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SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
EXHIBIT 10.4
PRESIDIO OIL COMPANY
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT (the "Agreement") is
made and entered into at Englewood, Colorado, on the 8th day of October, 1993,
by and between PRESIDIO OIL COMPANY (the "Company"), and GEORGE P. GIARD, JR.
(the "Executive").
ARTICLE I
PURPOSE
The Company desires to recognize the Executive's contributions to the
Company through his faithful and competent efforts by entering into this
Agreement for supplemental retirement benefits. The Company highly values the
services of the Executive as an important member of the management team and
recognizes the Executive's services have been instrumental to the Company's
growth. The Company desires to afford additional financial security to the
Executive in recognition of the Executive's past efforts, and further desires
to provide an incentive for the Executive to continue to contribute toward the
Company's growth and profitability.
ARTICLE II
RETIREMENT BENEFITS
2.1 NORMAL OR EARLY RETIREMENT BENEFIT. Upon the Executive's
Normal Retirement, the Company will pay benefits to the Executive in 120
monthly installments, commencing on the last day of the calendar month
beginning after the date of his Normal Retirement. Upon the Executive's Early
Retirement, the Company will pay benefits to the Executive in 120 monthly
installments, commencing on the last day of the calendar month following the
month in which the Executive attains age 65. The Normal Retirement or Early
Retirement annual benefit is equal to the Executive's Retirement Percentage
multiplied by his Final Average Earnings, adjusted pursuant to Sections 2.3 and
2.4 of this Agreement. A monthly installment equals 1/12 of the Normal
Retirement or Early Retirement annual benefit as calculated above.
2.2 VESTING. The Executive is 100% Vested under this Agreement
after he has completed 5 Years of Service (including Service completed prior to
the date of this Agreement) or upon Disability. The Company will not pay any
benefits under this Agreement to the Executive unless he is Vested or is deemed
to be Vested.
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SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
2.3 OFFSET OF ESOP VALUE. The Company will reduce the benefits
payable under this Agreement by the adjusted value resulting from any
contributions made by the Company, including any dividends paid thereon, to the
account of the Executive under the Company's employee stock ownership plan
("ESOP"). The offset is computed as follows:
(a) The value of the Executive's ESOP account
attributable to contributions by the Company (including any dividends
paid thereon) is determined as of the last day of the calendar month
preceding the date the Executive's benefits are to commence under this
Agreement;
(b) The value determined in paragraph (a) is increased by
the compounded value of any prior distributions (attributable to
contributions by the Company, including any dividends paid thereon)
from the ESOP to the Executive (compounded from the actual date of
each distribution to the date benefits are to commence, using the
T-Bond Rate as of the last day of the calendar month preceding the
date benefits are to commence); and
(c) The amount of the offset to be applied against each
monthly payment otherwise payable under this Agreement is the monthly
amount which would be payable if the ESOP were to purchase a ten-year
annuity with the Executive's ESOP account (as adjusted under
paragraphs (a) and (b) above). The Company will compute the monthly
payments under the annuity using a discount rate equal to the T-Bond
Rate in (b) above.
2.4 OFFSET FOR BENEFITS PAYABLE UNDER QUALIFIED PLANS. The
Company will reduce the benefits payable under this Agreement by any amounts
that would be payable to the Executive or to his Beneficiary under any other
qualified retirement plans the Company may adopt subsequent to the date of this
Agreement. The Company will compute the offset in the same manner as the
Company calculates the ESOP offset under Section 2.3.
2.5 TERMINATION PRIOR TO RETIREMENT. Upon the Executive's
Termination of employment with the Company (other than a Termination for Cause)
prior to Normal Retirement or Early Retirement and when the Executive is
Vested, he will receive benefits in accordance with Sections 2.1, 2.3 and 2.4
of this Agreement (using his Retirement Percentage and Final Average Earnings
as of the date of Termination of employment), commencing on the last day of the
calendar month following the month in which the Executive attains age 65.
2.6 DISABILITY. Upon the Executive's total and permanent
Disability while an active, full-time employee of the Company, the Executive
will be entitled to receive retirement benefits beginning on the last day of
the calendar month following the month in which the Executive becomes totally
and permanently disabled or attains age 65, whichever is later. The Executive
may apply to the Compensation Committee for payment
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SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
of benefits prior to attaining age 65. The Compensation Committee may grant or
deny such application in its sole discretion.
Solely for purposes of determining benefits in the event of
Disability, the Company will treat the Executive as if he were Vested on the
date he becomes totally and permanently disabled, irrespective of his actual
completed Years of Service. The Executive will not accrue Years of Service
during any period of Disability. If the Executive recovers from a Disability,
he will accrue additional Years of Service for purposes of determining Vesting
and Retirement Percentage beginning on the date he returns to Employment.
2.7 DEATH BENEFITS. The Company will not pay any death benefits
under this Agreement if the Executive dies before he is Vested. If the
Executive dies after he is Vested and prior to the payment of any benefits
pursuant to this Agreement, the Company will pay benefits determined in the
manner set forth in section 2.5 to the Executive's Beneficiary, except that
benefits will commence on the last day of the month following the Executive's
death rather than when he would have attained age 65. If the Executive dies
while receiving benefit payments under this Agreement, the Company will
continue paying such benefits to the Executive's Beneficiary for the remainder
of the period during which the Executive would have received such benefits if
he had remained alive.
2.8 TERMINATION FOR CAUSE. Notwithstanding any other provision of
this Agreement, if the Company terminates the Executive's employment for Cause,
the Company will not pay any Retirement Benefit or other benefit under this
Agreement to the Executive or to his Beneficiaries, irrespective of whether the
Executive was eligible for Normal Retirement or Early Retirement.
ARTICLE III
PAYMENT
3.1 WITHHOLDING; UNEMPLOYMENT TAXES. The Company will withhold
from payments under this Agreement any taxes required by law to be withheld.
3.2 DESIGNATION OF BENEFICIARY. The Executive may designate a
Beneficiary to receive all or part of the amounts earned by the Executive under
this Agreement in case of death. A designation of Beneficiary may be replaced
by a new designation or may be revoked by the Executive at any time. A
designation or revocation must be on a form provided for this purposes by the
Company and must be signed by the Executive and delivered to the Company prior
to the Executive's death. If the Executive is married, and chooses to
designate a Beneficiary other than his spouse, a written spousal consent
satisfactory to the Company is required.
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SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
In case of the Executive's death, the benefits to be paid to the
Executive under this Agreement will be paid in accordance with this Agreement
to the designated Beneficiary.
The amount payable to the Executive upon death and not subject to the
designation of a Beneficiary will be paid to the Executive's estate. If there
are any questions as to the legal right of any Beneficiary to receive payment
under this Agreement, the Company may pay the amount in question to the
Executive's estate and the Company will have no further liability to anyone
with respect to this amount.
3.3 NO OTHER BENEFITS. The Company will not pay any benefits
under this Agreement to the Executive or to his Beneficiary, whether by reason
of Termination of employment or otherwise, except as specifically provided
under the terms of this Agreement.
ARTICLE IV
CONDITIONS RELATED TO BENEFITS
4.1 ADMINISTRATION OF AGREEMENT. The Compensation Committee will
administer this Agreement and interpret, construe and apply its provisions in
accordance with its terms. All decisions of the Compensation Committee with
respect to this Agreement will be by vote or written consent of the majority of
its members and will be final and binding unless the Board determines
otherwise. The Executive may serve as a member of the Compensation Committee.
4.2 UNSECURED STATUS OF CLAIMS. The Executive and his heirs will
not have any legal or equitable rights, interests or claims in any specific
property or assets of the Company. No assets of the Company will be held under
any trust for the benefit of the Executive or his heirs, or held in any way as
collateral security for the fulfillment of the obligations of the Company under
this Agreement. The Company's obligation under this Agreement will be merely
that of an unfunded and unsecured promise of the Company to pay money in the
future. The Executive does not have any ownership, security or other rights in
any assets of the Company by virtue of entering into this Agreement.
4.3 NO EMPLOYMENT RIGHTS. Nothing in this Agreement will be
construed to create a contract of continuing employment between the Company and
the Executive. The Company reserves the right to elect any person to its
offices and to remove any employee in any manner and upon any basis permitted
by law.
4.4 COMPANY'S RIGHT TO TERMINATE OR AMEND. The Company reserves
the sole right to terminate or to amend this Agreement at any time. However,
no such termination or amendment of this Agreement may reduce the value of the
benefits theretofore accrued by the Executive unless the Executive consents to
such amendment in writing.
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SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
4.5 OFFSET. If, at the time the Company is to make payments or
installments of payments under this Agreement, the Executive or his Beneficiary
or both are indebted to the Company, then the payments remaining to be made to
the Executive or to his Beneficiary, or to both, at the discretion of the
Board, may be reduced by the amount of such indebtedness; provided, however,
that an election by the Board not to reduce any such payment or payments will
not constitute a waiver of the Company's claim for such indebtedness.
ARTICLE V
MISCELLANEOUS
5.1 NONASSIGNABILITY. Neither the Executive nor his Beneficiary,
if any, may assign or transfer any rights under this Agreement.
5.2 FACILITY OF PAYMENT. If the Company receives satisfactory
evidence that (i) the Executive or his Beneficiary, as the case may be, is
physically, mentally, or legally incompetent to receive a Benefit and to give a
valid receipt therefore at the time the Benefit is payable to the Executive or
his Beneficiary, (ii) an individual or institution is then maintaining or has
custody of such person, and (iii) no guardian, committee or other
representative of the estate of such person has been appointed, the Company may
direct the Benefit to be paid to the individual or institution maintaining or
having the custody of such person, and the receipt by such individual or
institution will be deemed payment into such person's hands and will be a valid
and complete discharge of the Company's obligation to pay the Benefit.
5.3 GENDER AND NUMBER. Wherever appropriate in this Agreement,
the masculine may mean the feminine and the singular may mean the plural and
vice versa.
5.4 VALIDITY. If any provision of this Agreement is held invalid,
void or unenforceable, the validity of the remaining provisions of this
Agreement will not be affected.
5.5 APPLICABLE LAW. This Agreement will be governed and construed
in accordance with the laws of the State of Delaware.
5.6 HEADINGS FOR REFERENCE ONLY. Headings used in this Agreement
are for reference only and are not to be used in construing the Agreement or
any provision of the Agreement.
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SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
ARTICLE VI
DEFINITIONS
"Agreement" means this Supplemental Executive Retirement Agreement
between the Company and the Executive.
"Beneficiary" means the person or persons designated as such in
accordance with Section 3.2.
"Board" means the Board of Directors of the Company.
"Cause" means the Executive's (a) willful misconduct, dishonesty or
reckless disregard of his duties as an officer or employee of the Company, (b)
any act of fraud, embezzlement or dishonesty towards the Company, or (c)
conviction or plea of guilty or no contest for any felony or misdemeanor
involving moral turpitude (other than any offense relating to driving a motor
vehicle which does not cause death or serious bodily injury).
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Compensation Committee" means the Compensation Committee appointed by
the Board, or if the Compensation Committee ceases to exist, "Compensation
Committee" means the Board.
"Constructive Termination" means (a) any material reduction of duties,
salary or target bonus of the Executive, or (b) any mandatory change in
location of the Executive's principal location or business.
"Disability" means any termination of employment prior to Normal
Retirement or Early Retirement that the Compensation Committee, in its complete
and sole discretion, determines is by reason of the Executive's total and
permanent disability. If the Executive makes application for disability
benefits under any long term disability program of the Company or the Social
Security Act, as now in effect or as hereafter amended, and qualifies for such
benefits, he will be presumed to qualify as totally and permanently disabled
under this Agreement, subject to the Compensation Committee's determination
that the disability is such that it may be regarded as total and permanent in
nature. If the Executive fails to qualify for any such disability benefits, he
will be presumed not to be totally and permanently disabled under this
Agreement. However, if the Compensation Committee at any time has reason to
question the existence or non-existence of a condition of total and permanent
disability with respect to the Executive, or if the Executive fails to make
application for any such disability benefits, the Compensation Committee may
require that the Executive submit to an examination by a physician or medical
clinic selected by
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SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
the Compensation Committee. On the basis of such medical evidence, the
Compensation Committee's determination of whether a condition of total and
permanent disability exists will be conclusive.
"Early Retirement" means a termination of employment by the Executive
(other than by reason of death) prior to Normal Retirement on or after the date
on which the Executive has both attained the age of 55 and completed five Years
of Service.
"Earnings" for any calendar year or other period of 12 consecutive
months means the Executive's base salary and bonuses (but excluding other forms
of compensation), paid to him by the Company during such period, before
reduction pursuant to any plan or agreement whereby compensation is deferred
including but not limited to a plan whereby compensation is deferred in
accordance with Section 401(k) or reduced in accordance with Section 125 of the
Code.
"Employment" or "Service" refers to full-time or substantially
full-time employment by the Company, or any parent holding company or
subsidiary, including any approved leave of absence.
"Executive" is George P. Giard, Jr., a senior officer of the Company.
"Final Average Earnings" means the average of the Executive's actual
annual Earnings for the 36 calendar months immediately preceding the
Executive's Normal Retirement or Early Retirement, Disability or death.
"Involuntary Termination" means a Termination of employment for any
reason other than for Normal Retirement or Early Retirement, voluntary
resignation, death or Disability.
"Normal Retirement" means a termination of employment by the Executive
other than by reason of death on or after the date on which the Executive
attains age 65.
"Retirement Percentage" is the sum of (i) 2% multiplied by the
Executive's Years of Service through the Year of Service in which the Executive
attains the age of 54 and (ii) 4.6% multiplied by the Executive's Years of
Service commencing with the Year of Service in which the Executive attains the
age of 55 and ending with the Year of Service in which the Executive attains
the age of 64; provided, however, that the Retirement Percentage shall not
exceed 60%.
A "subsidiary" of the Company is any corporation, partnership, venture
or other entity in which the Company has at least a 50% ownership interest.
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"T-Bond Rate" means the annual interest rate obtained at the most
recent auction of 10-year United States Treasury Bonds preceding the date for
which such rate is to be determined under this Agreement.
"Termination of employment" means the ceasing of the Executive's
employment for any reason whatsoever, whether voluntarily or involuntarily.
"Vested" refers to the date when the Executive first qualifies for
Normal Retirement Benefits under this Agreement.
A "Year" is a period of twelve (12) consecutive calendar months.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement on the date first written above.
PRESIDIO OIL COMPANY
By: /s/ C. S. HARDESTY
Christopher S. Hardesty
Vice President
EXECUTIVE
By: /s/ GEORGE P. GIARD, JR.
George P. Giard, Jr.
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