EXHIBIT 10.6
SEVERANCE AGREEMENT
This Severance Agreement (the "Agreement") is made and entered into as of
May 15, 1997 by and between Xxxxxxxxxxx Enterra, Inc., a Delaware corporation
(the "Company"), and Xxxxxx X. Xxxxxxx, an individual residing in Houston, Texas
("Xxxxxxx").
RECITALS:
WHEREAS, the Company and Xxxxxxx have previously entered into that certain
Consulting Agreement dated as of July 26, 1996, as amended as of January 1, 1997
(the "Consulting Agreement"); and
WHEREAS, the Consulting Agreement was terminated as of January 31, 1997
and Xxxxxxx was employed by the Company as of February 1, 1997;
WHEREAS, Xxxxxxx is currently serving, at the request of the Board of
Directors of the Company, as Acting President and Chief Executive Officer while
the Board of Directors conducts a search for a President and Chief Executive
Officer;
WHEREAS, Xxxxxxx has been a director of the Company since 1974 and is
continuing to serve as a director in addition to serving as Acting President and
Chief Executive Officer;
WHEREAS, the Company recognizes that Xxxxxxx'x agreement to serve as
Acting President and Chief Executive Officer is necessary to the management and
success of the Company during the interim period until the search for a
President and Chief Executive Officer is completed and further recognizes that
Xxxxxxx is foregoing certain opportunities by agreeing to serve in this capacity
during this interim period; and
WHEREAS, the Company wishes to provide Xxxxxxx with compensation in
addition to his compensation earned as an employee in connection with services
rendered as Acting President and Chief Executive Officer, such additional
compensation to be in recognition of his willingness to serve in this capacity
at the Company's request, notwithstanding lost opportunities;
NOW, THEREFORE, for and in consideration of the premises, the parties
hereto agree as follows:
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1. Upon the Board of Directors determining that Xxxxxxx'x services as
Acting President and Chief Executive Officer are no longer required, Xxxxxxx'x
employment by the Company shall terminate (the "Termination Date") and the
following shall occur:
(a) Xxxxxxx shall be entitled to receive or obtain from the Company,
beginning on the Termination Date and for one year after such date, the
following: (i) continuing payment on the first day of each month of an amount
equal to Xxxxxxx'x base salary in effect immediately prior to the Termination
Date and (ii) the right to participate in all employee benefit plans (excluding
disability plans) and the life insurance program generally available to all
employees of the Company, on the same basis as such other employees. Xxxxxxx
shall not be eligible to participate in any bonus or incentive compensation
plans, disability plans or qualified plans. At any time during such one-year
period, upon ten days prior written notice to the Company, together with the
written concurrence of any person who was a director of the Company immediately
prior the Termination Date, Xxxxxxx may elect to receive from the Company a
payment equal to the aggregate of the remaining payments owed by the Company
under the foregoing item (i) of this paragraph, and upon such payment by the
Company to Xxxxxxx, the Company shall have no further obligations to Xxxxxxx
under this paragraph (a).
(b) The Company shall provide Xxxxxxx with an office and secretarial
assistance for one year after the Termination Date; provided, however, that the
office provided shall be in space already paid for by the Company and the cost
of the secretarial assistance furnished shall not exceed the cost to the Company
on the Termination Date.
(c) Xxxxxxx holds 5,000 shares of Common Stock that were granted to
Xxxxxxx pursuant to the Company's Restricted Stock Incentive Plan (the
"Restricted Stock Plan"), some or all of which shares may remain subject to
restrictions on ownership on the Termination Date (such shares of Common Stock
being herein called the "Restricted Shares"). Notwithstanding any contrary
provision of the Restricted Stock Plan or of any agreement pursuant to which the
Restricted Shares were granted to Xxxxxxx, all restrictions on ownership shall
terminate with respect to the Restricted Shares on the Termination Date.
(d) Xxxxxxx holds an option granted under the Company's 1991 Stock
Option Plan (the "Option Plan") to purchase up to 12,000 shares of Common Stock,
$.10 par value ("Common Stock"), of the Company, some or all of which option may
remain unvested at the Termination Date (the "Unvested Option"). Notwithstanding
any contrary provision of the Option Plan or of the agreement pursuant to which
the Unvested Option was granted to Xxxxxxx, the rights of Xxxxxxx with respect
to said Unvested Option shall be fully vested on the Termination Date and shall
be exercisable by Xxxxxxx at any time within three years after the Termination
Date in accordance with the terms of the Option Plan.
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2. Xxxxxxx'x status as a director of the Company shall in no way be
affected by his employment by the Company, except that he will be deemed to have
been an inside or employee director of the Company for the period from February
1, 1997 through the Termination Date. Xxxxxxx shall be considered an outside or
non-employee director of the Company after the Termination Date.
3. Xxxxxxx hereby agrees that for a period of one year after the
Termination Date he will not, directly or indirectly, engage in any business
that is in competition with any business in which the Company or any of its
affiliates is engaged (the"Business") within any geographical area in which the
Business is being conducted as of the Termination Date as a director, officer,
employee, paid agent or paid consultant to, and he will not invest in or own,
directly or indirectly, any person, firm, partnership, corporation or other
entity that so competes (other than ownership of securities of a corporation of
which Xxxxxxx owns less than five percent of any class of outstanding
securities). In addition, Xxxxxxx agrees that for a period of one year after the
Termination Date he will not solicit for employment any individuals currently
employed by the Company.
4. Nothing herein shall require the Company to continue to employ Xxxxxxx,
and the Company's right to terminate his employment shall not be diminished or
affected by reason of this Agreement or by any provision hereof.
5. Xxxxxxx may not, without the Company's prior written consent, assign,
transfer or convey his rights or obligations under this Agreement. This
Agreement and all rights of Xxxxxxx hereunder shall inure to the benefit of and
be enforceable by Xxxxxxx'x personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Xxxxxxx should die while any amounts would still be payable to him hereunder if
he continued to live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to Xxxxxxx'x designated
beneficiaries set forth in a written beneficiary designation filed with the
Company or, if there be no such designated beneficiary, to Xxxxxxx'x estate.
6. This Agreement and all of the Company's rights and obligations
hereunder may be assigned or transferred by it, in whole but not in part, to and
shall be binding on and inure to the benefit of any "successor" of the Company,
but such assignment or transfer shall not relieve the Company of any of its
obligations hereunder. As used herein, the term "successor" shall mean only any
person, firm, corporation or other business entity which at any time by merger,
consolidation or otherwise shall have acquired all or substantially all of the
assets of the Company or to which the Company shall have transferred all or
substantially all of its assets. Any such successor shall be deemed to be
substituted for all purposes as the "Company" hereunder.
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7. This Agreement contains all of the understandings and agreements
between the parties with respect to the subject matter hereof. Any discussions
heretofore had between the parties on any subjects not contained herein and all
prior agreements are hereby abandoned and neither party shall have any
obligations to the other in respect thereto except as would apply as a matter of
law, this Agreement notwithstanding.
8. This Agreement shall not be varied, altered, modified, changed or in
any way amended, except by an instrument in writing, executed by the parties
hereto.
9. Any notices or communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been given when
delivered in person to the persons specified below or deposited in the United
States mail, certified or registered, postage prepaid, and addressed as follows:
If to Xxxxxxx: Xxxxxx X. Xxxxxxx
0000 X. Xxxx
Xxxxxxx, XX 00000
If to the Company: Xxxxxxxxxxx Enterra, Inc.
0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, XX 00000
Attn: General Counsel
Either party may change by notice to the other party the address to which
notices or communications to him or it are to be given.
10. This Agreement shall be construed in accordance with and governed by
the laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
XXXXXXXXXXX ENTERRA, INC.
By:/s/H. Xxxxxxx Xxxxxx
/S/XXXXXX X. XXXXXXX
Xxxxxx X. Xxxxxxx
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