EXHIBIT 10.29
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement is entered into effective June 5,
1997, ("Effective Date") by and between Sheridan Energy, Inc. ("Employer" or
"the Company"), a Delaware corporation, and X.X. Xxxxxxxx ("Executive").
WHEREAS, in conjunction with TGX Corporation's merger into its wholly-
owned subsidiary, Sheridan Energy, Inc., Executive has agreed to serve as
President, Chief Executive Officer, and a member of the Board of Directors ("the
Board") of the Company; and
WHEREAS, in order to effect the foregoing, Employer and Executive desire
to enter into this Employment Agreement (the "Agreement");
NOW, THEREFORE, in consideration of Executive's employment by Employer and
the mutual promises and covenants contained herein, the receipt and sufficiency
of which consideration is hereby acknowledged, Employer and Executive intend by
this Agreement to specify both the terms and conditions of Executive's
employment relationship with Employer and the post-employment obligations of
Executive and Employer.
1. EMPLOYMENT. Employer agrees to employ Executive and Executive agrees to
accept employment and to serve Employer upon the terms and conditions set forth
herein. Such employment is conditioned upon the merger between TGX Corporation
and the Company being approved.
2. TERM. The term (the "Term") of employment of Executive by the Employer
pursuant to this Agreement will commence on July 1, 1997, unless the parties
hereto mutually agree to a different date and end on December 31, 1999, unless
sooner terminated by Employer or Executive as provided for herein, or further
extended upon the mutual agreement of Employer and Executive, each as
hereinafter provided.
3. POSITION AND DUTIES. Executive shall serve as President and Chief
Executive Officer of the Company and shall have such responsibilities and
authority as may from time to time be assigned to him by the Board. For the
period commencing on the Effective Date and ending on the date that Employer's
successor is duly elected and has qualified, the Company shall expand its
current Board of Directors and shall elect Employee to fill such new position.
Thereafter for so long as Executive is President of the Company, he shall be
nominated by the Nominating Committee of the Company to serve as a member of the
Board of Directors of the Company. Executive shall report directly to the Board.
Executive shall obey all lawful directions of the Board and shall devote his
full-time and best efforts to promote the interests of Employer and to attend to
the business and affairs of the Company in order that he shall faithfully
perform his fiduciary duties and obligations hereunder as may be assigned to, or
vested in him, by the Board.
4. COMPENSATIONS AND RELATED MATTERS.
(a) Salary. During the period of Executive's employment hereunder,
Employer shall pay Executive a base salary at a rate of One
Hundred Ninety Thousand and No/100 ($190,000) per annum in equal
installments payable in accordance with Employer's established
payroll periods.
(b) Bonus. Employer shall pay Executive an annual discretionary bonus
("Annual Bonus") as determined in the sole and exclusive
discretion by the Board or the Compensation Committee of the
Board in an amount not to exceed $50,000 provided that Executive
meets the performance criteria agreed upon between Executive and
the Board's Compensation Committee. The Annual Bonus, if any,
shall be paid to Executive no later than sixty (60) days after
the end of the Company's fiscal year, provided, however,
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Executive must be employed on December 31 of each year in order to be
eligible to receive the Annual Bonus for such year.
(c) Reimbursement of Business Expenses. During the term of the Executive's
employment hereunder, Executive shall be entitled to reimbursement for
all reasonable business expenses incurred by Executive in performing
services hereunder; provided that such expenses are incurred and accounted
for in accordance with the policies and procedures established by
Employer.
(d) Club Membership. Employer shall pay the initiation fee which shall not
exceed in the aggregate $3,000, and monthly dues of $500, and any
reasonable charges related to business entertainment in accordance with the
policies and procedures set forth in subsection (c) above at any one
country club and one lunch club. Employer shall not be required to pay
for the initiation fee or monthly or annual dues at more than one country
club and one lunch club.
(e) Vacation. For 1997, Executive shall be entitled to two weeks vacation.
Thereafter, Executive shall be entitled to four weeks paid vacation
annually which shall be taken in each calendar year and shall not be
cumulative. Vacation shall be taken in accordance with the Employer's
vacation policies. Executive shall also be entitled to all paid holidays
given by Employer to its executives.
(f) Benefits. Executive shall be entitled to participate in all of the employee
benefit plans and arrangements in which the executives of the Company are
entitled to participate subject to any requirements for participation in
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any such plan or arrangement. The Company shall not make any changes in any
such plans or arrangements which would adversely affect the Executive's
rights or benefits thereunder, unless such change occurs pursuant to a
program applicable to all executives of the Company and does not result in
a proportionately greater reduction in the rights of, or benefits to, the
Executive as compared with any other executive of the Company. The
Executive shall be entitled to participate in or receive benefits under any
employee benefit plan or arrangement made available by the Company in the
future to its executives, subject to, and on a basis consistent with, the
terms, conditions and overall administration of such plan or arrangement.
Nothing paid to the Executive under any plan or arrangement presently in
effect or made available in the future shall be deemed to be in lieu of the
salary or bonus payable to the Executive pursuant to paragraphs (a) and (b)
of this Section.
(g) Stock Options.
(i) Grant of Option. In further consideration of the obligations of the
Executive hereunder, the Company hereby grants to the Executive an
option (the "Option") to purchase a total of 175,000 shares of common
stock of the Company (hereinafter called the "Stock"), under the
Company's 1997 Flexible Incentive Plan (if approved by the Company's
stockholders) (the "Flex Plan") subject to the terms and conditions
hereinafter set forth. Such option shall be proportionately increased
(and the yearly vesting shall similarly be
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proportionately increased) if, on the date of grant, the
option price is in excess of the book value of the Company.
(ii) Purchase Price. The purchase price of the Stock covered by
the Option shall be determined in accordance with the terms
of the Flex Plan.
(iii) Exercise of Option. The Option may be exercised, subject to
the limitations contained in this Agreement, by the
Executive during the Executive's employment by the Company
(i) as to not more than 58,333 shares, at any time or from
time to time after one year after the Effective Date, (ii)
as to not more than 116,666 shares, at any time or from
time to time after two years after the Effective Date, and
(iii) as to not more than 175,000 shares, at any time or
from time to time after three years after the Effective
Date, provided, however, if Executive is terminated without
cause after the Termination of this Agreement but before
the final installment of the Option has vested, then and in
that event, such final installment shall vest on the date
of Termination. Except as set forth in the Flex Plan, the
Option shall expire on the day preceding the tenth
anniversary of the Effective Date. The terms and provisions
of the Option shall be set forth in an Option Agreement to
be entered into by the Company and Executive in accordance
with the provisions of the Flex Plan.
5. TERMINATION. The Executive's employment hereunder may be terminated
without any breach of this Agreement only under the following circumstances:
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(a) Death. The Executive's employment hereunder shall terminate upon his
death.
(b) Disability. If, as a result of the Executive's incapacity due to physical
or mental illness, the Executive shall have been absent from his duties
hereunder on a full-time basis for the entire period of three (3)
consecutive months or for an aggregate of ninety (90) days within any
twelve (12) month period, and within thirty (30) days after written notice
of termination is given (which may occur before or after the end of such
three-month period) shall not have returned to the performance of his
duties hereunder on a full-time basis, the Employer may terminate the
Executive's employment hereunder.
(c) Cause. The Employer may terminate the Executive's employment hereunder with
or without "Cause." For purposes of this Agreement, the Employer shall have
"Cause" to terminate the Executive's employment hereunder upon: (A) the
continued failure by the Executive to substantially perform his duties
hereunder, after demand for substantial performance is delivered by the
Employer that specifically identifies the manner in which the Employer
believes the Executive has not substantially performed his duties, or (B)
the engaging by the Executive in conduct which is materially injurious to
the Employer; (C) the indictment of Executive on felony criminal charges or
conviction of any crime involving moral turpitude; (D) the commission of
fraud by Executive against any person; or (E) Executive's misappropriation
of funds or property of the Company. Notwithstanding the foregoing, the
Executive shall not be
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deemed to have been terminated for "Cause" without: (i) reasonable notice
to the Executive setting forth the reasons for the Employer's intention to
terminate for Cause, (ii) an opportunity for the Executive, together with
his counsel, to be heard before the Board, and (iii) delivery to the
Executive of a Notice of Termination as defined in subsection (f) hereof
from the Board finding that in the good faith opinion of such Board, the
Executive was guilty of conduct set forth above in clause (A) through (E)
of the preceding sentence, and specifying the particulars thereof in
detail.
(d) Other than for "Cause". The Executive may be terminated without Cause at
any time, upon five days notice, at the discretion of the Board.
(e) Termination by the Executive. The Executive may terminate his employment
hereunder: (i) for "Good Reason," as defined herein, or (ii) voluntarily.
For purposes of this Agreement, termination of the Executive's employment
for "Good Reason" shall be deemed to occur if such termination occurs: (i) after
a failure by the Employer to comply with any material provision of this
Agreement which has not been cured within thirty (30) days after notice of such
noncompliance has been given by the Executive to the Employer (ii) within twelve
(12) months after a "change in control," as hereinafter defined, which results
in a significant diminishment in the nature or scope of the authority, power,
function or duty attached to the position which Executive previously maintained
if such diminishment does not have the express written consent of Executive. For
purposes of this Agreement, a "change in control" shall be deemed to have
occurred if one of the following events occurs:
(i) a merger, reorganization or consolidation (a "Merger") of the Company
with any other entity in which the Company is not the
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survivor and the stockholders of the Company before the Merger do not
own more than 50% of the stock after the Merger;
(ii) a sale, distribution, or transfer of all or substantially all of the
assets of the Company;
(iii) the acquisition by any one party, or by one or more "affiliated"
parties as defined in Rule 12b-2 under the Securities Exchange Act of
1934, of more than fifty percent (50%) of the outstanding stock of
the Company provided such parties or affiliated parties on the
Effective Date of this Agreement do not own more than 5% of the
Company;
(iv) any event determined by a court to be similar in purpose or effect to
those set forth in subparagraphs (i) through (iii) immediately above,
and therefore properly includable under this paragraph (iv).
(f) Any termination of the Executive's employment by the Employer or by the
Executive (other than as a result of death) shall be communicated by
written Notice of Termination to the other party hereto. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment
under the provision so indicated. Any termination of Executive as an
employee of the Company whether, without limitation, with or without Cause,
voluntarily, or for Good Reason, shall also constitute a resignation by
Executive from the Board, even if Executive was elected to the Board by
stockholders' vote.
(g) The "Date of Termination" shall mean: (i) if the Executive's employment is
terminated by his death, the date of his death, (ii) if the Executive's
employment is terminated pursuant to subsection (b) above, thirty (30)
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days after Notice of Termination is given (provided that the Executive
shall not have returned to the performance of his duties on a full-
time basis during such thirty (30) day period), (iii) if the
Executive's employment is terminated pursuant to subsection (e) above,
the date specified in the Notice of Termination, and (iv) if the
Executive's employment is terminated for any other reason, the date on
which a Notice of Termination is given; provided if within thirty (30)
days after any Notice of Termination the party notified notifies the
other party that a dispute exists concerning the termination, and if
the resolution of such dispute specifically provides for a later Date
of Termination than the foregoing, the Date of Termination shall be
the date specified in the resolution of the dispute, but not later
than the earlier of (I) the expiration of the term of this Agreement,
or (II) the date on which the dispute is finally determined, either by
mutual written agreement of the parties, by binding and final
arbitration award or by a final judgment, order or decree of a court
of competent jurisdiction (the time for appeal therefrom having
expired and no appeal having been perfected).
6. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) In the event of the death of the Executive during the term of this
Agreement, the legal representative of the Executive shall be entitled
to the compensation provided for in Section 4(a) above for the month
in which Executive's death shall have taken place and for a period of
six (6) months thereafter at the rate being paid at the time of death.
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(b) In the event of the Disability of the Executive during the Period of
Employment, in addition to any compensation provided for under any
other disability plan provided by the Employer, the Executive shall be
entitled to the compensation provided for in Section 4(a) above, at the
rate being paid at the time of the commencement of the Disability, for
the period of such Disability but not in excess of six (6) months.
(c) If the Executive's employment shall be terminated for "Cause" or
voluntarily by the Executive, the Employer shall pay the Executive his
full salary through the Date of Termination at the rate in effect at
the time Notice of Termination is given and the Employer shall have no
further obligations to the Executive under this Agreement.
(d) If Employer shall terminate Executive's employment other than for
"Cause," as defined herein, then Employer shall pay Executive his
salary through the Term of this Agreement, on Employer's regularly
scheduled payroll dates. If Executive shall terminate his employment
for "Good Reason," as defined in this Agreement, then the Employer
shall pay the Executive his salary through the Term of this Agreement
at the rate in effect at the time Notice of Termination is given;
provided, however, that Executive shall for a twelve (12) month period
subsequent to such Termination be obligated, at Employer's reasonable
request, to consult with Employer for not to exceed 100 hours, and
Employer shall be obligated to pay Executive $125 per hour for any such
consultation.
7. CONFIDENTIALLY AND NON-DISCLOSURE AGREEMENT. Executive acknowledges that
by virtue of Executive's employment with Employer, Executive will be provided
access to certain
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confidential and proprietary information and knowledge relating to the
operation, products and services of Employer. This information and knowledge
includes, but is not limited to, Employer's marketing and business plans,
methods of operation, financial information, and other methods of doing
business, customer lists, customer information, sources of supply,
specifications and formulas, know-how, cost and pricing data, processes and
other compilations of information relating to the operation of Employer, maps,
reserve reports, technical information, seismic and other data, as well as any
and all information or material proprietary to Employer or designated as
confidential by Employer and not generally known by persons who are not
employees of Employer, which Executive develops or of which Executive may obtain
knowledge or access through or as a result of the Executive's employment with
Employer (including information and materials conceived, originated, discovered
or developed in whole or in part by Executive at the request or for the benefit
of Employer) (collectively, "CONFIDENTIAL INFORMATION AND TRADE SECRETS").
To assure the continued secrecy and protection of all Confidential
Information and Trade Secrets and in consideration of Employer providing
Executive access to Confidential Information and Trade Secrets, Executive hereby
agrees as follows:
(a) Non-Disclosure of Confidential Information and Trade Secrets. For
so long as the Confidential Information and Trade Secrets remain
confidential, secret or otherwise wholly or partially protectable
by Employer or its assignees, during and after the term of this
Agreement, Executive agrees not to use, reveal, report, publish,
disseminate, duplicate, convey, transfer or otherwise disclose or
permit the disclosure or dissemination of any such information
without the express written consent of Employer. Executive
expressly agrees not to use, directly or indirectly, for
Executive's own
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benefit or for the benefit of any other person or entity (except Employer)
any Confidential Information or Trade Secrets. Executive acknowledges that
the Confidential Information and Trade Secrets shall be utilized
exclusively for the benefit of Employer and shall not be used for any
purpose except in the course of Executive's work for Employer. Executive
further agrees not to furnish, duplicate or provide access to any part of
the Confidential Information and Trade Secrets to any person not employed
by Employer, without Employer's written consent.
(b) Protection of Confidential Information and Trade Secrets. Executive
agrees to take any and all precautions necessary to preclude the
dissemination of Employer's Confidential Information and Trade Secrets
and to restrict their use so that such information will not be disclosed or
made accessible to any other person or entity not employed by or affiliated
with Employer. Executive agrees to become familiar with and abide by
all of Employer's rules, guidelines, policies and procedures relating to
Confidential Information and Trade Secrets.
(c) Non-Removal of Employer Property. During the term of this Agreement,
Executive will be provided access to or use of property of Employer,
including, but not limited to such things as computers, beepers, pagers,
office equipment, tools, cellular telephones, contracts, correspondence,
memoranda, files and other business records and documents, training
manuals, operations manuals, guides, drawings, specifications, procedures,
policies, price lists, directories, electronic files, maps, reserve
reports, technical information, seismic and other data and other items
relating to
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the business of Employer whether produced or prepared by Employer or
Executive, and whether contained on hard copies or computer disks, drives,
tapes or other forms, and other Writings or recordings which relate to the
business or operation of Employer or contain Confidential Information or
Trade Secrets and all copies thereof (collectively, "COMPANY PROPERTY").
Any and all items of Company Property shall remain the exclusive property
of Employer and shall not be removed from the premises of Employer without
the prior written consent of Employer. All electronic files, recordings and
documents acquired, prepared or created by Executive relating to the (i)
business or operations of Employer; (ii) customers or prospective customers
of Employer; or (iii) sales activities, marketing efforts or business
development, shall be considered Company Property and shall remain the
exclusive property of Employer after termination of this Agreement.
(d) Return of Company Property. Upon the direction of Employer for any
reason and at any time before or after termination of this Agreement,
Executive shall promptly deliver to Employer (at Employer's office to
which the Executive is primarily assigned) all Company Property in the
Executive's possession, custody or control. At any time Employer requests
Executive to return any or all Company Property, whether before or after
termination of this Agreement, Executive agrees to conduct a prompt and
thorough search of Executive's offices, homes, vehicles, personal
computers and any other place Executive has reason to believe Company
Property may be located to ensure that all Company Property is promptly
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identified and returned to Employer. Executive expressly agrees not to
duplicate or otherwise make copies of any Confidential Information and
Trade Secrets or other Company Property in anticipation of termination of
this Agreement, and agrees to return to Employer any and all copies and
duplications in the Executive's possession, custody or control should any
such items be located or discovered after termination of this Agreement.
(e) Remedies Upon Executive's Breach or Threatened Breach. In the event that
Executive violates or breaches, or threatens or attempts to violate or
breach this Agreement, Executive acknowledges and agrees that
(i) Employer shall be entitled to all available legal remedies (including
damages) as well as equitable remedies, including the right to obtain
immediate injunctive relief prohibiting the violation or attempt or
threat to violate any obligation contained herein, and enforcing full
compliance with this Agreement;
(ii) Employer has the right to seek and obtain a temporary restraining
order and temporary and permanent injunctions restraining Executive
from disclosing, in whole or in part, the Confidential Information and
Trade Secrets and enforcing Executive's agreement to surrender all or
any portion of Company Property in Executive's possession, custody or
control.
Notwithstanding the rights of Employer to pursue any available legal
remedies, Executive agrees that any violation or attempted violation of this
Agreement would cause immediate and irreparable harm and damage to Employer and
that any legal remedy would be inadequate. Executive specifically acknowledges
the unique nature of the Confidential Information and Trade Secrets, the
necessity to preserve them in order to protect Employer's property rights, and
that any actual or threatened breach of Executive's covenants would cause
Employer irreparable harm and that money damages would not provide an adequate
remedy to Employer. Executive further acknowledges that this Agreement is
independent of and exclusive to any other provision related
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to Executive's employment by Employer. The existence of any claim or cause of
action of Executive against Employer, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement of this Agreement.
(f) Survival of Obligations After Termination of Employment
Agreement. Executive acknowledges and agrees that the obligations
of strict confidentiality and non-disclosure set forth herein
shall survive termination of this Agreement and shall continue in
full force and effect notwithstanding the termination of this
Agreement.
8. NON-SOLICITATION. During Executive's employment with Employer, and for
a period of two years after Executive's employment with Employer terminates
whether before or after the termination of this Agreement, Executive agrees that
he shall not:
(a) request, induce or attempt to induce anywhere where Employer does
or has done business, any customer, distributor, broker, agent or
supplier of Employer or any other person or entity doing business
with Employer, to limit, curtail or cancel its business with
Employer or to not do business with Employer; or
(b) request, induce, or attempt to induce anywhere any employee,
consultant, advisor or agent of Employer to terminate or limit
his or her relationship with Employer or not enter into any such
relationship; or
(c) make any statement (orally or in writing) about Employer or any
service or product of Employer which statement may reasonably be
expected to be detrimental to Employer.
For purposes of this provision, "Employer" shall include all affiliated
and related companies.
9. GENERAL PROVISION.
(a) Notices. Any notice or communication required or permitted
hereunder shall be in writing and shall be deemed to have been
duly given upon delivery, if delivered in person, or by any
expedited delivery service which
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provides proof of delivery, upon telecopy, facsimile, or similar
telecommunication or on the third business day After mailing, if mailed by
certified or registered mail, postage prepaid, return receipt requested,
addressed as follows, or in such other manner or to such other address as
any party shall hereafter designate by notice in writing to the other
parties hereto:
if to the Company:
Sheridan Energy, Inc.
000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Secretary
if to Executive:
Xx. X.X. Xxxxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
(b) Invalidity. Whenever possible, each provision of this Agreement will be
interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal,
or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality, or unenforceability will not
affect any other provision, this Agreement will be reformed, construed, and
enforced in any such jurisdiction as if such invalid, illegal, or
unenforceable provisions had never been contained herein, and a new,
enforceable provision shall be substituted which accomplishes the intent of
the invalid, illegal, or unenforceable provision as nearly as practicable.
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(c) Entirety of Agreement. This document supercedes all prior agreements
between the parties, written or oral, and embodies the complete agreement
and understanding among the parties, written or oral, which may have
related to the subject matter hereof in any way, and shall not be amended
orally, but only by the mutual agreement of the parties hereto in writing,
specifically referring to this Agreement.
(d) Separability. If any one or more of the provisions contained in this
Agreement shall be held illegal or unenforceable by a court, no other
provision shall be affected by this holding.
(e) Counterparts. This Agreement may be executed in separate counterparts,
any one of which need not contain signatures of more than one party, but
all of which taken together shall constitute the same agreement.
(f) Assignability. Except as expressly indicated herein, this Agreement is
intended to bind and inure to the benefit of, and be enforceable by,
Employer and Executive and their respective heirs, legal representatives,
successors, and permitted assigns. Neither this Agreement nor any of the
duties or obligations hereunder shall be assignable by Executive without
the prior written consent of the Board of Directors of Employer. Employer
may assign this Agreement.
(g) Arbitration/Governing Law. This Agreement and the legal relations created
between the parties hereto shall be governed by and construed under and in
accordance with the laws of the State of Texas, excluding the conflict of
laws provision thereof. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by
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arbitration, conducted before a panel of three arbitrator, in Houston,
Texas, in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrator's award in any
court having jurisdiction; provided, however, that the Employer shall be
entitled to seek a restraining order or injunction in any court of
competent jurisdiction to prevent any continuation of any violation of this
Agreement and the Executive hereby consents that such restraining order or
injunction may be granted without the necessity of the Company posting any
bond. The expense of such arbitration shall be borne by the Company.
(h) Executive represents and warrants that the execution of this Agreement and
the agreement to be employed by the Employer does not violate the terms
or provisions of Executive's current employment or any other agreement
of Executive.
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IN WITNESS WHEREOF, Employer and Executive have executed this
Agreement as of the date and year first above written.
SHERIDAN ENERGY, INC.
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chairman
EXECUTIVE
/s/ X. X. Xxxxxxxx
-----------------------------------
X. X. Xxxxxxxx
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