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EMPLOYMENT AGREEMENT

Employment Agreement

EMPLOYMENT AGREEMENT You are currently viewing:
This Employment Agreement involves

MARINER ENERGY, INC

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Title: EMPLOYMENT AGREEMENT
Governing Law: Texas    

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EXHIBIT 10.14

EMPLOYMENT AGREEMENT

This Employment Agreement ("AGREEMENT") is made and entered into as of

February 7, 2005 (the "EFFECTIVE DATE"), by and between MARINER ENERGY, INC., a

Delaware corporation (hereafter "COMPANY"), and Dalton F. Polasek (hereafter

"EXECUTIVE").

1. EMPLOYMENT. During the Employment Period (as defined in Section 4

hereof), the Company shall employ Executive, and Executive shall serve, as Chief

Operating Officer, reporting to the President or Chief Executive Officer of the

Company.

2. DUTIES AND RESPONSIBILITIES OF EXECUTIVE.

(a) During the Employment Period, Executive shall devote his full

time and attention during normal business hours to the business of the

Company, will act in the best interests of the Company and will perform

with due care his duties and responsibilities. Executive's duties will

include those normally incidental to the position of Executive Vice

President as well as whatever additional duties may be assigned to him by

the Board of Directors of the Company (the "BOARD") or the Chief Executive

Officer of the Company. Executive agrees to cooperate fully with the Board

and the Chief Executive Officer of the Company and not to engage in any

activity that materially interferes with the performance of Executive's

duties hereunder. During the Employment Period, Executive will not hold

outside employment without the advance written approval of the Board.

Provided that it shall not be a violation of this Agreement for Executive

to (1) serve on corporate, civic, or charitable boards or committees

(except for boards or committees of a business organization that competes

with the Company in any business in which the Company is regularly

engaged), which are listed on EXHIBIT A so long as such service does not

materially interfere with the performance of Executive's duties and

responsibilities under this Agreement, as determined in the good faith

opinion of the Board, (2) manage personal investments, or (3) take

vacation days and reasonable absences due to injury or illness, as set

forth herein and/or permitted by the general policies of the Company.

(b) Executive represents and covenants to the Company that he is not

subject or a party to any employment agreement, noncompetition covenant,

nondisclosure agreement, or any other agreement, covenant, understanding,

or restriction that would prohibit Executive from executing this Agreement

and fully performing his duties and responsibilities hereunder, or would

in any manner, directly or indirectly, limit or affect the duties and

responsibilities that may now or in the future be assigned to Executive

hereunder.

(c) Executive acknowledges and agrees that Executive owes the

Company a duty of loyalty and that the obligations described in this

Agreement are in addition to, and not in lieu of, the obligations

Executive owes the Company under the common law.

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3. COMPENSATION.

(a) During the Employment Period (as defined in Section 4 hereof),

the Company shall pay to Executive an annualized base salary of $250,000

(the "BASE SALARY") in consideration for Executive's services under this

Agreement, payable on a not less than semi-monthly basis, in conformity

with the Company's customary payroll practices for executive salaries. For

all purposes of this Agreement, Executive's Base Salary shall include any

portion thereof which is deferred under any nonqualified plan or

arrangement. Each year, the Board shall review Executive's salary based on

market survey data, corporate performance, and performance of Executive.

If, in its sole and complete discretion, the Board determines that an

increase in Executive's salary is appropriate, the Board may make such

adjustment, and such adjusted salary shall thereafter be Executive's Base

Salary for purposes of this Agreement. Executive's Base Salary may not be

reduced except as part of a general reduction of salaries paid to

management employees that is necessitated by business conditions, as

determined by the Board.

(b) Executive may be eligible for an annual discretionary

performance bonus with respect to each calendar year during the Employment

Period (the "ANNUAL BONUS"). The amount, if any, of Executive's Annual

Bonus will be determined by the Board in its sole and complete discretion

based on market survey data, corporate performance, and performance of

Executive. Bonus determinations will be made by the Board at a time

convenient to the Board but typically within 60 calendar days of the end

of each calendar year. The Board will, on an annual basis (at or near the

beginning of each calendar year in the Employment Period) establish a

target bonus for Executive for the upcoming year, and will communicate

such target to Executive. If the Board determines to award Executive an

Annual Bonus, it will be payable in conformity with the Company's

customary payroll practices for executive bonuses. The Board may also

award additional bonuses or other compensation to Executive at any time in

its sole and complete discretion.

(c) Any salary, bonus, and other compensation payments hereunder

shall be subject to such payroll and other taxes, withholdings, and

deductions as may be required by applicable law or with respect to

Executive's coverage in the Company's insurance and other employee benefit

plans.

4. TERM OF EMPLOYMENT. The initial term of this Agreement shall be for the

period beginning on the Effective Date and ending at midnight (EST) on March 2,

2006 (the "INITIAL TERM"); provided, however, that if the Company consummates an

initial public offering of its common stock prior to March 3, 2006, the Initial

Term shall end on March 2, 2007. For all purposes of this Agreement, the

consummation of a sale under Rule 144A and/or Regulation D of equity securities

of the Company shall be treated as the consummation of an initial public

offering by the Company. On March 3, 2006 (or 2007, if applicable) and on March

3 of each succeeding year (each such date being referred to as a "RENEWAL

DATE"), this Agreement shall automatically renew and extend for a period of 12

months (a "RENEWAL TERM") unless written notice of non-renewal is delivered from

one party to the other at least 90 days prior to such Renewal Date (in which

case the Termination Date shall be the day immediately prior to such

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Renewal Date). Notwithstanding any other provision of this Agreement, this

Agreement may be terminated at any time during the Initial Term or the Renewal

Term (if any) in accordance with Section 6. The period from the Effective Date

through the Termination Date of this Agreement, regardless of the time or reason

for such termination, shall be referred to herein as the "EMPLOYMENT PERIOD." In

the event that this Agreement is not renewed, Executive shall become an at-will

employee of the Company and the Company shall have the right to terminate

Executive's employment with the Company at any time.

5. BENEFITS. Subject to the terms and conditions of this Agreement,

Executive shall be entitled to the following benefits during the Employment

Period:

(a) REIMBURSEMENT OF BUSINESS EXPENSES. The Company agrees to

reimburse Executive for reasonable business-related expenses incurred in

the performance of Executive's duties under this Agreement.

(b) BENEFIT PLANS AND PROGRAMS. To the extent permitted by

applicable law and subject to the terms and eligibility requirements of

any such plan or program, Executive will be eligible to participate in all

benefit plans and programs, including improvements or modifications of the

same, that are maintained by the Company generally for executive employees

of the Company, subject to the eligibility requirements and other terms

and conditions of those plans and programs. The Company will not, however,

by reason of this Section 5(b) be obligated either (1) to institute,

maintain, or refrain from changing, amending, or discontinuing any such

benefit plan or program, or (2) to provide Executive with all benefits

provided to any other person or individual employed by the Company or any

of its affiliates.

6. TERMINATION OF EMPLOYMENT.

(a) COMPANY'S RIGHT TO TERMINATE. At any time during the Initial

Term or any Renewal Term, the Company shall have the right to terminate

this Agreement and Executive's employment with the Company for any of the

following reasons:

(1) Upon Executive's death (in which case the Termination Date

shall be the date of Executive's death);

(2) Upon Executive's Disability (as defined below);

(3) For Cause (as defined in Section 7); or

(4) For any other reason whatsoever, in the sole and complete

discretion of the Company.

(b) EXECUTIVE'S RIGHT TO TERMINATE. At any time during the Initial

Term or any Renewal Term, Executive will have the right to terminate this

Agreement and Executive's employment with the Company for:

(1) Good Reason (as defined in Section 7); or

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(2) For any other reason whatsoever, in the sole and complete

discretion of Executive.

(c) "DISABILITY." For purposes of this Agreement, "Disability" means

that Executive has sustained sickness or injury that renders Executive

incapable of performing the duties and services required of Executive

hereunder for a period of 90 consecutive calendar days or a total of 120

calendar days during any 12 month period.

(d) "NOTICES." Any termination of this Agreement by the Company

under Section 6(a) (other than termination due to the death of Executive),

or by Executive under Section 6(b) shall be communicated by a Notice of

Termination to the other party. A "Notice of Termination" means a written

notice that (1) indicates the specific termination provision in this

Agreement relied upon and (2) if the termination is by the Company for

Cause or by Executive for Good Reason, sets forth in reasonable detail the

facts and circumstances claimed to provide a basis for termination of

Executive's employment under the provision so indicated. The Notice of

Termination must specify the Termination Date. In the case of a

termination by the Company for Cause or due to Executive's Disability, or

by Executive for Good Reason, the Termination Date may be as early as the

date notice is given but no later than 30 calendar days after notice is

given, unless otherwise agreed to in writing by both parties. In the case

of a termination by the Company or by Executive for any other reason, the

Termination Date may be as early as 14 calendar days after notice is given

but no later than 60 calendar days after notice is given, unless otherwise

agreed to by the parties in writing.

7. SEVERANCE PAYMENTS.

(a) TERMINATION BY THE COMPANY. If (1) the Company terminates this

Agreement and Executive's employment with the Company and its affiliates

during the Initial Term or the Renewal Term (if any) pursuant to Section

6(a)(4), (2) Executive signs and does not revoke a waiver and release

agreement substantially similar to Exhibit B, and (3) Executive continues

to comply with Executive's ongoing obligations under Sections 11 and 12 of

this Agreement, then, subject to Section 7(h), the Company shall pay

Executive severance in accordance with Section 7(c). Such severance

payments shall be in addition to payment by the Company of all previously

unpaid amounts (including, without limitation, salary, bonuses, equity

plans, incentive compensation plans, fringe benefits, and expense

reimbursements) owed to Executive under this Agreement with respect to

periods prior to the Termination Date.

(b) TERMINATION BY EXECUTIVE. If (1) Executive terminates this

Agreement and Executive's employment with the Company and its affiliates

during the Initial Term or the Renewal Term (if any) pursuant to Section

6(b)(1), (2) Executive signs and does not revoke a waiver and release

agreement substantially similar to Exhibit B, and (3) Executive continues

to comply with Executive's ongoing obligations under Sections 11 and 12 of

this Agreement, then, subject to Section 7(h), the Company shall pay

Executive severance in accordance with Section 7(c). Such severance

payments shall be in addition to payment by the Company of all previously

unpaid amounts (including, without limitation, salary, bonuses, equity

plans, incentive compensation plans, fringe benefits,

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and expense reimbursements) owed to Executive under this Agreement with

respect to periods prior to the Termination Date.

(c) SEVERANCE AMOUNT. If the Company is required to pay Executive

severance by the express terms of Section 7(a) or 7(b), the Company shall

pay Executive the following as severance:

(1) Executive's Base Salary at the highest rate in effect

prior to the Termination Date as salary continuation for a period of

two years commencing on the date on which Executive's employment

with the Company is terminated (the "TERMINATION DATE") (the

"SEVERANCE PERIOD"), payable in equal monthly installments pursuant

to the Company's customary payroll practices for executive salaries;

provided, however, that, at the option of the Company, the amounts

payable under this Section 7(c) may be paid by the Company in one

lump sum.

(2) Executive, Executive's spouse, and Executive's dependents

will continue to be eligible for coverage under the Company's group

health plan or any successor plan on the same basis as active

executive employees of the Company, their spouses, and their

dependents for the duration of the Severance Period. If and when

group health coverage under another employer's plan is made

available to Executive, Executive's spouse, or Executive's

dependents, the Company's obligations under this paragraph will

cease with respect to each person to whom such coverage is made

available, notwithstanding that such person may not in fact become

covered under such other employer's plan. Executive's portion of the

premium for such coverage shall be withheld from the salary

continuation payments described in paragraph (1) immediately above

or, if salary continuation has been paid in a lump sum, Executive

shall reimburse the Company for Executive's portion of the premium

on a monthly basis.

(3) An amount equal to the sum of amounts paid or payable to

Executive as bonuses by the Company for the year prior to the year

in which the Termination Date occurs. This amount will be payable in

one lump sum, to Executive within 30 days after the end of the

Severance Period.

(4) Executive shall become 100% vested in all of the shares of

restricted stock granted to Executive under the Mariner Energy, Inc.

Equity Participation Plan to the extent Executive is less than 100%

vested in such shares as of the Termination Date.

(5) Executive shall become 50% vested in all of the rights and

interests granted to Executive under the Company's stock and other

equity plans (other than the Mariner Energy, Inc. Equity

Participation Plan), including without limitation any stock options,

restricted stock, restricted stock units, performance units, and/or

performance shares to the extent Executive is less than 50% vested

in such award as of the Termination Date.

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(6) Notwithstanding any other provision hereof, if the Company

incurs an obligation to pay severance under this Section 7(c) in

connection with the termination of Executive's employment after the

consummation of an initial public offering by the Company, then,

subject to Section 7(h), Executive shall be entitled to receive the

amounts specified in Section 8(a) in lieu of the amounts specified

in Sections 7(c)(1) and 7(c)(3).

(7) Payments under this Section 7(c) shall be in lieu of any

severance benefits otherwise due to Executive under any severance

pay plan or program maintained by the Company that covers its

employees or executives generally. If Executive receives payment

under Section 8(a), payments otherwise payable under Section 7(c)(1)

shall terminate.

(d) TERMINATION IN EVENT OF EXECUTIVE'S DISABILITY. If (1) the

Company terminates Executive's employment with the Company and its

affiliates during the Initial Term or the Renewal Term (if any) pursuant

to Section 6(a)(2), (2) Executive signs and does not revoke a waiver and

release agreement substantially similar to Exhibit B, and (3) Executive

continues to comply with Executive's ongoing obligations under Section 11

and 12 of this Agreement, then, subject to Section 7(h), the Company shall

pay Executive the severance described in accordance with Section 7(e).

Such severance payments shall be in addition to payment by the Company of

all previously unpaid amounts (including, without limitation, salary,

bonuses, equity plans, incentive compensation plans, fringe benefits, and

expense reimbursements) owed to Executive under this Agreement with

respect to periods prior to the Termination Date.

(e) DISABILITY SEVERANCE. If the Company is required to pay

Executive severance by the express terms of Section 7(d), the Company

shall pay Executive the following as severance:

(1) Executive's Base Salary at the highest rate in effect

prior to the Termination Date as salary continuation for the

duration of the Severance Period, payable in equal monthly

installments pursuant to the Company's customary payroll practices

for executive salaries; provided, however, that, at the option of

the Company, the amounts payable under this Section 7(e) may be paid

by the Company in one lump sum.

(2) Executive, Executive's spouse, and Executive's dependents

will continue to be eligible for coverage under the Company's group

health plan or any successor plan on the same basis as active

executive employees of the Company, their spouses, and their

dependents for the duration of the Severance Period. Executive's

portion of the premium for such coverage shall be withheld from the

salary continuation payments described in paragraph (1) immediately

above or, if salary continuation has been paid in a lump sum,

Executive shall reimburse the Company for Executive's portion of the

premium on a monthly basis. If and when group health coverage under

another employer's plan is made available to Executive, Executive's

spouse, or Executive's dependents, the Company's obligations under

this paragraph will cease with respect to each

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person to whom such coverage is made available, notwithstanding that

such person may not in fact become covered under such other

employer's plan.

(3) An amount equal to the sum of amounts paid or payable to

Executive as bonuses awarded by the Company for the calendar year

prior to the calendar year in which the Termination Date occurs.

This amount will be payable in one lump sum to Executive within 30

days after the end of the Severance Period.

(4) Executive shall become 100% vested in all of the shares of

restricted stock granted to Executive under the Mariner Energy, Inc.

Equity Participation Plan to the extent Executive is less than 100%

vested in such shares as of the Termination Date.

(5) Executive shall become 50% vested in all of the rights and

interests granted to Executive under the Company's stock and other

equity plans (other than the Mariner Energy, Inc. Equity

Participation Plan), including without limitation any stock options,

restricted stock, restricted stock units, performance units, and/or

performance shares to the extent Executive is less than 50% vested

in such award as of the Termination Date.

(6) Notwithstanding any other provision hereof, if the Company

incurs an obligation to pay severance under this Section 7(e) in

connection with termination of Executive's employment after the

consummation of an initial public offering by the Company, then,

subject to Section 7(h), Executive shall be entitled to receive the

amounts specified in Section 8(a) in lieu of the amounts specified

in Sections 7(e)(1) and 7(e)(3).

(7) Payments under this Section 7(e) shall be in lieu of any

severance benefits otherwise due to Executive under any severance

pay plan or program maintained by the Company that covers its

employees or executives generally.

(f) "CAUSE" means the occurrence or existence, prior to occurrence

of circumstances constituting Good Reason, of any of the following events:

(1) Executive's gross negligence or material mismanagement in

performing, or material failure or inability (excluding as a result

of death or Disability) to perform, Executive's duties and

responsibilities as described herein or as lawfully directed by the

Board or the Chief Executive Officer of the Company;

(2) Executive's having committed any act of willful misconduct

or material dishonesty against the Company or any of its affiliates

(including theft, misappropriation, embezzlement, forgery, fraud,

falsification of records, or misrepresentation) or any act that

results in, or could reasonably be expected to result in, material

injury to the reputation, business or business relationships of the

Company or any of its affiliates;

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(3) Executive's material breach of this Agreement, any

fiduciary duty owed by Executive to the Company or its affiliates,

or any written workplace policies applicable to Executive (including

the Company's code of conduct and policy on workplace harassment)

whether adopted on or after the date of this Agreement;

(4) Executive's having been convicted of, or having entered a

plea bargain, a plea of nolo contendre or settlement admitting guilt

for, any felony, any crime of moral turpitude, or any other crime

that could reasonably be expected to have a material adverse impact

on the Company's or any of its affiliates' reputations; or

(5) Executive's having committed any material violation of any

federal law regulating securities (without having relied on the

advice of the Company's attorney to perform required acts on the

Chief Executive Officer's behalf) or having been the subject of any

final order, judicial or administrative, obtained or issued by the

Securities and Exchange Commission, for any securities violation

involving fraud, including, for example, any such order consented to

by Executive in which findings of facts or any legal conclusions

establishing liability are neither admitted nor denied.

(g) "GOOD REASON" means the occurrence, prior to occurrence of

circumstances constituting Cause, of any of the following events without

Executive's consent:

(1) Any material breach by the Company of this Agreement,

provided that Executive provides the Board written notice of such

breach within 90 days from the first date that he is aware, or

reasonably should be aware, of such breach and such breach is not

remedied within 30 days of the Board's receipt of such written

notice;

(2) Any requirement by the Company that Executive relocate

outside of the Houston metropolitan area;

(3) Failure of any successor to assume this Agreement not

later than the date as of which it acquires substantially all of the

equity, assets or businesses of the Company;

(4) Any material reduction in Executive's title,

responsibilities, or duties or the Board directs Executive to cease

reporting to the President or Chief Executive Officer of the

Company; or

(5) The assignment to Executive of any duties materially

inconsistent with his duties as Chief Operating Officer of the

Company.

(h) LATER DETERMINATIONS. Notwithstanding any other provision of

this Agreement, if Executive's employment with the Company is terminated

s

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