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Exhibit 10.15
EMPLOYMENT AGREEMENT
This Agreement entered into as of the 31st day of January, 2000 (the "Effective
Date"), by and between Remington Oil and Gas Corporation (the "Company") and
James A. Watt (the "Executive").
WHEREAS, the Company desires to employ the Executive and the Executive desires
to be employed by the Company in the capacities and for the term and
compensation and subject to the terms and conditions hereinafter set forth, and
WHEREAS, the Board of Directors of the Company (the "Board") has determined that
it is essential and in the best interest of the Company and its stockholders to
retain the services of the Executive especially in the event of a threat or
occurrence of a Change of Control and to ensure his continued dedication and
efforts in such event without undue concern for his personal financial and
employment security; and
WHEREAS, in order to induce the Executive to remain in the employ of the Company
particularly in the event of a threat or an occurrence of a Change in Control,
the Company desires to enter into this Agreement with the Executive to provide
the Executive with certain benefits during the term of his employment before and
after a Change of Control and to provide the Executive with the Gross-Up Payment
(as hereinafter defined).
NOW, THEREFORE, in consideration of the respective agreements of the parties
contained herein, it is agreed as follows:
1. TERM OF AGREEMENT. The Employment Term shall commence on the Effective Date
and shall expire on the third anniversary of the Effective Date; provided,
however, that on each anniversary of the Effective Date, the Employment
Term shall be extended an additional one (1) year from such anniversary at
the mutual written agreement of the Company and the Executive.
2. EMPLOYMENT.
2.1 Subject to the provisions of Section 4 hereof, the Company agrees to
continue to employ the Executive and the Executive agrees to remain in the
employ of the Company during the Employment Term. During the Employment
Term, the Executive shall be employed as the President and Chief Executive
Officer of the Company or in such other senior executive capacity as may be
mutually agreed to in writing by the parties. The Executive shall perform
the duties, undertake the responsibilities and exercise the authority
customarily performed, undertaken and exercised by persons situated in a
similar executive capacity. He shall also promote, by entertainment or
otherwise, the business of the Company.
2.2 During the Employment Term, excluding periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and affairs
of the Company to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder. The Executive may (1) serve on
corporate, civil or charitable boards or committees, (2) manage personal
investments, and (3) deliver lectures and teach at educational institutions
or events so long as such activities do not significantly interfere with
the performance of the Executive's duties hereunder. It is expressly
understood and agreed that to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the continued
conduct of such activities (or the conduct of activities similar in nature
and scope thereto) subsequent to the Effective Date shall not thereafter be
deemed to interfere with the performance of the Executive's
responsibilities to the Company.
3. COMPENSATION
3.1 Base Salary. During the Employment Term, the Company agrees to pay or cause
to be paid to the Executive an annual base salary of $270,000, and as may
be increased from time to time at the discretion of the Board or its
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designee, the Compensation Committee of the Board (the "Compensation
Committee"), (hereinafter referred to as the "Base Salary"). Such Base
Salary shall be payable in accordance with the Company's customary
practices applicable to its executives.
3.2 Bonus. In addition to the Base Salary, the Executive shall be eligible to
receive an annual performance bonus (the "Bonus"). The amount of the Bonus
shall be targeted at 50% of the Base Salary, provided, however, that the
amount of the Bonus may be increased or decreased at the discretion of the
Board or the Compensation Committee following consultation with the
Executive. Each Bonus shall be paid no later than the end of the third
month of the fiscal year next following the fiscal year for which the Bonus
is awarded, unless the Executive shall elect to defer the receipt of such
Bonus.
3.3 Benefits. During the Employment Term, the Executive shall be entitled to
participate in all employee, executive or key-employee benefit or incentive
compensation plans maintained or established by the Company for the purpose
of providing compensation and/or benefits to employees, executives or key
employees, generally, including without limitation, all pension,
retirement, profit sharing, savings, stock option, deferred compensation,
restricted stock grants, medical, hospitalization, dental, life or travel
accident insurance plans. Unless otherwise provided herein, the
compensation and benefits hereunder, and the Executive's participation in
such plans, practices and programs shall be on the same basis and terms as
applicable to the other eligible participants in the particular plan,
practice or program. No additional compensation provided under any such
plans shall be deemed to modify or otherwise affect the terms of this
Agreement or any of the Executive's entitlements hereunder.
3.4 Vacation and Sick Leave. During the Employment Term, at such reasonable
times as the Board shall in its discretion permit, the Executive shall be
entitled, without loss of pay, to absent himself voluntarily from the
performance of his employment under this Agreement, provided that: (1) the
Executive shall be entitled to four (4) weeks of annual paid vacation; such
vacation to be taken in accordance with the policies of the Company in
regard to vacation, and (2) the Executive shall be entitled to sick leave
(without loss of pay) in accordance with the Company's policies in effect
from time to time.
3.5 Fringe Benefits, Perquisites and Expenses. During the Employment Term, the
Executive shall be entitled to all fringe benefits and perquisites
generally made available by the Company to its executives; provided,
however, even if not provided to all executives by the Company, the Company
shall provide the Executive with a membership in a luncheon or petroleum
club, memberships in appropriate professional associations, and an
automobile allowance in an amount deemed appropriate by the Board or the
Compensation Committee. The Executive shall be entitled to receive prompt
reimbursement of all expenses reasonably incurred by him in connection with
the performance of his duties hereunder or for promoting, pursuing or
otherwise furthering the business or interest of the Company.
4. TERMINATION
4.1 During the Employment Term, the Executive's employment hereunder may be
terminated under the following circumstances:
(1) Cause. The Company may terminate the Executive's employment for "Cause" by
written notice to the Executive ("Notice of Termination"), which
termination shall be effective upon the date of sending of such notice (the
"Termination Date"), if the Executive, as determined by at least two-thirds
(2/3rds) of the Board, not including the Executive who will not be entitled
to vote on the issue in the event he is a member of the Board, (a) shall
have been convicted of a felony or entered a plea of nolo contendre to a
felony charge, (b) shall have been involved in any act of material fraud,
theft, or other material misconduct detrimental to the best interests of
the Company, (c) shall have engaged in gross negligence or willful
misconduct with respect to his duties to the Company and as a result caused
material harm to the Company, (d) shall have engaged in competitive
behavior against the Company, misappropriated or aided in misappropriating
a material opportunity of the Company, secured or attempted to secure a
personal benefit not fully disclosed to and approved by a majority
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of the Board in connection with any transaction of or on behalf of the
Company, or (e) shall have failed to substantially perform his duties as
set forth herein.
(2) Disability. The Company may terminate the Executive's employment after
having established the Executive's disability. For purposes of this
Agreement, "Disability" means a physical or mental infirmity which impairs
the Executive's ability to substantially perform his duties under this
Agreement, which continues for a period of at least one hundred eighty
(180) continuous days. The Executive shall be entitled to the compensation
and benefits provided under this Agreement for any period during the
Employment term and prior to the establishment of the Executive's
Disability during which the Executive is unable to work due to a physical
or mental infirmity. Notwithstanding anything contained in this Agreement
to the contrary, until the Termination Date specified in the Notice of
Termination (as each term is hereinafter defined) relating to the
Executive's disability, the Executive shall be entitled to return to his
position with the Company as set forth in this Agreement in which event no
Disability of the Executive will be deemed to have occurred.
(3) Good Reason. The Executive may terminate his employment for "Good Reason."
For purposes of this Agreement, "Good Reason" shall mean the occurrence
after a Change in Control of any of the following events or conditions
described in Subsections (a) through (e) hereof: (a) any change in the
Executive's title, position, duties or responsibilities that results in the
Executive not having duties and responsibilities substantially equivalent
to or greater than those the Executive had immediately prior to such
change, (b) the assignment to the Executive of any duties or
responsibilities which, in the Executive's reasonable judgment, are
inconsistent with his status, title, position or responsibilities, (c) any
removal of the Executive from or failure to reappoint or reelect him to any
of such offices or positions, except in connection with the termination of
his employment for Disability, Cause, as a result of his death, or by the
Executive other than for Good Reason, (d) a reduction in the Executive's
Base Salary, Bonus or any failure to pay the Executive any compensation or
benefits to which he is entitled within ten (10) days of the date due, or
(e) the Executive is required to perform a substantial portion of his
duties and responsibilities required hereunder outside the Dallas/Fort
Worth metropolitan area.
4.2 Upon termination of the Executive's employment during the Employment Term,
the Executive shall be entitled to the following benefits:
(1) If the Executive's employment with the Company is terminated (a) by the
Company for Cause or Disability, (b) by reason of the Executive's death, or
(c) by the Executive other than for Good Reason, the Company shall pay the
Executive all amounts earned or accrued through the Termination Date,
including Base Salary, reimbursement for reasonable and necessary expenses
incurred by the Executive on behalf of the Company during the period ending
on the Termination Date, and all unpaid accumulated and accrued benefits
due under any benefit plan or program in which the Executive was a
participant in accordance with the terms and conditions of such plan or
program ("Accrued Compensation"). In addition to the foregoing, if the
Executive's employment is terminated by the Company for Disability or by
reason of the Executive's death, the Company shall pay the Executive or his
beneficiaries an amount equal to his Bonus multiplied by a fraction the
numerator of which is the number of days in such fiscal year through the
Termination Date and the denominator of which is 365 ("Pro-Rata Bonus").
The Executive's entitlement to any other compensation or benefits shall be
determined in accordance with the Company's employee benefit plan,
including stock option plans, and other applicable programs and practices
then in effect.
(2) If the Executive's employment is terminated by the Company for reasons
other than change of control, Cause, Disability, or by reason of the
Executive's death, the Executive will be entitled to the following: (a) the
Company shall pay the Executive all Accrued Compensation and a Pro Rata
Bonus, (b) the Company shall pay the Executive as severance pay and in lieu
of any further compensation for periods subsequent to the Termination Date,
in a single payment, an amount in cash equal to one (1) times the sum of
the Executive's then current Base Salary, (c) the Company shall provide the
Executive twelve (12) months of out placement services at the Company's
sole expense, (d) for a term of one (1) year following the Termination
Date, or until the Executive gains new employment with substantially
similar benefits, the Company, at its expense, shall provide the Executive
and his immediate family the same level of health benefits, including,
without limitation, medical, dental, disability, and life insurance,
provided the Executive and his immediate family at any time
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within six (6) months of the Termination Date, and (e) all stock options
granted the Executive will be immediately vested in accordance with any
stock option agreements between the Executive and the Company currently in
effect at the Termination Date.
(3) If the Executive's employment is terminated by the Company within
twenty-four (24) months after a change of control for reasons other than
Cause, Disability, by reason of the Executive's death; or if the Executive
terminates his employment with the Company for Good Reason, the Executive
will be entitled to the following: (a) the Company shall pay the Executive
all Accrued Compensation and a Pro Rata Target Bonus, (b) the Company shall
pay the Executive as severance pay and in lieu of any further compensation
for periods subsequent to the Termination Date, in a single payment, an
amount in cash equal to two and ninety-nine one hundredths percent (2.99%)
times the sum of (i) the Executive's then current Base Salary and (ii) the
Targeted Bonus (not subject to reduction), (c) the Company shall provide
the Executive twelve (12) months of out placement services at the Company's
sole expense, (d) for a term of three (3) years following the Termination
Date, or until the Executive gains new employment with substantially
similar benefits, the Company, at its expense, shall provide the Executive
and his immediate family the same level of health benefits, including,
without limitation, medical, dental, disability, and life insurance,
provided the Executive and his immediate family at any time within six (6)
months of the Termination Date, and (e) all stock options granted the
Executive will be immediately vested in accordance with any stock option
agreements between the Executive and the Company currently in effect at the
Termination Date.
4.3 The amounts provided for in Sections 4.2(1) and 4.2(2) of this Agreement
shall be paid within five (5) working days after the Executive's
Termination Date.
4.4 The Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise and
no such payment shall be offset or reduced by the amount of any
compensation or benefits provided the Executive in any subsequent
employment except as provided in Section 4.2(2)(d).
4.5 The severance pay and benefits provided for in Sections 4.2(1) and 4.2(2)
of this Agreement shall be in lieu of any other severance pay to which the
Executive may be entitled under any Company severance plan, program or
arrangement.
4.6 As used in this Agreement, the term "Change of Control" shall have the same
meaning as ascribed to it in the Company's 1997 Stock Option Plan (Exhibit
A) or as amended from time to time.
5. EXCISE TAX PAYMENTS
5.1 In the event that any payment or benefit (within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code") to the
Executive or for his benefit paid or payable pursuant to the terms of this
Agreement or otherwise arising out of his employment with the Company, or a
change of ownership or effective control of the Company or of a substantial
portion of its assets (a "Payment" or "Payments"), would be subject to
excise tax imposed by Section 4999 of the Code or any interest or penalties
are incurred by the Executive 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"), then the Executive will be
entitled to receive an additional payment (the "Gross-Up Payment") in an
amount such that after payment by the Executive of all applicable taxes,
interest and penalties (other than interest and penalties due to the
Executive's failure to timely file a tax return or pay taxes shown on his
return) including any Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
5.2 The Company shall bear any expense necessary in determining whether a
Gross-Up Payment is required pursuant to this Agreement. The Gross-Up
Payment, if any, shall be paid by the Company to the Executive within five
days of the Company's receipt of a determination from any accounting firm
satisfactory to the Executive that such Gross-Up Payment is required.
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6. CONFIDENTIAL INFORMATION. The Executive acknowledges and agrees that he
will not, without the prior written consent of the Company, at any time
during the Employment Term or for a period of three (3) years thereafter,
except as may be required by any competent legal authority, use or disclose
to any person, firm or other legal authority, any confidential records,
secrets or information related to the Company or any of its subsidiaries.
The Executive acknowledges and agrees that all information and secrets of
the Company and/or its subsidiaries that he has acquired or may acquire,
were received, or will be received in confidence and as a fiduciary of the
Company. The Executive will exercise utmost diligence to protect and guard
such information and secrets.
7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of the Company, its successors and assigns and the
Company shall require any successor or assign to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform if no such succession or
assignment had taken place. The term "Company" as used herein shall include
such successors and assigns. The term "successors and assigns" as used
herein shall mean a corporation or other entity acquiring all or
substantially all the assets and the business of the Company (including
this Agreement) whether by operation of law or otherwise. Neither this
Agreement nor any right or interest hereunder shall be assignable or
transferable by the Executive, his beneficiaries or legal representatives,
except by will or by the laws of descent or distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
personal representative.
8. NOTICE. For purposes of this Agreement, notices and all other
communications provided for in this Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly
given when personally delivered or sent certified mail, return receipt
requested, postage prepaid, addressed to the respective addresses last
given by each party to the other, provided, that all notices to the Company
shall be directed to the Board with a copy to the Secretary of the Company.
9. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any of its
subsidiaries and for which the Executive may qualify, nor shall anything
herein limit or reduce such rights as the Executive may have under any
other agreements with the Company or its subsidiaries. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive
under any plan or program of the Company or any of its subsidiaries shall
be payable in accordance with such plan or program, except as explicitly
modified by this Agreement.
10. SETTLEMENT OF CLAIMS. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including without
limitation, any set-off, counterclaim, defense, recoupment, or other right
which the Company may have against the Executive or others.
11. MISCELLANEOUS. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and the Company.
12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
13. SEVERABILITY. The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect
the validity or enforceability of the other provisions hereof.
14. WAIVER OF DEFAULT. Any waiver by either party of a breach of any provision
in this Agreement shall not operate as or be construed as a waiver of any
subsequent breach thereof.
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15. ENTIRE AGREEMENT. This Agreement represents the entire agreement between
the parties with respect to the subject matter hereof and supersedes any
and all prior agreements and understandings with respect to such subject
matter.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
effective as of the Effective Date.
Remington Oil and Gas Corporation
By:
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Title:
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Executive:
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James A. Watt
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EXHIBIT A
A "Change of Control" shall mean any of the following events:
(i) a merger or consolidation to which the Company is a party if the
individuals and entities who were stockholders of the Company immediately prior
to the effective date of such merger or consolidation have beneficial ownership
(as defined in Rule 13d-3 under the Exchange Act) of less than 50% of the total
combined voting power for election of directors of the surviving corporation
following the effective date of such merger or consolidation;
(ii) the acquisition or holding of direct or indirect beneficial
ownership (as defined under Rule 13d-3 of the Exchange Act) of securities of the
Company representing in the aggregate 30% or more of the total combined voting
power of the Company's then issued and outstanding voting securities by any
person, entity or group of associated persons or entities acting in concert,
other than S-Sixteen Holding Company, any employee benefit plan of the Company
or of any subsidiary of the Company, or any entity holding such securities for
or pursuant to the terms of any such plan, beginning from and after such time as
S-Sixteen Holding Company shall no longer have direct or indirect beneficial
ownership (as so defined) of securities of the Company representing in the
aggregate a larger percentage of the total combined voting power of the
Company's then issued and outstanding securities than that held by any other
person, entity or group;
(iii) the sale of all or substantially all of the assets
of the Company to any person or entity that is not a wholly owned
subsidiary of the Company; or
(iv) the approval by the stockholders of the Company of any plan or
proposal for the liquidation of the Company or its material subsidiaries, other
than into the Company.