This Employment
Agreement (the “Agreement”) by and between THE MERIDIAN
RESOURCE & EXPLORATION, LLC., a Delaware limited liability
company (the “Company”), and ALAN S. PENNINGTON (the
“Executive”) is made and entered into as of the
Effective Date set forth in Section 1.3 below:
A. The
Company desires to employ Executive in the capacity set forth on
EXHIBIT “A”, pursuant to the provisions of this
Agreement;
B. The
Executive desires employment as an employee of the Company pursuant
to the provisions of this Agreement; and
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”. 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 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 17
th day of December 2008, (the “Effective
Date”) and shall continue in force and effect for one
(1) year unless sooner terminated 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) MANAGEMENT WELL BONUS PARTICIPATION:
The Company and the Executive acknowledge the existence of a
separate agreement between themselves, titled “The Meridian
Resource Management Well Bonus Plan,” dated November 5,
1997 (“the Management Well Bonus Plan”); which
Management Well Bonus Plan is not affected by or superseded by the
terms and conditions of this Agreement; the Company and the
Executive agree that all interpretation and enforcement of the
terms of the Management Well Bonus Plan shall be separate and stand
alone. Notwithstanding anything to the contrary contained in this
Agreement or any other agreement, the Company and the Executive
acknowledge that the Executive’s participation under the
Management Well Bonus Plan is currently as set forth in EXHIBIT
“A”.
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
coverage under 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 thereof. 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 are 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 in the furtherance of the Executive’s
duties defined herein.
(e) VACATION. Executive shall be entitled
to the vacation as set out in EXHIBIT “A”.
(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
incentive compensation or employee benefit program or plan, so long
as such actions are similarly applicable to similarly situated
covered employees.
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
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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 “Disabled”
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;
(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 clause (2) or
(4) of this Section 2.1, the Company shall furnish the
Executive written notice of the Executive’s alleged failure
to abide by or alleged breach of this Agreement. Any such notice
shall set forth in detail the facts and circumstances alleged to
provide a basis for such termination. The Executive shall have
thirty (30) days 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. Any such notice shall set forth in detail the facts
and circumstances of the alleged failure. The Executive shall use
Executive’s best
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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) A
failure to elect or reelect or to appoint or reappoint the
Executive to the office of Senior Vice President and Chief
Accounting Officer of the Company or other material change by the
Company of the Executive’s functions, duties or
responsibilities which change would reduce the ranking or level,
dignity, responsibility, importance or scope of the
Executive’s position with the Company from the position and
attributes thereof described in Section 1.1 above;
(4) The
assignment or reassignment by the Company of the Executive to a
location not within thirty (30) miles of the Company’s
current location;
(5) The
failure for any reason of the Executive to continue to directly
report to the Chief Executive Officer and/or President of the
Company as his supervisor, without any intermediate
supervisor;
(6) The
failure of the Company to continue to provide the Executive with
office space, related facilities and secretarial assistance that
are commensurate with the Executive’s responsibilities to and
position with the Company;
(7) The
notification by the Company of the Company’s intention not to
observe or perform one or more of the obligations of the Company
under this Agreement;
(8) The
failure by the Company to fulfill its obligations to the Executive
as required by the Company’s Indemnification Agreement,
attached as Exhibit “B”;
(9) The
occurrence of any other material breach of this Agreement by the
Company or any of its subsidiaries.; or
(10) The
refusal to assume this Agreement by any successor or assign of the
Company as provided in Section 4.4.
(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 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, the
estate of the Executive, the Accrued
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