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AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Employee Retention Agreement

AMENDED AND RESTATED EMPLOYMENT AGREEMENT | Document Parties: ROSETTA RESOURCES INC. You are currently viewing:
This Employee Retention Agreement involves

ROSETTA RESOURCES INC.

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Title: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Governing Law: Texas     Date: 3/2/2009
Industry: Oil and Gas Operations     Sector: Energy

AMENDED AND RESTATED EMPLOYMENT AGREEMENT, Parties: rosetta resources inc.
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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 positi


 
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