EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") dated as of November 1, 1995, is by
and between Swift Energy Company, a Texas corporation (the "Company"), and Xxxxx
X. Xxxxxxx ("Employee").
W I T N E S S E T H:
WHEREAS, Employee is employed as Senior Vice President of the Company; and
WHEREAS, the Company and Employee wish to document certain terms of
employment of Employee in such capacity;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Company and Employee 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 Employee, and
Employee hereby agrees to serve as Senior Vice President of the Company, or in
such other position as is mutually acceptable to both Employee and the Company,
for a period of three years commencing on the date hereof, which period shall
automatically be extended for an additional year on each anniversary of this
Agreement thereafter (as so extended at any time, the "Term of Employment")
unless notice to the contrary is given not less than 60 days prior to any
anniversary of this Agreement by either party to this Agreement.
2. SCOPE OF EMPLOYMENT. During the Term of Employment, (i) Employee will
serve as Senior Vice President 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 Employee and the Company, and Employee 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,
(ii) the Company shall not require Employee to relocate from Houston, Texas, and
(iii) the Company may assign Employee to other duties.
3. COMPENSATION. During the Term of Employment, the Company shall
compensate Employee 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, but such compensation shall not be reduced at any
time in contemplation of, related to, or as a result of, a Change in Control, as
defined in Section 7.
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 Employee with the following reimbursements and
benefits:
(a) The Company shall reimburse Employee for reasonable and
necessary expenses incurred by Employee 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.
(b) Employee may participate in any non-cash benefits provided
by the Company to its employees as they may exist from time to time.
Such benefits 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
Employee's death during the Term of Employment, the Company shall make
available to Employee's spouse, at the expense of such spouse, medical
and dental insurance as provided by the terms and conditions of the
then existing medical and dental insurance policies carried by the
Company unless otherwise prohibited by applicable law.
5. CONFIDENTIALITY.
(a) Employee 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 Employee. 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 Employee
in the course of his employment. Accordingly, during and after
termination of employment by the Company, Employee agrees: (i) to
prevent the disclosure to any third party of all such Confidential
Information; (ii) not to use for Employee's 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 Employee or any knowledge or
information known to the public in general.
2
(b) Employee 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 Employee's
termination, is the property of the Company.
(c) Employee 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. Employee
shall be entitled to review, inspect and copy any of the Company
information or material necessary for legal or other proceedings to
which Employee 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, Employee 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 Employee
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 Employee 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) Employee's obligations under (a) and (b) of this section
shall continue in force only while Employee 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.
3
7. TERMINATION.
(a) Either the Company or Employee may terminate Employee's
employment during the Term of Employment upon 60 days' written notice.
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, except in those circumstances covered by 7(b) or (c)
below, Employee shall continue to receive salary for six months from
the day he last worked on the Company's behalf pursuant to this
Agreement, plus continuation at the Company's expense of such medical
and dental coverage as then in effect for the same six month period.
Notwithstanding the foregoing, Employee shall not receive such
compensation if the Company terminates his employment for cause.
"Cause" shall be defined as (i) commission of fraud against the
Company, its subsidiaries, affiliates or customers, (ii) willful
refusal without proper legal cause, after 30 days' advance written
notice from the Chairman of the Board of the Company and/or the Chief
Executive Officer of the Company, or, after a Change in Control, from
the Continuing Directors, to faithfully and diligently perform
Employee's duties as directed in such notice or correct or terminate
those practices as described in such notice, all within the context of
a forty-hour per week schedule, or (iii) breach of Section 5 of this
Agreement.
(b) Change of Control.
(1) In the event Employee's employment is terminated by the
Company, after, by, on account of, or in connection with, a
"Change of Control," as defined below, or in the event Employee
resigns during the Term of Employment hereunder following a
"Change in Control," as defined, the Company (i) shall pay
Employee on his last day of employment by the Company a lump sum
equal to eighteen months' salary, plus an additional two weeks'
salary for every year of service to the Company, (ii) continue at
the Company's expense such medical and dental coverage as then in
effect for the remainder of the Term of Employment, and (iii) pay
one year's premium on the universal life and group term life
insurance policies carried on Employee's 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 termination.
(2) Change of Control: "Change of Control," for purposes
of this Agreement, shall be deemed to have occurred upon the
occurrence of
4
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;
(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 Employee's death or as a
result of sickness or disability of a permanent nature rendering
Employee 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 Employee or the estate of
Employee, as applicable, in the year of death or the year thereafter
(i) compensation which would otherwise be payable to Employee (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 Employee 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
Employee (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
5
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.
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 Employee, 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 Employee 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.
6
IN WITNESS WHEREOF, the parties hereto affixed their signatures hereunder
as of the date first above written.
SWIFT ENERGY COMPANY
By /s/ X. X. Xxxxx
-------------------------------------
Name: X. X. Xxxxx
Title: President
"EMPLOYEE"
/s/ Xxxxx X. Xxxxxxx
----------------------------------------
XXXXX X. XXXXXXX
7
