Document:

Exhibit 10.1

 

AMENDMENT
TO THE

GUESS?, INC.

2006 NON-EMPLOYEE DIRECTORS’ STOCK GRANT

 AND STOCK
OPTION PLAN

WHEREAS, Guess?, Inc.
(the “Company”) maintains the Guess?, Inc. 2006 Non-Employee Directors’
Stock Grant and Stock Option Plan (the “Plan”); and

WHEREAS, pursuant
to Section 9 of the Plan, the Board of Directors of the Company (the “Board”)
may amend the Plan at any time.

NOW, THEREFORE, the Plan is hereby amended,
effective July 5, 2006 as follows:

1.             Section 2 is hereby amended by adding the new defined
term “Black Scholes Value” in between the defined terms “Beneficial Owner” and “Board,”
such new defined term to read as follows:

“‘Black Scholes Value’ has the meaning given to such term in Section 5(d).”

2.             Section 4(a)(i) is hereby amended in its entirety
to read as follows:

“(i) adopt,
revise and repeal such administrative rules, guidelines and practices governing
this Plan as it shall from time to time deem advisable and adjust the
assumptions used in determining the Black Scholes Value under Section 5(d) or
provide for a different valuation formula for such purposes;”

3.             Section 5(a)(i) is hereby amended in its
entirety to read as follows:

“(i) New Director Grants. Each person who
first becomes an Eligible Director on or after May 9, 2006 shall be
awarded an Option as of the date such person first becomes an Eligible Director
to purchase a number of shares of Common Stock equal to  $50,000 divided by the Black Scholes Value as
of the date of grant.”

 4.            Section 5(a)(ii) is
hereby amended in its entirety to read as follows:

“(ii)                Annual Grants. On each
Eligibility Date, each Eligible Director who has not been an employee of the
Company at any time during the immediately preceding 12 months shall be awarded
an Option as of such Eligibility Date to purchase a number of shares of Common
Stock equal to $90,000 divided by the Black Scholes Value as of that date,
provided, however, that an Eligible Director whose initial election or
appointment to the Board occurs after September 30 of a given year (or, if
the fiscal year of the Company shall be other than the calendar year, whose
initial election or appointment to the Board occurs more than nine months after
the start of the Company’s fiscal year) shall not receive an award pursuant to
this clause (ii) on the first Eligibility Date to occur after such initial
election or appointment.”

 

 

5.             Section 5
is amended by adding a new subsection (d) thereto to read as follows:

“(d)                Black
Scholes Value. As noted above, the number of shares to be granted subject
to any particular Option granted under this Section 5 is determined by
reference to the Black Scholes Value as of the particular date of grant of the
Option. For this purpose, “Black Scholes Value” means the value of an option to
purchase one share of Common Stock calculated as of the applicable date of
grant under the Black Scholes option value model. Unless otherwise provided by
the Board prior to the applicable date of grant, the Black Scholes option value
for Options to be granted on a particular date shall be based on the following
assumptions:

·                  the
then current price of a share of Common Stock is equal to the Fair Market Value
of a share of Common Stock as of the date of grant of the Option;

·                  the
per share exercise price of the Option is equal to the Fair Market Value of a
share of Common Stock as of the date of grant of the Option;

·                  the
expected life of the Option is 5 years;

·                  the
risk-free interest rate is the asked yield rate, as of the day preceding the
date of grant of the Option and as reported in the Wall Street Journal, for the
U.S. Treasury Note or Bond having a maturity date that is closest to the date
that is five years after the date of grant of the Option;

·                  the
volatility of the price of the Common Stock is calculated based on the daily
closing price of a share of Common Stock during each of the 60 months preceding
the date the grant of the Option occurs; and

·                  the
dividend yield on the Common Stock equals the rate determined by dividing the
most recent annual dividend declared on the Common Stock as of the date of
grant of the Option by the Fair Market Value of a share of Common Stock as of
the date of grant of the Option.”

6.             Section 8(a)(i) is hereby amended in its
entirety to read as follows:

“(i) New Director
Grant. Each person who first becomes an Eligible Director on or after May 9,
2006 shall be granted a Restricted Stock Award on the date such person first
becomes an Eligible Director for a number of restricted shares of Common Stock
equal to $50,000 divided by the Fair Market Value of a share of Common Stock on
the date of grant.”

7.             Section 8(a)(ii) is hereby amended in its
entirely to read as follows:

“(ii)                Annual Awards. On each
Eligibility Date, each Eligible Director who has not been an employee of the
Company at any time during the immediately preceding 12 months shall be granted
a Restricted Stock Award for a number of restricted shares of 

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Common Stock equal to
$90,000 divided by the Fair Market Value of a share of Common Stock on the date
of grant; provided, however, that an Eligible Director whose initial election
or appointment to the Board occurs after September 30 of a given year (or,
if the fiscal year of the Company shall be other than the calendar year, whose
initial election or appointment to the Board occurs more than nine months after
the start of the Company’s fiscal year) shall not receive an award pursuant to
this clause (ii) on the first Eligibility Date to occur after such initial
election or appointment.”

IN
WITNESS WHEREOF, the Company has caused its duly authorized
officer to execute this amendment this 5th day of July, 2006.

 

	
  

  	
   

  	
  GUESS?, INC.

  
	
   

  	
   

  	
  /s/ Carlos Alberini

  
	
   

  	
   

  	
  Name: Carlos Alberini

  
	
   

  	
   

  	
  Title: President and
  Chief Operating Officer

  

 

 3Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (the “Agreement”) is made effective as of July 6,
2006, by and between WESTERN GAS RESOURCES, INC., a Delaware corporation (the “Corporation”)
and John F. Chandler (“Employee”).

 

WITNESSETH:

 

WHEREAS, the
Corporation, directly and indirectly through its subsidiaries, affiliated
companies, partnerships, joint ventures and other business organizations
(collectively, the “Western Companies” and individually, a “Western Company”)
acquire, design, construct and operate natural gas gathering and processing
facilities, market, store and transport natural gas and natural gas liquids,
and explore for, develop, and produce oil and gas.

 

WHEREAS,
Employee has substantial experience in the Corporation’s business and is
currently the Corporation’s Executive Vice President and Chief Operating
Officer.

 

WHEREAS,
prior hereto, the Corporation and Employee entered into that Employment
Agreement, dated June 14, 2001 (the “Prior Agreement”)

 

WHEREAS, the
parties desire to clarify certain portions of the Prior Agreement and to modify
certain of the benefits and obligations provided thereunder and accordingly,
the Prior Agreement shall be terminated upon execution of and replaced in its
entirety by this Agreement.

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
herein, the parties hereto agree as follows:

 

1.             Definitions.

 

(a)           “Annual Bonus” means a cash bonus, as may be determined pursuant
to any bonus plan applicable to Employee for any fiscal year of the
Corporation, in an amount which has been approved by the Corporation’s Board of
Directors in its sole and absolute discretion to be payable to Employee.  For the purposes of Subsections 13(a) and
14(a)(i) of this Agreement, Annual Bonus shall mean the average of the
last three Annual Bonus payments made to Employee prior to the Termination Date
(annualized for any year in which Employee was not employed for the full year
if the bonus for such year was pro rated and including any Annual Bonus
determined by the Board of Directors in any year to be zero).  If Employee has been employed for a shorter
period than that required to obtain three Annual Bonus Payments, the amount of
Annual Bonus hereunder shall be the amount last paid to Employee or shall be
the averaged annual amount of the most recent Annual Bonus payments made if
more than one.

 

(b)           “Base Salary” means Employee’s current annual base salary payable
by the Corporation.

 

(c)           “Cause” means (i) Employee’s material breach of
this Agreement, or failure, neglect or refusal to perform his duties hereunder
(other than any such failure resulting from Employee’s disability or from the
assignment of duties that would constitute “Good Reason” as defined herein), (ii) any
act or omission by Employee constituting willful misconduct or gross negligence
which is, or could reasonably expected to become, 

 

1

 

materially injurious to the Corporation,
monetarily or otherwise, (iii) Employee’s material violation of any
domestic or foreign securities law or regulation, including those of the New
York Stock Exchange or stock exchange governing the listing of the Corporation’s
securities (other than inadvertent violations of reporting of beneficial ownership
pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)), (iv) any
act by Employee constituting a felony; (v) any act by Employee
constituting a misdemeanor involving moral turpitude, (vi) any theft or
fraud by Employee which results in a felony or misdemeanor conviction of
Employee, (vii) any dishonesty or knowing misrepresentation resulting or intended to result in personal benefit or enrichment to
Employee or harm to the Corporation, or (viii) Employee’s material
violation of any of the Corporation’s Board approved policies or any of the
Corporation’s policies regarding prohibited discriminatory or harassing
behavior.

 

(d)           “Change of Control” means as
a result of one transaction or a series of related transactions:

 

(i)            The
acquisition by any individual, entity or group (within the meaning of Section 12(d) (3) or
13(d) (2) of the Exchange Act (a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
more than thirty-five (35%) percent of either (A) the then outstanding
shares of common stock of the Corporation (the “Outstanding Common Stock”) or (B) the
combined voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of directors (the “Outstanding
Voting Securities”); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a Change
in Control: (A) any acquisition by the Corporation, (B) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation, or (C) any
acquisition by any entity pursuant to a transaction which complies with Subsection 1(d)(iii);
or

 

(ii)           Individuals
who, as of the date hereof, constitute the Board of Directors (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Corporation’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a person other than the Incumbent Board; or

 

(iii)          Consummation
of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Corporation (a “Business Combination”),
in each case, unless, following such Business Combination, (A) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting 

 

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securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Corporation or all or substantially all of the
Corporation’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Common Stock and Outstanding
Voting Securities, as the case may be, and (B) no person (excluding any
corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Corporation or such corporation resulting from
such Business Combination) beneficially owns, directly or indirectly, 35% or
more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination, and (C) at
least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Incumbent Board providing for such Business Combination; or

 

(iv)          Approval by
the shareholders of the Corporation of a complete liquidation or dissolution of
the Corporation.

 

(e)           “Change of
Control Event” means the earlier of (i) a Change of Control, or (ii) the
execution and delivery by the Corporation of an agreement providing for a
Change of Control.

 

(f)            “Change of Control Period” means the period commencing ninety (90)
days prior to the occurrence of a Change of Control Event and ending 12 months
after such Change of Control.

 

(g)           “Confidential
Information” means all nonpublic information and trade secrets (whether in
paper or electronic form, or contained in Employee’s memory or otherwise stored
or recorded) relating to or arising from the business, operations or properties
of any of the Western Companies, including, but not limited to, any information
concerning the business operations, business strategies, nonpublic policies or
internal structure of the Western Companies; Litigation Information;
Confidential Projects; proposed projects and areas of intended leasing activity
and gathering and processing activity; the customers, vendors, contractors,
suppliers or clients of any of the Western Companies; any acquisition
strategies of any of the Western Companies; the gas and other products,
marketing or transportation strategies of any of the Western Companies; the
terms of any gas gathering, processing, marketing, or transportation contracts
entered into by any of the Western Companies; past, present or future research
by any of the Western Companies in connection with the existing or proposed
business or operations of any of the Western Companies; personnel data of any
of the Western Companies; Employee’s work performed for, or relating to or for,
any customer or client of any of the Western Companies; the gas or other
product pricing for any customer or client of any of the Western Companies; any
method or procedure relating or pertaining to projects developed by any Western
Companies or contemplated by any Western Company to be developed; any gas
gathering, processing, drilling, marketing, transportation project which any of
the Western Companies is developing; all Technical and Engineering
Information.  Information shall not 

 

3

 

be deemed to be Confidential Information for
purposes of this Agreement which: (i) is or hereafter becomes publicly
known through no improper or unauthorized act or omission of Employee; (ii) is
received by Employee without restriction on disclosure from a third party who
disclosed the information without, to the best of Employee’s knowledge,
violating any restriction on confidentiality or disclosure; or (iii) is
independently developed after the termination of Employee’s employment with the
Corporation by Employee without reference to the Confidential Information and
without violation of any confidentiality restriction.

 

(h)           “Confidential Projects” means the activities of or plans of any
Western Company relating to the development, planning or execution of new
project, expansion or acquisition strategy or target relating to areas of
intended leasing activity and gathering and processing activity or any other
material business of any Western Company.

 

(i)            “Good Reason” means (i) any material breach by the
Corporation of its obligations under this Agreement, including the failure of
the Corporation to pay Employee the Base Salary or, if declared by the Board,
the Annual Bonus, or any other payment due Employee hereunder, or to provide
any benefits required pursuant to this Agreement; (ii) any action of
Corporation that results in any reduction in Employee’s title below an officer
title, (iii) any action of Corporation that results in any material
diminishment in Employee’s duties, functions, responsibilities or authority(
provided however that any changes in spending authority shall not be considered
to be a material diminishment in duties, functions, responsibilities or
authority), (iv) any reduction of Employee’s Base Salary, (v) any
material reduction of benefits on a basis different than other peer executives
of the Corporation; or (vi) a requirement that Employee be based anywhere
other than within twenty-five (25) miles of Employee’s current principal place
of employment except for travel that may be required of Employee in performing
his employment duties hereunder; provided, however, that if the
Corporation suspends Employee from performing his employment duties hereunder
for the purposes of performing an internal investigation potentially involving
Employee or if the Employee is terminated for Cause, then such suspension or
termination shall not constituted Good Reason.

 

(j)            “Litigation
Information” means information concerning possible or existing claims,
investigations or litigation involving any of the Western Companies.

 

(k)           “Material Competition” means that Employee is involved in any
business or investment activity, in any capacity, including, but not limited
to, as an employee, consultant, advisor, agent, shareholder (other than as a
shareholder of less than five (5%) percent of a publicly traded corporation),
independent contractor, investor, partner, member, owner or otherwise, which activity
directly competes with or has a material adverse economic effect on any of the
activities or business of any Western Company. 
Material competition includes, but is not limited to, any activity
involving the gathering and processing business within 25 miles of one of the
Western Companies’ existing or planned gathering, processing or generation
facilities; any activity involving the purchase of oil or gas leases, the
farming-in of such leases or any similar arrangement, within five (5) miles
of the boundaries of an existing oil or gas lease of any Western Company; and,
in relation to a Confidential Project involving oil and gas exploration,
development or production, any activity, directly or indirectly, involving the
purchase of oil or gas leases or the farm-in or participation in operations
under leases or any similar arrangement within ten (10) miles of the
boundaries of the target area of such Confidential Project.

 

4

 

(l)            “Short Term Disability Period” means the period of ninety (90)
days’ following determination of Employee’s disability as that term is defined
pursuant to the Corporation’s long-term disability insurance plan.

 

(m)          “Technical
and Engineering Information” means all nonpublic information, technical and
engineering information associated with or related to any oil, gas or mineral
property and any gathering and/or processing facility of any of the Western
Companies or with respect to which any of the Western Companies formed an
intention to acquire, lease or form any other business relationship prior to
the termination of Employee’s employment including, but not limited to, seismic
data, engineering reports and methods, geological matters, the results of
expiration, drilling, drill cores, cuttings and other samples, production,
processing, gathering and drilling techniques and water disposal techniques; or
any plans or strategy related to the foregoing.

 

(n)           “Termination Date” means the effective date of termination of
employment under this Agreement.

 

2.             Employment. The
Corporation hereby employs Employee and Employee hereby accepts such employment
with the Corporation upon the terms and conditions hereinafter set forth.  Employee’s employment shall continue until it
is terminated in accordance with the provisions herein.

 

3.             Powers, Duties and Responsibilities.

 

(a)           Employee shall devote his full time, attention and effort to the
business of the Western Companies during the Corporation’s normal business
hours and during such other times as are reasonably necessary for the proper
performance of his responsibilities hereunder; provided, however,
that Employee may serve (i) on the board of any charitable organization or
industry group, and (ii) with the consent of the Board of Directors,
Employee may serve on the board of one (1) publicly traded corporation;
and provided further that in the case of both (i) and (ii) above that
such service does not significantly interfere with Employee’s duties hereunder.

 

(b)           Employee’s primary duties shall be to act as the Executive Vice
President and Chief Operating Officer. 
Employee shall have such powers, duties and responsibilities, and shall
perform such other functions in connection with the business of the Western
Companies, as may be assigned from time to time by the Corporation.

 

4.             Base Salary and Annual Bonus.  For all of the services rendered by Employee
pursuant to this Agreement, the Corporation shall pay Employee his Base Salary,
payable in accordance with the Corporation’s normal pay practices so long as
employed under this Agreement.  In no
event shall Employee’s Base Salary be decreased, but it may, from time to time
be increased at the discretion of the Corporation.  In addition, the Corporation shall pay
Employee an Annual Bonus as determined by the Board of Directors from time to
time.

 

5.             Officer Insurance Coverage - Costs of Defense.  During the term of Employee’s employment and
thereafter, to the extent the Corporation maintains an insurance policy or
policies providing directors’ and officers’ liability insurance, Employee shall
be covered by such policy or policies, in accordance with its or their terms,
to the maximum extent of the coverage available for 

 

5

 

any officer of the Corporation provided
that such insurance coverage is available to the Corporation at a reasonable
cost. Such coverage shall provide to Employee officer liability insurance
coverage to cover any claims that may be made arising from his past, present,
or future activities on behalf of the Western Companies.  Employee hereby represents that to his
knowledge no investigation, claim, or litigation is currently pending or
threatened against him at this time relating to or arising out of his
activities as an employee of any Western Company.

 

6.             Cooperation With Respect to Investigations,
Claims or Litigation.  During the term of Employee’s employment and
at all times thereafter, should a Western Company become involved in any
investigation, claim, or litigation relating to or arising out of Employee’s
past, present, or future duties with a Western Company or with respect to any
matters which Employee has knowledge, Employee agrees to fully, and in good
faith, cooperate with the Corporation with respect to such investigation, claim,
or litigation.  The Corporation shall
reimburse Employee for any and all expenses in accordance with the
Indemnification Agreement, as defined below.

 

7.             Indemnification Agreement.  Exhibit “A”, attached hereto and
incorporated herein by reference, is an Indemnification Agreement by and
between the Corporation and Employee. The Corporation and Employee each agree
to execute and deliver such Indemnification Agreement concurrently with the
execution and delivery of this Agreement. To the extent any provision set forth
in the Indemnification Agreement is in conflict with any provision set forth in
this Agreement, the provision set forth in the Indemnification Agreement shall
govern.

 

8.             Employee Benefits.
During the term of employment hereunder, Employee shall be eligible to
participate in the employee benefit plans provided by the Corporation on the
same basis as other similarly situated executives at the level of Vice
President and above, as such plans may be changed from time to time, in
accordance with the provisions of such plans, including, but not limited to,
the Corporation’s qualified retirement plans and the Corporation’s stock
incentive plan(s). Employee hereby agrees and acknowledges that nothing in this
Agreement guarantees him the right to any grant of stock options, restricted
stock or any other right under any stock incentive plan, or other plan.

 

9.             Confidential Information and Nondisclosure.

 

(a)           Employee acknowledges that pursuant to his employment hereunder,
Employee occupies a position of trust and confidence.  Accordingly, in the course of performing the
employment obligations hereunder, Employee will have access to and may develop
or obtain certain Confidential Information.

 

(b)           Employee agrees that all Confidential Information shall remain the
exclusive property of the Corporation during and after Employee’s employment
with the Corporation.  Employee further
agrees that during and after the term hereof, he shall not, except for the
benefit of the Corporation pursuant to the exercise of his duties hereunder or
with prior written consent of the Corporation, use for any purpose or disclose
to any third party any of the Confidential Information.

 

(c)           All information, drawings, documents and materials whether in
writing, on computer disks, computer hard drive, on magnetic tape or otherwise
prepared by Employee in connection with his employment are hereby assigned to
the Corporation without reservation of any rights by Employee, and all such
information which Employee obtains in the course of or as result of his
employment by the Corporation in all cases shall 

 

6

 

be the sole
and exclusive property of the Corporation and will be delivered to the
Corporation by Employee on the earlier of a demand by the Corporation or
promptly after the Termination Date, together with all written, computer,
magnetic tape or other evidence of the information, drawings, document and
materials, if any, furnished by any Western Company to Employee in connection
with Employee’s employment.

 

(d)           If Employee violates this agreement of confidentiality, Employee
agrees that the Western Companies shall, in addition to any other remedy
provided by law, be permitted to pursue an action for injunctive relief,
monetary damages, or both.

 

10.          Non-Solicitation.
During the term of this Agreement and for a period of eighteen months (18)
thereafter, Employee shall not hire, offer to hire, solicit, or participate in
the hiring or induce the resignation of any officer or employee of any Western
Company; provided, however, nothing contained herein shall
prevent Employee from hiring any officer or employee of any Western Company
that originates as a result of a general solicitation in a publicly available
publication, including the internet, as long as there is no involvement or
participation of any kind or nature, directly or indirectly by Employee in (a) the
solicitation of the officer or employee of any Western Company, or (b) inducing
the resignation of such officer or employee of any Western Company. In the
event Employee violates this non-solicitation provision, the Western Company
shall, in addition to any other remedy provided by law, be permitted to pursue
an action for injunctive relief, monetary damages, or both.

 

11.          Agreement Not to Compete. The
parties hereto recognize that Employee is retained by the Corporation as part
of a professional, management and executive staff of the Corporation whose
duties include the formulation and execution of corporate strategy.  Therefore,

 

(a)           Employee hereby agrees that while Employee is employed pursuant to
this Agreement he shall not act or engage in Material Competition; and

 

(b)           for a period of one (1) year following the Termination date:

 

(i)            In the event that this Agreement is terminated by the Corporation
for Cause or by Employee without Good Reason, he shall not act or engage in
Material Competition with respect to the business or activities of any Western
Company as they exist on the date of termination of Employee’s employment; or

 

(ii)           In the event that this Agreement is terminated by the Corporation
without Cause or by the Employee for Good Reason, he shall not act or engage in
Material Competition with respect to any Confidential Projects as they existed
up to and including the Termination Date in any State in which any Western
Company engages or plans to engage in business.

 

In the event that Employee violates this
agreement not to compete, the Corporation shall, in addition to any other
remedies provided by law, be permitted to pursue an action for injunctive
relief (preliminary or permanent), monetary damages, or both.

 

12.          Termination of Employment.  Employee’s employment and this Agreement
shall terminate upon the first to occur of the following events:

 

(a)           Employee’s death.

 

7

 

(b)           The end of the Short Term Disability Period if Employee is unable
to return to work at the end of such Short Term Disability Period; provided,
however, that during such Short Term Disability Period, Employee shall
be entitled to 100% of Employee’s Base Salary reduced by any other
Corporation-provided salary-related benefits to which Employee may be entitled
with respect to the Short Term Disability Period which benefits are payable
solely on account of such disability (including, but not limited to, benefits
under any disability insurance policy, worker’s compensation law or any other
benefit program or arrangement).

 

(c)           Employee’s written election to terminate employment, with or
without Good Reason, to be effective ninety (90) days thereafter unless an
earlier effective date is specified by the Corporation.

 

(d)           The Corporation’s written election to terminate Employee’s
employment with or without Cause, effective as of the date set forth by the
Corporation in such election.

 

13.          Employee’s Rights and Obligations Upon Death or
Disability.  If Employee’s employment is terminated as a
result of death or disability, then Employee shall be entitled to the following
in full satisfaction of all of his rights under this Agreement or at law:

 

(a)           Employee’s Right to Base Salary and Benefits.  Employee shall be
entitled to the following: (i) Base Salary and employee benefits, if any,
which have been earned but not paid through the Termination Date, and (ii) an
Annual Bonus, equal to the product of (A) the Annual Bonus, and (B) a
fraction, the numerator of which is the number of days in the current fiscal
year through the date of termination and the denominator of which is 365.

 

(b)           Employee’s Obligations.  Notwithstanding such
termination of employment, if Employee is terminated as a result of disability,
Employee shall remain bound by the provisions of Sections 6, 9, 10 and 11
hereof.

 

14.          Employee’s Rights and Obligations Upon
Termination of Employment By The Corporation Without Cause or By Employee for
Good Reason.  If Employee’s employment is terminated by the
Corporation without Cause or by Employee for Good Reason, then Employee shall
be entitled to the following in full satisfaction of his rights under this
Agreement or at law:

 

(a)           Severance Pay.

 

(i)            Employee shall be entitled to severance pay in an amount equal to:

 

(A) the sum of (1) Employee’s Base Salary, if any, which
has been earned but not paid through the Termination Date, (2) the product
of (x) the Annual Bonus and (y) a fraction, the numerator of which is the
number of days in the current fiscal year through the Termination Date and the
denominator of which is 365, and (3) any accrued vacation or other pay
pursuant to the Corporation’s vacation or Paid Time Off policy, to the extent
not previously paid; and

 

(B) an amount equal to the sum of (1) Employee’s Base
Salary and (2) the Annual Bonus; provided, however, that in
the event that Employee’s 

 

8

 

employment
has been terminated, as set forth above in this Section 14, at any time
during a Change of Control Period, then this amount shall be multiplied by a
factor of 2 and Employee shall receive such increased amount less any amount
previously paid to Employee under this sub-section (B).

 

(ii)           Employee shall be entitled to continue to receive group health and
dental insurance coverage equivalent to the coverage to which he would have
been entitled under such plans if he had continued working for the Corporation in
the position held on the Termination Date for a period of 12 months following
the Termination Date, which period shall be increased to 24 months in the event
that Employee has been terminated at any time during a Change of Control
Period.  In addition, the Corporation
shall continue to pay the premiums on any supplemental term life and long term
disability policies obtained by the Corporation for Employee’s benefit on or
before the Termination date for a period of 12 months following the Termination
Date, which period shall be increased to 24 months in the event that Employee
has been terminated at any time during a Change of Control Period.

 

(b)           Certain Additional Payments by the Corporation. The Corporation shall be responsible for the payment of taxes to
the extent applicable as set forth in Exhibit “B” hereto.  Any payments made hereunder as a result of a
Change of Control shall be subject to the provisions of Exhibit “B”.

 

(c)           Employee’s Obligations.  Notwithstanding such
termination of employment, Employee shall remain bound by the provisions of
Sections 6, 9, 10 and 11 hereof.

 

15.          Employee’s Rights and Obligations Upon
Termination of Employment by the Corporation With Cause or Termination of
Employment by Employee Without Good Reason.  If Employee’s employment is terminated by the
Corporation with Cause or by Employee without Good Reason, then Employee shall
be entitled to the following in full satisfaction of all of his rights under
this Agreement or at law:

 

(a)           Severance Pay.  Employee shall not be entitled to any
severance pay.

 

(b)           Employee’s Right to Base Salary and Benefits. Employee shall only be entitled to the Base Salary and employee
benefits, if any, earned but not paid through the Termination Date. Employee
shall only be entitled to such additional Annual Bonus, if any, which has been
previously authorized by the Board of Directors, but has not been paid as of
the Termination Date.

 

(c)           Employee’s Obligations. Notwithstanding such termination of employment, Employee shall
remain bound by the provisions of Sections 6, 9, 10 and 11 hereof.

 

16.          Payment Dates; Section 409A of the
Internal Revenue Code.

 

(a)           Subject to
the provisions of Sections 16(b), (c) and (d) below, any payments
required to be made to Employee pursuant to Sections 13, 14 or 15 hereunder
shall be made within thirty (30) days’ of the Termination Date.

 

9

 

(b)           Anything in
this Agreement to the contrary notwithstanding, if (i) on the Termination
Date any of the Corporation’s stock is publicly traded on an established
securities market or otherwise (within the meaning of Section 409A(a)(2)(B)(i) of
the Internal Revenue Code, as amended (the “Code”)) and (B) as a result of
such termination, Employee would receive any payment that, absent the
application of this Section 16, would be subject to interest and
additional tax imposed pursuant to Section 409A(a) of the Code as a
result of the application of Section 409A(2)(B)(i) of the Code, then
no such payment shall be payable prior to the date that is the earliest of six (6) months
after the Termination Date or such other date as will cause such payment not to
be subject to such interest and additional tax.

 

(c)           It is the
intention of the parties that payments or benefits payable under this Agreement
not be subject to the additional tax imposed pursuant to Section 409A of
the Code.  To the extent such potential
payments or benefits could become subject to such Section, the parties shall
cooperate to amend this Agreement with the goal of giving Employee the economic
benefits described herein in a manner that does not result in such tax being
imposed.

 

(d)           Notwithstanding
anything to the contrary in the Agreement, payment to Employee upon termination
shall be conditioned upon Employee’s execution of a legal release in a form
satisfactory to Company in its discretion and drafted and executed to, among
other things, ensure a final, complete and enforceable release of all claims
that Employee has or may have against Company relating to or arising in any way
from Employee’s employment with Company and/or the termination thereof (but
excepting claims for indemnification or defense, whether under contract, the
Articles of Incorporation, By-Laws, or otherwise), and complete and continuing
confidentiality of Company’s proprietary information and trade secrets, and, at
the Company’s discretion, the circumstances of Executive’s separation from
Company and/or compensation received by Executive in connection with that
separation.

 

17.          Survival.  In the event that this Agreement is
terminated by either party, Sections 5, 6, 9, 10, and 11 shall survive for the
periods of time specified therein or if no period is specified, in perpetuity.

 

18.          Benefit. This
Agreement shall inure to the benefit of and be binding upon the Corporation,
its successors and assigns, including, but not limited to (a) any entity
which may acquire all or substantially all of the Corporation’s assets and
business, (b) any entity with or into which the Corporation may be
consolidated or merged, or (c) any entity that is the successor
corporation in a share exchange, and Employee, his heirs, guardians and
personal and legal representatives. Employee and the Corporation also agree
that each Western Company shall be deemed to be a third-party beneficiary to
this Agreement.

 

19.          Notices.  All notices and communications hereunder
shall be in writing and shall be deemed given when sent postage prepaid by
registered or certified mail, return receipt requested, and, if intended for
the Corporation, shall be addressed to it, to the attention of its President,
at:

 

Western Gas
Resources, Inc.

1099 18th
Street, Suite 1200

Denver,
Colorado 80202

 

10

 

or at such other address which the
Corporation shall have given notice to Employee in the manner herein provided,
and if intended for Employee, shall be addressed to him at his last known
residence, or at such other address at which Employee shall have given notice
to the Corporation in the manner provided herein:

 

John F.
Chandler

 

 

 

20.          Miscellaneous.

 

 

(a)           Governing Law and Venue.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado.  Resolution of any disputes under this
Agreement shall only be held in courts in Denver County, Colorado, and the
parties expressly consent to personal jurisdiction in courts in Denver County,
Colorado and waive any objections to such jurisdiction.

 

(b)           Severability.  In the event one or more of the provisions
contained in this Agreement, or any application thereof, shall be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or any other
application or modification thereof, shall not in any way be affected or
impaired. The parties further agree that any such invalid, illegal or
unenforceable provision or restriction shall be deemed modified so that it
shall be enforced to the greatest extent permissible under law, and to the
extent that any court of competent jurisdiction determines any provision or
restriction herein to be overly broad, or unenforceable, such court is hereby
empowered and authorized to limit such provisions or restriction so that it is
enforceable for the longest duration of time, within the largest geographical
area and with the broadest scope.

 

(c)           Counterparts.
This Agreement may be executed in more than one copy, each copy of which shall
serve as an original for all purposes, but all copies shall constitute but one
and the same Agreement.

 

(d)           Assignment.
Except as provided in Section 18, this Agreement is personal to each of
the parties hereto, and neither party may assign nor delegate any of such party’s
rights or obligations hereunder without first obtaining the written consent of
the other party.

 

(e)           Headings. All
headings set forth in this Agreement are intended for convenience only and
shall not control or affect the meaning, construction or effect of this
Agreement or of any of the provisions hereof.

 

(f)            Waiver of Breach. The
waiver by any party hereto of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach by any party.

 

(g)           Entire Agreement.
Except for the Indemnification Agreement, this Agreement contains all
agreements, understandings, and arrangements between the parties hereto and no
other exists. Except for the Indemnification Agreement, all previous
agreements, understandings, and arrangements between the parties relating to 

 

11

 

employment
are terminated by this Agreement. This Agreement may be amended, waived,
changed, modified, extended or rescinded only by a writing signed by the party
against whom such amendment, waiver, change, modification, extension or
rescission is sought.

 

12

 

IN WITNESS
WHEREOF, the parties have hereunto set their hands as of the date first written
above.

 

 

	
   

  	
  CORPORATION: 

  
	
   

  	
   

  
	
   

  	
  WESTERN GAS RESOURCES, INC. 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Peter
  A. Dea

  	
   

  
	
   

  	
  Name: 

  	
  Peter A. Dea 

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ John
  F. Chandler

  	
   

  
	
   

  	
  Name: John F. Chandler

  
						

 

13

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