CHANGE IN CONTROL SEVERANCE AGREEMENT AS AMENDED AND RESTATED
EXHIBIT
10.37
AS
AMENDED AND RESTATED
THIS
AMENDED AND RESTATED CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement”) is
made on December 1, 2008 between Xxxxxx Energy Company, a Delaware corporation
(the “Company”), and _________ (the “Executive”) and amends, restates and
supercedes the Change in Control Severance Agreement between the Company and the
Executive (the “Original Agreement”), effective as of ___________ (the
“Effective Date”).
WITNESSETH:
WHEREAS,
Executive is a senior executive of the Company or one of its Subsidiaries (as
defined below) and has made and is expected to continue to make major
contributions to the short-term and long-term profitability, growth and
financial strength of the Company; and
WHEREAS,
the Board of Directors of the Company (the “Board,” as defined in Section 23)
recognizes that, as is the case with many
publicly-held corporations, the possibility of a Change in Control (as defined
in Section 23) exists and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or
distraction of key management personnel to the detriment of the Company and its
stockholders; and
WHEREAS,
the Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of, and to contract for the
continued rendering of services by, members of the Company’s management,
including Executive, in connection with their assigned duties without
distraction in the face of potentially disturbing circumstances, and without the
Company’s loss of needed personnel, arising from the possibility of a Change in
Control; and
WHEREAS,
in consideration of Executive’s continued employment with the Company, the
Company desires to provide Executive with
certain compensation and benefits set forth in this Agreement in order to
ameliorate the financial and career impact on Executive in the event Executive’s
employment with the Company is terminated for a reason related to a Change in
Control; and
WHEREAS,
the Company and the Executive entered into the Original Agreement, effective as
of the Effective Date; and
WHEREAS,
the Company and the Executive now desire to amend, restate and supercede the
Original Agreement to reflect provisions of Section 409A of the Internal Revenue
Service Code and the final regulations issued thereunder, which amendment is to
be effective as of the Effective Date.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements hereinafter set forth (including definitions of capitalized terms
which are set forth in Section 23 and throughout this Agreement) and intending
to be legally bound hereby, the Company and Executive agree as
follows:
1. Obligations of Executive to
Remain Employed. Executive agrees that in the event any person
or group attempts a Change in Control and he is either notified by the Board or
aware of an attempted Change in Control, he shall not, without the written
agreement of the Board, voluntarily leave the employ of the Company other than
by reason of a Constructive Termination Associated With a Change in Control (as
defined in Section 23) (i) until such attempted Change in Control terminates or
(ii) if a Change in Control shall occur, until the occurrence of such actual
Change in Control. For purposes of the foregoing clause (i) and this
Agreement, Constructive Termination Associated With a Change in Control shall be
determined, except as expressly provided in the definition of the term, as if a
Change in Control had occurred when such attempted Change in Control (which is
sometimes referred to herein as a “potential”, as opposed to an “actual”, Change
in Control) became known
to the Board. For purposes
of this Agreement, any decision by the Board that the person or group has
abandoned or terminated his or its efforts to effect a Change in Control shall
be conclusive and binding on Executive.
1
2. Termination Associated With
a Change in Control.
(a) Involuntary Termination
Associated With a Change in Control. Executive shall be entitled to the
payments and benefits provided in Section 2(b) in the event Executive’s
employment is terminated after, or in connection with, a Change in Control, on
account of:
(i) an
Involuntary Termination Associated With a Change in Control (as defined in
Section 23) within the two-year period after an actual Change in
Control,
(ii) a
termination by the Company, other than for Cause (as defined in Section 23) or
other than due to Executive’s death or Disability (as defined in Section 23),
that (A) occurs not more than three (3) months prior to the date on which an
actual Change in Control occurs or (B) is requested by a third party who
initiates and effects an actual Change in Control, or
(iii) a
termination by Executive that occurs after a potential Change in Control but
before an actual Change in Control and is considered a Constructive Termination
Associated With a Change in Control.
For
purposes of clause (ii)(B) in the preceding sentence, to be eligible to receive
amounts described in Section 2(b) below, a Change in Control must be consummated
within the twelve (12) month period following Executive’s Termination Date (as
defined in Section 23), except in circumstances pursuant to which the
consummation of the Change in Control is delayed, through no failure of the
Company or the third person, by a governmental or regulatory authority or agency
with jurisdiction over the matter, or as a result of other similar
circumstances. In such a circumstance, the remainder of the twelve (12) month
period shall be tolled and shall recommence upon termination of the delaying
event.
(b) Payments Upon Involuntary
Termination Associated With a Change in Control. Subject to the
provisions of Section 2(c) or Sections 3 and 6 hereof, in the event a
termination described in Section 2(a) occurs, the Company shall pay and provide
to Executive on or beginning, as applicable, the first business day that occurs
following sixty (60) days after his Termination Date or, where Executive is
entitled to benefits under this Agreement by reason of clause (ii) or (iii) of
Section 2(a) above, the later of as soon as administratively feasible after the
date an actual Change in Control occurs or the first business day that occurs
following sixty (60) days after his Termination Date (contingent on the
execution of the release without revocation as contemplated in Section 4
hereof):
(i) a
lump sum cash payment equal to 2.0 times Executive’s Base Pay (as defined in
Section 23);
(ii) a
lump sum cash payment equal to 2.0 times Executive’s Target Bonus (as defined in
Section 23);
(iii) a pro rated payment of his Target Bonus for the year
in which Executive’s Termination Date occurs. The pro rated payment shall be
based on Executive’s Target Bonus as of Executive’s Termination Date, multiplied
by a fraction, the numerator of which is the number of days during which
Executive was employed by the Company in the year of his termination and the
denominator of which is 365;
2
(iv) any award under the Company’s long-term cash and equity
incentive program, including stock option, restricted stock, restricted unit,
other equity- or cash-based incentive awards or other equity- or cash-based
incentive agreements, which by its terms vests in connection with the Change in
Control,
provided that payment of such award shall be determined solely by the terms of
such award and any plan, program or arrangement which controls its determination
and payment; and
(v) for a
period of 24 months following his Termination Date, Executive shall continue to
receive on a monthly basis the medical and dental coverage in effect on his
Termination Date (or generally comparable coverage) for himself and, if
applicable, his spouse and dependents, as the same may be changed from time to
time for employees generally, as if Executive had continued in employment during
such period; or, as an alternative, the Company may elect to pay Executive cash
in lieu of such coverage in an amount equal to Executive’s reasonable after-tax
cost of continuing comparable coverage, where such coverage may not be continued
by the Company (or where such continuation would adversely affect the tax status
of the plan pursuant to which the coverage is provided), with any such cash
payments to be made in accordance with the ordinary payroll practices of the
Company (not less frequently than monthly) for employees generally for the
period during which such cash payments are to be provided.
(A) If
Executive does not receive the cash payment described in the preceding sentence,
the Company shall take all commercially reasonable efforts to provide that the
COBRA (as defined in Section 23) health care continuation coverage period under
section 4980B of the Code (as defined in Section 23) shall commence immediately
after the foregoing 24 month benefit period, with such continuation coverage
continuing until the end of applicable COBRA health care continuation coverage
period.
(B) If
Executive would have been eligible for post-retirement medical and dental
coverage had he retired from employment during the period of 24 months following
his Termination Date, but is not so eligible as the result of his Involuntary
Termination Associated With a Change in Control, then at the conclusion of the
benefit continuation period described in (A) above, the Company shall take all
commercially reasonable efforts to provide Executive on a monthly basis with
additional continued group medical and dental coverage comparable to that which
would have been available to him from time to time under the Company’s
post-retirement medical and dental program, for as long as such coverage would
have been available under such program, or, as an alternative, the Company may
elect to pay Executive cash in lieu of such coverage in an amount equal to
Executive’s reasonable after-tax cost of continuing comparable coverage, where
such coverage may not be continued by the Company (or where such continuation
would adversely affect the tax status of the plan pursuant to which the coverage
is provided), with any such cash payments to be made in accordance with the
ordinary payroll practices of the Company (not less frequently than monthly) for
employees generally for the period during which such cash payments are to be
provided.
(c) Limitation on Payments and
Benefits. Notwithstanding anything in this Agreement to the contrary, the
sum of the maximum amount payable and the value of the benefits provided to
Executive pursuant to this Section 2 and Section 6(a) shall be limited to 2.99
times the sum of Executive’s Base Pay and Bonus (as defined in Section 23).
In the event a reduction is required pursuant
hereto, unless Executive is permitted by the Company to choose the order of
reduction, the order of reduction shall be first all cash payments on a pro rata
basis, then any equity compensation on a pro rata basis, and lastly medical and
dental coverage.
3
(d) Cessation of Employment on
Account of Disability, Cause or Death. Notwithstanding anything in this
Agreement to the contrary, if Executive’s employment terminates on account of
Disability, Executive
shall be entitled to receive disability benefits under any disability program
maintained by the Company that covers Executive, and Executive shall not be
considered to have terminated employment under this Agreement and shall not
receive payments and benefits pursuant to this Section 2. If Executive’s
employment is terminated by the Company on account of Cause or because of his
death, Executive shall not be considered to have terminated employment under
this Agreement and shall not receive payments and benefits pursuant to this
Section 2.
(e) Beneficiaries. Executive shall
be entitled to select (and change, to the extent permitted under any applicable
law) a beneficiary or beneficiaries to receive any compensation or benefit
payable hereunder following Executive’s death, and may change such election, in
either case by giving the Company written notice thereof. In the event of
Executive’s death or a judicial determination of his incompetence, reference in
this Agreement to Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative. If Executive dies without
having designated a beneficiary, or if the beneficiary so designated has
predeceased Executive or cannot be located by the Company within one year after
the date when the Company commenced making a reasonable effort to locate such
beneficiary, then Executive's surviving spouse, or if none, then Executive's
estate shall be deemed to be his beneficiary.
3. Nonqualified Deferred
Compensation Plan Omnibus Provisions. Notwithstanding any other provision
of this Agreement, it is intended that any payment or benefit which is provided
pursuant to or in connection with this Agreement which is considered to be
nonqualified deferred compensation subject to Section 409A of the Code shall be
provided and paid in a manner, and at such time and in such form, as complies
with the applicable requirements of Section 409A of the Code to avoid the
unfavorable tax consequences provided therein for
non-compliance. Notwithstanding any other provision of this
Agreement, the Board is authorized to amend this Agreement, to amend any
election made by Executive under this Agreement and/or to delay the payment of
any monies and/or provision of any benefits in such manner as may be determined
by it to be necessary or appropriate to comply, or to evidence or further
evidence required compliance, with Section 409A of the Code (including any
transition or grandfather rules thereunder). For purposes of this
Agreement, all rights to payments and benefits hereunder shall be treated as
rights to a series of separate payments and benefits to the fullest extent
allowable by Section 409A of the Code. Payments or provision of
benefits in connection with a separation from service payment event will be
delayed, to the extent applicable, until six months after the separation from
service or, if earlier, the Executive’s death, if the Executive is a key
employee of a publicly traded corporation under Section 409A(a)(2)(B)(i) of the
Code (the “409A
Deferral Period”). In the event such payments
are otherwise due to be made in installments or periodically during the 409A
Deferral Period, the payments which would otherwise have been made in the 409A
Deferral Period shall be accumulated and paid in a lump sum as soon as the 409A
Deferral Period ends, and the balance of the payments shall be made as otherwise
scheduled. In the event benefits are required to be deferred, any
such benefit may be provided during the 409A Deferral Period at Executive’s
expense, with Executive having a right to reimbursement from the Company once
the 409A Deferral Period ends, and the balance of the benefits shall be provided
as otherwise scheduled. For purposes of this Agreement, termination
of employment will be read to mean a “separation from service” within the
meaning of Section 409A of the Code where it is reasonably
anticipated that no further services would be performed after that date or that
the level of bona fide services Executive would perform after that date (whether
as an employee or independent contractor) would permanently decrease to no more
than 20 percent of the average level of bona fide services performed over the
immediately preceding thirty-six (36)-month period.
4. Release.
Notwithstanding the foregoing, no payments shall be made or benefits provided
under Section 2(b) unless Executive executes, and does not revoke, the Company’s
standard written release, substantially in the form as attached hereto as
Appendix A (the “Release”), of any and all claims against the Company and all
related parties with respect to all matters arising out of Executive’s
employment by the Company (other than any claim or entitlement under an employee
benefit, long term cash or equity compensation plan, program, arrangement or
agreement which is due pursuant to the terms of such plan, program,
arrangement or agreement) or a termination thereof. Such Release must be
provided within sixty (60) days after Executive’s Termination Date or, where
Executive is entitled to benefits under this Agreement by reason of clause (ii)
or (iii) of Section 2(a) above, the later of before the date an actual Change in
Control occurs or within sixty (60) days after the Executive’s Termination
Date.
4
5. Enforcement. Without
limiting the rights of Executive at law or in equity, except as provided in
Section 6, if the Company fails to make any payment or provide any benefit
required to be made or provided hereunder on a timely basis, the Company will
pay interest on the amount or value thereof at an annualized rate of interest
equal to the so-called composite “prime rate” as quoted from time to time during
the relevant period in the Eastern Edition of The Wall Street
Journal. Such interest will be payable as it accrues consistent with the
timing of the related payments or benefits to be provided. Any change in such
prime rate will be effective on and as of the date of such change.
6. Tax Limitation on Payments
by the Company. The provisions of this Section 6 shall apply
notwithstanding anything in this Agreement to the contrary.
(a)
Subject to the limitation in Section 2(c), in the event that it shall be
determined that any Payment would constitute an “excess parachute payment”
within the meaning of Section 280G of the Code, then the Payments under Section
2 of this Agreement (“Change in Control Payments”) shall be reduced (but not
below zero) so that the Present Value of the aggregate of all Payments does not
exceed the Reduced Amount; provided, however, that no such reduction shall be
effected if the Net After-tax Benefit to Executive of receiving all of the
Payments exceeds by more than the lesser of $25,000 or 5% of the Net After-tax
Benefit to Executive resulting from having such Change in Control Payments so
reduced. In the event a reduction is required
pursuant hereto, the order of reduction shall be first all cash payments on a
pro rata basis, then any equity compensation on a pro rata basis, and lastly
medical and dental coverage. For purposes of this Section 6, the
following terms have the following meanings:
(i) “Net
After-tax Benefit” shall mean the Present Value of a Payment net of all federal
state and local income, employment and excise taxes imposed on Executive with
respect thereto, determined by applying the highest marginal rate(s) applicable
to an individual for Executive’s taxable year in which the Change in Control
occurs.
(ii)
“Payment” means any payment or distribution or provision of benefits by the
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, but
determined without regard to any reductions required by this Section
6.
(iii)
“Present Value” shall mean such value determined in accordance with Section
280G(d)(4) of the Code.
(iv)
“Reduced Amount” shall be an amount expressed in Present Value which maximizes
the aggregate Present Value of Payments without causing any Payment to be
subject to excise tax under Section 4999 of the Code or the deduction limitation
of Section 280G of the Code.
(b)
Except as set forth in the next sentence, all determinations to be made under
this Section 6 shall be made by the nationally recognized independent public
accounting firm used by the Company immediately prior to the Change in Control
(“Accounting Firm”), which Accounting Firm shall provide its determinations and
any supporting calculations to the Company and Executive within ten days of
Executive’s Termination Date. If determined by the Accounting Firm to be
excludible from parachute payments under Section 280G of the Code, the value of
Executive’s non-competition covenant under Section 10(a) of this Agreement shall
be determined by independent appraisal by a nationally-recognized business
valuation firm acceptable to both Executive and the Company, and a portion of
the Change in Control
Payments shall, to the extent of that appraised value, be specifically allocated
as reasonable compensation for such non-competition covenant and shall not be
treated as a parachute payment. Any such determination by the Accounting Firm
shall be binding upon the Company and Executive.
5
(c) If
the Accounting Firm determines that Change in Control Payments should be
reduced, the Company shall promptly give Executive notice to that effect and a
copy of the detailed calculation thereof. All determinations made by
the Accounting Firm under this Section 6 shall be binding upon the Company and
Executive and shall be made within twenty (20) business days of Executive’s
Termination Date.
(d) While
it is the intention of the Company and Executive to reduce the amounts payable
or distributable to Executive hereunder only if the aggregate Net After-tax
Benefit to Executive would thereby be increased in the manner provided for
herein, as a result of the uncertainty in the application of Section 4999 of the
Code at the time of the initial determination by the Accounting Firm hereunder,
it is possible that amounts will have been paid or distributed by the Company to
or for the benefit of Executive pursuant to this Agreement which should not have
been so paid or distributed (“Overpayment”) or that additional amounts which
will have not been paid or distributed by the Company to or for the benefit of
Executive pursuant to this Agreement could have been so paid or distributed
(“Underpayment”), in each case, consistent with the calculation of the Reduced
Amount hereunder. In the event that the Accounting Firm, based either
upon the assertion of a deficiency by the Internal Revenue Service against the
Company or Executive which the Accounting Firm believes has a high probability
of success determines that an Overpayment has been made, any such Overpayment
paid or distributed by the Company to or for the benefit of Executive shall be
treated for all purposes as a loan to Executive which Executive shall repay to
the Company together with interest at the applicable federal rate provided for
in Section 7872(f)(2) of the Code; provided, however, that no such loan shall be
deemed to have been made and no amount shall be payable by Executive to the
Company if and to the extent such deemed loan and payment would not either
reduce the amount on which Executive is subject to tax under Sections 1 and 4999
of the Code or generate a refund of such taxes. In the event that the Accounting
Firm, based upon controlling precedent or substantial authority, determines that
an Underpayment has occurred, any such Underpayment shall be promptly paid by
the Company to or for the benefit of Executive together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the
Code.
(e) All
of the fees and expenses of the Accounting Firm in performing the determinations
referred to in this Section 6 shall be borne solely by the Company.
(f) All
payments to be made under this Section 6 (other than any Underpayment described
in Section 6(d)) must be made by the end of the Executive’s taxable year next
following the Company’s taxable year in which the Company remits the related
taxes. Any right to reimbursement incurred due to a tax audit or
litigation addressing the existence or amount of a tax liability must be made by
the end of the Executive’s taxable year following the Executive’s taxable year
in which the taxes that are the subject of the audit or litigation are remitted
to the taxing authorities or, where no such taxes are remitted, the end of the
Executive’s taxable year following the year in which the audit is completed or
there is a final and non-appealable settlement or the resolution of the
litigation.
7. Duties
upon Termination; Mitigation Obligation. Upon termination
of employment for any reason, Executive or his estate shall surrender to the
Company all correspondence, letters, files, contracts, mailing lists, customer
lists, advertising materials, ledgers, supplies, equipment, checks, and all
other materials and records of any kind that are the property of the Company or
any of its subsidiaries or affiliates, that may be in Executive’s possession or
under his control, including all copies of any of the foregoing. The Company hereby
acknowledges that it will be difficult and may be impossible for Executive to
find reasonably comparable employment following the Termination Date.
Accordingly, the payment and provision of the severance compensation
by the Company to Executive in accordance with the terms of this Agreement is
hereby acknowledged by the Company to be reasonable, and Executive will not be
required to mitigate the amount of any payment or benefit provided for in this
Agreement by seeking other employment or otherwise, nor will any profits,
income, earnings or other benefits from any source whatsoever create any
mitigation, offset, reduction or any other obligation on the part of Executive
hereunder or otherwise.
6
8. Legal Fees and
Expenses. If
litigation or arbitration is commenced by either party to enforce or interpret
any provision contained in this Agreement, the Company will undertake to
indemnify Executive for his reasonable attorneys' fees and expenses
associated with such
litigation or arbitration if Executive substantially prevails in such litigation
or arbitration or any settlement thereof. Notwithstanding the
foregoing, if it should appear to Executive that the Company has failed
to comply with any of its obligations under this Agreement or in the event that
the Company or any other person takes or threatens to take any action to declare
this Agreement void or unenforceable, or institutes any litigation or other
action or proceeding designed to deny, or to recover from, Executive the
benefits provided or intended to be provided to Executive under Section 2 of
this Agreement, the Company will in any event
reimburse Executive for his reasonable attorneys' fees and expenses
incurred in
connection therewith up to $10,000 without regard to the commencement or outcome
of any litigation or arbitration in order for Executive to retain
counsel to advise and
represent Executive in connection with any such interpretation, enforcement or
defense, including without limitation the initiation or defense of any
litigation or other legal action, whether by or against the Company or any
director, officer or employee of the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship between the
Company and such counsel, the Company irrevocably consents to Executive’s
entering into an attorney-client relationship with such counsel, and in that
connection, the Company and Executive agree that a confidential relationship
will exist between Executive and such counsel. The first $10,000 of such
expenses will be paid by the Company as they are incurred by Executive, and any balance thereof
due to Executive shall be paid within thirty (30) days after any final judgment
or decision or settlement in which Executive substantially
prevails. Any reimbursements to be
paid by the Company to the Executive under this Section 8 for the first $10,000
of such expenses must be paid as soon as administratively feasible after the
Executive incurs the expense and the Executive will be entitled to receive any
balance thereof as soon as administratively feasible after the termination of
such litigation or arbitration or any settlement thereof under terms on which
the Executive substantially prevails.
9. Confidentiality.
Executive hereby covenants and agrees that, except as specifically requested or
directed by the Company, he will not disclose to any person not employed by the
Company, or use in connection with engaging in competition with the Company, any
confidential or proprietary information (as provided below) of the Company. For
purposes of this Agreement, the term “confidential or proprietary information”
will include all information of any nature and in any form that is owned by the
Company and that is not publicly available (other than by Executive’s breach of
this Section 9) or generally known to persons engaged in businesses similar or
related to those of the Company. Confidential or proprietary information will
include, without limitation, the Company’s financial matters, customers,
employees, industry contracts, strategic business plans, product development (or
other proprietary product data), marketing plans, consulting solutions and
processes, and all other secrets and all other information of a confidential or
proprietary nature which is protected by the Uniform Trade Secrets Act. For
purposes of the preceding two sentences, the term “Company” will also include
any Subsidiary (as defined in Section 23; collectively, the “Restricted Group”).
The foregoing obligations imposed by this Section 9 will not apply (i) in the
course of the business of and for the benefit of the Company, (ii) if such
confidential or proprietary information has become, through no fault of
Executive, generally known to the public, or (iii) if Executive is required by
law to make disclosure (after giving the Company notice and an opportunity to
contest such requirement). In addition, if not otherwise filed by the Company
with the U.S. Securities and Exchange Commission (“SEC”) and available through
public disclosure from the SEC, Executive agrees not to disclose the terms of
this Agreement to anyone, except Executive’s spouse, attorney and, as necessary,
tax/financial advisor, except as may be required by law. Likewise, the Company
agrees that the terms of this Agreement will not be disclosed except as may be
necessary
to obtain approval or authorization to fulfill its obligations hereunder or as
required by law. It is expressly understood that any violation of the
confidentiality obligation imposed hereunder constitutes a material breach of
this Agreement.
7
10. Covenants Not to Compete and
Not to Solicit; Breach of Agreement Obligations by
Executive.
(a) Covenant Not to
Compete. In the event Executive breaches his obligations to the Company
to remain employed as provided in Section 1 above or if Executive is entitled to
receive payments and benefits under Section 2 above other than pursuant to
clause (ii) or (iii) of Section 2(a) above, then, for a period of one (1) year
following Executive’s Termination Date, Executive shall not directly or
indirectly engage in (whether as an employee, consultant, proprietor, partner,
director or otherwise), or have any ownership interest in, or participate in a
financing, operation, management or control of, any person, firm, corporation or
business that is a Restricted Business in a Restricted Territory without the
prior written consent of the Board. For this purpose, ownership, whether direct
or beneficial, of no more than 5% of the outstanding securities entitled to vote
generally in the election of directors of a publicly traded corporation shall
not constitute a violation of this provision.
(b) Covenant Not to
Solicit. In the event Executive breaches his obligations to the Company
to remain employed as provided in Section 1 above or if Executive is entitled to
receive payments and benefits under Section 2 above other than pursuant to
clause (ii) or (iii) of Section 2(a) above, then, for a period of one (1) year
following Executive’s Termination Date, Executive shall not: (i) solicit,
encourage or take any other action which is intended to induce any other
employee, any supplier or any customer, of the Company or any Subsidiary to
terminate his employment or relationship with the Company or any Subsidiary; or
(ii) interfere in any manner with the contractual or employment relationship
between the Company and any such employee, supplier or customer of the Company
or any Subsidiary. The foregoing shall not prohibit Executive or any entity with
which Executive may be affiliated from hiring a former employee of the Company
or any Subsidiary; provided, that such hiring results exclusively from such
former employee’s affirmative response to a general recruitment
effort.
(c) Interpretation. The
covenants contained herein are intended to be construed as a series of separate
covenants, one for each of the counties, parishes, towns, cities or states or
similar local governmental or political subdivisions of the Restricted
Territory. Except for geographic coverage, each such separate covenant shall be
deemed identical in terms to the covenant contained in the preceding
subsections. If, in any judicial proceeding, the court shall refuse to enforce
any of the separate covenants (or any part thereof) deemed included in such
subsections, then such unenforceable covenant (or such part) shall be deemed to
be eliminated from this Agreement for the purpose of those proceedings to the
extent necessary to permit the remaining separate covenants (or portions
thereof) to be enforced.
(d) Remedies for
Breach. In the event of Executive’s termination of employment,
the Company’s obligations to provide the payments and benefits set forth in
Section 2 shall be and are expressly conditioned upon Executive’s covenants not
to compete and not to solicit as provided herein. In the event Executive
breaches his obligations to the Company as provided herein, the Company’s
obligations to provide the payments and benefits set forth in Section 2 shall
cease, and Executive shall be obligated to return to the Company any payments
and the value of any benefits previously received by him pursuant to Section 2.
In addition, it is recognized that damages in the event of breach of this
Section 10 by Executive would be difficult, if not impossible, to ascertain, and
it is therefore specifically agreed that the Company, in addition to and without
limiting any other remedy or right it may have, shall have the right to an
injunction or other equitable relief in any court of competent jurisdiction,
enjoining any such breach. The existence of the express rights to
cease or recover payment and the value of benefits otherwise provided for in
Section 2 and to obtain an injunction or other equitable relief shall not
preclude the Company from pursuing any other rights and remedies at law or in
equity which it may have.
8
(e) Definitions. For
proposes of this Section 10, the following terms have the following
meanings:
(i)
“Restricted Business” means any business function with a direct competitor of
the Company or any Subsidiary that is substantially similar to the business
function performed by Executive with the Company or any Subsidiary immediately
prior to his Termination Date.
(ii)
“Restricted Territory” means the counties, parishes, towns, cities, or states or
similar governmental or political subdivisions of any country in which the
Company or any Subsidiary operates or does business, inclusive of markets in
which the Company competes with the Restricted Business to sell its
products.
(f) Reasonableness. In
the event that the provisions of this Section 10 shall ever be deemed to exceed
the time, scope or geographic limitations permitted by applicable laws, then
such provisions shall be reformed to the maximum time, scope or geographic
limitations, as the case may be, permitted by applicable laws.
11. Employment Rights.
Executive and the Company acknowledge that, except as may otherwise be provided
under any other written agreement between Executive and the Company or a
Subsidiary, the employment of Executive by the Company is “at
will.” Nothing expressed or implied in this Agreement will create any
right or duty on the part of the Company or Executive, except as provided in
Section 1 above, to have Executive remain in the employment of the Company or
any Subsidiary prior to or following any Change in Control.
12. Withholding of Taxes.
The Company may withhold from any amounts payable under this Agreement all
federal, state, city or other taxes as the Company is required to withhold
pursuant to any applicable law, regulation or ruling.
13. Term of
Agreement.
(a) Regular Term and
Extensions. The term of this Agreement shall commence on the
Effective Date hereof and shall continue until December 31, 2008; provided, however, that commencing on
December 31, 2008, and each anniversary
thereafter, the term of this Agreement shall automatically be extended for one
year unless the Company gives notice not later than thirty (30) days preceding
any such anniversary year that it does not wish to extend this Agreement; and
provided, further, that regardless of any such notice by the Company, this
Agreement shall continue in effect for a period of 24 months beyond the term
provided herein if a Change in Control of the Company occurs during the period
that this Agreement is in effect.
(b) Early Termination by the
Board. Notwithstanding the foregoing, this Agreement shall be
subject to unilateral termination by the Company if the Board determines in good
faith that Executive is no longer a key management employee to be provided the
rights contained herein and so notifies Executive in writing; provided, however,
that such determination may not be made, and if made shall have no effect, if a
Change in Control shall have occurred or during any period of time when the
Company has knowledge that any person or group has taken steps reasonably
calculated to effect a Change in Control until, in the opinion of the Board, the
third person has abandoned or terminated his or its efforts to effect a Change
in Control.
9
14. Successors and Binding
Agreement.
(a) The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation, reorganization or otherwise) to all or substantially all
of the business or assets of the Company, by agreement in form and substance
reasonably satisfactory to Executive, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent the Company
would be required to perform if no such succession had taken place. This
Agreement will be binding upon and inure to the benefit of the Company and any
successor to the Company, including without limitation any persons acquiring
directly or indirectly all or substantially all of the business or assets of the
Company whether by purchase, merger, consolidation, reorganization or otherwise
(and such successor will thereafter be deemed “Company” for the purposes of this
Agreement), but will not otherwise be assignable, transferable or delegable by
the Company.
(b) This
Agreement will inure to the benefit of and be enforceable by Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees and legatees. This Agreement will supersede the provisions of any
employment agreement between Executive and the Company that relate to any matter
that is also the subject of this Agreement, and such provisions in such
employment agreement will be null and void. The foregoing sentence shall have no
impact on any
outstanding agreement made with Executive under the Company’s long-term
incentive program, including, stock option, restricted stock, restricted unit,
other equity- or cash-based incentive awards or other equity- or cash-based
agreements at any time in effect.
(c) This
Agreement is personal in nature and neither of the parties hereto will, without
the consent of the other, assign, transfer or delegate this Agreement or any
rights or obligations hereunder except as expressly provided in Sections 14(a)
and (b). Without limiting the generality or effect of the foregoing, Executive’s
right to receive payments and benefits hereunder will not be assignable,
transferable or delegable, whether by pledge, creation of a security interest,
or otherwise, other than by a transfer by Executive’s will or by the laws of
descent and distribution and, in the event of any attempted assignment or
transfer contrary to this Section 14(c), the Company will have no liability to
pay any amount so attempted to be assigned, transferred or
delegated.
15. Notices. For all
purposes of this Agreement, all communications, including without limitation,
notices, consents, requests or approvals, required or permitted to be given
hereunder will be in writing and will be deemed to have been duly given when
hand delivered or dispatched by electronic facsimile transmission (with receipt
thereof confirmed electronically), or five (5) business days after having been
mailed by United States registered or certified mail, return receipt requested,
postage prepaid, or three (3) business days after having been sent by a
nationally recognized courier service for overnight/next-day delivery, such as
FedEx, UPS, or the United States Postal Service, addressed to the Company (to
the attention of the Secretary of the Company) at its principal executive office
and to Executive at his principal residence, or to such other address as any
party may have furnished to the other in writing and in accordance herewith,
except that notices of changes of address will be effective only upon
receipt.
16. Governing
Law; Dispute Resolution. The validity,
interpretation, construction and performance of this Agreement will be governed
by and construed in accordance with the substantive laws of the State of
Delaware, without giving effect to the principles of conflict of laws of such
State. Any dispute or controversy arising under or in connection with
this Agreement (other than an action to enforce the covenants in Section 10
hereof) shall be resolved by arbitration in either Richmond, Virginia or
Charleston, West Virginia as so determined by Executive. Three arbitrators shall
be selected, and arbitration shall be conducted, in accordance with the rules of
the American Arbitration Association. Subject to Section 8 hereof, the
arbitrators shall have the discretion to award the cost of arbitration,
arbitrators’ fees and the respective attorneys’ fees of each party between the
parties as they see fit.
17. Validity. If any
provision of this Agreement or the application of any provision hereof to any
person or circumstances is held invalid, unenforceable or otherwise illegal, the
remainder of this Agreement and the application of such provision to any other
person or circumstances will not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal will be reformed to the extent (and
only to the extent) necessary to make it enforceable, valid or
legal.
10
18. Amendment;
Modification. This Agreement may only be amended by written agreement of
the parties hereto. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in a
writing signed by Executive and the Company. No waiver by either party hereto at
any time of any breach by the other party hereto or compliance with any
condition or provision of this Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations, oral
or otherwise, expressed or implied with respect to the subject matter hereof
have been made by either party that are not set forth expressly in this
Agreement.
19. Acknowledgement.
Executive acknowledges that he has signed this Agreement voluntarily and
knowingly in exchange for the consideration described herein, which Executive
acknowledges is adequate and satisfactory to him and which Executive
acknowledges is in addition to any other benefits to which Executive is
otherwise entitled and that Executive has been and is hereby advised in writing
to consult with an attorney prior to signing this Agreement.
20. Miscellaneous.
References to Sections are to references to Sections of this Agreement. Any
reference in this Agreement to a provision of a statute, rule or regulation will
also include any successor provision thereto. Whenever used herein, the
masculine includes the feminine.
21. Survival.
Notwithstanding any provision of this Agreement to the contrary, the parties’
respective rights and obligations under Sections 2, 3, 4, 5, 6, 7, 8, 9, 10, 14
and 16 will survive any termination or expiration of this Agreement or the
termination of Executive’s employment for any reason whatsoever.
22. Counterparts. This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original but all of which together will constitute one and the
same agreement.
23. Certain Defined
Terms. In addition to terms defined elsewhere herein, the following terms
have the following meanings when used in this Agreement with initial capital
letters:
(a) “Base
Pay” means the greater of (i) Executive’s annual base salary rate, exclusive of
Bonus, as in effect immediately preceding Executive’s Termination Date, and (ii)
Executive’s highest annual base salary rate, exclusive of Bonus, in effect at
any time during the three years immediately preceding the Change in
Control.
(b)
“Board” means the Board of Directors of the Company. If Executive is also a
member of the Board, then in the case of any provision hereof that requires
action by, or a determination of, the Board in connection with this Agreement,
it is understood that such provision refers to the members of the Board other
than Executive. Unless otherwise provided by the Board and except in determining
Cause, the Compensation Committee of the Board shall have full authority to act
on behalf of the Board in connection with any duty or action expressly assigned
under, or implicitly to be acted on in connection with, this Agreement to or by
the Board.
(c) “Bonus” means
the highest amounts payable under Executive’s annual cash bonus award
plus the highest amounts payable under all Executive’s outstanding long-term
cash incentive bonus awards that contain as a year of measurement, the year in
which Executive is terminated. Bonus does not include any stock option, stock
appreciation, stock purchase, restricted stock, restricted unit, performance
stock, performance unit, shadow stock or similar equity incentive plan, program,
arrangement or grant, one time bonus or payment, any amounts contributed by the
Company or any Subsidiary for the benefit of Executive to any qualified or
nonqualified deferred compensation plan, or any amounts designated by the
parties as amounts other than Bonus.
11
(d)
“Cause” shall occur hereunder only upon:
(i) the
willful and continued failure by Executive substantially to perform his duties
with the Company (other than any such failure resulting from his incapacity due
to physical or mental illness) after a written demand for substantial
performance is delivered to him by the Board which specifically identifies the
manner in which the Board believes that he has not substantially performed his
duties,
(ii)
Executive’s willful breach of fiduciary duty, willful violation of any law,
rule, or regulation (other than traffic violations or similar offenses), willful
violation of a final cease and desist order or willful engaging in other gross
misconduct which is materially and demonstrably injurious to the Company or any
Subsidiary, or
(iii)
Executive’s conviction of, or pleading guilty or nolo contendere to, the
commission of a felony involving fraud, embezzlement, theft or moral
turpitude.
For
purposes of this Section 23(d), no act, or failure to act, on Executive’s part
described in clause (i) or (ii) above shall be considered “willful” unless done,
or omitted to be done, by him not in good faith and without reasonable belief
that his action or omission was in the best interest of the Company and its
Subsidiaries. Notwithstanding the foregoing, Executive shall not be deemed to
have been terminated for Cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by the affirmative vote of not less
than two-thirds of the entire membership of the Board at a meeting of the Board
called and held for the purpose, among others (after at least 20 days prior
notice to Executive and an opportunity for Executive, together with his counsel,
to be heard before the Board), of finding that (x) in the good faith opinion of
the Board Executive failed to perform his duties or engaged in misconduct as set
forth above in clause (i) or (ii) of this paragraph, and, if applicable, that
Executive did not correct such failure or cease such misconduct after being
requested to do so by the Board, or (y) as set forth in clause (iii) of this
paragraph, Executive has been convicted of or has entered a plea of nolo
contendere to the commission of a felony. The fact that Executive
is or shortly may be “retirement eligible” and thus eligible for or entitled to
post-retirement benefits from any plan, arrangement or program sponsored,
participated in or contributed to by the Company or any Subsidiary shall not
prevent Executive’s termination from being considered termination for
Cause.
(e)
“Change in Control” means the occurrence of any of the following
events:
(i) a third person,
including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended, acquires (or has acquired during the twelve (12)-month
period ending on the date of the most recent acquisition) shares of the Company
having thirty (30) percent or more of the total number of votes that may be cast
for the election of directors of the Company; or
(ii) as the result
of any cash tender or exchange offer, merger or other business combination, or
any combination of the foregoing transactions, (a “Transaction”), the persons
who were directors of the Company before the Transaction shall cease to
constitute a majority of the Board of the Company or any successor to the
Company and be replaced by persons whose appointment or election is not endorsed
by the majority of directors before the Transaction.
For
purposes hereof, a “potential” Change in Control is considered to occur and
remain present commencing upon the date that any person or group attempts a
Change in Control and the Executive is either notified by the Board or aware of
an attempted Change in Control. All decisions regarding the
time of the commencement, the pendancy and the abandonment or termination of a
potential Change in Control shall be made by the Board in good faith and shall
be conclusive and binding
on the Executive. An “actual” Change in Control means that one of the
two events described in (i) or (ii) above has occurred.
12
(f) “COBRA” means
the Consolidated Omnibus Budget Reconciliation Act of 1986, as
amended.
(g)
“Code” means the Internal Revenue Code of 1986, as amended.
(h)
“Constructive Termination Associated With a Change in Control” means the
termination of Executive’s employment with the Company by Executive as a result
of the occurrence, without Executive’s written consent, of one of the following
events:
(i) following the
occurrence of an actual, but not a potential, Change in Control, the
assignment to Executive of any duties inconsistent in any respect with
Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities in effect immediately prior
to the Change in Control, or any other action by the Company or any Subsidiary
which results in a diminution in such position, authority, duties or
responsibilities, other than an isolated, insubstantial and inadvertent action
not taken in bad faith and which is remedied by the Company or Subsidiary
promptly after receipt of notice thereof given by Executive;
(ii) following the
occurrence of an actual or potential Change in Control, any failure by
the Company or any Subsidiary to continue Executive’s employment upon the terms
and conditions as existed immediately prior to the Change in Control (other than
any term or condition covered in clause (i) above), including but not limited to
compensation level and annual and long-term cash and equity incentive
opportunity, other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Company or Subsidiary
promptly after receipt of notice thereof given by Executive;
(iii)
following the occurrence of an actual or potential Change in Control, a material
reduction in the level of Employee Benefits provided to Executive immediately
prior to the Change in Control; or
(iv)
following the occurrence of an actual or potential Change in Control, the relocation of
Executive’s principal work location (other than in connection with a relocation
contemplated by the Company as of the date hereof or pursuant to organizational
changes in accordance with past practice) to a location that increases
Executive’s normal work commute by fifty (50) miles or more as compared to
Executive’s normal work commute immediately prior to the Change in Control or
that Executive’s required travel away from his office in the course of
discharging his responsibilities or duties of his job is increased by an
unreasonable amount as compared to that which was required of Executive in any
of the three (3) full years immediately prior to the Change in
Control.
For
purposes hereof, “Employee Benefits” means the perquisites, benefits and service
credit for benefits as provided under any and all employee retirement income and
welfare benefit policies, plans, programs or arrangements in which Executive is
entitled to participate, including, without limitation, any stock option, stock
appreciation, stock purchase, restricted stock, restricted unit, performance
stock, performance unit, shadow stock or similar equity incentive plan, program,
arrangement, savings, pension, supplemental executive retirement, or other
retirement income or welfare benefit, deferred compensation, incentive
compensation, group or other life, health, medical/hospital or other insurance
(whether funded by actual insurance or self-insured by the Company or a
Subsidiary), disability, salary continuation, expense reimbursement and other
employee benefit policies that may exist as of a Change in Control or any
successor policies, plans or arrangements that provide substantially similar
perquisites or benefits. Without
limiting the generality or effect of the foregoing, Executive shall have no
right to terminate employment in a Constructive Termination Associated With a
Change in Control in connection with an event described above unless (x)
Executive provides written notice to the Company within thirty (30) days of the
occurrence of such event that identifies such event with particularity, and (y)
the Company fails to correct such event within ten (10) business days after
receipt of such notice from Executive.
13
In no
event shall the termination of Executive’s employment with the Company on
account of Executive’s death or Disability or because Executive engaged in
conduct constituting Cause be deemed to be a Constructive Termination Associated
With a Change in Control.
(i)
“Disability” means Executive becomes permanently disabled within the meaning of,
and begins actually to receive long-term disability benefits pursuant to, the
long-term disability plan of the Company or any Subsidiary in effect for, or
applicable to, Executive, or if none, then Executive is determined by the Social
Security Administration to be totally and permanently disabled for purposes of
entitlement to Social Security disability benefits.
(j)
“Involuntary Termination Associated With a Change in Control” means the
termination of Executive’s employment related to a Change in Control: (i) by the
Company for any reason other than Cause, Executive’s death or Executive’s
Disability, or (ii) on account of a Constructive Termination Associated With a
Change in Control. The fact that Executive is or shortly may be “retirement
eligible” and thus eligible for or entitled to post-retirement benefits from any
plan, arrangement or program sponsored, participated in or contributed to by the
Company or any Subsidiary shall not prevent Executive’s termination from being a
Involuntary Termination Associated With a Change in Control.
(k) “Subsidiary” means any
Company affiliate, whether or not incorporated, the majority of the
outstanding capital stock or other ownership interests of which is owned,
directly or indirectly, by the Company.
(l)
“Target Bonus” means Executive’s annual cash bonus award target.
(m)
“Termination Date” means the last day of Executive’s employment with the Company
or any Subsidiary.
14
IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and
delivered as of the date first above written.
|
XXXXXX
ENERGY COMPANY
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
________________
[Executive]
|
||
15
Appendix
A
SEPARATION OF EMPLOYMENT
AGREEMENT AND GENERAL RELEASE
THIS
SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE (the “Agreement”) is made
as of this day of , , by and
between Xxxxxx Energy Company, a Delaware corporation (the “Company”), and
__________ (the “Executive”).
WHEREAS,
Executive formerly was employed by the Company as ;
and
WHEREAS,
Executive and Company entered into an Amended and Restated Change in Control
Severance Agreement, effective __________ (the “Severance Agreement”), which
provides for certain payments and benefits in the event that Executive’s
employment is terminated on account of a reason set forth in the Severance
Agreement; and
WHEREAS,
an express condition of Executive’s entitlement to the payments and benefits
under the Severance Agreement is the execution of a general release in the form
set forth below; and
WHEREAS,
Executive and the Company mutually desire to terminate Executive’s employment on
an amicable basis, such termination to be effective , (“Termination
Date”).
NOW,
THEREFORE, IT IS HEREBY AGREED by and between Executive and the Company as
follows:
1. (a)
Executive, for and in consideration of the commitments of the Company as set
forth in paragraph 6 of this Agreement, and intending to be legally bound, does
hereby REMISE, RELEASE AND FOREVER DISCHARGE the Company, its affiliates,
subsidiaries and parents, and its officers, directors, employees, and agents,
and its and their respective successors and assigns, heirs, executors, and
administrators (collectively, “Releasees”) from all causes of action, suits,
debts, claims and demands whatsoever in law or in equity, which Executive ever
had, now has, or hereafter may have, whether known or unknown, or which
Executive’s heirs, executors, or administrators may have, by reason of any
matter, cause or thing whatsoever, from the beginning of Executive’s employment
to the date of this Agreement, and particularly, but without limitation of the
foregoing general terms, any claims arising from or relating in any way to
Executive’s employment relationship with the Company, the terms and conditions
of that employment relationship, and the termination of that employment
relationship, including, but not limited to, any claims arising under the Age
Discrimination in Employment Act, the Older Workers Benefit Protection Act,
Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act,
the Family and Medical Leave Act of 1993, the Employee Retirement Income
Security Act of 1974, and any other claims under any federal, state or local
common law, statutory, or regulatory provision, now or hereafter recognized, and
any claims for attorneys’ fees and costs. This Agreement is effective without
regard to the legal nature of the claims raised and without regard to whether
any such claims are based upon tort, equity, implied or express contract or
discrimination of any sort.
(b) To
the fullest extent permitted by law, and subject to the provisions of paragraph
11 below, Executive represents and affirms that (i) [other than ,] Executive has not filed or
caused to be filed on Executive’s behalf any claim for relief against the
Company or any Releasee and, to the best of Executive’s knowledge and belief, no
outstanding claims for relief have been filed or asserted against the Company or
any Releasee on Executive’s behalf; and (ii) [other than ,] Executive has not reported
any improper, unethical or illegal conduct or activities to any supervisor,
manager, department head, human resources representative, agent or other
representative of the Company, to any member of the Company’s legal or
compliance departments, or to the ethics hotline, and has no knowledge of any
such
improper, unethical or illegal conduct or activities. Executive agrees to
dismiss with prejudice all claims for relief filed before the date
hereof.
A-1
(c)
Notwithstanding any other provision herein, the foregoing release does not apply
to any claim or entitlement under an employee benefit or long term cash or
equity incentive compensation plan, program, arrangement or agreement which is
due pursuant to the terms of such plan, program, arrangement or
agreement.
2. The
Company, for and in consideration of the commitments of Executive as set forth
in this Agreement, and intending to be legally bound, does hereby REMISE,
RELEASE AND FOREVER DISCHARGE Executive from all claims, demands or causes of
action arising out of facts or occurrences prior to the date of this Agreement,
but only to the extent the Company knows or reasonably should know of such facts
or occurrence and only to the extent such claim, demand or cause of action
relates to a violation of applicable law or the performance of Executive’s
duties with the Company; provided, however, that this release of claims shall
not in any case be effective with respect to any claim by the Company alleging a
breach of Executive’s obligations under this Agreement. [Note: The Company and Executive may,
but shall not be required to mutually agree on a case-by-case basis at the time
of the signing of this release to include the foregoing provision, or a
substantially similar provision, to this Agreement.]
3. In
consideration of the Company’s agreements as set forth in paragraph 6 herein,
Executive agrees to comply with the limitations described in Sections 9 and 10
of the Severance Agreement.
4.
Executive further agrees and recognizes that Executive has permanently and
irrevocably severed Executive’s employment relationship with the Company, that
Executive shall not seek employment with the Company or any affiliated entity at
any time within two (2) years after his Termination Date, and that the Company
has no obligation to employ him in the future.
5.
Executive further agrees that Executive will not disparage or subvert the
Company, or make any statement reflecting negatively on the Company, its
affiliated corporations or entities, or any of their officers, directors,
employees, agents or representatives, including, but not limited to, any matters
relating to the operation or management of the Company, Executive’s employment
and the termination of Executive’s employment, irrespective of the truthfulness
or falsity of such statement.
6. In
consideration for Executive’s agreements as set forth herein, the Company agrees
to pay or provide to or for Executive the payments and benefits described in
Section 2(b) of the Severance Agreement, the provisions of which are
incorporated herein by reference. Except as set forth in this Agreement, it is
expressly agreed and understood that Releasees do not have, and will not have,
any obligations to provide Executive at any time in the future with any
payments, benefits or considerations other than those recited in this paragraph,
those excluded from release in Section 1(c) of this Agreement or those required
by law, other than under the terms of any benefit plans which provide benefits
or payments to former employees according to their terms.
7.
Executive understands and agrees that the payments, benefits and agreements
provided in this Agreement are being provided to him in consideration for
Executive’s acceptance and execution of, and in reliance upon Executive’s
representations in, this Agreement. Executive acknowledges that if Executive had
not executed this Agreement containing a release of all claims against the
Company, Executive would not have been entitled to the payments and benefits set
forth in Section 2(b) of the Severance Agreement.
8.
Executive acknowledges and agrees that the Company previously has satisfied any
and all obligations owed to him under any employment agreement or offer letter
Executive has with the Company and, further, that this Agreement supersedes any
employment agreement or offer letter Executive has with the Company, and any and
all other prior agreements or understandings, whether written or oral, between
the parties which are inconsistent with this Agreement, and further, that,
except as set forth expressly herein, no promises or representations
have been made to him in connection with the termination of Executive’s
employment agreement, if any, or offer letter, if any, with the Company, or the
terms of this Agreement or the Severance Agreement.
A-2
9. If not
otherwise filed by the Company with the U.S. Securities and Exchange Commission
(“SEC”) and available through public disclosure from the SEC, Executive agrees
not to disclose the terms of this Agreement or the Severance Agreement to
anyone, except Executive’s spouse, attorney and, as necessary, tax/financial
advisor, except as may be required by law. Likewise, the Company agrees that the
terms of this Agreement will not be disclosed except as may be necessary to
obtain approval or authorization to fulfill its obligations hereunder or as
required by law. It is expressly understood that any violation of the
confidentiality obligation imposed hereunder constitutes a material breach of
this Agreement.
10.
Executive represents that Executive does not presently have in Executive’s
possession any records and business documents, whether on computer or hard copy,
and other materials (including but not limited to computer disks and tapes,
computer programs and software, office keys, correspondence, files, customer
lists, technical information, customer information, pricing information,
business strategies and plans, sales records and all copies thereof)
(collectively, the “Corporate Records”) provided by the Company and/or its
predecessors, subsidiaries or affiliates or obtained as a result of Executive’s
prior employment with the Company and/or its predecessors, subsidiaries or
affiliates, or created by Executive while employed by or rendering services to
the Company and/or its predecessors, subsidiaries or affiliates. Executive
acknowledges that all such Corporate Records are the property of the Company. In
addition, Executive shall promptly return in good condition any and all Company
owned equipment or property, including, but not limited to, automobiles,
personal data assistants, facsimile machines, copy machines, pagers, credit
cards, cellular telephone equipment, business cards, laptops and computers,
unless mutually agreed upon in writing. As of the Termination Date, the Company
will make arrangements to remove, terminate or transfer any and all business
communication lines including network access, cellular phone, fax line and other
business numbers.
11.
Nothing in this Agreement shall prohibit or restrict Executive from: (i) making
any disclosure of information required by law; (ii) providing information to, or
testifying or otherwise assisting in any investigation or proceeding brought by,
any federal regulatory or law enforcement agency or legislative body, any
self-regulatory organization, or the Company’s designated legal, compliance or
human resources officers; or (iii) filing, testifying, participating in or
otherwise assisting in a proceeding relating to an alleged violation of any
federal, state or municipal law relating to fraud, or any rule or regulation of
the Securities and Exchange Commission or any self-regulatory
organization.
12. The
parties agree and acknowledge that the agreement by the Company described
herein, and the settlement and termination of any asserted or unasserted claims
against the Releasees, are not and shall not be construed to be an admission of
any violation of any federal, state or local statute or regulation, or of any
duty owed by any of the Releasees to Executive.
13.
Executive agrees and recognizes that should Executive breach any of the
obligations or covenants set forth in this Agreement, the Company will have no
further obligation to provide Executive with the consideration set forth herein,
and will have the right to seek repayment of all consideration paid up to the
time of any such breach. Further, Executive acknowledges in the event of a
breach of this Agreement, Releasees may seek any and all appropriate relief for
any such breach, including equitable relief and/or money damages, attorneys’
fees and costs.
14.
Executive further agrees that the Company shall be entitled to preliminary and
permanent injunctive relief, without the necessity of proving actual damages, as
well as to an equitable accounting of all earnings, profits and other benefits
arising from any violations of this Agreement, which rights shall be cumulative
and in addition to any other rights or remedies to which the Company may be
entitled.
A-3
15. This
Agreement and the obligations of the parties hereunder shall be construed,
interpreted and enforced in accordance with the laws of the State of Delaware,
without giving effect to the principles of conflict of laws of such
State.
16.
Executive certifies and acknowledges as follows:
(a) That
Executive has read the terms of this Agreement, and that Executive understands
its terms and effects, including the fact that, other than as excepted in
paragraph 1 hereof, Executive has agreed to RELEASE AND FOREVER DISCHARGE the
Company and each and every one of its affiliated entities from any legal action
arising out of Executive’s employment relationship with the Company and the
termination of that employment relationship; and
(b) That
Executive has signed this Agreement voluntarily and knowingly in exchange for
the consideration described herein, which Executive acknowledges is adequate and
satisfactory to him and which Executive acknowledges is in addition to any other
benefits to which Executive is otherwise entitled; and
(c) That
Executive has been and is hereby advised in writing to consult with an attorney
prior to signing this Agreement; and
(d) That
Executive does not waive rights or claims that may arise after the date this
Agreement is executed; and
(e) That
the Company has provided him with a period of [twenty-one (21) - generally
applicable for an individual termination] or [forty-five (45) - generally
applicable for a group termination] days within which to consider this
Agreement, and that Executive has signed on the date indicated below after
concluding that this Separation of Employment Agreement and General Release is
satisfactory to him; and
(f)
Executive acknowledges that this Agreement may be revoked by him within seven
(7) days after execution, and it shall not become effective until the expiration
of such seven (7) day revocation period. In the event of a timely revocation by
Executive, this Agreement will be deemed null and void and the Company will have
no obligations hereunder.
Intending
to be legally bound hereby, Executive and the Company executed the foregoing
Separation of Employment Agreement and General Release this day of , .
| Witness: | ||||||||
|
Executive
|
||||||||
|
XXXXXX
ENERGY COMPANY
|
||||||||
| By: | Witness: | |||||||
|
Name:
|
||||||||
|
Title:
|
||||||||
A-4
