EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") dated as of November 7, 1995, is by
and between Swift Energy Company, a Texas corporation (the "Company"), and
A. Xxxx Xxxxx ("Xx. Xxxxx").
W I T N E S S E T H:
WHEREAS, Xx. Xxxxx is employed as the President and Chairman of the Board
of the Company; and
WHEREAS, the Company and Xx. Xxxxx wish to document certain terms of
employment of Xx. Xxxxx in such capacity;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Company and Xx. Xxxxx hereby agree as follows:
1. EMPLOYMENT AND TERM OF EMPLOYMENT. Subject to the terms and
conditions of this Agreement, the Company hereby agrees to employ Xx. Xxxxx, and
Xx. Xxxxx hereby agrees to serve as President and Chairman of the Board of the
Company, or in such other position as is mutually acceptable to both Xx. Xxxxx
and the Company, for a period of eight years commencing on the date hereof (the
"Term of Employment"). The first three years of the Term of Employment shall be
referred to herein as the "Initial Term," and the last five years of the Term of
Employment shall be referred to herein as the "Subsequent Term."
2. SCOPE OF EMPLOYMENT. During the Initial Term, (i) Xx. Xxxxx will
serve as President and Chairman of the Board of the Company with the powers and
responsibilities of such position set forth in the bylaws of the Company, or in
such other position as is mutually acceptable to both Xx. Xxxxx and the Company,
and Xx. Xxxxx will perform diligently to the best of his ability those duties
set forth therein and in this Agreement in a manner that promotes the interests
and goodwill of the Company and (ii) the Company shall not require Xx. Xxxxx to
relocate from Houston, Texas. During the Subsequent Term, Xx. Xxxxx will be
available for up to 20 hours per week for 46 weeks per year for consultation
regarding specific matters designated by, or particular assignments agreed upon
with, the Executive Committee of the Board of Directors or the Board of
Directors of the Company, together with serving in those specific executive or
director's positions to which Xx. Xxxxx is elected by either the Board of
Directors or by the shareholders of the Company, which assignments may be
performed from locations that are linked by computer to the Company's principal
executive offices in Houston, Texas. During both the Initial Term and the
Subsequent Term, it is specifically agreed that Xx. Xxxxx is entitled to take
and may take his accumulated vacation and sick leave, with payment according to
Company policies of any vacation time or sick leave not taken.
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3. COMPENSATION.
(a) Initial Term. During the Initial Term, the Company shall
compensate Xx. Xxxxx for his services hereunder in such amount as shall be
determined by the Compensation Committee of the Board of Directors of the
Company from time to time, according to policies current in effect or as
modified from time to time by the Board of Directors or the Compensation
Committee of the Board of Directors, provided that upon a "Change of
Control" (as defined in Section 7(b)(2) below) during the Initial Term, Xx.
Xxxxx'x total compensation during both the Initial Term and the Subsequent
Term shall be not less than Xx. Xxxxx'x total compensation during the last
preceding year for which he has been paid both base salary and a bonus,
which amount shall be increased by an inflation adjustment of 4% per annum.
(b) Subsequent Term. During the Subsequent Term, Xx. Xxxxx'x annual
base compensation will be one-half of his annual base compensation at the
end of the Initial Term, plus an annual inflation adjustment of 4% per
annum. At the end of the Initial Term, the Board of Directors or
Compensation Committee of the Board of Directors of the Company, will enter
into a new bonus arrangement with Xx. Xxxxx covering the Subsequent Term,
which takes into account anticipated activity levels and duties. In the
event of a Change of Control during the Subsequent Term, Xx. Xxxxx'x annual
base salary will be not less than the average of Xx. Xxxxx'x total
compensation during the three years of the Initial Term.
(c) Non-Competition Payment. In consideration of Xx. Xxxxx'x
continued compliance with Section 6 of this Agreement (whether or not he
continues as an employee of the Company hereunder), the Company shall pay
to Xx. Xxxxx five equal annual installments of the amount shown as the
"Non-Competition Payment" on Exhibit A hereto less normal federal
withholding tax deductions, if any, related thereto, payable on the first
day of each year of the Subsequent Term hereunder. If Xx. Xxxxx should die
prior to the end of the Initial Term or the Subsequent Term, any remaining
unpaid installments to be paid hereunder shall be paid to Xx. Xxxxx'x
estate.
4. ADDITIONAL COMPENSATION AND BENEFITS. As additional compensation for
Employee's services under this Agreement, during the Term of Employment the
Company agrees to provide Xx. Xxxxx with the following reimbursements and
benefits:
(a) The Company shall reimburse Xx. Xxxxx for reasonable and
necessary expenses incurred by Xx. Xxxxx in furtherance of the
Company's business, including a mileage allowance for all business-
related travel on a per-mile basis at a rate equivalent to that
allowed by the Internal Revenue Service, provided that such expenses
are incurred in accordance with the Company's policies and upon
presentation of documentation in accordance with expense reimbursement
policies of the Company as they may exist from time to time, and
submission to the Company of adequate documentation in accordance with
federal income tax regulations.
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(b) Xx. Xxxxx may participate in any non-cash benefits provided
by the Company to its employees as they may exist from time to time.
During both the Initial Term and the Subsequent Term, the Company will
provide Xx. Xxxxx at the Company's expense, benefits which shall
include leave or vacation time, medical and dental insurance, life
insurance, accidental death and dismemberment insurance, retirement
benefits and disability benefits, as such benefits may hereafter be
provided by the Company in accordance with its policies in force from
time to time. In addition, in the event of Xx. Xxxxx'x death during
the Term of Employment, for a twelve-month period after his death the
Company shall make available to Xx. Xxxxx'x spouse and his dependents
under the age of 20, at the expense of the Company, medical and dental
insurance comparable to that provided by the terms and conditions of
the Company's then existing medical and dental insurance policies, and
thereafter for the remainder of the eight-year period covered by the
Term of Employment such medical and dental insurance shall be provided
to Xx. Xxxxx'x spouse and dependents under the age of 20 at the
expense of such spouse, unless otherwise prohibited by applicable law.
5. CONFIDENTIALITY.
(a) Xx. Xxxxx recognizes that the Company's business involves
the handling of confidential information of both the Company and the
Company's affiliates and subsidiaries and requires a confidential
relationship between the Company and its affiliates and subsidiaries
and the Company and Xx. Xxxxx. The Company's business requires the
fullest practical protection and confidential treatment of unique and
proprietary business and technical information, including but not
limited to inventions, trade secrets, patents, proprietary and
confidential data and knowledge of both the Company's affiliates and
subsidiaries and the Company (collectively, hereinafter called
"Confidential Information") which is conceived or obtained by Xx.
Xxxxx in the course of his employment. Accordingly, during and after
termination of employment by the Company, Xx. Xxxxx agrees: (i) to
prevent the disclosure to any third party of all such Confidential
Information; (ii) not to use for Xx. Xxxxx'x own benefit any of the
Company's Confidential Information, and (iii) not to aid others in the
use of such Confidential Information in competition with the Company
or its affiliates and subsidiaries. These obligations shall exist
during and after any termination of employment hereunder.
Notwithstanding anything else contained herein, the term "Confidential
Information" shall not be deemed to include any general knowledge,
skills or experience acquired by Xx. Xxxxx or any knowledge or
information known to the public in general.
(b) Xx. Xxxxx agrees that every item of Confidential Information
referred to in this Section 5 which relates to the Company's present
business or which arises or is contemplated to arise out of use of the
Company's time, facilities, personnel or funds prior to Xx. Xxxxx'x
termination, is the property of the Company.
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(c) Xx. Xxxxx further agrees that upon termination of his
employment for any reason, he will surrender to the Company all
reports, manuals, procedures, guidelines, documents, writing,
illustrations, models and other such materials produced by him or
coming into his possession by virtue of his employment with the
Company during the period of his employment and agrees that all such
materials are at all times the property of the Company. Xx. Xxxxx
shall be entitled to review, inspect and copy any of the Company
information or material necessary for legal or other proceedings to
which Xx. Xxxxx is a party defendant by reason of the fact that he is
or was an Employee of the Company.
6. COVENANT NOT TO COMPETE.
(a) Subject to the provisions of (c) of this Section, without
the express prior written consent of the Company, Xx. Xxxxx will not
serve as an employee, officer, director or consultant, or in any other
similar capacity or make investments (other than open market
investments in no more than five percent (5%) of the outstanding stock
of any publicly traded company) in or on behalf of any person, firm,
corporation, association or other entity whose activities directly
compete with the activities of the Company where such employment may
involve assisting such competitor with such activities as the Xx.
Xxxxx performed on behalf of the Company which directly compete with
those now existing or contemplated as of this date; provided, however,
the Company recognizes that any investment made by Xx. Xxxxx in oil
and gas properties owned by the Company which investments are made on
the same terms (or terms more favorable to the Company) as those
offered to unaffiliated third parties are specifically excluded from
this section; and
(b) Subject to the provisions of (c) of this Section, without
the express prior written consent of the Company, he will not solicit,
recruit or hire, or assist any person, firm, corporation, association
or other entity in the solicitation, recruitment or hiring of any
person engaged by the Company as an employee, officer, director or
consultant.
(c) Xx. Xxxxx'x obligations under (a) and (b) of this section
shall continue in force only while he is receiving salary payments
from the Company after termination, provided that if there has been a
"Change in Control," as defined below, then the provisions of (a) and
(b) of this section shall have no further force and effect after the
date that such Change of Control occurs.
7. TERMINATION.
(a) Xx. Xxxxx may terminate his employment during the Term of
Employment upon 180 days' written notice, and the Company may
terminate Xx. Xxxxx'x employment by the Company solely for Cause.
"Cause" shall be defined as (i) a final non-appealable judgment that
Xx. Xxxxx has committed fraud against the Company, its subsidiaries or
customers, or (ii) final conviction of a felony.
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Any such termination by the Company shall require the affirmative vote of a
majority of the members of the Board of Directors of the Company then in
office who have been or will have been directors for the two-year period
ending on the date notice of the meeting or written consent to take such
action is first provided to shareholders, or those directors who have
been nominated for election or elected to succeed such directors by a
majority of such directors (the "Continuing Directors"). In the case
of termination during the Term of Employment due to Xx. Xxxxx'x
resignation, except in those circumstances covered by 7(b) below, Xx.
Xxxxx shall continue to receive salary for a period of six months from
the day he last worked on the Company's behalf pursuant to this
Agreement, plus an additional amount equal to two weeks' salary for
every year of service to the Company prior to that date, plus
continuation at the Company's expense of such medical and dental
coverage as then in effect for the same period, in addition to the
Non-Competition Payments set out in Section 3(c) hereof. In the event
of Xx. Xxxxx'x termination for Cause, he shall not be entitled to
receive any further salary payments, but he shall be entitled to
receive the Non-Competition Payments set out in Section 3(c) hereof.
(b) Change of Control.
(1) In the event Xx. Xxxxx resigns during the Term of
Employment hereunder following a "Change in Control," as defined
below, on his last day of employment by the Company, the Company
shall pay Xx. Xxxxx a lump sum equal to the amounts to be paid
under this Agreement as set out in Sections 3 hereof (including
the amounts set out in Section 3(c) hereof), plus an additional
two weeks' salary for every year of service to the Company,
discounted to present value at a rate of 8% per annum, and
continue at the Company's expense such medical and dental
coverage as then in effect for a twelve month period, and pay one
year's insurance premium on the universal life and group term
life policies carried on Xx. Xxxxx'x life, or any successor to,
or replacement of, such policies, together with assignment (if
possible under the terms thereof) of such universal life policy
to Employee within one year following such resignation.
(2) Change of Control: "Change of Control," for purposes
of this Agreement, shall be deemed to have occurred upon the
occurrence of any one (or more) of the following events, other
than a transaction with another person controlled by, or under
common control with, the Company:
(A) Any person, including a "group" as defined in
Section (3)(d)(3) of the Securities Exchange Act of 1934, as
amended, becomes the beneficial owner of shares of the
voting stock of the Company with respect to which 40% or
more of the total number of votes for the election of the
Board may be cast;
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(B) As a result of, or in connection with, any cash
tender offer, exchange offer, merger or other business
combination, sale of assets or contested election, or
combination of the above, persons who were directors of the
Company immediately prior to such event shall cease to
constitute a majority of the Board;
(C) The stockholders of the Company shall approve an
agreement providing either for a transaction in which the
Company will cease to be an independent publicly owned
corporation or for a sale or other disposition of all or
substantially all the assets of the Company; or
(D) A tender offer or exchange offer is made for
shares of the Company's Common Stock (other than one made by
the Company), and shares of Common Stock are acquired
thereunder ("Offer").
(c) In the event of termination due to Xx. Xxxxx'x death or as a
result of sickness or disability of a permanent nature rendering Xx.
Xxxxx unable to perform his duties hereunder for a period of six (6)
consecutive months ("Permanent Disability") during the Term of
Employment, the Company shall pay to Xx. Xxxxx or the estate of Xx.
Xxxxx, as applicable, in the year of death or the year thereafter
(i) compensation which would otherwise be payable to Xx. Xxxxx (as
determined by, and subject to the restrictions of, Section 3 hereof)
up to the end of the month of his death or the end of the sixth (6th)
month after he becomes unable to perform his duties hereunder, and
(ii) any bonus payable to Xx. Xxxxx pursuant to Section 3 prorated up
to the date of death or disability.
(d) Eighty-five (85) days following the date of termination of
employment under this Agreement by either party, all outstanding
options to purchase shares of common stock of the Company held by Xx.
Xxxxx (whether vested or unvested) shall be converted into new non-
qualified options to purchase common stock of the Company. Each new
non-qualified option shall cover the same number of shares as the
stock option which it replaces, and shall be exercisable for five
years, at an exercise price which is the lower of (x) the closing
price of the Company's common stock on the New York Stock Exchange (or
other exchange or automated quotation system upon which it is listed
or quoted) as of the date of termination of employment or (y) the
original exercise price of the previously outstanding option which it
replaces.
8. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Texas. Venue and jurisdiction of any action
relating to this Agreement shall lie in Houston, Xxxxxx County, Texas.
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9. NOTICE. Any notice, payment, demand or communication required or
permitted to be given by this Agreement shall be deemed to have been
sufficiently given or served for all purposes if delivered personally to and
signed for by the party or to any officer of the party to whom the same is
directed or if sent by registered or certified mail, return receipt requested,
postage and charges prepaid, addressed to such party at its address set forth
below such party's signature to this Agreement or to such other address as shall
have been furnished in writing by such party for whom the communication is
intended. Any such notice shall be deemed to be given on the date so delivered.
10. SEVERABILITY. In the event any provisions hereof shall be modified or
held ineffective by any court, such adjudication shall not invalidate or render
ineffective the balance of the provisions hereof.
11. ENTIRE AGREEMENT. This Agreement constitutes the sole agreement
between the parties and supersedes any and all other agreements, oral or
written, relating to the subject matter covered by the Agreement with the
exception of certain Indemnity Agreements which may exist between the Company
and Xx. Xxxxx, and which remain in force independent of this Agreement.
12. WAIVER. Any waiver or breach of any of the terms of this Agreement
shall not operate as a waiver of any other breach of such terms or conditions,
or any other terms or conditions, nor shall any failure to enforce any
provisions hereof operate as a waiver of such provision or any other provision
hereof.
13. ASSIGNMENT. This Agreement is a personal employment contract and the
rights and interests of Xx. Xxxxx hereunder may not be sold, transferred,
assigned or pledged.
14. SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, representatives,
successors and assigns.
IN WITNESS WHEREOF, the parties hereto affixed their signatures hereunder
as of the date first above written.
SWIFT ENERGY COMPANY
By /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Senior Vice President-Finance
Chief Financial Officer, Secretary
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A. XXXX XXXXX
/s/ A. Xxxx Xxxxx
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