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Exhibit 10.31
CONSULTING AGREEMENT
This agreement is entered into between Apache Corporation ("Apache"), a
Delaware corporation, and George J. Morgenthaler ("Morgenthaler") effective as
of 6:00 p.m. CST on November 10, 1993.
RECITALS
Since February 23, 1987, Morgenthaler has served Apache with diligence
and integrity as an officer and employee.
Apache and Morgenthaler wish to provide for the termination of
Morgenthaler's tenure as an officer and employee of Apache.
Apache wishes to provide for continued service by Morgenthaler as a
consultant to Apache.
Apache and Morgenthaler wish to establish standards of confidentiality
and conduct between them.
Apache and Morgenthaler wish to fully and finally settle all other
rights, matters and claims that may existing between them.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Apache and Morgenthaler agree as follows:
(1) Resignation. Effective 6:00 p.m. CST, November 10, 1993,
Morgenthaler's employment with Apache terminated and, as a
result, Morgenthaler resigns all positions as a director,
officer and committee member of Apache, its subsidiaries and
affiliated entities.
(2) Temporary Employment. From 7:00 a.m. CST, November 11, 1993,
through 6:00 p.m. CST, December 15, 1993 (the "Temporary
Employment Period"), Apache employs Morgenthaler as a
temporary employee at the pay rate of $17,083.33 per month
(pro-rated by the day).
(3) Consulting. Apache engages Morgenthaler to render consulting
services to Apache and its subsidiaries for a period
commencing December 16, 1993, and continuing through
December 15, 1995 (subject to early terminated as stated in
the next sentence, the "Consulting Period"). If Apache does
not pay 1993 incentive compensation bonuses to its executives
or provide for other additional compensation recognizing 1993
executive performance, then the Consulting Period shall
terminate on August 15, 1995.
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(4) Services. During the Temporary Employment Period and the Consulting
Period, Morgenthaler shall perform such consulting services as are
reasonably requested by the Chief Executive Officer of Apache (the
"CEO") and as are not inconsistent with Morgenthaler's prior duties and
responsibilities as an officer of Apache. Morgenthaler shall not be
required to maintain any office hours, nor shall Morgenthaler be
present at the offices of Apache except upon request of the CEO.
(5) Other Activities. Morgenthaler's obligation to render consulting
services shall be subordinate to, and shall be rendered only to the
extent there is no interference with, his other business, employment
and personal activities. Morgenthaler shall be free to accept
full-time or part-time employment with any organization, and to engage
in any business enterprise on his own behalf during the Consulting
Period or thereafter, whether or not the organization or enterprise
competes with Apache, so long as Morgenthaler complies with paragraphs
(6) and (7) of this agreement. If Morgenthaler desires to accept
employment with another organization, and if that employment creates a
professional conflict of interest for Morgenthaler, then Morgenthaler
shall promptly inform Apache's CEO of that employment and Morgenthaler
shall be automatically released from all obligations under paragraphs
(3) and (4) of this agreement, but all other terms of this agreement,
including those relating to payments and benefits to Morgenthaler,
shall remain in effect.
(6) Goodwill. Morgenthaler shall generally foster, maintain and promote
the goodwill of Apache, its subsidiaries, affiliates, and their
respective directors, officers, employees and/or representatives, past
and present. Apache shall generally foster, maintain and promote the
reputation and image of Morgenthaler. Apache shall not hinder or
discourage the future employment of Morgenthaler.
(7) Confidentiality. In addition to his fiduciary responsibilities and his
responsibilities as an Officer and General Counsel of Apache and his
responsibilities under the Texas Disciplinary rules of Professional
Conduct not to disclose certain information of or relating to Apache,
Morgenthaler shall maintain the confidentiality of, and shall not
disclose, Apache's business dealings, trade secrets, supplier lists,
customer lists, properties, geographic or financial areas of interest,
exploration plans or techniques or any other confidential information
of or relating to Apache, its subsidiaries, affiliates and their
directors, officers, employees and/or representatives, past and
present, and Morgenthaler shall not use such information in any manner,
whether for his own benefit or for the benefit of any other person or
entity, or to the detriment of Apache, its subsidiaries, affiliates and
their directors, officers, employees and/or representatives, past and
present or otherwise.
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(8) Monthly Payments. On or before the 16th day of each calendar
month during the Consulting Period (commencing with December
16, 1993), Morgenthaler shall invoice Apache for services in
the amount of $17,083.33, and Apache shall pay Morgenthaler
the invoiced amount on or before the first day of the next
calendar month. The invoiced amounts shall continue to be
paid without regard to Morgenthaler's employment by another
organization, his participation in a partnership, or his
engagement in business for his own account. The invoiced
amounts shall continue to be paid if Morgenthaler is disabled,
and shall continue to be paid to Morgenthaler's estate, heirs,
and successors in the event of his death. The invoiced
amounts shall continue to be paid if Morgenthaler is released
from his obligations under paragraphs (3) and (4) of this
agreement. Failure or tardiness by Morgenthaler in invoicing
Apache shall not waive or release Morgenthaler's right to
payment, but amounts invoiced more than five business days
late by Morgenthaler shall not be due until ten business days
after invoice. Morgenthaler may invoice Apache for the
initial monthly payment prior to inception of the Consulting
Period.
(9) Expense Reimbursement. Subject to Apache's travel policies governing
its executives, Apache shall reimburse Morgenthaler for all travel,
airline, room, entertainment, meal, beverage, car rental and other
out-of-pocket expenses incurred by Morgenthaler in the course of
performing his consulting obligations under this agreement, provided
that such consulting expenses are approved in advance by Apache.
(10) Benefits. During the Temporary Employment Period, Morgenthaler shall
receive the same benefits as Apache provides its executive officers.
During the Consulting Period, Apache shall:
(a) provide medical, dental and vision benefits to Morgenthaler
and his dependents to the same extent, and subject to the same
premium co-payments, as are extended to Apache executives; and
(b) provide life insurance and disability benefits (including
supplemental group life insurance) to Morgenthaler to the same
extent as extended to Apache executives;
but the foregoing benefits shall terminate to the extent that
replacement benefits are offered by an employer with which Morgenthaler
accepts employment. Apache shall not impair the cash value of any life
insurance currently maintained by Apache for Morgenthaler, and that
cash value shall remain the property of Morgenthaler. Apache shall
cause its employees, insurance carriers and agents to cooperate fully
with Morgenthaler in managing and maintaining Morgenthaler's insurance
coverage, in responding to Morgenthaler's insurance claims and in
responding to Morgenthaler's inquiries concerning insurance coverages.
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(11) Plan Balances. Apache shall cooperate in the prompt rollover of
Morgenthaler's 401(k) account balances to an IRA account or other
account designated by Morgenthaler. On January 3, 1994, Apache shall
disburse to Morgenthaler, or direct the disbursement to Morgenthaler
of, the balance in Morgenthaler's non-qualified retirement plan
account.
(12) Options and Phantoms. Except as provided in this paragraph,
Morgenthaler's outstanding stock options and phantom stock units shall
be governed by the terms of the Apache Corporation 1990 Stock Incentive
Plan and the 1990 Phantom Stock Appreciation Plan (the "Phantom Plan")
and the stock option agreements entered into between Morgenthaler and
Apache. On January 3, 1994, Apache shall pay Morgenthaler the sums due
him under the Phantom Plan as a result of his November 10, 1993,
Termination of Employment without Disqualification (as defined in the
Phantom Plan). Morgenthaler waives his right to payment on or before
December 10, 1993, under the Phantom Plan.
(13) Databases. During the Consulting Period, Morgenthaler shall continue
to have free access to and reasonable use of the business and legal
databases now maintained by Apache and used by Morgenthaler as an
executive of Apache.
(14) Office Equipment. Apache shall, on December 16, 1993, and in exchange
for the payment of $2,000.00 to Apache by Morgenthaler, sell and convey
to Morgenthaler the office equipment now in Morgenthaler's possession,
being one cellular telephone, one telefax, one personal computer,
software and one printer.
(15) Consulting Payment. On January 3, 1994, Apache shall pay Morgenthaler
$352,000.00 as a non-refundable consulting payment.
(16) Financing Planning. Apache shall pay or reimburse Morgenthaler for
personal tax and financial planning by Arthur Andersen & Co. during the
Consulting Period as required to evaluate and plan the financial and
tax impact of this agreement and termination of his employment and as
required to prepare tax returns for 1993 and 1994.
(17) Independent Contractor and Taxes. Morgenthaler acknowledges that his
engagement under this agreement is as an independent contractor and not
as an employee of Apache or its subsidiaries or affiliates.
Accordingly, Morgenthaler will be responsible for the payment of all
income tax and other taxes on cash amounts payable to Morgenthaler, and
Apache will not withhold any amounts from payments made under this
agreement. If the Internal Revenue Service asserts that Apache should
have withheld federal income taxes and/or Morgenthaler's share of FICA
taxes from such payments, Morgenthaler will reimburse Apache for any
monies paid by Apache to the U.S. Government in compliance with such
assertion, except for payments of interest or penalties.
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(18) Releases. Morgenthaler releases Apache and each of its subsidiaries,
affiliates and their respective directors, officers, employees and/or
representatives, past and present (hereafter the "Company"), and the
Company releases Morgenthaler, from any and all rights and claims
arising in any way out of Morgenthaler's employment or the acts or
omissions of the Company or Morgenthaler which occurred during the term
of Morgenthaler's employment, or arose out of the termination of
Morgenthaler's employment. The Company and Morgenthaler further
release and hold harmless each other from and against any and all
claims against the other that they may have based on any negligent or
intentional acts or omissions of any character whatsoever, whether
related to Morgenthaler's employment or otherwise, including without
limitation statements made by, to or about Morgenthaler or the Company,
which occurred prior to the effective date of this agreement, whether
known or unknown by the Company or Morgenthaler. The foregoing release
includes without limitation any rights and claims under state, federal,
or local laws, including without limitation, the Age Discrimination in
Employment Act, the Texas Commission on Human Rights Act and the common
law of the states of Texas, Colorado and any other jurisdiction.
Morgenthaler and the Company further agree that they will not institute
any charge, complaint or litigation against the other based on such
released rights and/or claims. Apache indemnifies and holds harmless,
and agrees to indemnify and hold harmless, Morgenthaler against any
liability or expense, including attorneys' fees and costs, incurred by
Morgenthaler in evaluating, defending, compromising, settling or
satisfying any claim (excluding those actions determined to be
violative of applicable criminal laws) brought by any person or
organization that is included within the definition of Company but that
is not a signatory to this agreement. Notwithstanding the foregoing,
the releases contained herein shall not apply to any rights that
Morgenthaler may have under:
(a) Apache's 1990 Stock Incentive Plan and the Phantom Plan and
the option agreements issued under those plans to which
Morgenthaler is a party;
(b) Apache's 401(k) plan and non-qualified retirement plan;
(c) this agreement; or
(d) COBRA to receive continued medical insurance benefits.
(19) Non-Assignability. Neither this agreement nor any right or interest
herein may be assigned or transferred by Apache or Morgenthaler without
the other's written consent, except as to:
(a) the rights of Morgenthaler's estate, heirs and devisees to
certain benefits under this agreement; and
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(b) the sale of all or substantially all of Apache's
assets, or the merger or combination of Apache with
another organization, if the asset purchaser or
surviving organization assumes the full performance of
Apache's obligations under this agreement, but Apache
shall not be relieved of its obligations under this
agreement by that assumption.
(20) No Attachment. Except as required by law, Morgenthaler's right to
receive payments under this agreement shall not be subject to
anticipation, commutation, alienation, sale, encumbrance, pledge,
hypothecation, execution, attachment, levy, offset, deduction, setoff,
condition, or assignment by operation of law, and any attempt,
voluntary or involuntary, to effect such action shall be null and void.
(21) Binding Effect. This agreement shall bind and inure to the benefit of
Morgenthaler, Apache and its subsidiaries and affiliates and their
permitted successors and assigns.
(22) Amendment, Modification, Waiver. This agreement shall not be amended
or modified except by an instrument in writing signed by the parties
hereto. No term of this agreement shall be deemed to have been waived,
nor shall there be an estoppel against enforcement of any provision of
this agreement, except by written instrument of the party charged with
such waiver or estoppel. No person or organization, including those
within the definition of Company, not a party to this agreement or a
permitted successor to a party to this agreement, shall be a
third-party beneficiary of this agreement or entitled to enforce its
terms. Morgenthaler acknowledges that he has had at least 21 days to
consider this agreement and has had legal advice with respect thereto.
(23) Remedies. Upon any material breach of this agreement by a party, the
other party shall be entitled to seek damages for the breach, and/or
shall be entitled to seek specific performance of this agreement.
Morgenthaler and Apache acknowledge and confess that there is no
adequate remedy at law for breach of obligations in this agreement
other than obligations for the payment of money. The prevailing party
in any litigation shall be entitled to an award of attorneys' fees by
the court. Interest on sums due from one party to another shall bear
interest at 18 percent per annum until paid.
(24) No Other Benefits. Except as provided in this agreement, Morgenthaler
shall not be entitled to any pension, profit-sharing, bonus,
disability, life insurance or similar plan or program of Apache,
whether now existing or hereafter adopted for the benefit of Apache's
employees or consultants.
(25) Headings and Meanings. The headings of paragraphs in this agreement
are for convenience only, and should not be considered in construing or
interpreting this agreement.
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(26) Governing Law. This agreement has been executed and delivered in the
State of Texas, and its validity, interpretation, performance and
enforcement shall be governed by the laws of that State.
(27) Notices. Any notice contemplated or permitted by this agreement shall
be delivered as follows:
To Apache or the Company
Raymond Plank
Chairman and Chief Executive Officer
Apache Corporation
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056
The above addresses for notice may be changed by written notice from
the changing party to the other party.
(28) Revocation. Morgenthaler may rescind this agreement by written notice
to Apache delivered on or before 5:00 p.m. on the seventh day after is
execution by Apache and Morgenthaler and delivery to Morgenthaler. If
no such notice of recision is timely received by Apache, the effective
time of this agreement shall be as stated above. Upon recision of this
agreement, Morgenthaler shall repay to Apache all sums paid pursuant to
this agreement except salary for services rendered by Morgenthaler
prior to the effective time.
/S/ GEORGE J. MORGENTHALER Dated: 12/15/93
George J. Morgenthaler
Apache Corporation
By: /S/ R. B. RICE Dated: 12/15/93
Name: Roger B. Rice
Its: Vice President
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