuant to Section 3.A. hereof; (vi) any failure
by the Company to continue to provide to Xxxxxx any benefit, bonus, profit
sharing, incentive, remuneration or compensation plan, stock ownership or
purchase plan, stock option plan, life insurance, disability plan, pension plan
or retirement plan in which Xxxxxx was entitled to participate in as at the date
of this Agreement, or the taking by the Company of any action adversely
affecting Xxxxxx'x participation in or materially reducing his rights or
benefits under or pursuant to any such plan or the failure by the Company to
increase or improve such rights or benefits on a basis consistent with practices
in effect prior to the date of the Agreement or with practices implemented and
subsequent to the date of this Agreement with respect to
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the senior executives of the Company generally, whichever is more favorable to
Xxxxxx; (vii) the Company requires Xxxxxx to relocate to any city or community
other than the City of Houston, except for required travel on the Company's
business to an extent substantially consistent with Xxxxxx'x business
obligations under this Agreement; or (viii) there is any material breach by the
Company of any provision of this Agreement.
B. Subject to Section 4.E. the termination by the Company of this
Agreement and Xxxxxx'x employment with Company, other than for just cause, shall
entitle Xxxxxx to receive, within thirty (30) days after the date of
termination, a sum equal to two (2) times the aggregate of: (i) Xxxxxx'x salary
for the twelve (12) months immediately preceding the termination, less any
applicable withholdings or deductions required by law; and (ii) any bonus paid
to Xxxxxx in such period.
C. Subject to Section 4.E. the termination by Xxxxxx of this Agreement and
Xxxxxx'x employment for any of the reasons specified in Section 4.A. shall
entitle Xxxxxx to receive, within thirty (30) days after the date of
termination, a sum equal to two (2) times the aggregate of: (i) Xxxxxx'x salary
for the twelve (12) months immediately preceding the termination, less any
withholdings or deductions required by law; and (ii) any bonus paid to Xxxxxx in
such period.
D. The parties agree that, because there can be no exact measure of the
damages which would occur to Xxxxxx as a result of termination of employment,
such payments contemplated in Sections 4.B. and 4.C. shall be deemed to
constitute liquidated damages and not a penalty and the Company agreed that
Xxxxxx shall not be required to mitigate his damages.
E. In addition to payments required to be made pursuant to Sections 4.B.
or 4.C, upon termination of this Agreement by the Company pursuant to Section 4
or by Xxxxxx pursuant to Section 4.A., the salary otherwise payable to and
earned by Xxxxxx to the date of termination shall be prorated to the date of
termination and shall become due and payable within thirty (30) days after the
date of termination and all other forms of compensation payable to Xxxxxx
pursuant to Article 3 shall, except as expressly provided herein or in any
Schedule hereto, terminate on the date of the termination; provided that as
expeditiously as possible after the termination the Company shall pay or
reimburse Xxxxxx for all reasonable business expenses incurred prior to the
termination. Notwithstanding the foregoing, Xxxxxx shall have a period of one
(1) year from the date of termination to exercise any stock options held by him,
and the Company shall continue to provide Xxxxxx with the medical, dental and
health benefits (but not life or disability insurance) set forth in Section 3.E.
for a period of eighteen (18) months from the date of termination.
F. Notwithstanding anything to the contrary herein, Xxxxxx shall be
entitled to terminate this Agreement and his employment with the Company at his
pleasure upon sixty days (60) written notice to such effect. In such event,
Xxxxxx shall not be entitled to any further compensation. The Company
acknowledges and agrees that
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the Company shall have no remedy against Xxxxxx, in law or otherwise, upon the
termination of this Agreement and Xxxxxx'x employment with the Company in
accordance with this Section 4.F.
G. Notwithstanding the termination of this Agreement under Section 4, the
provisions of Sections 4.E., 10 and 11, and all other provisions hereof which by
their terms are to be performed following the termination hereof shall survive
such termination and be continuing obligations.
5. Ownership Interest in Torch Energy. Xxxxxx agrees to divest himself of
all legal and equitable interest in Torch Energy Advisors Incorporated ("Torch
Energy"), whether such interests are common stock, options to acquire common
stock, or rights to receive payments from Torch Energy.
6. Consent and Waiver by Third Parties. Xxxxxx hereby represents and
warrants that he has obtained all necessary waivers and/or consents from third
parties as to enable him to accept employment with the Company on the terms and
conditions set forth herein and to execute and perform this Employment Agreement
without being in conflict with any other agreement, obligations or understanding
with any such third party.
7. Waivers and Modifications. This Employment Agreement may be modified,
and the rights and remedies of any provision hereof may be waived, only in
accordance with this Section 6. No modification or waiver by the Company shall
be effective without the consent of at least a majority of the Compensation
Committee of the Board of Directors then in office at the time of such
modification or waiver. No waiver by either party of any breach by the other or
any provision hereof shall be deemed to be a waiver of any later or other breach
thereof or as a waiver of any other provision of this Employment Agreement.
This Employment Agreement sets forth all of the terms of the understandings
between the parties with reference to the subject matter set forth herein and
may be waived, changed, discharged or terminated orally or by any course of
dealing between the parties, but only by an instrument in writing signed by the
party against whom any waiver, change, discharge or termination is sought.
8. Governing Law. This Employment Agreement shall be construed in
accordance with the laws of the State of Texas.
9. Severability. In case of one or more of the provisions contained in
this Employment Agreement for any reason shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Employment Agreement, but this
Employment Agreement shall be construed as if such invalid, illegal or
unenforceable provisions had never been contained herein.
10. The Company agrees in indemnify and save Xxxxxx harmless from and
against all costs, charges and expenses, including an amount paid to settle an
action or satisfy a judgment, reasonably incurred by him in respect of any
civil, criminal or
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administrative action or proceeding to which Xxxxxx is made a party by reason of
having been a director or officer of the Company if: (i) Xxxxxx acted honestly
and in good faith with a view to the best interests of the Company; and (ii) in
the case of criminal or administrative action or proceeding that is enforced by
a monetary penalty, Xxxxxx had reasonable grounds for believing that his conduct
was lawful.
11. The Company agrees to indemnify and save Xxxxxx harmless from and
against all costs, charges and expenses reasonably incurred by him in respect of
an action by or on behalf of the Company to procure a judgment in the Company's
favor to which Xxxxxx is made a party by reason of having been a director or
officer of the Company if: (i) Xxxxxx acted honestly and in good faith with a
view to the best interests of the Company; and (ii) in the case of a criminal or
administrative action or proceeding that is enforced by a monetary penalty,
Xxxxxx had reasonable grounds for believing that his conduct was lawful.
IN WITNESS WHEREOF, each of the parties hereto has executed this Employment
Agreement under seal as of the date and year first above written.
NUEVO ENERGY COMPANY
By:
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Xxxx X. Xxxxxxxx
Title: Chairman, Compensation Committee
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Xxxxxxx X. Xxxxxx
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