SEVERANCE AND TERMINATION OF EMPLOYMENT AGREEMENT
THIS SEVERANCE AND TERMINATION OF EMPLOYMENT AGREEMENT is between Xxxxx Oil
and Gas Company, a Nevada corporation ("Company") and Xxxxxxx X. Xxxxx, Xx.
("Employee"), shall be effective December 7, 1998 ("Effective Date"), and is
made with reference to the following agreed facts.
A. Employee has been employed as a full time employee of the Company
pursuant to an Amended Employment Agreement dated as of November 1, 1998 (the
"Amended Employment Agreement").
B. Pursuant to a change in the business of the Company, the Employee
shall not be employed by the Company after December 7, 1998.
C. The parties desire and intend to set forth the terms upon which the
employment under the Amended Employment Agreement shall be terminated.
FOR CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledged, the Company and Employee agree as follows:
1. Termination of Employment. The Employee shall cease to be an Employee of
the Company as of the close of business on the Effective Date.
2. Severance Compensation. As set forth in Section 3.2 of the Amended
Employment Agreement, upon termination, the Company shall be obligated to pay a
total of $140,000 (the "Severance Compensation") to the Employee which payment
shall be made on or before December 17, 1999. Employee shall also be paid the
bi-weekly compensation, at the same rate as was paid while an employee, for the
period ending December 31, 1998. At the time the Company pays the Severance
Compensation, the company shall also pay to Employee an amount equal to three
weeks compensation at the rate in effect prior to the Effective Date, as payment
for Employee's unused vacation time. All required withholding and similar taxes
or deductions shall be withheld from the Severance Compensation and the other
payments described in the preceding two sentences.
3. Options. All outstanding stock purchase options previously granted to
Employee under Company employee option plans shall be deemed to be terminated,
and in replacement thereof, Employee shall be granted the following nonqualified
stock purchase warrants, each of which shall expire if not previously exercised,
on December 31, 2000:
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Exercise Price
Warrants Per Share
9,960 ..................................................... $ 8.30
4,000 ..................................................... $ 7.00
890 .................................................... $10.00
5,000 ..................................................... $29.70
10,000 ...................................................... $ 5.00
10,000 ...................................................... $27.50
39,850 Total Warrants
The form of, and terms governing, these warrants shall be as set forth in
Exhibit A attached hereto and incorporated herein by reference.
4. Option To Purchase Automobile. Until the date the Severance
Compensation is paid, the Employee shall have the right to purchase, for cash,
the 1994 Suburban automobile (vin No: 0XXXX00X0XX000000) from the Company for
$8,000, its agreed value as of the Effective Date. If the Employee elects not to
purchase the automobile, he shall surrender the automobile to the Company in its
present condition at its Corporate Office on or before the close of Business on
December 17, 1998.
If Employee elects to purchase the automobile, he shall, on or before
December 17, 1998, obtain his own liability and property damage insurance
coverage for the vehicle in adequate amounts and shall cause the automobile to
be re-licensed in his name when payment is made. The Company shall deliver title
and other appropriate indicia of ownership once the automobile is fully paid.
The purchase price for the automobile may be netted against the amount of the
Severance Compensation described above, at Employee's election.
5. Future Consulting Services. For a period of nine months following
the date of termination, the Employee agrees to be available, on a reasonable
and mutually agreeable basis, to perform consulting services on an as-needed
basis for the Company or affiliates of the Company. It is specifically agreed
that there is no obligation in this Agreement for the Company to retain the
Employee on a consulting basis and any such future consulting services shall be
performed as an independent contractor. In the event the Company uses the
Employee as a consultant, the Company shall pay for such services on a day rate
basis equal to the lessor of $60.00 per hour or $480 per day. Any payments made
to Employee as a consultant shall not affect the obligations otherwise stated in
this Agreement.
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6. Termination of Amended Employment Agreement. With the specific
exception of Article 4 of the Amended Employment Agreement, which shall continue
to bind the Employee in its entirety after the Effective date of termination,
all other rights and obligations of the parties as set forth in the Amended
Employment Agreement hereby are terminated and shall be of no further effect and
shall be replaced by the obligations of the parties set forth in this Agreement.
Other than as set forth in this Agreement, the Company shall have no other
obligations whatsoever to the Employee.
7. Binding Arbitration. Any controversy arising out of or relating to
this Agreement or any modification or extension of this Agreement, including any
claim for damages and/or rescission, shall be settled by binding arbitration in
Grand Junction, Colorado in accordance with the Commercial Arbitration rules of
the American Arbitration Association before a panel of one arbitrator. The
arbitrator sitting in any such controversy shall have no power to alter or
modify any express provisions of the Agreement or to render any award which by
its terms effects any such alteration, or modification. This section shall
survive the termination of this Agreement.
8. General Release. Employee, on his own behalf, and on behalf of his
heirs and assigns, hereby fully and forever unconditionally releases and
discharges the Company, all of its past and present parent, subsidiary,
affiliated and related corporations, their predecessors, successors and assigns,
together with their divisions and departments, and all past or present officers,
directors, employees, insurers and agents of any of them (hereinafter referred
to collectively as "Releasees"), of and from and covenants not to xxx or assert
against Releasees, for any purpose, all claims, administrative complaints,
demands, actions and causes of action, of every kind and nature whatsoever,
whether at law or in equity, arising from or in any way related to Employee's
employment by the Company, including the termination thereof, based in whole or
in part upon any act or omission occurring on or before the date of this general
release, whether negligent or intentional, without regard to Employee's present
actual knowledge of the act or omission, which Employee may now have, or which
Employee, or any person acting on his behalf may at any future time have or
claim to have, including specifically, but not by way of limitation, unpaid
wages, unpaid benefits, matters which may arise at common law, such as breach of
contract, express or implied, promissory estoppel, wrongful discharge, tortious
interference with contractual rights, infliction of emotional distress,
defamation, or under federal, state or local laws, such as the Fair Labor
Standards Act, the Employee Retirement Income Security Act, the National Labor
Relations Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act, the Rehabilitation Act of 1973, the Americans with
Disabilities Act, the Family and Medical Leave Act, the Pregnancy Disability
Act, the Equal Pay Act, and the Colorado Civil Rights Act. Employee warrants
that he has not assigned or transferred any right or claim described in this
general release. Employee expressly assumes all risk that the facts and law
concerning this general release may be other than as presently known to
Employee, and acknowledges that, in signing this general release, Employee is
not relying on any information provided by Releasees or upon Releasees to
provide information not known to Employee. Employee acknowledges that he has
been advised to consult an attorney regarding this release, and that he has
consulted an attorney. This release shall be governed by and construed in
accordance with the laws of Colorado. In the event of any dispute
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under this release, the prevailing party shall be entitled to recover all costs
and reasonable attorneys' fees incurred in connection therewith.
The Company releases the Employee of and from and covenants not to xxx
or assert against Employee, for any purpose, all claims, administrative
complaints, demands, actions and causes of action of every kind and nature
whatsoever, whether at law or in equity, arising from, or in any way related to,
Employee's employment by the Company, based in whole or in part upon any act or
omission occurring on or before the date of this Agreement, whether negligent or
intentional, which the Company may now have, or which the Company may at any
future time have or claim to have, for actions prior to the Effective Date of
which the Board of Directors was specifically aware on the Effective Date,
provided that this release of the Employee shall not apply to any claim under
federal or state securities or corporate laws, which are against officers and
directors of the Corporation, including Employee.
Notwithstanding the above, the Employee shall be entitled to
contribution or indemnity for third party claims to the same extent as any other
person who served as an officer or Director of the Company immediately prior to
the Effective Date.
9. Resignation as Director. Employee shall hereby resign as a director
of the Company as of the Effective Date, and Employee shall sign all written
Consents of Directors recording decisions of the Board of Directors made while
Employee served as a Director. Should Employee refuse or be unavailable to
formally sign any such Written Consent, the Company may deem the Signature of
Employee on this Agreement to be his signature on any Consent
10. Transfer of Assets. On the Effective Date of this agreement, the
Company shall transfer to the Employee the Assets described in a letter dated
November 1, 1998. Employee acknowledges that the Company shall treat the
estimated fair value of the assets as 1998 income to the Employee and shall
notify the appropriate taxing authorities. It is mutually agreed that the fair
value of the assets transferred is $500. Employee shall be responsible for
removing these assets, as well the personal assets listed in the November 1,
1998 letter, from the Company's office facility at his own expense.
11. Confidentiality. The Employee acknowledges that the Company is
pursuing various strategic alternatives, including the possibility of merger or
recapitalization. The Employee specifically agrees not to interfere, comment,
discuss or otherwise disclose such matters or any information related to the
Company's activities, past or present, to any individual or entity other than an
officer or director of the Company, unless it has been expressly agreed to in
writing by the Company or required by law. Further, the Employee and the Company
mutually agree that they will not in the future make any disparaging statements
concerning the other or their respective business. The terms of this Agreement
shall remain strictly confidential; provided however, that the Employee and the
Company may disclose such matters to members of their immediate family, bankers,
underwriters, financial advisors, accountants, attorneys and tax advisors, or as
may be required by law.
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12. Purchase of Other Company Assets. Employee agrees than an affiliate
of Employee, Xxxxx Oil Partnership, will purchase all of the Company's right,
title and interest in and to the shut-in oil well and prospect known as the "LU
Sheep 2 S," located in central Wyoming for a purchase price of $2,500. Employee
shall cause his affiliate to pay the Company the purchase price for such
property on or before December 31, 1998, at which time the Company shall assign
and transfer to the purchaser all the Company's interest in the property. It is
specifically agreed that the transfer of the property is made without
representations or warranties by the Company and that the purchase of the
Company's interest in the property shall be made in an "as is" condition without
any reliance upon the Company or its management in making the purchase
determination.
13. Entire Agreement. This Agreement is the entire agreement between
the parties and supersedes all prior understandings or agreements with respect
to the matters referred to herein. This Agreement may not be altered or amended
except by a written agreement signed by the parties.
WHEREFORE, the parties have signed this Agreement on December __, 1998
with an Effective Date as indicated above.
XXXXX OIL AND GAS COMPANY EMPLOYEE:
By ____________________________ __________________________________
Xxxxxxx X. Xxxxxx, President Xxxxxxx X. Xxxxx, Xx.
WITNESSED:
By ____________________________
Virginia Cherry,
Assistant Corporate Secretary
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