SEPARATION AGREEMENT
Exhibit 10.1
This Separation Agreement (the “Agreement”) is made and entered into effective as of the 23rd
day of March, 2009 by and between T-3 Energy Services, Inc., a Delaware corporation (“Employer”)
and Xxx X. Xxxxx (“Employee”). Reference is made herein to the Employment Agreement effective as
of September 14, 2007 and amended as of December 10, 2008, between Employer and Employee.
Capitalized terms used herein but not otherwise defined in this Agreement shall have the meanings
given such terms in the Employment Agreement.
1. Termination of Employment.
Effective as of March 23, 2009, (the “Separation Date”) Employee has resigned his employment
and any and all positions he has held with Employer and any affiliates. Such termination shall be
deemed for the purposes of the Employment Agreement to be a termination other than for Good Cause
under Section 9 of the Employment Agreement and the provisions of Section 9 shall apply, subject to
the provisions of this Agreement.
2. Separation Benefits.
In consideration of Employee’s execution (without revocation) of this Agreement and his
release of all claims as provided in this Agreement, and Employee’s other agreements herein,
Employer agrees to provide Employee with the following payments and benefits, less all required
withholding and other authorized deductions, within ten (10) working days after the Waiver
Effective Date (as defined in Section 17):
(a) In accordance with Section 9(c) of the Employment Agreement, the sum of $2,783,437.50,
which is three times the sum of Employee’s (i) annual base pay and (ii) average bonus pay for the
previous two fiscal years of employment.
(b) In accordance with Section 9(b) of the Employment Agreement, the sum of $112,328.77, which
is the pro-rata portion of Employee’s target Annual Bonus for the current fiscal year.
(c) In accordance with Section 9(a)(ii) of the Employment Agreement, the unvested portion of
the employer contributions credited to Employee’s account under Employer’s 401(k) Savings and
Retirement Plan, if any.
(d) A lump-sum cash payment of $75,000 representing all amounts that may otherwise be due and
payable to Employee under Sections 4.8 and 4.9, or any other provisions of the Employment Agreement
not otherwise specified in this Agreement, or for any other reason.
3. Payment of Base Salary and Reimbursements Through Separation Date.
Employee shall be entitled to the following within 30 days of the Separation Date:
(a) In accordance with Section 9(a)(i) of the Employment Agreement, Employee shall be entitled
to Employee’s current annual base salary accrued but unpaid, less all required withholding and
authorized deductions, through the Separation Date.
(b) In accordance with Section 5 of the Employment Agreement, all reimbursable business
expenses incurred on or before the Separation Date, provided that Employee submits a written
request (following Employer’s standard business procedure) on or before 7 business days following
the Separation Date. If Employee fails to timely submit a request for reimbursement, Employee will
be deemed to have waived the claim for reimbursement. Employer will not reimburse Employee for
expense reports submitted after 7 business days following the Separation Date.
4. Equity Awards.
In consideration of Employee’s release of all claims as provided in this Agreement, and
Employee’s other agreements herein:
(a) In accordance with Section 9(d) of the Employment Agreement, all of Employee’s stock
options to purchase shares of Employer’s common stock and all of Employee’s restricted stock grants
shall fully vest notwithstanding any vesting schedule based on the expiration of time contained in
such stock option or restricted stock grant. All vested and unexercised stock options will remain
subject to the terms and conditions of the 2002 Stock Incentive Plan and any associated award
agreements under which the stock options were granted.
(b) In accordance with Section 11.15 of the Employment Agreement, Employee will receive a cash
payment equal to 10,000 multiplied by the closing share price of Employer’s stock on the Separation
Date within ten (10) working days after the Waiver Effective Date.
5. No Other Compensation.
Except as set forth in Sections 2, 3 and 4 above, Employee shall not be entitled to any other
salary, commission, bonuses, employee benefits (including long and short term disability, 401(k),
and pension), expense reimbursement or compensation from Employer or its affiliates after the date
of the Separation Date and all of Employee’s rights to salary, commission, bonuses, employee
benefits and other compensation hereunder which would have accrued or become payable after the
Separation Date from Employer (other than vested benefits under Employer’s benefit plans which are
payable to Employee pursuant to the terms and conditions set forth in the applicable plan
documents) shall cease upon the Separation Date, other than those expressly required under
applicable law (such as the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”)).
6. COBRA.
Employer will deliver to Employee a letter outlining the terms of COBRA, including the COBRA
premiums. Employee will have the option to elect to continue health care coverage under COBRA, as
explained in the COBRA letter. Under the terms of COBRA, Employer-sponsored health care plan
participants are offered the ability to participate in an Employer-sponsored health care plan for
up to 18 months after their separation dates. The COBRA
letter
will explain that to obtain such coverage, Employee must pay on a timely basis the monthly
COBRA premium. COBRA participants do not receive monthly invoices and are expected to make sure
that their monthly premium payments are received by the Employer’s COBRA
2
Administrator by the
applicable due dates. Employee’s failure to make a timely payment will result in loss of coverage
and, once lost, the coverage cannot be reinstated.
7. General Release.
In accordance with Section 10 of the Employment Agreement and in consideration of the payments
to be made hereunder and having acknowledged the above-stated consideration as full compensation
for and on account of any and all injuries and damages which Employee has sustained or claimed, or
may be entitled to claim, Employee, for himself, and his heirs, executors, administrators,
successors and assigns, does hereby release, forever discharge and promise not to xxx Employer, its
parents, subsidiaries, affiliates, successors and assigns, and their past and present officers,
directors, partners, employees, members, managers, shareholders, agents, attorneys, accountants,
insurers, heirs, administrators, executors (collectively the “Released Parties”) from any and all
claims, liabilities, costs, expenses, judgments, attorney fees, actions, known and unknown, of
every kind and nature whatsoever in law or equity, which Employee had, now has, or may have against
the Released Parties relating in any way to Employee’s employment with Employer or termination
thereof, including but not limited to, all claims for contract damages, tort damages, special,
general, direct, punitive and consequential damages, compensatory damages, loss of profits,
attorney fees and any and all other damages of any kind or nature; all contracts, oral or written,
between Employee and any of the Released Parties; any business enterprise or proposed enterprise
contemplated by any of the Released Parties, as well as anything done or not done prior to and
including the date of execution of this Agreement. Nothing in this Agreement shall be construed to
release Employer from any obligations set forth in this Agreement.
Employee understands and agrees that this release and covenant not to xxx shall apply to any
and all claims or liabilities arising out of or relating to Employee’s employment with Employer and
the termination of such employment, including, but not limited to: claims of discrimination based
on age, race, color, sex (including sexual harassment), religion, national origin, marital status,
parental status, veteran status, union activities, disability or any other grounds under applicable
federal, state or local law, including, but not limited to, claims arising under the Age
Discrimination in Employment Act of 1967, as amended; the Americans with Disabilities Act; the Fair
Labor Standards Act; the Family and Medical Leave Act; and Title VII of the Civil Rights Act, as
amended, the Civil Rights Act of 1991; 42 U.S.C. § 1981, the Employee Retirement Income Security
Act, the Consolidated Omnibus Budget Reconciliation Act of 1985 as amended, the Rehabilitation Act
of 1973, the Equal Pay Act of 1963 (EPA) as well as any claims regarding wages; benefits; vacation;
sick leave; business expense reimbursements; wrongful termination; breach of the covenant of good
faith and fair dealing; intentional or negligent infliction of emotional distress; retaliation;
outrage; defamation; invasion of privacy; breach of contract; fraud or negligent misrepresentation;
harassment; breach of duty; negligence; discrimination; claims under any employment, contract or
tort laws; claims arising under any other federal law, state law, municipal law, local law, or
common law; any claims arising out of any employment contract, policy or procedure; and any other
claims related to or arising out of his employment or the separation of his employment with
Employer.
In addition, Employee agrees not to cause or encourage any legal proceeding to be maintained
or instituted against any of the Released Parties.
3
This release does not apply to any claims for unemployment compensation or any other claims or
rights which, by law, cannot be waived, including the right to file an administrative charge or
participate in an administrative investigation or proceeding; provided, however that Employee
disclaims and waives any right to share or participate in any monetary award resulting from the
prosecution of such charge or investigation or proceeding.
8. Acknowledgement of Waiver of Claims under ADEA.
Employee expressly acknowledges that he is voluntarily, irrevocably and unconditionally
releasing and forever discharging Employer and its respective present and former parents,
subsidiaries, divisions, affiliates, branches, insurers, agencies, and other offices from all
rights or claims he has or may have against Employer including, but not limited to, without
limitation, all charges, claims of money, demands, rights, and causes of action arising under the
Age Discrimination in Employment Act of 1967, as amended (“ADEA”), including, but not limited to,
all claims of age discrimination in employment and all claims of retaliation in violation of ADEA.
Employee further acknowledges that the consideration given for this waiver of claims under the ADEA
is in addition to anything of value to which he was already entitled in the absence of this waiver.
Employee further acknowledges: (a) that he has been informed by this writing that he should
consult with an attorney prior to executing this Agreement; (b) that he has carefully read and
fully understands all of the provisions of this Agreement; (c) he is, through this Agreement,
releasing Employer from any and all claims he may have against it; (d) he understands and agrees
that this waiver and release does not apply to any claims that may arise under the ADEA after the
date he executes this Agreement; (e) he has at least twenty-one (21) days within which to consider
this Agreement; and (f) he has seven (7) days following his execution of this Agreement to revoke
the Agreement (as provided in Section 17 of this Agreement); and (g) this Agreement shall not be
effective until the revocation period has expired and Employee has signed and has not revoked the
Agreement.
9. Confidential Information and Covenants Not to Compete.
In accordance with Section 3 of the Employment Agreement, the parties agree that all terms and
provisions of the Employment Agreement, including, but not limited to, terms related to
Confidential Information and covenants not to compete, shall remain in full force and effect as
provided in the Employment Agreement. In the event of a conflict between the terms of the
Employment Agreement and the provisions of this Agreement, the Employment Agreement shall prevail.
10. Return of Confidential Information and Equipment.
Employee recognizes and acknowledges that he has received Confidential Information from
Employer. In accordance with Section 3.2 of the Employment Agreement, Employee acknowledges that
he has delivered to Employer all copies of Confidential Information in any form, electronic or
otherwise, pertaining to Employer or its business. Such Confidential Information includes, without
limitation, contact information in his possession in any form,
electronic or otherwise, pertaining to any customers or vendors (existing or potential) of
Employer. Upon termination, Employee shall also return to Employer his building pass, parking
pass, any credit card, any electronic devices and/or equipment including blackberry or cell
4
phone,
door keys, and all other personal property owned by Employer or purchased by Employer for use by
Employee during the term of his employment.
11. Nondisparagement.
Employee agrees that he will not, at any time, directly or indirectly, individually or in
concert with others, engage in any conduct or make any statement that is calculated or likely to
have the effect of undermining, disparaging or otherwise reflecting poorly upon the reputation,
good will, products, services, or business opportunities of Employer or its respective
subsidiaries, affiliates, officers, directors, shareholders, attorneys, employees, representatives,
successors and assigns, and any and all related corporate entities, either orally, in writing, or
in any other form of communication. Employer agrees that the executives of the Employer shall not
disparage Employee.
No provision of this Agreement shall in any way limit Employee’s ability to cooperate with any
federal, state or local government investigative agency or department or in connection with any
federal, state or local government investigation or be construed as prohibiting the provision of
non-privileged information, documents (including but not limited to this Agreement) and/or
testimony by Employee or Employer in response to a subpoena issued by a court of competent
jurisdiction, or as may otherwise be required by law or which Employee or Employer may be requested
to provide to any federal, state, or local governmental investigative agency or department or in
connection with any federal, state, or local investigation. However, in the event of receipt of
any non-governmental subpoena Employee agrees to notify Employer promptly before complying with
such a subpoena so that it may protect its interests, including moving to quash the subpoena, as
long as provision of such notice does not violate any applicable law, rule, or court order. If
Employer seeks to prevent disclosure in accordance with the applicable legal procedures, and
provides Employee with notice before the deadline for Employee’s compliance with the subpoena,
Employee shall not make any such disclosures until either such objections are withdrawn or the
objections are finally adjudicated by the appropriate tribunal to be invalid.
12. Resolution of Claims.
The provisions of this Agreement are contractual and not merely recitals and are intended to
resolve disputed claims. No party hereto admits liability of any kind and no portion of this
Agreement shall be construed as an admission of liability.
13. No Assignment of Claims.
Employee and Employer represent, recognizing that the truth of the following representation is
a material consideration upon which this Agreement is based, that they have not heretofore assigned
or transferred, or purported to assign or transfer, to any person or entity, any claim or any
portion thereof, or interest therein relating to any claims being released by any party to this
Agreement, and that they are unaware of any other entity having any interest in such
claims, and agree to indemnify and hold the other party harmless from and against any and all
claims, based on or arising out of any such third-party interest in, or assignment or transfer, or
purported assignment or transfer of, any claims, or any portion thereof or interest therein.
5
14. Applicable Law.
This Agreement is to be governed and construed in accordance with the laws of the State of
Texas, without regard to the choice of law provisions thereof.
15. Notice.
Except as otherwise required by law, any notice, consent, request, instruction, approval and
other communication provided for herein (other than routine correspondence in the ordinary course
of business) shall be in writing and shall be deemed validly given, made or served:
(a) on the date on which it is delivered personally with receipt acknowledged,
(b) five (5) business days after it shall have been sent by registered or certified mail
(receipt requested and postage prepaid),
(c) one (1) business day after it is sent by overnight courier (charges prepaid; confirmation
of receipt documented), or
(d) on the same business day when sent before 5:00 p.m., recipient’s time, and on the next
business day when sent after 5:00 p.m., recipient’s time, by telephone facsimile transmission,
provided that the sender receives electronic confirmation that the document has been received by
the recipient’s facsimile transmission equipment.
Notices to Employer shall be addressed as follows:
T-3 Energy Services, Inc.
0000 Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Phone: 000-000-0000
Fax: 000-000-0000
0000 Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Phone: 000-000-0000
Fax: 000-000-0000
Notices to Employee shall be addressed to the most recent address and telephone numbers
contained in Employer’s records.
Employee agrees to inform Employer, in writing, of any changes to his residential address
and/or telephone numbers.
16. Sufficient Time to Review.
Employee acknowledges and agrees that: (i) he has had reasonable and sufficient time to read
and review this Agreement and that he has, in fact, read and reviewed this Agreement; (ii) that he
has the right to consult with legal counsel regarding this Agreement and is encouraged to
consult with legal counsel with regard to this Agreement; (iii) that he has had (or has had
the opportunity to take) twenty-one (21) calendar days to discuss the Agreement with a lawyer of
his choice before signing it and, if he signs before the end of that period, he does so of his own
free will and with the full knowledge that he could have taken the full period; (iv) that he is
entering
6
into this Agreement freely and voluntarily and not as a result of any coercion, duress or
undue influence; (v) that he is not relying upon any oral representations made to him regarding the
subject matter of this Agreement; (vi) that by this Agreement he is receiving consideration in
addition to that which he was already entitled; and (vii) that he has received all information he
requires from Employer in order to make a knowing and voluntary release and waiver of all claims
against Employer.
17. Revocation/Payment.
Employee acknowledges and agrees that he has (7) seven days from the date of the execution of
this Agreement within which to rescind or revoke this Agreement by providing notice in writing to
Employer. Employee further understands that the Agreement will have no force and effect until the
end of that seventh day (the “Waiver Effective Date”), and that he will receive the payments and
benefits identified in Sections 2 and 4 above after the Waiver Effective Date and following
Employer’s receipt of the Agreement as executed by Employee if the Agreement is not revoked. If
Employee revokes the Agreement pursuant to this Section 17, the Employer will not be obligated to
pay or provide Employee with the separation payments and other benefits described in this
Agreement, and this Agreement shall be deemed null and void.
18. Taxes.
All payments made by Employer under this Agreement will be subject to applicable federal,
state and local taxes, and withholdings required for the same, which taxes will be the
responsibility of Employee.
19. Entire Agreement; Severability.
This Agreement constitutes the entire agreement and understanding among the parties hereto and
replaces, cancels and supersedes any prior agreements and understandings relating to the subject
matter hereof; and all prior representations, agreements, understandings and undertakings among the
parties hereto with respect to the subject matter hereof are merged herein. The parties agree that
this Agreement is the entire agreement between the parties relating to the subject matter hereof,
and that there is no agreement, representation or other inducement for the execution of this
Agreement other than the consideration recited herein. Should any provision of this Agreement be
found to be invalid or unenforceable, the remaining provisions of this Agreement shall be deemed to
be in full force and effect, at the Employer’s sole discretion, to the fullest extent permitted by
law. Any waiver of any term or provision of this Agreement shall not be deemed a continuing waiver
and shall not prevent Employer from enforcing such provision in the future.
The prevailing party in any action instituted pursuant to this Agreement shall be entitled to
recover from the other party its reasonable attorneys’ fees and other expenses incurred in such
action
20. Confidentiality.
Each of Employer and Employee agree that the contents of this Agreement, including but not
limited to its financial terms, are and will be kept strictly confidential by the parties. By
7
executing this Agreement, Employee agrees and represents that Employee has maintained and will
maintain the confidential nature of the agreement and has not and will not disclose its terms to
any third party, except to (a) Employee’s legal counsel, tax advisors and immediate family members
who agree to keep it confidential; (b) as required by law in which case Employee shall notify
Employer in writing in advance of such disclosure; and (c) as necessary to enforce this Agreement.
By executing this Agreement, Employer agrees and represents it has and will maintain the
confidential nature of the Agreement and has not and will not disclose its terms to any third
party, except (x) to its executive staff and governing bodies, as necessary or appropriate, and to
its outside counsel, auditors, and other advisors; (y) as otherwise required by law; and (z) as
necessary to enforce this Agreement. The payments and benefits referenced in Sections 2 and 4 are
expressly contingent on Employee’s compliance with the confidentiality covenant contained in this
Section 20.
21. Section 409A.
This Agreement is intended to provide payments that are exempt from or compliant with the
provisions of Section 409A of the Internal Revenue Code of 1986 (the “Code”) and related
regulations and Treasury pronouncements (“Section 409A”), and the Agreement shall be interpreted
accordingly. Notwithstanding anything herein to the contrary, if on the date of his separation
from service Employee is a “specified employee,” as defined in Section 409A, then all or a portion
of any severance payments, benefits, or reimbursements under this Agreement that would be subject
to the additional tax provided by Section 409A(a)(1)(B) of the Code if not delayed as required by
Section 409A(a)(2)(B)(i) of the Code shall be delayed until the first day of the seventh month
following his separation from service date (or, if earlier, Employee’s date of death) and shall be
paid as a lump sum (without interest) on such date. For purposes of this Agreement, a termination
of Employee’s employment must be a “separation from service” for purposes of Section 409A.
22. Binding Effect.
This Agreement shall be binding on and inure to the benefit of each of the parties hereto, as
well as their respective successors, assigns, heirs, executors and administrators.
EMPLOYEE AFFIRMS THAT HE HAS CONSULTED WITH HIS ATTORNEY OR HAS HAD AN OPPORTUNITY TO DO SO PRIOR
TO SIGNING THIS AGREEMENT AND THAT HE IS EXECUTING THE AGREEMENT VOLUNTARILY AND WITH FULL
UNDERSTANDING OF ITS CONSEQUENCES.
8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| T-3 ENERGY SERVICES, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxx, Xx. | |||
| Name: | Xxxxxx X. Xxxxx, Xx. | |||
| Title: | Lead Director | |||
| Employee: |
||||
| /s/ Xxx X. Xxxxx | ||||
| Xxx X. Xxxxx | ||||
9
