EXHIBIT 10.1
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[NEXEN LOGO OMITTED]
NEXEN INC.
000 - 0xx Xxx XX Xxxxxxx, XX Xxxxxx X0X 0X0
T 403 699-4000 F 000 000-0000 xxx.xxxxxxxx.xxx
January 28, 2005
Xx. Xxxxxx X. Xxxxxxxx
[address omitted]
Re: TERMINATION OF EMPLOYMENT AND SPECIAL SEPARATION AGREEMENT
Dear Xxx:
This letter confirms our discussions regarding the termination of your
employment with Nexen Inc. ("Nexen"). The terms set forth below constitute
Nexen's offer and, by your signature, your acceptance of this proposed Special
Separation Agreement (the "Agreement"). On behalf of Nexen, I want to express my
appreciation for your past service and contributions, and wish you success in
your future endeavors.
1. TERMINATION DATE AND RETIREMENT DATE. Your employment with Nexen will
terminate effective July 31, 2005 (the "Termination Date"). Your
effective retirement date will be August 1, 2005 (the "Retirement
Date").
2. RESIGNATION FROM CORPORATE OFFICES. Effective as of a mutually
agreeable date before the Retirement Date, you agree to, and will,
resign from all corporate offices you hold with Nexen and all
affiliates of Nexen, including but not limited to Nexen Chemicals
(B.C.), Ltd.; Nexen Chemicals Canada Limited Partnership; Nexen
Chemicals Canada Ltd.; Nexen Chemicals Holdings U.S.A., Inc.; Nexen
Chemicals U.S.A.; and Nexen Chemicals U.S.A., Inc.
3. PAYMENTS AND BENEFITS. Regardless of whether you accept this Agreement,
you will receive the following payments and benefits in accordance with
Nexen's existing policies, or at Nexen's discretion, pursuant to your
employment with Nexen and your participation in Nexen's benefit plans:
(a) REGULAR BASE SALARY. You are entitled to payment of your
regular base salary through the Termination Date.
(b) VACATION BENEFITS. You are entitled to payment for your
accrued and unused vacation leave benefits as of the
Termination Date.
(c) RETIREMENT PENSION BENEFITS. Upon your termination of
employment as of the Termination Date, you will be entitled to
receive benefits in accordance with the terms of the Nexen
Pension Plan, the Nexen Savings Plan, and the Nexen
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January 28, 2005
Page 2
Chemicals U.S.A. Inc. Restoration Plan. You may contact Xxxx
Xxxxxxxx for your plan balances and for information regarding
distributions.
(d) PRE-RETIREMENT HEALTH AND WELFARE BENEFITS. You are entitled
to continue your health and welfare benefits until the
Termination Date to the extent permitted and in accordance
with the terms of the applicable Nexen plan.
(e) POST-RETIREMENT HEALTH AND WELFARE BENEFITS. As of the date
you are no longer entitled to active employee coverage under
the Nexen U.S. health benefits program, you will be entitled,
at your option, to either COBRA continuation coverage or
post-retirement health and welfare benefits under Nexen's U.S.
program. If you decline coverage under the Nexen Retiree
Medical Benefits Program upon initial eligibility, or
thereafter, your eligibility for post-retirement health and
welfare benefits will end permanently, subject to your COBRA
continuation rights. You may contact Xxxx Xxxxxxxx for further
details regarding Nexen's post-retirement health and welfare
benefits. Nexen understands that you are also entitled to
post-retirement health and welfare benefits under the
Occidental Petroleum Corporation Retiree Medical Benefits
Plan. If you elect to participate in the Occidental Petroleum
Corporation Retiree Medical Benefits Plan, you will not be
eligible for post-retirement health and welfare benefits under
Nexen's U.S. Program. For your convenience, a copy of Nexen's
letter dated December 15, 2000, detailing your retirement from
Occidental Petroleum Corporation, is enclosed for your review.
(f) 2004 INCENTIVE BONUS. You are entitled to payment of your
incentive bonus payment for the year 2004, as approved by
Nexen's Board of Directors. Nexen will make such payment at
the same time as it pays 2004 incentive bonus payments to
similarly situated executive employees. Nexen expects to make
such payments in March 2005. Your 2004 incentive bonus payment
will be pensionable under the existing terms of the
arrangement for Executive Officers of Nexen (pensionable to
the lesser of target or actual payment).
(g) LONG-TERM INCENTIVES. Based on your participation in Nexen's
Stock Option Program, which provides for continued vesting and
opportunity to exercise options for a period of 18 months
following retirement, you are entitled to have options vested
in accordance with Nexen's Stock Option Program for a period
of 18 months after the Retirement Date. All outstanding
options, vested and unvested, will therefore expire on January
31, 2007. A table illustrating your option holdings with
vesting status as of the Retirement Date and January 31, 2007
is enclosed for your reference. You may contact Xxxxxx Xxxxxx
regarding any options transactions.
Xx. Xxxxxx X. Xxxxxxxx
January 28, 2005
Page 3
(h) OTHER BENEFITS. Unless otherwise specified in this Agreement,
you are entitled to payment or other entitlement, in
accordance with the terms of the applicable plan or other
benefit, of any benefits to which you have vested entitlement
as of the Termination Date under the terms of employee benefit
plans established by Nexen.
The amounts paid in accordance with this paragraph are gross amounts,
subject to lawful deductions, including any deductions you have
previously authorized in writing. Any amounts under subparagraphs (a)
and (b) of this paragraph not paid to you before the Termination Date
will be paid to you in one (1) lump sum on or within seven business
days from the Termination Date.
4. SPECIAL SEPARATION BENEFITS. Contingent upon your acceptance of the
terms of this Agreement and in consideration of your undertakings set
forth in Paragraphs 6 (General Release), 7 (Confidentiality,
Cooperation, Nonprosecution, and Nondisparagement), and 8 (Agreement to
Waive Certain Rights) of this Agreement, Nexen offers you, in addition
to the payments and benefits you will receive pursuant to Paragraph 3,
the following Special Separation Benefits:
(a) BASE SALARY. Payment of $626,000, which is approximately 24
months' of your regular base salary.
(b) TARGET BONUS. Payment of $250,400, which is approximately 40%
of your regular base salary and your target bonus for 24
months after the Effective Date.
(c) BENEFITS UPLIFT. Payment of $81,380, which represents a
benefits uplift of approximately 13% for 2005.
(d) VEHICLE ALLOWANCE. Payment of $28,800, which is approximately
24 months' of your vehicle allowance.
(e) EXECUTIVE OUTPLACEMENT SERVICES. If you elect to receive
executive outplacement services, payment of up to $25,000 to
the company with which Nexen currently contracts in Houston,
Texas to provide such services to its employees.
The amounts paid in accordance with subparagraphs (a)-(d) of this
paragraph are gross amounts, subject to lawful deductions, including
any deductions you have previously authorized in writing. The amounts
paid in accordance with subparagraphs (a)-(d) of this paragraph will be
paid to you in one (1) lump sum on or within seven business days from
the Termination Date.
5. RETURN OF PROPERTY. Whether or not you accept the terms of this
Agreement, you must return to Nexen any and all items of its property,
including without limitation keys, badge/access card, computers,
software, cellphones, calculators, equipment, credit cards, forms,
files,
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January 28, 2005
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manuals, correspondence, business records, personnel data, lists of
employees, salary and benefits information, customer lists and files,
lists of suppliers and vendors, price lists, contracts, contract
information, marketing plans, brochures, catalogs, training materials,
product samples, computer tapes and diskettes or other portable media,
computer-readable files and data stored on any hard drive or other
installed device, and data processing reports, and any and all other
documents or property in your possession or under your control. If you
have any property of Nexen that is not immediately available to you,
please make arrangements for its prompt return. By your signature
below, you represent that you have complied with these requirements.
6. GENERAL RELEASE. IN CONSIDERATION OF THE MUTUAL PROMISES AND
UNDERTAKINGS IN THIS AGREEMENT AND THE SPECIAL SEPARATION BENEFITS
DESCRIBED IN PARAGRAPH 4, YOU AND YOUR FAMILY MEMBERS, HEIRS,
SUCCESSORS, AND ASSIGNS (COLLECTIVELY THE "RELEASING PARTIES") HEREBY
RELEASE, ACQUIT, AND FOREVER WAIVE AND DISCHARGE ANY AND ALL CLAIMS AND
DEMANDS OF WHATEVER KIND OR CHARACTER, KNOWN OR UNKNOWN, WHETHER
VICARIOUS, DERIVATIVE, OR DIRECT, THAT YOU OR THEY, INDIVIDUALLY,
COLLECTIVELY, OR OTHERWISE, MAY HAVE OR ASSERT AGAINST: (A) NEXEN
INC.; (B) ANY ENTITY AFFILIATED WITH NEXEN INC., INCLUDING BUT NOT
LIMITED TO NEXEN CHEMICALS U.S.A., INC. AND NEXEN PETROLEUM U.S.A.,
INC.; (C) ANY PAST OR PRESENT OFFICER, DIRECTOR, OR OTHER EMPLOYEE OF
THE ENTITIES JUST NAMED IN (A)-(B), IN THEIR INDIVIDUAL AND OFFICIAL
CAPACITIES; OR (D) ANY PARTNER, FIDUCIARY, AGENT, REPRESENTATIVE,
VOLUNTEER, INSURER, ATTORNEY, OR ANY SUCCESSORS AND ASSIGNS OF THE
ENTITIES JUST NAMED IN (A)-(C) (COLLECTIVELY THE "RELEASED PARTIES").
THIS GENERAL RELEASE INCLUDES BUT IS NOT LIMITED TO ANY CLAIM OR DEMAND
BASED ON ANY FEDERAL, STATE, OR LOCAL STATUTORY OR COMMON LAW OR
CONSTITUTIONAL PROVISION THAT APPLIES OR IS ASSERTED TO APPLY, DIRECTLY
OR INDIRECTLY, TO THE FORMATION, CONTINUATION, OR TERMINATION OF YOUR
EMPLOYMENT RELATIONSHIP WITH NEXEN, INCLUDING BUT NOT LIMITED TO THE
AGE DISCRIMINATION IN EMPLOYMENT ACT ("ADEA"). THIS GENERAL RELEASE
DOES NOT APPLY TO (I) ANY RIGHTS OR CLAIMS UNDER THE ADEA THAT MAY
ARISE AFTER THE DATE THE EFFECTIVE DATE OF THIS AGREEMENT AS DEFINED BY
PARAGRAPH 14; (II) ANY RIGHTS OR CLAIMS TO INDEMNIFICATION TO WHICH YOU
ARE ENTITLED AS AN OFFICER, DIRECTOR, FORMER OFFICER, OR FORMER
DIRECTOR OF NEXEN OR ANY ENTITY AFFILIATED WITH NEXEN; OR (III) ANY
RIGHTS OR CLAIMS RELATING TO THE BREACH OR ENFORCEMENT OF THIS
AGREEMENT.
7. CONFIDENTIALITY, COOPERATION, NONPROSECUTION, AND NONDISPARAGEMENT. You
agree that:
(a) CONFIDENTIALITY. The fact and terms of this Agreement shall be
and remain confidential, and shall not be disclosed by you to
any party other than your spouse, attorney, and accountant or
tax return preparer, and except as otherwise may be required
by law, regulation, or judicial process. The fact and terms of
this Agreement shall be and remain confidential, and shall not
be disclosed by Nexen to any party, except as otherwise may be
required by law, regulation, or judicial process; provided,
however, that that Nexen may disclose the fact and terms of
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January 28, 2005
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this Agreement to those of its directors, officers, employees,
and representatives who need to know such information for the
purpose of administering this Agreement.
(b) COOPERATION. You will reasonably cooperate with Nexen or any
of the other Released Parties, at their reasonable request, in
any pertinent pending and future litigation, investigations,
arbitrations, and/or other fact-finding or adjudicative
proceedings, public or private, involving Nexen or any of the
other Released Parties. This obligation includes but is not
limited to your meeting with counsel for Nexen or the other
Released Parties at reasonable times upon their request, and
providing testimony in court, before an arbitrator or other
convening authority, or upon deposition that is truthful,
accurate, and complete, according to information known to you.
If you appear as a witness in any pending or future
litigation, arbitration, or other fact-finding or adjudicative
proceeding at the request of Nexen or any of the other
Released Parties, Nexen agrees to reimburse you, upon
submission of substantiating documentation, for necessary and
reasonable expenses incurred by you as a result of your
testifying.
(c) NONPROSECUTION. Except as requested by Nexen, or as permitted
or compelled by law or judicial process, you will not assist,
cooperate with, or supply information of any kind to any
individual or private-party litigant or their agents or
attorneys (i) in any proceeding, investigation, or inquiry
raising issues involving the formation, continuation, or
termination of your employment relationship with, or the
employment of other persons by, Nexen or any of the other
Released Parties, or (ii) in any other litigation against
Nexen or any of the other Released Parties.
(d) NONDISPARAGEMENT. Except as permitted or compelled by law or
judicial process, you will not knowingly make to any other
parties any statement, oral or written, which directly or
indirectly impugns the quality or integrity of Nexen's or any
of the other Released Parties' business or employment
practices, or any other disparaging or derogatory remarks
about Nexen or any of the other Released Parties.
8. AGREEMENT TO WAIVE CERTAIN RIGHTS.
(a) RIGHT TO OTHER RELIEF NOT PROVIDED IN THIS AGREEMENT. Except
as provided in this Agreement, you agree to irrevocably waive
any right to monetary recovery from the Released Parties,
whether sought directly by you or in the event any
administrative agency or other public authority, individual,
or group of individuals should pursue any claim on your
behalf; and you will not request or accept from the Released
Parties, as compensation or damages related to your employment
or the termination of your employment by Nexen, anything of
value that is not provided for in this Agreement.
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January 28, 2005
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(b) RIGHT TO A JURY TRIAL. You agree to irrevocably waive the
right to trial by jury with respect to any claim arising from
this Agreement or the formation, continuation, or termination
of your employment relationship with Nexen.
9. NONADMISSION OF LIABILITY OR WRONGDOING. This Agreement does not in any
manner constitute an admission of liability or wrongdoing on the part
of you, Nexen, or any of the other Released Parties, but you, Nexen,
and the other Released Parties expressly deny any such liability or
wrongdoing; and, except to the extent necessary to enforce this
Agreement, neither this Agreement nor any part of it may be construed,
used, or admitted into evidence in any judicial, administrative, or
arbitral proceedings as an admission of any kind by you, Nexen, or any
of the other Released Parties.
10. AUTHORITY TO EXECUTE. You represent and warrant that you have the
authority to execute this Agreement on behalf of all the Releasing
Parties.
11. GOVERNING LAW AND INTERPRETATION. This Agreement and the rights and
duties of the parties under it shall be governed by and construed in
accordance with the laws of the State of Texas, without regard for any
conflicts of laws principles. If any provision of this Agreement is
held to be unenforceable, such provision shall be considered separate,
distinct, and severable from the other remaining provisions of this
Agreement, and shall not affect the validity or enforceability of such
other remaining provisions; and in all other respects, this Agreement
shall remain in full force and effect. If any provision of this
Agreement is held to be unenforceable as written but may be made to be
enforceable by limitation, then such provision shall be enforceable to
the maximum extent permitted by applicable law. The language of all
parts of this Agreement shall in all cases be construed as a whole,
according to its fair meaning, and not strictly for or against any of
the parties.
12. BREACH OF AGREEMENT.
(a) Should you fail to comply with any of your obligations as set
forth in this Agreement, and not cure such failure within ten
(10) calendar days of your receipt of written notice from
Nexen specifying in reasonable detail the failure to comply,
Nexen will have no obligation to make payment of the Special
Separation Benefits described above, but all other provisions
of this Agreement shall remain in full force and effect.
(b) If, notwithstanding your release of claims as described in
Paragraph 6 above, you or any other of the Releasing Parties
(or any other party asserting any claim derivative of your
own) should nonetheless proceed to make any such claims
against Nexen or any of the other Released Parties by bringing
an action in a federal, state, or municipal court, then in
addition to any other legal or equitable remedies available to
Nexen for your breach of this Agreement, Nexen may seek,
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January 28, 2005
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and the court hearing the claims may hold you liable for,
Nexen's damages and costs, including attorney's fees, incurred
in defending against your claims. The foregoing provision does
not apply with respect to an action (i) brought under the ADEA
in which the general release provisions of this Agreement are
challenged, or (ii) to enforce any of your rights set forth in
this Agreement.
13. EXPIRATION OF OFFER. Nexen's offer of the Special Separation Benefit
described in Paragraph 4 above will expire at 5:00 p.m. on February 19,
2005, a period of more than 21 calendar days after you were provided
with the terms of this Agreement for your consideration. You may accept
this offer at any time before expiration by signing this letter in the
space provided below, and returning it to me. Whether or not you
execute this Agreement, you will receive the items set forth in
Paragraph 2, and are required to follow the obligations set forth in
Paragraph 5.
14. EFFECTIVE DATE. This Agreement will become effective and enforceable
upon the expiration of seven calendar days after your execution and
return of the Agreement to me (the "Effective Date"); provided,
however, that Nexen shall have no right to revoke or terminate this
Agreement after you have signed this Agreement and returned it to me.
At any time before the Effective Date of this Agreement, you may revoke
your acceptance by notifying me of your revocation in writing.
15. CONSIDERATION. Whether expressly stated in this Agreement or not, all
obligations that you assume and undertakings that you make by executing
this Agreement are understood to be in consideration of the mutual
promises and undertakings in this Agreement and the Special Separation
Benefits offered to you in Paragraph 4. Further, by executing this
Agreement, you acknowledge and agree that neither Nexen nor any of the
other Released Parties has any legal obligation to provide the Special
Separation Benefits to you.
16. ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS; AND INUREMENT. This Agreement
contains and constitutes the entire understanding and agreement between
you and Nexen as to its subject matter, and may be modified only by a
writing of contemporaneous or subsequent date executed by both you and
an authorized official of Nexen. From and after the Effective Date,
this Agreement shall inure to the benefit and be binding upon the
parties hereto and their respective heirs, executors, administrators,
successors, and assigns.
17. CONSULTATION WITH AN ATTORNEY. You have the right, and are encouraged
by this paragraph, to consult with an attorney before executing this
Agreement.
18. VOLUNTARY AGREEMENT. You acknowledge that your execution of this
Agreement is knowing and voluntary, and that you have had a reasonable
time to deliberate regarding its terms.
________________________________________
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January 28, 2005
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If you agree with the above provisions, please execute both copies of
this letter in the space provided below. You should return one executed original
to me, and maintain the other executed original in your files. Upon the
expiration of seven calendar days after the date of your execution and return of
this Agreement, unless revoked by you within that period, it shall then
constitute a valid and binding agreement between you and Nexen.
Sincerely,
NEXEN INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Vice President
Human Resources and Corporate Services
Enclosures
ACCEPTED AND AGREED TO:
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Date Signed: February 2, 2005
