EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") executed by and between COMSTOCK
RESOURCES, INC., a Nevada corporation (the "Company") with principal offices in
Frisco, Texas, and Roland O. Burns ("Employee").
1. Employment. The Company hereby agrees to employ Employee, and Employee
hereby agrees to render his exclusive service to the Company, in his current
capacity of Senior Vice President and Chief Financial Officer of the Company,
with such duties as may be assigned to him from time to time by the Board of
Directors.
2. Term of Agreement. This Agreement shall be effective commencing on June
1, 2000 (the effective date of this Agreement). This Agreement shall, as of its
first anniversary, and on each annual anniversary thereof, be extended
automatically, without further action by the Employee or the Company, for an
additional one (1) year, so that there shall, as of June 1 of each year, be
three (3) years remaining in the term of this Agreement (the "Employment
Period"), subject to earlier termination as hereinafter provided.
3. Place of Employment. Unless otherwise agreed by the Company and
Employee, throughout the term of this Agreement, Employee's business office
shall be located in Frisco, Texas, at such location as may be specified by the
Board of Directors of the Company.
4. Base Compensation. Employee shall be compensated by the Company at a
minimum base rate of $12,916.67 per month, payable semimonthly on the fifteenth
and final days of each month during the period of Employee's employment under
this Agreement, subject to such increases and additional payments as may be
determined from time to time by the Board of Directors of the Company in its
sole discretion. Employee shall also be entitled to participate in any Company
discretionary bonus plan. Such compensation shall be in addition to any group
insurance, pension, profit sharing, and other employee benefits, which are
extended from time to time to Employee in the discretion of the Board of
Directors of the Company and for which Employee is eligible. Subject to such
rules and procedures as are from time to time specified by the Company, the
Company shall also reimburse Employee for all reasonable expenses incurred by
him on behalf of the Company.
5. Performance of Services. Employee shall devote his full working time to
the business of the Company; provided, however, Employee shall be excused from
performing any services for the Company hereunder during periods of temporary
incapacity and during vacations conforming to the Company's standard vacation
policy, without thereby in any way affecting the compensation to which he is
entitled hereunder.
6. Continuing Obligations. In order to induce the Company to enter into
this Agreement, the Employee hereby agrees that all documents, records,
techniques, business secrets and other information which have come into his
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possession from time to time during his employment by the Company or which may
come into his possession during his employment hereunder, shall be deemed to be
confidential and proprietary to the Company and the Employee further agrees to
retain in confidence any confidential information known to him concerning the
Company and it's subsidiaries and their respective businesses so long as such
information is not publicly disclosed. In the event of a breach or threatened
breach by the Employee of the provisions of this Paragraph 6, the Company shall,
in addition to any other available remedies, be entitled to an injunction
restraining Employee from disclosing, in whole or in part, any such information
or from rendering any services to any person, firm or corporation to whom any of
such information may have been disclosed or is threatened to be disclosed.
7. Property of Company. All data, drawings, and other records and written
material prepared or compiled by Employee or furnished to Employee while in the
employ of the Company shall be the sole and exclusive property of the Company,
and none of such data, drawings or other records, or copies thereof, shall be
retained by Employee upon termination of his employment. Notwithstanding the
foregoing, Employee shall be under no obligation to return public information.
8. Surviving Provisions. The provisions of Paragraphs 6 and 7 of this
Agreement shall continue to be binding upon Employee in accordance with their
terms, notwithstanding termination of Employee's employment hereunder for any
reason.
9. Death or Disability. The Employee's employment shall terminate
automatically upon the Employee's death during the Employment Period. If the
Company determines in good faith that the Disability of the Employee has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Employee written notice of its intention to
terminate the Employee's employment. In such event, the Employee's employment
with the Company shall terminate effective on the 30th day after receipt of such
notice by the Employee (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Employee shall not have returned to
full-time performance of the Employee's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Employee from the Employee's duties
with the Company on a full-time basis for 150 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Employee or the Employee's legal representative.
10. Termination for Good Reason. The Employee's employment may be
terminated by the Employee for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean:
(a) the assignment to the Employee of any duties inconsistent in any
respect with the Employee's position (including status, offices,
titles and reporting requirements), authority, duties or
responsibilities as contemplated by paragraph 1. of this
Agreement;
(b) any purported termination by the Company of the Employee's
employment otherwise than as expressly permitted by this
Agreement; or
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(c) any failure by the Company to comply with and satisfy paragraph
18(a) of this Agreement
Any good faith determination of "Good Reason" made by the Employee
shall be conclusive.
11. Termination for Cause. It is agreed and understood that the Company
cannot terminate the employment of the Employee under this Agreement except for
Cause, which shall mean:
(a) Should Employee for reasons other than illness or injury absent
himself from his duties without the consent of the Company (which
consent shall not be unreasonably withheld) for more than twenty
(20) consecutive days;
(b) Should Employee be convicted of a felony involving moral
turpitude;
(c) Should Employee during the period of his employment by the
Company engage in any activity that would in the opinion of the
Board of Directors of the Company constitute a material conflict
of interest with the Company; provided that termination for Cause
based on this subparagraph (c) shall not be effective unless the
Employee shall have received written notice from the Board of
Directors of the Company of such activity (which notice shall
also include a demand for the Employee to cease the activity
giving rise to the conflict of interest) fifteen (15) days prior
to his termination and the Employee has failed after receipt of
such notice to cease all activities creating the conflict of
interest; or
(d) Should Employee be grossly negligent in the performance of his
duties hereunder, or materially in breach of his duties and
obligations under this Agreement; provided that termination for
Cause based on this subparagraph (d) shall not be effective
unless the Employee shall have received written notice from the
Board of Directors of the Company (which notice shall include a
description of the reasons and circumstances giving rise to such
notice) fifteen (15) days prior to his termination and the
Employee has failed after receipt of such notice to
satisfactorily discharge the performance of his duties hereunder
or to comply with the terms of this Agreement, as the case may
be.
The Company may terminate Employee's employment for Cause under this Agreement
without advance notice, except as otherwise specifically provided for in
subparagraphs (c) and (d) above. Termination shall not affect any of the
Company's other rights and remedies.
12. Obligations of the Company upon Termination.
(a) Good Reason or Involuntary Termination Other Than for Cause. If,
during the Employment Period, the Company shall terminate the
Employee's employment other than for Cause or the Employee shall
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terminate employment for Good Reason, the Company shall pay to
the Employee in a lump sum in cash within 30 days after the date
of termination the aggregate of the following amounts:
(1) the sum of (A) the Employee's annual base salary through the
date of termination to the extent not theretofore paid, (B)
the product of the annual bonus paid or payable, including
any bonus or portion thereof which has been earned but
deferred (and annualized for any fiscal year consisting of
less than twelve full months or during which the Employee
was employed for less than twelve full months), for the most
recently completed fiscal year during the Employment Period
(the "Fiscal Year Bonus"), if any, and a fraction, the
numerator of which is the number of days in the current
fiscal year through the date of termination, and the
denominator of which is 365, and (C) any compensation
previously deferred by the Employee (together with any
accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore
paid (the sum of the amounts described in clauses (A), (B)
and (C) shall be hereinafter referred to as the "Accrued
Obligations"); and
(2) an amount equal to 1.5 times the sum of the Employee's
annual base salary and the Fiscal Year Bonus; and for
eighteen (18) months after the Employee's date of
termination, the Company shall continue group medical
benefits to the Employee and/or the Employee's family at
least equal to those which would have been provided to them
in accordance with the plans if the Employee's employment
had not been terminated; provided, however, that if the
Employee becomes re-employed with another employer and is
eligible to receive group medical benefits under another
employer-provided plan, the medical benefits described
herein shall be secondary to those provided under such other
plan during such applicable period of eligibility.
In addition, the Company shall, at its sole expense as incurred,
provide the Employee with outplacement services, the scope and
provider of which shall be selected by the Employee in his sole
discretion, and the Company shall assign to the Employee
ownership of any life insurance policies owned by the Company
insuring the Employee's life.
(b) Death. If the Employee's employment is terminated by reason of
the Employee's death during the Employment Period, the Company
shall pay to the Employee's legal representatives the sum of (1)
the Accrued Obligations, and (2) an amount equal to six months'
annualized total compensation. Such amounts shall be paid in a
lump sum in cash within 30 days of the date of termination.
(c) Disability. If the Employee's employment is terminated by reason
of the Employee's Disability during the Employment Period, this
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Agreement shall terminate without further obligations to the
Employee, other than for payment of Accrued Obligations. Accrued
Obligations shall be paid to the Employee in a lump sum in cash
within 30 days of the date of termination. In addition, the
Company shall assign to the Employee ownership of any life
insurance policies owned by the Company insuring the Employee's
life.
(d) Cause or Voluntary Termination Other than for Good Reason. If the
Employee's employment shall be terminated for Cause during the
Employment Period, or if the Employee voluntarily terminates his
employment other than for Good Reason, this Agreement shall
terminate without further obligations to the Employee other than
the obligation to pay to the Employee his annual base salary
through the date of termination and the amount of any
compensation previously deferred by the Employee. Such amounts
shall be paid to the Employee in a lump sum in cash within 30
days of the date of termination.
13. Change in Control. For the purposes of this Agreement, a "Change in
Control" shall be deemed to have taken place if, without the approval or
recommendation of a majority of the then existing Board of the Company:
(a) a third person shall cause or bring about (through solicitation
of proxies or otherwise) the removal or resignation of a majority
of the then existing members of the Board or if a third person
causes or brings about (through solicitation of proxies or
otherwise) an increase in the size of the Board such that the
then existing members of the Board thereafter represent a
minority of the total number of persons comprising the entire
Board;
(b) a third person, including a "group" as defined in Paragraph
15(d)(3) of the Securities Exchange Act of 1934, becomes the
beneficial owner of shares of any class of the Company's stock
having 20% or more of the total number of votes that may be cast
for the election of directors of the Company;
(c) the stockholders of the Company approve a definitive agreement
for the merger or other business combination of the Company with
or into another corporation pursuant to which the Company will
not survive or will survive only as a subsidiary of another
corporation, for the sale or other disposition of all or
substantially all of the assets of the Company, or any
combination of the foregoing.
For purposes hereof, a person will be deemed to be the beneficial owner of any
voting securities of the Company which it would be considered to beneficially
own under Securities and Exchange Commission Rule 13d-3 (or any similar or
superseding statute or rule from time to time in effect).
14. Termination of Employment Following a Change of Control. Following a
Change of Control, if the Employee's employment is terminated for any reason
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other than Cause, death or Disability, or if the Employee voluntarily terminates
his employment within a period of six (6) months following the Change of
Control, then the Company shall pay to the Employee the Accrued Obligations and
an amount equal to 2.99 times the sum of the Employee's annual base salary and
the highest annual bonus paid to the Employee during the Employee's tenure with
the Company; and for eighteen (18) months after the Employee's date of
termination, the Company shall continue group medical benefits to the Employee
and/or the Employee's family at least equal to those which would have been
provided to them in accordance with the plans if the Employee's employment had
not been terminated; provided, however, that if the Employee becomes re-employed
with another employer and is eligible to receive group medical benefits under
another employer provided plan, the medical benefits described herein shall be
secondary to those provided under such other plan during such applicable period
of eligibility. In addition, the Company shall, at its sole expense as incurred,
provide the Employee with outplacement services, the scope and provider of which
shall be selected by the Employee in his sole discretion, and the Company shall
assign to the Employee ownership of any life insurance policies owned by the
Company insuring the Employee's life.
15. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined
that any payment or distribution by the Company to or for the
benefit of the Employee (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional
payments required under this paragraph 15) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or
any interest or penalties are incurred by the Employee with
respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Employee shall be
entitled to receive an additional payment (a "Gross-Up Payment")
in an amount such that after payment by the Employee 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) and Excise
Tax imposed upon the Gross-Up Payment, the Employee retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments.
(b) Subject to the provisions of paragraph 15(c), all determinations
required to be made under this paragraph 15, including whether
and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving
at such determination, shall be made by Arthur Andersen LLP or
such other certified public accounting firm as may be designated
by the Employee (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the
Employee within 15 business days of the receipt of notice from
the Employee that there has been a Payment, or such earlier time
as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, the Employee
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shall appoint another nationally recognized accounting firm to
make the determinations required hereunder (which accounting firm
shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely by
the Company. Any Gross-Up Payment, as determined pursuant to this
paragraph 15 shall be paid by the Company to the Employee within
five days of the receipt of the Accounting Firm's determination.
Any determination by the Accounting Firm shall be binding upon
the Company and the Employee. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by
the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to paragraph
15(c) and the Employee thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall determine the amount
of the Underpayment that has occurred and any such Underpayment
shall be promptly paid by the Company to or for the benefit of
the Employee.
(c) The Employee shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require
the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later
than ten business days after the Employee is informed in writing
of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid.
The Employee shall not pay such claim prior to the expiration of
the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If
the Company notifies the Employee in writing prior to the
expiration of such period that it desires to contest such claim,
the Employee shall:
(1) give the Company any information reasonably requested by the
Company relating to such claim,
(2) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Company,
(3) cooperate with the Company in good faith in order
effectively to contest such claim, and
(4) permit the Company to participate in any proceedings
relating to such claim;
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provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional
interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Employee harmless,
on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and payment of
costs and expenses. Without limitation of the foregoing
provisions of this paragraph 15(c), the Company shall
control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such
claim and may, at its sole option, either direct the
Employee to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the
Employee agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the
Company directs the Employee to pay such claim and sue for a
refund, the Company shall advance the amount of such payment
to the Employee, on an interest-free basis and shall
indemnify and hold the Employee harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest
or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with
respect to such advance; and further provided that any
extension of the statute of limitations relating to payment
of taxes for the taxable year of the Employee with respect
to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable
hereunder and the Employee shall be entitled to settle or
contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Employee of an amount advanced
by the Company pursuant to Paragraph 15(c), the Employee
becomes entitled to receive any refund with respect to such
claim, the Employee shall (subject to the Company's
complying with the requirements of Paragraph 15(c)) promptly
pay to the Company the amount of such refund (together with
any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Employee of an amount
advanced by the Company pursuant to Paragraph 15(c), a
determination is made that the Employee shall not be
entitled to any refund with respect to such claim and the
Company does not notify the Employee in writing of its
intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be
repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to
be paid.
16. Payment of Certain Costs of Employee. If a dispute arises regarding the
interpretation or enforcement of this Agreement, all legal fees and expenses
incurred by the Employee in seeking to obtain or enforce any right or benefit
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provided for in this Agreement or in otherwise pursuing his claim will be paid
by the Company, to the extent permitted by law. The Company further agrees to
pay prejudgment interest on any money judgment obtained by the Employee
calculated at the First National Bank of Chicago N.A. prime interest rate in
effect from time to time from the date that payment(s) to him should have been
made under this Agreement.
17. Mitigation. The Employee is not required to mitigate the amount of any
payments to be made by the Company pursuant to this Agreement by seeking other
employment or otherwise.
18. Successors.
(a) Except as may otherwise be provided under any other written
agreement between the Company and the Employee with respect
to the terms of Employee's employment in the event of a
Change of Control of the Company, the Company will require
any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to the
Employee, to expressly assume and agree 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 the effectiveness of any such
succession shall be a breach of this Agreement. As used in
this Agreement, "Company" shall mean the Company as
hereinbefore defined, any successor to its business and/or
assets as aforesaid which executes and delivers the
agreement provided for in this Paragraph 18 or which
otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal or legal
representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.
19. No Inconsistent Obligations. Employee represents and warrants that he
has not previously assumed any obligations inconsistent with those of this
Agreement.
20. Modification. This Agreement shall be in addition to all previous
agreements, written or oral, relating to Employee's employment by the Company,
and shall not be changed orally, but only by a written instrument to which the
Company and the Employee are both parties.
21. Binding Effect. This Agreement and the rights and obligations hereunder
shall be binding upon and inure to the benefit of the parties hereto and their
respective legal representatives, and shall also bind and inure to the benefit
of any successor of the Company by merger or consolidation or any assignee of
all or substantially all of its properties.
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22. Bankruptcy. Notwithstanding anything in this Agreement to the contrary,
the insolvency or adjudication of bankruptcy of the Company, whether voluntary
or involuntary, shall terminate this Agreement and the rights and obligations of
Company and Employee hereunder shall be of no further force or effect.
23. Law Governing. This Agreement made, accepted and delivered in Collin
County, Texas, is performable in Collin County, Texas, and it shall be construed
and enforced according to the laws of the State of Texas. Venue shall lie in
Collin County, Texas for the purpose of resolving and enforcing any dispute
which may arise under this Agreement and the parties agree that they will submit
themselves to the jurisdiction of the competent State or Federal Court situated
in Collin County, Texas.
24. Invalid Provision. In case any one or more of the provisions contained
in this Agreement shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be impaired thereby.
25. Notices. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
IF TO THE EMPLOYEE:
Roland O. Burns
8430 Edgewood Cove
Frisco, TX 75035
IF TO THE COMPANY:
Comstock Resources, Inc.
5300 Town and Country Blvd., Suite 500
Frisco, TX 75034
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
EXECUTED and effective as to this 1st day of June, 2000.
COMSTOCK RESOURCES, INC.
By:
/s/M. JAY ALLISON
---------------------
Name: M.Jay Allison
Title: President and Chief
Executive Officer
EMPLOYEE:
/s/ROLAND O. BURNS
---------------------
Name: Roland O.Burns
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