AMENDED EXECUTIVE EMPLOYMENT
AGREEMENT
An executive
employment agreement was made and entered into effective as of
March 5, 2008, between PetroQuest Energy, Inc., a Delaware
corporation having its principal executive office at 400 E. Kaliste
Saloom Road, Suite 6000, Lafayette, Louisiana 70508
(hereinafter referred to as the “Company”), and W. Todd
Zehnder (hereinafter referred to as the “Employee”)
(the “Agreement”). The Agreement is hereby amended
effective December 31, 2008 (hereinafter the “Amended
Agreement”) as follows:
WHEREAS, the
Company and the Employee terminated that certain Severance
Agreement dated as of December 6, 2006 (the “Prior
Agreement”) and the Company and the Employee entered into the
Agreement on the Original Effective Date; and
WHEREAS, the
Company and the Employee desire to amend the Agreement to comply
with Code Section 409A.
NOW, THEREFORE,
for and in consideration of the mutual promises, covenants and
obligations contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Employee hereby agree as
follows:
1. Certain
Definitions . As used in this Amended Agreement, the following
terms have the meanings prescribed below:
Affiliate
is used in this Amended Agreement to define a relationship to a
person or entity and means a person or entity who, directly or
indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such person or
entity.
Annual
Bonus shall have the meaning assigned thereto in
Section 4.2 hereof.
Base
Salary shall have the meaning assigned thereto in
Section 4.1 hereof.
Beneficial
Owner shall have the meaning assigned thereto in
Rule 13(d)-3 under the Exchange Act; provided, however, and
without limitation, that any individual, corporation, partnership,
group, association or other person or entity that has the right to
acquire any Voting Stock at any time in the future, whether such
right is (a) contingent or absolute or (b) exercisable
presently or at any time in the future, pursuant to any agreement
or understanding or upon the exercise or conversion of rights,
options or warrants, or otherwise, shall be the Beneficial Owner of
such Voting Stock.
Cause
shall have the meaning assigned thereto in Section 5.3
hereof.
Code shall
mean the Internal Revenue Code of 1986, as amended, and the
applicable rules, notices and regulations thereunder, as amended
from time to time.
Common
Stock means the Company’s common stock, par value $.001
per share.
Company
means PetroQuest Energy, Inc., a Delaware corporation, the
principal executive office of which is located at 400 E. Kaliste
Saloom Road, Suite 6000, Lafayette, Louisiana
70508.
Confidential
Information shall have the meaning assigned thereto in
Section 8.2 hereof.
Date of
Termination means the earliest to occur of (i) the date of
the Employee’s death, (ii) the date on which the
Employee terminates this Amended Agreement and his employment for
any reason or (iii) the date of receipt of the Notice of
Termination, or such later date as may be prescribed in the Notice
of Termination in accordance with Section 5.5 hereof;
provided, however, notwithstanding anything herein to the contrary,
for the purposes of Code Section 409A, with respect to any
amounts payable hereunder that are deferred compensation subject to
Code Section 409A or that are intended to be exempt from Code
Section 409A that require Employee’s termination, the
Employee’s termination shall mean a “Separation from
Service” within the meaning of Code
Section 409A.
Disability
means an illness or other disability which prevents the Employee
from discharging his responsibilities under this Amended Agreement
for a period of 180 consecutive calendar days, or an aggregate of
180 calendar days in any calendar year, during the Employment
Period, all as determined in good faith by the Board of Directors
of the Company (or a committee thereof).
Employee
means W. Todd Zehnder, whose business address is 400 E. Kaliste
Saloom Road, Suite 6000, Lafayette, Louisiana
70508.
Employment
Period shall have the meaning assigned thereto in
Section 3 hereof.
Exchange
Act means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Securities and
Exchange Commission thereunder, all as in effect from time to time
during the Employment Period.
Initial
Term shall have the meaning assigned thereto in Section 3
hereof.
Notice of
Termination shall have the meaning assigned thereto in
Section 5.5 hereof.
Original
Effective Date means March 5, 2008.
Termination
Agreement means the Termination Agreement dated the Original
Effective Date between the Company and the Employee, as amended
effective December 31, 2008 by the Amended Termination
Agreement and as amended from time to time.
Voting
Stock means all outstanding shares of capital stock of the
Company entitled to vote generally in an election of directors;
provided, however, that if the Company has shares of Voting Stock
entitled to more or less than one vote per share, each reference to
a proportion of the issued and outstanding shares of Voting Stock
shall be deemed to refer to the proportion of the aggregate votes
entitled to be cast by the issued and outstanding shares of Voting
Stock.
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Without
Cause shall have the meaning assigned thereto in
Section 5.4 hereof.
2. General
Duties of Company and Employee .
2.1 The Company
agrees to employ the Employee, and the Employee agrees to accept
employment by the Company and to serve the Company as Executive
Vice President, Chief Financial Officer and Treasurer. The
authority, duties and responsibilities of the Employee shall be
consistent with those of executive officers in a public company
with a similar title, and such other or additional duties as may
from time to time be assigned to the Employee by the Board of
Directors (or a committee thereof) and agreed to by the Employee.
While employed hereunder, the Employee shall devote full time and
attention during normal business hours to the affairs of the
Company and use his best efforts to perform faithfully and
efficiently his duties and responsibilities. The Employee may
(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 such activities
do not significantly interfere with the performance of the
Employee’s duties and responsibilities.
2.2 The Employee
agrees and acknowledges that he owes a fiduciary duty of loyalty,
fidelity and allegiance to act at all times in the best interests
of the Company and to do no act and to make no statement, oral or
written, which would injure Company’s business, its interests
or its reputation.
2.3 The Employee
agrees to comply at all times during the Employment Period with all
applicable policies, rules and regulations of the Company,
including, without limitation, the Company’s code of ethics
and the Company’s policy regarding trading in the Common
Stock, as each is in effect from time to time during the Employment
Period.
3. Term
. Unless sooner terminated pursuant to other provisions hereof, the
Employee’s period of employment under this Amended Agreement
shall be a period of three years beginning on the Original
Effective Date (the “Initial Term”). After the
expiration of the Initial Term, the Employee’s period of
employment under this Amended Agreement shall be automatically
renewed for successive one-year terms on each anniversary of the
Original Effective Date (the Initial Term and any and all renewals
thereof are referred to herein collectively as the
“Employment Period”).
4.
Compensation and Benefits .
4.1 Base
Salary . As compensation for services to the Company, the
Company shall pay to the Employee until the Date of Termination an
annual base salary of $265,000, including any increases thereon
from time to time (the “Base Salary”). The Board of
Directors (or a committee thereof), in its discretion, may increase
the Base Salary based upon relevant circumstances. The Base Salary
shall be payable in equal semi-monthly installments or in
accordance with the Company’s established policy, subject
only to such payroll and withholding deductions as may be required
by law and other deductions applied generally to employees of the
Company for insurance and other employee benefit plans.
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4.2 Bonus .
In addition to the Base Salary, the Employee may be awarded, for
each fiscal year until the Date of Termination, an annual bonus
(either pursuant to a bonus or incentive plan or program of the
Company or otherwise) in an amount to be determined by the Board of
Directors (or a committee thereof), in its sole discretion (the
“Annual Bonus”). Each such Annual Bonus shall be
payable at a time to be determined by the Board of Directors (or a
committee thereof) in its sole discretion.
4.3 Incentive,
Savings and Retirement Plans . Until the Date of Termination,
the Employee shall be eligible to participate in and shall receive
all benefits under all executive incentive, savings and retirement
plans (including 401(k) plans) and programs currently maintained or
hereinafter established by the Company for the benefit of its
executive officers and/or employees.
4.4 Welfare
Benefit Plan . Until the Date of Termination, the Employee
and/or the Employee’s family, as the case may be, shall be
eligible to participate in and shall receive all benefits under
each welfare benefit plan of the Company currently maintained or
hereinafter established by the Company for the benefit of its
employees. Such welfare benefit plans may include, without
limitation, medical, dental, disability, group life, accidental
death and travel accident insurance plans and programs.
4.5
Reimbursement of Expenses . The Employee may from time to
time until the Date of Termination incur various business expenses
customarily incurred by persons holding positions of like
responsibility, including, without limitation, travel,
entertainment and similar expenses incurred for the benefit of the
Company. Subject to the Company’s policy regarding the
reimbursement of such expenses as in effect from time to time
during the Employment Period, which does not necessarily allow
reimbursement of all such expenses, the Company shall reimburse the
Employee for such expenses from time to time, at the
Employee’s request, and the Employee shall account to the
Company for all such expenses by providing reasonable written
documentation thereof to the Company and all such expenses shall be
paid promptly, but in no event, later than 2
1 / 2
months after the end of
Employee’s tax year in which such expenses were
incurred.
4.6 Life
Insurance . The Company shall provide to the Employee life
insurance on terms that are mutually agreeable to the Company and
the Employee.
5.1 Death .
This Amended Agreement shall terminate automatically upon the death
of the Employee.
5.2
Disability . The Company may terminate this Amended
Agreement and Employee’s employment, upon written notice to
the Employee delivered in accordance with Sections 5.5 and
12.1 hereof, upon the Disability of the Employee.
5.3 Cause .
The Company may terminate this Amended Agreement and
Employee’s employment, upon written notice to the Employee
delivered in accordance with Sections 5.5 and 12.1 hereof, for
Cause. For purposes of this Amended Agreement, “Cause”
means (i) the conviction of the Employee of a felony (which,
through lapse of time or otherwise, is not subject to appeal), (ii)
the Employee’s willful refusal, without proper legal cause,
to perform his duties and responsibilities as contemplated in this
Amended Agreement or (iii) the Employee’s willful
engaging in activities which would (A) constitute a breach of
any term of this Amended Agreement, the Company’s code of
ethics, the Company’s policies regarding trading in the
Common Stock or reimbursement of business expenses or any other
applicable policies, rules or regulations of the Company, or
(B) result in a material injury to the business, condition
(financial or otherwise), results of operations or prospects of the
Company or its Affiliates (as determined in good faith by the Board
of Directors of the Company or a committee thereof).
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5.4 Without
Cause . The Company may terminate this Amended Agreement
Without Cause and Employee’s employment, upon written notice
to the Employee delivered in accordance with Sections 5.5 and 12.1
hereof. For purposes of this Amended Agreement, the Employee will
be deemed to have been terminated “Without Cause” if
the Employee is terminated by the Company for any reason other than
Cause, Disability or death.
5.5 Notice of
Termination . Any termination of this Amended Agreement and
Employee’s employment by the Company for Cause, Without Cause
or as a result of the Employee’s Disability shall be
communicated by Notice of Termination to the Employee given in
accordance with this Amended Agreement. For purposes of this
Amended Agreement, a “Notice of Termination” means a
written notice which (i) indicates the specific termination
provision in this Amended Agreement relied upon, (ii) sets
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee’s employment
under the provision so indicated and (iii) specifies the
termination date, if such date is other than the date of receipt of
such notice (which termination date shall not be more than
15 days after the giving of such notice).
6.
Obligations of Company upon Termination .
6.1 Cause or by
Employee . If this Amended Agreement shall be terminated either
by the Company for Cause or by the Employee for any reason, the
Company shall pay to the Employee, in a lump sum in cash within
30 days after the Date of Termination, the aggregate of the
Employee’s Base Salary (as in effect on the Date of
Termination) through the Date of Termination, if not theretofore
paid, and, in the case of compensation previously deferred by the
Employee, all amounts of such compensation previously deferred
shall be paid in accordance with the plan documents governing such
deferrals. All other obligations of the Company and rights of the
Employee hereunder shall terminate effective as of the Date of
Termination.
6.2 Death or
Disability .
(a) Subject to the
provisions of this Section 6.2, if this Amended Agreement is
terminated as a result of the Employee’s death or
Employee’s termination in connection with a Disability, the
Company shall pay to the Employee or his estate, in equal
semi-monthly installments, the Employee’s Base Salary (as in
effect on the Date of Termination) for 12 months after such Date of
Termination. The Company may purchase insurance (which shall be
owned by the Company) to cover all or any part of the obligation
contemplated in the foregoing sentence, and the Employee agrees to
submit to a physical examination to facilitate the procurement of
such insurance.
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(b) Whenever
compensation is payable to the Employee hereunder during a period
in which he is partially or totally disabled, and such Disability
would (except for the provisions hereof) entitle the Employee to
Disability income or salary continuation payments from the Company
according to the terms of any plan or program presently maintained
or hereafter established by the Company but prior to
Employee’s Disability that is a bona fide disability plan
under Treasury Regulation 1.409A-1(a)(5), the Disability
income or salary continuation paid to the Employee pursuant to any
such plan or program shall be considered a portion of the payment
to be made to the Employee pursuant to this Section 6.2 and
shall not be in addition hereto. If Disability income is payable
directly to the Employee by an insurance company under the terms of
an insurance policy paid for by the Company that is a bona fide
disability plan under Treasury Regulation 1.409A-1(a)(5), the
amounts paid to the Employee by such insurance company shall be
considered a portion of the payment to be made to the Employee
pursuant to this Section 6.2 and shall not be in addition
hereto.
6.3 Without
Cause . If this Amended Agreement shall be terminated by the
Company Without Cause:
(a) the Company
shall pay to the Employee, in a lump sum in cash within
30 days after the Date of Termination, the aggregate of the
following amounts:
(1) if not
theretofore paid, the Employee’s Base Salary (as in effect on
the Date of Termination) through the Date of Termination;
and
(2) in the case of
compensation previously deferred by the Employee, all amounts of
such compensation previously deferred and not yet paid by the
Company shall be paid in accordance with the plan documents
governing such deferrals;
(b) the Company
shall, promptly upon submission by the Employee of supporting
documentation, pay or reimburse to the Employee any costs and
expenses (including moving and relocation expenses) paid or
incurred by the Employee which would have been payable under
Section 4.5 of this Amended Agreement if the Employee’s
employment had not terminated, to be paid no later than 2
1 / 2
months after the end of the calendar
year in which such expenses were incurred; and
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(c) for the
12-month period commencing on the Date of Termination, the Company
shall pay the Company portion of any premiums and shall otherwise
continue benefits to the Employee and/or the Employee’s
family in accordance with the Company’s normal pay
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