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EXHIBIT 10(ll)
FIRST AMENDMENT TO EXECUTIVE
EMPLOYMENT AGREEMENT
This First Amendment to Executive Employment Agreement (the "Amendment"),
dated effective as of the 16th day of November, 1998, is between South Texas
Drilling & Exploration, Inc., a Texas corporation (the "Company"), and Xxxxxxx
Xxxxx Xxxxx (the "Employee").
RECITALS:
The Employee is currently employed by the Company pursuant to an Executive
Employment Agreement (the "Employment Agreement") dated effective as of the 25
day of April 1995.
The Company and the Employee desire to modify and amend certain terms and
provisions of the Employment Agreement and to approve, ratify and confirm the
Employment Agreement, as modified and amended by this Amendment.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein set forth, the parties hereto have agreed, and do hereby agree as
follows:
A. Section 1 of the Employment Agreement is hereby modified and amended as
necessary to provide that:
1. The Company employs, as of the date of this Amendment, and will employ
Employee in the business of the Company as its President and Chief Operating
Officer, and the Employee works, as of the date of this Amendment, and will
continue to work for the Company as its President and Chief Operating Officer,
for the period beginning as of November 16, 1998 and ending April 30, 2001, and
thereafter from year to year (renewing automatically upon expiration of the
employment term ending April 30, 2001 and upon expiration of each one year
employment term thereafter), unless and until such employment shall have been
earlier terminated as provided in the Employment Agreement, as amended by this
Amendment; and
2. During his employment by the Company, the Employee shall perform such
duties as shall from time to time be delegated or assigned to him by the Chief
Executive Officer or Board of Directors of the Company.
B. Section 3 of the Employment Agreement, as it pertains to annual base salary,
is hereby modified and amended as necessary to provide that:
1. The Company, as of the date of this Amendment, pays and will continue
to pay Employee an annual base salary of $95,000 for the year commencing May 1,
1998 and ending April 30, 1999;
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2. The Company will pay Employee a minimum annual base salary of $95,000 in
each of years one and two of the two year period commencing May 1, 1999 and
ending April 30, 2001;
3. Employee's annual base salary shall be payable in cash in accordance
with the Company's customary payroll practices; and
4. After April 30, 2001, Employee's annual base salary shall be as
determined by the Board of Directors of the Company but shall in no event be
less than $95,000.
C. Section 6 of the Employment Agreement is hereby modified and amended to
amend Sections 6(a)(i), 6(a)(ii), 6(a)(iii) and 6(a)(iv) to read as follows:
(i) repeated material willful misconduct of Employee in the performance of
Employee's duties and responsibilities to the Company;
(ii) embezzlement or theft of Company property or funds;
(iii) conviction of Employee of any felony offense during the term of this
Agreement; or
(iv) conviction of any act or omission constituting fraud under the laws of
the State of Texas.
D. Section 6 of the Employment Agreement is hereby modified and amended to
delete Section 6(b) in its entirety and to add a new Section 6(b) to read as
follows:
(b) Upon termination of this Agreement for any reason, the Company
shall pay to Employee any and all unpaid annual base salary and accrued
benefits due Employee through the date of termination.
Upon termination of the Employee without cause, as hereinafter defined,
and only after providing thirty days prior written notice to Employee that
the Company is terminating this agreement without cause, or upon
termination of this Agreement by Employee with reason, as hereinafter
defined, the Company shall pay to Employee, as severance pay, the greater
of (i) $75,000 or (ii) the annual base salary for the entire remaining term
of the two year period ending April 30, 2001, in cash payable in one lump
sum within five days of termination of Employee's employment relationship
with the Company. Such severance pay shall be in addition to the payment of
any and all unpaid annual base salary and accrued benefits due Employee
through the date of termination.
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Termination without cause shall mean any termination of this Agreement
by the Company which is not with cause, as defined in Section 6(a) above.
Termination with reason shall mean any termination of this Agreement by
the Employee by way of Employee's resignation due to (i) the Company's
failure in any material respect to perform any term or provision of this
Agreement, (ii) any material changes in the duties and responsibilities of
Employee without the written consent of Employee, (iii) the hiring or
promotion by the Company after November 16, 1998 of another executive
employee (excluding Xxxxxxx X. Xxxxxx) to a position of equal or greater
responsibility for the management of the Company without the written
consent of Employee, (iv) the Company's directing Employee to work at a
location other than San Antonio, Texas; or (v) after a change of control
(as defined in Section 13(d) hereof), any material change which, in the
sole but reasonable discretion of Employee, impacts detrimentally upon
Employee's position within the Company.
Employee shall be entitled to terminate this Agreement, either with
reason (as defined above) or without reason, by providing the Company with
a written notice of resignation at least thirty days prior to his intended
resignation date.
This Agreement shall terminate immediately upon the death of Employee.
In such event, in addition to the payment of any and all unpaid annual base
salary and accrued benefits due Employee through the date of termination,
the Company shall also pay the Employee's estate the annual base salary
that Employee would have earned for a period of ninety days following the
date of death and a pro rata amount of any discretionary bonus and any
other amounts attributable to any bonus, incentive or similar program (such
discretionary bonus and programs referred to in Section 3 hereof) paid to
Employee for the prior contract year, in the time and manner Employee would
have been paid such compensation. In addition, Employee's designated
beneficiaries shall be entitled to receive any life insurance benefits
provided to Employee in accordance with the applicable plan documents
and/or insurance policies governing such benefits.
E. Section 11 of the Employment Agreement is hereby modified and amended to
provide that should Employee resign as a director of the Company at any time
during his employment under the Employment Agreement, as amended by this
Amendment, he shall, upon written notice to the Company requesting
reappointment to the Board of Directors of the Company, be reappointed to serve
on the Company's Board of Directors until the next annual meeting of
stockholders, and following such reappointment the Company will take all
reasonable steps to cause Employee to be included in the Company's authorized
slate of nominees for the Board of Directors at all annual or special meetings
of stockholders to vote for the election of directors.
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F. Section 13 of the Employment Agreement is hereby modified and amended to
reflect a reduction in the number of shares of Company common stock subject to
the incentive stock option granted to Employee as of May 1, 1995 (the
"Incentive Option"), which Incentive Option is referenced in Section 13(a) of
the Employment Agreement, from 1,200,000 shares to 960,000 shares. The
reduction in option shares shall effect a cancellation of 100,000 shares
becoming exercisable on April 30, 1999 and 140,000 shares becoming exercisable
on April 30, 2000.
Section 13(a) of the Employment Agreement is hereby modified and amended to
provide that the Company shall register on Form S-8 under the Securities Act of
1933, as amended, all shares issuable pursuant to the Incentive Option,
referenced in Section 13(a) of the Employment Agreement, prior to June 30,
1999.
Section 13(a) of the Employment Agreement is hereby modified and amended to
delete the last three sentences of Section 13(a), which sentences relate to the
Employee's maintenance of a specified interest in the Company's common stock.
Section 13(b) of the Employment Agreement is hereby modified and amended to
delete Section 13(b) in its entirety.
G. Except as modified and amended by this Amendment, the Employment Agreement
shall remain in full force and effect as written. References to the "Agreement"
in the Employment Agreement shall mean the Employment Agreement as amended by
this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.
South Texas Drilling & Exploration, Inc.
By: /s/ XXXXXXX X. XXXXXX
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Name:
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Title:
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/s/ XXXXXXX XXXXX XXXXX
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Xxxxxxx Xxxxx Xxxxx
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