AMENDMENT TO EMPLOYMENT AGREEMENT

Exhibit 10

EXECUTION VERSION

This Amendment to the Employment Agreement (“Agreement”) is between Xxxxxxx Petroleum Corporation, which in this Agreement is referred to as “Xxxxxxx Petroleum” and Xxxxxxx X. Xxxxx, who is referred to as “Xxxxx”, and amends the Executive Employment and Severance Agreement dated November 1, 2017 and as amended August 24, 2018 (“Employment Agreement”) in all respects.

Background. Xxxxxxx Petroleum and Xxxxx acknowledge that Holly’s employment with Xxxxxxx Petroleum is ending effective as of the Effective Date (as defined in Joint Chapter 11 Plan of Reorganization of Xxxxxxx Petroleum Corporation and Its Debtor Affiliates [Dkt. No. 711] (the “Plan Effective Date”) (as amended, modified, or supplemented from time to time, the “Joint Plan”)) (such date referred to herein as the “Separation Date”). Both Xxxxx and Xxxxxxx Petroleum desire an amicable separation and to fully and finally settle any obligations that may exist between them on the terms set forth in this Agreement. In addition, Xxxxxxx Petroleum and Xxxxx desire that Xxxxx continue to provide services to Xxxxxxx Petroleum as a special advisor during a one-month transition period (the “Transition Period”) following the Separation Date as set forth on Exhibit A. During the Transition Period, Xxxxx shall reasonably cooperate and reasonably assist in the smooth transition of his duties and responsibilities to the new chief executive officer of Xxxxxxx Petroleum (the “New CEO”) as reasonably requested by the New CEO and the board of directors of Xxxxxxx Petroleum (the “Board”) and Xxxxx shall use his reasonable best efforts to faithfully and diligently perform such services hereunder, provided that Xxxxx shall not be obligated to expend any funds in connection with such services unless reimbursed by Xxxxxxx Petroleum. Holly’s services to Xxxxxxx Petroleum during the Transition Period will be at the level set forth on Exhibit A.

Employment Termination. Xxxxx understands that his employment with Xxxxxxx Petroleum is ended and his separation from service will be effective as of the Separation Date, based on reasons discussed between Xxxxx and Xxxxxxx Petroleum. The Employment Agreement provides for Holly’s receipt of certain separation benefits if he executes this Agreement containing a general release of all claims that is acceptable to Xxxxxxx Petroleum.

Severance Pay and Benefits. In return for the execution of this Agreement, it becoming effective (see paragraph 18), and Xxxxx honoring (and continuing to honor) all of its terms, Xxxxxxx Petroleum will provide Xxxxx with the severance pay and benefits in accordance with Section 5.c. of the Employment Agreement; provided, however, that no payment obligation under this Agreement shall arise until the first business day following the Plan Effective Date. Additionally, Xxxxxxx Petroleum will provide Xxxxx with accrued benefits consisting of (i) all base salary earned but unpaid for the time period ending with the Effective Date, (ii) reimbursement for any and all monies advanced in connection with Holly’s employment for reasonable and necessary expenses incurred by Xxxxx on behalf of the Xxxxxxx Petroleum for the time period ending with the Effective Date in accordance with Xxxxxxx Petroleum’s policies and (iii) any benefits to which Xxxxx is entitled on the Effective Date under the terms of any 401(k) plan of Xxxxxxx Petroleum. For the avoidance of doubt, Xxxxx understands and agrees that his acceptance of this Agreement mean that Xxxxx will not, under any circumstances, (i) be paid or become entitled to the severance pay and benefits provided under Section 5.d. of the Employment Agreement or any other payment or benefits in connection with a Change of Control (as defined in the Employment Agreement) or (ii) be entitled to any equity or equity-based compensation (or acceleration thereof) in connection with his separation from service or Xxxxxxx Petroleum’s restructuring and/or anticipated emergence from chapter 11 pursuant to the Joint Plan (the “Emergence”).

For the further avoidance of doubt, Xxxxx understands that the severance pay and benefits under Section 5.c. of the Employment Agreement includes only the following: (i) a lump sum payment equal to the sum of two times (2x) Holly’s base salary at the rate in effect as of immediately prior to the Separation Date and Holly’s 2020 target annual bonus, payable on the first day of the seventh month following the month in which the Separation Date occurs (equal to $2,526,500), (ii) at the expense of Xxxxxxx Petroleum and subject to

Holly’s timely election under COBRA, continued coverage of the same or equivalent life insurance, hospitalization, medical, dental, and vision coverage as provided to Xxxxx immediately prior to the Separation Date until the earlier of 18 months after the Separation Date or such time Xxxxx has obtained new employment (the “Benefits Continuation Period”) and (iii) beginning after the expiration of the six-month period following the Separation Date, an amount equal to the aggregate amount of any premiums paid by Xxxxx to maintain a group term life insurance policy providing a benefit in excess of $50,000 during the six-month period following the Separation Date and continuation of coverage of any such policy, at the expense of Xxxxxxx Petroleum, for the duration of the Benefits Continuation Period. Xxxxx expressly acknowledges and agrees that he is not entitled to any bonus payment for 2020 or otherwise.

Acknowledgement. Xxxxx understands that the severance pay and benefits identified in paragraph 3 above will not be paid or provided unless he accepts this Agreement, it becomes effective (see paragraph 18), and he honors (and continues to honor) all of its terms, and the continuing obligations set forth in the Employment Agreement, including without limitation, the restrictive covenants set forth in Section 7 of the Employment Agreement (Confidentiality; Non-Competition/Non-Solicitation; and Disclosure and Assignment to the Company of Inventions and Innovations) and the Transition Services. Xxxxx further understands and agrees that his breach of any of his continuing obligations, including without limitation, those described herein, shall result in (a) the cessation of any of the payments and benefits that may be provided pursuant to Section 3 of this Agreement and (b) Holly’s being required to repay the value of any severance payments and benefits to Xxxxxxx Petroleum upon ten days’ written request; provided, however, that nothing in this Agreement shall require Xxxxx to repay that certain prepaid variable compensation program award in the amount of $6,397,750 (or any portion thereof) that was paid to him prior to the Separation Date pursuant to the Executive Retention Bonus Agreement dated March 31, 2020 and notwithstanding anything in the Executive Retention Bonus Agreement, Xxxxx shall be entitled to the payments set forth in 3(a) above subject to the terms and conditions of this Agreement,

Release. Xxxxx understands and agrees that his acceptance of this Agreement means that, except as stated in paragraph 7, he is forever waiving and giving up any and all claims he may have, whether known or unknown, against Xxxxxxx Petroleum, its parent, subsidiaries, and related companies, their insurers, their officers, directors, employees and agents and the Ad Hoc Committee of Noteholders (as defined in the Joint Plan) for any personal monetary relief for himself, benefits or remedies that are based on any act or failure to act that occurred before he signed this Agreement. Xxxxx understands that this release and waiver of claims includes claims for or relating to: (a) his employment and the termination of his employment; (b) any Xxxxxxx Petroleum policy, practice, contract or agreement, including, but not limited, to the Employment Agreement; (c) the Emergence, (d) any tort or personal injury relating to Holly’s employment or termination of employment; (e) any policies, practices, laws or agreements governing the payment of wages, commissions or other compensation, including, but not limited, to the Colorado Wage Act, the Colorado Minimum Wage Order No. 30, and all terms for compensation under the Employment Agreement; (f) any laws governing employment discrimination or retaliation including (to the extent applicable), but not limited to, Title VII of the Civil Rights Act, the Employee Retirement Income Security Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act (ADEA), the Older Worker Benefit Protection Act, the Genetic Information Nondiscrimination Act, the Family and Medical Leave Act, the National Labor Relations Act (NLRA), the Colorado Anti-Discrimination Act, C.R.S. 00-00-000 et seq., the City and County of Denver’s Anti-Discrimination Ordinance, and any other applicable state or local laws; (g) any laws or agreements that provide for punitive, exemplary or statutory damages; and (h) any laws or agreements that provide for the payment of attorney fees, costs or expenses.

Future Employment. Xxxxx agrees that he is not now or hereafter entitled to employment or reemployment with Xxxxxxx Petroleum.

Claims Not Waived. Xxxxx understands that this Agreement does not waive any claims that he may have: (a) for compensation for illness or injury or medical expenses under any worker’s compensation statute; (b) for benefits under any plan currently maintained by Xxxxxxx Petroleum that provides for retirement benefits (however, Xxxxx agrees and acknowledges that the severance pay and benefits provided in paragraph 3 above shall not be considered or included for purposes of any retirement benefit contribution or plan); (c) under any law or any policy or plan currently maintained by Xxxxxxx Petroleum that provides health insurance continuation or conversion rights; (d) to indemnity, defense or insurance coverage for acts undertaken by him within the scope and course of his employment pursuant to applicable directors and officers insurance coverage, laws requiring indemnification for such acts, or the bylaws of the Company that require such indemnification; (e) under this Agreement; or (f) that by law cannot be released or waived.

Government Cooperation. Nothing in this Agreement prohibits Xxxxx from cooperating with any government agency, including the National Labor Relations Board or the Equal Employment Opportunity Commission, or any similar State agency. Further, Xxxxx understands that nothing in this Agreement (including any obligation in Paragraphs 5 or 9) prohibit him from reporting a possible violation of federal, state, or local law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, or any agency (including but not limited to the National Labor Relations Board or the Equal Employment Opportunity Commission) or Inspector General, or making other disclosures that are protected under any whistleblower provision of federal, state, or local law or regulation.

Prior Confidentiality Agreement(s). Xxxxx agrees and understands that this Agreement does not supersede any obligation to which he was subject under a prior agreement while employed with Xxxxxxx Petroleum that addresses confidentiality, noncompetition, patents or copyright. Xxxxx acknowledges that he was, and continues to be, subject to those obligations contained in Section 7, and all subsections to Section 7, of the Employment Agreement, and that he is expressly re-affirming his commitment to those obligations by executing this Agreement, and acknowledging that his failure to abide by such obligations will constitute a material breach of this Agreement.

10.

Trade Secrets/Defend Trade Secrets Act. Nothing in this Agreement (or any prior agreement on confidentiality to which Xxxxx may be subject) diminishes or limits any protection granted by law to trade secrets or relieves Xxxxx of any duty not to disclose, use, or misappropriate any information that is a trade secret, for as long as such information remains a trade secret. Additionally, nothing in this Agreement (or any prior agreement on confidentiality to which Xxxxx may be subject) is intended to discourage Xxxxx from reporting any theft of trade secrets to the appropriate government official pursuant to the Defend Trade Secrets Act of 2016 (“DTSA”) or other applicable state or federal law. Additionally, under the DTSA, a trade secret may be disclosed to report a suspected violation of law and/or in an anti-retaliation lawsuit, as follows:

An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual: (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order. Nothing in this Agreement (or any prior agreement on confidentiality to which Xxxxx may be subject) shall limit, curtail or diminish the Xxxxxxx Petroleum’s statutory rights under the DTSA, any applicable state law regarding trade secrets or common law.

11.

Relinquishment Of Positions. As of the Separation Date, Xxxxx acknowledges that he has fully and completely relinquished any and all officerships, directorships or other positions that he held with Xxxxxxx Petroleum and any of its affiliates, including without limitation, Holly’s position as chairman and member of the Board, chief executive officer of the Xxxxxxx Petroleum and any other positions (including, without limitation, as director, officer, manager, member or otherwise) with Xxxxxxx Petroleum and any of Xxxxxxx Petroleum’s subsidiaries, affiliates, joint ventures and other related entities Xxxxx agrees to execute any documents reasonably required to effectuate the foregoing.

12.

Nonadmission. Xxxxx and Xxxxxxx Petroleum both acknowledge and agree that nothing in this Agreement is meant to suggest that Xxxxxxx Petroleum has violated any law or contract or that Xxxxx has any claim against Xxxxxxx Petroleum.

13.

Voluntary Agreement. Xxxxx acknowledges and states that he has entered into this Agreement knowingly and voluntarily.

14.

Consulting An Attorney. Xxxxx acknowledges that Xxxxxxx Petroleum has told him that he should consult an attorney of his own choice about this Agreement and every matter that it covers before signing this Agreement, and that he has been provided an meaningful opportunity for such consultation.

15.

Attorney Fees and Costs.

Holly understands and agrees that if he violates the commitments he has made in this Agreement, Xxxxxxx Petroleum may seek to recover any payments and/or the value of any benefits provided in this Agreement, with the exception of One Thousand Dollars ($1,000), and that, except as provided in paragraph 16, he will be responsible for paying the actual attorney fees and costs incurred by Xxxxxxx Petroleum in enforcing this Agreement or in defending a claim released by paragraph 5.

Xxxxxxx Petroleum shall reimburse Xxxxx in an amount up to Twenty Thousand Dollars ($20,000) of reasonable and documented attorneys’ fees and expenses incurred by Xxxxx in connection with the negotiation of this Agreement with such reimbursement to be made within sixty days after the Separation Agreement.

16.

Exception to Attorney Fees Obligation. The obligation to pay Xxxxxxx Petroleum’s attorney fees and costs does not apply to an action by Xxxxx regarding the validity of this Agreement under the ADEA.

17.

Complete Agreement. Xxxxx understands and agrees that this document contains the entire agreement between him and Xxxxxxx Petroleum relating to his employment and the termination of his employment, that this Agreement, except as provided in paragraph 9, supersedes and displaces any prior agreements and discussions relating to such matters and that he may not rely on any such prior agreements or discussions.

18.

Effective Date. This Agreement shall not be effective until (a) the Plan Effective Date occurs, (b) the Schedule of Assumed Executory Contracts and Unexpired Leases (as defined in the Joint Plan) is amended to include the Employment Agreement, as amended by this Agreement, and (c) seven (7) days passes after Xxxxx signs this Agreement and returns this Agreement to Xxxxxxx Petroleum’s Chief Administrative Officer, General Counsel and Corporate Secretary. During that seven (7)-day period, Xxxxx may revoke his acceptance of this Agreement by delivering to Xxxxxxx Petroleum’s Chief Administrative Officer, General Counsel and Corporate Secretary a written statement stating he wishes to revoke this Agreement or not be bound by it.

19.

Final and Binding Effect. Xxxxx understands that if he signs this Agreement, returns it to Xxxxxxx Petroleum, and fails to revoke it consistent with paragraph 18, it will have a final and binding effect

and that by signing and returning this Agreement (and not revoking it) he may be giving up legal rights. Xxxxx also acknowledges that this Agreement may be signed in counter-parts (meaning by him and Xxxxxxx Petroleum separately) and that facsimile, copy or PDF copy signatures shall be treated as just as valid as original signatures.

20.

Exclusive Jurisdiction and Venue. This Agreement is to be governed by and construed under the laws of the United States and of the State of Colorado without resort to Colorado’s choice of law rules. Xxxxxxx Petroleum and Xxxxx agree that the forum and venue for any legal or equitable action or proceeding arising out of, or in connection with, this Agreement will lie in the appropriate federal or state courts in the State of Colorado and each specifically waives any and all objections to such jurisdiction and venue.

21.

Future Cooperation. Xxxxx agrees to reasonably cooperate with Xxxxxxx Petroleum in the future and to provide to Xxxxxxx Petroleum truthful information, testimony or affidavits requested in connection with any matter that arose during Holly’s employment. This cooperation may be performed at reasonable times and places and in a manner as to not interfere with any other employment or business activities that Xxxxx may have at the time of request. Xxxxxxx Petroleum agrees to reimburse Xxxxx for expenses incurred in providing such cooperation, so long as such expenses are approved in advance by Xxxxxxx Petroleum, including, if applicable, any legal fees and expenses reasonably incurred by Xxxxx if Xxxxx and Xxxxxxx Petroleum agree in good faith that Xxxxx should retain counsel independent of the counsel for Xxxxxxx Petroleum in order to cooperate as provided hereinabove.

22.

Return of Property. Xxxxx acknowledges an obligation and agrees to return all Xxxxxxx Petroleum property, unless otherwise specified in this paragraph. This includes all files, memoranda, documents, records, credit cards, keys and key cards, computers, laptops, personal digital assistants, cellular telephones, Blackberry devices or similar instruments, other equipment of any sort, badges, vehicles, and any other property of Xxxxxxx Petroleum. In addition, Xxxxx agrees to provide any and all access codes or passwords necessary to gain access to any computer, program or other equipment that belongs to Xxxxxxx Petroleum or is maintained by Xxxxxxx Petroleum or on company property. Further, Xxxxx acknowledges an obligation and agrees not to destroy, delete or disable any company property, including items, files and materials on computers and laptops.

23.

Nondisparagement. Xxxxx shall not, whether in writing (electronically or otherwise) or orally malign, denigrate or disparage Xxxxxxx Petroleum or any of its respective predecessors or successors, or any of their respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives, with respect to any of their respective past or present activities, or otherwise publish, whether in writing (electronically or otherwise) or orally statements that malign, denigrate or disparage any of the aforementioned parties. The Company agrees to instruct its senior officers and directors not to disparage Xxxxx. The foregoing shall not be violated by truthful statements in response to legal process, required governmental testimony or filings, or administrative or arbitral proceedings (including, without limitation, depositions in connection with such proceedings), and the foregoing limitation on Xxxxxxx Petroleum’s executives and directors shall not be violated by statements that they in good faith believe are necessary or appropriate to make in connection with performing their duties and obligations to Xxxxxxx Petroleum.

24.

Divisibility of Agreement or Modification by Court. Xxxxx understands that, to the extent permitted by law, the invalidity of any provision of this Agreement will not and shall not be deemed to affect the validity of any other provision. Xxxxx agrees that in the event that any provision of this Agreement is held to be invalid, it shall be, to the extent permitted by law, modified as necessary to be interpreted in a manner most consistent with the present terms of the provision, to give effect to the provision. Finally, in the event that any provision of this Agreement is held to be invalid and not capable of modification by a court, then Xxxxx understands and agrees that such provision shall be considered expunged (eliminated), and he further agrees that the remaining provisions shall be treated as in full force and effect as if this Agreement had been executed by Xxxxx after the expungement (elimination) of the invalid provision.

25.

Representations. By signing this Agreement, Xxxxx represents that he has read this entire document and understands all of its terms.

26.

21-Day Consideration Period. Xxxxx may consider whether to sign and accept this Agreement for a period of twenty-one (21) days from the day he received it. If this Agreement is not signed, dated and returned to Xxxxxxx Petroleum’s Chief Administrative Officer, General Counsel and Corporate Secretary within twenty-two (22) days, the offer of severance payments and benefits described in paragraph 3 above will no longer be available. Xxxxx acknowledges that should he sign and return this Agreement within the 21-day period identified in this subparagraph, he is knowingly waiving whatever additional time he may have up to the conclusion of the 21-day period for consideration of this Agreement.

27.

Withholding. Xxxxxxx Petroleum may withhold from any payments of compensation or benefits made to Xxxxx all applicable taxes, including but not limited to income, employment and social insurance taxes, as required by law. Xxxxx acknowledges and represents that Xxxxxxx Petroleum has not provided any tax advice to him in connection with this Agreement and that he has been advised by Xxxxxxx Petroleum to seek tax advice from his own tax advisors regarding this Agreement and the payments that may be made to him pursuant to this Agreement, including, specifically, regarding the application of the provisions of Section 409A of the Code.

28.

Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. Xxxxx acknowledges and agrees that all of Holly’s covenants and obligations to Xxxxxxx Petroleum, as well as the rights of Xxxxxxx Petroleum hereunder, shall run in favor of and shall be enforceable by Xxxxxxx Petroleum and any successor or assign to all or substantially all of Xxxxxxx Petroleum’s business or assets. Subject to the conditions precedent set forth herein, Xxxxxxx Petroleum hereby acknowledges and agrees that its obligations to Xxxxx under Section 3.a. of this Agreement shall be performed by Xxxxxxx Petroleum or any successor or assign to all or substantially all of Xxxxxxx Petroleum’s business or assets.


ACCEPTED:

XXXXXXX PETROLEUM CORPORATION

By:		/s/ Xxxxx X. XxXxxx
Name:		Xxxxx X. XxXxxx
Title:		Chief Administrative Officer, General Counsel and Corporate Secretary

ACCEPTED:

/s/ Xxxxxxx X. Xxxxx

XXXXXXX X. XXXXX

Dated: 8/13/20

Date Agreement was originally given to Xxxxx: 8/13/20

Exhibit A

During the Transition Period, Xxxxx shall assist with the smooth transition of his duties and responsibilities as requested by the New CEO and/or the Board and shall provide strategic or other operating and consulting services upon request. During the Transition Period Xxxxx acknowledges and agrees that he will not be entitled to any additional compensation or payments and he shall serve as a consultant and not as an employee. The consulting services shall not exceed ten (10) hours. During the Transition Period Xxxxx shall not contact any employees, customers, suppliers or vendors of Xxxxxxx Petroleum, unless requested to do so by the New CEO or the Board. It is the intent of the parties hereto that the level of services during the Transition Period shall not exceed 19.9% in the aggregate (as compared to services rendered prior to the Transition Period) such that he will experience a “separation of service” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, which level is anticipated to be less than 9.9 hours per week. Xxxxxxx Petroleum acknowledges and agrees to indemnify Xxxxx to the same level and extent as in effect prior to the Separation Date for actions taken by Xxxxx during the Transition Period in respect of the transition services described herein; provided such actions are taken in good faith and consistent with Holly’s obligations under this Agreement.

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AMENDMENT TO EMPLOYMENT AGREEMENT

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