Change In Control

Severance Plan

 

EX-10.31 9 ex10_31.htm EXHIBIT 10.31


Exhibit 10.31

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated Employment Agreement (this “Agreement”), effective as of December 31, 2008 (the “Amendment Date”), is between Rosetta Resources Inc., a Delaware corporation (“Employer”), and Randy L. Limbacher (“Executive”), and supersedes and replaces that certain Employment Agreement between Employer and Executive dated November 1, 2007.

 

WHEREAS, Executive has been employed as President and Chief Executive Officer of Employer ; and

 

WHEREAS, the parties desire to amend and restate the Employment Agreement dated as of November 1, 2007, all as herein provided;

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.              Definitions.  As used in this Agreement, the following terms have the following meanings:

 

(a)            “Affiliate” means, with respect to any entity, any other corporation, organization, association, partnership, sole proprietorship or other type of entity, whether incorporated or unincorporated, directly or indirectly controlling or controlled by or under direct or indirect common control with such entity.

 

(b)            “Annual Period” means the time period of each year beginning on the first day of the Employment Term and ending on the day before the anniversary of that date.

 

(c)            “Board” means the Board of Directors of Employer.

 

(d)            “Cause” means a finding by the Board of acts or omissions constituting, in the Board’s reasonable judgment, any of the following occurring during the Employment Term:

 

(i) a material breach of duty by Executive in the course of his employment with Employer or its Affiliates involving fraud, acts of dishonesty (other than inadvertent acts or omissions), disloyalty to Employer or its Affiliates or moral turpitude constituting criminal felony; (ii) conduct by Executive that is materially detrimental to Employer, monetarily or otherwise, or that reflects unfavorably on Employer or Executive to such an extent that Employer’s best interests reasonably require the termination of Executive’s employment; (iii) acts or omissions of Executive materially in violation of his obligations under this Agreement or at law; (iv) Executive’s material failure to comply with or enforce the personnel policies of Employer or its Affiliates, specifically including those concerning equal employment opportunity and those related to harassing conduct; (v) Executive’s material insubordination to the Board; (vi) subject to the details of Paragraph 4(b), Executive’s failure to devote his full working time and best efforts to the performance of his responsibilities to Employer or its Affiliates; (vii) Executive’s conviction of, or entry of a plea agreement or consent decree or similar arrangement with respect to a felony or any material violation of federal or state securities laws, in either case, having a material adverse effect on Employer or its Affiliates; or (viii) Executive’s material failure to cooperate with any investigation or inquiry authorized by the Board or conducted by a governmental authority related to Employer’s or an Affiliate’s business or Executive’s conduct related to Employer or an Affiliate.

 

 

 


 

 

(e)            “Competitor” means any person or entity that is engaged in the acquisition, exploration, development and production of oil and gas properties in competition with the activities of Employer or an Affiliate.

 

(f)            “Confidential Information” means, without limitation, all documents or information, in whatever form or medium, concerning or evidencing sales; costs; pricing; strategies; forecasts and long range plans; financial and tax information; personnel information; business, marketing and operational projections, plans and opportunities; customer, vendor, and supplier information; geological and geophysical maps, data, interpretations, and analyses; project and prospect locations and leads; well logs, interpretations, and analyses; and production information; but excluding any such information that is or becomes generally available to the public other than as a result of any breach of this Agreement or other unauthorized disclosure by Executive.

 

(g)            “Corporate Change” means (i) the dissolution or liquidation of Employer; (ii) a reorganization, merger or consolidation of Employer with one or more corporations (other than a merger or consolidation effecting a reincorporation of Employer in another state or any other merger or consolidation in which the shareholders of the surviving corporation and their proportionate interests therein immediately after the merger or consolidation are substantially identical to the shareholders of Employer and their proportionate interests therein immediately prior to the merger or consolidation) (collectively, a “Corporate Change Merger”); (iii) the sale of all or substantially all of the assets of Employer or an Affiliate as defined in the Rosetta Resources, Inc. 2005 Long-Term Incentive Plan; or (iv) the occurrence of a Change in Control. A “Change in Control” shall be deemed to have occurred if (x) individuals who were directors of Employer immediately prior to a Control Transaction shall cease, within two years of such Control Transaction to constitute a majority of the Board of Directors of Employer (or of the Board of Directors of any successor to Employer or to a company which has acquired all or substantially all its assets) other than by reason of an increase in the size of the membership of the applicable Board that is approved by at least a majority of the individuals who were directors of Employer immediately prior to such Control Transaction or (y) any entity, person or Group acquires shares of Employer in a transaction or series of transactions that result in such entity, person or Group directly or indirectly owning beneficially 50% or more of the outstanding shares of Common Stock. As used herein, “Control Transaction” means (A) any tender offer for or acquisition of capital stock of Employer pursuant to which any person, entity, or Group directly or indirectly acquires beneficial ownership of 20% or more of the outstanding shares of Common Stock; (B) any Corporate Change Merger of Employer; (C) any contested election of directors of Employer; or (D) any combination of the foregoing, any one of which results in a change in voting power sufficient to elect a majority of the Board of Directors of Employer. As used herein, “Group” means persons who act “in concert” as described in Sections 13(d)(3) and/or 14(d)(2) of the Securities Exchange Act of 1934, as amended.  Notwithstanding the foregoing, “Corporate Change” shall not include the Acquisition, the Offering or any public offering of equity of Employer pursuant to a registration that is effective under the Securities Act of 1933, as amended. As used herein, “Acquisition” and “Offering” shall have the same meaning given to those terms in the Rosetta Resources Inc. 2005 Long-Term Incentive Plan.

 

 

 


 

 

(h)            “Employment Termination Date” means the effective date of termination of Executive’s employment as established under Paragraph 6(g).

 

(i)             “Good Reason” means any of the following actions if taken without Executive’s prior written consent: (i) any material diminution in Executive’s authority, responsibilities or duties; (ii) any material diminution in Executive’s base compensation; (iii) any permanent relocation of Executive’s regular place of business to a location 50 miles or more from the then-current location of Employer’s executive offices; or (iv) any other action or inaction by Employer that constitutes a material breach by Employer of its obligations under this Agreement. Neither a transfer of employment among Employer and any of its Affiliates nor a change in the co-employment relationship, standing alone, constitutes “Good Reason.”

 

(j)             “Inability to Perform” means and shall be deemed to have occurred if Executive has been determined under Employer’s long-term disability plan to be eligible for long-term disability benefits. In the absence of Executive’s participation in, application for benefits under, or existence of such a plan, “Inability to Perform” means Executive’s inability to perform the essential functions of his position because of an illness or injury for (i) a period of six consecutive months or (ii) an aggregate of six months within any period of 12 consecutive months.

 

(k)            “Work Product” means all ideas, works of authorship, inventions, and other creations, whether or not patentable, copyrightable, or subject to other intellectual-property protection, that are made, conceived, developed or worked on in whole or in part by Executive while employed by Employer and/or any of its Affiliates, that relate in any manner whatsoever to the business, existing or then-proposed, of Employer and/or any of its Affiliates, or any other business or research or development effort in which Employer and/or any of its Affiliates engages during Executive’s employment.

 

2.              Employment.  Employer agrees to employ Executive (directly or through an Affiliate), and Executive agrees to be employed, for the period set forth in Paragraph 3. Executive will be employed in the position and with the duties and responsibilities set forth in Paragraph 4(a) and upon the other terms and conditions set out in this Agreement. Employer and Executive agree that such employment may be through a co-employment relationship with a professional employer organization, subject to the requirements of Paragraph 4(a).

 

 

 


 

 

3.              Term.  Executive’s employment under this Agreement shall commence on November 1, 2007, and shall be for an initial term of one Annual Period (the “Employment Term”), unless sooner terminated as provided in this Agreement. Subject to earlier termination as provided in this Agreement, the Employment Term shall be automatically extended for an additional Annual Period (not to exceed nine additional Annual Periods) unless either Executive or Employer gives written notice to the other six months or more prior to the end of the initial term or, if the Agreement has been automatically extended beyond the initial term, six months or more prior to the end of the additional Annual Period. In the event of such an automatic extension, each additional Annual Period shall be part of the “Employment Term.”  Upon such timely written notice or at the end of the nine additional periods contemplated above, Executive’s employment will end upon the expiration of the Employment Term.

 

4.              Position and Duties.

 

(a)            During the Employment Term, Executive shall be employed as President and Chief Executive Officer of Employer, under the direction and subject to the control of the Board (which direction shall be such as is customarily exercised over a chief executive officer), and Executive shall be responsible for the business, affairs, properties and operations of Employer and shall have general executive charge, management and control of Employer, with all such powers and authority with respect to such business, affairs, properties and operations as may be reasonably incident to such duties and responsibilities.  In addition, Executive shall have such other duties, functions, responsibilities, and authority as are from time to time delegated to Executive by the Board; provided, however, that such duties, functions, responsibilities, and authority are reasonable and customary for a person serving in the same or similar capacity of an enterprise comparable to Employer.

 

(b)            During the Employment Term, Executive shall devote his full business time, skill, and attention and his best efforts to the business and affairs of Employer to the extent necessary to discharge fully, faithfully, and efficiently the duties and responsibilities delegated and assigned to Executive in or pursuant to this Agreement, except for usual, ordinary, and customary periods of vacation and absence due to illness or other disability and as otherwise specified in this paragraph.  Employer agrees that it shall not be a violation of this paragraph for Executive to (i) serve on corporate, civic or charitable boards or committees, (ii) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (iii) manage personal investments, so long as in the case of (i), (ii) and (iii) above such activities do not significantly interfere or conflict with the performance of Executive’s responsibilities under this Agreement or the interests of Employer.  Specifically, Employer acknowledges that Executive currently serves on the Board of Directors of CARBO Ceramics, Inc. and currently serves as the Chairman of Junior Achievement for Southeast Texas and represents that such service shall not be considered a violation of this paragraph unless such activities significantly interfere with Executive’s performance of his responsibilities under this Agreement.  Executive shall not become a member of the board of directors or committees of any other business organization without the prior written consent of the Board.

 

 

 


 

 

(c)            In connection with Executive’s employment under this Agreement, Executive shall be based in Houston, Texas, or at any other place where the principal executive offices of Employer may be located during the Employment Term, subject to the provisions of Paragraph 1(i)(iii). Executive also will engage in such travel as the performance of Executive’s duties in the business of Employer may require.

 

(d)            All services that Executive may render to Employer or any of its Affiliates in any capacity during the Employment Term shall be deemed to be services required by this Agreement and the consideration for such services is that provided for in this Agreement.

 

(e)            Executive hereby acknowledges that he has read and is familiar with Employer’s policies regarding business ethics and conduct, and will comply with all such provisions, and any amendments thereto, during the Employment Term.

 

5.              Compensation and Related Matters.

 

(a)            Base Salary.  During each Annual Period of the Employment Term, Employer shall pay to Executive for his services under this Agreement an annual base salary (“Base Salary”). The Base Salary as of the Amendment Date shall be $625,000. The Base Salary is subject to annual adjustments beginning in January 2009, at the discretion of the Board, but in no event shall Employer pay Executive a Base Salary less than that set forth above, or any increased Base Salary later in effect, without the consent of Executive. The Base Salary shall be payable in installments in accordance with the general payroll practices of Employer, or as otherwise mutually agreed upon.

 

(b)            Annual Incentives.  Beginning in calendar year 2008 and during the Employment Term, Executive will participate in any incentive compensation plan (ICP) applicable to Executive’s position, as may be adopted by Employer from time to time and in accordance with the terms of such plan(s).  Executive’s target award opportunity under the ICP will be 100% of Executive’s Base Salary, and shall be subject to such other terms, conditions and restrictions as may be established by the Board or the ICP committee.

 

(c)            Long-Term Incentives.  During the Employment Term, Executive will participate in Employer’s 2005 Long-Term Incentive Plan (“LTI Plan”) applicable to Executive’s position, or any successor plan as may be adopted by Employer from time to time, in accordance with the terms of such plan(s). Except as provided in Paragraph 5(d), Executive will participate in such long term incentive opportunities (“LTI opportunities”) as may be determined by the Board or the LTI Plan committee, as applicable; provided that, in no event shall the LTI opportunities provided to Executive ever be less than the LTI opportunities then provided to other senior executives of Employer without the consent of Executive.

 

 

 


 

 

(d)            Equity Grants Related to Initial Employment.  Executive shall be granted the following awards pursuant to the terms of the LTI Plan:

 

(i)             On November 1, 2007, a nonqualified stock option to purchase 102,100 shares of Employer’s common stock at an exercise price equal to the Fair Market Value (as defined in the LTI Plan) of Employer’s common stock on the November 1, 2007, which option will have a ten year term and be 100% vested on the date of grant.

 

(ii)            On November 1, 2007, 102,100 shares of restricted common stock in Employer, which will vest as follows: (A) 25% of such shares (if a fractional number, then the next lower whole number) will vest on November 1, 2008, provided Executive is in the continuous service of Employer or an Affiliate until and on such vesting date; (B) an additional 25% of such shares (if a fractional number, then the next lower whole number) will vest on November 1, 2009, provided Executive is in the continuous service of Employer or an Affiliate until and on such vesting date; and (C) the remaining shares will vest on November 1, 2010, provided Executive is in the continuous service of Employer or an Affiliate until and on such vesting date.

 

(iii)           On January 1, 2008 (if Executive is employed by Employer on such date), $3,500,000 in value of sign-on restricted common stock in Employer, which will vest in full on the fifth anniversary of November 1, 2007, provided that Executive is in the continuous service of Employer or an Affiliate until and on such vesting date. The number of shares of restricted common stock to be granted to Executive in respect of the $3,500,000 in value shall be determined by dividing $3,500,000 by the Fair Market Value (as defined in the LTI Plan) of Employer’s common stock on November 1, 2007; provided, however, that no more than 200,000 shares of restricted common stock shall be granted to Executive pursuant to this Paragraph 5(d)(iii).

 

Notwithstanding the foregoing, the percentage indicated below of the total number of shares of restricted common stock granted Executive under this Paragraph 5(d)(iii) will vest on the date on which the Fair Market Value per share of Employer’s common stock has reached a level indicated below (each a “Target Level”) and remained at or above such Target Level for 30 consecutive trading days, provided that Executive is in the continuous service of Employer or an Affiliate until and on the applicable vesting date:

 

$22 per share 15%

$25 per share 20%

$30 per share 30%

$35 per share 20%

$40 per share 15%

 

 

 


 

 

To the extent that a specified percentage of shares vests based on a particular Target Level, and the shares associated with any lower Target Level have not previously vested, the shares associated with that lower Target Level shall vest on the same date.

 

The equity award grants provided for in this Paragraph 5(d) shall be subject to the terms and conditions of the LTI Plan and the award agreements covering such awards, which shall be substantially in the forms collectively attached hereto as Exhibit A, but only to the extent that such forms are not inconsistent with the terms and conditions of this Agreement.  In the event of an inconsistency between this Agreement and any such award, the terms of this Agreement shall govern (including, for example, the definitions of “Cause” and “Good Reason”).

 

(e)            Employee Benefits.  During the Employment Term, Executive shall be entitled to participate in all employee benefit plans, programs, and arrangements that are generally made available by Employer to its similarly situated employees, including without limitation Employer’s life insurance, long-term disability, and health plans. Executive acknowledges and agrees that cooperation and participation in medical or physical examinations may be required by one or more insurance companies in connection with the applications for such life and/or disability insurance policies.

 

(f)             Expenses.  Executive shall be entitled to receive reimbursement for all reasonable expenses incurred by Executive during the Employment Term in performing his duties and responsibilities under this Agreement, consistent with Employer’s policies or practices for reimbursement of expenses incurred by other senior executives of Employer (“Business Expenses”). Notwithstanding the foregoing, (i) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (ii) the reimbursement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred and (iii) the right to reimbursement shall not be subject to liquidation or exchange for any other benefit.

 

(g)            Vacations.  During each Annual Period of the Employment Term, Executive shall be eligible for four weeks’ paid vacation, as well as sick pay and other paid and unpaid time off in accordance with the policies and practices of Employer. Executive agrees to use his vacation and other paid time off at such times that are (i) consistent with the proper performance of his duties and responsibilities and (ii) mutually convenient for Employer and Executive.

 

(h)            Fringe Benefits.  During the Employment Term, Executive shall be entitled to the perquisites and other fringe benefits that are made available by Employer to its senior executives generally and to such perquisites and fringe benefits that are made available by Employer to Executive in particular, subject to any applicable terms and conditions of any specific perquisite or other fringe benefit.

 

 

 


 

 

6.              Termination of Employment.

 

(a)            Death.  Executive’s employment shall terminate automatically upon his death.

 

(b)            Inability to Perform.  Employer may terminate Executive’s employment for Inability to Perform.

 

(c)            Termination by Employer for Cause.  Employer may terminate Executive’s employment for Cause by providing Executive with a Notice of Termination as set out in Paragraph 6(f). Before terminating Executive’s employment for Cause, Employer must provide Executive with written notice of its intent to do so, which notice must specify the particular circumstances or events that Employer contends gives rise to the existence of Cause; provided, however, that if Employer intends to exercise its right to terminate Executive’s employment in whole or part under provisions (iii), (iv), (v), (vi) or (viii) of the definition of Cause, Employer must first provide Executive with a reasonable period of time to correct those circumstances or events Employer contends give rise to the existence of Cause under such provision(s) (the “Correction Period”), but not to the extent the Board makes a reasonable, good faith determination that those circumstances or events cannot reasonably be corrected. A 30-day Correction Period shall be presumptively reasonable. Executive will be given the opportunity within 30 calendar days of his receipt of Employer’s written notice of its intent to terminate Executive’s employment for Cause to defend himself with respect to the circumstances or events specified in such notice and in a manner and under such procedures as the Board may establish. Nothing in this Paragraph 6(c) precludes informal discussions between Executive and any member of the Board regarding such circumstances or events.

 

(d)            Termination by Executive for Good Reason.  Executive may terminate his employment for Good Reason. To exercise his right to terminate for Good Reason, Executive must provide written notice to Employer of his belief that Good Reason exists within 60 days of the date he first becomes aware of the condition(s) giving rise to the Good Reason, and that notice shall describe the condition(s) believed to constitute Good Reason. Employer shall have 30 days to remedy the Good Reason condition(s). If not remedied within that 30-day period, Executive may submit a Notice of Termination; provided, however, that the Notice of Termination invoking Executive’s right to terminate his employment for Good Reason must be given no later than 100 days after the date Executive first became aware of the condition(s) giving rise to the Good Reason; otherwise, Executive is deemed to have accepted the condition(s), or Employer’s correction of such condition(s), that may have given rise to the existence of Good Reason.

 

(e)            Termination by Either Party Without Cause or Without Good Reason.  Either Employer or Executive may terminate Executive’s employment without Cause or without Good Reason upon at least 60 days’ prior written notice to the other party.

 

(f)             Notice of Termination.  Any termination of Executive’s employment by Employer or by Executive (other than a termination pursuant to Paragraph 6(a)) shall be communicated by a Notice of Termination. A “Notice of Termination” is a written notice that must (i) indicate the specific termination provision in this Agreement relied upon; (ii) in the case of a termination for Inability to Perform, Cause, or Good Reason, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision invoked; and (iii) if the termination is by Executive under Paragraph 6(e), or by Employer for any reason, specify the Employment Termination Date.  The failure by Employer or Executive to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Cause or Good Reason shall not waive any right of Employer or Executive or preclude either of them from asserting such fact or circumstance in enforcing or defending their rights.

 

 

 


 

 

(g)            Employment Termination Date.  The Employment Termination Date, whether occurring before or after a Corporate Change, shall be as follows: (i) if Executive’s employment is terminated by his death, the date of his death; (ii) if Executive’s employment is terminated by Employer because of his Inability to Perform or for Cause, the date specified in the Notice of Termination, which date shall be no earlier than the date such notice is given; (iii) if Executive’s employment is terminated by Executive for Good Reason, the date on which the Notice of Termination is given; (iv) if the termination is under Paragraph 6(e), the date specified in the Notice of Termination, which date shall be no earlier than 60 days after the date such notice is given, or (v) if Executive’s employment is terminated by expiration of the Employment Term, or Executive or Employer gives timely notice pursuant to Paragraph 3, the date the Employment Term expires.

 

(h)            Deemed Resignation.  In the event of termination of Executive’s employment, Executive agrees that if at such time he is a member of the Board or is an officer of Employer or a director or officer of any of its Affiliates, he shall be deemed to have resigned from such position(s) effective on the Employment Termination Date, unless the Board and Executive agree in writing prior to the Employment Termination Date that Executive shall remain a member of the Board, in which case Executive shall not be deemed to have resigned his position as a member of the Board merely by virtue of the termination of his employment. Executive agrees to execute and deliver any documents evidencing his resignation from such positions that Employer may reasonably request; provided, however, that no such document shall affect the date that Executive ceased to be a Board member as described above such that Executive continues to have duties as a Board member beyond the date specified in the preceding sentence.

 

(i)             Investigation; Suspension.  Employer may suspend Executive with pay pending (a) an investigation as described in Paragraph 1(d)(viii), or (b) a determination by the Board whether Executive has engaged in acts or omissions constituting Cause.  Such a paid suspension shall not constitute a termination of Executive’s employment, or Good Reason.  Executive agrees to cooperate with Employer in connection with any such investigation.

 

 

 


 

 

7.              Compensation Upon Termination of Employment.

 

(a)            Death.  If Executive’s employment is terminated by reason of Executive’s death, Employer shall pay to such person as Executive shall designate in a written notice to Employer (or, if no such person is designated, to his estate) any unpaid portion of Executive’s Base Salary through the Employment Termination Date (the “Compensation Payment”), any earned but unused vacation (the “Vacation Payment”), and any unreimbursed Business Expenses, at the time and in the manner required by applicable law but in no event later than 30 business days after the Employment Termination Date.

 

(b)            Inability to Perform.  If Executive’s employment is terminated by reason of Executive’s Inability to Perform, Employer shall pay to Executive the Compensation Payment, the Vacation Payment, and any unreimbursed Business Expenses at the time and in the manner required by applicable law but in no event later than 30 business days after the Employment Termination Date.

 

(c)            Termination by Executive Without Good Reason.  If Executive’s employment is terminated by Executive pursuant to and in compliance with Paragraph 6(e), Employer shall pay to Executive the Compensation Payment, the Vacation Payment, and any unreimbursed Business Expenses, at the time and in the manner required by applicable law but in no event later than 30 business days after the Employment Termination Date.

 

(d)            Termination for Cause.  If Executive’s employment is terminated by Employer for Cause, Employer shall pay to Executive the Compensation Payment, the Vacation Payment, and any unreimbursed Business Expenses, at the time and in the manner required by applicable law but in no event later than 30 business days after the Employment Termination Date.

 

(e)            Termination Without Cause or With Good Reason or Upon Expiration of Employment Term.

 

(i)             If Executive’s employment is terminated by Employer for any reason other than death, Inability to Perform, or Cause, or is terminated by Executive for Good Reason during the Employment Term, or if Executive’s employment ends upon the expiration of the Employment Term, Employer shall pay to Executive the Compensation Payment, the Vacation Payment, and any unreimbursed Business Expenses, at the time and in the manner required by applicable law but in no event later than 30 business days after the Employment Termination Date.

 

(ii)            In addition, if Executive’s employment is terminated by Employer for any reason other than death, Inability to Perform, or Cause, or is terminated by Executive for Good Reason during the Employment Term, or if Employer gives timely notice pursuant to Paragraph 3 and Executive’s employment therefore ends upon the expiration of the Employment Term, Employer shall pay or provide to Executive in lieu of any other severance or separation benefits, at the time and in the manner provided in Paragraph 7(e)(iii), the following if, within 45 days after the Employment Termination Date, Executive has signed a general release agreement substantially in the form attached hereto as Exhibit B and Executive does not revoke such release:

 

 

 


 

 

(A)           Executive’s Base Salary as in effect on the Employment Termination Date (but in no event less than the Base Salary on November 1, 2007), multiplied by three;

 

(B)           Executive’s ICP award at the target level for the performance period in effect on the Employment Termination Date (but in no event less than the target level specified in Paragraph 5(b)), multiplied by three;

 

(C)           Immediate grant, and full and immediate vesting, of the restricted stock grant described Paragraph 5(d)(iii) if not previously granted;

 

(D)           Full and immediate vesting of all Employer stock options and restricted stock awards held by Executive as of the Employment Termination Date;

 

(E)            Executive will have twelve months after the Employment Termination Date, to exercise all Employer stock options, provided that in no event may such stock options be exercised after the latest date upon which the options would have expired by their original terms.

 

Notwithstanding the foregoing, Employer’s obligation under this Paragraph 7(e)(ii) is limited as follows:

 

(X)           If Executive engages in any conduct that materially violates Paragraph 8 or engages in any of the Restricted Activities described in Paragraph 9, Employer’s obligation to make payments to Executive under this Paragraph 7(e)(ii), if any such obligation remains, shall end as of the date Employer so notifies Executive in writing; and

 

(Y)           If Executive is found guilty or enters into a plea agreement, consent decree, or similar arrangement with respect to any felony criminal offense or any material violation of federal or state securities laws, or has a cease-and-desist order, injunction, or other penalty or judgment issued or entered in any material civil enforcement action brought against him by any United States regulatory agency or by a court of competent jurisdiction in a proceeding commenced by such a regulatory agency (in either case, regardless of whether Executive admits or denies the substantive allegations, and in each case for actions or omissions related to his employment with Employer or any of its Affiliates), (1) Employer’s obligation to make payments to Executive under this Paragraph 7(e)(ii) shall end as of the date that Employer so notifies Executive in writing, and (2) Executive shall repay to Employer any amounts paid to him pursuant to this Paragraph 7(e)(ii) within 30 days after receipt of a written request to do so by Employer.

 

 

 


 

 

(iii)           The amounts provided for under Paragraphs 7(e)(ii)(A) and 7(e)(ii)(B) shall be paid as follows:

 

(A)           An amount equal to (1) 50% of the amount provided for under Paragraph 7(e)(ii)(A) plus (2) the sum (to the extent that such sum exceeds zero) of the amounts provided for under Paragraphs 7(e)(ii)(A) and 7(e)(ii)(B) less the payment under Paragraph 7(e)(iii)(A)(1) less the Section 409A Exempt Amount, shall be paid in a single lump sum no later than 60 days after the Employment Termination Date, provided that the Employment Termination Date, constitutes a separation from service for purposes of Code Section 409A. For purposes of this Agreement, the “Section 409A Exempt Amount” is two times the lesser of (x) Executive’s annualized compensation based upon the annual rate of pay for services provided to Employer for the calendar year preceding the calendar year in which Executive has a separation from service (as defined in the Code and the final regulations and other guidance thereunder (“Code Section 409A”)) with Employer (adjusted for any increase during that year that was expected to continue indefinitely if the service provider had not separated from service) or (y) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive has a separation from service.

 

(B)            The Section 409A Exempt Amount or, if less, the excess of the amount provided for under Paragraphs 7(e)(ii)(A) and 7(e)(ii)(B) over the amount paid under Paragraph 7(e)(iii)(A), shall be paid in equal monthly installments over a period of 18 months commencing on the first day of the sixth month following the Employment Termination Date, provided that the Employment Termination Date constitutes a separation from service for purposes of Code Section 409A.

 

(f)             Termination of Employment Following Corporate Change.

 

(i)             If, within the two-year period following a Corporate Change, Executive’s employment with Employer or an Affiliate or successor of Employer is terminated for any reason other than death, Inability to Perform, or Cause, is terminated by Executive for Good Reason, or if Employer or an Affiliate or successor of Employer gives timely notice pursuant to Paragraph 3 and Executive’s employment therefore ends upon the expiration of the Employment Term, Executive will be paid the Compensation Payment, the Vacation Payment and any unreimbursed Business Expenses, at the time and in the manner required by applicable law but in no event later than 30 business days after the Employment Termination Date.  In addition, if, within 45 days after the Employment Termination Date, Executive has signed a general release agreement substantially in the form attached hereto as Exhibit B and Executive does not revoke such release, in lieu of any other payments under Paragraph 7(e)(ii), Employer shall (A) pay Executive a lump-sum amount equivalent to the sum of the amounts specified in Paragraph 7(e)(ii)(A) and 7(e)(ii)(B), and (B) provide Executive the benefits described in Paragraph 7(e)(ii)(C), 7(e)(ii)(D) and 7(e)(ii)(E).  The provisions of Paragraph 7(e)(ii)(X) and 7(e)(ii)(Y) shall not apply to this Paragraph 7(f).

 

 

 


 

 

(ii)            The payment provided for in Paragraph 7(f)(i)(A) shall be paid in a single lump sum payment on the 60th business day after the Employment Termination Date.

 

(iii)           In the event that it is determined that any payment (other than the Gross-Up payment provided for in this Paragraph 7(f)(iii)) or distribution by Employer or any of its Affiliates to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) by reason of being considered “contingent on a change in ownership or control” of Employer, within the meaning of Section 280G of the Code or any successor provision thereto (such tax being hereafter referred to as the “Excise Tax”), then Executive will be entitled to receive an additional payment or payments (a “Gross-Up Payment”). The Gross-Up Payment will be in an amount such that, after payment by Executive of all taxes, including any Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment. The determination of whether an Excise Tax would be imposed, the amount of such Excise Tax, and the calculation of the amounts referred to in this Paragraph 7(f)(iii) will be made at the expense of Employer by Employer’s regular independent accounting firm (the “Accounting Firm”), which shall provide detailed supporting calculations, and shall be based on the Executive’s actual taxes paid and tax rates applied, determined by reference to the Executive’s tax returns as filed for the relevant year(s), copies of which shall be provided to the Accounting Firm..  Any determination by the Accounting Firm will be binding upon Employer and Executive.  The Gross-Up Payment will be paid to Executive as soon as administratively practicable, but in no event later than the end of the Executive’s taxable year next following the Executive’s taxable year in which Executive remits the related taxes.

 

 

 


 

 

(g)            Health Insurance.  In addition, if Executive’s employment with Employer or an Affiliate or successor of Employer is terminated or ends under the circumstances set forth in Paragraph 7(f), Executive will receive, in addition to any other payments due under this Agreement, the following benefit: if, at the time of the Employment Termination Date, Executive participates in one or more health plans offered or made available by Employer and Executive is eligible for and elects to receive continued coverage under such plans in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or any successor law, Employer will reimburse Executive during the 18-month period following the Employment Termination Date, for the difference between the total amount of the monthly COBRA premiums for the same coverage as in effect on the Employment Termination Date, that are actually paid by Executive for such continued health plan benefits and the total monthly amount of the same premiums charged to active senior executives of Employer for health insurance coverage. Such reimbursement shall be made within the 90-day period following Executive’s payment of each monthly COBRA premium. Provided, however, that Employer’s reimbursement obligation under this Paragraph 7(g) shall terminate upon the earlier of (i) the expiration of the time period described above or (ii) the date Executive becomes eligible for health insurance coverage under a subsequent employer’s plan without being subject to any preexisting-condition exclusion under that plan, which occurrence Executive shall promptly report to Employer.  Provided further, however, the amount of COBRA reimbursement during a calendar year may not affect the COBRA expenses eligible for reimbursement in any other calendar year.

 

(h)            Exclusive Compensation and Benefits.  The compensation and benefits described in this Paragraph 7, along with the associated terms for payment, constitute all of Employer’s obligations to Executive with respect to the ending of Executive’s employment with Employer and/or its Affiliates, subject to Paragraph 24 and the remainder of this Paragraph 7(h).  Accordingly, Executive and Employer expressly acknowledge and agree that, following the Employment Termination Date, Executive shall have no rights to any employment by Employer or its Affiliates (including employment as described in Paragraphs 2, 3 and 4 of this Agreement), and no rights to any further compensation or benefits under Paragraph 5 of this Agreement.  Executive and Employer further acknowledge and agree that nothing in this Agreement is intended to limit or terminate (i) any obligations of Employer or Executive under the other terms of this Agreement, including, but not limited to, with respect to Employer, its obligations under Paragraphs 12 and 20, and, with respect to Executive, his obligations under Paragraphs 6(h), 8, 9, 10, 13, 22, and 23, or (ii) any earned, vested benefits (other than any entitlement to severance or separation pay, if any) that Executive may have under the applicable provisions of any benefit plan of Employer in which Executive is participating at the time of the termination of employment.

 

(i)             Code Section 409A Matters.  This Agreement is intended to comply with Code Section 409A and any ambiguous provisions will be construed in a manner that is compliant with or exempt from the application of Code Section 409A.  If a provision of the Agreement would result in the imposition of an applicable tax under Code Section 409A, the parties agree that such provision shall be reformed to avoid imposition of the applicable tax, with such reformation effected in a manner that has the most favorable result to Executive.

 

 

 


 

 

For purposes of Code Section 409A, each payment or amount due under this Agreement shall be considered a separate payment, and Executive’s entitlement to a series of payments under this Agreement is to be treated as an entitlement to a series of separate payments.

 

If (x) Executive is a “specified employee,” as such term is defined in Code Section 409A and determined as described below in this Paragraph 7(i), and (y) any payment due under this Agreement is subject to Code Section 409A and is required to be delayed under Code Section 409A because Executive is a specified employee, that payment shall be payable on the earlier of (A) the first business day that is six months after Executive’s separation from service, as such term is defined in Code Section 409A, (B) the date of Executive’s death, or (C) the date that otherwise complies with the requirements of Section 409A.  This Paragraph 7(i) shall be applied by accumulating all payments that otherwise would have been paid within six months of Executive’s separation and paying such accumulated amounts on the earliest business day which complies with the requirements of Code Section 409A.  For purposes of determining the identity of specified employees, the Board may establish procedures as it deems appropriate in accordance with Code Section 409A.

 

(j)             Payment after Executive’s Death.  In the event of Executive’s death after he becomes entitled to a payment or payments pursuant to this Paragraph 7, any remaining unpaid amounts shall be paid, at the time and in the manner such payments otherwise would have been paid to Executive, to such person as Executive shall designate in a written notice to Employer (or, if no such person is designated, to his estate).

 

(k)            Offset.  Executive agrees that Employer may set off against, and Executive authorizes Employer to deduct from, any payments due to Executive, or to his heirs, legal representatives, or successors, as a result of the termination of Executive’s employment any amounts which may be due and owing to Employer or any of its Affiliates by Executive, whether arising under this Agreement or otherwise; provided, however, that any such set off and deduction shall be made in a manner that complies with Code Section 409A to the extent applicable.

 

8.              Confidential Information.

 

(a)            Executive acknowledges and agrees that (i) Employer and its Affiliates are engaged in a highly competitive business; (ii) Employer and its Affiliates have expended considerable time and resources to develop goodwill with their customers, vendors, and others, and to create, protect, and exploit Confidential Information; (iii) Employer must continue to prevent the dilution of its and its Affiliates’ goodwill and unauthorized use or disclosure of its Confidential Information to avoid irreparable harm to its legitimate business interests; (iv) in the oil and gas acquisition, exploration, development and production business, his participation in or direction of Employer’s or its Affiliates’ day-to-day operations and strategic planning are an integral part of Employer’s continued success and goodwill; (v) given his position and responsibilities, he necessarily will be creating Confidential Information that belongs to Employer and enhances Employer’s goodwill, and in carrying out his responsibilities he in turn will be relying on Employer’s goodwill and the disclosure by Employer to him of Confidential Information; and (vi) he will have access to Confidential Information that could be used by any Competitor of Employer in a manner that would irreparably harm Employer’s competitive position in the marketplace and dilute its goodwill.  Employer acknowledges and agrees that nothing in this Agreement precludes Executive from accepting employment from any third party employer after termination of employment with Employer and its Affiliates for whatever reason, provided that Executive complies with his obligations under Paragraph 8(d) and at law with respect to the Confidential Information.

 

 

 


 

 

(b)            Employer acknowledges and agrees that Executive must have and continue to have throughout his employment the benefits and use of its and its Affiliates’ goodwill and Confidential Information in order to properly carry out his responsibilities. Employer accordingly promises upon execution and delivery of this Agreement to provide Executive immediate and continuing access to Confidential Information and to authorize him to engage in activities that will create new and additional Confidential Information.

 

(c)            Employer and Executive thus acknowledge and agree that during Executive’s employment with Employer, and upon execution and delivery of this Agreement, he (i) will receive Confidential Information that is unique, proprietary, and valuable to Employer and/or its Affiliates; (ii) will create Confidential Information that is unique, proprietary, and valuable to Employer and/or its Affiliates; and (iii) will benefit, including without limitation by way of increased earnings and earning capacity, from the goodwill Employer and its Affiliates have generated and from the Confidential Information.

 

(d)            Accordingly, Executive acknowledges and agrees that at all times during his employment by Employer and/or any of its Affiliates and thereafter:

 

(i)             all Confidential Information shall remain and be the sole and exclusive property of Employer and/or its Affiliates;

 

(ii)            he will protect and safeguard all Confidential Information;

 

(iii)           he will hold all Confidential Information in strictest confidence and not, directly or indirectly, disclose or divulge any Confidential Information to any person other than an officer, director, or employee of, or legal counsel for, Employer or its Affiliates, to the extent necessary for the proper performance of his responsibilities unless authorized to do so by Employer or compelled to do so by law or valid legal process;

 

 

 


 

 

(iv)           if he believes he is compelled by law or valid legal process to disclose or divulge any Confidential Information, he will notify Employer in writing sufficiently in advance of any such disclosure to allow Employer the opportunity to defend, limit, or otherwise protect its interests against such disclosure;

 

(v)           at the end of his employment with Employer for any reason or at the request of Employer at any time, he will return to Employer all Confidential Information and all copies thereof, in whatever tangible form or medium, including electronic; and

 

(vi)           absent the promises and representations of Executive in this Paragraph 8 and in Paragraph 9, Employer would require him immediately to return any tangible Confidential Information in his possession, would not provide Executive with new and additional Confidential Information, would not authorize Executive to engage in activities that will create new and additional Confidential Information, and would not enter or have entered into this Agreement.

 

9.              Nonsolicitation Obligations.  In consideration of Employer’s promises to provide Executive with Confidential Information and to authorize him to engage in activities that will create new and additional Confidential Information upon execution and delivery of this Agreement, and the other promises and undertakings of Employer in this Agreement, Executive agrees that, while he is employed by Employer and/or any of its Affiliates and for a 2-year period following the end of that employment for any reason, he shall not engage in any of the following activities (the “Restricted Activities”):

 

(a)            He will not, whether on his own behalf or on behalf of any other individual, partnership, firm, corporation or business organization, either directly or indirectly solicit, induce, persuade, or entice, or endeavor to solicit, induce, persuade, or entice, any person who is then employed by or otherwise engaged to perform services for Employer or its Affiliates to leave that employment or cease performing those services; and

 

(b)            He will not, whether on his own behalf or on behalf of any other individual, partnership, firm, corporation or business organization, either directly or indirectly solicit, induce, persuade, or entice, or endeavor to solicit, induce, persuade, or entice, any person who is then a customer, supplier, or vendor of Employer or any of its Affiliates to cease being a customer, supplier, or vendor of Employer or any of its Affiliates or to divert all or any part of such person’s or entity’s business from Employer or any of its Affiliates.

 

Executive acknowledges and agrees that the restrictions contained in this Paragraph 9 are ancillary to an otherwise enforceable agreement, including without limitation the mutual promises and undertakings set forth in Paragraph 8; that Employer’s promises and undertakings set forth in Paragraph 8 and Executive’s position and responsibilities with Employer give rise to Employer’s interest in restricting Executive’s post-employment activities; that such restrictions are designed to enforce Executive’s promises and undertakings set forth in this Paragraph 9 and his common-law obligations and duties owed to Employer and its Affiliates; that the restrictions are reasonable and necessary, are valid and enforceable under Texas law, and do not impose a greater restraint than necessary to protect Employer’s goodwill, Confidential Information, and other legitimate business interests; that he will immediately notify Employer in writing should he believe or be advised that the restrictions are not, or likely are not, valid or enforceable under Texas law or the law of any other state that he contends or is advised is applicable; that the mutual promises and undertakings of Employer and Executive under Paragraphs 8 and 9 are not contingent on the duration of Executive’s employment with Employer; that absent the promises and representations made by Executive in this Paragraph 9 and Paragraph 8, Employer would require him to return any Confidential Information in his possession, would not provide Executive with new and additional Confidential Information, would not authorize Executive to engage in activities that will create new and additional Confidential Information, and would not enter or have entered into this Agreement; and that his obligations under Paragraphs 8 and 9 supplement, rather than supplant, his common-law duties of confidentiality and loyalty owed to Employer.

 

 

 


 

 

 Employer agrees that any action that is undertaken by a subsequent employer of Executive will not be treated as an action by Executive for purposes of the foregoing provisions of this Paragraph 9 unless Executive personally engages in a Restricted Activity, whether directly or indirectly.

 

10.            Intellectual Property.

 

(a)            In consideration of Employer’s promises and undertakings in this Agreement, Executive agrees that all Work Product will be disclosed promptly by Executive to Employer, shall be the sole and exclusive property of Employer, and is hereby assigned to Employer, regardless of whether (i) such Work Product was conceived, made, developed or worked on during regular hours of his employment or his time away from his employment, (ii) the Work Product was made at the suggestion of Employer; or (iii) the Work Product was reduced to drawing, written description, documentation, models or other tangible form. Without limiting the foregoing, Executive acknowledges that all original works of authorship that are made by Executive, solely or jointly with others, within the scope of his employment and that are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act (17 U.S.C., Section 101), and are therefore owned by Employer from the time of creation.

 

(b)            Executive agrees to assign, transfer, and set over, and Executive does hereby assign, transfer, and set over to Employer, all of his right, title and interest in and to all Work Product, without the necessity of any further compensation, and agrees that Employer is entitled to obtain and hold in its own name all patents, copyrights, and other rights in respect of all Work Product. Executive agrees to (i) cooperate with Employer during and after his employment with Employer in obtaining patents or copyrights or other intellectual-property protection for all Work Product; (ii) execute, acknowledge, seal, and deliver all documents tendered by Employer to evidence its ownership thereof throughout the world; and (iii) cooperate with Employer in obtaining, defending, and enforcing its rights therein.

 

 

 


 

 

(c)            Executive represents that there are no other contracts to assign inventions or other intellectual property that are now in existence between Executive and any other person or entity. Executive further represents that he has no other employment or undertakings that might restrict or impair his performance of this Agreement. Executive will not in connection with his employment by Employer, use or disclose to Employer any confidential, trade secret, or other proprietary information of any previous employer or other person that Executive is not lawfully entitled to disclose.

 

11.            Reformation.  If the provisions of Paragraphs 8, 9, or 10 are ever deemed by a court to exceed the limitations permitted by applicable law, Executive and Employer agree that such provisions shall be, and are, automatically reformed to the maximum limitations permitted by such law.

 

12.            Indemnification and Insurance.  Employer shall indemnify Executive both (i) to the fullest extent permitted by the laws of the State of Delaware, and (ii) in accordance with the more favorable of Employer’s certificate of incorporation, bylaws and standard indemnification agreement as in effect on November 1, 2007 or as in effect on the date as of which the indemnification is owed.  In addition, Employer shall provide Executive with coverage under directors’ and officers’ liability insurance policies on terms not less favorable than those provided to any of its other directors and officers as in effect from time to time.

 

13.            Assistance in Litigation.  During the Employment Term and thereafter for the lifetime of Executive, Executive shall, upon reasonable notice, furnish such information and proper assistance to Employer or any of its Affiliates as may reasonably be required by Employer in connection with any litigation, investigations, arbitrations, and/or any other fact-finding or adjudicative proceedings involving Employer or any of its Affiliates. This obligation shall include, without limitation, to promptly upon request meet with counsel for Employer or any of its Affiliates and provide truthful testimony at the request of Employer or as otherwise required by law or valid legal process. Following the Employment Term, Employer shall reimburse Executive for all reasonable out-of-pocket expenses incurred by Executive and approved in advance by Employer in rendering such assistance (such as travel, parking, and meals but not attorney’s fees), but shall have no obligation to compensate Executive for his time in providing information and assistance in accordance with this Paragraph 13, provided that such reimbursement shall be made on or before the last day of the calendar year following the calendar year in which the expense is incurred, and provided further that Executive’s obligations under this Paragraph 13 following the Employment Termination Date shall not unreasonably interfere with Executive’s employment or other activities and endeavors.

 

14.            No Obligation to Pay. With regard to any payment due to Executive under this Agreement, it shall not be a breach of any provision of this Agreement for Employer to fail to make such payment to Executive if (i) Employer is prohibited from making the payment; (ii) Employer would be obligated to recover the payment if it was made; or (iii) Executive would be obligated to repay the payment if it was made; provided, however, that this Paragraph 14 shall only apply if such prohibition or obligation is legally imposed by statute or regulation.

 

 

 


 

 

15.            Deductions and Withholdings. With respect to any payment to be made to Executive, Employer shall deduct, where applicable, any amounts authorized by Employee, and shall withhold and report all amounts required to be withheld and reported by applicable law.

 

16.            Notices.  All notices, requests, demands, and other communications required or permitted to be given or made by either party shall be in writing and shall be deemed to have been duly given or made (a) when delivered personally, or (b) when deposited in the United States mail, first class registered or certified mail, postage prepaid, return receipt requested, to the party for which intended at the following addresses (or at such other addresses as shall be specified by the parties by like notice, except that notices of change of address shall be effective only upon receipt):

 

(i)             If to Employer, at:

 

Rosetta Resources Inc.

Attn: General Counsel

717 Texas

Suite 2800

Houston, Texas 77002

 

(ii)            If to Executive, at Executive’s then-current home address on file with Employer.

 

17.            Injunctive Relief.  Executive acknowledges and agrees that Employer would not have an adequate remedy at law and would be irreparably harmed in the event that any of the provisions of Paragraphs 8, 9, and 10 were not performed in accordance with their specific terms or were otherwise breached. Accordingly, Executive agrees that Employer shall be entitled to equitable relief, including preliminary and permanent injunctions and specific performance, in the event Executive breaches or threatens to breach any of the provisions of such Paragraphs, without the necessity of posting any bond or proving special damages or irreparable injury. Such remedies shall not be deemed to be the exclusive remedies for a breach or threatened breach of this Agreement by Executive, but shall be in addition to all other remedies available to Employer at law or equity.

 

18.            Mitigation.  Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Agreement be reduced by any compensation earned by Executive as the result of employment by another employer after the date of termination of Executive’s employment with Employer, or otherwise.

 

19.            Binding Effect; No Assignment by Executive; No Third Party Benefit.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, legal representatives, successors, and assigns; provided, however, that Executive shall not assign or otherwise transfer this Agreement or any of his rights or obligations under this Agreement. Subject to Paragraph 20, Employer is authorized to assign or otherwise transfer this Agreement or any of its rights or obligations under this Agreement only to an Affiliate of Employer. Executive shall not have any right to pledge, hypothecate, anticipate, or in any way create a lien upon any payments or other benefits provided under this Agreement; and no benefits payable under this Agreement shall be assignable in anticipation of payment either by voluntary or involuntary acts, or by operation of law, except by will or pursuant to the laws of descent and distribution. Nothing in this Agreement, express or implied, is intended to or shall confer upon any person other than the parties, and their respective heirs, legal representatives, successors, and permitted assigns, any rights, benefits, or remedies of any nature whatsoever under or by reason of this Agreement.

 

 

 


 

 

20.            Assumption by Successor.  Employer shall ensure that any successor or assignee (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all the business and/or assets of Employer or the oil and gas acquisition, exploration, development and production business of Employer, either by operation of law or written agreement, assumes the obligations of this Agreement (the “Assumption Obligation”). If Employer fails to fulfill the Assumption Obligation, such failure shall be considered Good Reason; provided, however, that the compensation to which Executive would be entitled to upon a termination for Good Reason pursuant to Paragraph 7(f) shall be the sole remedy of Executive for any failure by Employer to fulfill the Assumption Obligation. As used in this Agreement, “Employer” shall include any successor or assignee (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all the business and/or assets of Employer or the oil and gas exploration, development and production business of Employer that executes and delivers the agreement provided for in this Paragraph 20 or that otherwise becomes obligated under this Agreement by operation of law.

 

21.            Legal Fees and Expenses.  Employer will reimburse Executive for all reasonable legal fees and expenses incurred by Executive in connection with the preparation, review, and negotiation of this Agreement prior to its execution, provided that any such reimbursement shall be made within the same calendar year in which the fees and expenses are incurred.

 

22.            Governing Law; Venue.  This Agreement and the employment of Executive shall be governed by the laws of the State of Texas except for its laws with respect to conflict of laws. The exclusive forum for any lawsuit arising from or related to Executive’s employment or this Agreement shall be a state or federal court in Harris County, Texas. This provision does not prevent Employer from removing to an appropriate federal court any action brought in state court. EXECUTIVE HEREBY CONSENTS TO, AND WAIVES ANY OBJECTIONS TO, REMOVAL TO FEDERAL COURT BY EMPLOYER OF ANY ACTION BROUGHT AGAINST IT BY EXECUTIVE.

 

23.            JURY TRIAL WAIVER.  IN THE EVENT THAT ANY DISPUTE ARISING FROM OR RELATED TO THIS AGREEMENT OR EXECUTIVE’S EMPLOYMENT WITH EMPLOYER RESULTS IN A LAWSUIT, BOTH EMPLOYER AND EXECUTIVE MUTUALLY WAIVE ANY RIGHT THEY MAY OTHERWISE HAVE FOR A JURY TO DECIDE THE ISSUES IN THE LAWSUIT, REGARDLESS OF THE PARTY OR PARTIES ASSERTING CLAIMS IN THE LAWSUIT OR THE NATURE OF SUCH CLAIMS. EMPLOYER AND EXECUTIVE IRREVOCABLY AGREE THAT ALL ISSUES IN SUCH A LAWSUIT SHALL BE DECIDED BY A JUDGE RATHER THAN A JURY.

 

 

 


 

 

24.            Entire Agreement.  This Agreement contains the entire agreement between the parties concerning the subject matter expressly addressed herein and supersedes all prior agreements and understandings, written and oral, between the parties with respect to such subject matter.  However, nothing in this Paragraph 24 is intended to limit any obligations of the parties under any other agreement that Employer may enter into with Executive after the Amendment Date.

 

25.            Modification; Waiver.  No person, other than pursuant to a resolution duly adopted by the members of the Board, shall have authority on behalf of Employer to agree to modify, amend, or waive any provision of this Agreement. Further, this Agreement may not be changed orally, but only by a written agreement signed by the party against whom any waiver, change, amendment, modification or discharge is sought to be enforced. Executive acknowledges and agrees that no breach by Employer of this Agreement or failure to enforce or insist on its rights under this Agreement shall constitute a waiver or abandonment of any such rights or defense to enforcement of such rights.

 

26.            Construction.  This Agreement is to be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties.

 

27.            Severability.  If any provision of this Agreement shall be determined by a court to be invalid or unenforceable, the remaining provisions of this Agreement shall not be affected thereby, shall remain in full force and effect, and shall be enforceable to the fullest extent permitted by applicable law.

 

28.            Counterparts.  This Agreement may be executed by the parties in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement.

 

 

 


 

 

IN WITNESS WHEREOF, Employer has caused this Agreement to be executed on its behalf by its duly authorized officer, and Executive has executed this Agreement, effective as of the date first set forth above.

 

EMPLOYER

 

EXECUTIVE

 

 

 

 

 

 

ROSETTA RESOURCES INC.

 

RANDY L. LIMBACHER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

D. HENRY HOUSTON

 

 

 

CHAIRMAN, BOARD OF DIRECTORS

 

 

 

 

 


 

BACK TO TOP

 

EX-10.42 2 ex10_42.htm EXHIBIT 10.42

 


Exhibit 10.42

 

ROSETTA RESOURCES INC. 2009 CHANGE-IN-CONTROL PLAN FOR EXECUTIVE OFFICERS

 

This Rosetta Resources Inc. Change-in-Control Plan (the “Plan”), is effective as of December 7, 2009 (the “Effective Date”).

 

WHEREAS, Rosetta Resources Inc. (the “Employer”), wishes to employ certain individuals in executive level positions;

 

WHEREAS, it is the intent of the Employer that the Plan shall constitute an unfunded severance plan, and to the extent applicable, an unfunded nonqualified deferred compensation arrangement; and

 

WHEREAS, in order to retain the services of such individuals, the Employer desires to provide certain severance benefits as provided herein;

 

NOW, THEREFORE, the Employer hereby establishes the Plan as follows:

 

ARTICLE I

 

DEFINITIONS.

 

As used in this Plan, the following terms have the following meanings:

 

(a)           “Affiliate” means, with respect to any entity, any other corporation, organization, association, partnership, sole proprietorship or other type of entity, whether incorporated or unincorporated, directly or indirectly controlling or controlled by or under direct or indirect common control with such entity.

 

(b)           “Base Salary” means the amount of Executive’s regular annual salary, paid periodically and not based on performance, as reflected in the Employer’s payroll records.

 

(c)           “Board” means the Board of Directors of the Employer.

 

(d)           “Cause” means a finding by the Committee of acts or omissions while employed by the Employer, constituting, in the Committee’s sole discretion, (i) a breach of duty by Executive in the course of Executive’s employment involving fraud, acts of dishonesty (other than inadvertent acts or omissions), disloyalty to Employer or its Affiliates, or moral turpitude constituting criminal felony; (ii) conduct by Executive that is materially detrimental to Employer, monetarily or otherwise, or reflects unfavorably on Employer or Executive to such an extent that Employer’s best interests reasonably require the termination of Executive’s employment; (iii)  Executive’s failure to comply with or enforce Employer’s policies concerning equal employment opportunity, including engaging in sexually or otherwise harassing conduct; (iv) Executive’s repeated insubordination; (v) Executive’s failure to comply with or enforce, in any material respect, all other personnel policies of Employer or its Affiliates; (vi) Executive’s failure to devote Executive’s full working time and best efforts to the performance of Executive’s responsibilities to Employer or its Affiliates; (vii) Executive’s conviction of, or entry of a plea agreement or consent decree or similar arrangement with respect to a felony or any violation of federal or state securities laws; or (viii) Executive’s failure to cooperate with any investigation or inquiry authorized by the Committee or conducted by a governmental authority related to the business or Executive’s conduct.

 

 


 

 

(e)           “Change in Control” means a Corporate Change in which (i) individuals who were directors of Employer immediately prior to a Control Transaction shall cease, within two years of such Control Transaction to constitute a majority of the Board of Directors of Employer (or of the Board of Directors of any successor to Employer or to a company which has acquired all or substantially all its assets) other than by reason of an increase in the size of the membership of the applicable Board that is approved by at least a majority of the individuals who were directors of Employer immediately prior to such Control Transaction or (ii) any entity, person or Group acquires shares of Employer in a transaction or series of transactions that result in such entity, person or Group directly or indirectly owning beneficially 50% or more of the outstanding shares of Common Stock.

 

(f)           “Code” means the Internal Revenue Code of 1986, as amended.

 

(g)           “Committee” means the Compensation Committee of the Board of Directors.

 

(h)           “Corporate Change” means (i) the dissolution or liquidation of Employer; (ii) a reorganization, merger or consolidation of Employer with one or more corporations (other than a merger or consolidation effecting a reincorporation of Employer in another state or any other merger or consolidation in which the shareholders of the surviving corporation and their proportionate interests therein immediately after the merger or consolidation are substantially identical to the shareholders of Employer and their proportionate interests therein immediately prior to the merger or consolidation) (collectively, a “Corporate Change Merger”); (iii) the sale of all or substantially all of the assets of Employer or an affiliate as defined in the Rosetta Resources Inc. 2005  Long-Term Incentive Plan; or (iv) the occurrence of a Change in Control.

 

(i)           “Control Transaction” means (i) any tender offer for or acquisition of capital stock of Employer pursuant to which any person, entity, or Group directly or indirectly acquires beneficial ownership of 20% or more of the outstanding shares of Common Stock; (ii) any Corporate Change Merger of Employer; (iii) any contested election of directors of Employer; or (iv) any combination of the foregoing, any one of which results in a change in voting power sufficient to elect a majority of the Board of Directors of Employer.

 

(j)           “Covered Termination” means: (1) the termination of an Executive’s employment with the Employer for any reason other than death, Inability to Perform, or for Cause; or (2) the resignation of the Executive from such employment with Good Reason.

 

(k)           “Eligible Executive” means an Executive who has experienced a Covered Termination.

 

(l)           “Employment Termination Date” means the effective date of termination of Executive’s employment pursuant to Employer policies and applicable law.

 

 

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(m)           “Executive” means an individual employed by the Employer in the position of Vice President or higher, who has been designated by the Committee to be eligible to participate in the Plan, or who has accepted a written offer of employment which includes eligibility for participation in this Plan, and who commences employment in such position and capacity as a full-time employee of the Employer.   A list of all individuals designated as Executives at any given time shall be appended as Appendix A to the Plan.  Once designated on Appendix A as an Executive under the Plan, such Executive shall remain so designated and shall continue to be an Executive hereunder until the earliest to occur of (i) the date on which such Executive is removed from Appendix A by action of the Committee or by the Board, (ii) such Executive’s termination of employment for any reason, or (iii) the death of the Executive.

 

(n)           “Good Reason” means any of the following actions if taken without Executive’s prior written consent: (i) following the designation of an Executive by the Compensation Committee on Appendix A to the Plan, any reduction of the multiple or percentage applicable to an Executive, or removal of Executive, through a subsequent amendment to Appendix A to the Plan, (ii) a material diminution in Executive’s base compensation; or (iii) any permanent relocation of Executive’s place of business to a location 50 miles or more from the then-current location, provided such relocation is a material change in geographic location at which Executive must provide substantial services for purposes of Section 409A.  Neither a transfer of employment among Employer and any of its Affiliates, a change in the co-employment relationship, nor a mere change in job title constitutes “Good Reason.”  To exercise the right hereunder to terminate for Good Reason, Executive must provide Notice of Termination to Employer of his belief that Good Reason exists within 60 days of the initial existence of the Good Reason condition, and that notice shall describe the condition(s) believed to constitute Good Reason.  Employer shall have 30 days to remedy the Good Reason condition(s).  If not remedied within that 30-day period, Executive may submit a Notice of Termination; provided, however, that the Notice of Termination invoking Executive’s right to terminate his employment for Good Reason must be given no later than 100 days after the date the Good Reason condition first arose; otherwise, Executive is deemed to have accepted the condition(s), or the Employer’s correction of such condition(s), that may have given rise to the existence of Good Reason.

 

(o)           “Group” means persons who act “in concert” as described in Sections 13(d)(3) and/or 14(d)(2) of the Securities Exchange Act of 1934, as amended.

 

(p)           “Inability to Perform means and shall be deemed to have occurred if Executive has been determined under Employer’s long-term disability plan to be eligible for long-term disability benefits.  In the absence of Executive’s participation in, application for benefits under, or existence of such a plan, “Inability to Perform” means a finding by the Committee in its sole discretion that Executive is, despite any reasonable accommodation required by law, unable to perform the essential functions of Executive’s position because of an illness or injury for (i) 60% or more of the normal working days during six consecutive calendar months or (ii) 40% or more of the normal working days during twelve consecutive calendar months.

 

(q)           “Notice of Termination” means a written notice that shall (i) indicate the specific termination provision in this Plan relied upon; (ii) in the case of a termination for Inability to Perform, Cause, or Good Reason, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision invoked; and (iii) if the termination is by Executive for Good Reason, or by Employer for any reason, specify the Employment Termination Date.  The failure by Employer or Executive to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Cause or Good Reason shall not waive any right of Employer or Executive or preclude either of them from asserting such fact or circumstance in connection with a claim or appeal for benefits under this Plan.

 

 

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(r)           “Section 409A” means Section 409A of the Code and the regulations promulgated thereunder, and any other applicable Treasury guidance, as in effect at the time any payment or other action is to be taken under this Plan.

 

(s)           “Separation Agreement” means a general release agreement in a form acceptable to Employer which is not revoked by Eligible Executive prior to the date it becomes effective.

 

ARTICLE II

 

EMPLOYMENT.

 

Executives under this Plan shall be employed on an at-will basis, to the maximum extent permitted by applicable law.  This Plan shall not, and shall not be construed or interpreted as, creating a contract of employment with any person.

 

ARTICLE III

 

COMPENSATION UPON TERMINATION OF EMPLOYMENT

 

(a)           Termination of Employment for Any Reason.  If Executive’s employment is terminated, Employer shall pay to Executive (or in the case of death of Executive, to such person as Executive shall designate in a written notice to Employer or, if no such person is designated, to Executive’s estate) any unpaid portion of Executive’s Base Salary through the Employment Termination Date, any earned but unused vacation according to Employer’s policies then in effect, and any unreimbursed business expenses, at the time and in the manner required by applicable law, but in no event later than March 15 of the year following the year of the Executive’s death or termination of employment.

 

(b)

Termination Following Corporate Change.

 

(1)           If, within the two-year period following a Corporate Change, Executive’s employment with Employer or an Affiliate or successor of Employer is terminated due to a Covered Termination, Executive will be paid the payments described in Section (a) of Article III of this Plan.  In addition, if, within 21 or 45 days after the Employment Termination Date, as applicable, Executive has signed a Separation Agreement and Executive does not revoke such Separation Agreement, in lieu of any payments under Section (b) of Article III of the Rosetta Resources Inc. Executive Severance Plan, Eligible Executive shall be entitled to receive the following amounts:

 

(A)   The designated percentage or multiple, as set forth in Appendix A to the Plan as of the Employment Termination Date of such Executive, multiplied times the Eligible Executive’s Base Salary in effect on the Employment Termination Date;

 

 

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(B)    The designated percentage or multiple, as set forth in Appendix A to the Plan as of the Employment Termination Date of such Executive, multiplied times the Executive’s target performance bonus percentage for one year, utilizing the greater of (i) the target performance bonus percentage for the performance period in effect on the Employment Termination Date, or (ii) the target performance bonus percentage for the performance period in effect on the day preceding the date of the Corporate Change;

 

(C)    Full and immediate vesting of all Employer stock options and restricted stock awards held by Eligible Executive as of the Employment Termination Date;

 

(D)    With respect to Employer stock options that are vested as of the Employment Termination Date, Executive may exercise those options according to the terms of the Rosetta Resources Inc. 2005 Long-Term Incentive Plan.

 

(2)           The additional payments provided for in Sections (a) and (b) of this Article III shall be paid in a single lump-sum payment no later than 60 days after the Employment Termination Date, but in no event shall such single lump sum payment be paid later than the March 15 of the year following the year in which the Executive’s Termination of Employment occurs.

 

(3)           The Employer shall use commercially reasonable efforts to avoid payments under Section (b) of this Article III to be subject to excise taxes under section 280G of the Code that would be applied to the Executive’s payments under Code Section 4999.  If the Executive would receive payments under Section (b) of this Article III that would result in a Code section 280G excise tax, the Executive shall receive under Section (b) of Article III the greater of the following:  (i) the payments reduced to avoid imposition of the Code section 280G excise tax, or (ii) the payments reduced by the Code section 280G excise tax if such tax is required to be applied and withheld.  The determination of the amount to be paid under Section (b)(3) of this Article III will be made at the expense of Employer by Employer’s regular independent accounting firm, which shall provide detailed supporting calculations to both Employer and Executive.

 

(c)           COBRA Reimbursement.  In addition, if Executive’s employment with Employer or an Affiliate or successor of Employer is terminated or ends under the circumstances set forth in Section (b) of this Article III, and if Executive has signed a Separation Agreement and does not revoke such Separation Agreement as provided therein, Executive will receive, in addition to any other payments due under this Plan, the following benefit: if, at the time of the Employment Termination Date, Executive participates in one or more group health plans offered or made available by Employer and Executive is eligible for and elects to receive continued coverage under such plans in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or any successor law, Employer will reimburse Executive during the 12-month period following the Employment Termination Date, for the difference between the total amount of the monthly COBRA premiums for the same coverage as in effect on the Employment Termination Date, that are actually paid by Executive for such continued health plan benefits and the total monthly amount of the same premiums charged to active senior executives of Employer for health insurance coverage.  Such reimbursement shall be made within the 90-day period following Executive’s payment of each monthly COBRA premium.  Provided, however, that Employer’s reimbursement obligation under this Section (c) shall terminate upon the earlier of (i) the expiration of the time period described above or (ii) the date Executive becomes eligible for health insurance coverage under a subsequent employer’s group health plan without being subject to any preexisting-condition exclusion under that plan, which occurrence Executive shall promptly report to Employer.  Provided further, however, the amount of COBRA reimbursement during a calendar year may not affect the COBRA expenses eligible for reimbursement in any other calendar year.

 

 

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(d)           Exclusive Compensation and Benefits.  The compensation and benefits described in this Article, along with the associated terms for payment, constitute all of Employer’s obligations to Executive with respect to the termination of Executive’s employment with Employer and/or its Affiliates. However, nothing in this Plan is intended to limit any earned, vested benefits that Executive may have under the applicable provisions of any benefit plan of Employer in which Executive is participating at the time of the termination of employment.

 

(e)           Compliance with Section 409A.  It is the intent of this Plan to comply with the requirements of Section 409A so that none of the payments and benefits to be provided hereunder will be subject to the income recognition, additional tax and interest imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. Employer shall not be liable to Executive for any adverse tax consequences imposed upon Executive as a result of Section 409A.  Payments under the Plan shall be made only on the date or dates provided herein, and no acceleration or deferral of any such payments shall be made either by the Employer or at the request of the Executive.  Each aforementioned payment is a separate “payment” within the meaning of Treasury Regulation section 1.409A-2(b)(2)(iii).

 

(f)           Specified Employee Determination and Payment. If Employer determines that Section 409A applies to payments to an Executive under this Plan, and such Executive is a “specified employee” on the date of Executive’s “separation from service,” as those terms are defined in and pursuant to Section 409A, then, notwithstanding any provision of this Plan to the contrary, no payment of compensation under this Plan which has been determined to be a payment of “deferred compensation” within the meaning of Section 409A shall be made to Executive during the period lasting six months from the date of Executive’s separation from service unless Employer determines that there is no reasonable basis for believing that making such payment would cause Executive to suffer adverse tax consequences pursuant to Section 409A.  If any payment to Executive is delayed pursuant to the foregoing sentence, such payment instead shall be paid, without interest, on the first business day following the expiration of the six-month period referred to in the prior sentence.

 

(g)           Payment after Executive’s Death.  In the event of Executive’s death after Executive becomes entitled to a payment or payments pursuant to this Article III, any remaining unpaid amounts shall be paid, at the time and in the manner such payments otherwise would have been paid to Executive, to such person as Executive shall designate in a written notice to Employer (or, if no such person is designated, to Executive’s estate).  Notwithstanding anything herein to the contrary, an Executive who has been determined to be a “specified employee” who dies following such Executive’s “separation from service”, as provided in Section 409A, but prior to the six (6) month anniversary of the date of Executive’s “separation from service,” then any amounts payable under this Plan which are determined by the Employer to be subject to Section 409A, payment of which is delayed in accordance with this Article III, will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other amounts payable under this Plan will be payable in accordance with the payment schedule applicable to each payment or benefit.

 

 

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(h)           Offset.  To the maximum extent permitted by applicable law, Employer may set off against, and Executive authorizes Employer to deduct from, any payments due to the Executive, or to Executive’s heirs, legal representatives, or successors, as a result of the termination of the Executive’s employment any amounts which may be due and owing to Employer or any of its Affiliates by the Executive, whether arising under this Plan or otherwise; provided, however, that any such set off and deduction shall be made in a manner that complies with Section 409A and other laws, to the extent applicable.

 

ARTICLE IV

 

NO OBLIGATION TO PAY.

 

With regard to any payment due to Executive under this Plan, to the maximum extent permitted by applicable law, it shall not be a breach of any provision of this Plan for Employer to fail to make such payment to Executive if (i) Employer is legally prohibited from making the payment; (ii) Employer would be legally obligated to recover the payment if it was made; or (iii) Executive would be legally obligated to repay the payment if it was made.

 

ARTICLE V

 

DEDUCTIONS AND WITHHOLDINGS.

 

With respect to any payment to be made to the Executive, Employer shall deduct, where applicable, any amounts authorized by Employee, and shall withhold and report all amounts required to be withheld and reported by applicable law.

 

ARTICLE VI

 

NOTICES.

 

(a)           All notices, requests, demands, and other communications required or permitted to be given or made by either party shall be in writing and shall be deemed to have been duly given or made (1) when delivered personally, or (2) when deposited in the United States mail, first class registered or certified mail, postage prepaid, return receipt requested, to the party for which intended at the following addresses (or at such other addresses as shall be specified by the parties by like notice, except that notices of change of address shall be effective only upon receipt):

 

 

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(b)

If to Employer, at:

 

Rosetta Resources Inc.

Attn: General Counsel

717 Texas, Suite 2800

Houston, Texas 77002

 

(c)           If to Executive, at Executive’s then-current home address on file with Employer.

 

ARTICLE VII

 

MITIGATION.

 

Executive shall not be required to mitigate the amount of any payment provided for in this Plan by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Plan be reduced by any compensation earned by Executive as the result of employment by another employer after the date of termination of Executive’s employment with Employer, or otherwise.

 

ARTICLE VIII

 

BENEFITS UNASSIGNABLE.

 

Executive shall not have any right to pledge, hypothecate, anticipate, or in any way create a lien upon any payments or other benefits provided under this Plan; and no benefits payable under this Plan shall be assignable in anticipation of payment either by voluntary or involuntary acts, or by operation of law, except by will or pursuant to the laws of descent and distribution.

 

ARTICLE IX

 

AMENDMENT AND TERMINATION.

 

The Employer may amend or terminate this Plan at any time by action of the Board, subject to the rights of any Eligible Executive who has incurred a Covered Termination as of the date of such amendment or termination.  Provided, however, that the Board may delegate to an appropriate subcommittee of the Board or to a specified officer of the Corporation the authority to amend the Plan for the purpose of conforming the Plan to the requirements of Section 409A as interpreted in Treasury Regulations or other guidance.

 

ARTICLE X

 

GOVERNING LAW; VENUE.

 

This Plan shall be governed by the laws of the State of Texas except for its laws with respect to conflict of laws, and except to the extent preempted by any federal law.  The exclusive forum for any lawsuit arising from or related to Executive’s employment or this Plan shall be a state or federal court in Harris County, Texas.  To the extent this Plan is governed by federal law, nothing herein shall prevent or prohibit Employer from removing to an appropriate federal court any action brought in state court.

 

 

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ARTICLE XI

 

ADMINISTRATION, CLAIMS, APPEALS, EXHAUSTION REQUIREMENT.

 

(a)           Plan Administrator.  The overall responsibility for the administration and control of this Plan resides with the Committee.

 

(b)           Powers.  The Committee has the following authority with respect to the Plan:

 

(1)           The responsibility for the day to day administration and operation of the Plan;

 

(2)           The authority to issue and implement such rules as the Committee deems appropriate to administer the Plan;

 

(3)           The authority to interpret the Plan’s provisions, and to make factual determinations under the Plan, including but not limited to, the power to determine eligibility for payments hereunder, and the right to resolve and determine ambiguities, inconsistencies, and omissions in the provisions hereof;

 

(4)           The authority to appoint or designate such person or persons as the Committee deems necessary or advisable to carry out the administrative duties hereunder.

 

(c)           Claims. The Committee shall have the power and authority to determine claims for payments under the Plan, and shall make all factual determinations under the Plan in relation to any claim, or as otherwise required in this Plan.  Except as otherwise provided herein, the Executive (“claimant”) may make a claim for payment hereunder, or a claim contesting a factual determination hereunder, within 30 days of receipt of notice of such factual determination, or of any event giving rise to the existence of a right of payment under this Plan.  The Committee shall make a determination on a claim hereunder within 30 days of the receipt of a claim for payments under this Plan, and the claimant shall have the right to submit documentation or other evidence to the Committee in support of such claim.  The Committee may, by written notice to the claimant within the original 30 day claim period, have an additional 30 days in which to make a decision on the initial claim.  If the Committee does not provide a notice of extension or a decision on the initial claim within the time limits provided in this Article, the claim will be deemed denied for purposes of this Article.

 

(d)           Appeal of Denied Claim.  If a claim under Section (c) of this Article is denied or deemed denied, the claimant may file a written appeal with the full Board.  The claimant shall have the right to submit any additional documentation or other evidence to the Board in support of such appeal.  The Board shall make its decision and provide notice thereof in writing to the claimant within 30 days of the receipt of the appeal.  Provided, however, the Board may, by written notice to the claimant within the original 30 day appeal  period, have an additional 30 days  in which to make a decision on the initial appeal.  If the Board does not provide a notice of extension or a decision on the initial appeal within the time limits provided in this Article, the claim will be deemed denied for purposes of this Article.

 

 

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(e)           Contents of Notice of Denied Claim or Appeal.   Notice of any denied claim or appeal provided by the Committee or the Board, as appropriate, shall be in writing, and shall contain the following, at a minimum:

 

(1)           The facts determined, claim determination made or decision on appeal (herein, the “determination”);

 

(2)           A summary of the facts on which the determination was based;

 

(3)           The relevant provisions of this Plan on which the determination was based;

 

(4)           If appropriate, a description of any information or documentation required to complete the claimant’s claim; and

 

(5)           A description of the claimant’s appeal rights, if any.

 

(f)           Exhaustion of Administrative Remedy Required.  Executive may not bring a proceeding in any court under this Plan, or intended to enforce any provision of this Plan, without first having exhausted the administrative remedies provided herein.

 

(g)           Limitation of Actions.   No action may be brought to enforce any provision of this Plan after twelve (12) months following the denial of the later of: (i) the claimant’s claim under Section (c) of this Article XI, or (ii) the denial of the appeal provided for in Section (d) of this Article XI.

 

ARTICLE XII

 

TREATMENT OF PLAN UNDER ERISA.

 

Is the intent of the Employer, and this Plan shall be interpreted, construed and operated such that, this Plan shall be a “top-hat” plan exempt from certain provisions of ERISA, as provided in and within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA, as appropriate.  Benefits under this Plan shall be paid solely out of the general assets of the Employer and shall constitute an unsecured obligation of the Employer.

 

IN WITNESS WHEREOF, Employer has caused this Plan to be executed on its behalf by its duly authorized officer, and such duly authorized officer has executed this Plan, effective as of the Amendment Date first set forth above.

 

EMPLOYER

 

ROSETTA RESOURCES INC.

 

 

By:

/s/ Gerald L. Maxwell

 

 

GERALD L. MAXWELL

VICE PRESIDENT, HUMAN RESOURCES

 

 

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BACK TO TOP

 

EX-10.41 15 ex10_41.htm EXHIBIT 10.41

 


Exhibit 10.41

 

ROSETTA RESOURCES INC. EXECUTIVE SEVERANCE PLAN

 

 

This Rosetta Resources, Inc. Executive Severance Plan (the “Plan”), is effective as of July 1, 2008 (the “Effective Date”).

 

WHEREAS, Rosetta Resources Inc. (the “Employer”), wishes to employ certain individuals in executive level positions;

 

WHEREAS, it is the intent of the Employer that the Plan shall constitute an unfunded severance plan, and to the extent applicable, an unfunded nonqualified deferred compensation arrangement; and

 

WHEREAS, in order to retain the services of such individuals, the Employer desires to provide certain severance benefits as provided herein;

 

NOW, THEREFORE, the Employer hereby establishes the Plan as follows:

 

ARTICLE I

 

DEFINITIONS.

 

As used in this Plan, the following terms have the following meanings:

 

(a)               “Affiliate” means, with respect to any entity, any other corporation, organization, association, partnership, sole proprietorship or other type of entity, whether incorporated or unincorporated, directly or indirectly controlling or controlled by or under direct or indirect common control with such entity.

 

(b)           “Base Salary” means the amount of Executive’s regular annual salary, paid periodically and not based on performance, as reflected in the Employer’s payroll records.

 

(c)           “Board” means the Board of Directors of the Employer.

 

(d)           “Cause” means a finding by the Committee of acts or omissions while employed by the Employer, constituting, in the Committee’s sole discretion, (i) a breach of duty by Executive in the course of Executive’s employment involving fraud, acts of dishonesty (other than inadvertent acts or omissions), disloyalty to Employer or its Affiliates, or moral turpitude constituting criminal felony; (ii) conduct by Executive that is materially detrimental to Employer, monetarily or otherwise, or reflects unfavorably on Employer or Executive to such an extent that Employer’s best interests reasonably require the termination of Executive’s employment; (iii) Executive’s failure to comply with or enforce Employer’s policies concerning equal employment opportunity, including engaging in sexually or otherwise harassing conduct; (iv) Executive’s repeated insubordination; (v) Executive’s failure to comply with or enforce, in any material respect, all other personnel policies of Employer or its Affiliates; (vi) Executive’s failure to devote Executive’s full working time and best efforts to the performance of Executive’s responsibilities to Employer or its Affiliates; (vii) Executive’s conviction of, or entry of a plea agreement or consent decree or similar arrangement with respect to a felony or any violation of federal or state securities laws; or (viii) Executive’s failure to cooperate with any investigation or inquiry authorized by the Committee or conducted by a governmental authority related to the business or Executive’s conduct.

 

 

 


 

 

(e)           “Code” means the Internal Revenue Code of 1986, as amended.

 

(f)           “Committee” means the Compensation Committee of the Board of Directors.

 

(g)           “Covered Termination” means: (1) the termination of an Executive’s employment with the Employer for any reason other than death, Inability to Perform, or for Cause; or (2) the resignation of the Executive from such employment with Good Reason.

 

(h)           “Eligible Executive” means an Executive who has experienced a Covered Termination.

 

(i)            “Employment Termination Date” means the effective date of termination of Executive’s employment pursuant to Employer policies and applicable law.

 

(j)            “Executive” means an individual employed by the Employer in the position of Vice President or higher, who has been designated by the Committee to be eligible to participate in the Plan, or who has accepted a written offer of employment which includes eligibility for participation in this Plan, and who commences employment in such position and capacity as a full time employee of the Employer.  A list of all individuals designated as Executives at any given time shall be appended as Appendix A to the Plan.  Once designated on Appendix A as an Executive under the Plan, such Executive shall remain so designated and shall continue to be an Executive hereunder until the earliest to occur of (i) the date on which such Executive is removed from Appendix A by action of the Committee or by the Board, (ii) such Executive’s termination of employment for any reason, or (iii) the death of the Executive.

 

(k)           “Good Reason” means any of the following actions if taken without Executive’s prior written consent: (i) following the designation of an Executive by the Compensation Committee on Appendix A to the Plan, any reduction of the multiple or percentage applicable to an Executive, or removal of Executive, through a subsequent amendment to Appendix A to the Plan, (ii) a material diminution in Executive’s base compensation; or (iii) any permanent relocation of Executive’s place of business to a location 50 miles or more from the then-current location, provided such relocation is a material change in geographic location at which Executive must provide substantial services for purposes of Section 409A.  Neither a transfer of employment among Employer and any of its Affiliates, a change in the co-employment relationship, nor a mere change in job title constitutes “Good Reason.”  To exercise the right hereunder to terminate for Good Reason, Executive must provide Notice of Termination to Employer of his belief that Good Reason exists within 60 days of the initial existence of the Good Reason condition, and that notice shall describe the condition(s) believed to constitute Good Reason.  Employer shall have 30 days to remedy the Good Reason condition(s).  If not remedied within that 30-day period, Executive may submit a Notice of Termination; provided, however, that the Notice of Termination invoking Executive’s right to terminate his employment for Good Reason must be given no later than 100 days after the date the Good Reason condition first arose; otherwise, Executive is deemed to have accepted the condition(s), or the Employer’s correction of such condition(s), that may have given rise to the existence of Good Reason.

 

 

 


 

 

(l)            “Inability to Perform means and shall be deemed to have occurred if Executive has been determined under Employer’s long-term disability plan to be eligible for long-term disability benefits.  In the absence of Executive’s participation in, application for benefits under, or existence of such a plan, “Inability to Perform” means a finding by the Committee in its sole discretion that Executive is, despite any reasonable accommodation required by law, unable to perform the essential functions of Executive’s position because of an illness or injury for (i) 60% or more of the normal working days during six consecutive calendar months or (ii) 40% or more of the normal working days during twelve consecutive calendar months.

 

(m)           “Notice of Termination” means a written notice that shall (i) indicate the specific termination provision in this Plan relied upon; (ii) in the case of a termination for Inability to Perform, Cause, or Good Reason, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision invoked; and (iii) if the termination is by Executive for Good Reason, or by Employer for any reason, specify the Employment Termination Date.  The failure by Employer or Executive to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Cause or Good Reason shall not waive any right of Employer or Executive or preclude either of them from asserting such fact or circumstance in connection with a claim or appeal for benefits under this Plan.

 

(n)           “Section 409A” means Section 409A of the Code and the regulations promulgated thereunder, and any other applicable Treasury guidance, as in effect at the time any payment or other action is to be taken under this Plan.

 

(o)           “Separation Agreement” means a general release agreement in a form acceptable to Employer which is not revoked by Eligible Executive prior to the date it becomes effective.

 

ARTICLE II

 

EMPLOYMENT.

 

Executives under this Plan shall be employed on an at-will basis, to the maximum extent permitted by applicable law.  This Plan shall not, and shall not be construed or interpreted as, creating a contract of employment with any person.

 

ARTICLE III

 

COMPENSATION UPON TERMINATION OF EMPLOYMENT

 

(a)           Termination of Employment for Any Reason.  If Executive’s employment is terminated, Employer shall pay to Executive (or in the case of death of Executive, to such person as Executive shall designate in a written notice to Employer or, if no such person is designated, to Executive’s estate) any unpaid portion of Executive’s Base Salary through the Employment Termination Date, any earned but unused vacation according to Employer’s policies then in effect, and any unreimbursed business expenses, at the time and in the manner required by applicable law, but in no event later than March 15 of the year following the year of the Executive’s death or termination of employment.

 

 

 


 

 

(b)           Covered Termination.  In addition to the payments described in Section (a) of this Article III, if Executive’s employment is terminated in a Covered Termination, Employer shall pay or provide to Eligible Executive in lieu of any other severance or separation benefits, at the time and in the manner provided  in Section (e) of this Article III, the following if, within 21 or 45 days after the Employment Termination Date, as applicable, Eligible Executive has signed a Separation Agreement and does not revoke such Separation Agreement:

 

(1)            The designated percentage or multiple, as set forth in Appendix A to the Plan as of the Employment Termination Date of such Executive, multiplied times the Eligible Executive’s Base Salary in effect on the Employment Termination Date;

 

(2)            The designated percentage or multiple, as set forth in Appendix A to the Plan as of the Employment Termination Date of such Executive, multiplied times the Executive’s target performance bonus percentage for one year, based on the target performance bonus percentage for the performance period in effect on the Employment Termination Date;

 

(3)            Full and immediate vesting of all Employer stock options and restricted stock awards held by Eligible Executive as of the Employment Termination Date;

 

(4)            With respect to Employer stock options that are vested as of the Employment Termination Date, Executive may exercise those options according to the terms of the Rosetta Resources Inc. 2005 Long-Term Incentive Plan.

 

Provided, however, no payment shall be made under this Section (b) of this Article III if any payment is due or payable to the Eligible Executive under the Rosetta Resources Inc. Executive Change in Control Plan.

 

(c)           Exclusive Compensation and Benefits.  The compensation and benefits described in this Article III, along with the associated terms for payment, constitute all of Employer’s obligations to Executive with respect to the termination of Executive’s employment with Employer and/or its Affiliates. However, nothing in this Plan is intended to limit any earned, vested benefits that Executive may have under the applicable provisions of any benefit plan of Employer in which Executive is participating at the time of the termination of employment.

 

(d)           Exclusion from Section 409A.  It is the intent of this Plan to not provide “deferred compensation” as defined in Section 409A of the Code and the regulations thereunder (“Section 409A”) so that none of the payments and benefits to be provided hereunder will be subject to the provisions of Section 409A, and any ambiguities herein will be interpreted to so provide. Employer shall not be liable to Executive for any adverse tax consequences imposed upon Executive as a result of the operation of Section 409A.  Payments under the Plan shall be made only on the date or dates provided herein, and no acceleration or deferral of any such payments shall be made either by the Employer or at the request of the Executive.

 

 

 


 

 

(e)           Time of Payment of Severance Compensation.  Amounts payable under this Article III of this Plan shall be determined by the Committee and shall be made in a single lump sum payment not later than sixty (60) days after the Employment Termination Date, but in no event later than March 15 of the year following the year in which the Executive’s Termination of Employment occurs.  No request to accelerate or defer a payment to be made under this Plan or under a Separation Agreement will be permitted and no Separation Agreement shall allow for any such acceleration or deferral.

 

(f)           Payment after Executive’s Death.  In the event of Executive’s death after Executive becomes entitled to a payment or payments pursuant to this Article III, any remaining unpaid amounts shall be paid, at the time and in the manner such payments otherwise would have been paid to Executive, to such person as Executive shall designate in a written notice to Employer (or, if no such person is designated, to Executive’s estate).

 

(g)           Offset.  To the maximum extent permitted by applicable law, Employer may set off against, and Executive authorizes Employer to deduct from, any payments due to the Executive, or to Executive’s heirs, legal representatives, or successors, as a result of the termination of the Executive’s employment, any amounts which may be due and owing to Employer or any of its Affiliates by the Executive, whether arising under this Plan or otherwise.

 

(h)           Notice of Termination.  Each of Executive, in the case of a termination with Good Cause, or Employer, in case of a termination for any other reason, shall provide the other with a Notice of Termination which, in the case of a Notice of Termination by Employer which sets for Cause or Inability to Perform, such notice shall be treated as the denial of a claim for benefits for purposes of Article XI of this Plan.

 

ARTICLE IV

 

NO OBLIGATION TO PAY.

 

With regard to any payment due to Executive under this Plan, to the maximum extent permitted by applicable law, it shall not be a breach of any provision of this Plan for Employer to fail to make such payment to Executive if (i) Employer is legally prohibited from making the payment; (ii) Employer would be legally obligated to recover the payment if it was made; or (iii) Executive would be legally obligated to repay the payment if it was made.

 

ARTICLE V

 

DEDUCTIONS AND WITHHOLDINGS.

 

With respect to any payment to be made to the Executive, Employer shall deduct, where applicable, any amounts authorized by Employee, and shall withhold and report all amounts required to be withheld and reported by applicable law.

 

 

 


 

 

ARTICLE VI

 

NOTICES.

 

(a)           All notices, requests, demands, and other communications required or permitted to be given or made by either party shall be in writing and shall be deemed to have been duly given or made (1) when delivered personally, or (2) when deposited in the United States mail, first class registered or certified mail, postage prepaid, return receipt requested, to the party for which intended at the following addresses (or at such other addresses as shall be specified by the parties by like notice, except that notices of change of address shall be effective only upon receipt):

 

(b)           If to Employer, at:

 

Rosetta Resources Inc.

Attn: General Counsel

717 Texas, Suite 2800

Houston, Texas 77002

 

(c)           If to Executive, at Executive’s then-current home address on file with Employer.

 

ARTICLE VII

 

MITIGATION.

 

Executive shall not be required to mitigate the amount of any payment provided for in this Plan by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Plan be reduced by any compensation earned by Executive as the result of employment by another employer after the date of termination of Executive’s employment with Employer, or otherwise.

 

ARTICLE VIII

 

BENEFITS UNASSIGNABLE.

 

Executive shall not have any right to pledge, hypothecate, anticipate, or in any way create a lien upon any payments or other benefits provided under this Plan; and no benefits payable under this Plan shall be assignable in anticipation of payment either by voluntary or involuntary acts, or by operation of law, except by will or pursuant to the laws of descent and distribution.

 

ARTICLE IX

 

AMENDMENT AND TERMINATION.

 

The Employer may amend or terminate this Plan at any time by action of the Board, subject to the rights of any Eligible Executive who has incurred a Covered Termination as of the date of such amendment or termination.

 

ARTICLE X

 

GOVERNING LAW; VENUE.

 

This Plan shall be governed by the laws of the State of Texas except for its laws with respect to conflict of laws, and except to the extent preempted by any federal law.  The exclusive forum for any lawsuit arising from or related to Executive’s employment or this Plan shall be a state or federal court in Harris County, Texas.  To the extent this Plan is governed by federal law, nothing herein shall prevent or prohibit Employer from removing to an appropriate federal court any action brought in state court.

 

 

 


 

 

ARTICLE XI

 

ADMINISTRATION, CLAIMS, APPEALS, EXHAUSTION REQUIREMENT.

 

(a)           Plan Administrator.  The overall responsibility for the administration and control of this Plan resides with the Committee.

 

(b)           Powers.  The Committee has the following authority with respect to the Plan:

 

(1)            The responsibility for the day-to-day administration and operation of the Plan;

 

(2)            The authority to issue and implement such rules as the Committee deems appropriate to administer the Plan;

 

(3)            The authority to interpret the Plan’s provisions, and to make factual determinations under the Plan, including but not limited to, the power to determine eligibility for payments hereunder, and the right to resolve and determine ambiguities, inconsistencies, and omissions in the provisions hereof;

 

(4)            The authority to appoint or designate such person or persons as the Committee deems necessary or advisable to carry out the administrative duties hereunder.

 

(c)           Claims.  The Committee shall have the power and authority to determine claims for payments under the Plan, and shall make all factual determinations under the Plan in relation to any claim, or as otherwise required in the Plan.  Except as otherwise provided herein, the Executive (“claimant”) may make a claim for payment hereunder, or a claim contesting a factual determination hereunder, within 30 days of receipt of notice of such factual determination, or of any event giving rise to the existence of a right of payment under the Plan.  The Committee shall make a determination on a claim hereunder within 30 days of the receipt of a claim for payments under the Plan, and the claimant shall have the right to submit documentation or other evidence to the Committee in support of such claim.  The Committee may, by written notice to the claimant within the original 30-day claim period, have an additional 30 days in which to make a decision on the initial claim.  If the Committee does not provide a notice of extension or a decision on the initial claim within the time limits provided in this Article, the claim will be deemed denied for purposes of this Article.

 

(d)           Appeal of Denied Claim.  If a claim under Section (c) of this Article is denied or deemed denied, the claimant may file a written appeal with the full Board.  The claimant shall have the right to submit any additional documentation or other evidence to the Board in support of such appeal.  The Board shall make its decision and provide notice thereof in writing to the claimant within 30 days of the receipt of the appeal; provided, however, the Board may, by written notice to the claimant within the original 30-day appeal period, have an additional 30 days in which to make a decision on the initial appeal.  If the Board does not provide a notice of extension or a decision on the initial appeal within the time limits provided in this Article, the claim will be deemed denied for purposes of this Article.

 

 

 


 

 

(e)           Contents of Notice of Denied Claim or Appeal.   Notice of any denied claim or appeal provided by the Committee or the Board, as appropriate, shall be in writing, and shall contain the following, at a minimum:

 

(1)            The facts determined, claim determination made or decision on appeal (herein, the “determination”);

 

(2)            A summary of the facts on which the determination was based;

 

(3)            The relevant provisions of the Plan on which the determination was based;

 

(4)            If appropriate, a description of any information or documentation required to complete the claimant’s claim; and

 

(5)            A description of the claimant’s appeal rights, if any.

 

(f)            Exhaustion of Administrative Remedy Required.  Executive may not bring a proceeding in any court under this Plan, or intended to enforce any provision of this Plan, without first having exhausted the administrative remedies provided herein.

 

(g)           Limitation of Actions.   No action may be brought to enforce any provision of this Plan after twelve (12) months following the denial of the later of: (i) the claimant’s claim under Section (c) of this Article XI, or (ii) the denial of the appeal provided for in Section (d) of this Article XI.

 

ARTICLE XII

 

TREATMENT OF PLAN UNDER ERISA.

 

Is the intent of the Employer, and this Plan shall be interpreted, construed and operated such that, the Plan shall be a “top-hat” plan exempt from certain provisions of ERISA, as provided in and within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA, as appropriate.  Benefits under this Plan shall be paid solely out of the general assets of the Employer and shall constitute an unsecured obligation of the Employer.

 

 

 


 

 

IN WITNESS WHEREOF, Employer has caused this Plan to be executed on its behalf by its duly authorized officer, and such duly authorized officer has executed this Plan, effective as of the Effective Date first set forth above.

 

EMPLOYER

 

 

 

 

ROSETTA RESOURCES INC.

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

RANDY L. LIMBACHER

 

PRESIDENT & CHIEF EXECUTIVE OFFICER