EXHIBIT 10.7
CONTRACT FOR SERVICES
This Contract for Services (this
“Agreement”) is entered into by and between Pioneer
Natural Resources USA, Inc. (“Company”) and A. R.
Alameddine (“Contractor”). Company hereby engages the
services of Contractor, upon the following terms and
conditions:
(1) Services . Pursuant to each of
the provisions of this Agreement, Contractor shall provide
consulting services to the Company in connection with the Company's
evaluation and pursuit of prospects in the country of Iraq and the
Company's operations in the country of Tunisia (the
“Services” or the “Project”); provided,
however, in no event shall Contractor be obligated to perform
services for the Company hereunder at a level that would, during
the term of this Agreement, require Contractor to provide aggregate
services to the Company in excess of forty-nine percent (49%) of
the average hours performed by Contractor while an employee of the
Company over the 12 month period immediately preceding the
termination of his employment with the Company (the “Maximum
Commitment”). The Company and Contractor agree that they have
established the Maximum Commitment so that Contractor will be
deemed to have incurred a separation from service pursuant to, and
in accordance with the regulations promulgated under, Section 409A
of the Internal Revenue Code of 1986, as amended. The parties agree
to apply the Maximum Commitment for all purposes with respect to
the determination of whether Contractor has incurred such a
separation from service.
(2)
Term of Agreement . This Agreement shall commence on April 1, 2008 (the
“Commencement Date”) and shall remain in force until,
and, subject to the provisions of Section 9, shall terminate
automatically on March 31, 2009 (the “Termination
Date”); provided, however, that any termination will not
affect any of the obligations that expressly extend beyond the term
of this Agreement, including the obligations contained in Sections
18 and 19.
(3)
Terms of Payment . All payments made to Contractor hereunder shall be made only
in connection with the performance of the Services or completion of
the Project described in Section 1 above. Company shall pay
Contractor for: (a) service fees in the amount of $210,000 as
follows: (i) lump sum of $110,000 on October 1, 2008, and (ii) the
remaining $100,000 payable in six monthly payments of $16,666.67
beginning with the first payment on October 31, 2008 and ending
with the last payment on March 31, 2009, and (b) Travel Expenses,
as defined in this Section, of Contractor. For clarification
purposes, the total number of hours includes hours worked and hours
in transit. As used herein, “Travel Expenses” means
documented business related travel expenses and standard
business-type lodging expenses including first class international
air travel. Company shall reimburse Contractor only for Travel
Expenses invoiced by Contractor and for which reasonable backup
documentation in the form of receipts and the like is provided
along with such invoice. To enable Company to take advantage of any
available discount rates, upon request by Company, by notice or
other reasonable means, Contractor shall book all travel and
lodging through a travel agency and/or with carriers or hotels
designated by Company for direct billing to Company.
(4)
Contingent Supplemental Compensation and
Related Benefits . In
recognition of Contractor’s long, outstanding
and dedicated service to the Company, and Contractor’s
willingness to provide the Services following his retirement from
the Company on the terms and conditions set forth herein, the
Company agrees that, if, on or prior to September 30, 2008, there
shall occur a Potential Change in Control (as defined in paragraph
3 of the Change in Control Agreement dated August 16, 2005 between
Contractor and the Company (the “CIC Agreement”)), and
within twelve months following such Potential Change in Control
there occurs a Change in Control (as defined in paragraph 3 of the
CIC Agreement) that also constitutes a change in the ownership or
effective control of the Company as defined in the regulations
promulgated pursuant to Section 409A of the Internal Revenue Code
(a “Qualifying Change in Control”), then the Company
shall pay the Supplemental Compensation (as defined below)
to
Contractor or, in the event of his death, to his
estate, within 30 days of the occurrence of such a Qualifying
Change in Control. The term Supplemental Compensation shall mean an
amount equal to the sum of (i), (ii) and (iii) below:
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(i)
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the remainder of ( A ) the Separation Payment that would
have been payable to Contractor pursuant to paragraph 5(c)(6) of
the CIC Agreement had Contractor’s employment continued until
such Qualifying Change in Control and been terminated immediately
thereafter by the Company without Cause, minus (
B ) the amount payable
to Contractor upon his retirement pursuant to paragraph 4(a) of the
severance agreement with the Company signed by the Contractor while
an employee of the Company;
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(ii)
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the product of ( A ) the closing value of a share of
the Company’s common stock on the date that the Qualifying
Change in Control occurs and ( B ) the number of restricted shares
of the Company’s common stock that were subject to Restricted
Stock Award Agreements dated February 14, 2006 and February 26,
2007 between Contractor and the Company that were not vested
immediately prior to or in connection with Contactor’s
retirement from service with the Company on March 31,
2008;
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(iii)
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the product of the closing value of a share of the
Company’s common stock on the date that the Qualifying Change
in Control occurs and ( B
) the remainder of (1) the number of shares of the
Company’s common stock to which Contractor would have been
entitled pursuant to Section 5(a) of the Performance Unit Award
Agreement dated February 26, 2007 between Contractor and the
Company (the “Performance Unit Agreement”) had
Contractor been employed by the Company on the date that the
Qualifying Change in Control occurs minus (2) the number of shares
to which Contractor is actually entitled pursuant to Section 5(b)
of the Performance Unit Agreement.
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If Contractor becomes entitled to receive the
Supplemental Compensation in accordance with this Section 4, then
Contractor shall also be entitled to receive from the Company any
additional payments that would have been payable in accordance with
paragraph 5(e) of the CIC Agreement had his employment been
terminated by the Company without Cause on the date such Qualifying
Change in Control.
(5)
Audit . Company
shall have the right to audit the books and records of Contractor
relating to Company’s payment for Services and Travel
Expenses for the sole purpose of verifying the amounts due and
payable hereunder, once per calendar year, upon five (5) business
days notice to Contractor. Contractor shall maintain business
records, books, account information, and related materials
sufficient to permit Company to conduct such audits. The cost of
any audit shall be at Company’s expense.
(6)
Contractor Representations
. Notwithstanding any limitations or disclaimers
otherwise contained herein, Contractor represents that Contractor
has attained the requisite educational and experience level to
permit him or her satisfactorily to perform such Services, and
Contractor agrees to perform said Services in a professional and
workmanlike manner.
(7)
Taxes .
Contractor shall not be treated as an employee of Company with
respect to the Services performed hereunder for federal or state
tax purposes. Contractor shall protect, defend, indemnify and hold
Company and its officers, directors, and employees harmless from
and against any and all liability, claims, demands, proceedings and
causes of action by or on behalf of any state or federal
governmental administrative agencies for any such taxes.
(8)
Insurance .
Except as set forth in Section 28, Contractor shall be responsible
for all of his or her own insurance and Company shall have no
responsibility for any insurance coverage for Contractor, including
worker’s compensation insurance.
(9)
Termination With Cause
. Subject to the provisions of Section 2, with
reasonable cause, either party may terminate this Agreement
effective immediately upon the giving of written notice of intent
to terminate for cause. Reasonable cause shall include any breach
of this Agreement by the other party and the failure of such other
party to cure such breach within twenty (20) days of notice
thereof.
(10)
Non-Waiver . The
failure of either party to exercise any of its rights under this
Agreement for a breach thereof shall not be deemed a waiver of such
rights or waiver of any subsequent breach.
(11)
Security . In the event Contractor is required to
travel to a foreign country to perform the Services set forth in
Section 1, Company, at Company's expense, shall provide Contractor
security measures during Contractor's stay in such country similar
to the security measures that were provided to Contractor while an
employee of the Company, including evacuation from such country in
the event of unrest. In no event shall Contractor, in the
performance of the Services, be required to travel to any country
with respect to which the U.S. Department of State is then
maintaining a travel warning.
(12)
Intellectual Property Rights .
(a) Company
represents and warrants that any and all data, information,
documents, materials, supplies and equipment provided by it to
Contractor, or any method, process or technique which Company
requires Contractor to use, is the rightful property of Company or
Company has full right to supply such items to Contractor. Company
agrees to defend, indemnify and hold Contractor harmless from and
against any damage, loss, cost and/or expense (including attorneys
fees) resulting from a breach of this representation and
warranty.
(b) Contractor agrees
that all intellectual property, including but not limited to all
ideas and concepts contained in computer programs and software,
documentation or other literature or illustrations that are
conceived, developed, written, or contributed by Contractor
pursuant to this Agreement, either individually or in collaboration
with others, shall belong to and be the sole property of Company.
Contractor further agrees that all rights in all works prepared or
performed by Contractor pursuant to this Agreement shall belong
exclusively to Company and shall constitute "works made for hire''
for purposes of copyright law. The provisions of this Section shall
not be construed to assign to Company any of Contractor's rights in
any work, concept, invention or idea for which no equipment,
supplies, facilities, or trade secret information of Company was
used, that was developed entirely on Contractor's own time, and
that:
(i) does not
relate at the time of conception or reduction to practice of the
invention to Company's business or to Company's actual or
demonstrably anticipated research or development; or
(ii) does
not result from any work performed by Contractor for
Company.
(13)
No Authority to Bind Company
. Other than as specifically designated in writing
from time to time, Contractor has no authority to enter into any
contracts or agreements on behalf of Company. This Agreement does
not create a partnership, joint venture, or joint undertaking of
any kind between the parties.
(14)
Declaration of Independent Contractor
Status . Contractor declares
Contractor is engaged in his or her own independently established
business, and as such, Contractor has complied with all federal,
state, and local laws regarding business permits, certificates, and
licenses that may be required to carry out the work to be performed
under this Agreement. Except as provided in Section 19, as an
independent contractor, Contractor will be free to contract for
similar services and provide such services to other individuals and
other businesses without the consent of Company, express or
implied. Neither Company, nor its agents or representatives, shall
have a right to control or direct the manner, details,
or
means by which Contractor accomplishes and performs
the Services. The risk of loss in Contractor’s business shall
be borne entirely by Contractor. Company shall have no right to
inquire as to the profit generated by Contractor in the performance
of Contractor’s business except with respect to the
reimbursement by Company to Contractor of reasonable expenses
incident to the provision of the Services pursuant to Section
5.
(15)
Benefits . Because Contractor is engaged in
his or her own independently established business, Contractor is
not eligible for, and shall not participate in, any employee
pension, health, or other fringe or welfare benefit plans of
Company, except to the extent Contractor, as a former employee of
the Company, elects continuation of
