EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into on
this March 29, 1997, and effective as of April 28, 1997, by and between
SOUTHWESTERN ENERGY COMPANY, an Arkansas business corporation, designated herein
as SWEN, and XXXXXX X. XXXXXX, designated herein as EMPLOYEE.
WITNESSETH:
A. PARTIES
1. SOUTHWESTERN ENERGY COMPANY ("SWEN") is an Arkansas business
corporation with its principal office being situated in Fayetteville, Washington
County, Arkansas, and it is the parent company of the following wholly-owned
subsidiary corporations ("Subsidiaries"):
(a) Arkansas Western Gas Company: Arkansas Western Gas Company
("AWG") is an Arkansas business corporation with its home office being
situated in Fayetteville, Washington County, Arkansas, and it is a
natural gas distribution public utility in the States of Arkansas and
Missouri;
(b) SEECO, Inc.: SEECO, Inc. ("SEECO") is an Arkansas business
corporation with its home office in Fayetteville, Washington County,
Arkansas, and it is engaged in the natural gas exploration, development
and production business in the States of Arkansas, Oklahoma, Texas,
Louisiana and other areas;
(c) Southwestern Energy Production Company: Southwestern
Energy Production Company ("SEPCO") is an Arkansas business corporation
with its home office situated in Fayetteville, Washington County,
Arkansas, and it is engaged in the oil and gas exploration, development
and production business in the States of Arkansas, Oklahoma, Texas,
Louisiana and other areas in the United States and in the Gulf of
Mexico; and
(d) AW Realty Company: AW Realty Company ("AWR") is an
Arkansas business corporation with its home office situated in
Fayetteville, Washington County, Arkansas, and it is engaged in real
estate development and sales and owning and operating rental properties
in Arkansas.
2. XXXXXX X. XXXXXX: Xxxxxx X. Xxxxxx ("EMPLOYEE") is a natural person,
and is an experienced corporate executive.
B. RECITALS
1. SWEN, as the parent corporation, and/or all of the Subsidiaries are
engaged in the business of oil and gas exploration and development, the sale and
distribution of oil and gas, the natural gas public utility business, the real
estate development business and/or the ownership of real estate for sale and
rental, all for the production of income.
2. SWEN wishes to be assured of the services of the EMPLOYEE,
particularly with reference to the operation of the business now conducted by
SWEN and the Subsidiaries as specified above and in the areas indicated.
3. The purposes of this Agreement are:
(a) To provide for the employment by SWEN of the EMPLOYEE, for
the benefit of SWEN and all of its Subsidiaries and their shareholders
that benefit from the professional and managerial services rendered and
to be rendered by the EMPLOYEE; and
(b) To secure for SWEN and all of its Subsidiaries the
professional and managerial services of the EMPLOYEE and to provide for
the payment of compensation to the EMPLOYEE for such services to be
rendered directly to SWEN and the Subsidiaries and any other entities
that are now or which may be owned in the future by SWEN and/or the
Subsidiaries.
C. AGREEMENT
FOR AND IN CONSIDERATION of the foregoing recitals and of the mutual
promises set forth herein, SWEN hereby employs the EMPLOYEE and the EMPLOYEE
accepts such employment, and SWEN and the EMPLOYEE each covenant and agree, one
with the other, as follows:
1. Full-time Employment:
(a) The EMPLOYEE's employment under this Agreement shall
commence April 28, 1997 (the "Commencement Date"), and shall continue
until the expiration of three (3) years from and after the Commencement
Date (the "Term of Employment"). During the Term of Employment, the
EMPLOYEE shall perform the services as a full-time employee of SWEN as
designated by the Board of Directors in the area of the Chief Operating
Officer of the exploration and production and utility business
activities of SWEN.
(b) For such services as a full-time employee, SWEN shall
compensate the EMPLOYEE as follows:
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(i) SWEN shall pay the EMPLOYEE base compensation at
the rate of Two Hundred Seventy-Five Thousand Dollars
($275,000.00) per annum, in approximately equal installments
on SWEN's regularly scheduled payroll dates throughout the
Term of Employment; and, if SWEN's Board of Directors shall
determine, such additional compensation as may be provided
pursuant to any additional compensation plans adopted by SWEN
for its corporate officers as employees.
(ii) A grant, pursuant to SWEN's Stock Incentive
Plan, of 20,000 restricted shares to vest three years from the
date hereof and SWEN further grants to EMPLOYEE a cash "tax"
bonus, calculated using EMPLOYEE's estimated tax rate
(with appropriate adjustments to reflect the additional
taxable income resulting from the tax bonus), to pay for any
federal, state and/or local income taxes EMPLOYEE may
incur if EMPLOYEE elects to currently recognize income for
federal, state and local income tax purposes with respect to
such shares.
(iii) A grant, pursuant to SWEN's Stock Incentive
Plan, of 50,000 shares of Options.
(iv) A car allowance of $7,380 annually spread over
each pay period to compensate for any business use of a
personal vehicle. Any use exceeding 500 miles per month will
be compensated for at the currently allowed IRS rate.
(v) Reimbursement for relocation to Fayetteville,
Arkansas pursuant to the SWEN's employee
Relocation--Established Employees (P-17) reimbursement plan
currently in effect.
(vi) Reimbursement of all out-of-pocket expenses
incurred by the EMPLOYEE in connection with the performance of
his duties hereunder.
(c) The parties hereto contemplate that the base compensation
provided for the EMPLOYEE in paragraph (b)(i) above may be increased by
the Board of Directors of SWEN for any calendar year during the Term of
Employment and continuing thereafter during each successive calendar
year as long as the EMPLOYEE is employed on a full-time basis.
(d) The EMPLOYEE may be appointed to such executive positions
with SWEN as the Board of Directors of each shall determine.
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(e) SWEN represents to the EMPLOYEE that it established and at
its expense it now maintains in continuous existence for the benefit of
its qualified officers and employees the following:
(i) A qualified retirement plan that is fully
funded through a Trust;
(ii) A stock option and incentive bonus plan;
(iii) A qualified health, medical, hospital and
dental plan that is funded by a group insurance policy issued
by a reputable insurance company authorized to do business in
the State of Arkansas, which plan provides coverage for each
such officer and employee of SWEN and their immediate family;
and
(iv) A group professional liability insurance policy
issued by a reputable insurance company authorized to do
business in the State of Arkansas, covering all of SWEN's
officers, directors and all professional, technical and
related employees with at least minimum coverage.
The EMPLOYEE shall continue to be a participant in each of the
foregoing EMPLOYEE benefit plans and any other plans presently in
existence or that SWEN may create in the future and maintain for its
officer-employees, according to the terms and provisions of each such
plan and/or insurance policy, and shall continue as such participant as
long as he is an employee of SWEN. If SWEN shall create, in the future,
any such additional employee benefit plans, the EMPLOYEE shall become a
participant therein and his interest therein (salary, bonus and other
benefits) shall vest indefeasibly simultaneously with the creation
thereof.
2. Termination of Employment of the EMPLOYEE:
(a) If SWEN shall terminate the employment of the EMPLOYEE at
any time during the Term of Employment, then the termination rights of
the EMPLOYEE hereunder shall be determined pursuant to and under that
certain Executive Severance Agreement dated April 28, 1997 (the
"Executive Severance Agreement"), between SWEN and the EMPLOYEE,
provided that the term "Contract Period" as used in the Executive
Severance Agreement shall be deemed to refer to the Term of Employment
hereunder. The Executive Severance Agreement is hereby referred to for
a full recital of the terms and provisions thereof and by this
reference is made a part hereof. To the extent there is any conflict
between the terms of this Agreement and the terms of the Executive
Severance Agreement, the terms of this Agreement shall control.
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(b) At any time during the Term of Employment and on or within
thirty (30) days after the expiration of the Term of Employment,
EMPLOYEE shall have the right, at his option, to either (i) continue in
his position with SWEN or at a position appointed by the Board of
Directors or (ii) terminate his employment with SWEN and receive as a
severance payment (the "Severance Payment") a lump sum equal to the
product of (1) the highest monthly rate of base salary in effect during
the previous twelve months immediately preceding the "Termination Date"
(hereinafter defined) and (2) 12. If the EMPLOYEE elects option (i)
above, employment shall be on such terms and conditions as are mutually
acceptable and agreed upon by the EMPLOYEE and SWEN. The EMPLOYEE's
termination rights or conditions shall thereafter be as agreed upon by
contract between the EMPLOYEE and SWEN or as set forth by SWEN Company
policies. If the EMPLOYEE elects option (ii) above, the Severance
Payment shall be paid to the EMPLOYEE no later than the Termination
Date. For the purposes of this Agreement, the term "Termination Date"
shall mean the date that is five (5) business days after the EMPLOYEE
gives notice to SWEN of his election to terminate his employment.
3. Vacation: During the Term of Employment, the EMPLOYEE shall be
entitled to sick leave, holidays and an annual 4-week vacation, during which
time his compensation shall be paid in full. Each vacation shall be taken by
the EMPLOYEE at such times as may be mutually agreed upon by the EMPLOYEE and
SWEN.
4. Successors; Binding Agreement: The assignability and binding nature
of this Agreement shall be governed by the terms of Section 8 of the Executive
Severance Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
original duplicates on this March 29, 1997, effective as of the date April 28,
1997.
SOUTHWESTERN ENERGY COMPANY
By: /s/ XXXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxxxx
ATTEST:
/s/ XXXX X. XXXXXX
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Xxxx X. Xxxxxx, Secretary
/s/ XXXXXX X. XXXXXX
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EMPLOYEE
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THE STATE OF ARKANSAS
COUNTY OF WASHINGTON
BE IT REMEMBERED, that on this day came before the undersigned, a
Notary Public, within and for the County aforesaid, duly commissioned and
acting, Xxxxxxx X. Xxxxxxxx, President and Xxxx X. Xxxxxx, Secretary of
Southwestern Energy Company, a corporation, and stated that they had executed
the same for the consideration and purposes therein mentioned and set forth.
WITNESS my hand and seal as such Notary Public this 7th day of April,
1997.
/s/ XXXXX X. XXXXX
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Notary Public
My Commission Expires:
2-1-2003
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THE STATE OF TEXAS
COUNTY OF XXXXXX
BE IT REMEMBERED, that on this day came before the undersigned, a
Notary Public, within and for the County aforesaid, duly commissioned and
acting, Xxxxxx X. Xxxxxx, to me well known as the party in the foregoing
agreement, and stated that he had executed the same for the consideration and
purposes therein mentioned and set forth.
WITNESS my hand and seal as such Notary Public this 29th day of March,
1997.
/s/ XXXXXX XXXXXXXX
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Notary Public
My Commission Expires:
March 29, 2001
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