TERMINATION AGREEMENT AND GENERAL RELEASE
Exhibit 10.3
TERMINATION AGREEMENT AND GENERAL RELEASE
This Termination Agreement and General Release (“Agreement”) is made and entered into by and among Xxxxxx X. Xxxxxx (hereinafter referred to as “Xx. Xxxxxx”) and Xxxxxxxxxxxx Coal Company (hereinafter referred to as “Xxxxxxxxxxxx”).
WITNESSETH:
WHEREAS, Xxxxxxxxxxxx has indicated to Xx. Xxxxxx that it wishes to employ a new Chief Financial Officer; and
WHEREAS, Xx. Xxxxxx has indicated that he desires to leave the Company rather than accept another position within the Company; and
WHEREAS, Xx. Xxxxxx is a covered participant in the Xxxxxxxxxxxx Executive Severance Policy; and
WHEREAS, Xxxxxxxxxxxx wishes to deliver severance benefits in a mutually advantageous manner; and
WHEREAS, Xxxxxxxxxxxx wishes to assure a reasonable and orderly transition of Xx. Xxxxxx’x responsibilities and his continued support and assistance as needed.
NOW THEREFORE, in consideration of these premises and mutual promises herein contained, it is agreed as follows:
1. Xx. Xxxxxx will separate from the Company on August 31, 2003, and will resign all positions and directorships at the various subsidiaries and affiliates of the Company, as well as seats on various Company related committees and trusts on which he serves on that date. Xx. Xxxxxx will continue to receive his current salary on regular pay dates, be eligible for health, dental, life and disability insurance, vacation benefits, and accrual of credited service for retirement purposes, through to and including August 31, 2003. He shall not be eligible for any other compensation or benefits except as set forth herein.
2. At the time of termination of employment, Xx. Xxxxxx may elect to continue receiving group medical insurance pursuant to federal COBRA laws. All premiums for continued medical coverage under COBRA will be paid monthly by Xx. Xxxxxx.
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3. Upon separation and so long as he abides by the terms of this Agreement, which determination by the Company shall not be arbitrary and capricious, Xxxxxxxxxxxx agrees to pay Xx. Xxxxxx a severance in the sum of $720,000 at the rate of $50,000 per year for ten years plus an additional $110,000 per year for the first two years in equal monthly installments beginning on September 30, 2003. Xxxxxxxxxxxx reserves the right to at any time prepay all or any portion of the $720,000. The first 24 monthly installments of principal shall be in the amount of $13,333.33 from September 30, 2003 through August 31, 2005. The remaining 96 monthly installments of principal shall be in the amount of $4,166.67 from September 30, 2005 through August 31, 2013, which amount shall be adjusted monthly, beginning September 1, 2003, based on the outstanding principal and the per annum rate (yield) of the 10 year Treasury Notes as of the last business day of the preceding month. The monthly principal payments shall be subject to standard withholding deductions. A separate check will be issued for any interest payment. It is understood and agreed that payments made pursuant to this paragraph 3, paragraphs 4 and 5, and Xx. Xxxxxx'x eligibility for qualified pension benefits under the Company's Salaried Retirement Pension Plan earned through the date of his separation are the substitute for and in lieu of the payments Xx. Xxxxxx might otherwise be entitled to under the Xxxxxxxxxxxx Executive Severance Policy or any other compensation or benefit program as of the effective date of his separation.
4. Xx. Xxxxxx shall also be entitled to receive three years credit in the 2000 Award, two years credit in the 2001 Award, and one year credit in the 2002 Award under the Company's approved 2000 Performance Unit Plan ("Plan"). The value, if any, of these awards and the time and manner of payment will be determined by the Compensation and Benefits Committee, in its sole discretion, as provided in the 2000 Performance Unit Plan and Award Certificates, which terms and conditions shall be the same as for the other participants receiving Awards for those periods.
5. All stock options under the 1995, 2000 and 2002 Long-Term Stock Incentive Plans that are vested as of the date of Xx. Xxxxxx'x separation must be exercised within 90 days thereof. All unvested rights under the 1995, 2000 or 2002 Long-Term Incentive Stock Plans will lapse at the date of Xx. Xxxxxx'x separation.
6. Xxxxxxxxxxxx will pay Xx. Xxxxxx for any of the current year's vacation days that are not used prior to his separation.
7. Xx. Xxxxxx will remain a Company designee on the Xxxxxxxxxxxx membership at the Broadmoor Golf Club through the date of separation.
8. In the event of Xx. Xxxxxx'x death, all payments due hereunder by Xxxxxxxxxxxx will be paid to Xxxx Xxxxxx, his wife, and in the event of her death, then equally to his surviving children according to the same terms and conditions of this Agreement.
9. Xx. Xxxxxx will diligently discharge all his duties, through the date of his separation.
10. Xx. Xxxxxx agrees to provide reasonable consultation and assistance to Xxxxxxxxxxxx following his separation without additional compensation. For all matters other than issues associated with the financing of the acquisitions of the coal business of Entech, Inc. and Knife River by Xxxxxxxxxxxx Mining LLC or the UMWA Health and Benefit Funds, Xx. Xxxxxx shall be available for consultation for a period of three years. For issues associated with the Xxxxxxxxxxxx Mining LLC financing, Xx. Xxxxxx agrees to be available for consultation for the term of the financing and for issues associated with the UMWA Health and Benefit Funds for the term of the Master Agreement or, in the case of the 1974 Pension Plan, for the duration of any litigation related thereto. Any consultation shall be provided at times and in a manner that does not interfere with any other employment and Xxxxxxxxxxxx agrees to pay reasonable expenses incurred by Xx. Xxxxxx in providing the consultation required by this paragraph.
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11. Non-Disparagement. Xx. Xxxxxx agrees to refrain from making any disparaging comments, including defamation, libel or slander concerning Xxxxxxxxxxxx'x business, products or services, officers, employees and directors of Xxxxxxxxxxxx and its investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns or interfering with the contracts and relationships of Xxxxxxxxxxxx and its officers, directors, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns, except to say that he was terminated from employment and received benefits under Xxxxxxxxxxxx'x Executive Severance Policy. Xx. Xxxxxx agrees that he will not support or participate in or with any action taken by any party, including any union, Union Health and Benefit Fund, shareholder action or activity or any potential buyers of the Company without the express written consent of the Company. Likewise, Xxxxxxxxxxxx agrees to refrain from making any disparaging comments, including defamation, libel or slander concerning Xx. Xxxxxx or interfering with his contracts and relationships with any future employer. However, it is agreed that Xxxxxxxxxxxx may disclose that Xx. Xxxxxx was terminated from employment and received benefits under Xxxxxxxxxxxx'x Executive Severance Policy after the Company determined to hire a new Chief Financial Officer and Xx. Xxxxxx elected not to accept another position within the Company. For the purpose of the foregoing, "Xxxxxxxxxxxx" shall be deemed to include all Xxxxxxxxxxxx'x subsidiaries and affiliates.
12. Xxxxxxxxxxxx understands that Xx. Xxxxxx may seek other employment, however, Xx. Xxxxxx agrees not to seek or accept employment with any company or entity that directly or indirectly competes with Xxxxxxxxxxxx in the Western United States, including the upper Mid-West, for a period of two years from the effective date of his separation. Xx. Xxxxxx shall not be prohibited from accepting employment with any oil or gas firm or producer of power, so long as his position with said employer does not include matters relating directly to Xxxxxxxxxxxx Coal Company and its interests or the production, purchase, sale or pricing of coal. Moreover, should matters relating to Xxxxxxxxxxxx come to Xx. Xxxxxx'x attention in his capacity as an employee of such entity, he shall promptly notify Xxxxxxxxxxxx of such matters and recuse himself from any further involvement with them.
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13. In consideration of the payments by Xxxxxxxxxxxx to Xx. Xxxxxx described in paragraphs 3, 4 and 5 above, Xx. Xxxxxx, individually and on behalf of his successors, heirs, and assigns, hereby forever releases, remises, waives, acquits, and discharges Xxxxxxxxxxxx, together with any and all parent corporations of Xxxxxxxxxxxx and their respective affiliates, subsidiaries, successors, predecessors, assigns, directors, officers, shareholders, supervisors, employees, attorneys, agents, and representatives, from any and all actions, causes of action, claims, demands, losses, damages, costs, attorneys' fees, judgments, liens, indebtedness, and liabilities whatsoever, known or unknown, suspected or unsuspected, past or present, contingent or existing, arising from or relating or attributable to Xx. Xxxxxx'x employment by Xxxxxxxxxxxx, the termination of said employment, and, without limiting the generality of the foregoing, from any and all matters asserted, or which could have been asserted against any of the foregoing, in any lawsuit, or in any other state or federal judicial or administrative forum, up to and including the date of this Agreement, specifically, but not by way of limitation, including claims under the Federal Mine Safety and Health Act of 1977, as amended, the Fair Labor Standards Act, as amended, the National Labor Relations Act, as amended, the Family and Medical Leave Act, as amended, Title VII of the Civil Rights Act of 1964, as amended, the Post-Civil War Reconstruction Acts, as amended, the Age Discrimination in Employment Act, as amended, the Americans with Disabilities Act, the Rehabilitation Act of 1973, as amended, the Civil Rights Act of 1991, the Employee Retirement Income Security Act of 1974, as amended, any state civil rights act, any claim of wrongful discharge whether based upon tort or contract arising out of the common law of Colorado or any other state, and any other claim of any type whatsoever. Except for claims that allege gross negligence or willful misconduct, Xxxxxxxxxxxx, likewise, on its behalf, and on behalf of any and all subsidiaries and affiliates, hereby forever releases, remises, waives, acquits, and discharges Xx. Xxxxxx, his family, heirs, successors, assigns, or agents from any and all actions, causes of action, claims, demands, losses, damages, costs, attorneys' fees, judgments, liens, indebtedness, and liabilities whatsoever, known or unknown, suspected or unsuspected, past or present, arising from or relating or attributable to Xx. Xxxxxx'x employment by Xxxxxxxxxxxx, the termination of said employment, Xx. Xxxxxx'x subsequent search for other employment, and, without limiting the generality of the foregoing, specifically from any and all matters asserted or which could have been asserted in any lawsuit, up to the date of this Agreement. Xx. Xxxxxx and Xxxxxxxxxxxx desire to resolve all matters between them through the effective date of his separation from Xxxxxxxxxxxx. To that end, the parties hereby agree and acknowledge that, subject to their mutual agreement at that time, they in good faith intend, by letter agreement, to agree to apply the language of this paragraph 13, and all other provisions of this Agreement, through to and including August 31, 2003, with a signed letter by them on August 31, 2003.
14. Xx. Xxxxxx and Xxxxxxxxxxxx each forever waive all rights to assert that this Agreement was the result of a mistake in law or in fact. Further, they forever waive all rights to assert that any or all of the legal theories or factual assumptions used for negotiating purposes are for any reason inaccurate or inappropriate.
15. Payment of the compensation set forth in paragraphs 3, 4 and 5 above, constitutes reimbursement for and settlement of any and all claims, other than for breach of this Agreement, asserted or unasserted for unpaid compensation, including any entitlement to compensation pursuant to Xxxxxxxxxxxx'x Executive Severance Policy or incentive compensation programs, claims relating to benefits, claims under any federal, state or local law or cause of action concerning employment, all common law claims, including but not limited to, actions in tort, defamation and breach of contract, any claims relating to performance units, stock, or stock options, contractual or otherwise, and any claim or damage arising out of his employment with or separation from Xxxxxxxxxxxx under any common law theory or any state or federal ordinance not expressly referenced above which have arisen as of the effective date of this Agreement and Xx. Xxxxxx, his heirs, agents, assigns, executors, administrators, personal representatives and any future estates irrevocably and unconditionally release these claims. Notwithstanding anything to the contrary in this Agreement, Xx. Xxxxxx shall remain eligible for qualified pension benefits under the Company's Salaried Retirement Pension Plan earned through the date of his separation and shall remain covered pursuant to the terms of the Company's Officer & Director existing professional liability insurance.
16. Xx. Xxxxxx hereby covenants and warrants that he has not assigned or transferred to any person any portion of any claims which are released and waived in this Agreement.
17. Xx. Xxxxxx agrees to waive reinstatement to employment with Xxxxxxxxxxxx. Xx. Xxxxxx further promises not to apply in the future for employment with Xxxxxxxxxxxx or any parent corporation of Xxxxxxxxxxxx, or their respective affiliates, subsidiaries, successors, or assigns. Xx. Xxxxxx further agrees that should he make any application for employment in violation of this paragraph, the application may be rejected, with no liability to Xxxxxxxxxxxx or any parent corporation of Xxxxxxxxxxxx, or their respective affiliates, subsidiaries, successors, or assigns, and should he be employed contrary to this paragraph, without his disclosing the provisions of this paragraph, his employment may be terminated with no liability to Xxxxxxxxxxxx or any parent corporation of Xxxxxxxxxxxx, or their respective affiliates, subsidiaries, successors, or assigns.
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18. Xx. Xxxxxx agrees to take all reasonable steps to protect and keep confidential all material non-public information concerning Xxxxxxxxxxxx. It is expressly agreed that this confidentiality provision is an essential provision of this Agreement.
19. If the confidentiality provision in paragraph 18 is breached by Xx. Xxxxxx, Xxxxxxxxxxxx shall be entitled to take any and all actions to enforce the confidentiality provisions of paragraph 18 and shall be entitled to damages for any breach. The parties agree that equitable relief, in addition to damages for a breach, are appropriate remedies. Attorney's fees incurred in any action shall be the responsibility of the losing party.
20. Xx. Xxxxxx agrees to promptly return upon his separation any remaining Xxxxxxxxxxxx property in his possession, including keys, security cards, and any other property belonging to Xxxxxxxxxxxx.
21. This Agreement sets forth the complete Agreement between the parties. No other covenants or representations have been made or relied on by the parties, and no other consideration, other than that set forth herein, is due or owing between the parties. Specifically, but without limiting the scope of the foregoing, no payment of money between the parties is due or owing in any way, in any amount, or on account of any charge, including attorneys' fees, other than the sum described in paragraphs 3, 4 and 5 above.
22. Xx. Xxxxxx acknowledges that he has been advised by Xxxxxxxxxxxx to consult with an attorney prior to executing this Agreement, that he has been given at least twenty-one (21) days within which to consider this Agreement, and has been advised that for a period of seven (7) days following execution of this Agreement, he may revoke this Agreement and that it shall not become effective or enforceable until the expiration of said seven (7) day period. Xx. Xxxxxx further acknowledges that he will receive the payments described in paragraphs 3, 4 and 5 above only upon expiration of the seven (7) day time period described above.
23. Xx. Xxxxxx represents that he has read this Agreement and understands each of its terms. Xx. Xxxxxx further represents that no representations, promises, agreements, stipulations, or statements have been made by Xxxxxxxxxxxx, or its parent corporation or their respective affiliates, subsidiaries, successors, predecessors, assigns, directors, officers, employees, shareholders, supervisors, agents, attorneys, or representatives to induce this settlement, beyond those contained herein. Xx. Xxxxxx further represents that he voluntarily signs this Agreement as his own free act, and that Xx. Xxxxxx is not acting under any coercion or duress.
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24. If any provision of this Agreement should be declared to be unenforceable by any administrative agency or court of law, the remainder of the Agreement shall remain in full force and effect, and shall be binding upon the parties hereto as if the invalidated provision were not part of this Agreement.
25. Should Xx. Xxxxxx seek to take, or take, any legal, equitable or administrative action based upon any claim waived or released in Paragraph 13 above, or to claim that this Agreement is, in any respect, invalid, incomplete, or otherwise unenforceable, a condition precedent to any such action or claim shall be the tender in full of all payments made pursuant to Paragraphs 3, 4 and 5 above, which monies shall be held in escrow pending resolution of said action or claim. In any such dispute the prevailing party shall be entitled to his/its attorneys' fees, costs and expenses.
26. Colorado law shall govern the interpretation of this Agreement.
| PLEASE READ CAREFULLY. THIS TERMINATION AGREEMENT AND GENERAL RELEASE INCLUDES A RELEASE OF ALL KNOWN OR UNKNOWN CLAIMS. THE UNDERSIGNED STATES THAT HE/SHE HAS CAREFULLY READ THE FOREGOING TERMINATION AGREEMENT AND KNOWS AND UNDERSTANDS THE CONTENTS THEREOF, AND THAT HE/SHE EXECUTES THE SAME AS HIS/HER OWN ACT AND DEED. |
I, Xxxxxx X. Xxxxxx, acknowledge that I have been provided sufficient opportunity to review this Termination Agreement and General Release and to consult with an attorney with respect to its terms and conditions, including the general release contained herein. I further acknowledge that I have not relied upon any representation or statement not set forth in the Agreement. I have carefully read this document, understand all of its terms, accept and agree to its terms, and execute it voluntarily with full knowledge of its significance on this 2nd day of July, 2003.
| /s/ Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx |
Xxxxxx X. Xxxxxx appeared before me this 2nd day of July, 2003, and subscribed and swore to this Termination Agreement and General Release after having initialed each page thereof.
| My commission expires: 7/22/2004 | /s/ Xxxxxxx Xxxxx Notary Public |
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I, Xxxxxxxxxxx X. Xxxxxx, on behalf of Xxxxxxxxxxxx Coal Company, acknowledge that I have been provided sufficient opportunity to review this Termination Agreement and General Release and to consult with an attorney with respect to its terms and conditions, including the general release contained herein. I have read this document, understand all of its terms, accept and agree to its terms, and execute it voluntarily with full knowledge of its significance on this 2nd day of July, 2003.
| XXXXXXXXXXXX COAL COMPANY |
| By: /s/ Xxxxxxxxxxx X. Xxxxxx Title: Chairman, President and Chief Executive Officer |
Xxxxxxxxxxx X. Xxxxxx appeared before me this 2nd day of July, 2003, and subscribed and swore to this Termination Agreement and General Release after having initialed each page thereof.
| My commission expires: 7/22/2004 | /s/ Xxxxxxx Xxxxx Notary Public |
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