-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IslSV/B9OibxoGN+x01cN0dSO9V5gaz4i6z2Irhq3YOJgteTAeqkNpw/2MqtMbvW 9z0PmnsW8qUQyashO69n4g== 0001038357-04-000076.txt : 20041104 0001038357-04-000076.hdr.sgml : 20041104 20041104172210 ACCESSION NUMBER: 0001038357-04-000076 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041029 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Termination of a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041104 DATE AS OF CHANGE: 20041104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER NATURAL RESOURCES CO CENTRAL INDEX KEY: 0001038357 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 752702753 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13245 FILM NUMBER: 041120511 BUSINESS ADDRESS: STREET 1: 900 WILLIAMS SQUARE WEST STREET 2: 5205 N OCONNOR BLVD CITY: IRVING STATE: TX ZIP: 75039 BUSINESS PHONE: 9724449001 MAIL ADDRESS: STREET 1: 900 WILLIAMS SQUARE WEST STREET 2: 5205 N OCONNOR BLVD CITY: IRVING STATE: TX ZIP: 75039 8-K 1 nov2_8k.txt PIONEER 10/29/04 FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 29, 2004 Pioneer Natural Resources Company ------------------------------------------------------ (Exact name of Registrant as specified in its charter) Delaware 1-13245 75-2702753 - ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 5205 N. O'Connor Blvd., Suite 900, Irving, Texas 75039 - ------------------------------------------------ ---------- (Address of principal executive offices) (Zip Code) (972) 444-9001 ---------------------------------------------------- (Registrant's telephone number, including area code) Not applicable ------------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) PIONEER NATURAL RESOURCES COMPANY TABLE OF CONTENTS Page Item 1.01. Entry into a Material Definitive Agreement............... 3 Item 1.02. Termination of a Material Definitive Agreement........... 3 Item 9.01. Financial Statements and Exhibits (c) Exhibits........................................... 3 Signature............................................................ 4 Exhibit Index........................................................ 5 2 PIONEER NATURAL RESOURCES COMPANY Item 1.01. Entry into a Material Definitive Agreement On October 29, 2004, Pioneer Natural Resources Company (the "Company" or "Pioneer") entered into a new Non-Competition Agreement with Mark S. Sexton, the former President, Chief Executive Officer and director of Evergreen Resources, Inc. ("Evergreen") and a director of the Company since the merger of the Company and Evergreen on September 28, 2004. The Non-Competition Agreement is attached hereto as exhibit 10.1. On May 3, 2004, the Company and Evergreen entered into an Agreement and Plan of Merger, a Non-Competition Agreement with Mr. Sexton and Consulting and Non-Competition Agreements with Evergreen's Chief Operating Officer and Chief Financial Officer. Prior to completion of the merger in September 2004, a dispute arose concerning the amounts that would be payable to the executives pursuant to their change in control agreements upon completion of the merger. Pioneer believed the aggregate amount that would be payable was approximately $7.6 million based on Pioneer's analysis of the historical cash salaries and cash bonuses and estimated tax gross-ups for the three Evergreen executives. The executives asserted that the change in control payment calculation must also take into account the executives' restricted stock awards granted when their annual compensation was set and that the aggregate cash payable to them would be up to $30.0 million, depending on the value attributed to Evergreen common stock for purposes of the calculation. Pioneer disagreed with the methodology and stock valuations the executives used to calculate the cash amount that would be payable to them. Pioneer and the three Evergreen executives had a number of discussions to attempt to resolve the disagreement prior to the completion of the merger, but their efforts were unsuccessful. During October 2004, Pioneer and the three executives settled their disputes. Associated therewith, Pioneer paid to the three executives $6.4 million of aggregate non-competition payments and $7.6 million of change in control payments determined in accordance with the change in control agreements, including a $2.6 million change in control payment to Mr. Sexton. Mr. Sexton's new Non-Competition Agreement has a two-year term and replaces the Non-Competition Agreement dated May 3, 2004 between the Company and Mr. Sexton. The Non-Competition Agreement provides that Mr. Sexton will not: (i) engage in or be involved with a competing activity with the Company in the Raton Basin of Colorado or New Mexico, (ii) solicit with respect to hiring any employee of the Company and (iii) acquire any oil and gas interests within 20 miles of any oil and gas interests owned by Evergreen in three areas generally described as the Uintah and Piceance Basin in Utah and Colorado and the Western Sedimentary Basin in Canada without providing the Company 30 days prior written notice and offering the Company the right to acquire up to 50 percent of the oil and gas interests at cost. Mr. Sexton was paid $3.1 million as compensation for entering the new Non- Competition Agreement. Item 1.02. Termination of a Material Definitive Agreement As discussed above under "Item 1.01. Entry into a Material Definitive Agreement", the Non-Competition Agreement dated May 3, 2004 between the Company and Mr. Sexton has been terminated as of October 29, 2004. Item 9.01. Financial Statements and Exhibits (c) Exhibits 10.1 Non-Competition Agreement, dated October 29, 2004, between Pioneer Natural Resources Company and Mark S. Sexton. 3 PIONEER NATURAL RESOURCES COMPANY S I G N A T U R E Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PIONEER NATURAL RESOURCES COMPANY Date: November 4, 2004 By: /s/ Richard P. Dealy -------------------------------------- Richard P. Dealy Vice President and Chief Accounting Officer 4 PIONEER NATURAL RESOURCES COMPANY EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 10.1(a) Non-Competition Agreement, dated October 29, 2004, between Pioneer Natural Resources Company and Mark S. Sexton. - ------------- (a) filed herewith 5 EX-10 2 nov2_8kx10.txt PIONEER 10/29/04 FORM 8-K EXH. 10.1 EXHIBIT 10.1 NON-COMPETITION AGREEMENT This NON-COMPETITION AGREEMENT (this "Agreement") is entered into as of the 29th day of October, 2004, between Mark S. Sexton, an individual (the "Restricted Party"), and Pioneer Natural Resources Company, a Delaware corporation ("Parent"). RECITALS: WHEREAS, on May 3, 2004, Parent, Evergreen Resources, Inc., a Colorado corporation ("Evergreen"), and BC Merger Sub, Inc., a Colorado corporation ("Merger Sub"), entered into an Agreement and Plan of Merger that provided for the merger (the "Merger") of Merger Sub with and into Evergreen (the "Merger Agreement"); WHEREAS, at the time of the execution of the Merger Agreement, Restricted Party and Parent entered into a Consulting and Non-Competition Agreement /or Non-Competition Agreement dated May 3, 2004 (hereinafter referred to as the "May 3rd Agreement"); WHEREAS, subsequent to execution of the Merger Agreement a disagreement between Parent and Restricted Party arose regarding certain payments to be made to the Restricted Party pursuant to the Change in Control Agreement (defined hereinafter); WHEREAS, contemporaneously herewith Parent and Restricted Party are entering into an Agreement to resolve the disagreement described above ("Settlement Agreement"); and WHEREAS, the Restricted Party, as Mark S. Sexton and an executive officer of Evergreen and a stockholder of Evergreen at the time of the execution of the Merger Agreement, has special expertise in the oil and gas business and knowledge of the Confidential Information acquired by Parent under the Merger Agreement and, as a result, the obligation of Parent and Merger Sub to enter into the Merger Agreement was expressly conditioned upon the execution and delivery of the May 3rd Agreement by the Restricted Party, and the obligation of Parent to enter into the Settlement Agreement is expressly conditioned upon the execution and delivery of this Agreement by the Restricted Party to preserve and expand certain of the obligations of the May 3rd Agreement; and WHEREAS, the Restricted Party has agreed to execute, deliver and perform his obligations under this Agreement (i) in connection with the sale of Evergreen by means of the Merger; (ii) to protect the goodwill and Confidential Information acquired by Parent under the Merger Agreement; and (iii) to induce Parent to enter into the Settlement Agreement and consummate the transactions contemplated thereby, pursuant to which the Restricted Party will receive specified and agreed upon consideration. Page 1 of 10 Restricted Party initials ____ NOW, THEREFORE, in consideration of the payment to Restricted Party of $3,091,750.00 and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Defined Terms. When used in this Agreement, the following terms will have the following meanings: "Affiliate" means, with respect to any Person, each other Person that directly or indirectly (through one or more intermediaries or otherwise) controls, is controlled by, or is under common control with such Person. The term "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the actual power to direct or cause the direction of the management policies of a Person, whether through the ownership of stock, by contract, credit arrangement or otherwise; "Business Enterprise" means any corporation, partnership, limited liability company, sole proprietorship, joint venture, joint stock company, bank, association, trust, trust company, land trust, business trust or other business association or entity; "Change in Control Agreement" means that certain Change in Control Agreement dated as of March 1, 2002 between Evergreen and the Restricted Party; "Closing" means the closing of the transactions contemplated by the Merger Agreement; "Closing Date" means the date on which the Closing occurred; "Competing Business" means any Oil and Gas Business on or with respect to the Non Competition Area; "Confidential Information" means all information relating to the Evergreen Companies and/or the Evergreen Oil and Gas Interests, including without limitation information relating to title matters, environmental matters, financial statements and other financial matters, engineering reports reflecting the Evergreen Oil and Gas Interests, estimates of reserves, quality of reserves, geological matters, asset listings, production and operating costs, production capabilities, marketing, tax, forecasts and projections, in whatever form (whether documentary, computer storage or other), in all cases pertaining to the Non-Competition Area; "Derivative Information" means any notes, summaries, evaluations, analyses and other material derived by the Restricted Party Group from any of the Confidential Information; "Equity Interest" means the equity ownership rights in a Business Enterprise, whether in the form of capital stock, ownership unit, limited liability company interest, limited or general partnership interest or any other Page 2 of 10 Restricted Party initials ____ form of ownership, or any right, option, warrant, convertible security or indebtedness or other instrument enabling any Person to acquire any of the same; "Evergreen Company" or "Evergreen Companies" means Evergreen and each of its Subsidiaries; "Evergreen Oil and Gas Interests" means all Oil and Gas Interests in which any Evergreen Company has any ownership, working, income and/or net profits interest (including without limitation fee or leasehold interest); "Hydrocarbons" means, oil, condensate, gas, casinghead gas and other liquid or gaseous hydrocarbons; "Non-Competition Area" means any area within the Raton Basin in Colorado or New Mexico; "Oil and Gas Business" means owning, managing, acquiring, attempting to acquire, soliciting the acquisition of, operating, controlling or developing Oil and Gas Interests or engaging in or being connected with, as a principal, owner, officer, director, employee, shareholder, promoter, consultant, contractor, partner, member, joint venturer, agent, equity owner or in any other capacity whatsoever, any of the foregoing activities or the oil and gas exploration and production business; "Oil and Gas Interests" means (a) direct and indirect interests in and rights with respect to oil, gas, mineral and related properties (including revenues therefrom) and assets of any kind and nature, direct or indirect, including without limitation working, royalty and overriding royalty interests, mineral interests, leasehold interests, production payments, operating rights, net profits interests, other non-working interests and non-operating interests; (b) interests in and rights with respect to Hydrocarbons and other minerals or revenues therefrom and contracts or agreements in connection therewith and claims and rights thereto (including oil and gas leases, operating agreements, unitization and pooling agreements and orders, division orders, transfer orders, mineral deeds, royalty deeds, oil and gas sales, exchange and processing contracts and agreements and, in each case, interests thereunder), surface interests, fee interests, reversionary interests, reservations and concessions; (c) easements, rights of way, licenses, permits, leases, and other interests associated with, appurtenant to, or necessary for the operation of any of the foregoing; and (d) interests in equipment and machinery (including well equipment and machinery), oil and gas production, gathering, transmission, compression, treating, processing and storage facilities (including tanks, tank batteries, pipelines and gathering systems), pumps, water plants, electric plants, gasoline and gas processing plants, refineries and other tangible personal property and fixtures associated with, appurtenant to, or necessary for the operation of any of the foregoing, regardless of location; "Parent Company" or "Parent Companies" means Parent and each of its Subsidiaries, including, after the Closing, the Evergreen Companies; Page 3 of 10 Restricted Party initials ____ "Person" means any natural person, Business Enterprise or governmental authority; "Preferential Right Area" means any area within 20 miles of any Oil and Gas Interests owned by an Evergreen Party at the time of Closing in any of the three areas generally described as the Uintah and Piceance Basins in Utah and Colorado and the Western Sedimentary Basin in Canada; "Restricted Party Group" means the Restricted Party together with (a) each member of the Restricted Party's immediate family that lives in his household and (b) any Business Enterprise in which the Restricted Party, any one or more members of the Restricted Party's immediate family or the Restricted Party and one or more members of the Restricted Party's immediate family collectively own or have the right to acquire an Equity Interest in excess of 5% or otherwise have any right, through the ownership of a voting interest or otherwise, to direct the activities of such Business Enterprise; and "Subsidiary" or "Subsidiaries" means, with respect to any party, any entity, whether incorporated or unincorporated, of which at least a majority of the securities or ownership interests having by their terms voting power to elect a majority of the board of directors or other persons performing similar functions is directly or indirectly owned or controlled by such party or by one or more of its respective Subsidiaries. 2. Consideration. The Restricted Party has entered into this Agreement and made the covenants hereinafter set forth (i) in connection with the sale of Evergreen by means of the Merger; (ii) to protect the goodwill and Confidential Information acquired by Parent under the Merger Agreement; and (iii) to induce Parent to enter into the Settlement Agreement and consummate the transactions contemplated thereby, pursuant to which transactions the Restricted Party has or will receive consideration for his Equity Interest in Evergreen and will receive payments under the Settlement Agreement. 3. Advisory Board Services. Parent acknowledges that Restricted Party has agreed to act as a member of the Advisory Board of Heartland Oil and Gas Corp. for a period of two years. Parent agrees that none of the Restricted Party's activities in connection with his service on that Advisory Board shall be considered a breach of any obligation under this Agreement or the May 3rd Agreement. 4. Restriction on Activities (a) From the Closing Date through the second anniversary thereof (the "Restricted Period"), no member of the Restricted Party Group shall, without prior written consent of Parent, directly or indirectly: (i) engage in, carry on or assist, individually or as a principal, owner, officer, director, employee, shareholder, promoter, consultant, contractor, partner, member, joint venturer, agent, equity owner, lender or in any other capacity whatsoever, directly or indirectly, any (A) Competing Business Page 4 of 10 Restricted Party initials ____ or (B) Business Enterprise that is otherwise directly competitive with any Parent Company on or with respect to the Non-Competition Area; (ii) perform for any Business Enterprise engaged in a Competing Business any duty such member of the Restricted Party Group performed for the Evergreen Companies; that involved such member's access to, or knowledge or application of, Confidential Information; (iii) advise, request, induce or attempt to induce any customer, supplier, licensee or other business relation of any Parent Company to curtail, limit or cease doing business with any Parent Company, or in any way interfere with the relationship between any such customer, supplier, licensee or business relation and any Parent Company; (iv) individually or as a principal, owner, officer, director, employee, shareholder, promoter, consultant, contractor, partner, member, joint venturer, agent, equity owner or in any other capacity whatsoever with or in any Business Enterprise, own, acquire, attempt to acquire or solicit the acquisition of (or assist any person or Business Enterprise to own, acquire, attempt to acquire or solicit the acquisition of) (A) any Oil and Gas Interest on or with respect to the Non-Competition Area or (B) any Equity Interest in any Business Enterprise with any Oil and Gas Interests on or with respect to the Non-Competition Area; (v) contact or solicit with respect to hiring (A) any person who is an employee of any Parent Company, or (B) within 180 days after such person ceases to be so employed, any person who was an employee of any Parent Company; (vi) interfere with any of the Evergreen Oil and Gas Interests or in any way attempt to do any of the foregoing or assist any other Person to do or attempt to do any of the foregoing; or (vii) individually or as a principal, owner, officer, director, employee, shareholder or beneficial owner of 5% or more of the outstanding shares, promoter, consultant, contractor, partner, member, joint venturer, agent, equity owner or in any other capacity whatsoever with, or in, any Business Enterprise, acquire or assist any person or Business Enterprise to acquire, (A) any Oil and Gas Interest on or with respect to the Preferential Right Area or (B) any Equity Interest in any Business Enterprise with any Oil and Gas Interests on or with respect to the Preferential Right Area without providing Parent 30 days prior written notice and offering Parent the right to acquire up to 50% of the Oil and Gas Interest or Equity Interest in any Business Enterprise without any promote. Notice to Parent shall be in writing and Page 5 of 10 Restricted Party initials ____ set forth costs and all other relevant terms and conditions of such acquisition, along with copies of all applicable documentation related thereto including, without limitation, a copy of the relevant contracts, leases, assignments, farm-in agreements or equivalent agreements. Parent must make its election to participate in the transaction by written notification within 10 days after receipt of documentation that such Restricted Party has consummated the transaction. (b) The Restricted Party, on behalf of the Restricted Party Group, acknowledges that each of the covenants of Sections 4(a)(i) through 4(a)(vii) are in addition to, and shall not be construed as a limitation upon, any other covenant provided in Section 4(a). The Restricted Party, on behalf of the Restricted Party Group, agrees that the geographic boundaries, scope of prohibited activities and time duration of each of the covenants set forth in Sections 4(a)(i) through 4(a)(vii) are reasonable in nature and are no broader than are necessary to protect the goodwill and Confidential Information of the Evergreen Companies, the assets or Equity Interests of which are being acquired by Parent indirectly through the merger of Merger Sub with and into Evergreen, and to protect the other legitimate business interests of the Evergreen Companies, including without limitation any goodwill developed by the Restricted Party with the Evergreen Companies' customers, suppliers, licensees and business partners. (c) The parties hereto intend that the covenants contained in each of Sections 4(a)(i) through 4(a)(vii) be construed as a series of separate covenants, one for each county in the Non-Competition Area or Preferential Right Area. Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the applicable covenant contained in Sections 4(a)(i) through 4(a)(vii). Furthermore, each of the covenants in Sections 4(a)(i) through 4(a)(vii) hereof shall be deemed a separate and independent covenant, each being enforceable irrespective of the enforceability (with or without reformation) of the other covenants contained in Sections 4(a)(i) through 4(a)(vii) hereof. The Restricted Party admits, acknowledges, and agrees that the restrictions set forth in this Section 4 are (i) made in connection with a contract for the purchase and sale of a business as contemplated by C.R.S. 8-2-113(2)(a) and (ii) designed and intended to protect the Parent's trade secrets as contemplated by C.R.S. 8-2-113(2)(b). As such, the Restricted Party and the Parent agree that the restriction set forth in this Section 4 are valid and enforceable pursuant to Colorado law. 5. Confidentiality. The Restricted Party hereby acknowledges that, during the term of the Restricted Party's relationship with the Evergreen Companies, the Restricted Party Group has developed and had access to Confidential Information and Derivative Information. The Restricted Party hereby agrees as follows with respect to all Confidential Information and Derivative Information: (a) Upon the Closing, the Restricted Party will, and will cause each member of the Restricted Party Group to, immediately deliver to Parent Page 6 of 10 Restricted Party initials ____ all Confidential Information and Derivative Information in the possession of the Restricted Party Group. (b) During the Restricted Period, the Restricted Party will, and will cause each member of the Restricted Party Group to, keep all Confidential Information and Derivative Information strictly confidential and will not, and will cause each member of the Restricted Party Group not to, use (other than in the performance of duties for or on behalf of the Parent Companies) any of such data, information or results or disclose any such data, information or results to any Person unless otherwise required by law or regulation, and then only after written notice to Parent of the Restricted Party's determination of the need for disclosure. (c) In the event that the Restricted Party or any member of the Restricted Party Group becomes legally compelled to disclose any Confidential Information and/or Derivative Information, the Restricted Party will provide Parent with prompt notice so that Parent may seek a protective order or other appropriate remedy and/or waive the Restricted Party's compliance with the confidentiality and non-disclosure provisions of this Agreement, and the Restricted Party will cooperate with Parent to obtain such protective order or other remedy. In the event that such protective order or other remedy is not obtained, the Restricted Party Group will furnish only that portion of the Confidential Information and/or Derivative Information which it is advised by counsel is legally required. 6. Responsibility for Restricted Party Group. The Restricted Party will be responsible for any violation of the provisions hereof by any member of the Restricted Party Group. 7. Miscellaneous. It is further agreed as follows: (a) Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, by telecopy, by facsimile, or mailed by registered or certified mail (return receipt requested), or sent by Federal Express or other recognized overnight courier, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): To Parent: With a copy to: Pioneer Natural Resources USA, Inc. Pioneer Natural Resources USA, Inc. Attn: Larry Paulsen Attn: Mark Withrow 5205 N. O'Connor Blvd., Suite 900 5205 N. O'Connor Blvd., Suite 900 Irving, Texas 75093 Irving, Texas 75093 Telephone: (972) 969-4014 Telephone: (972) 969-4090 Fax: (972) 969-3581 Fax: (972) 969-3552 Page 7 of 10 Restricted Party initials ____ To the Restricted Party: Mark S. Sexton 27160 Craig Lane Golden, CO 80401 Telephone: 303-526-4567 Fax: 303-526-2552 (b) Severability. In the event that any provision of this Agreement, or the application thereof to any Person or circumstance, is held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalid, illegal or unenforceable provision shall be fully severable, this Agreement shall then be construed and enforced as if such provision had not been contained in this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by such provision or by its severance from this Agreement. Furthermore, in lieu of each such illegal, invalid, or unenforceable provision, there shall be added automatically as part of this Agreement a provision as similar in terms to such provision as may be possible and be legal, valid and enforceable. Notwithstanding the above, in the event any such invalidity, illegality or unenforceability of any portion of Section 4(a) hereof is caused by such provision being held to be excessively broad as to time, duration, geographical scope, activity or subject in any jurisdiction, then such provision shall, at the option of Parent, remain a part of this Agreement and shall be reformed and construed within such jurisdiction by limiting and reducing it so as to be enforceable to the extent compatible with then applicable law. (c) Entire Agreement. This Agreement constitutes the entire agreement and supercedes any and all previous agreements between the parties with respect to the subject matter hereof including the May 3rd Agreement. Neither this Agreement nor any of the provisions hereof can be changed, waived, discharged or terminated except by an instrument signed by the party against whom enforcement of the change, waiver, discharge or termination is sought. (d) Waiver. Waiver of performance of any obligation or term contained in this Agreement by any party, or waiver by one party of the other's default hereunder, will not operate as a waiver of performance of any other obligation or term of this Agreement or a future waiver of the same obligation or a waiver of any future default. (e) Governing Law. This Agreement will be interpreted, construed and enforced in accordance with the laws of the State of Colorado (excluding Colorado choice-of-law principles that might call for the application of some other state's law). Page 8 of 10 Restricted Party initials ____ (f) Specific Enforcement. The Restricted Party acknowledges on behalf of the Restricted Party Group that the covenants of the Restricted Party contained in Section 4, 5 and 6 of this Agreement are special and unique, that a breach by any member of the Restricted Party Group of any term or provision of any of such Sections may cause irreparable injury to Parent, and that remedies at law for the breach of any terms or provisions of Sections 4, 5 and 6 hereof may be inadequate. Accordingly, in addition to any other remedies they may have in the event of breach, Parent shall be entitled to enforce specific performance of the terms and provisions of Sections 4, 5 and 6 hereof, to obtain temporary and permanent injunctive relief to prevent the continued breach of such terms and provisions without the necessity of posting a bond or of proving actual damage, and to obtain attorneys' fees in respect of the foregoing if Parent prevails in such action or proceeding. [Signature page follows] Page 9 of 10 Restricted Party initials ____ IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. PIONEER NATURAL RESOURCES COMPANY By: /s/ Mark L. Withrow ------------------------------ Name: Mark L. Withrow Title: Executive Vice President /s/ Mark S. Sexton ----------------------------- Mark S. Sexton Page 10 of 10 Restricted Party initials ____ -----END PRIVACY-ENHANCED MESSAGE-----