Amendment to Employment Agreement

Amendment no. 2 to Employment Agreement

Reeves Termination Agreement

 

 

 

EX-10.31 2 h66142exv10w31.htm EX-10.31

EXHIBIT 10.31

EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”) by and between The Meridian Resource Corporation, a Texas corporation (the “Company”), and Paul D. Ching (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 as President and Chief Executive Officer; and

     B. The Executive desires employment as an employee of the Company pursuant to the provisions of this Agreement.

1. TERMS OF EMPLOYMENT

The terms of employment are as follows:

     1.1 EMPLOYMENT. The Company hereby employs the Executive for and during the term of this Agreement in the position of President and Chief Executive Officer. The Executive hereby accepts employment under the terms and conditions set forth in this Agreement.

     1.2 DUTIES OF EXECUTIVE. The Executive shall perform in the capacity of President and Chief Executive Officer 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 that may be assigned to the Executive by the Board of Directors of the Company. The Executive may not engage, directly or indirectly, in any other business, investment or activity that interferes with the Executive’s performance of the Executive’s duties hereunder or is contrary to the interests of the Company. The Executive shall at all times comply with and be subject to such policies and procedures as the Company may establish from time to time and are customary within the Company’s industry. The Executive acknowledges and agrees that the 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 that would injure the 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 December 30, 2008 (the “Effective Date”) and shall continue in force and effect until June 30, 2009 unless sooner terminated as provided in Section 2.1 hereof. 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:

 

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          (a) SALARY: A base salary of $41,667 per month, prorated for any partial period of employment (“Salary”). Such Salary shall be paid in installments in accordance with the Company’s regular payroll practices.

          (b) BONUS: A bonus at the sole discretion of the Board of Directors of the Company in an amount up to the equivalent of the Salary earned during the Executive’s tenure as President and Chief Executive Officer of the Company.

          (c) STOCK OPTIONS: Options to purchase an aggregate of 250,000 shares of the Company’s common stock at an exercise price equal to the closing market price of the Company’s common stock on the New York Stock Exchange on January 2, 2009. Such options shall be subject to the terms and conditions of the Company’s 2007 Long Term Incentive Plan (the “Plan”) and a Stock Option Agreement in the form attached hereto as Exhibit A, which the Company and the Executive are entering into concurrently with the execution of this Agreement.

     1.5 NO EMPLOYMENT BENEFITS. Except as set forth in this Agreement, the Executive shall not be entitled to participate in any of the Company’s employee benefit plans.

     1.6 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 the Executive’s duties and responsibilities under this Agreement.

     1.7 EXPENSES. The Company shall promptly reimburse the Executive for all reasonable business expenses incurred during the term of this Agreement by the Executive in performing services hereunder, including all reasonable expenses of travel and living expenses while away from home on business or at the request of and in the service of the Company; provided, in each case, that such expenses are incurred and accounted for in accordance with the policies and procedures established by the Company applicable to its professional and other employees.

2. 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 the 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 20 consecutive days or an aggregate of 40 days during the term of this Agreement 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

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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 reasonably acceptable to the Board of Directors of the Company, shall have determined that the Executive has become mentally, physically and/or emotionally incapable of performing the 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 2.2(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:

               (i) Conviction of the Executive by a court of competent jurisdiction of a felony or a crime involving moral turpitude;

               (ii) 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

               (iii) 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)(iii), 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:

               (i) The Company’s failure to pay the Executive the Compensation pursuant to the terms of this Agreement, which failure has not been cured within 30 days after notice of such noncompliance has been given by the Executive to the Company; or

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               (ii) Any failure by the Company to comply with any material provision of this Agreement, which failure has not been cured within 30 days after notice of such noncompliance has been given by the Executive to the Board of Directors of the Company. The Executive shall make a good faith determination whether the failure has been cured and shall so notify the Board of Directors of the Company within five days after the expiration of such 30 day period.

          (f) TERMINATION BY THE EXECUTIVE WITH NOTICE. The Executive may terminate this Agreement 15 days in advance for any reason, in the Executive’s sole discretion other than Good Reason, by giving the Company 15 days prior written notice, in which 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 the Executive’s estate, except to pay to the Executive’s spouse, or if none, to the estate of the Executive any Salary that has accrued as of the date of death, but was then unpaid. Any amount due the Executive under this Section 2.2(a) shall be paid in a lump sum in cash within 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 Salary that has accrued as of the date on which such Disability is determined, but was then unpaid. Any amount due the Executive under this Section 2.2(b) shall be paid in a lump sum in cash within 30 days after the termination of the Executive’s employment under Section 2.1(b).

          (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 Salary that has accrued as of the date of such termination, but was then unpaid. Any amount due the Executive under this Section 2.2(c) shall be paid in a lump sum in cash within 60 days after the termination of the Executive’s employment under Section 2.1(c).

          (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 Salary that has accrued as of the date of such termination, but was then unpaid and (ii) an amount equal to the Executive’s full Salary payable for the then remaining term of this Agreement. Any amount due the Executive under this Section 2.2(d) shall be paid in a lump sum in cash within 30 days after the termination of the Executive’s employment under Section 2.1(d).

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          (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 Salary that has accrued as of the date of such termination, but was then unpaid and (ii) an amount equal to the Executive’s full Salary payable for the then remaining term of this Agreement. Any amount due the Executive under this Section 2.2(e) shall be paid in a lump sum in cash within 30 days after the termination of the Executive’s employment under Section 2.1(e).

          (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 such termination. Executive shall be entitled to any accrued, but unpaid, Salary through the date of such termination. Any amount due the Executive under this Section 2.2(f) shall be paid in a lump sum in cash within 30 days after the termination of the Executive’s employment under Section 2.1(f).

          (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 2, the Company shall have no further obligation to the Executive under this Agreement.

     2.3 CHANGE OF CONTROL. For this Agreement, a CHANGE OF 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 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

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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 sole remedy, to terminate the Executive’s employment contemporaneously with the effectiveness of any such successor and receive (i) any Salary that has accrued as of the date of such termination, but was then unpaid and (ii) an amount equal to the Executive’s full Salary payable for the then remaining term of this Agreement. 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 end of the term of this Agreement, then the successor shall pay such Executive (i) any Salary that has accrued as of the date of such termination, but was then unpaid and (ii) an amount equal to the Executive’s full Salary payable for the then remaining term of this Agreement.

     2.4 OFFSET. The Company shall have the right to deduct from any amounts due the Executive pursuant to Section 2 any obligations owed by the Executive to the Company.

3. PROTECTION OF INFORMATION AND NON-COMPETITION

     3.1 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 and has 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, geologic and geophysical information, trademarks, licenses, hiring and training methods, financial and other confidential and proprietary information concerning its operations and expansion plans (“Trade Secrets”). 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

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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 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 upon the termination of this Agreement if requested by the Board of Directors of the Company, or at any time upon demand by the Board of Directors of the Company.

          (b) RESTRICTION ON SOLICITING EMPLOYEES OF THE COMPANY. The Executive covenants that during the term of this Agreement and for a period of one year (“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, the 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 one year after the date of his termination (“the Non-Compete Period”), he will not, 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 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 oil and gas prospect or producing areas in which the Company is operating or evaluating properties on the date of the termination of this Agreement (“Designated Area(s)”).

          (d) SURVIVAL OF COVENANTS. Each covenant of the Executive set forth in this Section 3 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 such covenant.

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          (e) REMEDIES. In the event of breach or threatened breach by the Executive of any provision of this Section 3, 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 such 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, including, but not limited to, geologic or geophysical information regarding Designated Areas, 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 such 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 Section 3 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 the Executive will receive sufficiently high remuneration and other benefits under this Agreement to justify such restriction.

4. 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:


               IF TO THE COMPANY:

 

Paul D. Ching


The Meridian Resource Corporation
1401 Enclave Parkway, Suite 300
Houston, Texas 77077
ATTN: General Counsel

Either party hereto may designate a different address by providing written notice of such new address to the other party hereto.

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     4.2 SEVERABILITY. If any provision contained in this Agreement is determined by a court of competent jurisdiction 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 that was determined to be void, illegal or unenforceable had not been contained herein. If the restrictions contained in Section 3 are found by a court to be unreasonable or overly broad as to geographic area or time, or otherwise unenforceable, the parties intend for such restrictions to be modified by such 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 either 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 either 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. This Agreement may not be modified, altered or amended except by written agreement of both 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.

     4.5 GOVERNING LAW. The parties intend that the laws of the State of Texas shall govern the validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties hereto, without regard to conflict of laws provisions.

     4.6 REPRESENTATION OF EXECUTIVE. The Executive hereby represents and warrants to the Company that the Executive has no existing obligations inconsistent with those contained in this Agreement. The Executive further represents and warrants to the Company that the Executive has entered into this Agreement pursuant to the 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. The Executive further represents to the Company and agrees: (i) that he was specifically advised to and fully understands his rights to discuss all aspects of this Agreement with an attorney of his choice, (ii) that he has, to the extent he desires, availed himself of these rights, (iii) that the Company’s attorney does not represent him individually with respect to this Agreement and (iv) has carefully read and fully understands the provisions of this Agreement.

     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, the Company shall include any parent, subsidiary or division of the Company, or any entity that, directly or indirectly, controls, is controlled by, or is under common control with the Company.

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     IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the Effective Date.

 

 

 

 

 

 

The Meridian Resource Corporation
 

 

 

By:  

/s/ LLOYD V. DELANO  

 

 

 

Name:  

Lloyd V. DeLano 

 

 

 

Title:  

Senior Vice President 

 

 

 

Executive
 

 

 

/s/ PAUL D. CHING  

 

 

Paul D. Ching 

 

 

 

 

 

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EX-10.1 2 h67095exv10w1.htm EX-10.1

Exhibit 10.1

AMENDMENT TO EMPLOYMENT AGREEMENT

     This Amendment to Employment Agreement (the “Amendment”) by and between The Meridian Resource Corporation, a Texas corporation (the “Company”), and Paul D. Ching (the “Executive”) is made and entered into as of June 4, 2009.

RECITALS

     WHEREAS, the Executive is employed by the Company in the capacity of President and Chief Executive Officer under an Employment Agreement dated effective as of December 30, 2008 (the “Employment Agreement”); and

     WHEREAS, the Executive and the Company wish to amend the Employment Agreement in accordance with the provisions of this Amendment.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto hereby agree as follows:

     1. Section 1.3 of the Employment Agreement. Section 1.3 of the Employment Agreement is hereby amended and restated to provide as follows:

     “1.3 TERM. This Agreement shall become effective as of December 30, 2008 (the “Effective Date”) and shall continue in force and effect until December 31, 2009 unless sooner terminated as provided in Section 2.1 hereof. 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.”

     2. Other Terms of the Employment Agreement. Except as otherwise provided in this Amendment, all other terms of the Employment Agreement shall remain in full force and effect. All references in the Agreement to “this Agreement” shall be read as references to the Employment Agreement, as amended by this Amendment, but references to the date of the Employment Agreement shall remain references to December 30, 2008.

     3. Counterparts. This Amendment may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by all of the parties hereto.

     4 Choice of Law. The parties intend that the laws of the State of Texas shall govern the validity of this Amendment, the construction of its terms and the interpretation of the rights and duties of the parties hereto, without regard to conflict of laws provisions.

 

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     IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the date first set forth above.

 

 

 

 

 

 

The Meridian Resource Corporation
 

 

 

By:  

/s/ Lloyd V. DeLano  

 

 

Name:  

Lloyd V. DeLano 

 

 

Title:  

Senior Vice President and Chief Accounting Officer 

 

 

 

Executive
 

 

  

/s/ Paul D. Ching 

 

 

Paul D. Ching

 

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EX-10.1 2 h69854exv10w1.htm EX-10.1

Exhibit 10.1

AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT

     This Amendment No. 2 to Employment Agreement (the “Amendment”) by and between The Meridian Resource Corporation, a Texas corporation (the “Company”), and Paul D. Ching (the “Executive”) is made and entered into February 22, 2010, but effective as of December 31, 2009.

RECITALS

     WHEREAS, the Executive is employed by the Company in the capacity of President and Chief Executive Officer under an Employment Agreement, dated effective as of December 30, 2008, as amended by the Amendment to Employment Agreement, dated June 4, 2009 (as so amended, the “Employment Agreement”); and

     WHEREAS, the Executive and the Company wish to amend the Employment Agreement in accordance with the provisions of this Amendment.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto hereby agree as follows:

     1. Section 1.3 of the Employment Agreement. Section 1.3 of the Employment Agreement is hereby amended and restated to provide as follows:

     “1.3 TERM. This Agreement shall become effective as of December 30, 2008 (the “Effective Date”) and shall continue in force and effect until March 31, 2010 unless sooner terminated as provided in Section 2.1 hereof. 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.”

     2. Other Terms of the Employment Agreement. Except as otherwise provided in this Amendment, all other terms of the Employment Agreement shall remain in full force and effect. All references in the Agreement to “this Agreement” shall be read as references to the Employment Agreement, as amended by this Amendment, but references to the date of the Employment Agreement shall remain references to December 30, 2008.

     3. Counterparts. This Amendment may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by all of the parties hereto.

     4 Choice of Law. The parties intend that the laws of the State of Texas shall govern the validity of this Amendment, the construction of its terms and the interpretation of the rights and duties of the parties hereto, without regard to conflict of laws provisions.

 

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     IN WITNESS WHEREOF, the parties have executed this Amendment on February 22, 2010, effective as of December 31, 2009.

 

 

 

 

 

 

The Meridian Resource Corporation
 

 

 

By:  

/s/ Lloyd DeLano  

 

 

 

Name:  

Lloyd DeLano 

 

 

 

Title:  

Senior Vice President 

 

 

 

Executive
 

 

 

/s/ Paul D. Ching  

 

 

Paul D. Ching 

 

 

 

 

 

2

 

 

 

EX-10.3 4 h56196aexv10w3.htm TERMINATION AGREEMENT - JOSEPH A. REEVES, JR.

 

Exhibit 10.3

TERMINATION AGREEMENT

     THIS TERMINATION AGREEMENT (this “Termination Agreement”) is entered into as of the 29th day of April, 2008, by and among The Meridian Resource Corporation, a Texas corporation (said corporation, together with its successors and assigns permitted under this Termination Agreement, hereinafter referred to as the “Company”), and Joseph A. Reeves ( the “Executive”).

W I T N E S S E T H:

     WHEREAS, the Company and the Executive entered into that certain (i) Employment Agreement dated as of the 18th day of August, 1993 (the “Employment Agreement”), (ii) Agreement wherein the Company granted the Executive certain net profits interests in Company properties dated the 27th day of June, 1995 (the “NPI Agreement”), and (iii) Restricted Stock Grant and Executive Deferred Compensation Agreement dated as of the 31st day of July 1996 (the “DC Agreement”) (the Employment Agreement, NPI Agreement and DC Agreement may collectively be referred to herein as the “Agreements”);

     WHEREAS, the Board of Directors of the Company has requested that the Executive terminate the Agreements and enter into a new short-term employment agreement;

     WHEREAS, the Executive is willing to terminate the Agreements provided that certain terms in the Agreements relating to such termination are fully taken into account in conjunction with this Termination Agreement;

     WHEREAS, the Company and the Executive have agreed to terminate the Agreements on the terms set forth herein;

     WHEREAS, the parties hereto desire to enter into this Termination Agreement to evidence the foregoing in accordance with the terms and conditions set forth in this Termination Agreement;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the receipt and sufficiency of which are hereby acknowledged and confessed, the parties hereto hereby agree as follows:

I.

 

Termination.

     A. The Company and the Executive hereby agree to terminate the Employment Agreement and the NPI Agreement (except to the extent that it is modified in Para. I.B. below) rights thereunder effective as of the 29th day of April, 2008.

     B. In conjunction with such termination, the Company and the Executive acknowledge and agree that the Executive is vested in his Net Profits Interests under the NPI Agreement which have been assigned to the Executive or to which the Executive is entitled to an assignment as a result of events occurring before April 28, 2008. Such Net Profits Interests will remain unaffected by this Termination Agreement. More

 

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particularly, and by way of illustration only, the Executive’s Net Profits Interest rights with respect to any well spudded prior to April 28, 2008 are vested and are not affected by this Agreement. The Company and the Executive further agree that, notwithstanding the provisions of Paragraph C of Article IV, of the NPI Agreement or any other provision of the NPI Agreement to the contrary, with respect to any well spudded after April 28, 2008, within the geographical boundaries of any Property (or on lands pooled therewith) subject to the NPI Agreement prior to April 28, 2008, the Net Profits Interest with respect to such well shall be calculated by including in the computation of “Chargeable Expenditures” with respect to such well the capital expenditures described in clause (ii) of said Paragraph C of Article IV of the NPI Agreement. The Company and the Executive further agree that after April 28, 2008 no new Net Profits Interests will be assigned to the Executive under or pursuant to the NPI Agreement outside of the geographical boundaries of any Property (or on lands pooled therewith) which was subject to a Net Profits Interest grant prior to April 28, 2008.

     C. The Company and the Executive hereby agree to freeze the DC Agreement effective as of the date hereof so that the Executive shall accrue no additional benefits under the DC Plan with respect to periods after the date hereof, provided, however, that the Executive’s deferral election for the 2008 calendar year shall remain in effect. The Company and the Executive agree to enter into a termination agreement pursuant to which the the DC Agreement shall be terminated effective as of the 29th day of April, 2008, and to each execute and deliver any other document or certificate necessary to evidence such termination.. The portion of the Executive’s account under the DC Agreement that is not subject to section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the rules and regulations promulgated thereunder by the Department of Treasury and the Internal Revenue Service (“Section 409A”) shall be distributed to the Executive immediately in accordance with the existing termination provisions of Section 9.3 of the DC Agreement. The remaining portion of the Executive’s account under the DC Agreement shall be distributed to the Executive on the date of his Separation From Service if he is not a Specified Employee on the date of his Separation From Service or on the date that is six months following the date of his Separation From Service if he is a Specified Employee on the date of his Separation From Service. For purposes of this Agreement, the terms “Separation From Service” and “Specified Employee” shall have the meanings ascribed to those terms in Section 409A. The Company and the Executive agree that the Executive shall have a fully vested interest in his account under the DC Agreement and that the freezing and termination of the DC Agreement shall not adversely impact the Executive’s rights with respect to such benefits. The Company and the Executive agree that the Company may satisfy its federal income tax withholding obligation and its Federal Insurance Contributions Act withholding obligation with respect to the Executive’s benefit under the DC Agreement by withholding therefrom shares of the Company’s Common Stock in an amount sufficient to satisfy such withholding obligations.

     D. The Company and the Executive hereby agree to continue the employment of the Executive under a new employment agreement to be executed concurrently with this Termination Agreement in the form attached hereto as Exhibit A (the “New Employment Agreement”).

 

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     E. Both parties agree to mutually cooperate to ensure compliance with this Termination Agreement and fulfillment of the terms, conditions and obligations contained herein. Without limiting the generality of the foregoing, the parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Termination Agreement. For example, to the extent any additional documents are necessary to confirm the conveyance of any Net Profits Interest previously conveyed or to be conveyed under the NPI Agreement, the Company will expeditiously deliver, execute, record or assign any such documents, agreements and interests at the expense of the Company. In addition, to the extent any corporate or board of directors action is necessary or appropriate to confirm any issuance of shares of Company stock under the DC Agreement, the Company agrees to take all such action. The Company further agrees to take such action which is reasonably appropriate to bring the DC Agreement into documentary compliance with Section 409A.

     F. The Executive agrees to vote in favor of an amendment to the Bylaws of the Company to effect a separation of the roles of the Company’s Chairman of the Board and Chief Executive Officer..

     G. The Executive agrees that his right to participate (either directly or through an affiliated entity) with the Company in new oil and gas projects by acquiring a portion of the Company’s working interest therein, including, without limitation, all rights under the letter agreement dated July 1, 1994, by and between the Executive and the Company, shall terminate on December 29, 2008. Such termination shall not affect in any way any such working interests acquired before such date. This section does not apply to any NPI interest, or benefit plan, or the DC Agreement to the extent that any such rights are addressed herein.

     H. Executive represents and warrants to the Company that following the execution of this Termination Agreement and the New Employment Agreement, except for the New Employment Agreement, the Consulting Agreement referred to therein, and the Employment Agreement, there are no other agreements relating to the compensation of the Executive, either written or oral.

II.

 

Payments and Benefits.

     A. As part of this Termination Agreement, the Company shall pay or cause to be paid to or on the behalf of the Executive the following amounts:

     1. the Executive’s current annual Base Salary (as defined in the Employment Agreement) for the remainder of the Employment Period (as defined in the Employment Agreement); and

     2. an amount equal to the last Annual Bonus paid to the Executive, (the “Recent Bonus”) as defined in the Employment Agreement); and

 

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     3. the product of two (2) times the sum of the current annual Base Salary plus the Recent Bonus; and

     4. a lump sum retirement benefit equal to the difference between (i) the actuarial equivalent to the benefit under any Retirement Plan (as defined in the Employment Agreement) the Executive would receive if he remained employed by the Company at the current annual Base Salary plus the Recent Bonus for the remainder of the Employment Period and (ii) actuarial equivalent of his benefit, if any, under any Retirement Plan.

     On the date of his Separation From Service if he is not a Specified Employee on the date of his Separation From Service or on the date that is six months following his Separation From Service if he is a Specified Employee on the date of his Separation From Service the Company shall pay or cause to be paid to the Executive, in a single sum in cash, the aggregate of the amounts specified in clauses 1, 2, 3 and 4 of this Section IIA.

     It is hereby agreed by the Company and the Executive that the sum of the amounts set forth in this section is UNITED STATES DOLLARS $4,953,374.00.

     B. In the event it shall be determined that any payment, benefit or distribution provided to the Executive hereunder or otherwise would constitute “parachute payments” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax (“Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that, after payment (whether through withholding at the source or otherwise) by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto), employment taxes and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed on such payment (or such amount is paid on the Executive’s behalf with respect to such Excise Tax). Any Gross-Up Payment that the Company is required to make to reimburse the Executive for federal, state and local taxes imposed upon the Executive, including the amount of additional taxes imposed upon the Executive due to the Company’s payment of the initial taxes on such amounts, shall be made by the Company by the end of the Executive’s taxable year next following the Executive’s taxable year in which the Executive remits the related taxes to the taxing authority.

     C. The Company shall promptly reimburse the Executive for costs and expenses of legal counsel and consultants related to the negotiation of the termination of the Agreements. However, such amount shall be limited to a collective amount of an additional $100,000 for expenses incurred by both Joseph A. Reeves and Michael J. Mayell beyond the amount previously approved by the Board of Directors for that

 

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purpose. Such payments under this Section II.D shall be made within ten (10) business days after the delivery of the Executive’s written request for the payment accompanied by such evidence of fees and expenses incurred as the Company may reasonably require. In any event the Company shall pay the Executive such legal fees, consultants’ fees and expenses by the last day of the Executive’s taxable year following the taxable year in which the Executive incurred such legal fees, consultants’ fees and expenses. The legal fees, consultants’ fees or expenses that are subject to reimbursement pursuant to this Section II.D shall not be limited as a result of when the fees or expenses are incurred. The amount of legal fees, consultants’ fees or expenses that is eligible for reimbursement pursuant to this Section II.D during a given taxable year of the Executive shall not affect the amount of expenses eligible for reimbursement in any other taxable year of the Executive. The right to reimbursement pursuant to this Section II.D is not subject to liquidation or exchange for another benefit.

     D. On the date of his Separation From Service if he is not a Specified Employee on the date of his Separation From Service or on the date that is six months following the date of his Separation From Service if he is a Specified Employee on the date of his Separation From Service, the Company shall transfer ownership to the Executive of all furnishings and artwork in the Executive’s office.

     E. All shares accrued to the Executive under the DC Agreement shall be delivered to the Executive pursuant to the terms of such agreement as adjusted to reflect any changes described in paragraph I.H.

III.

 

Miscellaneous.

     A. This Termination Agreement shall be governed by and construed in accordance with the laws of the State of Texas. Further, the Executive agrees that any legal proceeding to enforce the provisions of this Termination Agreement shall be brought in Houston, Harris County, Texas, and hereby waives his right to any pleas regarding subject matter or personal jurisdiction and venue. The captions of this Termination Agreement are not part of the provisions hereof and shall have no force or effect. This Termination Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

     B. Every notice, approval, request, demand, or statement required or permitted to be given under this Termination Agreement shall be in writing and shall be deemed sufficiently given when deposited in the mail, registered or certified, postage prepaid, and addressed to the party hereto to which given as follows:

 

 

 

 

 

 

 

 

 

 

 

If to the Executive:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If to the Company:

 

The Meridian Resource Corporation

 

 

 

 

 

 

1401 Enclave Parkway, Suite 300

 

 

 

 

 

 

Houston, Texas 77077

 

 

 

 

 

 

Attn:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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or to such other address as either party shall have furnished to the other in writing in accordance herewith. Written notice given by any other method shall be deemed effective when actually received by the party.

     C. Every provision of this Termination Agreement is intended to be severable such that the invalidity or unenforceability of any provision of this Termination Agreement shall not affect the validity or enforceability of any other provision of this Termination Agreement.

     D. The Company may withhold from any amounts payable under this Termination Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

     E. In the event that the Executive makes a demand upon the Company for any benefits or amounts due hereunder and the Company rejects such demand, and the Executive ultimately prevails in litigation resulting therefrom, the Company shall reimburse the Executive for reasonable attorney fees incurred by the Executive in enforcing rights to which the Executive shall have become entitled pursuant to this Termination Agreement. Such payments to the Executive under this Section III.E shall be made within ten (10) business days after the delivery of the Executive’s written request for the payment accompanied by such evidence of fees incurred as the Company may reasonably require. In any event the Company shall pay the Executive such legal fees by the last day of the Executive’s taxable year following the taxable year in which the Executive incurred such legal fees. The legal fees that are subject to reimbursement pursuant to this Section III.E shall not be limited as a result of when the fees or expenses are incurred. The amount of legal fees that is eligible for reimbursement pursuant to this Section III.E during a given taxable year of the Executive shall not affect the amount of expenses eligible for reimbursement in any other taxable year of the Executive. The right to reimbursement pursuant to this Section III.E is not subject to liquidation or exchange for another benefit.

     F. As soon as reasonably practicable, the Company shall create an irrevocable grantor trust (the “Rabbi Trust”) which shall be subject to the claims of creditors of the Company. As soon as reasonably practicable, the Company shall transfer to the Rabbi Trust cash sufficient (on an undiscounted basis) to pay the estimated amount of the portion of the Executive’s benefit under the DC Agreement that is subject to Section 409A and the amounts specified in clauses 1, 2, 3 and 4 of Section II.A. Such amount shall be paid from the Rabbi Trust on the dates specified in Sections I.C and II.A herein, provided that the Company shall remain liable to pay any such amounts which for any reason are not paid from the Rabbi Trust. The trustee of the Rabbi Trust shall be a bank or trust company selected by the Company. Pursuant to the terms of the Trust Agreement, the trustee shall pay over all funds and shares under the Rabbi Trust to the

 

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Executive on the date that is six months following the date of separation, as required by Section 409A.

     G. Except as specifically contemplated by this Termination Agreement, this Termination Agreement constitutes the entire agreement by the parties hereto relating to the subject matter hereof and supersedes and replaces all prior and contemporaneous agreements, arrangements or understandings, whether written or oral, between the Company and the Executive.

     H. No failure by a party hereto to insist upon strict performance of any term, covenant, condition or agreements of this Termination Agreement, or to exercise any right or remedy provided for in this Termination Agreement upon breach of any provisions, and no acceptance of payment or performance during the continuation of such breach, shall constitute a waiver of any term, covenant or condition herein or a waiver of any subsequent breach or default in the performance of any term, covenant, condition or agreements herein.

     I. This Termination Agreement may be executed in multiple counterparts, each of which shall be deemed an original for all purposes, but all of which shall constitute one and the same instrument.

     J. Any capitalized term used but not otherwise defined herein shall have the meaning given to such term in the Employment Agreement, the NPI Agreement, or in the DC Agreement, as the case may be.

 

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     IN WITNESS WHEREOF, the undersigned have executed this Termination Agreement on the 29th day of April, 2008, to be effective on the date first written above.

 

 

 

 

 

 

 

THE MERIDIAN RESOURCE CORPORATION

 

 

a Texas corporation

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Lloyd V. DeLano

 

 

 

 

 

 

 

Name:

 

Lloyd V. DeLano

 

 

 

 

 

 

 

Title:

 

Senior Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Joseph A. Reeves, Jr.