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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): DECEMBER 15, 1999
--------------------
OCEAN ENERGY, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
TEXAS 1-8094 74-1764876
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation or organization) Number) Identification No.)
1001 FANNIN, SUITE 1600
HOUSTON, TEXAS 77002-6714
(Address of principal executive offices) (Zip code)
</TABLE>
Registrant's telephone number, including area code: (713) 265-6000
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Item 5. Other Events.
Ocean Energy, Inc., a Texas corporation (the "Company"), issued a press
release on December 15, 1999, announcing that (i) James T. Hackett ("Hackett"),
the Company's President and Chief Executive Officer, would assume the additional
responsibility of serving as Chairman of the Board of Directors of the Company
effective January 1, 2000 and (ii) James C. Flores ("Flores"), the Company's
Chairman of the Board, would resign his position as Chairman of the Board of
Directors of the Company effective December 31, 1999 but would continue to serve
as a Vice Chairman of the Company and a member of its Board of Directors.
In connection with these changes, the Company and Hackett have executed
an amendment to his Severance Agreement and a second amendment to his Employment
Agreement. These amendments are attached hereto as Exhibits 99.1 and 99.2,
respectively, and are incorporated herein by reference.
In addition, pursuant to a letter agreement dated December 22, 1999,
the Company has agreed to provide Flores certain severance benefits in lieu of
the benefits that would have been provided to him pursuant to his existing
Employment Agreement with the Company. These in lieu severance benefits include
(i) a lump sum payment and (ii) vesting of outstanding unvested stock options.
In addition, Flores has executed an Employment Agreement relating to his
position as Vice Chairman of the Company. The cost associated with the benefits
to Flores provided for in the letter agreement will be approximately $5.8
million ($3.7 million after tax) and will be recorded as a reduction in earnings
for the quarter ended December 31, 1999. The letter agreement and the Employment
Agreement are attached hereto as Exhibit 99.3 and Exhibit 99.4, respectively,
and are incorporated herein by reference. The foregoing summary is qualified in
its entirety by reference to these exhibits.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Amendment to Severance Agreement, effective as of December 15, 1999,
between the Company and Hackett, amending the Severance Agreement
between the Company and Hackett effective as of August 25, 1998.
99.2 Second Amendment to Employment Agreement, effective as of December 15,
1999, between the Company and Hackett, further amending the Employment
Agreement between the Company and Hackett effective as of September 16,
1998, as amended on November 24, 1998.
99.3 Letter Agreement between the Company and Flores, dated December 22,
1999.
99.4 Employment Agreement between the Company and Flores, effective as of
January 1, 2000.
[the remainder of this page is intentionally left blank]
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
OCEAN ENERGY, INC.
By: /s/ Robert K. Reeves
-------------------------------
Robert K. Reeves
Executive Vice President,
General Counsel and Secretary
Dated: January 7, 2000
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EXHIBIT INDEX
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<CAPTION>
EXHIBIT NO. DESCRIPTION
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99.1 Amendment to Severance Agreement, effective as of
December 15, 1999, between the Company and Hackett,
amending the Severance Agreement between the Company
and Hackett effective as of August 25, 1998.
99.2 Second Amendment to Employment Agreement, effective
as of December 15, 1999, between the Company and
Hackett, further amending the Employment Agreement
between the Company and Hackett effective as of
September 16, 1998, as amended on November 24, 1998.
99.3 Letter Agreement between the Company and Flores,
dated December 22, 1999.
99.4 Employment Agreement between the Company and Flores,
effective as of January 1, 2000.
</TABLE>
<PAGE> 1
EXHIBIT 99.1
AMENDMENT TO
SEVERANCE AGREEMENT
WHEREAS, OCEAN ENERGY, INC., a Texas corporation, formerly known as
Seagull Energy Corporation (the "Company") and JAMES T. HACKETT ("Executive")
have heretofore entered into a Severance Agreement (the "Agreement"), which was
effective as of August 25, 1998; and
WHEREAS, the Company and Executive previously amended the Agreement in
certain respects, contingent on, and effective upon, the merger of Ocean Energy,
Inc., a Delaware corporation, with and into Company, which was consummated on
March 30, 1999 (the "Merger"); and
WHEREAS, in connection with the Merger, Company amended its Articles of
Incorporation to change its name to "Ocean Energy, Inc.;" and
WHEREAS, the Company and Executive desire to further amend the
Agreement;
NOW, THEREFORE, the Company and Executive agree that the Agreement
shall be amended as follows, effective as of December 15, 1999:
1. References in the Agreement to "Seagull Energy Corporation" shall be
deemed to be references to "Ocean Energy, Inc."
2. Paragraph 1(a)(v) of the Agreement shall be deleted and the
following shall be substituted therefor:
"(v) A termination encompassed by Paragraph 2.3(i) of the
Employment Agreement between the Company and Executive dated September
16, 1998, as amended (the 'Employment Agreement')."
3. Paragraph 1(d) of the Agreement shall be deleted and the following
shall be substituted therefor:
"(d) 'COMPENSATION' shall mean the greater of:
(i) Executive's annual salary plus his Targeted
Incentive Award immediately prior to the date on which a
Change of Control occurs, or
(ii) Executive's annual salary plus his Targeted
Incentive Award at the time of his Involuntary Termination."
4. Paragraph 1(e) of the Agreement shall be deleted.
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5. Paragraph 1(h) of the Agreement shall be deleted and the following
shall be substituted therefor:
"(h) 'SEVERANCE AMOUNT' shall mean an amount equal to 2.99
times Executive's Compensation, reduced by the present value of any
salary continuation or bonus amounts payable to Executive under the
Employment Agreement or any successor thereto. Such present value shall
be determined using the rate of interest referred to in Paragraph 4
hereof as of the last day of Executive's employment with the Company."
6. Paragraph 1(i) of the Agreement shall be deleted and the following
shall be substituted therefor:
"(i) 'TARGETED INCENTIVE AWARD' shall mean Executive's
Incentive Target as set forth in the Employment Agreement, expressed as
a dollar amount based on such Executive's annual salary for such year."
7. Paragraph 3(b) of the Agreement shall be deleted and the following
shall be substituted therefor:
"(b) Further, if Executive's Involuntary Termination occurs on
or after the date Executive's annual bonus has been determined in
accordance with the Employment Agreement, but prior to the date such
annual bonus is paid, Executive shall receive an additional lump sum
cash payment in an amount equal to his Targeted Incentive Award."
8. As amended hereby, the Agreement is specifically ratified and
reaffirmed.
EXECUTED effective as of December 15, 1999.
"EXECUTIVE"
/s/ JAMES T. HACKETT
-----------------------------
JAMES T. HACKETT
"COMPANY"
OCEAN ENERGY, INC.
BY: /s/ WILLIAM L. TRANSIER
-----------------------------------------
NAME: William L. Transier
TITLE: Executive Vice President and
Chief Financial Officer
<PAGE> 1
EXHIBIT 99.2
SECOND AMENDMENT TO
EMPLOYMENT AGREEMENT
WHEREAS, OCEAN ENERGY, INC., a Texas corporation, formerly known as
Seagull Energy Corporation ("Company") and JAMES T. HACKETT ("Executive") have
heretofore entered into an Employment Agreement (the "Agreement"), which was
effective as of September 16, 1998; and
WHEREAS, Company and Executive previously amended the Agreement in
certain respects by a document entitled, "Amendment to Employment Agreement"
(the "Amendment"), which was executed on November 24, 1998, but contingent on,
and effective upon, the merger of Ocean Energy, Inc., a Delaware corporation,
with and into Company, which was consummated on March 30, 1999 (the "Merger");
and
WHEREAS, in connection with the Merger, Company amended its Articles of
Incorporation to change its name to "Ocean Energy, Inc.;" and
WHEREAS, Company and Executive desire to further amend the Agreement;
NOW, THEREFORE, Company and Executive agree that the Agreement shall be
amended as follows, effective as of December 15, 1999, except as otherwise
provided herein:
1. References in the Agreement to "Seagull Energy Corporation" or
"Seagull" shall be deemed to be references to "Ocean Energy, Inc." Further,
references to Company's "Compensation Committee" shall be deemed to be
references to Company's "Organization & Compensation Committee."
2. Company and Executive acknowledge that Executive has heretofore been
appointed President and Chief Executive Officer of Company and elected a member
of the Board of Directors of Company (the "Board of Directors") and that,
effective as of January 1, 2000, Executive has also been elected as Chairman of
the Board of Directors. Therefore, effective as of January 1, 2000, Paragraph 1
of the Amendment, which amended the second sentence of Paragraph 1.2 of the
Agreement, shall be deleted and the second sentence of Paragraph 1.2 of the
Agreement shall be restored to read as follows:
"Effective as of January 1, 2000, Company shall cause Executive to be
elected as Chairman of the Board of Directors."
3. Paragraph 3.3 of the Agreement shall be deleted and the following
shall be substituted therefor:
<PAGE> 2
"3.3 ANNUAL BONUSES. For the 1999 calendar year and subsequent
calendar years ending during the period of this Agreement, Executive
shall be eligible to receive an annual cash bonus in an amount
determined by the Compensation Committee, based on Executive's
individual performance and the performance of Company, with a target
(an 'Incentive Target') of 100% of Executive's annual base salary
(including any annual base salary that Executive would have received if
he had not received an Option in lieu of such annual salary pursuant to
paragraph 3.1 and any annual base salary deemed deferred under the
SBP), but subject to a maximum of 200% of Executive's annual base
salary (including any annual base salary that Executive would have
received if he had not received an Option in lieu of such annual salary
pursuant to paragraph 3.1 and any annual base salary deemed deferred
under the SBP)."
4. Effective as of January 1, 2000, Paragraph 3 of the Amendment, which
amended Paragraph 5.2 of the Agreement, shall be deleted and Paragraph 5.2 of
the Agreement shall be restored to read as originally written.
5. As amended hereby, the Agreement is specifically ratified and
reaffirmed.
EXECUTED effective as of December 15, 1999.
OCEAN ENERGY, INC.
BY: /s/ William L. Transier
--------------------------------
NAME: William L. Transier
TITLE: Executive Vice President and
Chief Financial Officer
"COMPANY"
/s/ James T. Hackett
-------------------------------------
JAMES T. HACKETT
"EXECUTIVE"
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EXHIBIT 99.3
PRIVILEGED AND CONFIDENTIAL
December 22, 1999
Mr. James C. Flores
Chairman of the Board
Ocean Energy, Inc.
1001 Fannin, Suite 1600
Houston, Texas 77002
Dear Jim:
In recognition of your past service to the Company, and in anticipation of
certain future actions, the Board of Directors of Ocean Energy, Inc., a Texas
corporation ("OEI"), hereby extends to you an opportunity to receive certain
in-lieu severance benefits upon your resignation as Chairman of the Board and
acceptance of the position of Vice Chairman.
Under the terms of this opportunity, you have been granted by OEI an unfunded
and unsecured promise to provide certain in-lieu severance benefits which would
have otherwise been provided in the event of your "Termination" as Chairman of
OEI, as set forth in that certain Employment Agreement entered into effective as
of March 27, 1998, by and between OEI and James C. Flores, as amended.
Specifically, the in-lieu severance benefits will include (1) a lump sum cash
payment of $5.4 million, and (2) vesting of all outstanding and unvested stock
options. Your right to the cash payment and option vesting will be completely
contingent upon you completing the following actions:
1. Resign as Chairman of the Board of Directors of OEI effective as
of December 31, 1999 and accept the position of Vice Chairman of
the Board of Directors beginning January 1, 2000.
2. Accomplish an orderly transition of your current duties as
Chairman of the Board of Directors of OEI.
3. Execute an Employment Agreement as required by OEI to govern your
duties and compensation as Vice Chairman.
OEI believes that such actions can be accomplished by January 1, 2000, and the
in-lieu severance benefits will therefore vest to you on January 1, 2000,
assuming you complete the actions required above.
<PAGE> 2
Mr. James C. Flores
December 22, 1999
Page 2
If you vest in the in-lieu severance benefits, payment of the cash amount will
occur within 15 business days thereafter. In addition, OEI shall on such date
cause the options to purchase stock that were granted to you during 1999 and
that are outstanding as of such date to be amended to provide that each be fully
exercisable on such date and shall continue to be exercisable thereafter,
subject to the termination provisions contained therein. Any such amendment will
require your acknowledgement and agreement that the acceleration of the
exercisability of such outstanding stock options may cause any such options
intended to be incentive stock options ("ISO's") within the meaning of Section
422(b) of the Internal Revenue Code of 1986 as amended, to be treated as options
that do not constitute ISO's.
Any rights that you possess in this in-lieu severance opportunity shall not be
subject to any restrictions other than those indicated in this letter.
It is our intention that this in-lieu severance opportunity will facilitate the
smooth transition of your role at the Company and assure your continued
participation as Vice Chairman and a member of the Board of Directors.
Please execute the acknowledgement below to indicate your acceptance of this
proposal.
Sincerely,
/s/ James T. Hackett
James T. Hackett
President and Chief Executive Officer
(on Behalf of the Board of Directors of
Ocean Energy, Inc., a Texas corporation)
ACKNOWLEDGED AND ACCEPTED this 28th day of December, 1999.
By: /s/ James C. Flores
---------------------
James C. Flores
<PAGE> 1
EXHIBIT 99.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), effective as of January 1, 2000
(the "Effective Date"), is made by and between OCEAN ENERGY, INC., a Texas
corporation ("Company"), and JAMES C. FLORES, an individual who resides in
Houston, Texas ("Executive").
W I T N E S S E T H:
WHEREAS, Executive is currently employed by Company and serves as
Chairman of the Board of Directors of Company (the "Board of Directors"); and
WHEREAS, Company and Executive entered into an Employment Agreement
dated March 27, 1998, which has been previously amended in certain respects and
is currently in effect (the "Employment Agreement"); and
WHEREAS, Company and Executive desire to enter into an agreement that
replaces the Employment Agreement and that reflects their desire for Executive
to serve as Vice Chairman of the Board of Directors while employed by the
Company on and after the Effective Date;
NOW THEREFORE, the parties, in consideration of the mutual promises,
covenants and obligations contained herein, do hereby agree as follows:
1. EFFECT OF AGREEMENT. Effective as of the Effective Date, this
Agreement supersedes and replaces the Employment Agreement in its entirety and
the Employment Agreement shall be null and void and of no further force and
effect.
2. RESIGNATIONS. Executive has resigned (a) as Chairman of the Board of
Directors effective as of December 31, 1999, (b) as a member of the Executive
Management Committee and its Chairman, effective as of December 31, 1999, (c) as
a member of any other committee of Company on which Executive serves, effective
as of December 31, 1999, and (d) from any other office, trusteeship or position
that Executive holds with Company (other than as a director or employee of
Company) or any subsidiary or division of Company or any employee benefit plan
(other than as a participant or beneficiary of any employee benefit plan)
relating to Company, in each case effective as of December 31, 1999.
3. VICE CHAIRMAN. Effective as of the Effective Date, the Board of
Directors has elected Executive to serve as Vice Chairman of the Board of
Directors. As Vice Chairman, Executive shall have such powers and duties as
designated in Company's bylaws and as from time to time may be assigned to him
by the Chief Executive Officer of Company (the "CEO"), including, but not
limited to, advising the CEO on strategy development, equity/debt structuring,
strategic combinations, as well as acquisitions and divestitures. The
designation of Vice Chairman shall continue through the remainder of the Term of
this Agreement pursuant to Paragraph 6.
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4. DIRECTORSHIP. Executive shall serve the remainder of his current term
as a director of Company. Any renomination of Executive for a subsequent term as
a director of Company shall be considered in the same manner as other directors
of Company.
5. COMPENSATION AND BENEFITS. During the Term of this Agreement, Company
shall provide to Executive the following compensation and benefits:
(A) BASE SALARY. Company shall pay to Executive a base salary of
$8,333.33 per month ($100,000 annual rate) in accordance with Company's
standard policy regarding payment of compensation to executives, but no
less frequently than monthly.
(B) ANNUAL BONUS. For each year during the Term of this
Agreement, Executive shall be eligible to receive an annual bonus in
such amount, if any, as may be determined in the sole discretion of the
Board of Directors.
(C) STOCK OPTION GRANTS. Executive shall be eligible to receive
such grants of options to purchase common stock of the Company ("Stock")
as may be determined in the sole discretion of the Board of Directors.
(D) COMPANY BENEFIT PLANS. Executive and, to the extent
applicable, Executive's spouse, dependents and beneficiaries, shall be
allowed to participate in all benefits, plans and programs, including
improvements or modifications of the same, which are now, or may
hereafter be, available to other executive employees of Company. Such
benefits, plans and programs shall include, without limitation, any
thrift plan, employee stock ownership plan, health insurance or health
care plan, life insurance, disability insurance, vacation and sick leave
plan, and the like that may be maintained by Company. Company shall not,
however, by reason of this Paragraph be obligated to institute,
maintain, or refrain from changing, amending, or discontinuing, any such
benefit plan or program, so long as such changes are similarly
applicable to executive employees generally.
(E) OTHER BENEFITS. Company shall continue to provide Executive
with such other benefits as are appropriate for his position,including,
without limitation, automobile expenses, an office, secretarial
assistance, convenient parking, and existing social/business club
membership fees, dues and assessments.
(F) BUSINESS AND ENTERTAINMENT EXPENSES. Company will reimburse
Executive for, or pay on behalf of Executive, reasonable and appropriate
expenses incurred and properly accounted for by Executive for Company
business related purposes, including dues and fees to industry and
professional organizations, costs of entertainment and business
development.
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Executive acknowledges and hereby agrees that the compensation payable pursuant
to this Paragraph is for his employment under this Agreement and that he shall
receive no separate fees or other compensation or benefits with respect to his
services as a director or any other offices of Company.
6. TERM AND TERMINATION OF AGREEMENT. Company agrees to employ Executive
and Executive agrees to be employed by Company pursuant to this Agreement for a
term of beginning on the Effective Date and ending on the second anniversary of
the Effective Date (the "Term"), subject to earlier termination as provided
below. Notwithstanding the foregoing, the parties hereto may terminate
Executive's employment prior to the end of such Term pursuant to Paragraphs (a)
or (b) below. Further, with the consent of Company, Executive may continue to be
employed by Company following the Term of this Agreement; provided, however,
that any such employment shall be as an "at-will" employee of Company, unless
another employment agreement is mutually agreed upon.
(a) Company shall have the right to terminate Executive's
employment under this Agreement at any time for any of the following
reasons:
(i) Upon Executive's death;
(ii) Upon Executive's becoming incapacitated by accident,
sickness or other circumstance which renders him mentally or
physically incapable of performing the duties and services
required of him hereunder on a full-time basis with reasonable
accommodation for a period of at least 120 consecutive days or
for a period of 180 business days during any twelve-month period;
(iii) For cause, which for purposes of this Agreement
shall mean a finding by the Board of Directors of Executive's
gross negligence or wilful misconduct in the rendering of
services required of him pursuant to this Agreement or
Executive's final conviction of a felony or of a misdemeanor
involving moral turpitude, excluding misdemeanor convictions
relating to the operation of a motor vehicle;
(iv) For Executive's material breach of any material
provision of this Agreement, which, if correctable, remains
uncorrected for 30 days following written notice of such breach
to Executive by Company; or
(v) For any other reason whatsoever in the sole discretion
of the Board of Directors.
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(b) Executive shall have the right to terminate his employment
under this Agreement at any time for any of the following reasons:
(i) For Company's material breach of any material
provision of this Agreement, which, if correctable, remains
uncorrected for 30 days following written notice of such breach
to Company by Executive; or
(ii) For any other reason whatsoever in the sole
discretion of Executive.
(c) If Company or Executive desires to terminate Executive's
employment hereunder at any time prior to the expiration of the Term of
this Agreement, it or he shall do so by giving written notice to the
other party that it or he has elected to terminate Executive's
employment hereunder and stating the effective date and reason for such
termination; provided that no such action shall alter or amend any other
provisions hereof or rights arising hereunder.
(d) In the event that Executive's employment is terminated by
Companyas provided in (a) above prior to the expiration of the Term of
this Agreement, then, upon such termination, the compensation and
benefits payable pursuant to Paragraph 5 shall terminate
contemporaneously with the termination of such employment, except that
if such termination shall be pursuant to (a)(i), (a)(ii) or (a)(v),
Company shall pay to Executive within fifteen days following the date of
such termination a lump sum cash payment in an amount equal to the sum
of (I) Executive's Base Salary for the remainder of the Term of this
Agreement and (II) the economic value of participation in Company's
benefit plans (based on an annual salary rate of $100,000) for the
remainder of the Term of this Agreement.
(e) In the event that Executive's employment is terminated by
Executive as provided in (b) above prior to the expiration of the Term
of this Agreement, then, upon such termination, the compensation and
benefits payable pursuant to Paragraph 5 shall terminate
contemporaneously with the termination of such employment, except that
if such termination shall be pursuant to (b)(i), Company shall pay to
Executive within fifteen days following the date of such termination a
lump sum cash payment in an amount equal to the sum of (I) Executive's
Base Salary for the remainder of the Term of this Agreement and (II) the
economic value of participation in Company's benefit plans (based on an
annual salary rate of $100,000) for the remainder of the Term of this
Agreement.
(f) Upon the expiration of the two year Term of this Agreement,
and upon the date of any earlier termination of Executive's employment
pursuant to 6(a)(i), 6(a)(ii), 6(a)(v) or 6(b)(i) above, Executive's
outstanding restricted stock
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grants shall no longer contain any restrictions, and Executive's
outstanding stock options shall be deemed fully vested and exercisable
on such date and shall continue to be fully exercisable for the
remaining term of each option grant. OEI and Executive shall on such
date enter into appropriate amendments to each option grant to provide
for the vesting and extension of exercisability, which shall include
Executive's acknowledgement and agreement that the acceleration of the
vesting and exercisability of such outstanding stock options may cause
any such options intended to be incentive stock options ("ISO's"),
within the meaning of Section 422(b) of the Internal Revenue Code of
1986, as amended, to be treated as options that do not constitute ISO's.
This Paragraph 6(f) shall not be applicable if Executive's employment is
terminated prior to the end of the two year Term pursuant to 6(a)(iii),
6(a)(iv) or 6(b)(ii).
7. PROTECTION OF INFORMATION. Executive acknowledges that Company's
business is highly competitive and that Company's methods, strategies, books,
records, and documents, Company's technical information concerning its products,
equipment, services, and processes, procurement procedures and pricing
techniques, and the names of and other information (such as credit and financial
data) concerning Company's customers, business affiliates, affairs, and
operations all comprise confidential business information and/or trade secrets
("Confidential Information") of Company which are valuable, special, and unique
assets of Company which Company uses in its business to obtain a competitive
advantage over its competitors which do not know or use this information.
Executive further acknowledges that protection of Company's Confidential
Information against unauthorized disclosure and use is of critical importance to
Company in maintaining its competitive position. Accordingly, Executive hereby
agrees that, notwithstanding any other provisions of this Agreement other than
those contained in the following sentences, he will not at any time during the
Term of this Agreement and for an additional period of twenty-four months
thereafter make any unauthorized disclosure of any Confidential Information of
Company or make any unauthorized use thereof. However, Executive's obligations
under this paragraph shall not extend to:
(a) Information which is or becomes a part of the public domain
or is available to the public by publication or otherwise without
disclosure by Executive;
(b) Information which was within Executive's knowledge or in his
possession prior to his initial employment by Company;
(c) Information which, either prior or subsequent to Company's
disclosure to Executive, was disclosed to Executive, without an
obligation of confidentiality, by a third party who did not acquire such
information, directly or indirectly from Executive, Company, or from any
third party who is under an obligation of confidentiality; or
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<PAGE> 6
(d) Any disclosure of Confidential Information by Executive which
is required by law, including deposition or trial testimony by Executive
pursuant to subpoena. If Executive is requested or required (by oral
questions, interrogatories, requests for information or documents,
subpoena, civil investigative demand, or similar process) to disclose
any Confidential Information, Executive will promptly notify Company of
such request or requirements so that Company may seek an appropriate
protective order or waive compliance with the provisions of this
Agreement.
Executive acknowledges and agrees that money damages would not be sufficient
remedy for any breach of this Paragraph concerning Confidential Information by
Executive, and Company shall be entitled to seek specific performance and
injunctive relief as remedies for such breach or threatened breach, as well as
reasonable and necessary attorneys' fees, experts' fees, and costs incurred in
the connection with such breach or threatened breach. Such remedies shall not be
deemed the exclusive remedies for such a breach by Executive but shall be in
addition to all remedies available at law or in equity to Company, including the
recovery of damages from Executive. For purposes of this Paragraph, Company
shall be construed to include any parent, subsidiary, or other affiliate of
Company.
8. OWNERSHIP BY COMPANY. Company shall, without further remuneration to
Executive, own, be entitled to possession of, and have the right to use,
publish, and disclose any results, reports, product, or data developed by
Executive during the course of his employment hereunder, but identification of
Executive with such results, reports, or data shall not be made without
Executive's express consent.
9. NONCOMPETITION PROVISIONS. As part of the consideration for the
compensation and benefits to be paid to Executive pursuant to Paragraph 5
hereunder and as part of the consideration for the option vesting and
exercisability pursuant to Paragraph 6(e) hereunder; to protect the trade
secrets and confidential information of Company and its affiliates that have
been and will in the future be disclosed or entrusted to Executive, the business
good will of Company and its affiliates that has been and will in the future be
developed in Executive, or the business opportunities that have been and will in
the future be disclosed or entrusted to Executive by Company and its affiliates;
and as an additional incentive for Company to enter into this Agreement, Company
and Executive agree to the noncompetition obligations hereunder. Executive shall
not, directly or indirectly for Executive or for others, in any geographic area
or market where Company or any of its affiliates are conducting any business as
of the Effective Date or have during the previous twelve months conducted such
business:
(a) engage in any business competitive with the business
conducted by Company;
(b) render advice or services to, or otherwise assist, any other
person, association, or entity who is engaged, directly or indirectly,
in any business
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<PAGE> 7
competitive with the business conducted by Company with respect to such
competitive business; or
(c) induce any employee of Company or any of its affiliates to
terminate his or her employment with Company or such affiliates, or hire
or assist in the hiring of any such employee by any person, association,
or entity not affiliated with Company.
These noncompetition obligations shall apply during the Term of this Agreement.
Executive understands that the restrictions set forth in this Paragraph may
limit Executive's ability to engage in certain businesses anywhere in the world
during the period provided for above, but acknowledges that Executive will
receive sufficiently high remuneration under this Agreement to justify such
restriction. Executive acknowledges that money damages would not be sufficient
remedy for any breach of this Paragraph by Executive, and Company shall be
entitled to enforce the provisions of this Paragraph by terminating any payments
then owing to Executive under this Agreement and/or to specific performance and
injunctive relief as remedies for such breach or any threatened breach;
provided, however, that payments then owing to Executive may not be terminated
unless the Board of Directors determines that such breach by Executive has
directly resulted or could reasonably be expected to result in a material
adverse economic impact on Company's business. Such remedies shall not be deemed
the exclusive remedies for a breach of this Paragraph, but shall be in addition
to all remedies available at law or in equity to Company, including without
limitation, the recovery of damages from Executive and Executive's agents
involved in such breach and remedies available to Company pursuant to other
agreements with Executive. It is expressly understood and agreed that Company
and Executive consider the restrictions contained in this Paragraph to be
reasonable and necessary to protect the proprietary information of Company.
Nevertheless, if any of the aforesaid restrictions are found by a court having
jurisdiction to be unreasonable, or overly broad as to geographic area or time,
or otherwise unenforceable, the parties intend for the restrictions therein set
forth to be modified by such court so as to be reasonable and enforceable and,
as so modified by the court, to be fully enforced.
10. RELEASE. As part of the consideration for the compensation and
benefits to be paid to Executive pursuant to Paragraph 5 and as an additional
incentive for Company to enter into this Agreement, Executive hereby agrees to
execute a release, at the time and in the form established by Company, releasing
Company, its shareholders, partners, officers, directors, employees and agents
from any and all claims and from any and all causes of action of any kind or
character, including but not limited to all claims or causes of action arising
out of Executive's employment with Company or his separation therefrom, other
than claims or causes of action arising out of the provisions of this Agreement.
11. WITHHOLDING OF TAXES AND OTHER EMPLOYEE DEDUCTIONS. Company may
withhold from any benefits and payments made pursuant to this Agreement all
federal, state, city and other taxes as may be required pursuant to any law or
governmental regulation or ruling and all other normal employee deductions made
with respect to Company's employees generally.
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12. NOTICES. For purposes of this Agreement, notices and all other
communications provided for herein 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, return receipt requested, postage prepaid, if
addressed as follows:
If to Company, to: Ocean Energy, Inc.
1001 Fannin, Suite 1600
Houston, Texas 77002-6794
Attention: Chairman of the Board
If to Executive, to: Mr. James C. Flores
P.O. Box 1083
Houston, Texas 77251
or such other addresses as either party may furnish to the other in writing, in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
14. GOVERNING LAW. This Agreement is entered into under and shall be
governed for all purposes by the laws of the State of Texas.
15. NO WAIVER. No failure by either party hereto at any time to give
notice of any breach by the other party of, or to require compliance with, any
condition or provision of this Agreement shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or at any prior or
subsequent time.
16. SEVERABILITY. If a court of competent jurisdiction determines that
any provision of this Agreement is invalid or unenforceable, then the invalidity
or unenforceability of that provision shall not affect the validity or
enforceability of any other provision of this Agreement, and all other
provisions shall remain in full force and effect.
17. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of Company and any successor of Company, by merger or otherwise.
Further, this Agreement shall be binding and inure to the benefit of Executive,
his spouse, and his estate. If Executive shall die prior to full payment of
amounts due pursuant to this Agreement, such amounts shall be payable pursuant
to the terms of this Agreement to his spouse, if then living, or if his spouse
is not then living, to his estate. Except as provided in the preceding
sentences, this Agreement and the rights and obligations of the parties
hereunder are personal, and neither this Agreement nor any right, benefit, or
obligation
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of either party hereto shall be subject to voluntary or involuntary assignment,
alienation, or transfer, whether by operation of law or otherwise, without
the prior written consent of the other party.
18. ENTIRE AGREEMENT. Except as provided in the written benefit plans
and programs referenced in Paragraph 5, this Agreement represents the entire
agreement between the parties hereto with respect to the matters covered herein
and may not be changed, altered, or modified in any respect except by an
instrument in writing signed by both the parties hereto.
IN WITNESS WHEREOF, Company has caused this Agreement to be duly
executed by one of its officers thereunto duly authorized and Executive has
executed this Agreement, this 29th day of December, 1999, to be effective as of
the Effective Date.
OCEAN ENERGY, INC.
BY: /s/ James T. Hacket
----------------------------------------------
Name: James T. Hackett
Title: President and Chief Executive Officer
/s/ James C. Flores
--------------------
JAMES C. FLORES
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