EX-99.(E)(21) 16 d92350ex99-e21.txt EMPLOYMENT AGREEMENT - ED BUTLER EXHIBIT (e)(21) EMPLOYMENT AGREEMENT THIS AGREEMENT is made and entered into as of this 1st day of January, 2001 by and between DevX Energy, Inc., having its principal executive offices at 13760 Noel Road, Suite 1030, Dallas TX 75240-7336, and V. Ed Butler having a mailing address at 4820 Windmill Lane, Flower Mound, Texas, 75028. WHEREAS: a. The Employee has extensive knowledge of and experience in the oil and gas industry in the United States and the geographic areas in which the Company and subsidiaries carry on business. b. The Employee is desirous of being employed by the Company and the Company is desirous of employing the Employee upon the terms herein provided. c. The Company has determined that it is in its best interests to provide the Employee with compensation and benefits under the provisions of a contract of employment that will assure the Company that it will have the full attention and dedication of the Employee notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below), and that will diminish the inevitable distraction of the Employee by virtue of the personal uncertainties and risks created by the absence of a contract of employment. d. The Company wishes to protect the Employee from loss of compensation and benefits if his continued employment with the Company is no longer possible through no fault of the Employee. NOW, THEREFORE, in consideration of these premises and the mutual covenants herein contained, the Company and the Employee hereby agree as follows: 1. DEFINITIONS. The capitalized terms defined in this Section shall have the meanings assigned to them in this Section whether the particular term is used herein in the singular or in the plural. 1.1. "Affiliate" has the meaning set out in Rule 405 promulgated under the Securities Act of 1933, as amended. 1.2. "Base Salary" has the meaning set in Schedule B as same may be amended from time to time. 1.3. "Beneficial Ownership" has the meaning set out in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended. 1.4. "Bonus" has the meaning set out in paragraph B of Schedule A 1.5. "Cause" means: 1.5.1. the willful and continued failure by the Employee to substantially perform his duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness), where such failure has not been remedied within a reasonable time after having received a written demand for substantial performance from the Company which specifically identified the manner in which the Company believed that the Employee had not substantially performed his duties, provided that no act, or failure to act, on the Employee's part shall be considered "willful" unless done, or omitted to be done, by him not in good faith and without reasonable belief that his action or omission was not in the best interest of the Company, or 1.5.2. a good faith determination by the Company that the Employee is guilty of illegal substance abuse, moral turpitude, fraud upon the Company or embezzlement provided that no determination of illegal substance abuse or moral turpitude may be made against the Employee without giving the Employee notice of the allegations against him in reasonable detail and giving him an opportunity to present, not less than 30 calendar days later, such evidence or make such submissions in respect thereof to the Company as the Employee deems advisable. 1.5.3. the final, non-appealable felony conviction of the Employee. 1.6. "Change of Control" means any of the following: 1.6.1. any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company's common stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company's common stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger; 1.6.2. any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company; 1.6.3. any approval by the stockholders of the Company of any plan or proposal for the liquidation or dissolution of the Company; 1.6.4. the cessation of control (by virtue of their not constituting a majority of directors) of the Company's Board of Directors by the Continuing Directors. 1.6.5. (A) the acquisition of beneficial ownership of an aggregate of 15% of the voting power of the Company's outstanding voting securities by any person or group who Beneficially Owned less than 10% of the voting power of the Company's outstanding voting securities on the Effective Date, (B) the acquisition of Beneficial Ownership of an additional 5% of the voting power of the Company's outstanding voting securities by any person or group who Beneficially Owned at least 10% of the voting power of the Company's outstanding voting securities on the Effective Date, or (C) the execution by the Company and a stockholder of a contract that by its terms grants such stockholder (in its, hers or his capacity as a stockholder) or such stockholder's Affiliate including, without limitation, such stockholder's nominee to the Board of Directors (in its, hers or his capacity as an Affiliate of such stockholder), the right to veto or block decisions or actions of the Board of Directors; provided, however, that notwithstanding the foregoing, the events described in items (A), (B) or (C) above shall not constitute a Change in Control hereunder if the acquiring person or group is (aa) a trustee or other fiduciary holding securities under an employee benefit plan of the Company and acting in such capacity, (bb) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of voting securities of the Company and, provided further, that none of the following shall constitute a Change in Control: (x) the right of the holders of any voting securities of the Company to vote as a class on any matter or (y) any vote required of disinterested or unaffiliated directors or stockholders including, without limitation, pursuant to Section 144 of the Delaware General Corporation Law or Rule 16b-3 promulgated pursuant to the Securities Exchange Act of 1934; or 1.6.6. subject to applicable law, in a Chapter 11 bankruptcy proceeding, the appointment of a trustee or the conversion of a case involving the Company to a case under Chapter 7; and 1.6.7. notwithstanding anything in this Agreement to the contrary, the transactions contemplated by the Pre-Effective Amendment No. 1 to the Company's Registration Statement on form S-2 filed with the Securities & Exchange Commission on October 6, 2000 shall not be considered a Change of Control hereunder. 1.7. "Continuing Directors" the individuals who were directors at Effective Date or become directors thereafter but whose election was approved by a vote of at least two-thirds of the directors who were directors as of the Effective Date or whose own election was previously so approved; 1.8. "Company" means DevX Energy, Inc. a company incorporated under the laws of the state of Nevada. 1.9. "Company Group" means the Company, DevX Energy, Inc., a Delaware corporation, DevX Operating Company, Corrida Resources, Inc., and any other entity that directly or indirectly controls, is controlled by, or is under common control with the Company or such one or more of the foregoing as the context may require. 1.10. "Confidential Information" means all written, computer readable or other tangible forms of information, documents, memoranda, or other materials prepared by or on behalf of or pertaining to the Company Group and the business, properties and assets thereof including, without limitation, employee lists, production reports, reserve reports, exploration targets, work-over programs, capital expenditures, proposed or planned acquisitions or divestments, performance reports, plans, studies, projections, methods, designs, investigative or production techniques at any time used, developed, investigated, made or sold by or on behalf of the Company Group (whether or not by the Employee), before or during the term of this Agreement, that are maintained as confidential by the Company Group or any part thereof but does not include information that is readily available to the public or that was known to the Employee prior to the Effective Date (provided that the onus to establish that the information was not Confidential Information as defined in this Agreement shall be on the Employee). 1.11. "Date of Termination" means the date on which the Company notifies the Employee of such termination or the date on which the Employee notifies the Company that he is voluntarily resigning as the case may be, provided that if the Employee's employment is terminated by reason of death, the Date of Termination shall be the date of death of the Employee and provided further that if a Change of Control occurs within 30 days of the date on which the Company notifies the Employee that his employment has been terminated and the Employee can reasonably demonstrate that such termination arose in the contemplation of a Change of Control, then the Date of Termination shall be deemed to be the day following the Change of Control. 1.12. "Disability" means a condition of ill health or physical or mental incapacity, that, in the good faith opinion of the Compensation Committee of the Company's Board of Directors, and, notwithstanding the reasonable accommodations made by the Company, renders the Employee materially unable or unwilling to perform his duties under this Agreement, for a period of not less than 120 days within any 12-month period irrespective of whether or not all or any such 120 days are consecutive. 1.13. "Effective Date" means January 1, 2001. 1.14. "Employment Period" has the meaning specified therefore in Section 4. 1.15. "Employee" means V. Ed Butler. 1.16. "Good Reason" means any of the following: 1.16.1. Without his express written consent, the assignment to the Employee of any duties materially inconsistent with his positions, duties, responsibilities and status with the Company as of the Effective Date, a substantial reduction in his reporting responsibilities, titles or offices as of the Effective Date as the same may be increased from time to time, or any removal of the Employee from or any failure to re-elect the Employee to any of such positions, except as such removal or failure arises in connection with the termination of his employment for Cause, Disability or as a result of his death or by the Employee other than for Good Reason; 1.16.2. A reduction by the Company in the Employee's Base Salary as in effect at the time of the reduction where such reduction is not in proportion to a simultaneous reduction in the Base Salary of the Employee's peers; 1.16.3. The failure by the Company to continue in effect any benefit or compensation plan (including but not limited to any stock option plan, pension plan or, health and accident plan) in which the Employee from time to time participates (or plans providing substantially similar benefits, and whether by or through the Company or another member of the Company Group), the taking of any action by the Company which would adversely affect the Employee's participation in or materially reduce his benefits under any of such plans or deprive him of any material fringe benefit enjoyed by him, or the failure by the Company to provide the Employee with the number of paid vacation days to which he is then entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy in effect immediately prior to the Effective Date except for such changes in benefits that affect all of the Employee's peers and do not result in a proportionately greater reduction in the rights of or benefits to the Employee as compared with the Employee's peers; 1.16.4. Any failure of the Company to obtain the assumption of, or the agreement to perform, this Agreement by any successor as contemplated in Section 14.1 hereof; 1.16.5. Any purported termination of the Employee's employment by the Company which is not effected pursuant to Section 6.6.1 hereof; 1.16.6. Neither the decision nor the notification by the Company that it does not intend to extend the Employment Period shall be considered to be Good Reason provided that the decision not to extend was taken in good faith. 1.17. "Notice of Termination" means a written notice which indicates the specific termination provision in this Agreement relied upon, and, to the extent applicable, 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. 1.18. "Option Plan" means the 1997 Incentive Equity Plan of the Company as same may be amended or replaced from time to time. 1.19. "Target Bonus" has the meaning set out in Schedule B as same may be amended from time to time. 2. EMPLOYMENT. Upon the terms and subject to the conditions contained in this Agreement, the Employee agrees to provide full-time services for the Company during the Employment Period. The Employee agrees to devote his best efforts to the business of the Company, and shall perform his duties in a diligent, trustworthy and business-like manner, all for the purpose of advancing the business of the Company. 3. DUTIES. The Employee shall have the position and title of Vice President, Asset Management and shall have the duties customarily attendant to that position and as set more particularly set out in Schedule B hereto. During the Employment Period, the Employee's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those set forth in Schedule B. During the Employment Period, and excluding any periods of vacation and sick leave to which the Employee is entitled, the Employee agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Employee hereunder, to use the Employee's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Employee to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (C) manage personal investments, so long as such activities do not create a conflict of interest with the Company's affairs or significantly interfere with the performance of the Employee's responsibilities as an employee of the Company in accordance with this Agreement. 4. EMPLOYMENT PERIOD. The employment of the Employee by the Company as provided in Paragraph 2 shall be for the period commencing on January 1, 2001 through and ending on December 31, 2001 (the "EMPLOYMENT PERIOD") unless earlier terminated pursuant to the provisions of Section 6. 5. SALARY AND BENEFITS. The salary and benefits of the Employee hereunder are as set forth on Schedules A & B attached hereto. 6. TERMINATION OF EMPLOYMENT. Subject to the terms of this Agreement, the Company may terminate the employment of the Employee prior to the expiration of the Employment Period at any time as it deems appropriate. 6.1. Termination Without Cause. If, during the Employment Period, the Employee's employment is terminated by the Company Without Cause, or by the Employee for Good Reason, the Company shall have no further obligation to make any payment or extend any benefit to the Employee, except that Company shall pay the Employee, in a lump sum in cash within 30 days after the Date of Termination, an amount equal to the sum of: 6.1.1. eight (8) month's Base Salary at the rate in effect immediately prior to the termination; 6.1.2. If, at the Date of Termination, no bonus has been declared by the Board as payable to the Employee in respect of the fiscal year in which termination occurs, the Target Bonus established for the Employee with respect to the year in which the termination occurs, prorated to the Date of Termination; 6.1.3. Any accrued but unpaid salary and bonuses; and 6.1.4. The cash equivalent of unvested options as required by Section 6.6.3 hereof. 6.2. Termination After a Change of Control. If, during the Employment Period, the Employee's employment is terminated pursuant to Section 6.1 and the Date of Termination is within the twelve (12) month period following a Change of Control, the Company shall pay to the Employee, instead of the amounts provided in 6.1.1 and 6.1.2, an amount that is equal to the sum of twelve (12) month's Base Salary, at the rate in effect immediately prior to the Date of Termination, plus the Target Bonus established for the Employee with respect to the year in which termination occurs. 6.3. Voluntary Resignation or Termination for Cause. If, during the Employment Period, the Employee shall voluntarily terminate his employment for other than Good Reason or if the Company shall discharge the Employee for Cause, the Company shall have no further obligation to make any payment or extend any benefit to the Employee except that the Company shall pay the Employee accrued but unpaid salary, bonuses and benefits payable pursuant to Section 5 hereof through the Date of Termination. 6.4. Termination for Disability. If, during the Employment Period, the Company terminates this Agreement for Disability, the Company shall have no further obligation to make any payment or extend any benefit to the Employee except that the Company shall pay to the Employee, or his legal representative as the case may be, all accrued but unpaid salary and bonuses, if any, provided that if at the Date of Termination for Disability, no bonus has been declared by the Board as payable to the Employee in respect of the fiscal year in which such termination occurs, the Company shall pay the Target Bonus established for the Employee with respect to such year, prorated to the Date of Termination. 6.5. Death of the Employee. If the Employee dies prior to the end of Employment Period, the Employee's employment and other obligations under this Agreement shall automatically terminate and the Company shall have no further obligation to make any payment or extend any benefit to the Employee as of the end of the month in which the Employee's death occurs; provided that the Company shall pay to the Employee's estate, as soon as practicable, all accrued and unpaid salary and bonuses, if any, provided further that, if no bonus has been declared for the year in which death occurred, the Company shall pay the Target Bonus established for the Employee in respect of such year prorated to the Date of Termination. 6.6. General Termination Provisions. 6.6.1. Notice of Termination. Any termination by the Company or by the Employee shall be communicated by Notice of Termination to the other party thereto given in accordance with Section 14.3 hereof. The failure by the Employee or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Disability shall not render the Notice of Termination ineffective or waive any right of the Employee or the Company hereunder or preclude the Employee or the Company from asserting such fact or circumstance in enforcing the Employee's or the Company's rights hereunder. 6.6.2. Employee Benefits Payable on Termination. Except in the case where the Employee's employment is terminated for Cause or the Employee voluntarily terminates his employment for other than Good Reason and, notwithstanding anything in this Agreement to the contrary, the Company shall maintain in full force and effect to the end of the period referred to in Section 6.1.1 or 6.2, whichever is applicable, for the continued benefit of the Employee and, if applicable, the Employee's spouse and children, the employee benefits set forth in Item G of Schedule A attached hereto that he was entitled to receive immediately prior to the Date of Termination (subject to the general terms and conditions applicable at such time and from time to time of the plans and programs under which he receives such benefits). 6.6.3. Stock Options. Except in the case where the Employee's employment is terminated for Cause or the Employee voluntarily terminates his employment for other than Good Reason and notwithstanding anything in this Agreement to the contrary, any unvested stock options previously issued to the Employee shall become vested in the Employee, or his estate as the case may be, immediately upon receipt of a Notice of Termination provided that, if the Option Plan under which the options were granted prohibits such immediate vesting, the Company shall pay the cash equivalent of the aggregate positive spread between the exercise price of all such unvested options and the highest closing price of the Company's common stock during the 10 trading days preceding the Termination Date. 6.6.4. Mitigation of Amounts Payable Hereunder. The Employee shall not be required to mitigate the amount of any payment provided for in this Section 6 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 6 be reduced by any compensation earned by the Employee as the result of employment by another employer after the Date of Termination, or otherwise. 6.6.5. Complete Payment. The payments and other benefits to be made or to be extended to the Employee under the provisions of this Section 6 upon termination of the Employee's employment shall be in complete satisfaction of any and all payments that would otherwise be due to the Employee had he remained employed by the Company during the remainder of the Employment Period and the Company shall have no further obligation to make any payment or extend any benefit to the Employee under Sections 4, 5 and 6 of this Agreement or otherwise upon or after such termination other than as provided in this Section 6. 7. INDEMNITY. The Company shall indemnify, to the full extent authorized by law, as same may be amended from time to time, the Employee and his heirs, Employees, administrators and legal representatives, from any and all suits, claims, actions, demands or proceedings of any kind to which the Employee is named or in respect of which he may be or become liable by reason of the fact that he is or was a director, officer or employee of any member of the Company Group or by reason of the fact that he is or was, at the Company's request, serving as the representative of the Company or any member of the Company Group on any other corporation, trust, joint venture or enterprise not part of the Company Group. 8. CONFIDENTIAL INFORMATION. The Employee recognizes and acknowledges that he requires access to Confidential Information to perform his duties hereunder and such information constitutes valuable, special and unique property of the Company Group. The Company agrees to provide Confidential Information immediately upon the execution of this Agreement and thereafter at such time or times as are or may become required by the needs the position of the Employee and his responsibilities within the Company. The Employee agrees that he shall not at any time, either during or subsequent to the term of this Agreement, disclose to others, use, copy or permit to be copied, except in pursuance of his duties for and on behalf of the Company, it successors, assigns or nominees, any Confidential Information of any member of the Company Group (regardless of whether developed by the Employee) without the prior written consent of the Company, provided however, that this provision shall not prohibit the Employee from disclosing Confidential Information in compliance with a court order. 9. DELIVERY OF DOCUMENTS UPON TERMINATION. The Employee shall deliver to the Company or its designee at the termination of his employment all correspondence, memoranda, notes, records, drawings, sketches, plans, customer lists, product compositions, and other documents and all copies thereof, made, composed or received by the Employee, solely or jointly with others, that are in the Employee's possession, custody, or control at termination and that are related in any manner to the past, present, or anticipated business or any member of the Company Group, except for items owned by the Employee at the Effective Date. In this regard, the Employee hereby grants and conveys to the Company all right, title and interest in and to, including without limitation, the right to possess, print, copy, and sell or otherwise dispose of, any reports, records, papers, summaries, photographs, drawings or other documents, and writings, and copies, abstracts or summaries thereof, that may be prepared by the Employee or under his direction or that may come into his possession in any way during the term of his employment with the Company that relate in any manner to the past, present or anticipated business of any member of the Company Group. 10. FURTHER ACTS. At the request of the Company (but without additional compensation from the Company during his employment by the Company) the Employee shall execute any and all papers and perform all lawful acts that the Company may deem necessary or appropriate to further evidence or carry out the transactions contemplated in this Agreement including, without limitation, such acts as may be necessary for the preparation, filing, prosecution, and maintenance of applications for United States letters patent and foreign letters patent, or for United States and foreign copyright, with respect to any inventions, works or other matters prepared or authored by the Employee in the course of his employment. 11. NON COMPETITION. In consideration for being given continued access to Confidential Information by the Company upon the execution of this agreement the Employee acknowledges and agrees that: 11.1. He shall not directly or indirectly engage in the business of acquiring oil and natural gas reserves and oil and natural gas production and exploitation; or any other business in which any member of the Company Group directly or indirectly engages during the term of the Agreement. This provision shall apply during the Employment Period and, for the eight month period following the termination thereof, provided, however, that the restriction in this Section 11 shall apply only to the reasonable and limited geographic area in which any member of the Company Group directly or indirectly has material operations as of the Date of Termination or expiration of this Agreement whichever comes first. For purposes of this Section 11, the Employee shall be deemed to engage in a business if he directly or indirectly, engages or invests in, owns, manages, operates, controls or participates in the ownership, management, operation or control of, is employed by, associated or in any manner connected with, or renders services or advice to, any business engaged in acquiring oil and natural gas reserves and oil and natural gas production and exploitation; provided, however, that the Employee may invest in the securities of any enterprise (but without otherwise participating in the activities of such enterprise) if (x) such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934 and (y) the Employee does not have Beneficially Ownership of more than 5% of the outstanding capital stock of such enterprise; 11.2. If a court of competent jurisdiction determines that the length of time or any other restriction, or portion thereof, set forth in this Section 11 is overly restrictive and unenforceable, the court may reduce or modify such restrictions to those which it deems reasonable and enforceable under the circumstances, and as so reduced or modified, the parties hereto agree that the restrictions of this Section 11 shall remain in full force and effect. The Employee further agrees that if a court of competent jurisdiction determines that any provision of this Section 11 is invalid or against public policy, the remaining provisions of this Section 11 and the remainder of this Agreement shall not be affected thereby, and shall remain in full force and effect. 11.3. The geographic area in which the Company Group does business is the continental United States in scope and that the restrictions imposed by this Agreement are legitimate, reasonable and necessary to protect the investment of the Company Group in its business and the goodwill associated therewith. The Employee acknowledges that the scope and duration of the restrictions contained herein are reasonable in light of the time that the Employee has been engaged in oil and gas industry, his reputation therein and his relationship with the suppliers, customers and clients of the Company Group. The Employee further acknowledges that the restrictions contained herein are not burdensome to the Employee in light of the consideration paid therefor and the other opportunities that remain open to the Employee. Moreover, the Employee acknowledges that he has other means or opportunities available to him for the pursuit of his profession or livelihood that will not be impaired by the provisions of this Section 11. 12. REMEDIES. The Employee acknowledges that a remedy at law for any breach or attempted breach of the Employee's obligations under Sections 8 through 11 hereof may be inadequate, agrees that the Company may be entitled to specific performance and injunctive and other equitable remedies in case of any such breach or attempted breach, and further agrees to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief. The Company shall have the right to offset against amounts to be paid to the Employee pursuant to the terms hereof any amounts from time to time owing by the Employee to the Company. The termination of the Agreement pursuant to Section 4 [end of Employment Period], 6.3 [Cause] or 6.4 [disability] hereof shall not be deemed to be a waiver by the Company of any breach by the Employee of this Agreement or any other obligation owed the Company, and notwithstanding such a termination the Employee shall be liable for all damages attributable to such a breach. 13. DISPUTE RESOLUTION. Subject to the Company's right to seek injunctive relief in court as provided in Section 12 hereof, any dispute, controversy or claim arising out of or in relation to or connection to this Agreement, including without limitation any dispute as to the construction, validity, interpretation, enforceability or breach of this Agreement, shall be exclusively and finally settled by arbitration, and any party may submit such dispute, controversy or claim, including a claim for indemnification under this Section 13, to arbitration. 13.1. Selection of Arbitrators. The arbitration shall be heard and determined by one arbitrator, who shall be impartial and who shall be selected by mutual agreement of the parties. If the parties cannot agree on the sole arbitrator, then the appointing authority for the implementation of such procedure shall be the Senior United States District Judge for the Northern District of Texas, who shall appoint an independent arbitrator who does not have any financial interest in the dispute, controversy or claim. If the Senior United States District Judge for the Northern District of Texas refuses or fails to act as the appointing authority within ninety (90) days after being requested to do so, then the appointing authority shall be the Chief Employee Officer of the American Arbitration Association, who shall appoint an independent arbitrator who does not have any financial interest in the dispute, controversy or claim. All decisions and awards by the arbitration tribunal shall be made by majority vote. 13.2. Proceedings. Unless otherwise expressly agreed in writing by the parties to the arbitration proceedings: 13.2.1. The arbitration proceedings shall be held in Dallas, Texas, at a site chosen by mutual agreement of the parties, or if the parties cannot reach agreement on a location within thirty (30) days of the appointment of the last arbitrator, then at a site chosen by the arbitrators; 13.2.2. The arbitrators shall be and remain at all times wholly independent and impartial; 13.2.3. The arbitration proceedings shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as amended from time to time; 13.2.4. Any procedural issues not determined under the arbitral rules selected pursuant to item 13.2.3 above shall be determined by the law of the place of arbitration, other than those laws which would refer the matter to another jurisdiction; 13.2.5. The decision of the arbitrators shall be reduced to writing; final and binding without the right of appeal; the sole and exclusive remedy regarding any claims, counterclaims, issues or accounting presented to the arbitrators; made and promptly paid in United States dollars free of any deduction or offset, and any costs or fees incident to enforcing the award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement; 13.2.6. The award shall include interest from the date of any breach or violation of this Agreement, as determined by the arbitral award, and from the date of the award until paid in full, at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code; and 13.2.7. Judgment upon the award may be entered in any court having jurisdiction over the person or the assets of the party owing the judgment or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be. 13.3. Acknowledgment Of Parties. Each party acknowledges that by executing this Agreement he or it has voluntarily and knowingly entered into an agreement to arbitrate under this Section. 14. MISCELLANEOUS PROVISIONS. 14.1. Successors of the Company. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to the Employee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Employee to compensation from the Company in the same amount and on the same terms as the Employee would be entitled to under this Agreement had the Employee terminated his employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, "COMPANY" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 14.1 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. 14.2. Employee's Heirs, etc. The Employee may not assign his rights or delegate his duties or obligations hereunder without the written consent of the Company. This Agreement shall inure to the benefit of and be enforceable by the Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Employee should die while any amounts would still be payable to him hereunder as if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to his designee or, if there be no such designee, to his estate. 14.3. Notice. For the purposes of this Agreement, notices and all other communications provide for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement, provided that all notices to the Company shall be directed to the attention of the Chief Employee Officer of the Company with a copy to the Secretary of the Company, or to such other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 14.4. Amendment; Waiver. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Employee and such officer as may be specifically designated by the Board of Directors of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. 14.5. Invalid Provisions. Should any portion of this Agreement be adjudged or held to be invalid, unenforceable or void, such holding shall not have the effect of invalidating or voiding the remainder of this Agreement and the parties hereby agree that the portion so held invalid, unenforceable or void shall, if possible, be deemed amended or reduced in scope, or otherwise be stricken from this Agreement to the extent required for the purposes of validity and enforcement thereof. 14.6. Survival of the Employee's Obligations. Regardless of whether the Employee's employment by the Company is terminated, voluntarily or involuntarily, by the Company or the Employee, with or without Cause, the Employee's fiduciary obligations arising as a consequence of his employment and, without limiting the generality of the foregoing, the provisions of Sections 8 through 11 of this Agreement shall survive the termination of this Agreement. 14.7. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 14.8. Governing Law. This Agreement shall be governed by and construed under the laws of the State of Texas. 14.9. Captions and Gender. The use of captions and Section headings herein is for purposes of convenience only and shall not effect the interpretation or substance of any provisions contained herein. Similarly, the use of the masculine gender with respect to pronouns in this Agreement is for purposes of convenience and includes either sex who may be a signatory. 14.10. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, both written and oral, between the parties with respect to the subject matter hereof. 14.11. Employee Release. In consideration of the mutual covenants contained herein, the Employee forever and unconditionally releases and discharges the Company Group, and each member thereof and their respective owners, directors, officers, employees, assigns, representatives or agents from any and all claims, demands, complaints, or causes of action of any nature relating to or arising out of Employee's employment with any member of the Company Group prior to the Effective Date hereof including any claims arising under or relating to the contract of employment dated December 15, 1997 (the "1997 Contract"). Such release encompasses, but is not limited to any and all claims by Employee under the Age Discrimination In Employment Act, severance amounts, wages, salary, bonuses, stock options or other benefits of employment payable under the 1997 Contract and whether or not in the context of a change of control as well as any and all claims under any U.S. federal, or state tort or common law, express or implied contract or any U.S. federal, state, or local statutes but does not encompass the obligations of the parties under this Agreement. IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the date first set forth above. DEVX ENERGY, INC. (EMPLOYEE) By: /s/ EDWARD J. MUNDEN /s/ V. ED BUTLER ----------------------------------- ---------------------------- Name: Edward J. Munden Name: V. Ed Butler Title: President & Chief Executive Officer SCHEDULE A SALARY AND BENEFITS A. Base Salary. The Company shall pay the Employee during the Employment Period the Base Salary as set out in Schedule B as same may be increased from time to time. The Base Salary shall be paid by the Company in accordance with its regular payroll practices. The Company may not reduce the Employee's Base Salary at any time during the Employment Period. B. Bonus. The Company may, in its sole discretion, pay to the Employee an annual cash bonus (the "ANNUAL BONUS") of between 0% and 200% of the Employee's Target Bonus as set out in Schedule B as same may be amended from time to time. For greater certainty, it is expressly understood and agreed that the Company may, in its absolute discretion, determine that the Annual Bonus to be paid to the Employee in any particular fiscal year may be zero or otherwise less than, equal to or in excess of the Target Bonus established for such year. Any Annual Bonus that is declared but not paid by the last business day of the third month following the fiscal year end in respect of which the bonus was declared shall bear interest thereafter until paid at the greater of the Prime Rate then in effect or the highest rate then applicable under any lending agreement to which the Company is then a party. C. Annual Review. The Company shall review the Base Salary annually on or before the start of each fiscal year during the Employment Period and may amend same in accordance with this agreement as the Company deems appropriate. D. Stock Options. The Company, may in its sole discretion, grant the Employee such stock options pursuant to the Company's 1997 Incentive Equity Plan (the "PLAN"), as amended, as determined by the Company. All such Stock Options shall be subject to the terms and conditions of the Plan. E. Payment and Reimbursement of Expenses. During the Employment Period, the Company shall pay or reimburse the Employee for all reasonable travel and other expenses incurred by the Employee in performing his obligations under this Agreement in accordance with the policies and procedures of the Company for its senior Employee officers, provided that the Employee properly accounts therefor in accordance with the regular policies of the Company. F. Office Space. The Company shall, at its expense, provide an office for the Employee at the headquarters of the Company. The Company shall furnish and equip the Employee's office in accordance with the standards commensurate with a position similar to that of the Employee in a corporation of equivalent size located in the same area and engaged in the same type of business as that of the Company. G. Fringe Benefits and Perquisites. During the Employment Period, the Employee shall be entitled to participate in or receive the Benefits as set out in Schedule B and under any other plan or arrangement made available by the Company to its Employee officers including, medical, dental, disability insurance, 401K plans and other benefit plans as and when established by the Company, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements. Nothing paid to the Employee under any plan or arrangement made available to the Employee shall be deemed to be in lieu of compensation hereunder. Nothing herein shall obligate the Company to establish any such plan or arrangement not expressly required in Schedule B. H. Tax. The Company may deduct and withhold from any compensation, benefits, or amounts payable under this Agreement all federal, state, city, or other taxes as may be required pursuant to any law or governmental regulation or ruling. Schedule B to the Employment Agreement dated January 1, 2001 Between DevX Energy, Inc. (the Company") and V. Ed Butler (the "Employee") Base Salary: $125,000 per annum Target Bonus: 15% of Base Salary Duties and Responsibilities: as assigned from time to time by the Vice President, Engineering Reporting Relationships: to the Vice President, Engineering and in his absence, the Chief Operating Officer or his equivalent. Benefits: A. Vacation During the Employment Period, the Employee shall be entitled to paid vacation and such other paid absences, whether for holidays, illness, personal time, or any similar purposes, as determined by the Company from time to time provided that the amount of paid vacation shall not be less than three (3) weeks (or fifteen (15) business days) during any 12 month period. B. Sick Leave During any period of illness, the Company shall continue to pay the Base Salary to the Employee until such time as the illness constitutes a Disability as defined in the Agreement. C. Vehicle Allowance $450 per month.