EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement) by and between TEXAS MERIDIAN
RESOURCES EXPLORATION, INC., a Texas corporation (the "Company"), and P. RICHARD
GESSINGER (the "Executive") is made and entered into as of the Effective Date
set forth in Section 1.3 below:
RECITALS
A. The Company desires to employ Executive in the capacity set forth on
EXHIBIT "A", pursuant to the provisions of this Agreement; and
B. The Executive desires employment as an employee of the Company
pursuant to the provisions of this Agreement.
ARTICLE I.
TERMS OF EMPLOYMENT
The terms of employment are as follows:
1.1 EMPLOYMENT. The Company hereby employs the Executive for and during
the term hereof in the position set forth on EXHIBIT "A", but Company may
subsequently assign Executive to a different position or modify Executive's
duties and responsibilities. The Executive hereby accepts employment under the
terms and conditions set forth in this Agreement. Provided, however, Executive's
primary office shall be within fifty (50) miles of the current principal office
of the Company.
1.2 DUTIES OF EXECUTIVE. The Executive shall perform in the capacity
described in Section 1.1 hereof and shall have such duties, responsibilities,
and authorities as may be designated for such office. The Executive agrees to
devote the Executive's best efforts, abilities, knowledge, experience and full
business time to the faithful performance of the duties, responsibilities, and
authorities which may be assigned to the Executive. Executive may not engage,
directly or indirectly, in any other business, investment, or activity that
interferes with Executive's performance of Executive's duties hereunder, or is
contrary to the interests of the Company. Executive shall at all times comply
with and be subject to such policies and procedures as the Company may establish
from time to time, which will be customary within Company's industry. Executive
acknowledges and agrees that Executive owes a fiduciary duty of loyalty,
fidelity and allegiance to act at all times in the best interests of the Company
and to do no act which would injure Company's business, its interests, or its
reputation. The foregoing shall not be construed to prevent the Executive from
making passive investments in other businesses or enterprises, provided such
investments do not require services on the part of the Executive.
1.3 TERM. This Agreement shall become effective as of the 1st day of
December, 1997 (the "Effective Date") and shall continue in force and effect for
one (1) year unless sooner terminated
Page 1 of 12 Pages
as provided in Section 2.1 hereof. Unless this Agreement is terminated before
the end of its initial term, the term hereof shall be automatically extended for
successive one (1) year terms, unless terminated prior to the expiration of any
one (1) year term. Except as set out herein, this Agreement may only be renewed
or extended by written agreement executed by the Company and the Executive
pursuant to mutually acceptable terms and conditions.
1.4 COMPENSATION. The Company shall pay the Executive, as "Compensation"
for services rendered by the Executive under this Agreement the following Salary
plus Bonus.
(a) SALARY: A base salary per month as set forth on EXHIBIT "A", prorated
for any partial period of employment ("Salary"). Such Salary shall be paid
in installments in accordance with the Company's regular payroll
practices. Each calendar year the Company, will determine the cost of
living increase to be added to the Salary.
(b) BONUS: A bonus as set forth in EXHIBIT "A" ("Bonus").
(c) PARTICIPATION: A participation interest as set forth in EXHIBIT "A",
in the Company's executive well participation program.
1.5 EMPLOYMENT BENEFITS. In addition to the Salary payable to the
Executive hereunder, the Executive shall be entitled to the following benefits:
(a) EMPLOYMENT BENEFITS. As an employee of the Company, the
Executive shall participate in and receive all general employee benefit
plans and programs, as may be in effect from time to time, upon
satisfaction by the Executive of the eligibility requirements therefor.
Nothing in this Agreement is to be construed or interpreted to provide
greater rights, participation, coverage, or benefits under such benefit
plans or programs than provided to similarly situated employees pursuant
to the terms and conditions of such benefit plans and programs.
(b) WORKING FACILITIES. During the term of this Agreement, the
Company shall provide, at its expense, office space, furniture, equipment,
supplies and personnel as shall be adequate for the Executive's use in
performing Executive's duties and responsibilities under this Agreement.
(c) CLUB. Company shall reimburse Executive for all general club
dues and business related expenses incurred at the clubs set forth in
EXHIBIT "A".
(d) PROFESSIONAL DUES. The Company shall pay for all professional
dues, seminars, continuing education and related activities approved in
advance by the Chief Executive Officer.
(e) VACATION. Executive shall be entitled to the vacation as set out
in EXHIBIT "A".
Page 2 of 12 Pages
(f) GENERAL. The other benefits set out in EXHIBIT "A".
(g) LIMITATIONS. Company shall not by reason of this Article 1.5 be
obligated to institute, maintain, or refrain from changing, amending, or
discontinuing, any such incentive compensation or employee benefit program
or plan, so long as such actions are similarly applicable to covered
employees similarly situated.
ARTICLE II.
TERMINATION
2.1 TERMINATION. Notwithstanding anything herein to the contrary, this
Agreement and the Executive's employment hereunder may be terminated without any
breach of this Agreement at any time during the term hereof by reason of and in
accordance with the following provisions:
(a) DEATH. If the Executive dies during the term of this Agreement
and while in the employ of the Company, this Agreement shall automatically
terminate as of the date of the Executive's death, and the Company shall
have no further liability hereunder to the Executive or Executive's
estate, except to the extent set forth in Section 2.2(a) hereof.
(b) DISABILITY. If, during the term of this Agreement, the Executive
shall be prevented from performing the Executive's duties hereunder, for a
period of not less than sixty (60) consecutive days or an aggregate of
ninety (90) days during any period of twelve (12) consecutive calendar
months, by reason of becoming disabled as hereinafter defined, the Company
may terminate this Agreement immediately upon written notice to the
Executive without any further liability hereunder to the Executive, except
as set forth in Section 2.2(b) hereof. For purposes of this Agreement, the
Executive shall be deemed to have a "Disability" when the Board of
Directors of the Company, upon the written report of a qualified physician
designated by the Board of Directors of the Company, shall have determined
that the Executive has become mentally, physically and/or emotionally
incapable of performing Executive's duties and services under this
Agreement.
(c) TERMINATION BY THE COMPANY FOR CAUSE. Prior to the expiration of
the term of this Agreement, the Company may discharge the Executive for
cause and terminate this Agreement immediately upon written notice to the
Executive without any further liability hereunder to the Executive, except
to the extent set forth in Section 2.1(c) hereof. For purposes of this
Agreement, a "discharge for cause" shall mean termination of the Executive
upon written notice to the Executive limited, however, to one or more of
the following reasons:
(1) Conviction of the Executive by a court of competent
jurisdiction of a felony or a crime involving moral turpitude;
(2) The Executive's failure or refusal to comply with the
Company's policies, standards, and regulations of the Company, which
from time to time may be established;
Page 3 of 12 Pages
(3) The Executive's engaging in conduct amounting to fraud,
dishonesty, gross negligence, willful misconduct or conduct that is
unprofessional, unethical, or detrimental to the reputation,
character or standing of the Company; or
(4) The Executive's failure to faithfully and diligently
perform the duties required hereunder or to comply with the
provisions of this Agreement.
Prior to terminating this Agreement pursuant to Section
2.1(c), (2), or (4), the Company shall furnish the Executive written
notice of the Executive's alleged failure to abide by or alleged
breach of this Agreement. The Executive shall have thirty (30) days
after the Executive's receipt of such notice to cure such failure to
abide or breach and the Company's Board of Directors, in its sole
discretion, shall determine if the failure to abide or breach is
cured.
(d) TERMINATION BY THE COMPANY WITH NOTICE. The Company may
terminate this Agreement at any time, for any reason, other than as set
forth in Subparagraphs (a), (b) or (c) of this Section 2.1, with or
without cause, in the Company's sole discretion, immediately upon written
notice to the Executive without any further liability hereunder to the
Executive, except to the extent set forth in Section 2.2(d) hereof.
(e) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive may
terminate this Agreement at any time for Good Reason (as hereinafter
defined) in which event the Company shall have no further liability
hereunder to the Executive, except to the extent set forth in Section
2.2(e) hereof. For purposes of this Agreement, the term "Good Reason"
shall mean, without the Executive's express written consent, the
occurrence of any of the following circumstances:
(1) The Company's failure to pay the Executive the
Compensation pursuant to the terms of this Agreement that has not
been cured within thirty (30) days after notice of such
noncompliance has been given by the Executive to the Company; or
(2) Any failure by the Company to comply with any material
provision of this Agreement that has not been cured within thirty
(30) days after notice of such noncompliance has been given by the
Executive to the Company. The Executive shall use Executive's best
efforts to make a good faith determination if the failure has been
cured and shall so notify the Company within five (5) days after the
expiration of said thirty (30) day period; or
(3) The Company's cancellation or termination of the executive
well bonus plan or the Executive's participation in such Plan.
(f) TERMINATION BY THE EXECUTIVE WITH NOTICE. The Executive may
terminate this Agreement fifteen (15) days in advance for any reason, in
the Executive's sole discretion other than Good Reason, by giving the
Company fifteen (15) days prior written notice, in which
Page 4 of 12 Pages
event the Company shall have no further liability hereunder to the
Executive, except to the extent set forth in Section 2.2(f) hereof.
2.2 COMPENSATION UPON TERMINATION.
(a) DEATH. In the event the Executive's employment hereunder is
terminated pursuant to the provisions of Section 2.1(a) hereof due to the
death of the Executive, the Company shall have no further obligation to
the Executive or Executive's estate, except to pay to the Executive's
spouse, or if none, to the estate of the Executive any accrued, but
unpaid, Salary and any vacation or sick leave benefits, which have accrued
as of the date of death, but were then unpaid or unused. Any amount due
the Executive hereunder shall be paid in a lump sum in cash within thirty
(30) days after the death of the Executive.
(b) DISABILITY. In the event the Executive's employment hereunder is
terminated pursuant to the provisions of Section 2.1(b) hereof due to
Disability of the Executive, the Company shall be relieved of all of its
obligations under this Agreement, except to pay the Executive any accrued,
but unpaid Salary, and vacation or sick leave benefits, which have accrued
as of the date on which such Disability is determined, but then remains
unpaid. The provisions of the preceding sentence shall not affect the
Executive's rights to receive payments under the Company's disability
insurance plan, if any. Any amount due the Executive hereunder shall be
paid in a lump sum in cash within thirty (30) days after the termination
of the Executive's employment hereunder.
(c) TERMINATION BY THE COMPANY FOR CAUSE. In the event the
Executive's employment hereunder is terminated by the Company for Cause
pursuant to the provisions of Section 2.1(c) hereof, the Company shall
have no further obligation to the Executive under this Agreement except to
pay the Executive any accrued, but unpaid, Salary and any vacation or sick
leave benefits, which have accrued as of the date of termination of this
Agreement, but were then unpaid or unused. Any amount due the Executive
hereunder shall be paid in a lump sum in cash within sixty (60) days after
the termination of the Executive's employment hereunder.
(d) TERMINATION BY THE COMPANY WITH NOTICE. In the event the
Executive's employment hereunder is terminated by the Company pursuant to
the provisions of Section 2.1(d) hereof, the Executive shall be entitled
to receive (i) any accrued, but unpaid, Salary and any vacation or sick
leave benefits, which have accrued as of the date of termination of this
Agreement, but were then unpaid or unused and (ii) an amount payable in
monthly installments equal to the Executive's full monthly Salary payable
for the greater of twelve (12) months or the remainder of the then
existing term of this Agreement. Any amount due the Executive under (i) of
this Section shall be paid in a lump sum in cash within thirty (30) days
after the termination of the Executive's employment hereunder.
(e) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. In the event this
Agreement is terminated by the Executive pursuant to the provisions of
Section 2.1(e) hereof, the Executive shall be entitled to receive (i) any
accrued, but unpaid, Salary and any vacation or
Page 5 of 12 Pages
sick leave benefits which have accrued as of the date of termination of
the Agreement, but were then unpaid or unused and (ii) the full monthly
Salary payable hereunder for the twelve (12) months in accordance with the
Company's regular payroll periods or over such lesser period as the
Company may determine. Any amount due the Executive under (i) of this
Section shall be paid in a lump sum in cash within thirty (30) days after
the termination of the Executive's employment hereunder.
(f) TERMINATION BY THE EXECUTIVE WITH NOTICE. In the event the
Executive's employment hereunder is terminated by the Executive pursuant
to the provisions of Section 2.1(f) hereof, all future compensation to
which Executive is entitled and all future benefits for which Executive is
eligible shall cease and terminate as of the date of termination.
Executive shall be entitled to any accrued, but unpaid or unused, Salary,
vacation or sick leave benefits through the date of termination. Any
amount due the Executive hereunder shall be paid in a lump sum in cash
within thirty (30) days after the termination of Executive's Employment
hereunder.
(g) TERMINATION OF OBLIGATIONS OF THE COMPANY UPON PAYMENT OF
COMPENSATION. Upon payment of the amount, if any, due the Executive
pursuant to the preceding provisions of this Section II, the Company shall
have no further obligation to the Executive under this Agreement.
2.3 CHANGE OF CONTROL. For this Agreement, a CHANGE IN CONTROL shall be
deemed to occur if:
(a) any person (other than the Company, an employee benefit plan of the
Company or any holder of the Company's voting securities on the date
hereof), acquires directly or indirectly the Beneficial Ownership
(as defined in Section 13(d) of the Exchange Act) of any voting
security of the Company and immediately after such acquisition such
Person is, directly or indirectly, the Beneficial Owner of voting
securities representing more than 50 percent of the total voting
power of all of the then outstanding voting securities of the
Company;
(b) the following individuals no longer constitute a majority of the
members of the Board: (A) the individuals who, as of the date
hereof, constitute the Board (the"Original Directors); (B) the
individuals who thereafter are elected to the Board and whose
election, or nomination for election, to the Board was approved by a
vote of at least two-thirds of the Original Directors then still in
office (such directors becoming "Additional Original Directors"
immediately following their election); or (C) the individuals who
are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds
of the Original Directors and Additional Original Directors then
still in office (such directors also becoming "Additional Original
Directors" immediately following their election);
(c) the stockholders of the Company approve a merger, consolidation,
recapitalization or reorganization of the Company, or a reverse
stock split of outstanding voting
Page 6 of 12 Pages
securities, or consummation of any such transaction if stockholder
approval is not obtained, other than any such transaction which
would result in at least 50 percent of the total voting power
represented by the voting securities of the surviving entity
outstanding immediately after such transaction being Beneficially
Owned by at least 50 percent of the holders of outstanding voting
securities of the Company immediately prior to the transaction, with
the voting power of each such continuing holder relative to other
such continuing holder not substantially altered in the transaction;
or
(d) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or a substantial portion more than
50 percent of the value of the total assets of the Company.
In the event of a Change of Control, the Company will require any and all
successors to the Company to expressly assume and agree pursuant to an
appropriate written assumption agreement to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. Failure of the Company to obtain such
agreement prior to or contemporaneously with the effectiveness of any such
successor shall be a breach of the Agreement and shall entitle the Executive, as
his or her sole remedy, to terminate Executive's employment contemporaneously
with the effectiveness of any such successor and receive Executive's Monthly
Base Salary for the next twelve (12) months in accordance with the Company's
regular payroll practices and immediately receive any accrued, but unpaid,
salary, vacation or sick leave. In the event the successor assumes and agrees,
pursuant to a written assumption agreement, to perform this Agreement, but
terminates this Agreement pursuant to Section 2.1(d) prior to the expiration of
six (6) months from the effectiveness of such successor, then the successor
shall pay such Executive, his Monthly Base Salary in accordance with the
Company's regular payroll practices for the next twelve (12) months after such
termination and immediately pay any accrued, but unpaid, salary, vacation or
sick leave.
2.4 OFFSET. The Company shall have the right to deduct from any amounts
due the Executive pursuant to Article II, any obligations owed by the Executive
to the Company.
2.5 WELL BONUS PLAN. Notwithstanding anything contained in Section 2.2
hereof, Executive's right to receive a bonus pursuant to the Company's
management well bonus plan shall be determined in accordance with the terms and
conditions of said plan.
ARTICLE III.
PROTECTION OF INFORMATION AND NON-COMPETITION
PROTECTIVE COVENANTS. The Executive recognizes that his employment by the
Company is one of the highest trust and confidence because (i) the Executive
will become fully familiar with all aspects of the Company's business during the
term of this Agreement, (ii) certain information of which the Executive will
gain knowledge during his employment is proprietary and confidential information
Page 7 of 12 Pages
which is special and peculiar value to the Company, and (iii) if any such
proprietary and confidential information were imparted to or became known by any
person, including the Executive, engaging in a business in competition with that
of the Company, hardship, loss or irreparable injury and damage could result to
the Company, the measurement of which would be difficult if not impossible to
ascertain. The Executive acknowledges that the Company has developed unique
skills, concepts, designs, marketing programs, marketing strategy, business
practices, methods of operation, trademarks, licenses, hiring and training
methods, financial and other confidential and proprietary information concerning
its operations and expansion plans ("Trade Secrets"). Trade Secrets shall not
include the geologic or geophysical information, rather such information shall
be subject to the terms and provisions of Subparagraph (c) below. Therefore, the
Executive agrees that it is necessary for the Company to protect its business
from such damage, and the Executive further agrees that the following covenants
constitute a reasonable and appropriate means, consistent with the best interest
of both the Executive and the Company, to protect the Company against such
damage and shall apply to and be binding upon the Executive as provided herein:
(a) TRADE SECRETS. The Executive recognizes that his position with
the Company is one of the highest trust and confidence by reason by of the
Executive's access to and contact with certain Trade Secrets of the
Company. The Executive agrees and covenants to use his best efforts and
exercise utmost diligence to protect and safeguard the Trade Secrets of
the Company. The Executive further agrees and covenants that, except as
may be required by the Company in connection with this Agreement, or with
the prior written consent of the Company, the Executive shall not, either
during the term of this Agreement or thereafter, directly or indirectly,
use for the Executive's own benefit or for the benefit of another, or
disclose, disseminate, or distribute to another, any Trade Secret (whether
or not acquired, learned, obtained, or developed by the Executive alone or
in conjunction with others) of the Company or of others with whom the
Company has a business relationship. All memoranda, notes, records,
drawings, documents, or other writings whatsoever made, compiled,
acquired, or received by the Executive during the term of this Agreement,
arising out of, in connection with, or related to any activity or business
of the Company, including, but not limited to, Trade Secrets, are, and
shall continue to be, the sole and exclusive property of the Company, and
shall, together with all copies thereof and all advertising literature, be
returned and delivered to the Company by the Executive immediately,
without demand, upon the termination of this Agreement, or at any time
upon the Company's demand.
(b) RESTRICTION ON SOLICITING EMPLOYEES OF THE COMPANY. The
Executive covenants that during the term of this Agreement and for the
period set forth on EXHIBIT "A" ("Non-Solicitation Period") following the
termination of this Agreement, he will not, either directly or indirectly,
call on, solicit, or take away, or attempt to call on, solicit, induce or
take away any employee of the Company, either for himself or for any other
person, firm, corporation or other entity. Further, Executive shall not
induce any employee of the Company to terminate his or her employment with
the Company.
(c) COVENANT NOT TO COMPETE. The Executive hereby covenants and
agrees that during the term of this Agreement and for the later of one (1)
year after the date of his termination or until the Company no longer has
a well operating in such designated prospects
Page 8 of 12 Pages
("the Non-Compete Period"), he will not without the prior written consent
of the Company, directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, shareholder (other than through
ownership of publicly-traded capital stock of a corporation which
represents less than five percent (5%) of the outstanding capital stock of
such corporation), corporate officer, director, investor, financier or in
any other individual or representative capacity, engage or participate in
any business competitive with the business conducted by the Company within
the prospect areas on which Executive has worked up to the date of the
termination of this Agreement ("Designated Prospect(s)"). The Company
shall provide to the Executive a list and an outline of each such
Designated Prospect within fifteen (15) business days after the date of
termination. Further, Executive agrees and covenants not to use for his
benefit or for the benefit of another or disclose, disseminate or
distribute to another any geologic or geophysical information regarding
the Designated Prospects during the Non-Compete Period.
(d) SURVIVAL OF COVENANTS. Each covenant of the Executive set forth
in this Article III shall survive the termination of this Agreement and
shall be construed as an agreement independent of any other provision of
this Agreement, and the existence of any claim or cause of action of the
Executive against the Company whether predicated on this Agreement or
otherwise shall not constitute a defense to the enforcement by the Company
of said covenant.
(e) REMEDIES. In the event of breach or threatened breach by the
Executive of any provision of this Article III, the Company shall be
entitled to relief by temporary restraining order, temporary injunction,
or permanent injunction or otherwise, in addition to other legal and
equitable relief to which it may be entitled, including any and all
monetary damages which the Company may incur as a result of said breach,
violation or threatened breach or violation. The Company may pursue any
remedy available to it concurrently or consecutively in any order as to
any breach, violation, or threatened breach or violation, and the pursuit
of one of such remedies at any time will not be deemed an election of
remedies or waiver of the right to pursue any other of such remedies as to
such breach, violation, or threatened breach or violation, or as to any
other breach, violation, or threatened breach or violation.
(f) LIMITATIONS. The obligations of confidentiality regarding Trade
Secrets and geologic or geophysical information regarding the Designated
Prospects set forth in this Section 3.1 shall not apply if (i) it can be
demonstrated by the Executive to have been within his legitimate possession
prior to the time of disclosure by the disclosing party, (ii) it was in the
public domain prior to disclosure, or (iii) if such disclosure comes into the
public domain through no fault of the Executive.
The Executive hereby acknowledges that the Executive's agreement to be
bound by the protective covenants set forth in this Article III was a material
inducement for the Company entering into this Agreement and agreeing to pay the
Executive the compensation and benefits set forth herein. Further, Executive
understands the foregoing restrictions may limit his or her ability to engage in
certain businesses during the period of time provided for, but acknowledges that
Executive will receive sufficiently high remuneration and other benefits under
this Agreement to justify such restriction.
Page 9 of 12 Pages
ARTICLE IV.
GENERAL PROVISIONS
4.1 NOTICES. all notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be deemed to have been
delivered on the date personally delivered or on the date deposited in a
receptacle maintained by the United States Postal Service for such purpose,
postage prepaid, by certified mail, return receipt requested, addressed to the
respective parties as follows:
IF TO THE EXECUTIVE As set forth in EXHIBIT "A"
IF TO THE COMPANY:Texas Meridian Resources Exploration, Inc.
15995 N. Barkers Landing, Suite 300
Houston, Texas 77079
ATTN: General Counsel
Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto.
4.2 SEVERABILITY. If any provision contained in this Agreement is
determined by a court of competent jurisdiction or an arbitrator pursuant to
Section 5 below to be void, illegal or unenforceable, in whole or in part, then
the other provisions contained herein shall remain in full force and effect as
if the provision which was determined to be void, illegal, or unenforceable had
not been contained herein. If the restrictions contained in Article III are
found by a court to be unreasonable or overly broad as to geographic area or
time, or otherwise unenforceable, the parties intend for said restrictions to be
modified by said court so as to be reasonable and enforceable and, as so
modified, to be fully enforced.
4.3 WAIVER MODIFICATION, AND INTEGRATION. The waiver by any party hereto
of a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach by any party. This instrument contains the
entire agreement of the parties concerning employment and supersedes all prior
and contemporaneous representations, understandings and agreements (including
but not limited to any initial employment or independent contractor agreement)
either oral or in writing, between the parties hereto with respect to the
employment of the Executive by the Company and all such prior or contemporaneous
representations, understandings and agreements, both oral and written, are
hereby terminated, unless otherwise specifically designated on EXHIBIT "A". This
Agreement may not be modified, altered or amended except by written agreement of
all the parties hereto.
4.4 BINDING EFFECT. This Agreement shall be binding and effective upon the
parties and their respective heirs, executors and successors. Neither party
shall assign this Agreement without the prior written consent of the other
party, except that the Company shall have the right to assign this Agreement to
an entity.
Page 10 of 12 Pages
4.5 GOVERNING LAW. The parties intend that the laws of the State of Texas
should govern the validity of this Agreement, the construction of its terms, and
the interpretation of the rights and duties of the parties hereto.
4.6 REPRESENTATION OF EXECUTIVE. The Executive hereby represents and
warrants to the Company that the Executive has not previously assumed any
obligations inconsistent with those contained in this Agreement, unless
specifically set out in EXHIBIT "A". The Executive further represents and
warrants to the Company that the Executive has entered into this Agreement
pursuant to Executive's own initiative and that this Agreement is not in
contravention of any existing commitments. The Executive acknowledges that the
Company has entered into this Agreement in reliance upon the foregoing
representations of the Executive.
4.7 COUNTERPART EXECUTION. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
4.8 COMPANY. For the purposes of this Agreement, Company shall include any
parent, subsidiary division of the Company, or any entity, who directly or
indirectly, controls, is controlled by, or is under common control with the
Company.
4.9 EXECUTIVE. Executive represents to the Company and agrees that he: (i)
was specifically advised to and fully understands his rights to discuss all
aspects of this Agreement with an attorney, (ii) has, to the extent he desires,
availed himself of these rights,and (iii) has carefully read and fully
understands the provisions of this Agreement.
ARTICLE V.
ARBITRATION
5.1 RESOLUTION OF DISPUTES. In the event any dispute(s) arises between the
parties, the parties shall cooperate in good faith to resolve the dispute(s). If
the parties cannot resolve the dispute(s) between themselves within ten (10)
days after written notice of activation of the terms of this Article V, each
party shall, within seven (7) days after the expiration of said 10 day period,
select a mediator and shall notify the other party of such selection. The
mediators shall have thirty (30) days from the expiration of said 7 day period
to resolve the dispute(s). If a resolution of the dispute(s) does not occur
through said mediation within said 30 days, the dispute(s) shall be resolved by
binding arbitration.
5.2 ARBITRATION. In the event any dispute cannot be resolved through
mediation the parties agree to submit such dispute(s) to binding non-appealable
arbitration within ten (10) days from the expiration of the 30 day period set
out in Section 5.1. Any such arbitration arising hereunder shall be conducted in
Houston, Texas in accordance with the rules of the American Arbitration
Association then in effect. Each party hereby submits itself to personal
jurisdiction in Houston, Texas, for the purpose of such arbitration proceedings.
Within fifteen (15) days from submitting the dispute(s) to arbitration each
party shall select its arbitrator. Then within twenty (20) days after said 15
days the two arbitrators shall select a third arbitrator. The three arbitrators
shall have their first meeting within
Page 11 of 12 Pages
twenty (20) days after the selection of the third arbitrator. The arbitrators
shall reach a final decision within one hundred eighty (180) days of their first
meeting. The costs of arbitration shall be borne equally by the parties, except
each party shall be responsible for such party's own arbitrator's and attorneys'
fees.
ARTICLE VI.
CONFIDENTIALITY
6.1 CONFIDENTIALITY. This Agreement is confidential, and the substance may
be disclosed only as mutually agreed by the parties or as may be required by
law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written effective as of the Effective Date.
THE COMPANY:
TEXAS MERIDIAN RESOURCES
EXPLORATION, INC.
By:__________________________________
Printed Name:_____________________
Title:____________________________
EXECUTIVE:
Printed Name: P. RICHARD GESSINGER
Page 12 of 12 Pages
EXHIBIT "A" TO
EMPLOYMENT AGREEMENT
Executive Name: P. Richard Gessinger
Position: Chief Financial Officer and Executive Vice President of
the Meridian Resource Corporation
Monthly Base Salary: Sixteen Thousand Six Hundred Sixty-Six and 67/100
Dollars ($16,666.67)
Bonus: An annual bonus at the discretion of the Company's Board
of Directors.
Well Bonus Plan: An interest of one-half of one percent (0.50%) in the
Company's management well bonus plan will be granted to
you. In conjunction with said management well bonus plan
you will be granted the right to receive up to 20,000
shares of Company common stock subject to the
calculation set out below and to an initial 4 year
vesting program. The only requirement for the annual
vesting is you must be employed by the Company on each
annual vesting date. The purpose of said stock grant is
to create a floor amount of consideration you will
receive in 1998 from the management well bonus plan. If
the amount you receive from the management well bonus
plan in 1998 exceeds $200,000, then no shares will vest
other than the initial 5,000 shares. If the amount
received from the management well bonus plan in 1998 is
less than $200,000, then you will receive the number of
shares, valued for the purposes hereof at $10.00 per
share, necessary to equal the difference between the
amount you received and $200,000. Five thousand (5,000)
shares of said 20,000 shares will vest on January 1,
1998 and one third of the shares issued pursuant to the
above calculation shall vest on January 1, 1999, 2000
and 2001.
Stock Options: You will be granted 25,000 stock options (ISO and NQSO).
The grant price of these options is $10.00. The options
will vest over a four year period in accordance with the
stock option plans.
Salary Deferral Program:You may choose to defer all or part of your salary
under an existing salary deferral program and receive a
partial match up to 50% of your salary by purchasing
common stock with the deferred salary.
Page 1 of 2 Pages
Annual Medical Exam: The Company will pay for an annual physical exam with an
approved medical facility or with an approved physician.
Business expenses: All reasonable expenses for travel or otherwise related
to business on behalf of the Company will be reimbursed.
Parking: The Company will provide a reserved parking space.
Vacation: Four (4) weeks, on a calendar basis, effective from the
first day of employment. The vacation shall be earned at
the rate of 1.67 days for each full month of employment.
Vacation days will be coordinated in advance, subject to
the reasonable discretion of the Chief Executive Officer
and/or President of The Meridian Resource Corporation.
Clubs: The Company will pay your monthly dues and business use
of your Coronado Club and Lochinvar Country Club
membership. The Company will acquire a corporate
membership at Lochinvar Country Club for your use, if
you pay one-half of the cost of the membership. Upon
your termination from the Company, you may elect to
either pay the Company the other one-half of the cost of
the membership and the membership will be transferred to
you or the Company will pay you the one-half of the cost
of the membership originally paid by you and retain the
corporate membership. Personal usage will be for your
own account.
Non-Solicitation Period:Six (6) months
Non-Compete Period: Six (6) months
Home Address: 705 Pifer Road
Houston, Texas 77024
Page 2 of 2 Pages