Exhibit 10.37
SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Second 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 Michael H. Hickey
(“Executive”), and supersedes and replaces that certain
Amended and Restated Employment Agreement between Employer and
Executive dated September 1, 2007.
WHEREAS, Executive has been
employed as Vice President and General Counsel of Employer;
and
WHEREAS, the parties desire to
amend and restate the Amended and Restated Employment Agreement
dated as of September 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, whether
occurring during or before the Employment Term, constituting, in
the Board’s reasonable judgment, (i) a breach of duty by
Executive in the course of his 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) acts or omissions of
Executive materially in violation of his obligations under this
Agreement or at law; (iv) Executive’s failure to comply with
or enforce Employer’s policies concerning equal employment
opportunity, including engaging in sexually or otherwise harassing
conduct; (v) Executive’s repeated insubordination; (vi)
Executive’s failure to comply with or enforce, in any
material respect, all other personnel policies of Employer or its
Affiliates; (vii) Executive’s failure to devote his full
working time and best efforts to the performance of his
responsibilities to Employer or its Affiliates; (viii)
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 (ix)
Executive’s failure to cooperate with any investigation or
inquiry authorized by the Board or conducted by a governmental
authority related to the business or Executive’s conduct, or
(x) Executive’s failure to maintain a law license in good
standing in the State of Texas.
(e) “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.
(f) “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.
(g) “Confidential
Information” means any information about Rosetta or its
Affiliates that is protected by the attorney-client privilege and
any unprivileged information relating to Rosetta or its Affiliates
or furnished to Executive by reason of Executive’s legal
representation of Rosetta or its Affiliates and Executive’s
employment by Rosetta, including, 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.
(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 demotion of
Executive as evidenced by a material diminution in
Executive’s responsibilities or duties; (ii) a material
diminution in Executive’s base compensation; (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 services for purposes of Section 409A
of the Internal Revenue Code of 1986, as amended (the
“Code”) and the regulations thereunder; or (iv) any
other action or inaction by Employer that constitutes a material
breach by Employer of its obligations under Paragraphs 12 or 20 of
this Agreement. 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.”
(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 a finding by
the Board in its sole judgment that Executive is, despite any
reasonable accommodation required by law, unable to perform the
essential functions of his 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.
(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
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. Work Product includes any material
previously conceived, made, developed, or worked on during
Executive’s employment with Employer or any
Affiliate.
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.
3.
Term
. Executive’s employment under this Agreement
shall commence on August 1, 2005 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 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, Executive’s employment and this Agreement
will end upon the expiration of the Employment Term. The
ending of Executive’s employment as a result of the
expiration of the Employment Term shall not constitute a
termination of employment by either party under this
Agreement.
(a) Executive
shall be employed as Vice President and General
Counsel. In such capacity, Executive, subject to the
ultimate control and direction of the Chief Executive Officer of
Employer, shall have such duties, functions, responsibilities, and
authority as are from time to time delegated to Executive by the
Chief Executive Officer of Employer; 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, and provided further,
however, that Executive shall not be directed by the Chief
Executive Officer or Board to take any action that would reasonably
require Executive to withdraw from representation of the Company
(other than a withdrawal due to an actual or potential conflict of
interest) or that could reasonably be expected to result in
sanctions under the Texas Disciplinary Rules of Professional
Conduct to the extent that such direction is provided or continues
to be provided after Executive has notified the chairman of the
Board in writing that the contemplated actions would require
withdrawal and/or could reasonably be expected to result in
sanctions
(b) During
the Employment Term, Executive shall devote his full 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.
(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. 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, including but not limited to those
regarding business ethics and conduct and securities trading, and
will comply with all such policies, 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 effective as of
Amendment Date shall be $240,000. The Base Salary is
subject to adjustments at the discretion of the Board, but in no
event shall Employer pay Executive a Base Salary less than that set
forth above 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 . During the Employment Term,
Executive will participate in any incentive compensation plan (ICP)
or retention bonus arrangement 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 for
the year ending on December 31, 2007, will be based upon 65% of
Executive’s Base Salary paid to Executive by Employer
prorated for the number of months in such period as compared to a
full year and shall be subject to such other terms, conditions and
restrictions as may be established by the Board or the compensation
committee.
(c)
Long-Term Incentives . During the Employment
Term, Executive will participate in Employer’s long-term
incentive (LTI) plan applicable to Executive’s position, in
accordance with the terms of such plan(s). Except as
provided in Paragraph 5(d), Executive will participate in such LTI
plan award opportunities as may be determined by the Board or the
compensation committee of the Board, as applicable.
(d)
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 agrees to cooperate and
participate in any medical or physical examinations as may be
required by any insurance company in connection with the
applications for such life and/or disability insurance
policies.
(e)
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.
(f)
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.
(g)
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 and Agreement
.
(a)
Death . Executive’s employment and this
Agreement shall terminate automatically upon his death.
(b)
Inability to Perform . Employer may terminate
this Agreement or this Agreement and Executive’s employment
for Inability to Perform.
(c)
Termination by Employer for Cause . Employer may
terminate Executive’s employment and this Agreement for Cause
by providing Executive with a Notice of Termination as set out in
Paragraph 6(f). Before terminating Executive’s
employment and this Agreement 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 and this Agreement in whole or part
under provisions (v) or (vi) 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 only to the extent Employer
determines that they may 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 and
this Agreement 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 Chief Executive Officer of
Employer may establish. Nothing in this Paragraph 6(c)
precludes informal discussions between Executive and Employer
regarding such circumstances or events.
(d)
Termination by Executive for Good Reason
. Executive may terminate his employment and this
Agreement 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 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.
(e)
Termination by Either Party Without Cause or Without Good
Reason . Either Employer or Executive may terminate
Executive’s employment and this Agreement without Cause or
Good Reason upon at least 60 days’ prior written notice to
the other party.
(f)
Notice of Termination . Any termination of
Executive’s employment or, pursuant to Paragraph 6(b), a
termination of this Agreement alone, 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
or, pursuant to Paragraph 6(b), the date of termination of this
Agreement. 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; or (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.
(h)
Deemed Resignation . In the event of termination
of Executive’s employment or the expiration of the Employment
Term, 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 or the
expiration of the Employment Term, unless the Board notifies
Executive prior to the Employment Termination Date or the
expiration of the Employment Term of the Board’s desire that
Executive 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 or
the expiration of the Employment Term. Executive agrees
to execute and deliver any documents evidencing his resignation
from such positions that Employer may reasonably
request.
(i)
Investigation; Suspension . Employer may suspend
Executive with pay pending an investigation authorized by the Board
or a governmental authority or a determination by the Board whether
Executive has engaged in acts or omissions constituting Cause, and
such paid suspension shall not constitute a termination of this
Agreement or Executive’s employment, or Good
Reason. Executive agrees to cooperate with Employer in
connection with any such investigation.
7.
Compensation Upon Termination of
Employment or Expiration of Employment Term .
(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.
(b)
Inability to Perform . If Executive’s
employment and this Agreement 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.
(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
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