Document:

Unassociated Document

    Exhibit
      10.3

     

    

     

    ENERGY
      XXI (BERMUDA) LIMITED

     

    EXECUTIVE
      EMPLOYMENT AGREEMENT 

     

    This
      Employment Agreement (“Agreement”)
      by and
      between Energy XXI (Bermuda) Limited, a Bermuda corporation (“Company”),
      and
      Steven A. Weyel (“Executive”)
      is
      entered into effective as of September 10, 2008 (the “Effective
      Date”).
      

     

    WHEREAS,
      Executive is currently employed by the Company; and 

     

    WHEREAS,
      Executive and the Company have heretofore entered into that certain Employment
      Agreement dated as of April 4, 2006 (“Original
      Agreement”);
      and

     

    WHEREAS,
      the Company desires to continue to employ Executive in an executive capacity,
      and Executive likewise desires to continue to be employed by the Company; and
      

     

    WHEREAS,
      the Company and Executive desire to replace the Original Agreement with this
      Agreement;

     

    NOW,
      THEREFORE, in consideration of (1) the Company’s agreement to grant to Executive
      Five Hundred Thousand (500,000) stock options to purchase the Company’s common
      shares under the Energy XXI Services, LLC 2006 Long-Term Incentive Plan
      (“Grant”), such Grant to be made pursuant to the terms and conditions of the
      Stock Option Agreement governing the Grant and subject to the prior approval
      of
      the Grant by the Company’s Remuneration Committee, and (2) the mutual promises,
      covenants, representations, obligations and agreements contained herein, and
      for
      other valuable consideration, the receipt and adequacy of which are hereby
      acknowledged, the parties agree as follows: 

     

    1.
      Employment-at-will.
      Company
      agrees to employ Executive, and Executive hereby agrees to be employed by
      Company. Employment of Executive shall be at will and may be terminated by
      either party on the terms and conditions set forth in this Agreement.

     

    2.
      Term
      of Employment.
      Subject
      to the provisions for termination provided in the Agreement, the term of this
      Agreement (the “Term”)
      shall
      commence on the Effective Date and shall continue through the third anniversary
      of the Effective Date. The Term shall be automatically renewed and extended
      for
      a period of thirty-six (36) months commencing on each successive day after
      the Effective Date.

     

    3.
      Executive’s
      Duties.
      

     

    (a)
      Positions.
      During
      the Term, Executive shall serve as President and Chief Operating Officer of
      Company (and/or in such other positions as the parties mutually may agree),
      with
      such customary duties and responsibilities as may from time to time be assigned
      to him by the Company or the Chief Executive Officer, provided that such duties
      are at all times consistent with the duties of such position. Executive shall
      report directly to the Chief Executive Officer. As a part of his existing duties
      Executive currently serves as a Director on the Company’s Board of Directors
      (“Board”).
      The
      Company and the Board will use best efforts to maintain Executive’s role as a
      Director during the term of this Agreement. Executive agrees to serve without
      additional compensation, if elected or appointed thereto, in one or more offices
      or as a director of any of the Company’s Affiliates. For purposes of this
      Agreement, the term “Affiliate”
shall
      mean any entity which owns or controls, is owned or controlled by, or is under
      common ownership or control with, the Company. Executive agrees to serve in
      the
      positions referred to herein and to perform all duties relating thereto
      diligently and to the best of his ability. 

     

    (b)
      Other
      Interests.
      Executive agrees, during the period of his employment by the Company, to devote
      his primary business time, energy and best efforts to the business and affairs
      of the Company and its Affiliates and not to engage, directly or indirectly,
      in
      any other business or businesses, whether or not similar to that of the Company,
      except with the consent of the Board. The foregoing notwithstanding, the parties
      recognize and agree that Executive may engage in personal investments and other
      corporate, civic and charitable activities that do not conflict with the
      business and affairs of the Company or interfere with Executive’s performance of
      his duties hereunder without the necessity of obtaining the consent of the
      Board, provided, however, that Executive agrees that if the Board determines
      that continued service with one or more of these entities is inconsistent with
      Executive’s duties hereunder and gives written notice of such to Executive,
      Executive will resign from such position(s). 

     

    
      
        
        

      

      
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    (c)
      Duty
      of Loyalty.
      Executive acknowledges and agrees that Executive owes a fiduciary duty of
      loyalty, fidelity, and allegiance to use his reasonable best efforts to act
      at
      all times in the best interests of the Company. In keeping with these duties,
      Executive shall make full disclosure to the Company of all business
      opportunities pertaining to the Company’s business and shall not appropriate for
      Executive’s own benefit business opportunities concerning the subject matter of
      the fiduciary relationship. 

     

    4.
      Compensation.
      

     

    (a)
      Base
      Compensation.
      For
      services rendered by Executive under this Agreement, Company shall pay to
      Executive a minimum base salary (“Base
      Compensation”)
      of
      $490,000 per annum payable in accordance with Company’s customary payroll
      practice for its senior executive officers. The amount of Base Compensation
      shall be reviewed periodically by the Remuneration Committee of the Board (the
      “Committee”)
      and
      may be increased from time to time as the Committee may deem appropriate.
      References in this Agreement to Base Compensation shall refer to annual base
      salary so increased. Base Compensation, as in effect at any time, may not be
      decreased without the prior written consent of Executive.

     

    (b)
      Annual
      Bonus.
      In
      addition to his Base Compensation, Executive shall be eligible to receive each
      year during the Term, a cash incentive payment (“Bonus”)
      in an
      amount determined by the Committee based on Executive’s individual performance,
      the performance of Company and performance goals established by the Committee.
      The Target Bonus shall be an amount equal to 100% of Executive’s Base
      Compensation in effect at the time the Bonus is determined by the Committee
      (“Target
      Bonus”).
      Such
      Bonus, if any, shall be paid not later than the fifteenth day of the second
      calendar month following the the last day of the Company’s fiscal year in
      which the Bonus was earned ends.

     

    (c)
      Equity
      Compensation.
      During
      this Agreement, Executive shall be eligible to participate in any equity
      compensation arrangement or plan offered by the Company to senior executives
      on
      such terms and conditions as the Committee of the Board shall determine. Nothing
      herein shall be construed to give Executive any rights to any amount or type
      of
      awards, or rights as a shareholder pursuant to any such plan, grant or award
      except as provided in such award or grant to Executive provided in writing
      and
      authorized by the Committee of the Board. 

     

    5.
      Other
      Benefits.
      

     

    (a)
      During this Agreement, Executive shall be entitled to participate in all
      incentive compensation plans and to receive all fringe benefits and perquisites
      offered by Company to any of its senior executive officers, including, without
      limitation, participation in the various health, retirement, life insurance,
      short-term and long-term disability insurance, parking and other executive
      benefit plans or programs provided to the executives of Company in general,
      subject to the regular eligibility requirements with respect to each of such
      benefit plans or programs, and such other benefits or perquisites as may be
      approved by the Committee during the Term, all on a basis at least as favorable
      to Executive as may be provided to similarly situated senior executive officers
      of Company. Executive shall be entitled to take appropriate and reasonable
      annual vacation time provided that such vacation time does not interfere with
      his duties hereunder. Company shall reimburse Executive monthly for country
      or
      golf and luncheon club dues and one club initiation fee. 

     

    (b)
      Business
      Expenses.
      Company
      shall reimburse Executive for all reasonable business expenses incurred by
      Executive in the performance of his duties, which expenses will be subject
      to
      the oversight of Company’s Audit Committee of the Board in the normal course of
      business and will be compliant with the applicable Reimbursement Plan (as
      defined below) of the Company. It is understood that Executive is authorized
      to
      incur reasonable business expenses for promoting the business of Company,
      including reasonable expenditures for travel, lodging, meals and client or
      business associate entertainment. Request for reimbursement for such expenses
      must be accompanied by appropriate documentation. 

     

    
      
        
        

      

      
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    (c)
      Automobile.
      The
      Company shall provide Executive with an automobile (or an automobile allowance)
      that is determined by the Committee or the Board to be appropriate for the
      needs
      and requirements of Executive’s employment, and the Company shall reimburse
      Executive for, or pay on behalf of Executive, reasonable and appropriate
      expenses incurred by Executive for maintaining and operating such automobile.
      Such reimbursements shall comply with all requirements of the applicable
      Reimbursement Plan (as defined below) of the Company. Such automobile shall
      be
      available to Executive and his spouse for personal use.

     

    (d)
      Life
      Insurance.
      During
      Executive’s employment hereunder, the Company shall maintain one or more
      policies of life insurance on the life of Executive providing an aggregate
      death
      benefit in an amount not less than $3 million (the “Minimum
      Death Benefit”).
      Executive shall have the right to designate the beneficiary or beneficiaries
      of
      the death benefit payable pursuant to such policy or policies up to an aggregate
      death benefit in an amount equal to the Minimum Death Benefit. The provisions
      of
      this Section can be satisfied in whole or in part by any group life insurance
      policy provided by the Company in accordance with this Section. Executive shall
      (i) furnish any and all information reasonably requested by the Company or
      the
      insurer to facilitate the issuance of the life insurance policy or policies
      described in this Section or any adjustment to any such policy, and (ii) take
      such physical examinations as the Company or the insurer deems necessary. If
      Executive refuses to cooperate or makes any material misstatement of information
      or nondisclosure of medical history, then the Company shall have no further
      obligation to provide the benefit described in this Section.

     

    6.
      Termination
      and Effect on Compensation.
      

     

    (a)
      Resignation
      by Executive.
      

     

    (i)
      Executive may terminate his employment under this Agreement and resign his
      position(s) with the Company at any time, for any reason whatsoever, or for
      no
      reason, in Executive’s sole discretion, by delivering a Notice of Termination
      (defined in Section 6(e) below). In the event of such termination, except as
      otherwise provided below, Executive shall not be entitled to further
      compensation pursuant to this Agreement except as may be provided by the terms
      of any benefit plans of Company in which Executive may be a participant, and
      the
      terms of any outstanding equity grants, and for salary accrued but unpaid
      through the Date of Termination (defined in Section 6(f) below) and
      reimbursement of business expenses properly incurred but unreimbursed (to the
      extent reimbursable) prior to Date of Termination. 

     

    (ii)
      Notwithstanding the provisions of this Section 6(a)(i), in the event that
      Executive terminates this Agreement by resigning for Good Reason (defined in
      Section 6(j) below), (A) the Company shall pay Executive immediately upon
      the Date of Termination a lump sum equal to three (3) times the sum of the
      Base
      Compensation and the Target Bonus; (B) for the 36-month period after the
      Date of Termination, Company shall continue to cover Executive (and Executive’s
      dependents) in the medical plan sponsored by Company (or any successor) for
      its
      executives, provided Executive timely remits to Company the applicable monthly
      COBRA premium (less the COBRA administrative surcharge) for such continued
      coverage; and (C) Company shall reimburse Executive for any medical premium
      expenses incurred by Executive under (B) within 30 days after the date of
      such payment by Executive and in compliance with Treasury Regulation §
1.409A-3(i)(1)(iv) with regard to medical benefits. 

     

    (b)
      Death
      of Executive.
      If
      Executive dies during the term of this Agreement, then the Company will be
      obligated to continue for twelve (12) months after the Date of Termination
      (defined in Section 6(f) below) to pay the Base Salary payments under Section
      4(a) of this Agreement. The Company may thereafter terminate this Agreement
      without compensation to Executive’s estate except to the extent this Agreement
      or any plan or arrangement of the Company provides for vested benefits or
      continuation of benefits beyond termination of Executive’s
      employment.

     

    (c)
      Disability
      of Executive.
      Except
      as provided in Section 6(d)(iii), if Executive shall have been absent from
      the full-time performance of Executive’s duties with Company for 180 business
      days during any twelve-month period as a result of Executive’s incapacity due to
      accident, physical or mental illness, or other circumstance which renders him
      mentally or physically incapable of performing the duties and services required
      of him hereunder on a full-time basis as determined by Executive’s physician
      (“Disability”),
      Executive’s employment may be terminated by Company for Disability. If
      Executive’s employment is terminated for Disability, Executive shall be entitled
      to the compensation and benefits provided in Section 6(d)(i) hereof.

     

    
      
        
        

      

      
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    (d)
      Other
      Terminations.
      

     

    (i)
      By
      Company for Reason Other Than Cause.
      Company
      may terminate this Agreement and Executive’s employment for any reason
      whatsoever, or for no reason, in the Board’s sole discretion upon Notice of
      Termination (as defined in Section 6(e) below). For purposes of this Agreement,
      acceptance by the Company of Executive’s resignation upon request or by mutual
      agreement shall be deemed to be a termination by the Company. Except as
      otherwise provided below, in the event that Executive’s employment is terminated
      by Company for any reason other than Cause (defined in Section 6(d)(v) below),
      then in addition to any compensation or benefits to which Executive may be
      entitled through the Date of Termination (as defined in Section 6(f) below):
      (A) Company shall pay Executive immediately upon the Date of Termination a
      lump sum equal to three (3) times the sum of the Base Compensation and the
      Target Bonus; (B) for the 36-month period after the Date of Termination,
      Company shall continue to cover Executive (and Executive’s dependents) in the
      medical plan sponsored by Company (or any successor) for its executives,
      provided Executive timely remits to Company the applicable monthly COBRA premium
      (less the COBRA administrative surcharge) for such continued coverage; and
      (C) Company shall reimburse Executive for any medical premium expenses
      incurred by Executive under (B) within 30 days after the date of such
      payment by Executive. 

     

    (ii)
      By
      Company or Executive Following Material Change in Management.
      If
      (A) John D. Schiller, Jr. ceases to be the Company’s Chief Executive
      Officer and Executive is not offered the position of Chief Executive Officer,
      with Executive’s compensation being commensurate with the compensation for the
      position of Chief Executive Officer and Executive resigns within six
      (6) months of (A) above, , then in addition to any compensation or
      benefits to which Executive may be entitled through the Date of Termination
      (X) Company shall pay Executive immediately upon the Date of Termination a
      lump sum equal to two (2) times the sum of the Base Compensation and the Target
      Bonus; (Y) for the 24-month period after the Date of Termination, Company
      shall continue to cover Executive (and Executive’s dependents) in the medical
      plan sponsored by Company (or any successor) for its executives, provided
      Executive timely remits to Company the applicable monthly COBRA premium (less
      the COBRA administrative surcharge) for such continued coverage; and
      (Z) Company shall reimburse Executive for any medical premium expenses
      incurred by Executive under (Y) within 30 days after the date of such
      payment by Executive. 

     

    (iii)
      By
      Company or Executive Following a Change in Control.
      Except
      as set forth in Section 6(d)(iv) below, if within a one-year period
      following a Change in Control (defined in Section 6(i) below), Executive resigns
      or is terminated for any reason, then in addition to any compensation or
      benefits to which Executive may be entitled through the Date of Termination
      (A) Company shall pay Executive immediately upon Date of Termination a lump
      sum equal to three (3) times the sum of the Base Compensation and the
      Target Bonus; (B) for the 36-month period after the Date of Termination,
      Company shall continue to cover the Executive (and Executive’s dependents) in
      the medical plan sponsored by Company (or any successor) for its executives,
      provided Executive timely remits to Company the applicable monthly COBRA premium
      (less the COBRA administrative surcharge) for such continued coverage; and
      (C) Company shall reimburse Executive for any medical premium expenses
      incurred by Executive under (B) within 30 days after the date of such
      payment by Executive. 

     

    (iv)
      Notwithstanding the provision of Section 6(d)(iii) above, if following a Change
      in Control, (A) the surviving entity requests Executive to remain employed
      by the Company, acknowledged by surviving entity expressly assuming and agreeing
      in writing to perform this Agreement, (B) John D. Schiller, Jr. is the
      Chief Executive Officer and/or Chairman of the Board of the surviving entity;
      and (C) Executive continues to report directly to John D. Schiller, Jr.,
      then Executive may not resign under Section 6(d)(iii) until six (6) months
      after the date of the Change in Control. 

     

    (v)
      By
      Company for Cause.
      Notwithstanding the foregoing provisions of this Section 6, in the event
      Executive is terminated because of Cause, Company shall have no obligations
      pursuant to this Agreement after the Date of Termination other than for salary
      accrued but unpaid through the Date of Termination (defined in Section 6(f)
      below) and reimbursement of business expenses properly incurred but unreimbursed
      (to the extent reimbursable) prior to Date of Termination. For purposes herein,
      “Cause”
means
      (A) Executive’s gross negligence, gross neglect or willful misconduct in the
      performance of the duties required hereunder, (B) Executive’s commission of a
      felony that results in a material adverse effect on the Company, or
      (C) Executive’s material breach of any material provision of this
      Agreement. Notwithstanding the foregoing, prior to any termination for Cause
      under clauses (A) or (C) of the preceding sentence, (X) Company
      must provide Executive with reasonable notice detailing the failure or conduct
      which the Chief Executive Officer believes to constitute Cause, (Y) Company
      must provide Executive a reasonable opportunity to cure such failure or conduct,
      and (Z) after such notice and an opportunity to cure, the Chief Executive
      Officer and the Committee must reasonably determine that Executive has not
      cured
      such failure or conduct. Executive shall not be deemed to have been terminated
      for Cause unless and until Executive shall have been provided an opportunity
      to
      be heard in person by the Committee (with the assistance of Executive’s counsel
      if Executive so desires) on at least five business days’ advance notice, and the
      Committee must unanimously approve the termination of Executive for Cause.
      

     

    
      
        
        

      

      
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    (vi)
      If
      Executive is a “specified employee” (as defined within Section 409A of the
      Internal Revenue Code of 1986, as amended (the “Code”) and the accompanying
      regulations to Section 409A of the Code, the “Nonqualified Deferred Compensation
      Rules”) at the time that Executive incurs a “separation from service” (as
      defined in the Nonqualified Deferred Compensation Rules), any applicable lump
      sum payment described in Sections 6(a)(ii), 6(d)(i), 6(d)(ii), or 6(d)(iii)
      shall not be in accordance with the time periods described in the applicable
      Sections, but shall be delayed for a period of six months. Any such lump sum
      payment which Executive is entitled to but that shall be delayed pursuant to
      the
      preceding sentence shall be contributed to the trustee of a “rabbi” trust (the
“Trust”),
      which
      is an unfunded arrangement that will be designed to comply with Revenue
      Procedure 92-64. Such amounts that would otherwise be payable upon separation
      from service shall be held by the trustee pursuant to the terms of such Trust
      and paid to Executive as of the earlier of: (1) the first day of the
      seventh month following Executive’s separation from service; or
      (2) Executive’s date of death. Such amounts (including any such amounts
      that would otherwise be payable in installments commencing on separation from
      service) shall be accumulated and paid in a lump sum with interest (based on
      the
“prime rate” as published in the Wall Street Journal, plus one (1) percent)
      on the date that is the earlier of (1) or (2) above, unless such day
      is not a business day, in which case the business day immediately prior to
      such
      date in (1) or (2) above shall be the date the prime rate is determined, and
      shall be paid in installments (to the extent applicable) thereafter.

     

    (vii)
      All
      reimbursements and in-kind benefits provided pursuant to this Agreement shall
      be
      made in accordance with Treasury Regulation Section 1.409A-3(i)(l)(iv) such
      that
      any reimbursements or in-kind benefits will be deemed payable at a specified
      time or on a fixed schedule relative to a permissible payment event.
      Specifically, (1) the amounts reimbursed and in-kind benefits under this
      Agreement, other than with respect to medical benefits provided under this
      Section 6, during Executive’s taxable year may not affect the amounts reimbursed
      or in-kind benefits provided in any other taxable year, (2) the reimbursement
      of
      an eligible expense shall be made on or before the last day of Executive’s
      taxable year following the taxable year in which the expense was incurred,
      (3)
      the right to reimbursement or an in-kind benefit is not subject to liquidation
      or exchange for another benefit, and (4) any expenses reimbursed/in-kind
      benefits provided under Sections 6(d)(i), 6(d)(ii) and
      6(d)(iii) hereof will not affect the expenses eligible for
      reimbursement/in-kind benefits provided in any other year (any such
      reimbursement or in-kind benefit arrangement to be referred to herein as a
      “Reimbursement
      Plan”).
      

     

    (e)
      Notice
      of Termination.
      Any
      purported termination of Executive’s employment by Company or by Executive and
      any purported termination of this Agreement shall be communicated by written
      notice of termination (“Notice
      of Termination”)
      to the
      other party hereto in accordance with Section 10 hereof. Notice of
      Termination shall include the effective Date of Termination (defined in Section
      6(f) below) of this Agreement. Any Notice of Termination shall be deemed to
      also
      be Executive’s resignation as director and/or officer of any Affiliate of the
      Company. Executive agrees to execute any and all documentation of such
      resignations upon request by the Company, but he shall be treated for all
      purposes as having so resigned upon the Date of Termination, regardless of
      when
      or whether he executes any such documentation. 

     

    
      
        
        

      

      
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    (f)
      Date
      of Termination.
      “Date
      of Termination”
shall
      mean in the case of Executive’s death, his date of death, and in all other
      cases, the date specified in the Notice of Termination as the effective date
      on
      which this Agreement shall be terminated, provided that for purposes of
      determining the date of payment pursuant to Executive’s termination for any
      reason shall be the date of Executive’s separation of service in accordance with
      Treasury Regulation 1.409A-1(h).

     

    (g)
      No
      Duty to Mitigate.
      Executive shall not be required to mitigate the amount of any payment or benefit
      provided for in this Agreement by seeking other employment or otherwise, nor,
      except as provided in Section 6(k), shall the amount of any payment or
      benefit provided for in this Agreement be reduced by any compensation or benefit
      earned by Executive as a result of employment by another employer,
      self-employment earnings, by retirement benefits, by offset against any amount
      claimed to be owing by Executive to Company, or otherwise. 

     

    (h)
      Full
      Tax Gross-Up of Payments.
      In the
      event that any payment, award, benefit or distribution (or any acceleration
      of
      any payment, award, benefit or distribution) made or provided to or for the
      benefit of Executive in connection with this Agreement or Executive’s employment
      with Company or the termination thereof (the “Payments”)
      is
      determined to be subject to any additional tax imposed by Section 4999 or
      409A of the Code or any interest or penalties with respect to such additional
      taxes (such additional taxes, together with any such interest and penalties,
      are
      collectively referred to as the “Excise
      Taxes”),
      then
      Executive shall be entitled to receive an additional payment (a “Gross-Up
      Payment”)
      from
      Company such that the net amount received by Executive after paying any
      applicable Excise Taxes and any federal, state or local income or FICA taxes
      on
      such Gross-Up Payment, shall be equal to the amount Executive would have
      received if such Excise Taxes were not applicable to the Payments. 

     

    For
      purposes of determining whether any of the Payments will be subject to the
      Excise Taxes and the amount of such Excise Taxes, (i) all of the Payments
      shall be treated as “parachute payments” (within the meaning of
      Section 280G(b)(2) of the Code) unless, in the opinion of tax counsel
      reasonably acceptable to Executive (“Tax
      Counsel”),
      such
      payments or benefits (in whole or in part) do not constitute parachute payments,
      including by reason of Section 280G(b)(4)(A) of the Code; (ii) all
“excess parachute payments” within the meaning of Section 280G(b)(1) of the
      Code shall be treated as subject to the Excise Tax unless, in the opinion of
      Tax
      Counsel, such excess parachute payments (in whole or in part) represent
      reasonable compensation for services actually rendered (within the meaning
      of
      Section 280G(b)(4)(B) of the Code) in excess of the base amount (as the
      term “base amount” is defined in Section 280G(b)(3) of the Code) allocable
      to such reasonable compensation, or are otherwise not subject to the Excise
      Tax;
      (iii) the value of any noncash benefits or any deferred payment or benefit
      shall be determined by the Tax Counsel in accordance with the principles of
      Sections 280G(d) and 409A of the Code; and (iv) all Payments shall be
      deemed subject to the Excise Tax pursuant to section 409A of the Code unless,
      in
      the opinion of Tax Counsel, such Payments are not subject to Excise Tax pursuant
      to section 409A. For purposes of determining the amount of the Gross-Up Payment,
      Executive shall be deemed to pay federal income tax at the highest marginal
      rate
      of federal income taxation in the calendar year in which the Payments are made
      and State and local income taxes at the highest marginal rate of taxation in
      the
      State and locality of Executive’s residence on the date the Payments are made,
      net of the maximum reduction in federal income taxes which could be obtained
      from deduction of such State and local taxes. 

     

    In
      the
      event that the Excise Taxes are determined by the IRS, on audit or otherwise,
      to
      exceed the amount taken into account hereunder in calculating the Gross-Up
      Payment (including by reason of any payment the existence or amount of which
      cannot be determined at the time of the Gross-Up Payment), the Company shall
      make another Gross-Up Payment in respect of such excess (plus any interest,
      penalties or additions payable by Executive with respect to such excess) within
      ten (10) business days following the date that Executive remits to the IRS
      such additional Excise Taxes. Executive and the Company shall each reasonably
      cooperate with the other in connection with any administrative or judicial
      proceedings concerning the existence or amount of liability for Excise Tax
      with
      respect to the Payments. 

     

    If
      a
      termination of Executive’s employment shall have occurred, the Company shall
      promptly reimburse to Executive all reasonable attorneys fees and expenses
      necessarily incurred by Executive in disputing in good faith any issue with
      the
      Company or its Affiliates pursuant to this Section 6(h) or asserting in good
      faith any claim, demand or cause of action against the Company or its Affiliates
      pursuant to this Section 6(h). Such reimbursements shall be made within ten
      (10) business days after delivery of Executive’s written requests for
      payment accompanied with such evidence of fees and expenses incurred as the
      Company reasonably may require. This reimbursement obligation shall remain
      in
      effect following Executive’s termination of employment for the applicable
      statute of limitations period relating to any such claim, and the amount of
      reimbursements hereunder during any calendar year shall not affect the expenses
      eligible for reimbursement in any other year. 

     

    
      
        
        

      

      
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    The
      Gross-Up Payments provided to Executive shall be made not later than the tenth
      (10th) business day following the date Executive remits to the IRS any such
      Excise Taxes; provided, however, that if the amounts of such Gross-Up Payments
      cannot be finally determined on or before the due date of any Excise Tax return
      required as a result of the Payments, the Company shall pay to Executive within
      10 days after the date Executive remits to the IRS such Excise Taxes, an
      estimate of the Gross-Up Payments due, as determined in good faith by Executive
      and the Company, the estimate to be of the minimum amount of such payments
      to
      which Executive is clearly entitled. In the event that the amount of the
      estimated payment exceeds the amount subsequently determined to have been due,
      such excess shall constitute a non-interest bearing loan by the Company to
      Executive, payable on the tenth (10th) business day after demand by the
      Company. At the time the payments are made under this Agreement, the Company
      shall provide Executive with a written statement setting forth the manner in
      which such payments were calculated and the basis for such calculations,
      including, without limitations any opinions or other advice the Company has
      received from Tax Counsel or other advisors or consultants and any such opinions
      or advice which are in writing shall be attached to the statement. 

     

    Any
      Gross-Up Payments hereunder will not affect the expenses eligible for
      reimbursement provided in any other year and this Tax Gross-Up provision shall
      remain in effect until the applicable 280G and 409A statute of limitations
      has
      ended. 

     

    (i)
      Change
      in Control.
      For
      purposes of this Agreement, a “Change
      in Control”
shall
      mean an occurrence of the following during the Term: 

     

    (1)
      The
“acquisition” by any “Person”
(as
      the
      term person is used for purposes of Section 13(d) or 14(d) of the
      Securities Exchange Act of 1934, as amended (the “1934
      Act”))
      of
“Beneficial
      Ownership”
(within
      the meaning of Rule 13d-3 promulgated under the 1934 Act) of any securities
      of
      Company which generally entitles the holder thereof to vote for the election
      of
      directors of Company (the “Voting
      Securities”)
      which,
      when added to the Voting Securities then “Beneficially
      Owned”
by
      such
      Person, would result in such Person either “Beneficially
      Owning”
fifty
      percent (50%) or more of the combined voting power of Company’s then
      outstanding Voting Securities or having the ability to elect fifty percent
      (50%) or more of Company’s directors; provided, however, that for purposes
      of this paragraph (1) of Section 6(i), a Person shall not be deemed to
      have made an acquisition of Voting Securities if such Person: (a) becomes
      the Beneficial Owner of more than the permitted percentage of Voting Securities
      solely as a result of open market acquisition of Voting Securities by Company
      which, by reducing the number of Voting Securities outstanding, increases the
      proportional number of shares Beneficially Owned by such Person; (b) is
      Company or any corporation or other Person of which a majority of its voting
      power or its equity securities or equity interest is owned directly or
      indirectly by Company (a “Controlled
      Entity”);
      (c) acquires Voting Securities in connection with a “Non
      Control Transaction”
(as
      defined in paragraph (3) of this Section 6(i)); or (d) becomes
      the Beneficial Owner of more than the permitted percentage of Voting Securities
      as a result of a transaction approved by a majority of the Incumbent Board
      (as
      defined in paragraph (2) below); or 

     

    (2)
      The
      individuals who, as of the Effective Date, are members of the Board (the
“Incumbent
      Board”),
      cease
      for any reason to constitute at least a majority of the Board; provided,
      however, that if either the election of any new director or the nomination
      for
      election of any new director by Company’s stockholders was approved by a vote of
      at least a majority of the Incumbent Board, such new director shall be
      considered as a member of the Incumbent Board; provided further, however, that
      no individual shall be considered a member of the Incumbent Board if such
      individual initially assumed office as a result of either an actual or
      threatened “Election
      Contest”
(as
      described in Rule 14a-11 promulgated under the 1934 Act) or other actual or
      threatened solicitation of proxies or consents by or on behalf of a Person
      other
      than the Board (a “Proxy
      Contest”)
      including by reason of any agreement intended to avoid or settle any Election
      Contest or Proxy Contest; or 

     

    (3)
      The
      consummation of a merger, consolidation or reorganization involving Company
      (a
“Business
      Combination”),
      unless (1) the stockholders of Company, immediately before the Business
      Combination, own, directly or indirectly immediately following the Business
      Combination, at least fifty percent (50%) of the combined voting power of
      the outstanding voting securities of the corporation resulting from the Business
      Combination (the “Surviving
      Corporation”)
      in
      substantially the same proportion as their ownership of the Voting Securities
      immediately before the Business Combination, and (2) the individuals who
      were members of the Incumbent Board immediately prior to the execution of the
      agreement providing for the Business Combination constitute at least a majority
      of the members of the Board of Directors of the Surviving Corporation, and
      (3) no Person (other than (x) Company or any Controlled Entity,
      (y) a trustee or other fiduciary holding securities under one or more
      Executive benefit plans or arrangements (or any trust forming a part thereof)
      maintained by Company, the Surviving Corporation or any Controlled Entity,
      or
      (z) any Person who, immediately prior to the Business Combination, had
      Beneficial Ownership of fifty percent (50%) or more of the then outstanding
      Voting Securities) has Beneficial Ownership of fifty percent (50%) or more
      of the combined voting power of the Surviving Corporation’s then outstanding
      voting securities (a Business Combination described in clauses (1), (2) and
      (3) of this paragraph shall be referred to as a “Non-Control
      Transaction”);

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (4)
      A
      complete liquidation or dissolution of Company; or 

     

    (5)
      The
      sale or other disposition of all or substantially all of the assets of Company
      to any Person (other than a transfer to a Controlled Entity). 

     

    A
      Change
      in Control shall not be deemed to occur solely because fifty percent
      (50%) or more of the then outstanding Voting Securities is Beneficially
      Owned by (x) a trustee or other fiduciary holding securities under one or
      more executive benefit plans or arrangements (or any trust forming a part
      thereof) maintained by Company or any Controlled Entity or (y) any
      corporation which, immediately prior to its acquisition of such interest, is
      owned directly or indirectly by the stockholders of Company in substantially
      the
      same proportion as their ownership of stock in Company immediately prior to
      such
      acquisition. 

     

    Any
      event
      that would otherwise constitute a Change in Control shall not be deemed to
      be a
      Change in Control if (i) the Incumbent Board continues to constitute a
      majority of the Board of the Company (or of the Surviving Corporation (if not
      the Company) and of any and all resulting parent entity(ies) in a Business
      Combination ) (ii) John D. Schiller, Jr. continues to serve as Chairman of
      the Board and/or Chief Executive Officer of the Company (or of the Surviving
      Corporation (if not the Company) and of any and all resulting parent entity(ies)
      in a Business Combination), (iii) any successor entity of the Company, if any,
      agrees in writing to expressly assume and agree to perform this Agreement,
      as
      required by Section 12 of this Agreement, and (iv) Executive maintains his
      same position of employment and reporting relationship (or is offered the
      position of Chief Executive Officer, with Executive’s compensation being
      commensurate with the compensation for the position of Chief Executive Officer,
      in the event that John D. Schiller, Jr. no longer holds that position) with
      the
      Company (or of the Surviving Corporation (if not the Company) and of any and
      all
      resulting parent entity(ies) in a Business Combination) after such event for
      a
      period of at least three (3) years. 

     

    (j)
      Good
      Reason.
      For
      purposes of this Agreement, “Good
      Reason”
shall
      mean (1) the material breach of any of the Company’s obligations under this
      Agreement without Executive’s written consent or (2) the occurrence of any
      of the following circumstances, without Executive’s written consent:

     

    (i)
      the
      change of Executive’s title or the assignment to Executive of any duties that
      materially adversely alter the nature or status of Executive’s office, title,
      responsibilities, including reporting responsibilities, or action by the Company
      that results in the material diminution of Executive’s position, duties or
      authorities, from those in effect immediately prior to such change in title,
      assignment or action; 

     

    (ii)
      the
      failure by Company to continue in effect any compensation plan in which
      Executive participates that is material to Executive’s total compensation unless
      an equitable arrangement (embodied in an ongoing substitute or alternative
      plan)
      has been made with respect to such plan, or the failure by Company to continue
      Executive’s participation therein (or in such substitute or alternative plan) on
      a basis not materially less favorable to Executive, unless any such failure
      to
      continue in effect any compensation plan or participation relates to a
      discontinuance of such plans or participation on a management-wide or
      Company-wide basis; 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (iii)
      the
      taking of any action by Company which would directly or indirectly materially
      reduce or deprive Executive of any material pension, welfare or fringe benefit
      then enjoyed by Executive, unless such action relates to a discontinuance of
      benefits on a management-wide or Company-wide basis; 

     

    (iv)
      the
      relocation of Company’s principal executive offices, or the Company’s requiring
      Executive to relocate, anywhere outside the greater Houston, Texas metropolitan
      area, except for required travel on the Company’s business to an extent
      substantially consistent with Executive’s obligations under this Agreement; or

     

    (v)
      the
      Company’s material breach of any material provision of this Agreement.

     

    Executive
      is required to provide notice to the Company of the existence of the conditions
      described above in this Section 6(j)(i) through (v) within a period not to
      exceed 90 days from the initial existence of the condition, upon the notice
      of
      which the Company must be provided a period of at least 30 days during which
      it
      may remedy the condition. 

     

    (k)
      Taxable
      Health Care Coverage or Benefits.
      To the
      extent the health care coverage or benefits received by Executive after
      termination are taxable to Executive, Company shall make Executive “whole” on a
      net after tax basis by reimbursing Executive for such amount no later than
      10
      days after such taxes are remitted by Executive to the IRS; provided, however,
      that such coverage shall cease if Executive obtains comparable replacement
      coverage (although Executive shall have no obligation to pursue such
      coverage).

     

    (l)
      Acceleration
      of Unvested Awards.
      In the
      event of Executive’s termination or resignation under the circumstances
      described in Sections 6(a)(ii), 6(b), 6(c), 6(d)(i), 6(d)(ii), 6(d)(iii) or
      6(d)(iv), then all then outstanding Company stock-based awards of Executive,
      other than the awards dated the date of this Agreement (which shall be governed
      by the terms of agreement with respect to such award), and all equity
      compensation described in Section 4(c) shall become immediately exercisable
      and payable in full, as the case may be, with any performance goals associated
      therewith being deemed to have been achieved at the maximum levels and all
      restrictions removed with respect thereto (including without limitation with
      respect to any options that would otherwise vest in accordance with performance
      goals and any grants of restricted stock and/or restricted stock units that
      shall have been granted prior to the Effective Date). 

     

    (m)
      Reimbursements
      for Expenses.
      Company
      shall reimburse Executive for business expenses properly incurred prior to
      the
      Date of Termination, regardless of the circumstances of termination, and in
      accordance with the Company’s Reimbursement Plans. 

     

    7.
      Restrictive
      Covenants.
      

     

    (a)
      General.
      The
      parties acknowledge that during the Term, Company may disclose to Executive
      or
      provide Executive with access to trade secrets or confidential information
      (“Confidential
      Information”)
      of
      Company or its Affiliates; and/or place Executive in a position to develop
      business goodwill on behalf of Company or its Affiliates; and/or entrust
      Executive with business opportunities of Company or its Affiliates. As part
      of
      the consideration for the compensation and benefits to be paid to Executive
      hereunder; to protect the trade secrets and Confidential Information of the
      Company and its Affiliates that have been and will in the future be disclosed
      or
      entrusted to Executive, the business good will of the Company and its Affiliates
      that has been and will in the future be developed in Executive, or the business
      opportunities that have been and will in the future be disclosed or entrusted
      to
      Executive by the Company and its Affiliates; and as an additional incentive
      for
      the Company to enter into this Agreement, the Company and Executive agree to
      the
      following obligations relating to unauthorized disclosures, non-competition
      and
      non-solicitation.

     

    (b)
      Confidential
      Information; Unauthorized Disclosure.
      Executive shall not, whether during the period of his employment hereunder
      or
      thereafter, without the written consent of the Board or a person authorized
      thereby, disclose to any person, other than an executive of Company or a person
      to whom disclosure is reasonably necessary or appropriate in connection with
      the
      performance by Executive of his duties as an executive of Company, any
      Confidential Information obtained by him while in the employ of Company with
      respect to Company’s business, including but not limited to technology,
      know-how, processes, maps, geological and geophysical data, other proprietary
      information and any information whatsoever of a confidential nature, the
      disclosure of which he knows or should know will be damaging to Company;
      provided, however, that Confidential Information shall not include any
      information known generally to the public (other than as a result of
      unauthorized disclosure by Executive) or any information which Executive may
      be
      required to disclose by any applicable law, order, or judicial or administrative
      proceeding. In no event shall an asserted violation of the provisions of this
      paragraph constitute a basis for deferring or withholding any amounts payable
      to
      Executive under this Agreement. Within fourteen (14) days after the termination
      of Executive’s employment for any reason, Executive shall return to Company all
      documents and other tangible items containing Company information which are
      in
      Executive’s possession, custody or control. Executive agrees that all
      Confidential Information of the Company exclusively belongs to the Company,
      and
      that any work of authorship relating to the Company’s business, products or
      services, whether such work is created solely by Executive or jointly with
      others, and whether or not such work is Confidential Information, shall be
      deemed exclusively belonging to the Company.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (c)
      Non-Competition.
      During
      the Term and for a period of one (1) year thereafter, Executive shall not in
      any
      geographic area or market where the Company or any of its Affiliates are
      conducting any Business (defined below) or have during the previous 12 months
      conducted such Business, directly or indirectly for Executive or for others,
      engage in or become interested financially in as a principal, executive,
      partner, shareholder, agent, manager, owner, advisor, lender, guarantor of
      any
      person engaged in any business substantially identical to the Business (defined
      below); provided, however, that Executive may invest in stock, bonds or other
      securities in any such business (without participating in such business) if:
      (i)(A) such stock, bonds or other securities are listed on any United States
      securities exchange or are publicly traded in an over the counter market and
      (B) its investment does not exceed, in the case of any capital stock of any
      one issuer, 5% of the issued and outstanding capital stock, or in the case
      of
      bonds or other securities, 5% of the aggregate principal amount thereof issued
      and outstanding, or (ii) such investment is completely passive and no
      control or influence over the management or policies of such business is
      exercised. The term “Business”
shall
      mean the exploration, development and production of crude petroleum and natural
      gas. Notwithstanding the foregoing provisions of this Section 7(c),
      Executive shall have no further obligations under this Section 7(c) in the
      event of (1) a termination of Executive’s employment by Company without Cause,
      (2) a termination of Executive’s employment pursuant to Section 6(d)(ii), (3) a
      termination of Executive’s employment pursuant to Section 6(d)(iii) or (4)
      Executive’s resignation for Good Reason. 

     

    (d)
      Non-Solicitation.
      Executive undertakes toward Company and is obligated, during the Term and for
      a
      period of one (1) year thereafter, in any geographic area or market where the
      Company or any of its Affiliates are conducting any Business or have during
      the
      previous 12 months conducted such Business, not to solicit or hire, directly
      or
      indirectly for Executive or for others, in any manner whatsoever (except in
      response to a general solicitation), in the capacity of executive, consultant
      or
      in any other capacity whatsoever, one or more of the executives, directors
      or
      officers or other persons (hereinafter collectively referred to as “Company
      Executives”)
      who at
      the time of solicitation or hire, or in the 90 day period prior thereto, are
      working full-time or part-time for Company or any of its Affiliates and not
      to
      endeavor, directly or indirectly, in any manner whatsoever, to encourage any
      of
      said Company executives to leave his or her job with Company or any of its
      Affiliates and not to endeavor, directly or indirectly, and in any manner
      whatsoever, to incite or induce any client of Company or any of its Affiliates
      to terminate, in whole or in part, its business relations with Company or any
      of
      its Affiliates. 

     

    (e)
      Enforcement
      and Reformation.
      It is
      the desire and intent of the parties that the provisions of this Section 7
      shall be enforced to the fullest extent permissible under the laws and public
      policies applied in each jurisdiction in which enforcement is sought.
      Accordingly, if any particular provision of this Section 7 shall be
      adjudicated to be invalid or unenforceable, such provision shall be deemed
      amended to delete therefrom the portion thus adjudicated to be invalid or
      unenforceable. Such deletion shall apply only with respect to the operation
      of
      such provisions of this Section 7 in the particular jurisdiction in which
      such adjudication is made. In addition, if the scope of any restriction
      contained in this Section 7 is too broad to permit enforcement thereof to
      its fullest extent, then such restriction shall be enforced to the maximum
      extent permitted by law, and Executive hereby consents and agrees that such
      scope may be judicially modified in any proceeding brought to enforce such
      restriction. 

     

    (f)
      Remedies.
      In the
      event of a breach or threatened breach by Executive of the provisions of this
      Section 7, Executive acknowledges that money damages would not be
      sufficient remedy, and the Company shall be entitled to specific performance,
      injunction and such other equitable relief as may be necessary or desirable
      to
      enforce the restrictions contained herein. Nothing herein contained shall be
      construed as prohibiting Company from pursuing any other remedies available
      for
      such breach or threatened breach or any other breach of this Agreement.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (g)
      Nondisparagement.
      Executive and the Company and its Affiliates shall refrain from any criticisms
      or disparaging comments about each other or in any way relating to Executive’s
      employment or separation from employment; provided, however, that nothing in
      this Agreement shall apply to or restrict in any way the communication of
      information by the Company or any of its Affiliates or Executive to any state
      or
      federal law enforcement agency or require notice to the Company or Executive
      thereof, and none of Executive, the Company or any of its Affiliates will be
      in
      breach of the covenant contained above solely by reason of testimony or
      disclosure which is compelled by applicable law or regulation or process of
      law.
      A violation or threatened violation of this prohibition may be enjoined by
      the
      courts. The rights afforded under this provision are in addition to any and
      all
      rights and remedies otherwise afforded by law.

     

    8.
      Non-exclusivity
      of Rights.
      Nothing
      in this Agreement shall prevent or limit Executive’s continuing or future
      participation in any benefit, bonus, incentive or other plan or program provided
      by Company or any of its Affiliates and for which Executive may qualify, nor
      shall anything herein limit or otherwise adversely affect such rights as
      Executive may have under any stock option or other agreements with Company
      or
      any of its Affiliates. 

     

    9.
      Non-assignability
      by Executive.
      The
      obligations of Executive hereunder are personal and may not be assigned or
      delegated by him or transferred in any manner whatsoever, nor are such
      obligations subject to involuntary alienation, assignment or transfer, except
      by
      will or the laws of descent and distribution. 

     

    10.
      Method
      of Notice.
      For the
      purpose of this Agreement, notices and all other communications provided for
      in
      the Agreement shall be in writing and shall be deemed to have been duly given
      when personally delivered, sent by overnight courier or by facsimile with
      confirmation of receipt or on the third business day after being mailed by
      United States registered mail, return receipt requested, postage prepaid,
      addressed to Company at its principal office address and facsimile number,
      directed to the attention of the Board with a copy to the Secretary of Company,
      and to Executive at Executive’s residence address and facsimile number on the
      records of Company or to such other address as either party may have furnished
      to the other in writing in accordance herewith except that notice of change
      of
      address shall be effective only upon receipt. 

     

    11.
      Validity.
      The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity or enforceability of any other provision of this Agreement,
      which shall remain in full force and effect. 

     

    12.
      Successors
      and Binding Agreement.
      This
      Agreement shall be binding upon and inure to the benefit of the Company and
      any
      successor of the Company (whether direct or indirect, by purchase, merger,
      consolidation or otherwise), and this Agreement shall inure to the benefit
      of
      and be enforceable by the Executive’s legal representatives. The Company shall
      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 to assume expressly 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. As used in this Agreement,
      “Company” shall mean the Company as hereinbefore defined and any successor by
      operation of law or otherwise and any successor to its business and/or assets
      as
      aforesaid which assumes and agrees to perform this Agreement.

     

    13.
      Indemnification.
      The
      Company agrees to indemnify the Executive with respect to any acts or omissions
      he may commit during the period during which he is an officer, director and/or
      employee of the Company or any Affiliate thereof, and to provide him with
      coverage under any directors’ and officers’ liability insurance policies, in
      each case on terms not less favorable than those provided to any of its other
      directors and officers as in effect from time to time. 

    

    14.
      Withholding.
      Anything to the contrary notwithstanding, all payments required to be made
      by
      the Company hereunder to Executive, his spouse, his estate or beneficiaries,
      shall be subject to withholding of such amounts relating to taxes as the Company
      may reasonably determine it should withhold pursuant to any applicable law
      or
      regulation. In lieu of withholding such amounts in whole or in part, the Company
      may, in its sole discretion, accept other provisions for payment of taxes as
      required by law, provided it is satisfied that all requirements of law affecting
      its responsibilities to withhold such taxes have been satisfied. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    15.
      Legal
      Fees.
      The
      Company agrees to pay as incurred, to the full extent permitted by law, all
      legal fees and expenses which the Executive may reasonably incur as a result
      of
      any contest by the Company, the Executive or others of the validity or
      enforceability of, or liability or entitlement under, any provision of this
      Agreement or any guarantee of performance thereof (whether such contest is
      between the Company and the Executive or between either of them and any third
      party, and including as a result of any contest by the Executive about the
      amount of any payment pursuant to this Agreement), plus in each case interest
      on
      any delayed payment at the applicable Federal rate provided for in Section
      7872(f)(2)(A) of the Code. The Company’s obligations under this paragraph shall
      apply without regard to the outcome of any such contest; provided, however,
      that
      if such contest relates to a payment, act or omission that occurred prior to
      a
      Change in Control, then the Company’s obligations under this paragraph shall
      apply only if the Executive obtains any money judgment or otherwise prevails
      with respect to any such contest. 

     

    16.
      Waiver
      and Modification.
      No
      provision of this Agreement may be modified, waived or discharged unless such
      waiver, modification or discharge is agreed to in writing and signed by
      Executive and such officer as may be specifically authorized by the Board.
      No
      waiver by either party hereto at any time of any breach by the other party
      hereto of, or in 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. 

     

    17.
      Applicable
      Law.
      This
      Agreement is entered into under, and the validity, interpretation, construction
      and performance of this Agreement shall be governed by, the laws of the State
      of
      Texas. 

     

    18.
      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.

     

    19.
      Entire
      Agreement.
      Except
      as provided in the written benefit plans and programs and agreements of the
      Company in effect during the Term of this Agreement, this Agreement is an
      integration of the parties’ agreement; no agreement 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;
      and this Agreement contains the entire understanding of the parties in respect
      of the subject matter and supersedes and replaces in full all prior written
      or
      oral agreements and understandings between the parties with respect to such
      subject matters. Without limiting the scope of the preceding sentence, all
      prior
      understandings and agreements among the parties hereto relating to the subject
      matter hereof (including, without limitation, the Original Agreement) are hereby
      null and void and of no further force and effect. 

    

    20.
      Representation
      by Executive.
      Executive hereby represents and warrants to the Company that, as of the
      Effective Date, he is not a party to any employment or other agreement with
      any
      third party which would preclude him from continuing employment with the Company
      and performing his obligations under this Agreement.

    

    21.
      Severability.
      If a
      court of competent jurisdiction determines that any provision of this Agreement
      is invalid or unenforceable, then the invalidity or unenforceability of that
      provision shall not affect the validity or enforceability of any other provision
      of this Agreement and all other provisions shall remain in full force and
      effect. 

    

    22.
      Headings.
      The
      paragraph headings have been inserted for purposes of convenience and shall
      not
      be used for interpretive purposes. 

    

    23.
      Gender
      and Plurals.
      Wherever the context so requires, the masculine gender includes the feminine
      or
      neuter, and the singular number includes the plural and conversely.

    

    

    [Remainder
      of page intentionally left blank.]

    

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        12

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of September 10,
      2008, effective for all purposes as provided above on the Effective
      Date.

     

    
      	 	 	 
	
              ENERGY
                XXI (BERMUDA) LIMITED

            
	 	 
	
              By:

            	
               

            	
              /s/
                David M. Dunwoody

            
	 	
               

            	
              David
                M. Dunwoody

            
	 	
               

            	
              Director
                and Chairman of the 

              Remuneration
                Committee

            

    

     

    
      	 
	
              EXECUTIVE

            
	 
	
              /s/
                Steven A. Weyel

            
	
              Steven
                A. Weyel

            

    

     

     

    
      
        
        

      

      
        13Exhibit
      10.4

     

    

     

    ENERGY
      XXI (BERMUDA) LIMITED

     

    EXECUTIVE
      EMPLOYMENT AGREEMENT 

     

    This
      Employment Agreement (“Agreement”)
      by and
      between Energy XXI (Bermuda) Limited, a Bermuda corporation (“Company”),
      and
      David West Griffin (“Executive”)
      is
      entered into effective as of September 10, 2008 (the “Effective
      Date”).
      

     

    WHEREAS,
      Executive is currently employed by the Company; and 

     

    WHEREAS,
      Executive and the Company have heretofore entered into that certain Employment
      Agreement dated as of April 4, 2006 (“Original
      Agreement”);
      and

     

    WHEREAS,
      the Company desires to continue to employ Executive in an executive capacity,
      and Executive likewise desires to continue to be employed by the Company; and
      

     

    WHEREAS,
      the Company and Executive desire to replace the Original Agreement with this
      Agreement;

     

    NOW,
      THEREFORE, in consideration of (1) the Company’s agreement to grant to Executive
      Two Hundred Fifty Thousand (250,000) stock options to purchase the Company’s
      common shares under the Energy XXI Services, LLC 2006 Long-Term Incentive Plan
      (“Grant”), such Grant to be made pursuant to the terms and conditions of the
      Stock Option Agreement governing the Grant and subject to the prior approval
      of
      the Grant by the Company’s Remuneration Committee, and (2) the mutual promises,
      covenants, representations, obligations and agreements contained herein, and
      for
      other valuable consideration, the receipt and adequacy of which are hereby
      acknowledged, the parties agree as follows: 

     

    1.
      Employment-at-will.
      Company
      agrees to employ Executive, and Executive hereby agrees to be employed by
      Company. Employment of Executive shall be at will and may be terminated by
      either party on the terms and conditions set forth in this Agreement.

     

    2.
      Term
      of Employment.
      Subject
      to the provisions for termination provided in the Agreement, the term of this
      Agreement (the “Term”)
      shall
      commence on the Effective Date and shall continue through the third anniversary
      of the Effective Date. The Term shall be automatically renewed and extended
      for
      a period of thirty-six (36) months commencing on each successive day after
      the Effective Date.

     

    3.
      Executive’s
      Duties.
      

     

    (a)
      Positions.
      During
      the Term, Executive shall serve as Chief Financial Officer of Company (and/or
      in
      such other positions as the parties mutually may agree), with such customary
      duties and responsibilities as may from time to time be assigned to him by
      the
      Company or the Chief Executive Officer, provided that such duties are at all
      times consistent with the duties of such position. Executive shall report
      directly to the Chief Executive Officer. As a part of his existing duties
      Executive currently serves as a Director on the Company’s Board of Directors
      (“Board”).
      Executive agrees to serve without additional compensation, if elected or
      appointed thereto, in one or more offices or as a director of any of the
      Company’s Affiliates. For purposes of this Agreement, the term “Affiliate”
shall
      mean any entity which owns or controls, is owned or controlled by, or is under
      common ownership or control with, the Company. Executive agrees to serve in
      the
      positions referred to herein and to perform all duties relating thereto
      diligently and to the best of his ability. 

     

    (b)
      Other
      Interests.
      Executive agrees, during the period of his employment by the Company, to devote
      his primary business time, energy and best efforts to the business and affairs
      of the Company and its Affiliates and not to engage, directly or indirectly,
      in
      any other business or businesses, whether or not similar to that of the Company,
      except with the consent of the Board. The foregoing notwithstanding, the parties
      recognize and agree that Executive may engage in personal investments and other
      corporate, civic and charitable activities that do not conflict with the
      business and affairs of the Company or interfere with Executive’s performance of
      his duties hereunder without the necessity of obtaining the consent of the
      Board, provided, however, that Executive agrees that if the Board determines
      that continued service with one or more of these entities is inconsistent with
      Executive’s duties hereunder and gives written notice of such to Executive,
      Executive will resign from such position(s). 

     

    
      
         

      

      
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    (c)
      Duty
      of Loyalty.
      Executive acknowledges and agrees that Executive owes a fiduciary duty of
      loyalty, fidelity, and allegiance to use his reasonable best efforts to act
      at
      all times in the best interests of the Company. In keeping with these duties,
      Executive shall make full disclosure to the Company of all business
      opportunities pertaining to the Company’s business and shall not appropriate for
      Executive’s own benefit business opportunities concerning the subject matter of
      the fiduciary relationship. 

     

    4.
      Compensation.
      

     

    (a)
      Base
      Compensation.
      For
      services rendered by Executive under this Agreement, Company shall pay to
      Executive a minimum base salary (“Base
      Compensation”)
      of
      $325,000.00 per annum payable in accordance with Company’s customary payroll
      practice for its senior executive officers. The amount of Base Compensation
      shall be reviewed periodically by the Remuneration Committee of the Board (the
      “Committee”)
      and
      may be increased from time to time as the Committee may deem appropriate.
      References in this Agreement to Base Compensation shall refer to annual base
      salary so increased. Base Compensation, as in effect at any time, may not be
      decreased without the prior written consent of Executive.

     

    (b)
      Annual
      Bonus.
      In
      addition to his Base Compensation, Executive shall be eligible to receive each
      year during the Term, a cash incentive payment (“Bonus”)
      in an
      amount determined by the Committee based on Executive’s individual performance,
      the performance of Company and performance goals established by the Committee.
      The Target Bonus shall be an amount equal to 85% of Executive’s Base
      Compensation in effect at the time the Bonus is determined by the Committee
      (“Target
      Bonus”).
      Such
      Bonus, if any, shall be paid not later than the fifteenth day of the second
      calendar month following the the last day of the Company’s fiscal year in
      which the Bonus was earned ends.

     

    (c)
      Equity
      Compensation.
      During
      this Agreement, Executive shall be eligible to participate in any equity
      compensation arrangement or plan offered by the Company to senior executives
      on
      such terms and conditions as the Committee of the Board shall determine. Nothing
      herein shall be construed to give Executive any rights to any amount or type
      of
      awards, or rights as a shareholder pursuant to any such plan, grant or award
      except as provided in such award or grant to Executive provided in writing
      and
      authorized by the Committee of the Board. 

     

    5.
      Other
      Benefits.
      

     

    (a)
      During this Agreement, Executive shall be entitled to participate in all
      incentive compensation plans and to receive all fringe benefits and perquisites
      offered by Company to any of its senior executive officers, including, without
      limitation, participation in the various health, retirement, life insurance,
      short-term and long-term disability insurance, parking and other executive
      benefit plans or programs provided to the executives of Company in general,
      subject to the regular eligibility requirements with respect to each of such
      benefit plans or programs, and such other benefits or perquisites as may be
      approved by the Committee during the Term, all on a basis at least as favorable
      to Executive as may be provided to similarly situated senior executive officers
      of Company. Executive shall be entitled to take appropriate and reasonable
      annual vacation time provided that such vacation time does not interfere with
      his duties hereunder. Company shall reimburse Executive monthly for country
      or
      golf and luncheon club dues and one club initiation fee. 

     

    (b)
      Business
      Expenses.
      Company
      shall reimburse Executive for all reasonable business expenses incurred by
      Executive in the performance of his duties, which expenses will be subject
      to
      the oversight of Company’s Audit Committee of the Board in the normal course of
      business and will be compliant with the applicable Reimbursement Plan (as
      defined below) of the Company. It is understood that Executive is authorized
      to
      incur reasonable business expenses for promoting the business of Company,
      including reasonable expenditures for travel, lodging, meals and client or
      business associate entertainment. Request for reimbursement for such expenses
      must be accompanied by appropriate documentation. 

     

    
      
         

      

      
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    (c)
      Automobile.
      The
      Company shall provide Executive with an automobile (or an automobile allowance)
      that is determined by the Committee or the Board to be appropriate for the
      needs
      and requirements of Executive’s employment, and the Company shall reimburse
      Executive for, or pay on behalf of Executive, reasonable and appropriate
      expenses incurred by Executive for maintaining and operating such automobile.
      Such reimbursements shall comply with all requirements of the applicable
      Reimbursement Plan (as defined below) of the Company. Such automobile shall
      be
      available to Executive and his spouse for personal use.

     

    (d)
      Life
      Insurance.
      During
      Executive’s employment hereunder, the Company shall maintain one or more
      policies of life insurance on the life of Executive providing an aggregate
      death
      benefit in an amount not less than $2 million (the “Minimum
      Death Benefit”).
      Executive shall have the right to designate the beneficiary or beneficiaries
      of
      the death benefit payable pursuant to such policy or policies up to an aggregate
      death benefit in an amount equal to the Minimum Death Benefit. The provisions
      of
      this Section can be satisfied in whole or in part by any group life insurance
      policy provided by the Company in accordance with this Section. Executive shall
      (i) furnish any and all information reasonably requested by the Company or
      the
      insurer to facilitate the issuance of the life insurance policy or policies
      described in this Section or any adjustment to any such policy, and (ii) take
      such physical examinations as the Company or the insurer deems necessary. If
      Executive refuses to cooperate or makes any material misstatement of information
      or nondisclosure of medical history, then the Company shall have no further
      obligation to provide the benefit described in this Section.

     

    6.
      Termination
      and Effect on Compensation.
      

     

    (a)
      Resignation
      by Executive.
      

     

    (i)
      Executive may terminate his employment under this Agreement and resign his
      position(s) with the Company at any time, for any reason whatsoever, or for
      no
      reason, in Executive’s sole discretion, by delivering a Notice of Termination
      (defined in Section 6(e) below). In the event of such termination, except as
      otherwise provided below, Executive shall not be entitled to further
      compensation pursuant to this Agreement except as may be provided by the terms
      of any benefit plans of Company in which Executive may be a participant, and
      the
      terms of any outstanding equity grants, and for salary accrued but unpaid
      through the Date of Termination (defined in Section 6(f) below) and
      reimbursement of business expenses properly incurred but unreimbursed (to the
      extent reimbursable) prior to Date of Termination. 

     

    (ii)
      Notwithstanding the provisions of this Section 6(a)(i), in the event that
      Executive terminates this Agreement by resigning for Good Reason (defined in
      Section 6(j) below), (A) the Company shall pay Executive immediately upon
      the Date of Termination a lump sum equal to three (3) times the sum of the
      Base
      Compensation and the Target Bonus; (B) for the 36-month period after the
      Date of Termination, Company shall continue to cover Executive (and Executive’s
      dependents) in the medical plan sponsored by Company (or any successor) for
      its
      executives, provided Executive timely remits to Company the applicable monthly
      COBRA premium (less the COBRA administrative surcharge) for such continued
      coverage; and (C) Company shall reimburse Executive for any medical premium
      expenses incurred by Executive under (B) within 30 days after the date of
      such payment by Executive and in compliance with Treasury Regulation §
1.409A-3(i)(1)(iv) with regard to medical benefits. 

     

    (b)
      Death
      of Executive.
      If
      Executive dies during the term of this Agreement, then the Company will be
      obligated to continue for twelve (12) months after the Date of Termination
      (defined in Section 6(f) below) to pay the Base Salary payments under Section
      4(a) of this Agreement. The Company may thereafter terminate this Agreement
      without compensation to Executive’s estate except to the extent this Agreement
      or any plan or arrangement of the Company provides for vested benefits or
      continuation of benefits beyond termination of Executive’s
      employment.

     

    (c)
      Disability
      of Executive.
      Except
      as provided in Section 6(d)(iii), if Executive shall have been absent from
      the full-time performance of Executive’s duties with Company for 180 business
      days during any twelve-month period as a result of Executive’s incapacity due to
      accident, physical or mental illness, or other circumstance which renders him
      mentally or physically incapable of performing the duties and services required
      of him hereunder on a full-time basis as determined by Executive’s physician
      (“Disability”),
      Executive’s employment may be terminated by Company for Disability. If
      Executive’s employment is terminated for Disability, Executive shall be entitled
      to the compensation and benefits provided in Section 6(d)(i) hereof.

     

    
      
         

      

      
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    (d)
      Other
      Terminations.
      

     

    (i)
      By
      Company for Reason Other Than Cause.
      Company
      may terminate this Agreement and Executive’s employment for any reason
      whatsoever, or for no reason, in the Board’s sole discretion upon Notice of
      Termination (as defined in Section 6(e) below). For purposes of this Agreement,
      acceptance by the Company of Executive’s resignation upon request or by mutual
      agreement shall be deemed to be a termination by the Company. Except as
      otherwise provided below, in the event that Executive’s employment is terminated
      by Company for any reason other than Cause (defined in Section 6(d)(v) below),
      then in addition to any compensation or benefits to which Executive may be
      entitled through the Date of Termination (as defined in Section 6(f) below):
      (A) Company shall pay Executive immediately upon the Date of Termination a
      lump sum equal to three (3) times the sum of the Base Compensation and the
      Target Bonus; (B) for the 36-month period after the Date of Termination,
      Company shall continue to cover Executive (and Executive’s dependents) in the
      medical plan sponsored by Company (or any successor) for its executives,
      provided Executive timely remits to Company the applicable monthly COBRA premium
      (less the COBRA administrative surcharge) for such continued coverage; and
      (C) Company shall reimburse Executive for any medical premium expenses
      incurred by Executive under (B) within 30 days after the date of such
      payment by Executive. 

     

    (ii)
      [Section intentionally left blank.] 

     

    (iii)
      By
      Company or Executive Following a Change in Control.
      Except
      as set forth in Section 6(d)(iv) below, if within a one-year period
      following a Change in Control (defined in Section 6(i) below), Executive resigns
      or is terminated for any reason, then in addition to any compensation or
      benefits to which Executive may be entitled through the Date of Termination
      (A) Company shall pay Executive immediately upon Date of Termination a lump
      sum equal to three (3) times the sum of the Base Compensation and the
      Target Bonus; (B) for the 36-month period after the Date of Termination,
      Company shall continue to cover the Executive (and Executive’s dependents) in
      the medical plan sponsored by Company (or any successor) for its executives,
      provided Executive timely remits to Company the applicable monthly COBRA premium
      (less the COBRA administrative surcharge) for such continued coverage; and
      (C) Company shall reimburse Executive for any medical premium expenses
      incurred by Executive under (B) within 30 days after the date of such
      payment by Executive. 

     

    (iv)
      Notwithstanding the provision of Section 6(d)(iii) above, if following a Change
      in Control, the surviving entity requests Executive to remain employed by the
      Company, acknowledged by surviving entity expressly assuming and agreeing in
      writing to perform this Agreement, then Executive may not resign under
      Section 6(d)(iii) until six (6) months after the date of the Change in
      Control. 

     

    (v)
      By
      Company for Cause.
      Notwithstanding the foregoing provisions of this Section 6, in the event
      Executive is terminated because of Cause, Company shall have no obligations
      pursuant to this Agreement after the Date of Termination other than for salary
      accrued but unpaid through the Date of Termination (defined in Section 6(f)
      below) and reimbursement of business expenses properly incurred but unreimbursed
      (to the extent reimbursable) prior to Date of Termination. For purposes herein,
      “Cause”
means
      (A)  Executive’s gross negligence, gross neglect or willful misconduct in
      the performance of the duties required hereunder, (B) Executive’s commission of
      a felony that results in a material adverse effect on the Company, or
      (C) Executive’s material breach of any material provision of this
      Agreement. Notwithstanding the foregoing, prior to any termination for Cause
      under clauses (A) or (C) of the preceding sentence, (X) Company
      must provide Executive with reasonable notice detailing the failure or conduct
      which the Chief Executive Officer believes to constitute Cause, (Y) Company
      must provide Executive a reasonable opportunity to cure such failure or conduct,
      and (Z) after such notice and an opportunity to cure, the Chief Executive
      Officer and the Committee must reasonably determine that Executive has not
      cured
      such failure or conduct. Executive shall not be deemed to have been terminated
      for Cause unless and until Executive shall have been provided an opportunity
      to
      be heard in person by the Committee (with the assistance of Executive’s counsel
      if Executive so desires) on at least five business days’ advance notice, and the
      Committee must unanimously approve the termination of Executive for Cause.
      

     

    
      
         

      

      
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    (vi)
      If
      Executive is a “specified employee” (as defined within Section 409A of the
      Internal Revenue Code of 1986, as amended (the “Code”) and the accompanying
      regulations to Section 409A of the Code, the “Nonqualified Deferred Compensation
      Rules”) at the time that Executive incurs a “separation from service” (as
      defined in the Nonqualified Deferred Compensation Rules), any applicable lump
      sum payment described in Sections 6(a)(ii), 6(d)(i), or 6(d)(iii) shall not
      be
      in accordance with the time periods described in the applicable Sections, but
      shall be delayed for a period of six months. Any such lump sum payment which
      Executive is entitled to but that shall be delayed pursuant to the preceding
      sentence shall be contributed to the trustee of a “rabbi” trust (the
“Trust”),
      which
      is an unfunded arrangement that will be designed to comply with Revenue
      Procedure 92-64. Such amounts that would otherwise be payable upon separation
      from service shall be held by the trustee pursuant to the terms of such Trust
      and paid to Executive as of the earlier of: (1) the first day of the
      seventh month following Executive’s separation from service; or
      (2) Executive’s date of death. Such amounts (including any such amounts
      that would otherwise be payable in installments commencing on separation from
      service) shall be accumulated and paid in a lump sum with interest (based on
      the
“prime rate” as published in the Wall Street Journal, plus one (1) percent)
      on the date that is the earlier of (1) or (2) above, unless such day
      is not a business day, in which case the business day immediately prior to
      such
      date in (1) or (2) above shall be the date the prime rate is determined, and
      shall be paid in installments (to the extent applicable) thereafter.

     

    (vii)
      All
      reimbursements and in-kind benefits provided pursuant to this Agreement shall
      be
      made in accordance with Treasury Regulation Section 1.409A-3(i)(l)(iv) such
      that
      any reimbursements or in-kind benefits will be deemed payable at a specified
      time or on a fixed schedule relative to a permissible payment event.
      Specifically, (1) the amounts reimbursed and in-kind benefits under this
      Agreement, other than with respect to medical benefits provided under this
      Section 6, during Executive’s taxable year may not affect the amounts reimbursed
      or in-kind benefits provided in any other taxable year, (2) the reimbursement
      of
      an eligible expense shall be made on or before the last day of Executive’s
      taxable year following the taxable year in which the expense was incurred,
      (3)
      the right to reimbursement or an in-kind benefit is not subject to liquidation
      or exchange for another benefit, and (4) any expenses reimbursed/in-kind
      benefits provided under Sections 6(d)(i) and 6(d)(iii) hereof will not
      affect the expenses eligible for reimbursement/in-kind benefits provided in
      any
      other year (any such reimbursement or in-kind benefit arrangement to be referred
      to herein as a “Reimbursement
      Plan”).
      

     

    (e)
      Notice
      of Termination.
      Any
      purported termination of Executive’s employment by Company or by Executive and
      any purported termination of this Agreement shall be communicated by written
      notice of termination (“Notice
      of Termination”)
      to the
      other party hereto in accordance with Section 10 hereof. Notice of
      Termination shall include the effective Date of Termination (defined in Section
      6(f) below) of this Agreement. Any Notice of Termination shall be deemed to
      also
      be Executive’s resignation as director and/or officer of any Affiliate of the
      Company. Executive agrees to execute any and all documentation of such
      resignations upon request by the Company, but he shall be treated for all
      purposes as having so resigned upon the Date of Termination, regardless of
      when
      or whether he executes any such documentation. 

     

    (f)
      Date
      of Termination.
      “Date
      of Termination”
shall
      mean in the case of Executive’s death, his date of death, and in all other
      cases, the date specified in the Notice of Termination as the effective date
      on
      which this Agreement shall be terminated, provided that for purposes of
      determining the date of payment pursuant to Executive’s termination for any
      reason shall be the date of Executive’s separation of service in accordance with
      Treasury Regulation 1.409A-1(h).

     

    (g)
      No
      Duty to Mitigate.
      Executive shall not be required to mitigate the amount of any payment or benefit
      provided for in this Agreement by seeking other employment or otherwise, nor,
      except as provided in Section 6(k), shall the amount of any payment or
      benefit provided for in this Agreement be reduced by any compensation or benefit
      earned by Executive as a result of employment by another employer,
      self-employment earnings, by retirement benefits, by offset against any amount
      claimed to be owing by Executive to Company, or otherwise. 

     

    
      
         

      

      
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    (h)
      Full
      Tax Gross-Up of Payments.
      In the
      event that any payment, award, benefit or distribution (or any acceleration
      of
      any payment, award, benefit or distribution) made or provided to or for the
      benefit of Executive in connection with this Agreement or Executive’s employment
      with Company or the termination thereof (the “Payments”)
      is
      determined to be subject to any additional tax imposed by Section 4999 or
      409A of the Code or any interest or penalties with respect to such additional
      taxes (such additional taxes, together with any such interest and penalties,
      are
      collectively referred to as the “Excise
      Taxes”),
      then
      Executive shall be entitled to receive an additional payment (a “Gross-Up
      Payment”)
      from
      Company such that the net amount received by Executive after paying any
      applicable Excise Taxes and any federal, state or local income or FICA taxes
      on
      such Gross-Up Payment, shall be equal to the amount Executive would have
      received if such Excise Taxes were not applicable to the Payments. 

     

    For
      purposes of determining whether any of the Payments will be subject to the
      Excise Taxes and the amount of such Excise Taxes, (i) all of the Payments
      shall be treated as “parachute payments” (within the meaning of
      Section 280G(b)(2) of the Code) unless, in the opinion of tax counsel
      reasonably acceptable to Executive (“Tax
      Counsel”),
      such
      payments or benefits (in whole or in part) do not constitute parachute payments,
      including by reason of Section 280G(b)(4)(A) of the Code; (ii) all
“excess parachute payments” within the meaning of Section 280G(b)(1) of the
      Code shall be treated as subject to the Excise Tax unless, in the opinion of
      Tax
      Counsel, such excess parachute payments (in whole or in part) represent
      reasonable compensation for services actually rendered (within the meaning
      of
      Section 280G(b)(4)(B) of the Code) in excess of the base amount (as the
      term “base amount” is defined in Section 280G(b)(3) of the Code) allocable
      to such reasonable compensation, or are otherwise not subject to the Excise
      Tax;
      (iii) the value of any noncash benefits or any deferred payment or benefit
      shall be determined by the Tax Counsel in accordance with the principles of
      Sections 280G(d) and 409A of the Code; and (iv) all Payments shall be
      deemed subject to the Excise Tax pursuant to section 409A of the Code unless,
      in
      the opinion of Tax Counsel, such Payments are not subject to Excise Tax pursuant
      to section 409A. For purposes of determining the amount of the Gross-Up Payment,
      Executive shall be deemed to pay federal income tax at the highest marginal
      rate
      of federal income taxation in the calendar year in which the Payments are made
      and State and local income taxes at the highest marginal rate of taxation in
      the
      State and locality of Executive’s residence on the date the Payments are made,
      net of the maximum reduction in federal income taxes which could be obtained
      from deduction of such State and local taxes. 

     

    In
      the
      event that the Excise Taxes are determined by the IRS, on audit or otherwise,
      to
      exceed the amount taken into account hereunder in calculating the Gross-Up
      Payment (including by reason of any payment the existence or amount of which
      cannot be determined at the time of the Gross-Up Payment), the Company shall
      make another Gross-Up Payment in respect of such excess (plus any interest,
      penalties or additions payable by Executive with respect to such excess) within
      ten (10) business days following the date that Executive remits to the IRS
      such additional Excise Taxes. Executive and the Company shall each reasonably
      cooperate with the other in connection with any administrative or judicial
      proceedings concerning the existence or amount of liability for Excise Tax
      with
      respect to the Payments. 

     

    If
      a
      termination of Executive’s employment shall have occurred, the Company shall
      promptly reimburse to Executive all reasonable attorneys fees and expenses
      necessarily incurred by Executive in disputing in good faith any issue with
      the
      Company or its Affiliates pursuant to this Section 6(h) or asserting in good
      faith any claim, demand or cause of action against the Company or its Affiliates
      pursuant to this Section 6(h). Such reimbursements shall be made within ten
      (10) business days after delivery of Executive’s written requests for
      payment accompanied with such evidence of fees and expenses incurred as the
      Company reasonably may require. This reimbursement obligation shall remain
      in
      effect following Executive’s termination of employment for the applicable
      statute of limitations period relating to any such claim, and the amount of
      reimbursements hereunder during any calendar year shall not affect the expenses
      eligible for reimbursement in any other year. 

     

    The
      Gross-Up Payments provided to Executive shall be made not later than the tenth
      (10th) business day following the date Executive remits to the IRS any such
      Excise Taxes; provided, however, that if the amounts of such Gross-Up Payments
      cannot be finally determined on or before the due date of any Excise Tax return
      required as a result of the Payments, the Company shall pay to Executive within
      10 days after the date Executive remits to the IRS such Excise Taxes, an
      estimate of the Gross-Up Payments due, as determined in good faith by Executive
      and the Company, the estimate to be of the minimum amount of such payments
      to
      which Executive is clearly entitled. In the event that the amount of the
      estimated payment exceeds the amount subsequently determined to have been due,
      such excess shall constitute a non-interest bearing loan by the Company to
      Executive, payable on the tenth (10th) business day after demand by the
      Company. At the time the payments are made under this Agreement, the Company
      shall provide Executive with a written statement setting forth the manner in
      which such payments were calculated and the basis for such calculations,
      including, without limitations any opinions or other advice the Company has
      received from Tax Counsel or other advisors or consultants and any such opinions
      or advice which are in writing shall be attached to the statement. 

     

    
      
         

      

      
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    Any
      Gross-Up Payments hereunder will not affect the expenses eligible for
      reimbursement provided in any other year and this Tax Gross-Up provision shall
      remain in effect until the applicable 280G and 409A statute of limitations
      has
      ended. 

     

    (i)
      Change
      in Control.
      For
      purposes of this Agreement, a “Change
      in Control”
shall
      mean an occurrence of the following during the Term: 

     

    (1)
      The
“acquisition” by any “Person”
(as
      the
      term person is used for purposes of Section 13(d) or 14(d) of the
      Securities Exchange Act of 1934, as amended (the “1934
      Act”))
      of
“Beneficial
      Ownership”
(within
      the meaning of Rule 13d-3 promulgated under the 1934 Act) of any securities
      of
      Company which generally entitles the holder thereof to vote for the election
      of
      directors of Company (the “Voting
      Securities”)
      which,
      when added to the Voting Securities then “Beneficially
      Owned”
by
      such
      Person, would result in such Person either “Beneficially
      Owning”
fifty
      percent (50%) or more of the combined voting power of Company’s then
      outstanding Voting Securities or having the ability to elect fifty percent
      (50%) or more of Company’s directors; provided, however, that for purposes
      of this paragraph (1) of Section 6(i), a Person shall not be deemed to
      have made an acquisition of Voting Securities if such Person: (a) becomes
      the Beneficial Owner of more than the permitted percentage of Voting Securities
      solely as a result of open market acquisition of Voting Securities by Company
      which, by reducing the number of Voting Securities outstanding, increases the
      proportional number of shares Beneficially Owned by such Person; (b) is
      Company or any corporation or other Person of which a majority of its voting
      power or its equity securities or equity interest is owned directly or
      indirectly by Company (a “Controlled
      Entity”);
      (c) acquires Voting Securities in connection with a “Non
      Control Transaction”
(as
      defined in paragraph (3) of this Section 6(i)); or (d) becomes
      the Beneficial Owner of more than the permitted percentage of Voting Securities
      as a result of a transaction approved by a majority of the Incumbent Board
      (as
      defined in paragraph (2) below); or 

     

    (2)
      The
      individuals who, as of the Effective Date, are members of the Board (the
“Incumbent
      Board”),
      cease
      for any reason to constitute at least a majority of the Board; provided,
      however, that if either the election of any new director or the nomination
      for
      election of any new director by Company’s stockholders was approved by a vote of
      at least a majority of the Incumbent Board, such new director shall be
      considered as a member of the Incumbent Board; provided further, however, that
      no individual shall be considered a member of the Incumbent Board if such
      individual initially assumed office as a result of either an actual or
      threatened “Election
      Contest”
(as
      described in Rule 14a-11 promulgated under the 1934 Act) or other actual or
      threatened solicitation of proxies or consents by or on behalf of a Person
      other
      than the Board (a “Proxy
      Contest”)
      including by reason of any agreement intended to avoid or settle any Election
      Contest or Proxy Contest; or 

     

    (3)
      The
      consummation of a merger, consolidation or reorganization involving Company
      (a
“Business
      Combination”),
      unless (1) the stockholders of Company, immediately before the Business
      Combination, own, directly or indirectly immediately following the Business
      Combination, at least fifty percent (50%) of the combined voting power of
      the outstanding voting securities of the corporation resulting from the Business
      Combination (the “Surviving
      Corporation”)
      in
      substantially the same proportion as their ownership of the Voting Securities
      immediately before the Business Combination, and (2) the individuals who
      were members of the Incumbent Board immediately prior to the execution of the
      agreement providing for the Business Combination constitute at least a majority
      of the members of the Board of Directors of the Surviving Corporation, and
      (3) no Person (other than (x) Company or any Controlled Entity,
      (y) a trustee or other fiduciary holding securities under one or more
      Executive benefit plans or arrangements (or any trust forming a part thereof)
      maintained by Company, the Surviving Corporation or any Controlled Entity,
      or
      (z) any Person who, immediately prior to the Business Combination, had
      Beneficial Ownership of fifty percent (50%) or more of the then outstanding
      Voting Securities) has Beneficial Ownership of fifty percent (50%) or more
      of the combined voting power of the Surviving Corporation’s then outstanding
      voting securities (a Business Combination described in clauses (1), (2) and
      (3) of this paragraph shall be referred to as a “Non-Control
      Transaction”);

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (4)
      A
      complete liquidation or dissolution of Company; or 

     

    (5)
      The
      sale or other disposition of all or substantially all of the assets of Company
      to any Person (other than a transfer to a Controlled Entity). 

     

    A
      Change
      in Control shall not be deemed to occur solely because fifty percent
      (50%) or more of the then outstanding Voting Securities is Beneficially
      Owned by (x) a trustee or other fiduciary holding securities under one or
      more executive benefit plans or arrangements (or any trust forming a part
      thereof) maintained by Company or any Controlled Entity or (y) any
      corporation which, immediately prior to its acquisition of such interest, is
      owned directly or indirectly by the stockholders of Company in substantially
      the
      same proportion as their ownership of stock in Company immediately prior to
      such
      acquisition. 

     

    Any
      event
      that would otherwise constitute a Change in Control shall not be deemed to
      be a
      Change in Control if (i) the Incumbent Board continues to constitute a
      majority of the Board of the Company (or of the Surviving Corporation (if not
      the Company) and of any and all resulting parent entity(ies) in a Business
      Combination ), (ii) Executive maintains his same position of employment and
      reporting relationship with the Company (or of the Surviving Corporation (if
      not
      the Company) and of any and all resulting parent entity(ies) in a Business
      Combination) and (iii) any successor entity of the Company, if any, agrees
      in
      writing to expressly assume and agree to perform this Agreement, as required
      by
      Section 12 of this Agreement, after such event for a period of at least three
      (3) years. 

     

    (j)
      Good
      Reason.
      For
      purposes of this Agreement, “Good
      Reason”
shall
      mean (1) the material breach of any of the Company’s obligations under this
      Agreement without Executive’s written consent or (2) the occurrence of any
      of the following circumstances, without Executive’s written consent:

     

    (i)
      the
      change of Executive’s title or the assignment to Executive of any duties that
      materially adversely alter the nature or status of Executive’s office, title,
      responsibilities, including reporting responsibilities, or action by the Company
      that results in the material diminution of Executive’s position, duties or
      authorities, from those in effect immediately prior to such change in title,
      assignment or action; 

     

    (ii)
      the
      failure by Company to continue in effect any compensation plan in which
      Executive participates that is material to Executive’s total compensation unless
      an equitable arrangement (embodied in an ongoing substitute or alternative
      plan)
      has been made with respect to such plan, or the failure by Company to continue
      Executive’s participation therein (or in such substitute or alternative plan) on
      a basis not materially less favorable to Executive, unless any such failure
      to
      continue in effect any compensation plan or participation relates to a
      discontinuance of such plans or participation on a management-wide or
      Company-wide basis; 

     

    (iii)
      the
      taking of any action by Company which would directly or indirectly materially
      reduce or deprive Executive of any material pension, welfare or fringe benefit
      then enjoyed by Executive, unless such action relates to a discontinuance of
      benefits on a management-wide or Company-wide basis; 

     

    (iv)
      the
      relocation of Company’s principal executive offices, or the Company’s requiring
      Executive to relocate, anywhere outside the greater Houston, Texas metropolitan
      area, except for required travel on the Company’s business to an extent
      substantially consistent with Executive’s obligations under this Agreement; or

     

    (v)
      the
      Company’s material breach of any material provision of this Agreement.

     

    Executive
      is required to provide notice to the Company of the existence of the conditions
      described above in this Section 6(j)(i) through (v) within a period not to
      exceed 90 days from the initial existence of the condition, upon the notice
      of
      which the Company must be provided a period of at least 30 days during which
      it
      may remedy the condition. 

     

    (k)
      Taxable
      Health Care Coverage or Benefits.
      To the
      extent the health care coverage or benefits received by Executive after
      termination are taxable to Executive, Company shall make Executive “whole” on a
      net after tax basis by reimbursing Executive for such amount no later than
      10
      days after such taxes are remitted by Executive to the IRS; provided, however,
      that such coverage shall cease if Executive obtains comparable replacement
      coverage (although Executive shall have no obligation to pursue such
      coverage).

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (l)
      Acceleration
      of Unvested Awards.
      In the
      event of Executive’s termination or resignation under the circumstances
      described in Sections 6(a)(ii), 6(b), 6(c), 6(d)(i), 6(d)(iii) or 6(d)(iv),
      then
      all then outstanding Company stock-based awards of Executive, other than the
      awards dated the date of this Agreement (which shall be governed by the terms
      of
      agreement with respect to such award), and all equity compensation described
      in
      Section 4(c) shall become immediately exercisable and payable in full, as
      the case may be, with any performance goals associated therewith being deemed
      to
      have been achieved at the maximum levels and all restrictions removed with
      respect thereto (including without limitation with respect to any options that
      would otherwise vest in accordance with performance goals and any grants of
      restricted stock and/or restricted stock units that shall have been granted
      prior to the Effective Date). 

     

    (m)
      Reimbursements
      for Expenses.
      Company
      shall reimburse Executive for business expenses properly incurred prior to
      the
      Date of Termination, regardless of the circumstances of termination, and in
      accordance with the Company’s Reimbursement Plans. 

     

    7.
      Restrictive
      Covenants.
      

     

    (a)
      General.
      The
      parties acknowledge that during the Term, Company may disclose to Executive
      or
      provide Executive with access to trade secrets or confidential information
      (“Confidential
      Information”)
      of
      Company or its Affiliates; and/or place Executive in a position to develop
      business goodwill on behalf of Company or its Affiliates; and/or entrust
      Executive with business opportunities of Company or its Affiliates. As part
      of
      the consideration for the compensation and benefits to be paid to Executive
      hereunder; to protect the trade secrets and Confidential Information of the
      Company and its Affiliates that have been and will in the future be disclosed
      or
      entrusted to Executive, the business good will of the Company and its Affiliates
      that has been and will in the future be developed in Executive, or the business
      opportunities that have been and will in the future be disclosed or entrusted
      to
      Executive by the Company and its Affiliates; and as an additional incentive
      for
      the Company to enter into this Agreement, the Company and Executive agree to
      the
      following obligations relating to unauthorized disclosures, non-competition
      and
      non-solicitation.

     

    (b)
      Confidential
      Information; Unauthorized Disclosure.
      Executive shall not, whether during the period of his employment hereunder
      or
      thereafter, without the written consent of the Board or a person authorized
      thereby, disclose to any person, other than an executive of Company or a person
      to whom disclosure is reasonably necessary or appropriate in connection with
      the
      performance by Executive of his duties as an executive of Company, any
      Confidential Information obtained by him while in the employ of Company with
      respect to Company’s business, including but not limited to technology,
      know-how, processes, maps, geological and geophysical data, other proprietary
      information and any information whatsoever of a confidential nature, the
      disclosure of which he knows or should know will be damaging to Company;
      provided, however, that Confidential Information shall not include any
      information known generally to the public (other than as a result of
      unauthorized disclosure by Executive) or any information which Executive may
      be
      required to disclose by any applicable law, order, or judicial or administrative
      proceeding. In no event shall an asserted violation of the provisions of this
      paragraph constitute a basis for deferring or withholding any amounts payable
      to
      Executive under this Agreement. Within fourteen (14) days after the termination
      of Executive’s employment for any reason, Executive shall return to Company all
      documents and other tangible items containing Company information which are
      in
      Executive’s possession, custody or control. Executive agrees that all
      Confidential Information of the Company exclusively belongs to the Company,
      and
      that any work of authorship relating to the Company’s business, products or
      services, whether such work is created solely by Executive or jointly with
      others, and whether or not such work is Confidential Information, shall be
      deemed exclusively belonging to the Company.

     

    (c)
      Non-Competition.
      During
      the Term and for a period of one (1) year thereafter, Executive shall not in
      any
      geographic area or market where the Company or any of its Affiliates are
      conducting any Business (defined below) or have during the previous 12 months
      conducted such Business, directly or indirectly for Executive or for others,
      engage in or become interested financially in as a principal, executive,
      partner, shareholder, agent, manager, owner, advisor, lender, guarantor of
      any
      person engaged in any business substantially identical to the Business (defined
      below); provided, however, that Executive may invest in stock, bonds or other
      securities in any such business (without participating in such business) if:
      (i)(A) such stock, bonds or other securities are listed on any United States
      securities exchange or are publicly traded in an over the counter market and
      (B) its investment does not exceed, in the case of any capital stock of any
      one issuer, 5% of the issued and outstanding capital stock, or in the case
      of
      bonds or other securities, 5% of the aggregate principal amount thereof issued
      and outstanding, or (ii) such investment is completely passive and no
      control or influence over the management or policies of such business is
      exercised. The term “Business”
shall
      mean the exploration, development and production of crude petroleum and natural
      gas. Notwithstanding the foregoing provisions of this Section 7(c),
      Executive shall have no further obligations under this Section 7(c) in the
      event of (1) a termination of Executive’s employment by Company without Cause,
      (2) a termination of Executive’s employment pursuant to Section 6(d)(iii) or (3)
      Executive’s resignation for Good Reason. 

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (d)
      Non-Solicitation.
      Executive undertakes toward Company and is obligated, during the Term and for
      a
      period of one (1) year thereafter, in any geographic area or market where the
      Company or any of its Affiliates are conducting any Business or have during
      the
      previous 12 months conducted such Business, not to solicit or hire, directly
      or
      indirectly for Executive or for others, in any manner whatsoever (except in
      response to a general solicitation), in the capacity of executive, consultant
      or
      in any other capacity whatsoever, one or more of the executives, directors
      or
      officers or other persons (hereinafter collectively referred to as “Company
      Executives”)
      who at
      the time of solicitation or hire, or in the 90 day period prior thereto, are
      working full-time or part-time for Company or any of its Affiliates and not
      to
      endeavor, directly or indirectly, in any manner whatsoever, to encourage any
      of
      said Company executives to leave his or her job with Company or any of its
      Affiliates and not to endeavor, directly or indirectly, and in any manner
      whatsoever, to incite or induce any client of Company or any of its Affiliates
      to terminate, in whole or in part, its business relations with Company or any
      of
      its Affiliates. 

     

    (e)
      Enforcement
      and Reformation.
      It is
      the desire and intent of the parties that the provisions of this Section 7
      shall be enforced to the fullest extent permissible under the laws and public
      policies applied in each jurisdiction in which enforcement is sought.
      Accordingly, if any particular provision of this Section 7 shall be
      adjudicated to be invalid or unenforceable, such provision shall be deemed
      amended to delete therefrom the portion thus adjudicated to be invalid or
      unenforceable. Such deletion shall apply only with respect to the operation
      of
      such provisions of this Section 7 in the particular jurisdiction in which
      such adjudication is made. In addition, if the scope of any restriction
      contained in this Section 7 is too broad to permit enforcement thereof to
      its fullest extent, then such restriction shall be enforced to the maximum
      extent permitted by law, and Executive hereby consents and agrees that such
      scope may be judicially modified in any proceeding brought to enforce such
      restriction. 

     

    (f)
      Remedies.
      In the
      event of a breach or threatened breach by Executive of the provisions of this
      Section 7, Executive acknowledges that money damages would not be
      sufficient remedy, and the Company shall be entitled to specific performance,
      injunction and such other equitable relief as may be necessary or desirable
      to
      enforce the restrictions contained herein. Nothing herein contained shall be
      construed as prohibiting Company from pursuing any other remedies available
      for
      such breach or threatened breach or any other breach of this Agreement.

     

    (g)
      Nondisparagement.
      Executive and the Company and its Affiliates shall refrain from any criticisms
      or disparaging comments about each other or in any way relating to Executive’s
      employment or separation from employment; provided, however, that nothing in
      this Agreement shall apply to or restrict in any way the communication of
      information by the Company or any of its Affiliates or Executive to any state
      or
      federal law enforcement agency or require notice to the Company or Executive
      thereof, and none of Executive, the Company or any of its Affiliates will be
      in
      breach of the covenant contained above solely by reason of testimony or
      disclosure which is compelled by applicable law or regulation or process of
      law.
      A violation or threatened violation of this prohibition may be enjoined by
      the
      courts. The rights afforded under this provision are in addition to any and
      all
      rights and remedies otherwise afforded by law.

     

    8.
      Non-exclusivity
      of Rights.
      Nothing
      in this Agreement shall prevent or limit Executive’s continuing or future
      participation in any benefit, bonus, incentive or other plan or program provided
      by Company or any of its Affiliates and for which Executive may qualify, nor
      shall anything herein limit or otherwise adversely affect such rights as
      Executive may have under any stock option or other agreements with Company
      or
      any of its Affiliates. 

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    9.
      Non-assignability
      by Executive.
      The
      obligations of Executive hereunder are personal and may not be assigned or
      delegated by him or transferred in any manner whatsoever, nor are such
      obligations subject to involuntary alienation, assignment or transfer, except
      by
      will or the laws of descent and distribution. 

     

    10.
      Method
      of Notice.
      For the
      purpose of this Agreement, notices and all other communications provided for
      in
      the Agreement shall be in writing and shall be deemed to have been duly given
      when personally delivered, sent by overnight courier or by facsimile with
      confirmation of receipt or on the third business day after being mailed by
      United States registered mail, return receipt requested, postage prepaid,
      addressed to Company at its principal office address and facsimile number,
      directed to the attention of the Board with a copy to the Secretary of Company,
      and to Executive at Executive’s residence address and facsimile number on the
      records of Company or to such other address as either party may have furnished
      to the other in writing in accordance herewith except that notice of change
      of
      address shall be effective only upon receipt. 

     

    11.
      Validity.
      The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity or enforceability of any other provision of this Agreement,
      which shall remain in full force and effect. 

     

    12.
      Successors
      and Binding Agreement.
      This
      Agreement shall be binding upon and inure to the benefit of the Company and
      any
      successor of the Company (whether direct or indirect, by purchase, merger,
      consolidation or otherwise), and this Agreement shall inure to the benefit
      of
      and be enforceable by the Executive’s legal representatives. The Company shall
      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 to assume expressly 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. As used in this Agreement,
      “Company” shall mean the Company as hereinbefore defined and any successor by
      operation of law or otherwise and any successor to its business and/or assets
      as
      aforesaid which assumes and agrees to perform this Agreement.

     

    13.
      Indemnification.
      The
      Company agrees to indemnify the Executive with respect to any acts or omissions
      he may commit during the period during which he is an officer, director and/or
      employee of the Company or any Affiliate thereof, and to provide him with
      coverage under any directors’ and officers’ liability insurance policies, in
      each case on terms not less favorable than those provided to any of its other
      directors and officers as in effect from time to time. 

    

    14.
      Withholding.
      Anything to the contrary notwithstanding, all payments required to be made
      by
      the Company hereunder to Executive, his spouse, his estate or beneficiaries,
      shall be subject to withholding of such amounts relating to taxes as the Company
      may reasonably determine it should withhold pursuant to any applicable law
      or
      regulation. In lieu of withholding such amounts in whole or in part, the Company
      may, in its sole discretion, accept other provisions for payment of taxes as
      required by law, provided it is satisfied that all requirements of law affecting
      its responsibilities to withhold such taxes have been satisfied. 

     

    15.
      Legal
      Fees.
      The
      Company agrees to pay as incurred, to the full extent permitted by law, all
      legal fees and expenses which the Executive may reasonably incur as a result
      of
      any contest by the Company, the Executive or others of the validity or
      enforceability of, or liability or entitlement under, any provision of this
      Agreement or any guarantee of performance thereof (whether such contest is
      between the Company and the Executive or between either of them and any third
      party, and including as a result of any contest by the Executive about the
      amount of any payment pursuant to this Agreement), plus in each case interest
      on
      any delayed payment at the applicable Federal rate provided for in Section
      7872(f)(2)(A) of the Code. The Company’s obligations under this paragraph shall
      apply without regard to the outcome of any such contest; provided, however,
      that
      if such contest relates to a payment, act or omission that occurred prior to
      a
      Change in Control, then the Company’s obligations under this paragraph shall
      apply only if the Executive obtains any money judgment or otherwise prevails
      with respect to any such contest. 

     

    16.
      Waiver
      and Modification.
      No
      provision of this Agreement may be modified, waived or discharged unless such
      waiver, modification or discharge is agreed to in writing and signed by
      Executive and such officer as may be specifically authorized by the Board.
      No
      waiver by either party hereto at any time of any breach by the other party
      hereto of, or in 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. 

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    17.
      Applicable
      Law.
      This
      Agreement is entered into under, and the validity, interpretation, construction
      and performance of this Agreement shall be governed by, the laws of the State
      of
      Texas. 

     

    18.
      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.

     

    19.
      Entire
      Agreement.
      Except
      as provided in the written benefit plans and programs and agreements of the
      Company in effect during the Term of this Agreement, this Agreement is an
      integration of the parties’ agreement; no agreement 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;
      and this Agreement contains the entire understanding of the parties in respect
      of the subject matter and supersedes and replaces in full all prior written
      or
      oral agreements and understandings between the parties with respect to such
      subject matters. Without limiting the scope of the preceding sentence, all
      prior
      understandings and agreements among the parties hereto relating to the subject
      matter hereof (including, without limitation, the Original Agreement) are hereby
      null and void and of no further force and effect. 

    

    20.
      Representation
      by Executive.
      Executive hereby represents and warrants to the Company that, as of the
      Effective Date, he is not a party to any employment or other agreement with
      any
      third party which would preclude him from continuing employment with the Company
      and performing his obligations under this Agreement.

    

    21.
      Severability.
      If a
      court of competent jurisdiction determines that any provision of this Agreement
      is invalid or unenforceable, then the invalidity or unenforceability of that
      provision shall not affect the validity or enforceability of any other provision
      of this Agreement and all other provisions shall remain in full force and
      effect. 

    

    22.
      Headings.
      The
      paragraph headings have been inserted for purposes of convenience and shall
      not
      be used for interpretive purposes. 

    

    23.
      Gender
      and Plurals.
      Wherever the context so requires, the masculine gender includes the feminine
      or
      neuter, and the singular number includes the plural and conversely.

    

    

    [Remainder
      of page intentionally left blank.]

    

    -
      SIGNATURE PAGE FOLLOWS -

    
      
         

      

      
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    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of September 10,
      2008, effective for all purposes as provided above on the Effective
      Date.

     

    
      	 	 	 	 
	 	
              ENERGY
                XXI (BERMUDA) LIMITED

            
	 	 	 
	 	
              By:

            	
               

            	
              /s/
                John D. Schiller, Jr.

            
	 	 	
               

            	
              John
                D. Schiller, Jr. 

              Chief
                Executive Officer and 

              Chairman
                of the Board

            
	 	 	
               

            	 

    

     

    
      	 	 
	 	
              EXECUTIVE

            
	 	 
	 	
              /s/
                David West Griffin

            
	 	
              David
                West Griffin

            

    

     

     

    
      
         

      

      
        13

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