## **Exhibit 10.14**

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## **DESCRIPTION OF 2004BONUS PROGRAM FOR EXECUTIVE OFFICERS**

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Under the Company’s bonus program, the annual bonus of the executiveofficers is determined by recommendation of the Compensation Committee, afterreviewing recommendations of the Chairman and Chief Executive Officer, which isthen submitted for approval by the full Board. The amount of bonus that may be earned is based on a targeted percentageof the executive officer’s annual salary, subject to a maximum-targetedpercentage. Subject to adjustment by the Board of Directors, the bonuses of theexecutive officers for 2004 are based 80% on achievement of the Company’sperformance objectives as established by the Compensation Committee and 20% onachievement of the individual’s performance objectives. The Company’s overallperformance objectives are measured by certain operational and financialobjectives.  The operational objectivesfor the Company for 2004 consisted of targeted annual increases in reserves(weighted 40%) and production (weighted 30%), competitive finding anddevelopment costs (weighted 15%) and operating expenses (weighted 15%), ascompared with those projected in the Company’s annual budget for the applicableperiod. The financial goals for the Company for 2004 were: (1) to ensure thatfunds were available to execute the Company’s overall recommended case capitalspending program as projected in its 2004 annual budget and plan (the “RecommendedCase”) while maintaining a prudent financial structure with a debt-to-total capitalratio of less than 30%, subject to adjustment due to acquisitions; (2) to fundthe Recommended Case, excluding acquisitions, from internal cash flow ratherthan taking on more debt; and (3) building pre-tax cash flow from ourexploration and production activities to a level sufficient to provide thenecessary funds to conduct a program that will provide consistent physical(reserve and production) and fiscal (cash flow and net income) growth for Edge.

 

Individual performance is assessed by a performance management processbased on mutually defined expectations for each employee, including executiveofficers. The process includes individual appraisal components that are bothobjective and subjective. The objective components include quantifiable objectivesand the subjective performance components include roles and accountabilities,performance attributes and behaviors. Individual performance of the executiveofficers, except the Chief Executive Officer, is first assessed by the ChiefExecutive Officer, who makes recommendations to the Compensation Committee forits consideration.  Bonus opportunitiesfor Messrs. Long and Tugwell for 2004 ranged from 0% to 80% of base salary. Mr.Elias’ employment agreement provides a bonus opportunity ranging from 0% to100% of his base salary subject to the achievement of specific objective andsubjective performance criteria established mutually between the CompensationCommittee and Mr. Elias on an annual basis. For 2004, the Board determined thata bonus for Mr. Elias would be determined based 80% on the achievement of thesame Company performance criteria applicable to the other executive officersand 20% on the achievement of certain individual performance objectives asdetermined by the Compensation Committee and approved by the full Board. Bonusawards to be paid, if any, for 2004 performance are not determined as of thedate of this Form 10-K and will be reported in the Proxy Statement for the 2006Annual Meeting.

 

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Under the bonus program, the 2004 bonuses will be paid in cash. Allbonuses are subject to the final approval of the Board of Directors. 

 

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