-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JlYn0Otpt0W7++++kXlrBBc1aQjaQpsKs8ZhKnG2EuXuj7FICYCRUAT+w/30+93v e76nd6JR6v0A2VXtle6sfw== 0000860713-97-000004.txt : 19970425 0000860713-97-000004.hdr.sgml : 19970425 ACCESSION NUMBER: 0000860713-97-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970415 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970424 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SNYDER OIL CORP CENTRAL INDEX KEY: 0000860713 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 752306158 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10509 FILM NUMBER: 97586365 BUSINESS ADDRESS: STREET 1: 777 MAIN ST STE 2500 CITY: FORT WORTH STATE: TX ZIP: 76102 BUSINESS PHONE: 8173384043 MAIL ADDRESS: STREET 1: 777 MAIN STREET SUITE 2500 CITY: FORT WORTH STATE: TX ZIP: 76102 8-K 1 FORM 8-K - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------------- FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 15, 1997 SNYDER OIL CORPORATION (Exact name of registrant as specified in its charter) Delaware 1-10509 75-2306158 (State or other jurisdiction Commission File (IRS Employer of incorporation) Number) Identification No.) 777 Main Street Fort Worth, Texas 76102 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (817) 338-4043 - -------------------------------------------------------------------------------- Item 5. Other Events On April 16, 1997, Snyder Oil Corporation (the "Company") issued the following press release relating to the appointment of William G. Hargett as President and Chief Operating Officer of the Company effective May 2, 1997: "Fort Worth, Texas, April 16, 1997 - Snyder Oil Corporation (NYSE- SNY) announced today that William G. Hargett has been named President, Chief Operating Officer and a Director of the Company. John C. Snyder will relinquish his position as interim President of the Company and will continue as Chief Executive Officer and Chairman of the Board of Directors. "Hargett, 47, comes to Snyder from Greenhill Petroleum Corporation, where he was President and Director until yesterday's $270 million sale of that company to Mesa, Inc. Prior to Greenhill, he served as President of Amax Oil & Gas, Inc. until that company's $820 million sale to Union Pacific Resources Group, Inc. Previously, he served for 5 years as President and Chief Executive Officer of North Central Oil Corporation, and was with Tenneco Oil Company for 14 years in a variety of exploration and management positions. He earned B.S. and M.S. degrees in geology from the University of Alabama. "In his new position, Mr. Hargett will be responsible for the Company's overall exploration and production activities and much of its daily administration. At year-end 1996, Snyder had proved reserves of 141 million BOE with a pretax value discounted at 10% of $1.2 billion. During 1996 the Company produced 13.2 million BOE. "Commenting on the new President, Mr. Snyder said, 'From his days as a Tenneco exploration manager, through his experiences running three successful oil and gas companies, Billy Hargett has demonstrated an ability to make an impact and add significant value. He has a rare combination of technical, operational and managerial skills that will help enormously as SOCO continues growing through major development projects currently underway in the Gulf and the Rockies, through our exploration targeting Cotton Valley reefs under our large acreage position in North Louisiana and through acquisitions whose value can be enhanced by aggressive exploitation. We are striving to reach a new level of profitability and growth and believe we have found the man who can best help us get there.' "Snyder Oil Corporation is engaged in the production, development, acquisition and exploration of domestic oil and gas properties. The Company is also engaged in international exploration and production, directly as well as through affiliates." Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits. 1. Employment Agreement effective as of May 2, 1997 between Snyder Oil Corporation and William G. Hargett. 2. Indemnification Agreement dated as of May 2, 1997 between Snyder Oil Corporation and William G. Hargett. 3. Severance Agreement dated as of April 17, 1997 between Snyder Oil Corporation and Thomas J. Edelman. 4. Advisory Agreement entered into effective as of May 1, 1997 between Snyder Oil Corporation and Thomas J. Edelman. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SNYDER OIL CORPORATION /s/ Peter E. Lorenzen ----------------------- By: Peter E. Lorenzen Vice President April 24, 1997 EX-1 2 WILLIAM G. HARGETT EMPLOYMENT AGREEMENT EXHIBIT 1 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT ("Agreement") is made by and between SNYDER OIL CORPORATION, a Delaware corporation ("Company"), and WILLIAM G. HARGETT ("Executive"). W I T N E S S E T H: WHEREAS, Company is desirous of employing Executive in an executive capacity on the terms and conditions, and for the consideration, hereinafter set forth and Executive is desirous of being employed by Company on such terms and conditions and for such consideration; NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations contained herein, Company and Executive agree as follows: ARTICLE 1: EMPLOYMENT AND DUTIES 1.1 Employment; Effective Date. Company agrees to employ Executive and Executive agrees to be employed by Company, beginning as of the Effective Date (as hereinafter defined) and continuing for the period of time set forth in Article 2 of this Agreement, subject to the terms and conditions of this Agreement. For purposes of this Agreement, the "Effective Date" shall be May 2, 1997. 1.2 Positions. From and after the Effective Date, Company shall employ Executive in the positions of President and Chief Operating Officer of Company, or in such other positions as the parties mutually may agree. On the Effective Date, Company shall cause Executive to be elected to serve on the Board of Directors of Company (the "Board of Directors") as a full member thereof, and thereafter Company shall continue to cause Executive to be nominated to serve on the Board of Directors and will use reasonable efforts to secure Executive's election to the Board of Directors. It is the intention of the parties that Executive will be elected to and will serve on the Board of Directors while serving hereunder as President and Chief Operating Officer of Company. 1.3 Duties and Services. Executive agrees to serve in the positions referred to in paragraph 1.2 and to perform diligently and to the best of his abilities the duties and services appertaining to such offices, as well as such additional duties and services appropriate to such offices which the parties mutually may agree upon from time to time. Executive's employment shall also be subject to the policies maintained and established by Company that are of general applicability to Company's executive employees, as such policies may be amended from time to time. 1.4 Other Interests. Executive agrees, during the period of his employment by Company, to devote his primary business time, energy and best efforts to the business and affairs of Company and its affiliates and not to engage, directly or indirectly, in any other business or businesses, whether or not similar to that of Company, except with the consent of the Board of Directors. The foregoing notwithstanding, the parties recognize and agree that Executive may engage in passive personal investments (including, without limitation, commodity trading of oil and gas for Executive's own -1- account) and other business activities that do not conflict with the business and affairs of Company or interfere with Executive's performance of his duties hereunder. 1.5 Duty of Loyalty. Executive acknowledges and agrees that Executive owes a fiduciary duty of loyalty to act at all times in the best interests of Company. In keeping with such duty, Executive shall make full disclosure to Company of all business opportunities pertaining to Company's business and shall not appropriate for Executive's own benefit business opportunities concerning Company's business. ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT 2.1 Term. Unless sooner terminated pursuant to other provisions hereof, Company agrees to employ Executive for the period beginning on the Effective Date and ending on the fourth anniversary of the Effective Date; provided, however, that beginning with the second anniversary of the Effective Date, said term of employment shall be extended automatically for an additional successive one-year period as of each anniversary date of the Effective Date that occurs while this Agreement is in effect; and provided further, however, that if, at any time prior to any such anniversary date of the Effective Date, either party shall give written notice to the other that no such automatic extension shall occur, then Executive's employment shall terminate on the last day of the two-year period beginning on the anniversary date of the Effective Date that next occurs after such notice is given. 2.2 Company's Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Company shall have the right to terminate Executive's employment under this Agreement at any time for any of the following reasons: (i) upon Executive's death; (ii) upon Executive's becoming incapacitated by accident, sickness or other circumstance which renders him mentally or physically incapable of performing the duties and services required of him hereunder on a full-time basis for a period of at least 180 consecutive days; (iii) for cause, which for purposes of this Agreement shall mean Executive (A) has engaged in gross negligence or willful misconduct in the performance of the duties required of him hereunder, (B) has willfully refused without proper legal reason to perform the duties and responsibilities required of him hereunder, (C) has materially breached any material provision of this Agreement or any material corporate policy maintained and established by Company that is of general applicability to Company's executive employees, (D) has willfully engaged in conduct that he knows or should know is materially injurious to Company or any of its affiliates, or (E) has engaged in illegal conduct or any act of serious dishonesty which adversely affects, or reasonably could in the future adversely affect, the value, reliability, or performance of Executive in a material manner; provided, however, that Executive's employment may be terminated pursuant to this paragraph 2.2(iii) only if such termination is approved by at least two-thirds of the members of the Board of Directors after Executive has been given written -2- notice by Company of the specific reason for such termination and an opportunity for Executive, together with his counsel, to be heard before the Board of Directors; or (iv) for any other reason whatsoever, in the sole discretion of the Board of Directors. Members of the Board of Directors may participate in any hearing that is required pursuant to paragraph 2.2(iii) by means of conference telephone or similar communications equipment by means of which all persons participating in the hearing can hear and speak to each other; provided, however, that at least one-half of the members of the Board of Directors shall attend the hearing in person. 2.3 Executive's Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Executive shall have the right to terminate his employment under this Agreement for any of the following reasons: (i) within 60 days of and in connection with or based upon (A) a material breach by Company of any material provision of this Agreement, (B) an overall substantial and material reduction in the nature or scope of Executive's duties and responsibilities, or (C) the assignment to Executive of duties and responsibilities that are materially inconsistent with the positions referred to in paragraph 1.2; provided, however, that, prior to Executive's termination of employment under this paragraph 2.3(i), Executive must give written notice to Company of any such breach, reduction or assignment and such breach, reduction or assignment must remain uncorrected for 30 days following such written notice; or (ii) at any time for any other reason whatsoever, in the sole discretion of Executive. 2.4 Notice of Termination. If Company or Executive desires to terminate Executive's employment hereunder at any time prior to expiration of the term of employment as provided in paragraph 2.1, it or he shall do so by giving written notice to the other party that it or he has elected to terminate Executive's employment hereunder and stating the effective date and reason for such termination, provided that no such action shall alter or amend any other provisions hereof or rights arising hereunder, including, without limitation, the provisions of Article 4 hereof. ARTICLE 3: COMPENSATION AND BENEFITS 3.1 Base Salary. During the period of this Agreement, Executive shall receive a minimum annual base salary of $325,000. Executive's annual base salary shall be reviewed by the Board of Directors (or a committee thereof) on an annual basis, and, in the sole discretion of the Board of Directors (or such committee), such annual base salary may be increased, but not decreased, effective as of March 1 of each year. Executive's annual base salary shall be paid in equal installments in accordance with the Company's standard policy regarding payment of compensation to executives but no less frequently than monthly. 3.2 Bonuses. Executive shall be eligible to receive an annual bonus of up to 100% of Executive's annual base salary with the amount of such bonus to be determined by the Compensation Committee of the Board of Directors (the "Committee") based upon criteria established from time to -3- time by the Committee; provided, however, that for the period beginning on the Effective Date and ending on December 31, 1997, such bonus shall not be less than $90,277.78. 3.3 Initial Stock Option. On the Effective Date, Company shall grant to Executive an option (the "Initial Option") to purchase 200,000 shares of Company's common stock ("Stock") pursuant to the Snyder Oil Corporation Restated 1989 Stock Option Plan, as amended (the "Plan"). The purchase price for each share of Stock subject to the Initial Option shall be equal to the Fair Market Value (as such term is defined in the Plan) of a share of Stock as of the Effective Date. Subject to the terms of the Plan and the agreement to be executed by Company and Executive evidencing the Initial Option, the Initial Option shall (i) have a term of five years (which term shall begin on the Effective Date), (ii) vest and become exercisable with respect to (A) 30% of the shares covered thereby on the first anniversary of the Effective Date, (B) an additional 30 % of the shares covered thereby on the second anniversary of the Effective Date, and (C) an additional 40 % of the shares covered thereby on the third anniversary of the Effective Date, and (iii) constitute an incentive stock option (within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended) to the maximum extent permitted by law. 3.4 Living Expenses and Moving Allowance. Upon Executive's request at any time after he has, during the term of his employment hereunder, relocated his principal residence to the Fort Worth, Texas metropolitan area, Company shall pay to Executive a lump sum amount of $50,000 to compensate Executive for such relocation. No other amounts, except as expressly provided herein, shall be paid to or on behalf of Executive for moving costs or other expenses associated with the relocation of Executive's residence to the Fort Worth, Texas metropolitan area. For the period (the "Commuting Period") beginning on the Effective Date and ending on the earlier of (i) the date Executive relocates his principal residence to the Fort Worth, Texas metropolitan area or (ii) the second anniversary of the Effective Date, Company shall, at its sole cost and expense, provide Executive with a furnished apartment in the Fort Worth, Texas metropolitan area, which apartment shall be mutually agreeable to Company and Executive and shall have electricity, local phone service, basic cable television service, and weekly maid service. Further, during the Commuting Period, Company shall (A) reimburse Executive for the reasonable costs of his transportation between Fort Worth and Houston and (B) reimburse Executive for his transportation expenses incurred within Fort Worth or, at the request of Executive, provide him with an automobile for his use within Fort Worth. 3.5 Other Perquisites. During his employment hereunder, Executive shall be afforded the following benefits as incidences of his employment: (i) Business and Entertainment Expenses - Subject to Company's standard policies and procedures with respect to expense reimbursement as applied to its executive employees generally, Company shall reimburse Executive for, or pay on behalf of Executive, reasonable and appropriate expenses incurred by Executive for business related purposes, including dues and fees to industry and professional organizations and costs of entertainment and business development. (ii) Annual Stock Options - Executive shall be entitled to receive, on an annual basis, an option to purchase shares of Stock pursuant to a stock option plan maintained by Company. The terms of each such option and the number of shares of Stock subject to each -4- such option shall be determined by the Committee based upon criteria established from time to time by the Committee. (iii) Club Membership - During Executive's employment hereunder prior to the relocation of his principal residence to the Fort Worth, Texas metropolitan area, Company shall pay the monthly dues associated with Executive's existing membership in the Houston Petroleum Club. Upon such relocation, Company shall obtain membership for Executive in the Fort Worth Petroleum Club and Company shall pay the initiation fees and monthly dues associated with such membership. Executive's membership in the Fort Worth Petroleum Club shall cease upon Executive's termination of employment hereunder, and such membership shall be transferred to Company (or its designee) upon such termination. (iv) Other Company Benefits - Executive and, to the extent applicable, Executive's spouse, dependents and beneficiaries, shall be allowed to participate in all benefits, plans and programs, including improvements or modifications of the same, which are now, or may hereafter be, available to other executive employees of Company. Such benefits, plans and programs shall include, without limitation, Company's Deferred Compensation Plan for Select Employees and any profit sharing plan, thrift plan, health insurance or health care plan, life insurance, disability insurance, pension plan, supplemental retirement plan, vacation and sick leave plan, and the like which may be maintained by Company. Company shall not, however, by reason of this paragraph be obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any such benefit plan or program, so long as such changes are similarly applicable to executive employees generally. (v) Vacation - During his employment hereunder, Executive shall be entitled to four weeks of paid vacation each calendar year (including 1997). (vi) Indemnification Agreement - Contemporaneously with the execution of this Agreement, Company and Executive shall execute and enter into an indemnification agreement in the form previously approved by the Board of Directors and the stockholders of Company and attached to this Agreement as Exhibit A. ARTICLE 4: PROTECTION OF INFORMATION 4.1 Disclosure to Executive. Company shall disclose to Executive, or place Executive in a position to have access to or develop, trade secrets or confidential information of Company or its affiliates; and/or shall entrust Executive with business opportunities of Company or its affiliates; and/or shall place Executive in a position to develop business good will on behalf of Company or its affiliates. 4.2 Property of Company. All documents, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, E-mail, voice mail, electronic databases, maps, and all other writings or materials of any type embodying any information relating to Company or its business are and shall be the sole and exclusive property of Company. Upon termination of Executive's employment by Company, for any reason, Executive promptly shall deliver the same, and all copies thereof, to Company. -5- 4.3 No Unauthorized Use or Disclosure. Executive will not, at any time during or after Executive's employment by Company, make any unauthorized disclosure of any confidential business information or trade secrets of Company or its affiliates, or make any use thereof, except in the carrying out of Executive's employment responsibilities hereunder. Affiliates of the Company shall be third party beneficiaries of Executive's obligations under this paragraph. As a result of Executive's employment by Company, Executive may also from time to time have access to, or knowledge of, confidential business information or trade secrets of third parties, such as customers, suppliers, partners, joint venturers, and the like, of Company and its affiliates. Executive also agrees to preserve and protect the confidentiality of such third party confidential information and trade secrets to the same extent, and on the same basis, as Company's confidential business information and trade secrets. 4.4 Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article by Executive, and Company shall be entitled to enforce the provisions of this Article by terminating payments then owing to Executive under this Agreement and/or to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity to Company, including the recovery of damages from Executive and his agents involved in such breach and remedies available to Company pursuant to other agreements with Executive. ARTICLE 5: NONCOMPETITION OBLIGATIONS 5.1 In General. As part of the consideration for the compensation and benefits to be paid to Executive hereunder; to protect the trade secrets and confidential information of Company and its affiliates that have been and will in the future be disclosed or entrusted to Executive, the business good will of Company and its affiliates that has been and will in the future be developed in Executive, or the business opportunities that have been and will in the future be disclosed or entrusted to Executive by Company and its affiliates; and as an additional incentive for Company to enter into this Agreement, Company and Executive agree to the noncompetition obligations hereunder. Executive shall not, directly or indirectly for Executive or for others, in any geographic area or market where Company or any of its affiliates are conducting any business or have during the previous twelve months conducted such business: (i) engage in any business competitive with the business conducted by Company; or (ii) render advice or services to, or otherwise assist, any other person, association, or entity who is engaged, directly or indirectly, in any business competitive with the business conducted by Company with respect to such competitive business. The noncompetition obligations set forth above shall apply only during the period that Executive is employed by Company. Further, during the period that Executive is employed by Company and for one year thereafter, Executive shall not, directly or indirectly for Executive or for others, induce any employee of Company or any of its affiliates to terminate his or her employment with Company or such affiliates, or hire or assist in the hiring of any such employee by any person, association, or entity not affiliated with Company; provided, however, that the one-year post-employment period referred to in -6- this sentence shall be reduced to 90 days if Executive's employment hereunder shall be terminated on the date upon which a Change in Control (as defined in paragraph 7.3) occurs or within 12 months thereafter. 5.2 Enforcement and Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article by Executive, and Company shall be entitled to enforce the provisions of this Article by terminating any payments then owing to Executive under this Agreement and/or to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity to Company, including without limitation, the recovery of damages from Executive and Executive's agents involved in such breach and remedies available to Company pursuant to other agreements with Executive. 5.3 Reformation. It is expressly understood and agreed that Company and Executive consider the restrictions contained in this Article to be reasonable and necessary to protect the proprietary information of Company. Nevertheless, if any of the aforesaid restrictions are found by a court having jurisdiction to be unreasonable, or overly broad as to geographic area or time, or otherwise unenforceable, the parties intend for the restrictions therein set forth to be modified by such court so as to be reasonable and enforceable and, as so modified by the court, to be fully enforced. ARTICLE 6: STATEMENTS CONCERNING COMPANY 6.1 In General. Executive shall refrain, both during the employment relationship and after the employment relationship terminates, from publishing any oral or written statements, to any person or entity (other than, during the employment relationship, to Company, any of its affiliates, or any of such entities' officers, employees, agents, or representatives) that damage or disparage the reputation of Company, any of its affiliates, or any of such entities' officers, employees, agents or representatives. A violation or threatened violation of this prohibition may be enjoined by the courts. The rights afforded Company and its affiliates under this provision are in addition to any and all rights and remedies otherwise afforded by law. ARTICLE 7: EFFECT OF TERMINATION ON COMPENSATION 7.1 By Expiration. If Executive's employment hereunder shall terminate upon expiration of the term provided in paragraph 2.1 hereof because either party has provided the notice contemplated in such paragraph, then all compensation and all benefits to Executive hereunder shall continue to be provided until the expiration of such term and such compensation and benefits shall terminate contemporaneously with termination of his employment. 7.2 By Company. If Executive's employment hereunder shall be terminated by Company prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that if such termination shall be for any reason other than those encompassed by paragraphs 2.2(i), (ii), or (iii), then Company shall provide Executive with the Termination Benefits. For purposes of this Agreement, the term "Termination Benefits" shall mean the following: (i) Company shall pay to Executive, within 15 -7- days after Executive's termination of employment, a single lump sum cash payment in an amount equal to the aggregate base salary that would have been paid to Executive (based upon his base salary in effect pursuant to paragraph 3.1 at the time of Executive's termination of employment) during the unexpired portion of the term set forth in paragraph 2.1; (ii) the Initial Option shall become immediately exercisable in full upon Executive's termination of employment and for a period of six months thereafter (but in no event shall the Initial Option be exercisable after the expiration of its original term); (iii) all other outstanding stock options granted by Company to Executive shall become immediately exercisable in full upon Executive's termination of employment and for a period of three months thereafter or for such greater period as may be provided in the plan or plans pursuant to which such stock options were granted (but in no event shall any such stock option be exercisable after the expiration of the original term of such stock option); and (iv) during the period, if any (but in no event for more than 18 months after the date of Executive's termination of employment), that Executive elects to continue coverage for himself and any of his eligible dependents under Company's group health plans pursuant to the continuation of coverage provisions contained in Sections 601 through 608 of the Employee Retirement Income Security Act of 1974, as amended, Executive's premiums for such coverage shall be no greater than that charged by Company generally to its active executive employees for coverage under such plans. 7.3 By Executive. If Executive's employment hereunder shall be terminated by Executive prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that if such termination shall occur (i) for a reason encompassed by paragraph 2.3(i) , (ii) for any reason whatsoever on the date upon which a Change in Control (as hereinafter defined) occurs or within 12 months thereafter, or (iii) for Good Reason (as hereinafter defined) during the sixty-day period beginning on the second anniversary of the Effective Date, then Company shall provide Executive with the Termination Benefits. For purposes of this paragraph, the following terms shall have the meanings indicated: "Change in Control" shall mean (1) any merger, consolidation, or reorganization in which Company is not the surviving entity (or survives only as a subsidiary of an entity), (2) any sale, lease, exchange, or other transfer of (or agreement to sell, lease, exchange, or otherwise transfer) all or substantially all of the assets of Company to any other person or entity (in one transaction or a series of related transactions), (3) dissolution or liquidation of Company, (4) when any person or entity, including a "group" as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote) of more than 40% of the outstanding shares of Company's voting stock (based upon voting power), (5) as a result of or in connection with a contested election of directors, the persons who were directors of Company before such election shall cease to constitute a majority of the Board of Directors, or (6) any event that is reported by Company under Item 1 of a Form 8-K filed with the Securities and Exchange Commission; provided, however, that the term "Change in Control" shall not include any reorganization, merger, consolidation, sale, lease, exchange, or similar transaction involving solely Company and one or more previously wholly-owned subsidiaries of Company unless such matter is described in clause (6) above. -8- "Good Reason" shall mean termination by Executive of his employment with Company because in Executive's judgment, and subject to the good-faith concurrence of the Committee, the scope of Executive's authority within Company is not appropriate. 7.4 Additional Payments By Company. Notwithstanding anything to the contrary in this Agreement, in the event that any payment or distribution by Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are hereinafter collectively referred to as the "Excise Tax"), Company shall pay to Executive an additional payment (a "Gross-up Payment") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed on any Gross-up Payment, Executive retains an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payments. Company and Executive shall make an initial determination as to whether a Gross-up Payment is required and the amount of any such Gross-up Payment. Executive shall notify Company in writing of any claim by the Internal Revenue Service which, if successful, would require Company to make a Gross-up Payment (or a Gross-up Payment in excess of that, if any, initially determined by Company and Executive) within ten days of the receipt of such claim. Company shall notify Executive in writing at least ten days prior to the due date of any response required with respect to such claim if it plans to contest the claim. If Company decides to contest such claim, Executive shall cooperate fully with Company in such action; provided, however, Company shall bear and pay directly or indirectly all costs and expenses (including additional interest and penalties) incurred in connection with such action and shall indemnify and hold Executive 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 Company's action. If, as a result of Company's action with respect to a claim, Executive receives a refund of any amount paid by Company with respect to such claim, Executive shall promptly pay such refund to Company. If Company fails to timely notify Executive whether it will contest such claim or Company determines not to contest such claim, then Company shall immediately pay to Executive the portion of such claim, if any, which it has not previously paid to Executive. 7.5 No Duty to Mitigate Losses. Executive shall have no duty to find new employment following the termination of his employment under circumstances which require Company to pay any amount to Executive pursuant to this Article 7. Any salary or remuneration received by Executive from a third party for the providing of personal services (whether by employment or by functioning as an independent contractor) following the termination of his employment under circumstances pursuant to which this Article 7 apply shall not reduce Company's obligation to make a payment to Executive (or the amount of such payment) pursuant to the terms of this Article 7. 7.6 Liquidated Damages. In light of the difficulties in estimating the damages for an early termination of this Agreement, Company and Executive hereby agree that the payments, if any, to be received by Executive pursuant to this Article 7 shall be received by Executive as liquidated damages. 7.7 Incentive and Deferred Compensation. This Agreement governs the rights and obligations of Executive and Company with respect to Executive's base salary and certain perquisites of employment. Except as expressly provided herein, Executive's rights and obligations both during -9- the term of his employment and thereafter with respect to stock options, restricted stock, incentive and deferred compensation, life insurance policies insuring the life of Executive, and other benefits under the plans and programs maintained by Company shall be governed by the separate agreements, plans and other documents and instruments governing such matters. ARTICLE 8: MISCELLANEOUS 8.1 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 personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to Company to: Snyder Oil Corporation 777 Main Street, Suite 2500 Fort Worth, Texas 76102 Attention: Chairman of the Board of Directors If to Executive to: Mr. William G. Hargett 2106 Pleasant Creek Drive Kingwood, Texas 77345 or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices or changes of address shall be effective only upon receipt. 8.2 Applicable Law. This Agreement is entered into under, and shall be governed for all purposes by, the laws of the State of Texas. 8.3 No Waiver. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 8.4 Severability. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect. 8.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. 8.6 Withholding of Taxes and Other Employee Deductions. Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to Company's employees generally. -10- 8.7 Headings. The paragraph headings have been inserted for purposes of convenience and shall not be used for interpretive purposes. 8.8 Gender and Plurals. Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely. 8.9 Affiliate. As used in this Agreement, the term "affiliate" shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership or control with, Company. 8.10 Assignment. This Agreement shall be binding upon and inure to the benefit of Company and any successor of Company, by merger or otherwise. Except as provided in the preceding sentence, this Agreement, and the rights and obligations of the parties hereunder, are personal and neither this Agreement, nor any right, benefit, or obligation of either party hereto, shall be subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without the prior written consent of the other party. 8.11 Term. This Agreement has a term co-extensive with the term of employment provided in paragraph 2.1. Termination shall not affect any right or obligation of any party which is accrued or vested prior to such termination. Without limiting the scope of the preceding sentence, the provisions of Articles 4 and 6 shall survive any termination of the employment relationship and/or of this Agreement. 8.12 Arbitration. If a dispute arises out of or related to this Agreement and the dispute cannot be settled through direct discussions, Company and Executive agree that they shall first endeavor to settle the dispute in an amicable fashion, including the use of a mediator. If such efforts fail to resolve the dispute, the dispute shall be resolved as follows: (i) Except as provided in paragraph 8.12(ii), any and all claims, demands, cause of action, disputes, controversies, and other matters in question arising out of or relating to this Agreement, any provision hereof, the alleged breach thereof, or in any way relating to the subject matter of this Agreement, involving Company, Executive, and/or their respective representatives, even though some or all of such claims allegedly are extra-contractual in nature, whether such claims sound in contract, tort, or otherwise, at law or in equity, under state or federal law, whether provided by statute or the common law, for damages or any other relief, shall be resolved by binding arbitration pursuant to the Federal Arbitration Act in accordance with the Commercial Arbitration Rules then in effect with the American Arbitration Association. The arbitration proceeding shall be conducted in Fort Worth, Texas. The arbitration may be initiated by either party by the providing to the other a written notice of arbitration specifying the claims. Within thirty days of the notice of initiation of the arbitration procedure, each party shall denominate one arbitrator. The two arbitrators shall select a third arbitrator failing agreement on which within thirty days of the original notice, the parties (or either of them) shall apply to the Senior Active United States District Judge for the Southern District of Texas, who shall appoint a third arbitrator. The three arbitrators, utilizing the Commercial Arbitration Rules of the American Arbitration Association, shall by majority vote within 120 days of the selection of the third arbitrator, resolve all disputes between the parties. There shall be no transcript of the hearing before the arbitrators. The arbitrators' decision shall -11- be in writing, but shall be as brief as possible. The arbitrators shall not assign the reasons for their decision. The arbitrators' decision shall be final and non-appealable to the maximum extent permitted by law. Judgment upon any award rendered in any such arbitration proceeding may be entered by any federal or state court having jurisdiction. This agreement to arbitrate shall be enforceable in either federal or state court. The enforcement of this agreement to arbitrate and all procedural aspects of this agreement to arbitrate, including but not limited to, the construction and interpretation of this agreement to arbitrate, the issues subject to arbitration (i.e., arbitrability), the scope of the arbitrable issues, allegations of waiver, delay or defenses to arbitrability, and the rules governing the conduct of the arbitration, shall be governed by and construed pursuant to the Federal Arbitration Act and shall be decided by the arbitrators. In deciding the substance of any such claims, the arbitrators shall apply the substantive laws of the State of Texas (excluding Texas choice-of-law principles that might call for the application of some other State's law); provided, however, it is expressly agreed that the arbitrators shall have no authority to award treble, exemplary, or punitive damages under any circumstances regardless of whether such damages may be available under Texas law, the parties hereby waiving their right, if any, to recover treble, exemplary, or punitive damages in connection with any such claims. This agreement to arbitrate is not applicable to disputes between or among Company and Executive based upon or arising out of any other agreement, benefit plan, or program heretofore or hereafter entered into between Executive and Company or its affiliates. Notwithstanding the preceding provisions of this paragraph 8.12(i), Company and Executive may agree to use one arbitrator rather than three arbitrators as provided above, and, in the event of any such agreement, the 120-day period referred to in the sixth sentence of this paragraph 8.12(i) shall begin on the date of the parties' selection of such one arbitrator. (ii) Notwithstanding the agreement to arbitrate contained in paragraph 8.12(i), in the event that either party wishes to seek a temporary restraining order, a preliminary or temporary injunction, or other injunctive relief in connection with any or all such claims, demands, cause of action, disputes, controversies, and other matters in question arising out of or relating to this Agreement, any provision hereof, the alleged breach thereof, or in any way relating to the subject matter of this Agreement, involving Company, Executive, and/or their respective representatives, even though some or all of such claims allegedly are extra-contrac tual in nature, whether such claims sound in contract, tort, or otherwise, at law or in equity, under state or federal law, whether provided by statute or the common law, for damages or any other relief, each party shall have the right to pursue such injunctive relief in court, rather than by arbitration. The parties agree that such action for a temporary restraining order, a preliminary or temporary injunction, or other injunctive relief may be brought in the State or federal courts residing in Fort Worth, Texas, or in any other forum in which jurisdiction is appropriate. 8.13 Entire Agreement. Except as provided in (i) the written benefit plans and programs referenced in paragraph 3.5(iv) and (ii) any signed written agreement contemporaneously or hereafter executed by Company and Executive, this Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of Executive by Company. Without limiting the scope of the preceding sentence, all understandings and agreements preceding the date of execution of this Agreement and relating to the subject matter hereof are hereby null and void -12- and of no further force and effect. Any modification of this Agreement will be effective only if it is in writing and signed by the party to be charged. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the 15th day of April, 1997, to be effective as of the Effective Date. SNYDER OIL CORPORATION By: /s/ John C. Snyder --------------------------- Name: John C. Snyder Title: Chairman "COMPANY" /s/ William G. Hargett ------------------------------ WILLIAM G. HARGETT "EXECUTIVE" -13- EX-2 3 WILLIAM G. HARGETT INDEMNIFICATION AGREEMENT EXHIBIT 2 INDEMNIFICATION AGREEMENT INDEMNIFICATION AGREEMENT dated as of May 2, 1997 between SNYDER OIL CORPORATION, a Delaware corporation (the "Company"), and William G. Hargett ("Indemnitee"). Preliminary Statements Competent and experienced persons are becoming more reluctant to serve as directors or officers of corporations unless they are provided with adequate protection against claims and actions against them for their activities on behalf or at the request of such corporations, generally through insurance and indemnification. Uncertainties in the interpretations of the statutes and regulations, laws and public policies relating to indemnification of corporate directors and officers are such as to make adequate, reliable assessment of the risks to which directors and officers of such corporations may be exposed difficult, particularly in light of the proliferation of lawsuits against directors and officers generally. The Board of Directors of the Company, based upon its business experience, has concluded that the continuation of present trends in litigation against corporate directors and officers will inevitably make it more difficult for the Company to attract and retain directors and officers of the highest degree of competence committed to the active and effective direction and supervision of the business and affairs of the Company and its subsidiaries and affiliates and the operation of its and their facilities, and the Board deems such consequences to be so detrimental to the best interests of the Company that it has concluded that the Company should act to provide its directors and officers with enhanced protection against inordinate risks attendant on their positions in order to assure that the most capable persons otherwise available will be attracted to, or will remain in, such positions and, in such connection, such directors have further concluded that it is not only reasonable and prudent but necessary for the Company to obligate itself contractually to indemnify to the fullest extent permitted by applicable law its directors and certain of its officers and certain persons serving other entities on behalf or at the request of the Company and to assume, to the maximum extent permitted by applicable law, financial responsibility for expenses and liabilities which might be incurred by such individuals in connection with claims lodged against them for their decisions and actions in such capacities. Section 145 of the General Corporation Law of the State of Delaware, under which law the Company is organized, empowers a corporation organized in Delaware to indemnify persons who serve as directors, officers, employees or agents of the corporation or persons who serve at the request of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, and further specifies that the indemnification provided by such section "shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise," and further empowers a corporation to "purchase and maintain insurance" on behalf of such persons "against any liability asserted against him or incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of" said laws. The Certificate of Incorporation, as amended, and By-laws of the Company permit indemnification in accordance with the fullest extent permitted by applicable law. The Company has (i) reviewed the type of insurance available to insure the directors and officers of the Company and of its affiliates against costs, expenses (including attorneys' fees and disbursements), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by them in connection with any action, suit or proceeding to which they are, or are threatened to be made, a party by reason of their status or decisions or actions in such positions, (ii) studied the nature and extent of the coverage provided by such insurance and the cost thereof to the Company, (iii) concluded at the present time not to obtain such insurance in view of the costs and benefits thereof and (iv) concluded, in part based upon Company's decision not to obtain -1- such insurance, that it would be in the best interests of the Company and its stockholders for the Company to enter into agreements to indemnify certain of such persons in the form of this Agreement. The Company has, moreover, concluded that it would continue to be in the best interests of the Company to enter into such agreements with such persons even if the Company should, in the future, obtain any such insurance inasmuch as such insurance is, and is likely to continue to be, subject to certain significant exclusions and limitations or could cease to be reasonably available on any basis. The Company desires to have Indemnitee serve or continue to serve as a director or officer of the Company, or as a director, officer, employee, partner, trustee, agent or fiduciary of such other corporations, partnerships, joint ventures, employee benefit plans, trusts or other enterprises (each a "Company Affiliate") of which he has been or is serving, or will serve on behalf or at the request of or for the convenience of or to represent the interests of the Company, free from undue concern for unpredictable, inappropriate or unreasonable claims for damages by reason of his being, or having been, a director or officer of the Company or a director, officer, employee, partner, trustee, agent or fiduciary of a Company Affiliate or by reason of his decisions or actions on their behalf. Indemnitee is willing to serve, or to continue to serve, or to take on additional service for, the Company or the Company's Affiliates in such aforesaid capacities on the condition that he be indemnified as provided for herein. Accordingly, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows: 1. Services to the Company. Indemnitee will serve or continue to serve as a director or officer of the Company (in the case of a Company officer, at the will of the Company or under separate contract, if any such contract exists or shall hereafter exist) or as a director, officer, employee, partner, trustee, agent or fiduciary of a Company Affiliate faithfully and to the best of his ability so long as he is duly elected and qualified in accordance with the provisions of the By-laws or other applicable constitutive documents thereof; provided, however, that (i) Indemnitee may at any time and for any reason resign from such position (subject to any contractual obligations which Indemnitee shall have assumed apart from this Agreement) and (ii) neither the Company nor any Company Affiliate shall have any obligation under this Agreement to continue the Indemnitee in any such position. 2. Right to Indemnification. The Company shall, to the fullest extent permitted by applicable law as then in effect, indemnify any Indemnitee who is or was involved in any manner (including, without limitation, as a party or a witness) or is threatened to be made so involved in any threatened, pending or completed investigation, claim, action, suit or proceeding, whether civil, criminal, administrative or investigative (including, without limitation, any action, suit or proceeding by or in the right of the Company to procure a judgment in its favor) (a "Proceeding") by reason of the fact that such person is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of any Company Affiliate against all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such Proceeding; provided, however, that, except as provided in Section 3(d), the foregoing shall not apply to a director or officer of the Company with respect to a Proceeding that was commenced by such director or officer. Such indemnification shall include the right to receive payment in advance of any expenses incurred by Indemnitee in connection with such Proceeding, consistent with the provisions of applicable law as then in effect. 3. Advancement of Expenses; Procedures; Presumptions and Effect of Certain Proceedings; Remedies. In furtherance, but not in limitation, of the foregoing provisions, the following procedures, presumptions and remedies shall apply with respect to advancement of expenses and the right to indemnification hereunder: -2- (a) Advancement of Expenses. All reasonable expenses incurred by or on behalf of the Indemnitee in connection with any Proceeding shall be advanced to the Indemnitee by the Company within 20 calendar days after the receipt by the Company of a statement or statements from the Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the expenses incurred by the Indemnitee and, if required by law at the time of such advance, shall include or be accompanied by an undertaking by or on behalf of the Indemnitee to repay the amounts advanced if it should ultimately be determined that the Indemnitee is not entitled to be indemnified against such expenses pursuant to this Article. (b) Procedure for Determination of Entitlement to Indemnification. (i) To obtain indemnification under this Article, an Indemnitee shall submit to the Secretary of the Company a written request, including such documentation and information as is reasonably available to the Indemnitee and reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification (the "Supporting Documentation"). The determination of the Indemnitee's entitlement to indemnification shall be made not later than 60 calendar days after receipt by the Company of the written request for indemnification together with the Supporting Documentation. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that the Indemnitee has requested indemnification. (ii) The Indemnitee's entitlement to indemnification hereunder shall be determined in one of the following ways (each of which shall give effect to the presumptions set forth in Section 3(c)): (A) by a majority vote of the Disinterested Directors (as hereinafter defined), if they constitute a quorum of the Board; (B) by a written opinion of Independent Counsel (as hereinafter defined) if a quorum of the Board consisting of Disinterested Directors is not obtainable or, even if obtainable, a majority of such Disinterested Directors so directs; (C) by the stockholders of the Company (but only if a majority of the Disinterested Directors, if they constitute a quorum of the Board, presents the issue of entitlement to indemnification to the stockholders for their determination) or (D) as provided in Section 3(c). (iii) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 3(b)(ii), a majority of the Disinterested Directors, if any, shall select the Independent Counsel, but only an Independent Counsel to which the Indemnitee does not reasonably object. If there shall be no Disinterested Directors, such Independent Counsel shall be selected by a majority of the Directors, but only an Independent Counsel to which the Indemnitee does not reasonably object. (c) Presumptions and Effect of Certain Proceedings. Except as otherwise expressly provided herein, the Indemnitee shall be presumed to be entitled to indemnification hereunder upon submission of a request for indemnification together with the Supporting Documentation in accordance with Section 3(b)(i), and thereafter the Company shall have the burden of proof to overcome that presumption in reaching a contrary determination. In any event, if the person or persons empowered under Section 3(b) to determine entitlement to indemnification shall not have been appointed or shall not have made a determination within 60 calendar days after receipt by the Corporation of the request therefor together with the Supporting Documentation, the Indemnitee shall be deemed to be entitled to indemnification and the Indemnitee shall be entitled to such indemnification unless the Company establishes as provided in the final sentence of Section 3(d)(ii) or by written opinion of Independent Counsel that (A) the Indemnitee misrepresented or failed to disclose a material fact in making the request for indemnification or in the Supporting Documentation or (B) such indemnification is prohibited by law. The termination of any Proceeding described in Section 2, or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, adversely affect the right of the Indemnitee to indemnification or create a presumption that the Indemnitee did not act in good faith and in a manner which the Indemnitee reasonably believed to be in -3- or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that the Indemnitee had reasonable cause to believe that his conduct was unlawful. (d) Remedies of Indemnitee. (i) In the event that a determination is made pursuant to Section 3(b) that the Indemnitee is not entitled to indemnification hereunder, (A) the Indemnitee shall be entitled to seek an adjudication of his entitlement to such indemnification either, at the Indemnitee's sole option, in (x) an appropriate court of the State of Delaware or any other court of competent jurisdiction or (y) an arbitration to be conducted by a single arbitrator, selected by mutual agreement of the Company and Indemnitee (or, failing such agreement, by the then sitting Chief Judge of the United States District Court for the Northern District of Texas), pursuant to the rules of the American Arbitration Association; (B) any such judicial proceeding or arbitration shall be de novo and the Indemnitee shall not be prejudiced by reason of such adverse determination and (C) in any such judicial proceeding or arbitration the Company shall have the burden of proving that the Indemnitee is not entitled to indemnification under this Article. If any such determination is made, the Indemnitee shall be entitled, on five days written notice to the Secretary of the Company, to receive the written report of the persons making such determination, which report shall include the reasons and factual findings, if any, upon which such determination was based. (ii) If a determination shall have been made or deemed to have been made, pursuant to Section 3(b) or (c), that the Indemnitee is entitled to indemnification, the Company shall be obligated to pay the amounts constituting such indemnification within five days after such determination has been made or deemed to have been made and shall be conclusively bound by such determination unless the Company establishes as provided in the final sentence of this paragraph that (A) the Indemnitee misrepresented or failed to disclose a material fact in making the request for indemnification or in the Supporting Documentation or (B) such indemnification is prohibited by law. If (x) advancement of expenses is not timely made pursuant to Section 3(a) or (y) payment of indemnification is not made within five calendar days after a determination of entitlement to indemnification has been made or deemed to have been made pursuant to Section 3(b) or (c), the Indemnitee shall be entitled to seek judicial enforcement of the Company's obligation to pay to the Indemnitee such advancement of expenses or indemnification. Notwithstanding the foregoing, the Company may bring an action, in an appropriate court in the State of Delaware or any other court of competent jurisdiction, contesting the right of the Indemnitee to receive indemnification hereunder due to the occurrence of an event described in subclause (A) or (B) of this clause (ii) (a "Disqualifying Event"); provided, however, that in any such action the Company shall have the burden of proving the occurrence of such Disqualifying Event. (iii) The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 3(d) that the procedures and presumptions of this Section 3 are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. (iv) If the Indemnitee, pursuant to this Section 3(d), seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, the Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any expenses actually and reasonably incurred by the Indemnitee if the Indemnitee prevails in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that the Indemnitee is entitled to receive part but not all of the indemnification or advancement of expenses sought, the expenses incurred by the Indemnitee in connection with such judicial adjudication or arbitration shall be prorated accordingly. -4- (e) Definitions. For purposes of this Section 3: "Disinterested Director" means a director of the Company who is not or was not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee. "Independent Counsel" means a law firm or a member of a law firm that neither presently is, nor in the past five years has been, retained to represent (a) the Company or the Indemnitee in any matter material to either such party or (b) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing under the law of the State of Delaware, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee's rights hereunder. 4. Other Rights to Indemnification. The indemnification and advancement of costs and expenses (including attorneys' fees and disbursements) provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may now or in the future be entitled under any provision of applicable law, the Certificate of Incorporation or any By-law of the Company or any other agreement or any vote of directors or stockholders or otherwise, whether as to action in his official capacity or in another capacity while occupying any of the positions or having any of the relationships referred to in Section 1 of this Agreement. 5. Duration of Agreement. (a) This Agreement shall be effective from and after the effective date of the Agreement, and shall continue until and terminate upon the later of (i) the tenth anniversary after Indemnitee has ceased to occupy any of the positions or have any of the relationships described in Section 1 of this Agreement or (ii) (A) the final termination or resolution of all Proceedings with respect to Indemnitee commenced during such 10-year period and (B) either (x) receipt by Indemnitee of the indemnification to which he is entitled hereunder with respect thereto or (y) a final adjudication or binding arbitration that Indemnitee is not entitled to any further indemnification with respect thereto, as the case may be. (b) This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, devisees, executors, administrators or other legal representatives. 6. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable under any particular circumstances or for any reason whatsoever (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, all other portions of any Section, paragraph or clause of this Agreement that contains any provision that has been found to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable), or the validity, legality or enforceability under any other circumstances shall not in any way be affected or impaired thereby and (b) to the fullest extent possible consistent with applicable law, the provisions of this Agreement (including, without limitation, all other portions of any Section, paragraph or clause of this Agreement that contains any such provision that has been found to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be deemed revised, and shall be construed so as to give effect to the intent manifested by this Agreement (including the provision held invalid, illegal or unenforceable). 7. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. 8. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. -5- 9. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 10. Notification and Defense of Claim. Indemnitee agrees to notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any matter which may be subject to indemnification hereunder, whether civil, criminal or investigative; provided, however, that the failure of Indemnitee to give such notice to the Company shall not adversely affect Indemnitee's rights under this Agreement except to the extent the Company shall have been materially prejudiced as a direct result of such failure. Nothing in this Agreement shall constitute a waiver of the Company's right to seek participation at its own expense in any Proceeding which may give rise to indemnification hereunder. 11. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, in either case: (a) if to Indemnitee, at the address indicated on the signature page hereof, (b) if to the Company: Snyder Oil Corporation 777 Main Street, Suite 2500 Fort Worth, Texas 76102 Attn: Secretary or to such other address as may have been furnished to either party by the other party. 12. Governing Law. The parties hereto agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. IN WITNESS WHEREOF, the parties hereto have executed this Agreement On April 15, 1997 as of the day and year first above written. SNYDER OIL CORPORATION By: /s/John C. Snyder -------------------------- Name: John C. Snyder Title: Chairman By: /s/ William G. Hargett -------------------------- Name: William G. Hargett Address: 2106 Pleasant Creek Drive Kingwood, Texas 77345 -6- EX-3 4 THOMAS J. EDELMAN SEVERANCE AGREEMENT SEPARATION AGREEMENT THIS SEPARATION AGREEMENT (this "Agreement") is entered into as of April 17, 1997, by and between Snyder Oil Corporation, a Delaware corporation ("SOCO"), and Thomas J. Edelman ("Mr. Edelman"); W I T N E S S E T H: WHEREAS, Mr. Edelman was a co-founder and has been a principal officer of SOCO since 1981; and WHEREAS, Mr. Edelman is currently an employee of the Company (as such term is hereinafter defined) and will remain an employee of the Company through April 30, 1997 (the "Resignation Date"); and WHEREAS, Mr. Edelman and SOCO are contemporaneously with the execution of this Agreement entering into that certain Advisory Agreement (the "Advisory Agreement"), which Advisory Agreement sets forth the terms and conditions pursuant to which Mr. Edelman will perform certain advisory services for SOCO after the Resignation Date; and WHEREAS, Mr. Edelman and SOCO have agreed to certain terms and conditions concerning Mr. Edelman's termination of employment with the Company; NOW, THEREFORE, for and in consideration of the amounts and benefits to be paid and provided to Mr. Edelman under this Agreement and the mutual promises, covenants, and undertakings contained in this Agreement, and intending to be legally bound, SOCO and Mr. Edelman agree as follows: 1. Resignation; Transition From Employee to Contractor: Effective as of February 20, 1997, Mr. Edelman resigned as (a) an officer and director of the Company and (b) a fiduciary and member of any committee established with respect to any employee benefit plan maintained by the Company. For purposes of this Agreement, the term "Company" shall mean SOCO and each of its subsidiaries (other than Patina Oil & Gas Corporation and its subsidiaries (collectively, "Patina")). From the date hereof through the Resignation Date, (1) Mr. Edelman shall continue to be an employee of the Company, (2) Mr. Edelman shall receive compensation from the Company at Mr. Edelman's rate of base salary as in effect on the date hereof, and (3) the Company shall continue to maintain and staff its office in New York City. Effective as of the Resignation Date, Mr. Edelman's employment with the Company shall terminate. As of May 1, 1997, there shall be an independent contractor relationship between SOCO and Mr. Edelman, which relationship shall be governed by the Advisory Agreement. Upon (A) the payment of Mr. Edelman's base salary through the Resignation Date, (B) the payment of the amounts specified in paragraph 4 hereof, and (C) subject to the provisions of paragraph 7(a) hereof, the payment of the amounts and provision of the benefits specified in paragraphs 2 and 3 hereof, the Company shall have no further obligations -1- to Mr. Edelman for any salary, bonus, or other compensation of any type for services rendered by Mr. Edelman to the Company on or before the Resignation Date. 2. Severance Payment: Subject to the provisions of paragraph 7(a) hereof, in consideration of his services over the past sixteen (16) years, SOCO shall pay to Mr. Edelman a severance payment in the form of thirty six (36) consecutive monthly installments of Thirty Thousand Dollars ($30,000.00) each, with such monthly installments being due and payable on the 15th day of each month beginning on May 15, 1997. In the event of Mr. Edelman's death prior to his receipt of all thirty six (36) of such installments, Mr. Edelman's heirs, administrators, legatees, or permitted assignees shall be entitled under this Agreement to all of the remaining unpaid installments that otherwise would have been due Mr. Edelman, which shall continue to be paid in monthly installments. Mr. Edelman waives, and the Company shall not be required to pay, any other severance pay or severance benefits in connection with the termination of the employment relationship, whether from a severance plan sponsored by the Company or the general assets of the Company. The consideration and remuneration provided for under this Agreement are in lieu of and take the place of any other severance pay or severance benefit, which Mr. Edelman forfeits. 3. Stock Options and Deferred Compensation: Subject to the provisions of paragraph 7(a) hereof and pursuant to the actions taken by the Board of Directors of SOCO on February 20, 1997, each agreement evidencing a stock option awarded to Mr. Edelman under SOCO's 1989 Stock Option Plan, as amended (the "1989 Plan"), which agreements provide for stock options covering an aggregate of 292,600 shares of SOCO's common stock, shall be and hereby is amended, effective as of the expiration of the seven-day revocation period referred to in paragraph 7(a) hereof, to provide that such stock options (a) are 100% vested and exercisable in full, (b) shall remain exercisable until March 1, 2002, and (c) shall terminate and cease to be exercisable on March 2, 2002. Termination of Mr. Edelman's employment with the Company and SOCO's Affiliates (as such term is defined in the 1989 Plan) for any reason whatsoever shall not affect the exercisability of any such stock option. Mr. Edelman understands and agrees that the actions taken pursuant to this paragraph 3 constitute a modification and/or extension of the Incentive Options (as such term is defined in the 1989 Plan) that have heretofore been awarded to Mr. Edelman, and, accordingly, such actions will cause some or all of such options to no longer qualify as incentive stock options pursuant to section 422 of the Internal Revenue Code of 1986, as amended. Subject to the provisions of paragraph 7(a) hereof and effective as of the expiration of the seven-day revocation period referred to in paragraph 7(a) hereof, all of the Company contributions made through the Resignation Date to Mr. Edelman's account under SOCO's Deferred Compensation Plan for Select Employees shall be fully vested. In addition, the Company hereby confirms that, pursuant to the terms of SOCO's Savings and Profit Sharing Plan, all of the amounts credited to Mr. Edelman's accounts under such plan through the Resignation Date will be fully vested. 4. Additional Payments. SOCO has agreed to pay Mr. Edelman (a) the sum of $7,074.90, which amount approximates 50% of the Company's estimated cost of providing Mr. Edelman and his family with health insurance benefits for a three-year period beginning on the Resignation Date, and (b) the sum of $6,346.15 in respect of his unused 1997 vacation time. The amounts referred to in the preceding sentence shall be paid in a single lump sum cash payment on the Resignation Date. -2- 5. Nonsolicitation of Employees: From the date hereof through May 1, 1998, Mr. Edelman agrees that he shall not, directly or indirectly, for himself or for others, induce any employee of the Company(other than an employee in the Company's New York City office from and after the Resignation Date) to terminate his or her employment with the Company, or hire or assist in the hiring of any such employee by any person, association, or entity not affiliated with the Company without the written consent of the Chairman or Chief Executive Officer of SOCO. 6. Publishing Statements: Each party hereto shall refrain, during the remaining portion of the employment relationship, during the advisory relationship, and after the advisory relationship terminates, from publishing any oral or written statements about the other party, any of its subsidiaries, or any of such entities' officers, directors, employees, agents or representatives that are slanderous, libelous, or defamatory; or that disclose private or confidential information about such other party or any of its subsidiaries, or any of such entities' business affairs, officers, directors, employees, agents, or representatives; or that constitute an intrusion into the seclusion or private lives of such other party or any of its subsidiaries, or any of such parties' officers, directors, employees, agents, or representatives; or that give rise to unreasonable publicity about the private lives of such other party or any of its subsidiaries, or any of such entities' officers, directors, employees, agents, or representatives; or that place such other party or any of its subsidiaries, or any of such entities' officers, directors, employees, agents, or representatives in a false light before the public; or that constitute a misappropriation of the name or likeness of such other party or any of its subsidiaries, or any of such entities' officers, directors, employees, agents, or representatives. A violation or threatened violation of this paragraph 6 may be enjoined by the courts. The rights afforded such other party under this paragraph 6 are in addition to any and all rights and remedies otherwise afforded by law. Notwithstanding the foregoing, (a) nothing in this paragraph 6 shall be interpreted to mean that Mr. Edelman will be constrained from making responsible statements as to his business judgment on material corporate matters affecting the Company and (b) the provisions of this paragraph 6 shall cease to apply after March 1, 2002. 7. Mutual Release and Indemnity: (a) Mr. Edelman, on his behalf and on behalf of his representatives, heirs, administrators, executors, and assigns, and on behalf of any other persons or entities claiming by, through, or under Mr. Edelman, does hereby fully release, acquit and forever discharge the Company and its employees, officers, directors, trustees, committee-members, Boards, members of such Boards, chairmen of the boards, shareholders, contractors, consultants, agents, representatives, attorneys, successors, and assigns (the "Released Entities"), from and against any and all of Mr. Edelman's rights, claims, charges, demands, and causes of action against the Released Entities of any kind or character, both past and present, known or unknown, including but not limited to those arising under the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, and the Employee Retirement Income Security Act of 1974, all as amended, and any other state or federal statute, regulation or the common law (contract, tort or other), which relate to Mr. Edelman's employment or termination of -3- employment with the Company, including but not limited to any alleged discriminatory or retaliatory employment practices, any matter relating to or arising under any employment agreement with the Company, any and all prior discussions, representations, understandings, or agreements between, on the one hand, the Company and/or its agents, representatives, attorneys, or contractors, and, on the other hand, Mr. Edelman or his agents or representatives, regarding his employment and termination of employment with the Company or services heretofore rendered to the Company, or any other matter whatsoever. Notwithstanding the preceding provisions of this paragraph 7(a), this release (1) shall not serve to waive or release any of Mr. Edelman's rights or claims that may arise after the date this Agreement is executed and (2) shall not affect any future obligation which the Company may have to Mr. Edelman under the terms of this Agreement or the Advisory Agreement. Mr. Edelman acknowledges and agrees that all of the requirements of applicable law pertaining to the waiver of his rights under the Age Discrimination in Employment Act have been complied with, including that he has been given twenty-one (21) days to consider this Agreement and this release, that he was advised by the Company to consult an attorney, and that he has in fact consulted an attorney prior to executing this Agreement and this release. For a period of seven (7) days following the execution of this Agreement, Mr. Edelman may revoke the portion of this release that relates to any claims he may have under the Age Discrimination in Employment Act. If Mr. Edelman does not within seven (7) days following the execution of this Agreement provide SOCO with a written notice of such revocation, then Mr. Edelman shall no longer have such revocation right. If Mr. Edelman does within seven (7) days following the execution of this Agreement provide SOCO with a written notice of such revocation, then (A) the Company shall have no obligation to make any payment under paragraph 2 hereof or provide the indemnification provided for in paragraph 7(d) hereof, (B) Mr. Edelman's stock option agreements shall not be amended as provided in paragraph 3 hereof, and (C) the vesting of Mr. Edelman's account under SOCO's Deferred Compensation Plan for Select Employees shall not be accelerated as provided in paragraph 3 hereof. (b) The Company hereby unconditionally and irrevocably forever releases and discharges Mr. Edelman from all claims, charges, complaints, obligations, liabilities, promises, agreements, contracts, damages, causes of action, suits, accrued benefits or other liabilities of any kind or character, whether known or hereafter discovered, arising from or in any way connected with or related to Mr. Edelman's past service as (1) an officer, director, employee, or agent of the Company (including Mr. Edelman's services relating to Patina taken on behalf of the Company prior to his resignation as an officer of the Company) or (2) a fiduciary or member of any committee established with respect to any employee benefit plan maintained by the Company; provided, however, that such release (A) shall not apply to any claims, demands or causes of action that the Company may have against Mr. Edelman for past conduct that constitutes a felony, (B) shall not serve to waive or release any rights or claims of the Company that may arise after the date this Agreement is executed, and (C) shall not affect any future obligation which Mr. Edelman may have to the Company under the terms of this Agreement or the Advisory Agreement. (c) It is expressly agreed that no future disputes between (1) any of the Company or any of the Released Entities, and (2) Mr. Edelman, whether under this Agreement or otherwise, shall in any way affect the enforceability of the releases granted above. -4- (d) Subject to the provisions of paragraph 7(a) hereof, the Company hereby agrees to indemnify and hold harmless Mr. Edelman from and against all losses, claims, damages, liabilities and expenses incurred by him (including reasonable fees and disbursements of counsel) that arise out of or in connection with Mr. Edelman's past service as (1) an employee, officer, director, or agent of the Company (including Mr. Edelman's services relating to Patina taken on behalf of the Company prior to his resignation as an officer of the Company) or (2) a fiduciary or member of any committee established with respect to any employee benefit plan maintained by the Company, in each case to the same extent that Mr. Edelman was indemnified with respect to such matters by the Company while he served in such capacities. 8. Notices: For purposes of this Agreement, notice, demands and all other communica tions between the parties shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows: If to Mr. Edelman: Mr. Thomas J. Edelman 770 Park Avenue, Apt. 8D New York, New York 10021 If to SOCO or the Company: Snyder Oil Corporation Attn: John C. Snyder, Chairman 777 Main Street, Suite 2500 Fort Worth, Texas 76102 or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 9. Withholding of Taxes: The Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling. 10. Successor Obligations and Assignment: The rights and obligations of the Company under this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. Mr. Edelman can freely assign any rights accruing to him under this Agreement (other than pursuant to paragraph 3 hereof) to any associated party subject to the consent of SOCO, which consent shall not be unreasonably withheld. 11. Amendment: This Agreement may not be modified except by an agreement in writing executed by both SOCO and Mr. Edelman. -5- 12. Governing Laws: This Agreement shall be subject to and governed by the laws of the State of Texas, without giving effect to principles of conflicts of law. 13. Validity: In the event that any portion or provision of this Agreement is found to be invalid or unenforceable, such invalid or unenforceable portion shall be severed and the remainder of this Agreement shall remain valid and enforceable. 14. Counterparts: This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 15. Effect of Agreement: The terms of this Agreement shall supersede any obligations and rights of the Company and Mr. Edelman relating to the subject matter hereof. However, nothing in this Agreement shall be construed to diminish in any way the rights of Mr. Edelman or the Company pursuant to the Advisory Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. SNYDER OIL CORPORATION By: /s/John C. Snyder ------------------------- John C. Snyder, Chairman /s/Thomas J. Edelman ------------------------- THOMAS J. EDELMAN -6- EX-4 5 THOMAS J. EDELMAN ADVISORY AGREEMENT ADVISORY AGREEMENT THIS ADVISORY AGREEMENT (this "Agreement") is entered into effective as of May 1, 1997, by and between Snyder Oil Corporation, a Delaware corporation (the "Company"), and Thomas J. Edelman ("Advisor" or "Mr. Edelman"); WITNESSETH: WHEREAS, the Company wishes to continue to benefit from the advice, experience and knowledge of Mr. Edelman; and WHEREAS, Advisor is willing to advise the Company, upon the terms and conditions contained herein; NOW, THEREFORE, for and in consideration of the compensation to be paid Mr. Edelman under this Agreement and the mutual promises, covenants, and undertakings contained herein, the Company and Advisor agree as follows: 1. Independent Contractor: There shall be created pursuant to this Agreement an independent contractor relationship between the Company and Advisor whereby Mr. Edelman shall supply advisory services to the Company in accordance with and subject to the terms and conditions set forth herein. 2. Term: The term of this Agreement shall be for a three-year period ending April 30, 2000, unless earlier terminated pursuant to its provisions. 3. Services: During the term of this Agreement, and subject to his reasonable availability, Mr. Edelman shall provide such advisory services as the Board of Directors of the Company (the "Board") or the Chief Executive Officer of the Company (the "CEO") may reasonably request or that Mr. Edelman believes might be valuable to the Company, including assisting the Board and the CEO in such strategic and financial matters, acquisition strategy or other projects as the Board or the CEO deems appropriate. Advisor agrees to make all reasonable efforts to attend Board meetings at the request of the Chairman of the Governance Committee of the Board. The method of performance, hours utilized and other details of Advisor's services hereunder shall be within Mr. Edelman's sole control. While retained as an advisor by the Company, Advisor shall have the right to devote his time and efforts to whatever other business, professional, public service, or community pursuits as he may elect. The Company recognizes that Mr. Edelman currently is an officer and director of Patina Oil & Gas Corporation and Lomak Petroleum, Inc., is a director of certain other public companies and may have similar business relationships in the future. Consequently, except to the extent specifically provided for in a separate agreement, Advisor has no obligation to offer the Company any opportunities of which he becomes aware. -1- 4. Compensation and Expense Reimbursement: A. General Services Fee: As compensation for his services during the term of this Agreement, Mr. Edelman shall receive a monthly fee, payable on the 15th of each month beginning May 15, 1997, in the amount of $10,000. B. Additional Fees: In addition, the Company shall pay Advisor such amounts as the parties may mutually agree from time to time and reflect in one or more separate agreements with respect to Mr. Edelman's performance of any services outside the scope of this Agreement. Specifically, the Company and Advisor may from time to time enter into fee agreements relating to transactions which Advisor brings to the attention of the Company or on which the Company requests Mr. Edelman's assistance. If Advisor becomes entitled to any amount under any such separate agreement during any calendar year, then (1) the amount payable thereunder shall be reduced by one-half of the fees paid pursuant to paragraph 4A of this Agreement during such calendar year and on or before the date of payment of such amount and (2) the fees payable pursuant to paragraph 4A hereof from and after the date of payment under such separate agreement shall be reduced by one-half until the earlier of (a) the end of such calendar year and (b) the time the reductions under the preceding clauses (1) and (2) equal the amount payable under such separate agreement. The fee payable under paragraph 4A of this Agreement shall not be reduced below $5,000 for any month as the result of the foregoing sentence. C. Expenses: The Company shall promptly reimburse Advisor for all reasonable out-of-pocket expenses incurred by him in performance of his services hereunder, provided that such expenses are in line with the Company's policies and are submitted to the Company (with proper supporting documentation) in accordance with the Company's policy then in effect for employee expense reports. Such expenses shall include, but are not limited to, transportation, hotel accommodations, and such other expenses as might be incurred by Advisor in furtherance of the Company's business. 5. Confidential Information: Advisor and the Company acknowledge that the Company's and Advisor's businesses are highly competitive and that they may, from time to time, provide each other with access to confidential information. Both parties agree that they will not make any unauthorized disclosure of confidential business information obtained from each other ("Confidential Information"), or make any unauthorized use thereof. However, each party shall be permitted to disclose Confidential Information as is required by law, including deposition or trial testimony pursuant to subpoena, provided that if they are requested or required (by oral question, interrogatories, request for information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information, if reasonably possible under the circumstances as determined in good faith, they will promptly notify the other party of such request or requirement so that the other party may seek an appropriate protective order or waive compliance with the provisions of this Agreement. In the absence of a protective order or the receipt of a waiver hereunder, or in the good faith determination of Advisor that time is of the essence, Advisor shall obtain legal counsel, and if Advisor and/or his counsel in good faith believe that Advisor is compelled to disclose the -2- Confidential Information or be exposed to liability for contempt or suffer other censure or penalty, Advisor may disclose only such Confidential Information to the party compelling disclosure as is required by law, as determined by Advisor on advice of counsel. Advisor further agrees that he will cooperate with the Company in its efforts to obtain a protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information. All reasonable legal fees, costs and expenses incurred by Mr. Edelman in obtaining legal representation pursuant to his obligations under this paragraph shall be paid by the Company. The obligations of the parties set forth in this paragraph 5 shall apply during the term of this Agreement and shall survive for one year following the termination of this Agreement for any reason whatsoever. 6. Capacity and Benefits: At all times while serving under this Agreement, Advisor shall be an independent contractor and not a common-law employee. Therefore, except to the extent provided in any other agreement between Advisor and the Company, Advisor shall not, during the term of this Agreement, be entitled to participate in the Company's benefit plans and programs for its employees. Further, Advisor will in no way be considered to be an agent, employee, or servant of the Company. Advisor shall have no authority to bind the Company without receiving specific written authority to do so. It is not the purpose or intention of this Agreement or the parties to create, and the same shall not be construed as creating, any partnership, partnership relation, joint venture, agency, or employment relationship. 7. Termination: A. Disability: If Advisor becomes unable to provide advisory services hereunder during the term of this Agreement by reason of illness or incapacity, then this Agreement shall terminate, and Advisor shall be entitled to the entire monthly fee provided under paragraph 4A hereof for the month in which such termination occurs. B. Death: If Advisor dies during the term of this Agreement, then this Agreement shall terminate, and Advisor shall be entitled to the entire monthly fee provided under paragraph 4A hereof for the month in which Advisor's death occurs. C. Termination by the Company or Advisor: This Agreement may be terminated at any time on or after April 30, 1998, by either party for any reason whatsoever, with or without cause, upon 30 days' prior written notice to the other party. In such event, Advisor shall be entitled to pro-rata compensation under paragraph 4A hereof through the effective date of such termination. D. Expiration of the Term: This Agreement shall terminate automatically and without notice upon the expiration of the three-year term provided in paragraph 2 hereof. E. Other Agreements: If Advisor revokes any portion of the release provided for in that certain Separation Agreement of even date herewith between the Company and Advisor, or if Advisor breaches such Separation Agreement or any other agreement with the Company, then this -3- Agreement shall automatically terminate effective as of the date of such revocation or breach, as applicable. F. Effect of Termination: Upon termination of this Agreement, all of the parties' obligations, other than the confidentiality obligations under paragraph 5 hereof and the Company's obligation to pay any unpaid fees or unreimbursed expenses under this Agreement, shall terminate. The confidentiality obligations under paragraph 5 hereof and the Company's indemnification of the Advisor, a copy of which is attached to this Agreement as an Exhibit, shall survive termination of this Agreement as set forth in such paragraph and Exhibit. 8. Notices: For purposes of this Agreement, notice, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by United States certified or registered mail, return receipt requested, addressed as follows: If to Advisor: Mr. Thomas J. Edelman 770 Park Avenue, Apt. 8D New York, New York 10021 If to the Company: Mr. John C. Snyder Chairman Snyder Oil Corporation 777 Main Street, Suite 2500 Fort Worth, Texas 76102 or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 9. Successor Obligations and Assignment: The rights and obligations of the Company under this Agreement shall inure to the benefit of and be binding upon its successors and assigns. Advisor may assign any rights accruing to him under this Agreement to any affiliated entity with the consent of the Company, which consent shall not be unreasonably withheld. 10. Amendment: This Agreement may not be modified except by an agreement in writing executed by both the Company and Advisor. 11. Governing Laws: This Agreement shall be subject to and governed by the laws of the State of Texas, without giving effect to principles of conflicts of law. 12. Validity: In the event that any portion or provision of this Agreement is found to be invalid or unenforceable, the other portions or provisions hereof shall not be affected thereby. -4- 13. Counterparts: This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 14. Effect of Agreement: The terms of this Agreement shall supersede any obligations and rights of the Company and Advisor respecting advisory services. Nothing in this Agreement shall be construed as permitting either party hereto to directly or indirectly benefit from any confidential business information obtained from the other party during the period that Mr. Edelman was an employee, officer or director of the Company. IN WITNESS WHEREOF, the parties have executed this Agreement on the 17 day of April,1997, to be effective as of May 1,1997. SNYDER OIL CORPORATION By: /s/ John C. Snyder ------------------------------ John C. Snyder Chairman /s/ Thomas J. Edelman ------------------------------ Thomas J. Edelman -5- EXHIBIT TO ADVISORY AGREEMENT May 1, 1997 Thomas J. Edelman 770 Park Avenue, Apt. 8D New York, New York 10021 Dear Mr. Edelman: In connection with your engagement to advise and assist us pursuant to the Advisory Agreement dated the date hereof, Snyder Oil Corporation (the "Company") hereby agrees to indemnify and hold harmless Thomas J. Edelman (the "Advisor" or "Mr. Edelman") and his affiliates, to the full extent lawful from against all losses, claims, damages, liabilities and expenses incurred by him (including fees and disbursements of counsel) which (A) are related to or arise out of (i) actions taken or omitted to be taken (including any untrue statements made or any statements omitted to be made) by the Company or (ii) actions taken or omitted to be taken by an indemnified person with our consent or in conformity with our actions or omissions or (B) are otherwise related to or arising out of Mr. Edelman's activities on our behalf under his engagement, and we will reimburse Mr. Edelman or his affiliates indemnified hereunder for all expenses (including fees and disbursements of counsel) as they are incurred by him or such other indemnified person in connection with investigating, preparing or defending any such action or claim, whether or not in connection with pending or threatened litigation in which Mr. Edelman or any other indemnified person is a party. We will not be responsible, however, for any losses, claims, damages, liabilities or expenses pursuant to clause (B) of the preceding sentence which are finally judicially determined to have resulted primarily from the bad faith or gross negligence of the person seeking indemnification hereunder. We also agree that Mr. Edelman or his affiliates, shall have no liability to us for or in connection with such engagement except for such liability for losses, claims, damages, liabilities or expenses incurred by us which is finally judicially determined to have resulted primarily from Mr. Edelman's bad faith or gross negligence. We also agree that we will not, without the prior written consent of Mr. Edelman, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not Mr. Edelman or any other indemnified person is an actual or potential party to such claim, action, suit or proceeding) unless such settlement, compromise or consent includes an unconditional release of Mr. Edelman and each other indemnified person hereunder from all liability arising out of such claim, action, suit or proceeding. The foregoing agreement shall be in addition to any rights that Mr. Edelman or any other indemnified person may have at common law or otherwise, including, but not limited to, any right to contribution. We hereby consent to personal jurisdiction and service and venue in any court in which any claim which is subject to this agreement is brought against Mr. Edelman or any other indemnified person. Exhibit - 1 It is understood that, in connection with Mr. Edelman's above-mentioned Advisory Agreement, Mr. Edelman may also be engaged to act for us in one or more additional capacities, and that the terms of the original Advisory Agreement or any such additional Agreement may be embodied in one or more separate written agreements. This indemnification shall apply to the original Advisory Agreement, any such additional Agreement and any modification of the original Advisory Agreement or such additional Agreement and shall remain in full force and effect following the completion or termination of Mr. Edelman's Agreement(s). We further understand that if Mr. Edelman is asked to act for us in any other formal capacity, such further action may be subject to a separate agreement containing provisions and terms to be mutually agreed upon. Very truly yours, SNYDER OIL CORPORATION By:/s/ John C. Snyder ----------------------------- John C. Snyder Chairman Agreed and Accepted: By:/s/ Thomas J. Edelman ----------------------------- Thomas J. Edelman Exhibit - 2 -----END PRIVACY-ENHANCED MESSAGE-----