Exhibit 10.14
FORM OF
CONFIDENTIALITY AND NONCOMPETE AGREEMENT
     This CONFIDENTIALITY AND NONCOMPETE AGREEMENT (this “Agreement”), dated as
of January 23, 2004, is made by and among Resolute Holdings, LLC, a Delaware
limited liability company, and its subsidiary Resolute Natural Resources
Company, a Delaware corporation (together, the “Company”), and
                     (“Employee”).
WITNESSETH:
     WHEREAS, the Company and its subsidiary have been recently created and
organized in connection with a proposed transaction (the “Proposed Transaction”)
in which Natural Gas Partners VII, L.P., a Delaware limited partnership (“NGP”),
and others will each purchase Equity Units (as defined in the Company’s
operating agreement) of the Company (the “Membership Interests”);
     WHEREAS, in connection with the consummation of the Proposed Transaction,
the Company and/or one or more of the Company’s subsidiaries (collectively, the
“Related Parties”) plans to employ Employee on an “at-will” basis and to grant
to Employee certain Incentive Interests in the Company (“Incentive Interests”);
     WHEREAS, Employee desires to be employed on such basis and to receive the
Incentive Interests;
     WHEREAS, Employee acknowledges that, in the course of his employment by the
Related Parties and performance of services on behalf of the Related Parties, he
will become privy to various business opportunities, economic and trade secrets
and relationships of the Related Parties; and
     WHEREAS, it is a condition to (i) the consummation of the Proposed
Transaction, and (ii) the employment of Employee by the Related Parties and the
provision to Employee of the Incentive Interests, that Employee enter into a
confidentiality and noncompete agreement on the terms and conditions hereinafter
set forth;
     NOW, THEREFORE, in consideration of, and as a material inducement to, NGP’s
consummation of the Proposed Transaction, and in consideration of the employment
of Employee by the Related Parties and the Company’s provision of the Incentive
Interests to Employee, as well the Related Parties providing access to
confidential information and training, the Company and Employee, intending to be
legally bound, hereby agree as follows:
     1. Business Opportunities and Intellectual Property.
     (a) Employee shall promptly disclose to the Company all Business
Opportunities and Intellectual Property (as defined below) that exist on the
date hereof or become such during the Employment Term or the Post Termination
Noncompete Term.

 

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     (b) Employee hereby assigns and agrees to assign to the Company, its
successors, assigns, or designees, all of Employee’s right, title, and interest
in and to all Business Opportunities and Intellectual Property that exist on the
date hereof or become such during the Employment Term or the Post Termination
Noncompete Term, and further acknowledges and agrees that all Business
Opportunities and Intellectual Property that exist on the date hereof or become
such during the Employment Term or the Post Termination Noncompete Term
constitute the exclusive property of the Company.
     (c) For purposes hereof, “Business Opportunities” shall mean all business
ideas, prospects, proposals and other opportunities pertaining to the lease,
acquisition, exploration, production, gathering or marketing of hydrocarbons and
related products and the exploration potential of geographical areas on which
hydrocarbon exploration prospects are located, that are:
     (i) developed by Employee: (A) during the period that Employee is employed
by any of the Related Parties (the “Employment Term”), or (B) before the
Employment Term, if such opportunities were developed in connection with
(I) assets that have been sold or contributed to the Company by Employee, or
(II) Employee’s activities in the oil and gas industry, directly or indirectly,
related to the Related Parties’ properties or assets acquired during the
Employment Term; and
     (ii) originated by any third parties and brought to the attention of
Employee, whether before or during the Employment Term, except to the extent
that (I) such opportunities are not applicable, directly or indirectly, to any
of the Related Parties’ properties or assets acquired during the Employment
Term, and (II) third parties possess valid and enforceable rights to such
opportunities;
together with information relating thereto, including, without limitation, the
“Related Parties’ Business Records” (as defined below).
     (d) For purposes hereof “Intellectual Property” shall mean all ideas,
inventions, discoveries, processes, designs, methods, substances, articles,
computer programs, and improvements (including, without limitation, enhancements
to, or further interpretation or processing of, information that was in the
possession of Employee prior to the date of this Agreement), whether or not
patentable or copyrightable, which do not fall within the definition of Business
Opportunities, and which are discovered, conceived, invented, created, or
developed by Employee, alone or with others if such discovery, conception,
invention, creation, or development (i) occurs in the course of Employee’s
employment with the Related Parties, or (ii) occurs with the use of any of the
Related Parties’ time, materials, assets or facilities (including assets sold or
contributed to the Company by Employee), or (iii) in the opinion of at least a
majority of the Managers of the Company, relates or pertains in any way to the
Related Parties’ properties or assets acquired during the Employment Term,
except to the extent that any third party possesses a valid and enforceable
right to such Intellectual Property.
     2. NonCompete Obligations During Employment Term.
     (a) Except as set forth in subsection (b) hereof and in the Disclosure
Schedule, Employee agrees that during the Employment Term:

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     (i) Employee will not, other than through the Related Parties, engage or
participate in any manner, whether directly or indirectly through any family
member or as an employee, employer, consultant, agent, principal, partner, more
than two percent equity-holder, officer, director, licensor, lender, lessor or
in any other individual or representative capacity, in any business or activity
which is engaged in leasing, acquiring, exploring, producing, gathering or
marketing hydrocarbons and related products; and
     (ii) all investments made by Employee (whether in Employee’s own name or in
the name of any family members or made by any Controlled Affiliates, as defined
below), which relate to the lease, acquisition, exploration, production,
gathering or marketing of hydrocarbons and related products shall be made solely
through the Related Parties; and Employee will not (directly or indirectly
through any family members), and will not permit any Controlled Affiliate to:
(A) invest or otherwise participate alongside the Related Parties in any
Business Opportunities, or (B) invest or otherwise participate in any business
or activity relating to a Business Opportunity, regardless of whether any of the
Related Parties ultimately participates in such business or activity.
For purposes hereof, “Controlled Affiliates” are entities in which Employee and
Employee’s family members collectively own, directly or indirectly, a majority
of the equity or voting interests. The restrictions of this Section 2(a) do not
apply to purely passive investments in public companies that do not exceed two
percent of the outstanding equity interest in the applicable company.
     (b) Employee represents that neither Employee nor his Controlled Affiliates
or his immediate family members (i.e., his spouse and minor children living in
Employee’s household) own any investments or interests which relate to the
lease, acquisition, exploration, production, gathering or marketing of
hydrocarbons and related products, other than Employee’s interest in the
Company. This paragraph shall not apply to, and the Employee shall be entitled
to hold and acquire purely passive investments in public companies in the energy
industry provided such investments do not exceed two percent of the outstanding
equity securities of any company.
     3. Confidentiality Obligations.
     (a) Employee hereby acknowledges that all trade secrets and confidential or
proprietary information of the Related Parties (collectively referred to herein
as “Confidential Information”) constitute valuable, special and unique assets of
the Related Parties’ business, and that access to and knowledge of such
Confidential Information is essential to the performance of Employee’s duties.
Employee agrees that during the Employment Term and during the eighteen month
period following the date of termination of Employee’s employment (the
“Termination Date”), Employee will hold the Confidential Information in strict
confidence and will not publish, disseminate or otherwise disclose, directly or
indirectly, to any person other than the Related Parties and their respective
officers, directors and employees, any Confidential Information or use any
Confidential Information for Employee’s own personal benefit or for the benefit
of anyone other than the Related Parties. The Company agrees to provide
Confidential Information to Employee in exchange for Employee’s agreement to
keep such Confidential Information, and any Confidential Information to which
Employee has already become privy, in strict confidence as provided in this
Agreement.

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     (b) For purposes of this Section 3, it is agreed that Confidential
Information includes, without limitation, any information heretofore or
hereafter acquired, developed or used by any of the Related Parties relating to
Business Opportunities or Intellectual Property or other geological,
geophysical, economic, financial or management aspects of the business,
operations, properties or prospects of the Related Parties whether oral or in
written form, whether or not included in the Related Parties’ Business Records,
but shall exclude any information which (A) is or has become part of common
knowledge or understanding in the oil and gas industry or otherwise in the
public domain (other than from disclosure by Employee in violation of this
Agreement), (B) was rightfully in the possession of Employee, as shown by
Employee’s records, prior to the date of this Agreement and which is not
directly applicable to the business of the Company or any of its properties or
assets, (C) is lawfully acquired by Employee after the Employment Term from any
third party not bound by an obligation of confidence to the disclosing party; or
(D) is independently developed by or for the Employee after the Employment Term
without using the Confidential Information of the Related Parties; provided,
however, that Employee shall provide to the Company copies of all information
described in clause (B) to the extent reasonably requested by the Company;
provided further, however, that this Section 3 shall not be applicable to the
extent (1) Employee is required to testify in a judicial or regulatory
proceeding pursuant to the order of a judge or administrative law judge after
Employee requests that such Confidential Information be preserved or
(2) Employee receives a valid and effective subpoena, interrogatory or other
legally enforceable request for information in connection with a judicial
process.
     4. Obligations After Termination Date.
     (a) The purpose of the provisions of Section 2 and this Section 4 are to
protect the Company from unfair loss of goodwill and business advantage and to
shield Employee from pressure to use or disclose Confidential Information or to
trade on the goodwill belonging to the Company. Accordingly, during the
Post-Termination Noncompete Term (as defined below), Employee will not engage or
participate in any manner, whether directly or indirectly through any family
member or as an employee, employer, consultant, agent, principal, partner,
shareholder, officer, director, licensor, lender, lessor or in any other
individual or representative capacity, in any business or activity which is
engaged in leasing, acquiring, exploring, producing, gathering or marketing
hydrocarbons and related products in an area that is within a ten (10) mile
radius of the boundaries of, any mineral property interest of any of the Related
Parties (including, without limitation, a mineral lease, overriding royalty
interest, production payment, net profits interest, mineral fee interest, or
option or right to acquire any of the foregoing, or an area of mutual interest
as designated pursuant to contractual agreements between the Related Party and
any third party) or any other property on which the Related Parties have, or are
in the process of negotiating, an option, right, license, or authority to
conduct or direct exploratory activities, such as three dimensional seismic
acquisition or other seismic, geophysical and geochemical activities (but not
including any preliminary geological mapping), as of the Termination Date;
provided that, this Section 4 shall not preclude Employee from making personal
investments in securities of oil and gas companies which are registered on a
national stock exchange or on The Nasdaq Stock Market, if the aggregate amount
owned by Employee and all family members and affiliates does not exceed 2% of
such company’s outstanding securities.
     (b) For purposes hereof, the “Post Termination Noncompete Term” is:

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     (i) the 18 month period following the Termination Date, if (A) Employee
voluntarily resigned or otherwise voluntarily terminated his/her position as an
officer or employee of the Related Parties, unless the Employee’s resignation
follows the Related Parties’ reduction of Employee’s annual salary,
(B) Employee’s employment by the Related Parties was terminated for Cause, or
(C) Employee breached in any material respect any of the provisions of
Sections 3, 4 or 5 hereof; or
     (ii) in the event that (A) Employee’s services as an officer or employee
are terminated by a Related Party other than for Cause or (B) Employee
voluntarily resigned or otherwise voluntarily terminated his/her position
following a reduction of Employee’s annual salary by a Related Party, and in
either case, (C) Employee is not in breach in any material respect of any of the
provisions of Section 3, 4 or 5 hereof, the period during which the Company
makes Severance Payments (as defined below) to Employee, the length of which
shall be determined by the Company at its discretion, but in no event to be
longer than 18 months following the Termination Date.
     (c) For purposes hereof, the term Severance Payments shall mean a monthly
payment that is equal to the regular monthly salary that Employee was receiving
from the Related Parties immediately before the Termination Date (which in no
event shall be less than Employee’s regular monthly salary or monthly salary in
effect immediately prior to the reduction that preceded Employee’s resignation,
if applicable), and such Severance Payments shall be payable at the same times
as Employee’s regular salary was paid immediately before the Termination Date.
     (d) For purposes hereof, “Cause” means any of the following: (i) Employee’s
conviction of, or plea of nolo contendere to, any felony or to any crime or
offense causing substantial harm to the Company or its affiliates or involving
acts of theft, fraud, embezzlement, moral turpitude or similar conduct;
(ii) Employee’s repeated intoxication by alcohol or drugs during the performance
of Employee’s duties in a manner that materially and adversely affects
Employee’s performance of such duties; (iii) malfeasance in the conduct of
Employee’s duties, including, but not limited to, (A) willful and intentional
misuse or diversion of funds of the Company or its affiliates, (B) embezzlement,
or (C) fraudulent or willful and material misrepresentations or concealments on
any written reports submitted to the Company or its affiliates; (iv) Employee’s
material violation of any provision of the Voting and Members Agreement of even
date herewith among Employee, the Company and others that remains uncured for a
period of 30 days after notice thereof; or (v) Employee’s material failure to
perform the duties of Employee’s employment or engagement or material failure to
follow or comply with the reasonable and lawful written directives of the
managing Boards of the Company, in either case after Employee shall have been
informed, in writing, of such material failure and given a period of not less
than 60 days to remedy same.
     (e) The Company shall not be obligated to make Severance Payments if
Section 4(b)(ii) above applies; however, if the Company elects not to make such
payments there shall be no Post Termination Noncompete Term under
Section 4(b)(ii). If the Company does elect to make Severance Payments under
Section 4(b)(ii), it must notify Employee of such decision no later than five
business days after the Termination Date. Thereafter, the Company shall be
entitled to cease making Severance Payments at any time and for any reason, but
only upon at least 30 days advance written notice to Employee, at which time the
Post Termination

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Noncompete Term shall end. Employee acknowledges that any Severance Payments
made to Employee under Section 4(b)(ii) above, as well as the Company’s
agreement to provide Confidential Information to Employee, will constitute
adequate consideration for Employee’s agreements set forth in Section 4(a)
above.
     (f) Employee will not, during the eighteen month period following the
Termination Date, solicit, entice, persuade or induce, directly or indirectly,
any employee (or person who within the preceding 90 days was an employee) of any
of the Related Parties or any other person who is under contract with or
rendering services to any of the Related Parties, to (i) terminate his or her
employment by, or contractual relationship with, such person, (ii) refrain from
extending or renewing the same (upon the same or new terms), (iii) refrain from
rendering services to or for such person, (iv) become employed by or enter into
contractual relations with any Persons other than such person, or (v) enter into
a relationship with a competitor of any of the Related Parties.
     5. Business Records.
     (a) Employee agrees to promptly deliver to the Company, upon termination of
Employee’s employment by the Related Parties, or at any other time when the
Company so requests, all documents in existence on the Termination Date relating
to the business of the Related Parties, including, without limitation: all
geological and geophysical reports and related data such as maps, charts, logs,
seismographs, seismic records and other reports and related data, calculations,
summaries, memoranda and opinions relating to the foregoing, production records,
electric logs, core data, pressure data, lease files, well files and records,
land files, abstracts, title opinions, title or curative matters, contract
files, notes, records, drawings, manuals, correspondence, financial and
accounting information, customer lists, statistical data and compilations,
patents, copyrights, trademarks, trade names, inventions, formulae, methods,
processes, agreements, contracts, manuals or any other documents relating to the
business of the Related Parties (collectively, the “Related Parties’ Business
Records”), and all copies thereof and therefrom.
     (b) Employee confirms that all of the Related Parties’ Business Records
(and all copies thereof and therefrom) that are required to be delivered to the
Company pursuant to this Section 5 constitute the exclusive property of the
Company and the other Related Parties.
     (c) The obligation of confidentiality set forth in Section 3 shall continue
notwithstanding Employee’s delivery of any such documents to the Company.
     (d) Notwithstanding the foregoing provisions of this Section 5 or any other
provision of this Agreement, Employee shall be entitled to retain any written
materials which, as shown by Employee’s records, were in Employee’s possession
on or prior to the date hereof, subject to the Company’s right to receive a copy
of such materials or, in lieu thereof, proof that such materials were in
existence on the date hereof.
     (e) The provisions of this Section 5 shall continue in effect
notwithstanding termination of Employee’s employment for any reason.

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     6. Miscellaneous.
     (a) The invalidity or non-enforceability of any provision of this Agreement
in any respect shall not affect the validity or enforceability of this Agreement
in any other respect or of any other provision of this Agreement. In the event
that any provision of this Agreement shall be held invalid or unenforceable by a
court of competent jurisdiction by reason of the geographic or business scope or
the duration thereof, such invalidity or unenforceability shall attach only to
the scope or duration of such provision and shall not affect or render invalid
or unenforceable any other provision of this Agreement, and, to the fullest
extent permitted by law, this Agreement shall be construed as if the geographic
or business scope or the duration of such provision had been more narrowly
drafted so as not to be invalid or unenforceable.
     (b) Employee acknowledges that the Company’s remedy at law for any breach
of the provisions of this Agreement is and will be insufficient and inadequate
and that the Company shall be entitled to equitable relief, including by way of
temporary and permanent injunction, in addition to any remedies the Company may
have at law.
     (c) The representations and covenants contained in this Agreement on the
part of Employee will be construed as ancillary to and independent of any other
agreement between the Company and Employee, and, except as set forth in this
Agreement, the existence of any claim or cause of action of Employee against the
Company or any of the other Related Parties or any officer, director, or
shareholder of the Company or any of the other Related Parties, whether
predicated on Employee’s employment or otherwise, shall not constitute a defense
to the enforcement by the Company of the covenants of Employee contained in this
Agreement. In addition, the provisions of this Agreement shall continue to be
binding upon Employee in accordance with their terms, notwithstanding the
termination of Employee’s employment for any reason.
     (d) The parties to this Agreement agree that the limitations contained in
Section 4 with respect to time, geographical area, and scope of activity are
reasonable. However, if any court shall determine that the time, geographical
area, or scope of activity of any restriction contained in Section 4 is
unenforceable, it is the intention of the parties that such restrictive covenant
set forth herein shall not thereby be terminated but shall be deemed amended to
the extent required to render it valid and enforceable.
     (e) All notices or other communications required or permitted to be given
under this Agreement shall be in writing and shall be duly given if personally
delivered or on the third day after being sent postage pre-paid by certified or
registered mail, return receipt requested or by telecopy as follows: (a) if
addressed to Employee, at the address or telecopy number furnished to the
Company by Employee, or (b) if addressed to the Company, at its principal place
of business or at its telecopy number at such address, to the attention of the
President. Either party may change its address or telecopy number set forth
above by giving the other party notice of such change in accordance with the
provisions of this Section 6(e). A notice shall be deemed given, if by personal
delivery or expedited delivery service, on the date of such delivery to such
address, if by certified mail, on the date of receipt, refusal or first
attempted date of delivery if unclaimed, or if by telecopy, on the date of
receipt of the transmission of such notice at such telecopy number.

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     (f) This Agreement may not be altered or amended except by a writing, duly
executed by the party against whom such alteration or amendment is sought to be
enforced.
     (g) The parties agree that this Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware (without
regard to rules or principles of conflicts of law requiring the application of
the law of another State).
     (h) This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof.
     (i) This Agreement may be executed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
     (j) This Agreement and the obligations of the parties hereunder shall be
terminate if the Company ceases to conduct business as a result of the failure
of Resolute Holdings, LLC to drawn upon the capital commitments of the
“Purchasers” (as defined in the Operating Agreement of Resolute Holdings, LLC)
and use the proceeds thereof to purchase material energy industry assets.
     IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
in multiple counterparts as of the day and year first above written.

            RESOLUTE HOLDINGS, LLC
      By:           Nicholas J. Sutton, CEO                RESOLUTE NATURAL
RESOURCES COMPANY
      By:           Nicholas J. Sutton, CEO                EMPLOYEE:

[name]
                     

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Disclosure Schedule
None.

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