EXHIBIT 1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made by and between XXXXXX
OIL CORPORATION, a Delaware corporation ("Company"), and XXXXXXX X. XXXXXXX
("Executive").
W I T N E S S E T H:
WHEREAS, Company is desirous of employing Executive in an executive
capacity on the terms and conditions, and for the consideration, hereinafter set
forth and Executive is desirous of being employed by Company on such terms and
conditions and for such consideration;
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants and obligations contained herein, Company and Executive agree as
follows:
ARTICLE 1: EMPLOYMENT AND DUTIES
1.1 Employment; Effective Date. Company agrees to employ Executive and
Executive agrees to be employed by Company, beginning as of the Effective Date
(as hereinafter defined) and continuing for the period of time set forth in
Article 2 of this Agreement, subject to the terms and conditions of this
Agreement. For purposes of this Agreement, the "Effective Date" shall be May 2,
1997.
1.2 Positions. From and after the Effective Date, Company shall employ
Executive in the positions of President and Chief Operating Officer of Company,
or in such other positions as the parties mutually may agree. On the Effective
Date, Company shall cause Executive to be elected to serve on the Board of
Directors of Company (the "Board of Directors") as a full member thereof, and
thereafter Company shall continue to cause Executive to be nominated to serve on
the Board of Directors and will use reasonable efforts to secure Executive's
election to the Board of Directors. It is the intention of the parties that
Executive will be elected to and will serve on the Board of Directors while
serving hereunder as President and Chief Operating Officer of Company.
1.3 Duties and Services. Executive agrees to serve in the positions
referred to in paragraph 1.2 and to perform diligently and to the best of his
abilities the duties and services appertaining to such offices, as well as such
additional duties and services appropriate to such offices which the parties
mutually may agree upon from time to time. Executive's employment shall also be
subject to the policies maintained and established by Company that are of
general applicability to Company's executive employees, as such policies may be
amended from time to time.
1.4 Other Interests. Executive agrees, during the period of his
employment by Company, to devote his primary business time, energy and best
efforts to the business and affairs of Company and its affiliates and not to
engage, directly or indirectly, in any other business or businesses, whether or
not similar to that of Company, except with the consent of the Board of
Directors. The foregoing notwithstanding, the parties recognize and agree that
Executive may engage in passive personal investments (including, without
limitation, commodity trading of oil and gas for Executive's own
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account) and other business activities that do not conflict with the business
and affairs of Company or interfere with Executive's performance of his duties
hereunder.
1.5 Duty of Loyalty. Executive acknowledges and agrees that Executive
owes a fiduciary duty of loyalty to act at all times in the best interests of
Company. In keeping with such duty, Executive shall make full disclosure to
Company of all business opportunities pertaining to Company's business and shall
not appropriate for Executive's own benefit business opportunities concerning
Company's business.
ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT
2.1 Term. Unless sooner terminated pursuant to other provisions hereof,
Company agrees to employ Executive for the period beginning on the Effective
Date and ending on the fourth anniversary of the Effective Date; provided,
however, that beginning with the second anniversary of the Effective Date, said
term of employment shall be extended automatically for an additional successive
one-year period as of each anniversary date of the Effective Date that occurs
while this Agreement is in effect; and provided further, however, that if, at
any time prior to any such anniversary date of the Effective Date, either party
shall give written notice to the other that no such automatic extension shall
occur, then Executive's employment shall terminate on the last day of the
two-year period beginning on the anniversary date of the Effective Date that
next occurs after such notice is given.
2.2 Company's Right to Terminate. Notwithstanding the provisions of
paragraph 2.1, Company shall have the right to terminate Executive's employment
under this Agreement at any time for any of the following reasons:
(i) upon Executive's death;
(ii) upon Executive'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 for a period of at least 180 consecutive
days;
(iii) for cause, which for purposes of this Agreement shall
mean Executive (A) has engaged in gross negligence or willful
misconduct in the performance of the duties required of him hereunder,
(B) has willfully refused without proper legal reason to perform the
duties and responsibilities required of him hereunder, (C) has
materially breached any material provision of this Agreement or any
material corporate policy maintained and established by Company that is
of general applicability to Company's executive employees, (D) has
willfully engaged in conduct that he knows or should know is materially
injurious to Company or any of its affiliates, or (E) has engaged in
illegal conduct or any act of serious dishonesty which adversely
affects, or reasonably could in the future adversely affect, the value,
reliability, or performance of Executive in a material manner;
provided, however, that Executive's employment may be terminated
pursuant to this paragraph 2.2(iii) only if such termination is
approved by at least two-thirds of the members of the Board of
Directors after Executive has been given written
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notice by Company of the specific reason for such termination and an
opportunity for Executive, together with his counsel, to be heard
before the Board of Directors; or
(iv) for any other reason whatsoever, in the sole discretion
of the Board of Directors.
Members of the Board of Directors may participate in any hearing that is
required pursuant to paragraph 2.2(iii) by means of conference telephone or
similar communications equipment by means of which all persons participating in
the hearing can hear and speak to each other; provided, however, that at least
one-half of the members of the Board of Directors shall attend the hearing in
person.
2.3 Executive's Right to Terminate. Notwithstanding the provisions of
paragraph 2.1, Executive shall have the right to terminate his employment under
this Agreement for any of the following reasons:
(i) within 60 days of and in connection with or based upon (A)
a material breach by Company of any material provision of this
Agreement, (B) an overall substantial and material reduction in the
nature or scope of Executive's duties and responsibilities, or (C) the
assignment to Executive of duties and responsibilities that are
materially inconsistent with the positions referred to in paragraph
1.2; provided, however, that, prior to Executive's termination of
employment under this paragraph 2.3(i), Executive must give written
notice to Company of any such breach, reduction or assignment and such
breach, reduction or assignment must remain uncorrected for 30 days
following such written notice; or
(ii) at any time for any other reason whatsoever, in the sole
discretion of Executive.
2.4 Notice of Termination. If Company or Executive desires to terminate
Executive's employment hereunder at any time prior to expiration of the term of
employment as provided in paragraph 2.1, it or he shall do so by giving written
notice to the other party that it or he has elected to terminate Executive's
employment 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, including, without limitation,
the provisions of Article 4 hereof.
ARTICLE 3: COMPENSATION AND BENEFITS
3.1 Base Salary. During the period of this Agreement, Executive shall
receive a minimum annual base salary of $325,000. Executive's annual base salary
shall be reviewed by the Board of Directors (or a committee thereof) on an
annual basis, and, in the sole discretion of the Board of Directors (or such
committee), such annual base salary may be increased, but not decreased,
effective as of March 1 of each year. Executive's annual base salary shall be
paid in equal installments in accordance with the Company's standard policy
regarding payment of compensation to executives but no less frequently than
monthly.
3.2 Bonuses. Executive shall be eligible to receive an annual bonus of
up to 100% of Executive's annual base salary with the amount of such bonus to be
determined by the Compensation Committee of the Board of Directors (the
"Committee") based upon criteria established from time to
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time by the Committee; provided, however, that for the period beginning on the
Effective Date and ending on December 31, 1997, such bonus shall not be less
than $90,277.78.
3.3 Initial Stock Option. On the Effective Date, Company shall grant to
Executive an option (the "Initial Option") to purchase 200,000 shares of
Company's common stock ("Stock") pursuant to the Xxxxxx Oil Corporation Restated
1989 Stock Option Plan, as amended (the "Plan"). The purchase price for each
share of Stock subject to the Initial Option shall be equal to the Fair Market
Value (as such term is defined in the Plan) of a share of Stock as of the
Effective Date. Subject to the terms of the Plan and the agreement to be
executed by Company and Executive evidencing the Initial Option, the Initial
Option shall (i) have a term of five years (which term shall begin on the
Effective Date), (ii) vest and become exercisable with respect to (A) 30% of the
shares covered thereby on the first anniversary of the Effective Date, (B) an
additional 30 % of the shares covered thereby on the second anniversary of the
Effective Date, and (C) an additional 40 % of the shares covered thereby on the
third anniversary of the Effective Date, and (iii) constitute an incentive stock
option (within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended) to the maximum extent permitted by law.
3.4 Living Expenses and Moving Allowance. Upon Executive's request at
any time after he has, during the term of his employment hereunder, relocated
his principal residence to the Fort Worth, Texas metropolitan area, Company
shall pay to Executive a lump sum amount of $50,000 to compensate Executive for
such relocation. No other amounts, except as expressly provided herein, shall be
paid to or on behalf of Executive for moving costs or other expenses associated
with the relocation of Executive's residence to the Fort Worth, Texas
metropolitan area. For the period (the "Commuting Period") beginning on the
Effective Date and ending on the earlier of (i) the date Executive relocates his
principal residence to the Fort Worth, Texas metropolitan area or (ii) the
second anniversary of the Effective Date, Company shall, at its sole cost and
expense, provide Executive with a furnished apartment in the Fort Worth, Texas
metropolitan area, which apartment shall be mutually agreeable to Company and
Executive and shall have electricity, local phone service, basic cable
television service, and weekly maid service. Further, during the Commuting
Period, Company shall (A) reimburse Executive for the reasonable costs of his
transportation between Fort Worth and Houston and (B) reimburse Executive for
his transportation expenses incurred within Fort Worth or, at the request of
Executive, provide him with an automobile for his use within Fort Worth.
3.5 Other Perquisites. During his employment hereunder, Executive
shall be afforded the following benefits as incidences of his employment:
(i) Business and Entertainment Expenses - Subject to Company's
standard policies and procedures with respect to expense reimbursement
as applied to its executive employees generally, Company shall
reimburse Executive for, or pay on behalf of Executive, reasonable and
appropriate expenses incurred by Executive for business related
purposes, including dues and fees to industry and professional
organizations and costs of entertainment and business development.
(ii) Annual Stock Options - Executive shall be entitled to
receive, on an annual basis, an option to purchase shares of Stock
pursuant to a stock option plan maintained by Company. The terms of
each such option and the number of shares of Stock subject to each
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such option shall be determined by the Committee based upon criteria
established from time to time by the Committee.
(iii) Club Membership - During Executive's employment
hereunder prior to the relocation of his principal residence to the
Fort Worth, Texas metropolitan area, Company shall pay the monthly dues
associated with Executive's existing membership in the Houston
Petroleum Club. Upon such relocation, Company shall obtain membership
for Executive in the Fort Worth Petroleum Club and Company shall pay
the initiation fees and monthly dues associated with such membership.
Executive's membership in the Fort Worth Petroleum Club shall cease
upon Executive's termination of employment hereunder, and such
membership shall be transferred to Company (or its designee) upon such
termination.
(iv) Other Company Benefits - Executive and, to the extent
applicable, Executive's spouse, dependents and beneficiaries, shall be
allowed to participate in all benefits, plans and programs, including
improvements or modifications of the same, which are now, or may
hereafter be, available to other executive employees of Company. Such
benefits, plans and programs shall include, without limitation,
Company's Deferred Compensation Plan for Select Employees and any
profit sharing plan, thrift plan, health insurance or health care plan,
life insurance, disability insurance, pension plan, supplemental
retirement plan, vacation and sick leave plan, and the like which may
be maintained by Company. Company 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.
(v) Vacation - During his employment hereunder, Executive
shall be entitled to four weeks of paid vacation each calendar year
(including 1997).
(vi) Indemnification Agreement - Contemporaneously with the
execution of this Agreement, Company and Executive shall execute and
enter into an indemnification agreement in the form previously approved
by the Board of Directors and the stockholders of Company and attached
to this Agreement as Exhibit A.
ARTICLE 4: PROTECTION OF INFORMATION
4.1 Disclosure to Executive. Company shall disclose to Executive, or
place Executive in a position to have access to or develop, trade secrets or
confidential information of Company or its affiliates; and/or shall entrust
Executive with business opportunities of Company or its affiliates; and/or shall
place Executive in a position to develop business good will on behalf of Company
or its affiliates.
4.2 Property of Company. All documents, drawings, memoranda, notes,
records, files, correspondence, manuals, models, specifications, computer
programs, E-mail, voice mail, electronic databases, maps, and all other writings
or materials of any type embodying any information relating to Company or its
business are and shall be the sole and exclusive property of Company. Upon
termination of Executive's employment by Company, for any reason, Executive
promptly shall deliver the same, and all copies thereof, to Company.
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4.3 No Unauthorized Use or Disclosure. Executive will not, at any time
during or after Executive's employment by Company, make any unauthorized
disclosure of any confidential business information or trade secrets of Company
or its affiliates, or make any use thereof, except in the carrying out of
Executive's employment responsibilities hereunder. Affiliates of the Company
shall be third party beneficiaries of Executive's obligations under this
paragraph. As a result of Executive's employment by Company, Executive may also
from time to time have access to, or knowledge of, confidential business
information or trade secrets of third parties, such as customers, suppliers,
partners, joint venturers, and the like, of Company and its affiliates.
Executive also agrees to preserve and protect the confidentiality of such third
party confidential information and trade secrets to the same extent, and on the
same basis, as Company's confidential business information and trade secrets.
4.4 Remedies. Executive acknowledges that money damages would not be
sufficient remedy for any breach of this Article by Executive, and Company shall
be entitled to enforce the provisions of this Article by terminating payments
then owing to Executive under this Agreement and/or to specific performance and
injunctive relief as remedies for such breach or any threatened breach. Such
remedies shall not be deemed the exclusive remedies for a breach of this
Article, but shall be in addition to all remedies available at law or in equity
to Company, including the recovery of damages from Executive and his agents
involved in such breach and remedies available to Company pursuant to other
agreements with Executive.
ARTICLE 5: NONCOMPETITION OBLIGATIONS
5.1 In General. As part of the consideration for the compensation and
benefits to be paid to Executive hereunder; to protect the trade secrets and
confidential information of Company and its affiliates that have been and will
in the future be disclosed or entrusted to Executive, the business good will of
Company and its affiliates that has been and will in the future be developed in
Executive, or the business opportunities that have been and will in the future
be disclosed or entrusted to Executive by Company and its affiliates; and as an
additional incentive for Company to enter into this Agreement, Company and
Executive agree to the noncompetition obligations hereunder. Executive shall
not, directly or indirectly for Executive or for others, in any geographic area
or market where Company or any of its affiliates are conducting any business or
have during the previous twelve months conducted such business:
(i) engage in any business competitive with the business
conducted by Company; or
(ii) 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
Company with respect to such competitive business.
The noncompetition obligations set forth above shall apply only during the
period that Executive is employed by Company. Further, during the period that
Executive is employed by Company and for one year thereafter, Executive shall
not, directly or indirectly for Executive or for others, induce any employee of
Company or any of its affiliates to terminate his or her employment with Company
or such affiliates, or hire or assist in the hiring of any such employee by any
person, association, or entity not affiliated with Company; provided, however,
that the one-year post-employment period referred to in
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this sentence shall be reduced to 90 days if Executive's employment hereunder
shall be terminated on the date upon which a Change in Control (as defined in
paragraph 7.3) occurs or within 12 months thereafter.
5.2 Enforcement and Remedies. Executive acknowledges that money damages
would not be sufficient remedy for any breach of this Article by Executive, and
Company shall be entitled to enforce the provisions of this Article by
terminating any payments then owing to Executive under this Agreement and/or to
specific performance and injunctive relief as remedies for such breach or any
threatened breach. Such remedies shall not be deemed the exclusive remedies for
a breach of this Article, but shall be in addition to all remedies available at
law or in equity to Company, including without limitation, the recovery of
damages from Executive and Executive's agents involved in such breach and
remedies available to Company pursuant to other agreements with Executive.
5.3 Reformation. It is expressly understood and agreed that Company and
Executive consider the restrictions contained in this Article to be reasonable
and necessary to protect the proprietary information of Company. 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.
ARTICLE 6: STATEMENTS CONCERNING COMPANY
6.1 In General. Executive shall refrain, both during the employment
relationship and after the employment relationship terminates, from publishing
any oral or written statements, to any person or entity (other than, during the
employment relationship, to Company, any of its affiliates, or any of such
entities' officers, employees, agents, or representatives) that damage or
disparage the reputation of Company, any of its affiliates, or any of such
entities' officers, employees, agents or representatives. A violation or
threatened violation of this prohibition may be enjoined by the courts. The
rights afforded Company and its affiliates under this provision are in addition
to any and all rights and remedies otherwise afforded by law.
ARTICLE 7: EFFECT OF TERMINATION ON COMPENSATION
7.1 By Expiration. If Executive's employment hereunder shall terminate
upon expiration of the term provided in paragraph 2.1 hereof because either
party has provided the notice contemplated in such paragraph, then all
compensation and all benefits to Executive hereunder shall continue to be
provided until the expiration of such term and such compensation and benefits
shall terminate contemporaneously with termination of his employment.
7.2 By Company. If Executive's employment hereunder shall be terminated
by Company prior to expiration of the term provided in paragraph 2.1, then, upon
such termination, regardless of the reason therefor, all compensation and
benefits to Executive hereunder shall terminate contemporaneously with the
termination of such employment; provided, however, that if such termination
shall be for any reason other than those encompassed by paragraphs 2.2(i), (ii),
or (iii), then Company shall provide Executive with the Termination Benefits.
For purposes of this Agreement, the term "Termination Benefits" shall mean the
following: (i) Company shall pay to Executive, within 15
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days after Executive's termination of employment, a single lump sum cash payment
in an amount equal to the aggregate base salary that would have been paid to
Executive (based upon his base salary in effect pursuant to paragraph 3.1 at the
time of Executive's termination of employment) during the unexpired portion of
the term set forth in paragraph 2.1; (ii) the Initial Option shall become
immediately exercisable in full upon Executive's termination of employment and
for a period of six months thereafter (but in no event shall the Initial Option
be exercisable after the expiration of its original term); (iii) all other
outstanding stock options granted by Company to Executive shall become
immediately exercisable in full upon Executive's termination of employment and
for a period of three months thereafter or for such greater period as may be
provided in the plan or plans pursuant to which such stock options were granted
(but in no event shall any such stock option be exercisable after the expiration
of the original term of such stock option); and (iv) during the period, if any
(but in no event for more than 18 months after the date of Executive's
termination of employment), that Executive elects to continue coverage for
himself and any of his eligible dependents under Company's group health plans
pursuant to the continuation of coverage provisions contained in Sections 601
through 608 of the Employee Retirement Income Security Act of 1974, as amended,
Executive's premiums for such coverage shall be no greater than that charged by
Company generally to its active executive employees for coverage under such
plans.
7.3 By Executive. If Executive's employment hereunder shall be
terminated by Executive prior to expiration of the term provided in paragraph
2.1, then, upon such termination, regardless of the reason therefor, all
compensation and benefits to Executive hereunder shall terminate
contemporaneously with the termination of such employment; provided, however,
that if such termination shall occur (i) for a reason encompassed by paragraph
2.3(i) , (ii) for any reason whatsoever on the date upon which a Change in
Control (as hereinafter defined) occurs or within 12 months thereafter, or (iii)
for Good Reason (as hereinafter defined) during the sixty-day period beginning
on the second anniversary of the Effective Date, then Company shall provide
Executive with the Termination Benefits. For purposes of this paragraph, the
following terms shall have the meanings indicated:
"Change in Control" shall mean (1) any merger, consolidation,
or reorganization in which Company is not the surviving entity (or
survives only as a subsidiary of an entity), (2) any sale, lease,
exchange, or other transfer of (or agreement to sell, lease, exchange,
or otherwise transfer) all or substantially all of the assets of
Company to any other person or entity (in one transaction or a series
of related transactions), (3) dissolution or liquidation of Company,
(4) when any person or entity, including a "group" as contemplated by
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
acquires or gains ownership or control (including, without limitation,
power to vote) of more than 40% of the outstanding shares of Company's
voting stock (based upon voting power), (5) as a result of or in
connection with a contested election of directors, the persons who were
directors of Company before such election shall cease to constitute a
majority of the Board of Directors, or (6) any event that is reported
by Company under Item 1 of a Form 8-K filed with the Securities and
Exchange Commission; provided, however, that the term "Change in
Control" shall not include any reorganization, merger, consolidation,
sale, lease, exchange, or similar transaction involving solely Company
and one or more previously wholly-owned subsidiaries of Company unless
such matter is described in clause (6) above.
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"Good Reason" shall mean termination by Executive of his
employment with Company because in Executive's judgment, and subject to
the good-faith concurrence of the Committee, the scope of Executive's
authority within Company is not appropriate.
7.4 Additional Payments By Company. Notwithstanding anything to the
contrary in this Agreement, in the event that any payment or distribution by
Company to or for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (a "Payment"), would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended, or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest or penalties, are hereinafter collectively referred to as the
"Excise Tax"), Company shall pay to Executive an additional payment (a "Gross-up
Payment") in an amount such that after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed on any Gross-up Payment, Executive retains an
amount of the Gross-up Payment equal to the Excise Tax imposed upon the
Payments. Company and Executive shall make an initial determination as to
whether a Gross-up Payment is required and the amount of any such Gross-up
Payment. Executive shall notify Company in writing of any claim by the Internal
Revenue Service which, if successful, would require Company to make a Gross-up
Payment (or a Gross-up Payment in excess of that, if any, initially determined
by Company and Executive) within ten days of the receipt of such claim. Company
shall notify Executive in writing at least ten days prior to the due date of any
response required with respect to such claim if it plans to contest the claim.
If Company decides to contest such claim, Executive shall cooperate fully with
Company in such action; provided, however, Company shall bear and pay directly
or indirectly all costs and expenses (including additional interest and
penalties) incurred in connection with such action and shall indemnify and hold
Executive 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
Company's action. If, as a result of Company's action with respect to a claim,
Executive receives a refund of any amount paid by Company with respect to such
claim, Executive shall promptly pay such refund to Company. If Company fails to
timely notify Executive whether it will contest such claim or Company determines
not to contest such claim, then Company shall immediately pay to Executive the
portion of such claim, if any, which it has not previously paid to Executive.
7.5 No Duty to Mitigate Losses. Executive shall have no duty to find
new employment following the termination of his employment under circumstances
which require Company to pay any amount to Executive pursuant to this Article 7.
Any salary or remuneration received by Executive from a third party for the
providing of personal services (whether by employment or by functioning as an
independent contractor) following the termination of his employment under
circumstances pursuant to which this Article 7 apply shall not reduce Company's
obligation to make a payment to Executive (or the amount of such payment)
pursuant to the terms of this Article 7.
7.6 Liquidated Damages. In light of the difficulties in estimating the
damages for an early termination of this Agreement, Company and Executive hereby
agree that the payments, if any, to be received by Executive pursuant to this
Article 7 shall be received by Executive as liquidated damages.
7.7 Incentive and Deferred Compensation. This Agreement governs the
rights and obligations of Executive and Company with respect to Executive's base
salary and certain perquisites of employment. Except as expressly provided
herein, Executive's rights and obligations both during
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the term of his employment and thereafter with respect to stock options,
restricted stock, incentive and deferred compensation, life insurance policies
insuring the life of Executive, and other benefits under the plans and programs
maintained by Company shall be governed by the separate agreements, plans and
other documents and instruments governing such matters.
ARTICLE 8: MISCELLANEOUS
8.1 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,
addressed as follows:
If to Company to: Xxxxxx Oil Corporation
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Chairman of the Board of Directors
If to Executive to: Xx. Xxxxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxx 00000
or to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices or changes of address shall be
effective only upon receipt.
8.2 Applicable Law. This Agreement is entered into under, and
shall be governed for all purposes by, the laws of the State of Texas.
8.3 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 or at any prior or subsequent
time.
8.4 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.
8.5 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.
8.6 Withholding of Taxes and Other Employee Deductions. Company 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 Company's employees generally.
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8.7 Headings. The paragraph headings have been inserted for purposes
of convenience and shall not be used for interpretive purposes.
8.8 Gender and Plurals. Wherever the context so requires, the
masculine gender includes the feminine or neuter, and the singular number
includes the plural and conversely.
8.9 Affiliate. As used in this Agreement, the term "affiliate" shall
mean any entity which owns or controls, is owned or controlled by, or is under
common ownership or control with, Company.
8.10 Assignment. This Agreement shall be binding upon and inure to the
benefit of Company and any successor of Company, by merger or otherwise. Except
as provided in the preceding sentence, this 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.
8.11 Term. This Agreement has a term co-extensive with the term of
employment provided in paragraph 2.1. Termination shall not affect any right or
obligation of any party which is accrued or vested prior to such termination.
Without limiting the scope of the preceding sentence, the provisions of Articles
4 and 6 shall survive any termination of the employment relationship and/or of
this Agreement.
8.12 Arbitration. If a dispute arises out of or related to this
Agreement and the dispute cannot be settled through direct discussions, Company
and Executive agree that they shall first endeavor to settle the dispute in an
amicable fashion, including the use of a mediator. If such efforts fail to
resolve the dispute, the dispute shall be resolved as follows:
(i) Except as provided in paragraph 8.12(ii), any and all
claims, demands, cause of action, disputes, controversies, and other
matters in question arising out of or relating to this Agreement, any
provision hereof, the alleged breach thereof, or in any way relating to
the subject matter of this Agreement, involving Company, Executive,
and/or their respective representatives, even though some or all of
such claims allegedly are extra-contractual in nature, whether such
claims sound in contract, tort, or otherwise, at law or in equity,
under state or federal law, whether provided by statute or the common
law, for damages or any other relief, shall be resolved by binding
arbitration pursuant to the Federal Arbitration Act in accordance with
the Commercial Arbitration Rules then in effect with the American
Arbitration Association. The arbitration proceeding shall be conducted
in Fort Worth, Texas. The arbitration may be initiated by either party
by the providing to the other a written notice of arbitration
specifying the claims. Within thirty days of the notice of initiation
of the arbitration procedure, each party shall denominate one
arbitrator. The two arbitrators shall select a third arbitrator failing
agreement on which within thirty days of the original notice, the
parties (or either of them) shall apply to the Senior Active United
States District Judge for the Southern District of Texas, who shall
appoint a third arbitrator. The three arbitrators, utilizing the
Commercial Arbitration Rules of the American Arbitration Association,
shall by majority vote within 120 days of the selection of the third
arbitrator, resolve all disputes between the parties. There shall be no
transcript of the hearing before the arbitrators. The arbitrators'
decision shall
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be in writing, but shall be as brief as possible. The arbitrators shall
not assign the reasons for their decision. The arbitrators' decision
shall be final and non-appealable to the maximum extent permitted by
law. Judgment upon any award rendered in any such arbitration
proceeding may be entered by any federal or state court having
jurisdiction. This agreement to arbitrate shall be enforceable in
either federal or state court. The enforcement of this agreement to
arbitrate and all procedural aspects of this agreement to arbitrate,
including but not limited to, the construction and interpretation of
this agreement to arbitrate, the issues subject to arbitration (i.e.,
arbitrability), the scope of the arbitrable issues, allegations of
waiver, delay or defenses to arbitrability, and the rules governing the
conduct of the arbitration, shall be governed by and construed pursuant
to the Federal Arbitration Act and shall be decided by the arbitrators.
In deciding the substance of any such claims, the arbitrators shall
apply the substantive laws of the State of Texas (excluding Texas
choice-of-law principles that might call for the application of some
other State's law); provided, however, it is expressly agreed that the
arbitrators shall have no authority to award treble, exemplary, or
punitive damages under any circumstances regardless of whether such
damages may be available under Texas law, the parties hereby waiving
their right, if any, to recover treble, exemplary, or punitive damages
in connection with any such claims. This agreement to arbitrate is not
applicable to disputes between or among Company and Executive based
upon or arising out of any other agreement, benefit plan, or program
heretofore or hereafter entered into between Executive and Company or
its affiliates. Notwithstanding the preceding provisions of this
paragraph 8.12(i), Company and Executive may agree to use one
arbitrator rather than three arbitrators as provided above, and, in the
event of any such agreement, the 120-day period referred to in the
sixth sentence of this paragraph 8.12(i) shall begin on the date of the
parties' selection of such one arbitrator.
(ii) Notwithstanding the agreement to arbitrate contained in
paragraph 8.12(i), in the event that either party wishes to seek a
temporary restraining order, a preliminary or temporary injunction, or
other injunctive relief in connection with any or all such claims,
demands, cause of action, disputes, controversies, and other matters in
question arising out of or relating to this Agreement, any provision
hereof, the alleged breach thereof, or in any way relating to the
subject matter of this Agreement, involving Company, Executive, and/or
their respective representatives, even though some or all of such
claims allegedly are extra-contrac tual in nature, whether such claims
sound in contract, tort, or otherwise, at law or in equity, under state
or federal law, whether provided by statute or the common law, for
damages or any other relief, each party shall have the right to pursue
such injunctive relief in court, rather than by arbitration. The
parties agree that such action for a temporary restraining order, a
preliminary or temporary injunction, or other injunctive relief may be
brought in the State or federal courts residing in Fort Worth, Texas,
or in any other forum in which jurisdiction is appropriate.
8.13 Entire Agreement. Except as provided in (i) the written benefit
plans and programs referenced in paragraph 3.5(iv) and (ii) any signed written
agreement contemporaneously or hereafter executed by Company and Executive, this
Agreement constitutes the entire agreement of the parties with regard to the
subject matter hereof, and contains all the covenants, promises,
representations, warranties and agreements between the parties with respect to
employment of Executive by Company. Without limiting the scope of the preceding
sentence, all understandings and agreements preceding the date of execution of
this Agreement and relating to the subject matter hereof are hereby null and
void
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and of no further force and effect. Any modification of this Agreement will be
effective only if it is in writing and signed by the party to be charged.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the 15th day of April, 1997, to be effective as of the Effective Date.
XXXXXX OIL CORPORATION
By: /s/ Xxxx X. Xxxxxx
---------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman
"COMPANY"
/s/ Xxxxxxx X. Xxxxxxx
------------------------------
XXXXXXX X. XXXXXXX
"EXECUTIVE"
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