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EXHIBIT 10.9
CONSULTING AGREEMENT
THIS AGREEMENT (the "Agreement") is dated as of April 15, 1998 by and
between MIDDLE BAY OIL COMPANY, INC., an Alabama corporation ("Offeror"), and
XXXXXX X. XXXXXX ("Xxxxxx"), an individual residing at 0000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx 00000;
W I T N E S S E T H :
WHEREAS, Xxxxxx is now and has been President and Chief Executive
Office of Enex Resources Corporation, a Delaware corporation ("Enex"); and
WHEREAS, on March 27, 1998, Offeror completed a cash tender offer (the
"Tender Offer") for all of Enex's outstanding shares of common stock (the
"Shares"); and
WHEREAS, Offeror has acquired approximately 80% of the Shares and has
requested that Xxxxxx resign from his offices as a director, President and Chief
Executive Officer of Enex and from all positions he holds as director or officer
of any subsidiaries of Enex; but Offeror desires to secure Xxxxxx'x services in
a consultant capacity;
NOW, THEREFORE, in consideration of such arrangements and the mutual
promises and agreement contained herein, the parties enter into this Agreement
upon the following terms and conditions:
1. ENGAGEMENT AS CONSULTANT. Offeror retains Xxxxxx to provide services
and advice to Offeror from time to time concerning investor relations and
transactions involving the limited partnerships of which Enex served as general
partner (the "Related Partnerships"). Offeror agrees that Xxxxxx will provide
his consulting services from the Kingwood, Texas area and will not be required
to relocate to any other city. Nothing in this Agreement shall prevent Xxxxxx
from engaging in other employment or business activities that do not prevent him
from fulfilling his duties under this Agreement.
2. TERM. The term of this Agreement shall begin as of the date of this
Agreement and end May 18, 2002.
3. CONSIDERATION. As a consulting fee, for a covenant not to compete
and a preferential right to purchase acquisitions, Offeror agrees to pay Xxxxxx
$20,000 per month for his services during each month of the term of this
Agreement.
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(a) Covenant Not to Compete. During the term of this
Agreement, Xxxxxx shall not, directly or indirectly, engage in any
activities that interfere with those of Offeror or that affect the
properties in which Offeror or any company managed by Offeror (an
"Offeror Entity") has an interest. Xxxxxx agrees not to solicit or
engage in a transaction involving the acquisition or sale of any
interest in any Offeror Entity or any oil and gas property which
Offeror is then negotiating to purchase or has previously indicated to
Xxxxxx its present intention to purchase. This paragraph shall not
preclude Xxxxxx'x participation in any other business activity,
including any business activity relating to the ownership of interests
in properties producing or (or which are believed to be capable of
producing) oil and/or gas, provided such activities do not conflict
with the provisions of the immediately preceding sentence or of Section
3(b). Without limiting the generality of the foregoing, Xxxxxx may
purchase or invest in such interests for his own accounts or on behalf
of others, and may serve as a consultant, partner, member, stockholder,
director, officer and/or employee of one or more funds, partnerships or
other entities engaged in the oil and gas business (i.e., Xxxxxx will
be subject to the doctrine of corporate opportunities only insofar as
it applies to business opportunities in which Offeror has expressed an
interest, as determined from time to time by resolutions appearing in
Offeror's minute book or as otherwise properly evidenced and provided
for in writing in Offeror's books and records).
(b) Oil and Gas Acquisitions. Xxxxxx will be developing and
reviewing opportunities to acquire oil and/or gas leases, prospects and
producing properties from corporations or other entities which own or
control such property. For a period of ten (10) days after receipt of
notice from Xxxxxx, Offeror shall have a preferential right to
purchase, on the same terms and conditions offered to others by Xxxxxx,
any and all interests in any potential oil and gas acquisition which
Xxxxxx controls or proposes to acquire during the term of this
Agreement.
4. REIMBURSEMENT OF EXPENSES. Offeror shall reimburse Xxxxxx each month
for reasonable and necessary business expenses incurred in connection with the
performance of consulting services, upon presentation and approval of expense
receipts and vouchers or such other supporting information as Offeror may
reasonably request.
5. CONFIDENTIAL INFORMATION. Xxxxxx recognizes that he will occupy a
position of trust with respect to providing consulting services to Offeror and,
in such position, will have access to confidential information and trade secrets
of Offeror. Therefore, Xxxxxx agrees that:
(a) he shall not use or disclose any of Offeror's confidential
information or trade secrets to any person, except in the course of his service
to Offeror; and
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(b) at the end of the term of the Agreement, he shall return
to Offeror any and all documents and materials which constitute or
contain Offeror's confidential information or trade secrets.
For purposes of this Agreement, the term "confidential information" or "trade
secrets" shall include all information of any nature and any form which is owned
by Offeror and which is not publicly available or generally known to persons
engaged in businesses similar to that of Offeror, but not any information in
Xxxxxx'x possession prior to the effective date of this Agreement or available
to Xxxxxx otherwise than by reason of his consulting services to Offeror.
6. DEATH OF CONSULTANT. In the event of Xxxxxx'x death during the term
of this Agreement, Offeror shall pay to his beneficiary, from month to month, a
death benefit in an amount equal to $20,000 per month for each of the months
remaining in the time period from the date of Xxxxxx'x death through May 18,
2002. Offeror may fund this obligation through the purchase of insurance on the
life of Xxxxxx. For the purpose of this paragraph, beneficiary shall mean any
person or persons designated in writing by Xxxxxx, and if no person has been so
designated, his estate.
7. TERMINATION OF THE AGREEMENT BY OFFEROR. In the event of Offeror's
termination of this Agreement for any reason, Offeror shall continue to be
obligated and shall monthly pay to Xxxxxx x xxxxxxxxx payment in an amount equal
to $20,000 for each month remaining in the time period from the date of such
termination through May 18, 2002.
8. EMPLOYMENT STATUS. Xxxxxx shall be an independent contractor, not an
employee of Offeror, and shall not be entitled to benefits provided by Offeror
to its employees. Offeror shall not withhold income or employment taxes or pay
employment taxes with respect to amounts paid to Xxxxxx pursuant to this
Agreement, which taxes shall be the sole responsibility of Xxxxxx.
9. NONASSIGNABILITY. This Agreement may not be assigned by either party
without the other party's prior written consent, but shall be binding upon the
parties and their respective personal representatives, successors and permitted
assigns.
10. MODIFICATION AND WAIVER.
(a) Amendment to Agreement. This Agreement may not be modified or
amended except in a writing signed by both parties.
(b) Waiver. No term or condition of this Agreement shall be deemed
to have been waived, unless expressly provided in writing by the party
charged with such waiver.
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11. EFFECT OF PRIOR AGREEMENTS. This Agreement contains the entire
understanding between Offeror and Xxxxxx and supersedes all other prior
agreements between Offeror and Xxxxxx and between Enex and Xxxxxx, including
Xxxxxx'x current employment agreement with Enex.
12. NOTICES. All notices or communications shall be in writing,
addressed as follows:
(a) To Offeror: Middle Bay Oil Company, Inc.
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
(b) To Xxxxxx: Xxxxxx X. Xxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
All such notices shall be conclusively deemed to be received and shall be
effective: (if) if sent by hand delivery, upon receipt; (ii) if sent by telecopy
or facsimile transmission, upon confirmation of receipt by the sender of such
transmission; or (iii) if sent by registered or certified mail, on the fifth day
after the date on which such notice is mailed.
13. GOVERNING LAW. This Agreement has been executed and delivered in
the State of Texas, and its validity, interpretation, performance and
enforcement shall be governed by the laws of said state.
IN WITNESS WHEREOF, this Agreement was signed by the parties as of the
day and year first above written.
MIDDLE BAY OIL COMPANY, INC.
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, Chief Executive Officer
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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