Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement ("Employment Agreement" or "Agreement"),
effective September 1, 2004 is between Harvest Natural Resources, Inc.
(hereinafter sometimes called the "Company") and James A. Edmiston III , a
resident of Texas ("Employee"),
WHEREAS, the Company desires to secure the experience, abilities and
service of Employee by employing the Employee in the position of Executive Vice
President and Chief Operating Officer of the Company upon the terms and
conditions specified herein;
NOW, THEREFORE, in consideration of the premises, the terms and provisions
set forth herein, the mutual benefits to be gained by the performance thereof
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. TERM OF EMPLOYMENT.
Subject to the terms and conditions set forth in this Employment
Agreement, the Company agrees to employ Employee and Employee agrees to be
employed by the Company for the term which starts on September 1, 2004 and
ends on May 31, 2007. On May 31, 2007, and on each one-year period
thereafter (an "Extension Date") the term of this Employment Agreement
shall automatically be extended for a one-year period unless and until
either party has given written notice to the other at least one year
before any extension date that it or he wishes to terminate this Agreement
as of such extension date.
2. POSITION AND DUTIES.
(a) Position. Subject to annual election by the Company's Board of
Directors, Employee's position shall be Executive Vice President and
Chief Operating Officer of Harvest Natural Resources, Inc.
(b) Duties and Responsibilities. Employee's duties and responsibilities
initially shall be those normally associated with Employee's
position, plus any additional duties and responsibilities the
Company initially may assign orally or in writing to Employee.
Employee shall undertake to perform all Employee's duties and
responsibilities for the Company and its affiliates in good faith
and on a full-time basis and shall at all times act in the course of
Employee's employment under this Employment Agreement in the best
interest of the Company and Company's affiliates.
(c) The Company's Right to Change Position or Duties. Subject to the
terms of this Agreement, the Company shall have the right, to the
extent the Company from time to time reasonably deems necessary or
appropriate, to change Employee's position, or to expand or reduce
Employee's duties and responsibilities.
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3. COMPENSATION AND BENEFITS.
(a) Base Salary. During the term of this Employment Agreement, Employee'
yearly base salary shall be not less than $300,000 US (paid
bi-weekly), which yearly base salary shall be payable from the
Company's Houston offices to Employee in accordance with the
Company's standard payroll practices and policies, and shall be
subject to such withholdings as required by U.S. Federal law and the
State of Texas, or as otherwise permissible under such practices or
policies. Base salary for any partial period of employment shall be
prorated. The Company shall annually review Employee's base salary.
(b) Signing Bonus. Employee shall receive a signing bonus of $50,000
payable to Employee on the date of this Employment Agreement.
(c) Annual Bonus. Employee shall be eligible for such annual bonus as
may be determined by the Human Resources Committee of the Company's
Board of Directors and the Company's Board of Directors, which bonus
shall be based on Employee's performance under the performance
contract guidelines adopted by the Company, the Company's overall
performance and any special circumstances the Human Resources
Committee and the Board deem appropriate. Any such bonus is to be
determined at the discretion of the Company's Human Resources
Committee and the Board of Directors. Employee acknowledges that the
Company is not obligated to award him any bonus in any year.
(d) Employee Benefit Plans. Employee shall be eligible to participate in
the employee benefit plans, programs and policies maintained by the
Company for similarly situated employees in accordance with the
terms and conditions to participate in such plans, programs, and
policies as in effect from time to time.
(e) Stock Option Award. As of September 1, 2004, Employee was granted a
stock option to purchase 100,000 shares of the Company's common
stock under the Company's 2004 Long Term Incentive Plan (the "Plan")
at the average of the highest price and the lowest price on
September 1, 2004 for the common stock of the Company as reported by
the New York Stock Exchange. Except as otherwise provided herein,
Employee's right to exercise this option shall vest over a three (3)
year period: 33,334 shares on September 1, 2005; 33,333 shares on
September 1, 2006; and 33,333 shares on September 1, 2007; provided,
Employee is still an employee of Company and as otherwise set forth
in the Plan and Stock Option Agreement, to be executed between
Employee and Company effective as of the date of grant.
(f) Restricted Stock Award. As of September 1, 2004, Employee was
granted 20,000 restricted shares of the Company's common stock under
the Plan. Except as otherwise provided herein, the shares shall be
restricted for a period of thirty-six (36) months commencing
September 1, 2004. The terms and conditions of the award of
restricted stock are set forth in the Restricted Stock Agreement to
be executed between Employee and Company effective as of the date of
grant.
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(g) Vacation. Employee shall be entitled to four (4) weeks annual
vacation.
(h) Expenses. The Company shall pay or reimburse Employee for all
reasonable expenses actually incurred or paid by the Employee in the
performance of his services hereunder upon the presentation of
expense statements or vouchers or such other supporting information
as the Company may reasonably require of Employee.
(i) Office Facilities and Services. Employee shall be accorded such
benefits and support services, including without limitation, office
facilities, administrative assistant, communications, and such other
perquisites as would normally be accorded by a corporation of the
size and at the stage of development in the industry in which the
Company is, to its Executive Vice President and Chief Operating
Officer.
(j) Indemnification. Employee shall be entitled to the benefit of the
indemnification provisions contained in the bylaws of the Company as
the same may be amended.
4. TERMINATION OF EMPLOYMENT.
(a) Termination By The Company Other Than For Cause Or Disability, Or By
Employee For Good Reason.
(1) The Company shall have the right to terminate Employee's
employment other than for Cause at any time, and Employee
shall have the right to quit or resign for Good Reason at any
time.
(2) If (a) the Company or its successors terminate Employee's
employment with the Company other than (i) for Cause or (ii)
pursuant to a notice of termination delivered in accordance
with Section 1 of this Employment Agreement or (b) Employee
resigns for Good Reason, then (x) the Company shall pay to
Employee within thirty (30) days after the termination or
resignation an amount equal to twenty-four months of
Employee's base salary as in effect immediately before
Employee's termination of employment or resignation, and (y)
any outstanding stock option(s) granted by the Company to
Employee shall become fully vested and shall remain
exercisable for twelve (12) months following Employee's
termination pursuant to this section 4(a)(2), or the tenth
anniversary of the date(s) of the grant(s) specified in the
relevant option agreement(s), whichever is the shorter period,
and (z) any remaining restriction period on restricted shares
of stock granted by the Company to Employee will lapse as of
the date of termination or resignation and a certificate(s)
representing such shares will be delivered to Employee within
thirty (30) days after such date.
(3) If the termination or resignation described in Section 4(a)(2)
occurs within 730 days after or 240 days before a Change of
Control, then (v) the Company shall pay to Employee, within
thirty (30) days after the later to
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occur of the termination, resignation or the Change of
Control, an amount equal to twenty-four months of Employee's
base salary as in effect immediately before Employee's
termination of employment or resignation and the Bonus Amount,
(w) any outstanding stock option(s) granted by the Company to
Employee shall become fully vested and shall remain
exercisable for twelve (12) months following Employee's
termination or resignation, or the tenth anniversary of the
date(s) of the grant(s) specified in the relevant option
agreement(s), whichever is the shorter period, and (x) any
remaining restriction period on restricted shares of stock
granted by the Company to Employee will lapse as of the date
of termination or resignation and a certificate(s)
representing such shares will be delivered to Employee within
thirty (30) days after the later to occur of the termination,
resignation or the Change of Control, (y) for a period of
twenty-four months following the later to occur of the
termination or resignation or the Change of Control, the
Company shall continue to provide Employee and Employee's
dependents with the same level of life, disability, accident,
dental and health insurance benefits Employee and Employee's
dependents were receiving immediately before Employee's
termination or resignation, and (z) the Company will pay
Employee, within thirty (30) days after the later to occur of
the termination, resignation or the Change of Control, an
additional amount such that the net amount retained by
Employee pursuant to the benefits described in Section 4(a)(2)
and clause (x) of this Section 4(a)(3) after any federal,
state, local and other taxes (including without limitation any
excise tax imposed under Section 4999 of the Internal Revenue
Code of 1986, as amended from time to time) shall be equal to
the amount that Employee would have received pursuant to those
benefits before payment of any such taxes.
(4) If the Company or its successors terminate Employee's
employment with the Company pursuant to a notice of
termination delivered in accordance with Section 1 of this
Employment Agreement within 730 days after or 240 days before
a Change of Control, then (v) the Company shall pay to
Employee, within thirty (30) days after the later to occur of
the termination or the Change of Control, an amount equal to
twenty-four months of Employee's base salary as in effect
immediately before Employee's termination of employment and
the Bonus Amount, (w) any outstanding stock option(s) granted
by the Company to Employee shall become fully vested and shall
remain exercisable for twelve (12) months following Employee's
termination pursuant to this section 4(a)(4), or the tenth
anniversary of the date(s) of the grant(s) specified in the
relevant option agreement(s), whichever is the shorter period,
(x) any remaining restriction period on restricted shares of
stock granted by the Company to Employee will lapse as of the
date of termination and a certificate(s) representing such
shares will be delivered to Employee within thirty (30) days
after such date, (y) for a period of twenty-four months
following Employee's termination the Company shall continue to
provide Employee
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and Employee's dependents with the same level of life,
disability, accident, dental and health insurance benefits
Employee and Employee's dependents were receiving immediately
before Employee's termination of employment, and (z) the
Company shall pay to Employee, within thirty (30) days after
the later to occur of the termination or the Change of
Control, an additional amount such that the net amount
retained by Employee pursuant to the benefits described in
clauses (v), (w) and (x) of this section 4(a)(4) after any
federal, state, local and other taxes (including without
limitation any excise tax imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended from time to time)
shall be equal to the amount that Employee would have received
pursuant to such benefits before payment of any such taxes.
(b) Termination By The Company For Cause, Or By Employee Other Than For
Good Reason.
(1) The Company shall have the right to terminate Employee's
employment at any time for Cause, and Employee shall have the
right to quit or resign at any time other than for Good
Reason.
(2) If the Company terminates Employee's employment for Cause or
pursuant to a notice of termination delivered in accordance
with Section 1 of this Employment Agreement that is not
delivered within 730 days after or 240 days before a Change of
Control, or Employee quits or resigns other than for Good
Reason, the Company's only obligation to Employee under this
Employment Agreement shall be to pay Employee's base salary
(including accrued vacation) actually earned up to the date
Employee's employment terminates.
(c) Termination for Disability or Death.
(1) The Company shall have the right to terminate Employee's
employment on or after the date Employee has a Disability, and
Employee's employment shall terminate at Employee's death.
(2) If Employee's employment terminates under this section 4(c),
the Company shall pay Employee or, if Employee dies,
Employee's estate the amount provided for under section
4(a)(2) and, in addition, Employee or, if Employee dies,
Employee's estate shall be entitled to the provisions of
section 4(a)(2) with respect to Employee's stock options and
restricted stock.
(d) Bonus Amount. The term "Bonus Amount" means the higher of (i) the
highest annual bonus earned by Employee for the last three fiscal
years ending prior to the termination date, and (ii) (A) the target
bonus percentage as established by the Company's Board of Directors
for the fiscal year in which the Change of Control occurs,
multiplied by (B) Employee's annual base salary for that fiscal year
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(whether or not paid or accrued for the full year at the time of
Employee's termination or resignation).
(e) Cause. The term "Cause" shall mean (1) Employee's final conviction
of a felony by a trial court, (2) Employee's material breach of this
Employment Agreement or (3) Employee's material violation of any
policy or code of conduct of the Company.
(f) Good Reason. The term "Good Reason" shall mean any of the following,
unless Employee shall have given his express written consent
thereto: (1) a material breach of the terms and conditions of this
Employment Agreement by the Company which remains uncorrected for
thirty (30) days after Employee delivers written notice of such
breach to the Company; (2) failure to maintain or reelect Employee
to the position described in section 2(a); (3) a significant
reduction of Employee's duties, position or responsibilities
relative to the Employee's duties, position or responsibilities in
effect immediately prior to such reduction, unless Employee is
provided with comparable duties and responsibilities; (4) a
substantial reduction, without good business reasons, of the
facilities and perquisites available to Employee immediately prior
to such reduction; (5) a reduction by the Company of Employee's
monthly base salary in effect immediately prior to such reduction;
(6) the Company fails to continue Employee's participation in any
bonus, incentive, profit sharing, performance, savings, retirement
or pension policy, plan, program or arrangement on substantially the
same or better basis, both in terms of the amount of benefits
provided to Employee and the level of Employee's participation,
relative to other participants, (7) the relocation of the Employee
more than fifty (50) miles from the location of the Company's
principal office on the date hereof; (8) the failure of the Company
to obtain a satisfactory agreement from a successor to assume and
agree to perform this Agreement as contemplated by section 6(d); (9)
after August 31, 2005 and before August 31,2006, the Company's Board
of Directors appoints a Chief Executive Officer other than Employee
or Dr. Peter J. Hill.
(g) Disability. Employee shall have a "disability" under this Employment
Agreement on the date the Company receives written notice from a
physician selected by the Company that Employee no longer can
perform one or more of the essential functions of Employee's job
even with reasonable accommodation.
(h) Change of Control. A "Change of Control" means the occurrence of any
of the following:
(1) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934) (a "Covered Person") of beneficial
ownership (within the meaning of rule 13d-3 promulgated under
the Securities Exchange Act of 1934) of 50 percent or more of
the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the "Voting Securities"); provided,
however, that for
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purposes of this subsection (1) of this Section 4(g) the
following acquisitions shall not constitute a Change of
Control: (i) any acquisition by the Company, (ii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any entity
controlled by the Company, or (iii) any acquisition by any
entity pursuant to a transaction which complied with clauses
(i), (ii) and (iii) of subsection (3) of this Section 4(g); or
(2) individuals who, as of the date of this Employment Agreement,
constitute the board of directors of the Company (the
"Incumbent Board") cease for any reason to constitute at least
a majority of the board of directors of the Company; provided,
however, that any individual becoming a director after the
date of this Employment Agreement whose election, or
nomination for election by the Company's stockholders, was
approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual
or threatened election contest with respect to the election or
removal of directors; or
(3) the consummation of a reorganization, merger or consolidation
or sale of the Company, or a disposition of at least 50
percent of the assets of the Company including goodwill (a
"Business Combination"), provided, however, that for purposes
of this subsection (3), a Business Combination will not
constitute a change of control if the following three
requirements are satisfied:
following such Business Combination, (i) all or substantially
all of the individuals and entities who were the beneficial
owners, respectively, of the Company's voting securities
immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50 percent of the
ownership interests of the entity resulting from such Business
Combination (including, without limitation, an entity which as
a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries or other affiliated entities)
in substantially the same proportions as their ownership
immediately prior to such Business Combination, (ii) no
Covered Person (excluding any employee benefit plan (or
related trust) of the Company or such entity resulting from
such Business Combination) beneficially owns, directly or
indirectly, 50 percent or more of, respectively, the ownership
interests in the entity resulting from such Business
Combination, except to the extent that such ownership existed
prior to the Business Combination, and (iii) at least a
majority of the members of the board of directors of the
entity resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the board of
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directors of the Company, providing for such Business
Combination. For this purpose any individual who becomes a
director after the date of this Employment Agreement, and
whose election or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with
respect to the election or removal of directors.
(i) Benefits. Employee shall have the right to receive any benefits
payable under the Company's employee benefits plans, programs and
policies (other than the Company's Policy for Termination and
Separation from Employment (the "Severance Policy")) which Employee
otherwise has a non-forfeitable right to receive under the terms of
such plans, programs and policies (other than severance benefits)
independent of Employee's rights under this Employment Agreement
upon a termination of employment in addition to any other benefits
under this section 4 without regard to the reason for such
termination of employment. Employee acknowledges and agrees that
until the termination of this Agreement, he shall not be entitled to
participate in the Severance Policy.
(j) Notice of Termination. Any termination by the Company or by Employee
for any reason shall be communicated by a notice of termination to
the other party hereto and shall be given in accordance with section
6(a). Such notice shall state the specific termination provision in
this Agreement relied upon, and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination under the provision so indicated.
(k) No Mitigation. Employee shall not be required to mitigate the amount
of any severance payment contemplated by this Agreement, nor shall
any such payment be reduced by any earnings that Employee may
receive from any other source.
(l) Stock Award Agreements. In the event of a conflict adverse to
Employee between the terms of this Agreement and the terms of any
agreement granting Employee stock options or restricted stock, the
terms of this Agreement shall govern.
5. COVENANTS BY EMPLOYEE.
(a) Property of the Company.
(1) Employee covenants and agrees that upon the termination of
Employee's employment for any reason or, if earlier, upon the
Company's request, Employee shall promptly return all
"Property" which had been entrusted or made available to
Employee by the Company.
(2) The term "Property" shall mean all records, files, memoranda,
reports, price lists, drawing, plans, sketches, keys, codes,
computer hardware and
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software and other property of any kind or description
prepared, used or possessed by Employee during Employee's
employment by the Company (and any duplicates of any such
property) together with any and all information, ideas,
concepts, discoveries, and inventions and the like conceived,
made, developed or acquired at any time by Employee
individually or with others during Employee's employment which
relate to the Company's business, products or services.
(b) Trade Secrets.
(1) In consideration for the promises made in section 5(d) of this
Agreement, the Company promises that it shall provide and make
available to Employee certain confidential, proprietary
information and trade secrets.
(2) Employee covenants and agrees that Employee shall hold in a
fiduciary capacity for the benefit of the Company and each of
its affiliates, and shall not directly or indirectly use or
disclose, any Trade Secret that Employee may have acquired
pursuant to section 5(b)(1) above during the term of
Employee's employment by the Company for so long as such
information remains a trade secret.
(3) The term "Trade Secret" shall mean information, including, but
not limited to, technical or non-technical data, a formula, a
patent, a compilation, a program, a device, a method, a
technique, a drawing, a process, financial data, financial
plans, product plans, or that: (a) derives economic value,
actual or potential, from not being generally known to, and
not being generally readily ascertainable by proper means by
other persons who can obtain economic value from its
disclosures or use, and (b) is the subject of reasonable
efforts by the Company and its affiliates to maintain its
secrecy.
(4) This section 5(b) is intended to provide rights to the Company
which are in addition to those rights the Company has under
the common law or applicable statutes for the protection of
trade secrets.
(c) Confidential Information.
(1) Employee covenants and agrees while employed under this
Employment Agreement and thereafter during the Restricted
Period he shall hold in a fiduciary capacity for the benefit
of the Company and each of its affiliates, and shall not
directly or indirectly use or disclose, any of the Company's
or the Company's affiliates' Confidential or Proprietary
Information that Employee may have acquired (whether or not
developed or compiled by Employee and whether or not Employee
is authorized to have access to such information) during the
term of, and in the course of, or as a result of Employee's
employment by the Company or its affiliates.
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(2) The term "Confidential or Proprietary Information" shall mean
any secret, confidential or proprietary information that the
Company or an affiliate (not otherwise included in the
definition of a Trade Secret under this Agreement) that has
not become generally available to the public by the act of one
who has the right to disclose such information without
violation of any right of the Company or its affiliates.
(d) Non-Competition. During the period of Employee's employment with the
Company and thereafter during the Restricted Period, the Employee
covenants and agrees that, in connection with business operations
and prospective interest of the Company on the date of Employee's
termination as an employee in the countries of Russia and Venezuela,
which prospective interests are disclosed to Employee prior to or on
the date of the Employee's termination as an employee, he shall not
directly or indirectly own any interest in, manage, control,
participate in, consult with, render services for, or in any manner
engage in any businesses materially adverse to or in competition
with the Company (unless the Board of Directors shall have
authorized such activity and the Company shall have consented
thereto in writing). Investments in less than 5% of the outstanding
securities of any class of the Company subject to the reporting
requirements of Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended, shall not be prohibited by this
section. For purposes of this section (d), the term "Company" shall
include Harvest Natural Resources, Inc. and any of its affiliates or
subsidiaries or any company in which it is a minority shareholder or
a joint venture partner. For purposes of this section, the term
"businesses" shall mean any enterprise, commercial venture, or
project involving oil and gas exploration or production activities
in the same geographic areas as the Company's activities during the
period of Employee's employment.
Further, during the period of Employee's employment with the Company
and thereafter during the Restricted Period, the Employee covenants
and agrees that he will not directly or indirectly through another
entity induce or otherwise attempt to influence any employee of the
Company to leave the Company's employment or in any way interfere
with the relationship between the Company and any employee thereof.
Further, the Employee will not induce or attempt to induce any
customer, supplier, licensee, joint venture partner, shareholder,
licensor or other business relation of the Company to cease doing
business with the Company or in any way interfere with the
relationship between any such customer, supplier, licensee, joint
venture partner, shareholder, licensor or business relation of the
Company.
If (i) pursuant to the arbitration process described in Section 6(c)
of this Employment Agreement (or such other process as to which the
Company and Employee may agree upon in writing), it is determined
that Employee has violated the provisions of this Section 7(d), and
(ii) Employee has received a payment from the Company pursuant to
Section 4(a)(2)(x), Section 4(a)(3)(x) or Section 4(a)(4)(v) of this
Agreement (the "Lump Sum Severance Amount"), then, in addition to
any other remedies that the Company may have, Employee shall be
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obligated, and hereby agrees, to pay the Company, as liquidated
damages, an amount (but not less than zero) equal to the product of
(x) the Lump Sum Severance Amount and (y) a fraction whose numerator
is the excess of twenty-four (24) over the number of calendar months
that have elapsed since the last day of Employee's termination of
employment under Section 4 of this Agreement and whose denominator
is twenty-four (24).
(e) Employment Restriction - Conflict of Interest: Employee covenants
and agrees that he will not receive and has not received any
payments, gifts or promises and Employee will not engage in any
employment or business enterprises that in any way conflict with his
service and the interests of the Company or its affiliates. In
addition, Employee agrees to comply with the laws or regulations of
any country, including, without limitation, the United States of
America, having jurisdiction over Employee or the Company.
Employee shall not make any payments, loans, gifts or promises or
offers of payments, loans or gifts, directly or indirectly, to or
for the use or benefit of any official or employee of any government
or to any other person if Employee knows, or has reason to believe,
that any part of such payments, loans or gifts, or promise or offer,
would violate the laws or regulations of any country, including,
without limitation, the United States of America, having
jurisdiction over Employee or the Company.
By signing this Agreement, Employee acknowledges that he has not
made and will not make any payments, loans, gifts, promises of
payments, loans or gifts to or for the use or benefit of any
official or employee of any government or to any other person which
would violate the laws or regulations of any country, including,
without limitation, the United States of America, having
jurisdiction over Employee or the Company.
(f) Restricted Period. The term "Restricted Period" shall mean the
two-year period which starts on the date Employee's employment
terminates with the Company without regard to whether such
termination comes before or after the end of the term of this
Employment Agreement.
(g) Reasonable and Continuing Obligations. Employee agrees that
Employee's obligations under this section 5 will continue beyond the
date Employee's employment terminates if such continuance is
reasonable and necessary to protect the Company's legitimate
business interests. The Company additionally shall have the right to
take such other action as the Company deems necessary or appropriate
to compel compliance with the provisions of this section 5.
6. MISCELLANEOUS.
(a) Notices. Notices and all other communications 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. Notices to the Company shall be sent to
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1177 Enclave Parkway, Suite 300, Houston, Texas 77077. Notices and
communications to Employee shall be sent to Employee's home address.
(b) No Waiver. Except for the notice described in section 4(d), no
failure by either the Company or Employee at any time to give notice
of any breach by the other of, or to require compliance with, any
condition or provision of this Employment Agreement shall be deemed
a waiver of any provisions or condition of this Employment Agreement
(c) Arbitration and Governing Law. ANY UNRESOLVED DISPUTE OR CONTROVERSY
BETWEEN EMPLOYEE AND THE COMPANY ARISING UNDER OR IN CONNECTION WITH
THIS AGREEMENT SHALL BE SETTLED EXCLUSIVELY BY ARBITRATION,
CONDUCTED IN ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION THEN IN EFFECT. THE COMPANY WILL BEAR THE ADMINISTRATIVE
COSTS OF ANY ARBITRATION UNDER THIS AGREEMENT, INCLUDING THE
ARBITRATOR'S FEES. THE ARBITRATOR SHALL NOT HAVE THE AUTHORITY TO
ADD TO, DETRACT FROM, OR MODIFY ANY PROVISION HEREOF. THE ARBITRATOR
SHALL HAVE THE AUTHORITY TO ORDER REMEDIES WHICH EMPLOYEE COULD
OBTAIN IN A COURT OF COMPETENT JURISDICTION, INCLUDING BACK-PAY,
SEVERANCE COMPENSATION, REIMBURSEMENT OF COSTS, INCLUDING THOSE
INCURRED TO ENFORCE THIS AGREEMENT, AND INTEREST THEREON IN THE
EVENT THE ARBITRATOR DETERMINES THAT EMPLOYEE WAS TERMINATED WITHOUT
DISABILITY OR GOOD CAUSE, AS DEFINED HEREIN, OR THAT THE COMPANY HAS
OTHERWISE MATERIALLY BREACHED THIS AGREEMENT. A DECISION BY THE
ARBITRATOR SHALL BE IN WRITING AND WILL BE FINAL AND BINDING.
JUDGMENT MAY BE ENTERED ON THE ARBITRATOR'S AWARD IN ANY COURT
HAVING JURISDICTION. THE ARBITRATION PROCEEDING SHALL BE HELD IN
HOUSTON, TEXAS, UNITED STATES OF AMERICA. NOTWITHSTANDING THE
FOREGOING, THE COMPANY SHALL BE ENTITLED TO SEEK INJUNCTIVE OR OTHER
EQUITABLE RELIEF FROM ANY COURT OF COMPETENT JURISDICTION, WITHOUT
THE NEED TO RESORT TO ARBITRATION IN THE EVENT THAT EMPLOYEE
VIOLATES SECTIONS 5(b), 5(c), 5(d) OR 5(e) OF THIS AGREEMENT. THIS
AGREEMENT SHALL IN ALL RESPECTS BE CONSTRUCTED ACCORDING TO THE LAWS
OF THE STATE OF TEXAS.
(d) Assignment by Company. This Employment Agreement shall be binding
upon and inure to the benefit of the Company and any successor to
all or substantially all of the business or assets of the Company.
The Company may assign this Employment Agreement to any affiliate or
successor, and no such assignment shall be treated as a termination
of Employee's employment under this Employment Agreement; provided,
however, that in the case of an assignment to an affiliate, the
Company shall not be relieved of its obligations under this
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Agreement. The Company will require any successor corporation
(whether direct or indirect, and whether by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business or assets of the Company to expressly assume and to agree
to perform this Agreement in the same manner and to the same extent
as the Company, as if no such succession had taken place. Failure of
the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a material breach of
this Agreement. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business or
assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
(e) Assignment by Employee. Employee's rights and obligations under this
Employment Agreement are personal, and they shall not be assigned or
transferred without the Company's prior written consent.
(f) Other Agreements. With the exceptions of any of the Company's stock
option plans (and related agreements), incentive plans and change of
control plans, and the performance contract guidelines adopted by
the Company, this Employment Agreement replaces and merges any and
all previous agreements and understandings regarding all the terms
and conditions of Employee's employment relationship with the
Company, and this Employment Agreement constitutes the entire
agreement of the Company and Employee with respect to such terms and
conditions.
(g) Amendment. No amendment to this Employment Agreement shall be
effective unless it is in writing and signed by the Company and by
Employee.
(h) Invalidity. If any part of this Employment Agreement is held by a
court of competent jurisdiction to be invalid or otherwise
unenforceable, the remaining part shall be unaffected and shall
continue in full force and effect, and the invalid or otherwise
unenforceable part shall be deemed not to be part of this Employment
Agreement.
(i) Enforceability by Beneficiaries. This Agreement shall inure to the
benefit of and be enforceable by the parties hereto and their
respective heirs, legal or personal representatives and successors
and if Employee should die while any amount would still be payable
to him hereunder if he had continued to live, all such amounts shall
be paid in accordance with the terms of this Agreement to Employee's
devisee, legatee or other designee or, if there is no such designee,
to his estate.
IN WITNESS WHEREOF, the Company and Employee have executed this Employment
Agreement in multiple originals to be effective as set out above.
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HARVEST NATURAL RESOURCES, INC. JAMES A. EDMISTON III
By:________________________________ By:___________________________
Steven W. Tholen
Senior Vice President and Chief Financial
Officer
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