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This excerpt taken from the AREX DEF 14A filed Apr 24, 2009. Employment
Agreements; Other Agreements
We have employment agreements with Messrs. Craft, Reed and
Smart that entitle these officers to receive severance payments
equal to a specified number of months of base salary if their
employment is terminated by the Company other than for cause
and, in certain cases, in the event of a change in control or
termination for good reason. These agreements were entered into
in January 2003 when the Company was privately-held, as a means
to attract and retain an initial core management team. In
addition, we entered into a restricted stock award agreement
with Mr. Henderson in connection with his initial
employment in February 2007 that entitles him to accelerated
vesting of a restricted stock award in the event of termination
without cause, for good reason or upon a change of control but
no other severance benefits relating to termination of his
employment. The employment agreements, potential severance
payments and restricted stock award agreement are discussed in
more detail in this Proxy Statement under “Potential
Payments upon Termination or Change in Control.” Except for
recent amendments to the employment agreements in December 2008
to take into account Section 409A of the Internal Revenue
Code, the committee has not reviewed these agreements, all of
which were entered into before the committee was formed, and the
committee has not formulated a specific policy on the use of
employment or severance agreements going forward.
In addition, all of our employees, including our named executive
officers, have entered into non-disclosure agreements that
prohibit employees from (a) disclosing confidential or
proprietary information at any time and (b) for a period of
one year from termination of employment, soliciting employment
of any employee of the Company. We view these agreements as
critical in the highly competitive business of exploration and
development of oil and gas properties, and these agreements are
independent of any compensation or benefits otherwise payable to
our employees.
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