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EXHIBIT 10.7
October 22, 1997
Mr. H. Leighton Steward
909 Poydras Street
New Orleans, Louisiana 70112
Dear Leighton,
This letter constitutes your Employment Agreement with
Burlington Resources Inc. (the "Company") when accepted by you in the space
provided below. Reference is hereby made to the Agreement and Plan of Merger
dated as of July 16, 1997 among the Company, The Louisiana Land and Exploration
Company ("LL&E") and BR Acquisition Corporation (the "Merger Agreement").
1. POSITION AND TERM. The Company agrees to employ you
and you agree to act as its Vice Chairman of the Board of Directors of the
Company (the "Board") during the period commencing at the Effective Time of the
Merger, as those terms are defined in the Merger Agreement, and continuing
through December 1, 1999. The Company will amend its By-Laws to provide that
the position of Vice Chairman of the Board will constitute an officer position
within the Company. For at least so long as you serve as Vice Chairman, you
will also serve as Chairman of the Executive Committee of the Board.
2. BASE SALARY. Your minimum salary will be $450,000
per annum or such higher rate as may be fixed from time to time by the Board.
3. STOCK OPTIONS. You shall participate in the
Company's 1993 Stock Incentive Plan in accordance with the Company's normal
option grant process as to amounts and timing and options granted thereunder
shall be at an option price per share equal to 100% of the fair market value of
such stock on such date of grant and become exercisable on the first
anniversary of such date of grant; provided, however, that the second grant to
you of stock options shall in no event become exercisable later than November
30, 1999.
4. INCENTIVE COMPENSATION, LONG-TERM INCENTIVES AND
OTHER BENEFITS. You will participate with other senior executives of the
Company in compensation and benefit plans in effect from time to time including
the Incentive Compensation Plan, the Stock Incentive Plan, the Performance
Share Unit Plan, the Deferred Compensation Plan, the Supplemental Benefits
Plan, the Key Executive Severance Protection Plan and any other plan or
perquisites available to other executives at your level of responsibility in
the Company, including a company
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Mr. H. Leighton Steward
October 22, 1997
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automobile and company-provided country and luncheon club memberships but not
including the Senior Executive Survivor Plan. You will also participate in
health, retirement, survivor and disability plans available to all employees of
the Company. You understand that the Company may amend, modify or terminate
these plans at any time. You shall also be entitled to receive $50,000 per
year, payable in monthly installments, as a housing allowance and such amount
shall be paid to you whether or not you incur any housing expenses. For
purposes of computing all benefits (other than Incentive Compensation) that are
tied to the level of your compensation, your salary shall be treated as the
greater of your actual salary hereunder or your actual annual salary rate from
LL&E immediately before the effective date of this agreement.
Your maximum bonus opportunity under the Incentive
Compensation Plan will be 100% of base salary. Annual bonuses are determined
by the Compensation and Nominating Committee of the Board (the "Compensation
Committee") based on Company and individual performance. All plans referenced
in this section are plans of the Company.
You and the Company agree that, for purposes of the letter
agreement dated December 27, 1994 between you and LL&E, you will not be treated
as having terminated employment for purposes of paragraph 2 and Appendix A of
said letter agreement until your employment with the Company terminates.
5. SEVERANCE BENEFIT. If your employment is terminated
by the Company for any reason before December 1, 1999 other than as a result of
your death, permanent disability or for Cause, or is initiated by you for Good
Reason, the Company will pay you within 10 days after the date of termination
an amount equal to the product of the number of whole and partial months
remaining from the date of your termination until December 1, 1999, times your
then current monthly base salary. The terms Cause and Good Reason are defined
in the Key Executive Severance Protection Plan.
6. COORDINATION WITH OTHER PLANS. If your termination
entitles you to benefits under the Key Executive Severance Protection Plan, you
may elect to receive the benefits payable under Section 5 of this agreement in
lieu of those benefits. If you elect to receive the benefits under this
agreement, you will nevertheless be eligible to receive the additional benefits
related to the gross-up payment for excise taxes under Article 6 of that plan.
7. TERMINATION AGREEMENT. The Company agrees that it
shall pay or cause to be paid to you the benefits described in the Termination
Agreement dated March 13, 1996 between you and LL&E (the "Termination
Agreement") if (i) you are terminated by the Company on any grounds whatsoever
except for "cause" during the "Protection Period" or if you terminate your
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October 22, 1997
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employment with the Company voluntarily within the "Protection Period" (it
being acknowledged that there has been a significant change in the nature or
scope of your duties and/or responsibilities for the purposes of the
Termination Agreement) or (ii) your employment with the Company terminates by
reason of your death during the "Protection Period", or (iii) you become
disabled during the "Protection Period" under circumstances entitling you to
disability benefits under the Company's long-term disability plan or under
Social Security. Terms in quotation marks in this Section 7 shall have the
meaning set forth in the Termination Agreement. The benefits provided under
this Section 7 shall be in addition to any other benefits to which you may be
entitled under the plans of the Company. You acknowledge and agree that you
shall not become a participant in the Company's Executive Survivor Benefit Plan
and hereby waive any benefits to which you would otherwise become entitled
under such plan.
8. NON-DISCLOSURE. As an officer of the Company, you
will have access to and continue to receive and develop confidential and
proprietary information and trade secrets pertaining to the business of the
Company and its affiliates, including, without limitation, reports, maps, data
(including geologic and seismic data and interpretations thereof), plans, and
contracts. As part of the consideration for this agreement and in return for
receiving access to such confidential information, you agree to keep all such
confidential and proprietary information confidential. In particular, you
agree that you will not divulge, communicate or otherwise disclose any
confidential information furnished to you or obtained or developed by you while
employed by the Company to any person, firm, corporation or entity other than
to an authorized representative of the Company. You agree that if your
employment with the Company is terminated, you will not discuss the Company's
business, operations, plans, strategies, personnel or business relationships or
agreements with the press or with any of the Company's current or prospective
customers or suppliers or with any other person with which the Company has
business relationships.
9. NON-COMPETITION. In order to enforce your
obligations under Section 8 and in consideration for the benefits of employment
described in this agreement, you agree to the covenant not to compete in this
Section 9. You agree and acknowledge that this covenant not to compete is
ancillary to your commitment as set forth in Section 8 to refrain from
disclosing such confidential information. If you initiate the termination of
your employment with the Company other than for Good Reason during the term of
this agreement, you agree that you will not for a period of two years after
your termination be employed by, consult with, provide advice or information
to, otherwise perform services for, own, manage, operate, join, control or
participate in the ownership of more than 5% of the voting power of equity
securities of, management, operation or control of any Competitor (as defined
in this agreement) unless released by the Company from such obligation in
writing with respect to a specific situation, it being understood
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October 22, 1997
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that your serving as a director of a public entity will not be in violation of
the foregoing provision, provided that you are not at such time serving as a
director of the Company, and, provided further, that your obligations under
Section 8 will continue to be in effect during any such service. A Competitor
is defined as any entity (i) that is engaged in exploring for and producing oil
and natural gas in Louisiana, Montana, New Mexico, North Dakota, Oklahoma,
Texas or federal or state waters in the Gulf of Mexico or in the oil and gas
marketing business in the mainland United States and (ii) whose assets
associated with such oil and gas business exceed $50 million.
10. NON-INTERFERENCE. For a period ending two years
after you terminate employment with the Company, you agree not to solicit,
directly or indirectly, any officer or employee of the Company to leave and
work for any other employer. During this same period, you agree not to suggest
to others that they approach or solicit any officers or employees of the
Company with respect to potential employment elsewhere.
11. SEVERABILITY AND ENFORCEMENT. It is the desire of
the parties hereto that this agreement be enforced to the maximum extent
permitted by law, and should any provision contained herein be held
unenforceable, the parties hereby agree and consent that such provision will be
reformed to make it a valid and enforceable provision to the maximum extent
permitted by law. Any provision hereof not capable of such reformation and
determined to be prohibited by or unenforceable under applicable law of any
jurisdiction will as to such jurisdiction be deemed ineffective and deleted
from this agreement without affecting any other provision of this agreement.
In the event of a breach by you of any of the provisions of
Sections 8, 9 or 10, you understand and agree that the Company may, in addition
to any other rights or remedies existing in its favor, apply to any court of
law or equity of competent jurisdiction for specific performance and injunctive
or other relief in order to enforce or prevent any violations of such
provisions.
You understand and agree that this agreement is being executed
by the Company on behalf of itself and each of its affiliates, and that all
rights of the Company under this agreement and all of your obligations and
duties under this agreement will inure to the benefit of and may be enforced by
the Company or any of its affiliates.
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If the above correctly sets forth our agreement, please sign
the original and return it to me. Please retain a copy for your records.
Very truly yours,
BURLINGTON RESOURCES INC.
/s/ BOBBY S. SHACKOULS
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By Bobby S. Shackouls
Its Chairman of the Board, President
and Chief Executive Officer
ACCEPTED and AGREED TO
this 22 day of October, 1997
/s/ H. LEIGHTON STEWARD
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H. Leighton Steward