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EXHIBIT 10.18
[NATIONAL ENERGY GROUP, INC. LETTERHEAD]
October 31, 1997
VIA HAND DELIVERY
Xx. Xxxxxx X. Xxxx
00000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Re: Separation Agreement
Dear Xx. Xxxx:
National Energy Group, Inc. (the "Company") recognizes your service to the
Company. This letter confirms the discussions we have held concerning the
resignation of your employment from the Company, and the Company's offer and
your acceptance of this proposed separation agreement (this "Separation
Agreement") on the terms set forth below.
1. Resignation; Termination of Employment. You agree to resign as an
officer of the Company and its Chief Financial Officer effective
October 31, 1997. Your employment with the Company, where you have
been employed as a Senior Vice President and Chief Financial Officer,
is terminated effective December 6, 1997 (hereinafter the "Separation
Date"), at which time your Employment Agreement dated January 1, 1996
and any other agreements regarding your employment with the Company
shall also terminate.
2. Salary and Benefits. In accordance with the Company's existing
policies, you have received, will receive, or are receiving with this
letter the following payments and benefits pursuant to your employment
with the Company and your participation in the Company's benefit
plans:
(a) Payment of your regular base salary of $15,000.00 per month
through December 6, 1997, less all legally required
deductions; and
(b) Payment of accrued and unused vacation leave, if any, through
December 6, 1997, less all legally required deductions.
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The amounts paid in accordance with subparagraphs (a) and (b) of this
Paragraph are gross amounts, subject to lawful deductions, including
any deductions you have previously authorized or authorize prior to
your Separation Date.
Your paid group health insurance benefits shall continue through
December 31, 1997. After the Separation Date, you are entitled at
your option to continue your group health insurance coverage at your
expense (but subject to the provisions of Paragraph 3 (b) below), in
accordance with applicable law. Please complete the COBRA election
form, which will be furnished to you, and return it to Ms. Xxxxx
Xxxxx-Xxxxxxxxx at your earliest convenience, if you elect to continue
such insurance coverage.
Payment of any benefits to which you have vested entitlement under the
terms of the employee benefit plans established by the Company,
including but not limited to the Company 401(k) Plan, shall be paid to
you in accordance with the provisions of such plans.
3. Special Separation Benefits. In consideration of the General Release,
the Confidentiality of Separation Agreement and Nondisparagement
provision, and the Agreement Regarding Solicitation of Employees set
forth in this Agreement, and contingent upon your acceptance of the
terms of this Agreement, the Company offers you the following Special
Separation Benefits, in addition to the benefits you will receive
pursuant to Paragraph 2; provided that the Special Separation Benefits
described in this Paragraph 3 shall be subject to and not become due
and payable until such time that you have made actual payment of
amounts owed to the Company for loans, salary advances and/or
non-reimbursable expense advances, which you and the Company agree to
be an amount equal to Thirty-Three Thousand Five Hundred Eighty
Dollars and 93/100 Cents ($33,580.93):
(a) Termination Allowance. A termination allowance in the amount
of Eighty-Five Thousand Dollars ($85,000.00), which is
equivalent to your base salary for a period of five (5) months
from your Separation Date through April 30, 1998 payable on
execution and delivery of this Separation Agreement and
subject to all legally required or authorized deductions; and
(b) Extension of Health Care Benefits. Reimbursement to you on a
monthly basis of eighty-five percent (85%) of the cost of your
COBRA premium for group health insurance coverage for a period
of eighteen (18) months commencing January 1, 1998 up through
and including June 30, 1999, provided you elect to continue
and/or convert to COBRA coverage for such eighteen (18) month
period under the
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Page 3
Company's group health insurance policy and furnish the
Company an invoice for each such payment actually made by you
or on your behalf.
(c) Personal Leave. From and after October 30, 1997 until your
Separation Date, the Company shall grant you a personal leave
of absence, during which time you shall receive your full
salary and benefits; provided that you shall make your
services available to the Company from time to time during
such period as may be requested to assist the Company with its
business and operations.
(d) Stock Options. The Company agrees that it shall help you
facilitate a "cashless option" of any stock options granted to
you by the Company which have vested in accordance with their
terms, whereby payment for the exercise of such options shall
be made to the Company concurrently with their exercise and
sale; provided that such "cashless option" shall apply only to
any such stock options which are exercised by you and the
underlying shares immediately sold in a transaction where the
Company receives its exercise option payment within a period
following such "cashless option" exercise not to exceed five
(5) days.
(e) Redemption Right. The Company agrees to amend that certain
Letter Agreement by and between the Company and Xxxxxx x. Xxxx
dated January 14, 1996 pertaining to the redemption on or
before December 15, 1997 of certain shares of the Company's
common stock to provide that such redemption date be extended
for a period of time through June 30, 1998.
(f) Executive Committee Meeting. Xxxxxx X. Xxxx shall be invited
and attend the Company's next regularly scheduled Executive
Committee meeting to address his desire to make a presentation
to the Company's Board of Directors on December 5, 1997. Xx.
Xxxxx X. Xxxxxx agrees to recommend to the Executive Committee
that it place Xxxxxx X. Xxxx on the agenda for such Company's
December 5, 1997 Board of Directors meeting.
By execution of this Separation Agreement and payment of the Special
Separation Benefits described in subparagraph 3(a) hereof, you
acknowledge and agree that for purposes of unemployment compensation
benefits, the amounts to be paid as specified in this Paragraph 3
constitute wages in lieu of notice for the period from the Separation
Date through April 30, 1997. Accordingly, you agree not to seek,
qualify for nor receive unemployment compensation benefits for the
period from December 7, 1997 through April 30, 1998
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4. Return of Property. You agree to return to the Company any and all
items of its property, including without limitation: a 1997 Chevrolet
Suburban automobile, office keys, security access cards, computers,
equipment, credit cards, forms, files, manuals, correspondence,
business records, personnel data, lists of employees, salary and
benefits information, work product, maps, data and files relating to
xxxxx, leases, partners and/or contractors, seismic data and files,
contracts, contract information, Prospect information and plans for
future Prospects, brochures, catalogs, computer tapes and diskettes,
and data processing reports, and any and all other documents or
property which you have had possession of or control over during the
course of your employment, and which you have not already returned to
the Company. You agree that you will return such property to the
Company by no later than the close of business on or before your
Separation Date, or as soon thereafter as is possible with respect to
any items not then immediately available or which you later find in
your possession. The provisions of this Paragraph 4 do not prohibit
the maintenance by you of copies of any non-confidential,
non-proprietary information, such as reading files, work papers,
calculations, flowcharts and other similar information reflecting the
performance of your job duties and responsibilities.
5. Use of Confidential Information. You acknowledge and agree that,
except for your knowledge and training to compete in the marketplace
and except for information which is now or in the future becomes
available in the public domain, all of the non-public documents and
information to which you have had access during your employment,
including but not limited to all information pertaining to any
specific business transactions in which the Company or any other
Company Released Parties (as defined in Paragraph 6 below) were, are,
or may be involved, all information concerning salary and benefits
paid to employees of the Company or any of the other Company Released
Parties, all personnel information relating in any way to current or
former employees of the Company or any of the other Company Released
Parties, all non-public information obtained in the course of
employment pertaining to acquisitions, divestitures, xxxxx, Prospects
and development plans of the Company or any of the other Company
Released Parties, lease holdings and lease block bid information and
strategies, all financial budgetary information, all other information
specified in Paragraph 4 above, and in general, the business and
operations of the Company or any of the other Company Released Parties
in addition to any other work product, calculations, files, maps,
logs, flowcharts and other related and/or similar information to which
you had access through the Company, its partners or consultants are
considered confidential and are not to be disseminated or disclosed by
you to any other parties, except as may be required by law or judicial
process. In the event you are required to disclose such information
to any other party, you shall provide the Company immediate
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October 31, 1997
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written notice to enable the Company to seek, at the Company's
discretion and expense, a protective order or take other such action
as the Company in its sole discretion deems advisable or necessary.
You further agree that in the event it appears that you will be
compelled by law or judicial process to disclose such confidential
information, you will notify Xx. Xxxxxx X. Xxxxxx, General Counsel, in
writing at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx, 00000,
immediately upon your receipt of any such notice, a subpoena or other
legal process.
6. General Release.
(a) Except for the obligations of the Company and the Company
Released Parties to be performed hereunder and in
consideration of the Special Separation Benefits described
above, you and your family members, heirs, successors, and
assigns (collectively, the "Xxxx Released Parties") hereby
release, acquit, and forever discharge any and all claims and
demands of whatever kind or character, whether vicarious,
derivative, or direct, that you or they, individually,
collectively, or otherwise, may have or assert against (i)
National Energy Group, Inc. or (ii) any officer, director,
stockholder, fiduciary, agent, employee, representative,
insurer, attorney, or any successors and assigns of National
Energy Group, Inc. or the individuals referenced in (ii) above
(collectively, the "Company Released Parties"). This
Separation Agreement includes but is not limited to any claim
or demand based on any federal, state, or local statutory or
common law that applies or is asserted to apply, directly or
indirectly, to the formation of your employment relationship,
your employment relationship, or the termination of your
employment relationship with the Company. Thus, you and the
other Xxxx Released Parties agree not to make any claims or
demands against the Company or any of the other Company
Released Parties such as for wrongful discharge; unlawful
employment discrimination; retaliation; breach of contract
(express or implied); breach of the duty of good faith and
fair dealing; violation of the public policy of the United
States, the State of Texas, or any other state; intentional or
negligent infliction of emotional distress; tortious
interference with contract; promissory estoppel; detrimental
reliance; defamation of character; duress; negligent
misrepresentation; intentional misrepresentation or fraud;
invasion of privacy; loss of consortium; assault; battery;
conspiracy; bad faith; negligent hiring or supervision; any
intentional or negligent act of personal injury; any alleged
act of harassment or intimidation; or any other intentional or
negligent tort; or any alleged violation of the Age
Discrimination in Employment Act of 1967; Title VII of the
Civil Rights Act of 1964; the Americans with Disabilities Act
of 1990; the Employee Retirement Income Security Act of
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October 31, 1997
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1974; the Fair Labor Standards Act; the Fair Credit Reporting
Act; the Texas Commission on Human Rights Act; or the Texas
Wage Payment Statute, Tex. Rev. Civ. Stat. Xxx. art. 5155.
(b) Except for your obligations to be performed hereunder, the
Company and the other Company Released Parties hereby release,
acquit, and forever discharge any and all claims and demands
of whatever kind or character, whether vicarious, derivative,
or direct, that it or they, individually, collectively, or
otherwise may have or assert against you or any of the other
Xxxx Released Parties. This Separation Agreement includes,
but is not limited to, any claim or demand based on any
federal, state, or local statutory or common law that applies
or is asserted to apply, directly or indirectly, to the
formation of your employment relationship, your employment, or
the termination of your employment relationship with the
Company.
(c) Except as otherwise provided herein, the effect of this
Separation Agreement is to mutually release, acquit, and
forever discharge any and all claims and demands of whatever
kind or character, that either party, the Xxxx Released
Parties, or the Company Released Parties may now have, or
hereafter have or assert against each other arising out of the
employment relationship (including the formation and
termination thereof) which has existed between you and the
Company. It is further agreed that each of you and the
Company agree to indemnify and hold harmless the other for any
breach of the provisions of this Separation Agreement by the
respective Xxxx Released Parties or Company Released Parties
which results in damage to the other or to the respective
parties hereto. This mutual general release does not include:
(i) the executory obligations of either party yet to be
performed, or (ii) any rights, claims or obligations which may
accrue as between the parties after the date of this
Separation Agreement.
7. Confidentiality of this Separation Agreement and Nondisparagement. In
consideration of the Special Separation Benefits described above, each
of the Company and you agree that the terms of this Separation
Agreement shall be and remain confidential, and shall not be disclosed
by you and the other Xxxx Release Parties or the Company and the other
Company Released Parties to any party other than your spouse,
attorney, accountant or tax return preparer; provided such persons
have agreed to keep such information confidential, and except as may
be required by law or judicial process. Each of the Company and you
further agree, except as compelled by law or judicial process, not to
cooperate or supply information of any kind in any proceeding,
investigation, or inquiring raising issues under the Age
Discrimination in Employment Act of 1967, Title VII of the Civil
Rights Act of 1964, the
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October 31, 1997
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Americans with Disabilities Act of 1990, the Employee Retirement
Income Security Act of 1974, the Fair Labor Standards Act, the Fair
Credit Reporting Act, the Texas Commission on Human Rights Act, or the
Texas Wage Payment Statute, Tex. Rev. Civ. Stat. Xxx. art. 5155, or
any other federal, state, or local law, involving the formation of
your employment relationship, your employment relationship, the
termination of your employment relationship, or the employment of
other persons by the Company or any of the Company Released Parties.
In the event it appears that either party hereto shall be compelled by
law or judicial process to disclose the terms and conditions of this
Separation Agreement, such party shall immediately notify the other
party in writing and provide a copy of any notice that such disclosure
is being requested or required so that such party at its sole
discretion and expense may seek a protective order or take other such
action as such party in its sole discretion deems advisable or
necessary.
You and the other Xxxx Release Parties further agree not to make any
statement, oral or written, which directly or indirectly impugns the
quality or integrity of the Company's or any of the Company Released
Parties' business practices, or to make any other disparaging or
derogatory remarks or statements, oral or written, about the Company
or any of the Company Released Parties, their officers, directors,
stockholders, managerial personnel, or other employees or their
partners and consultants to any other parties.
In consideration of the General Release, the Confidentiality of
Separation Agreement and Nondisparagement provision, and the Agreement
Regarding Solicitation of Employees and Consultants, set forth herein,
the Company and the Company Released Parties agree that it and they,
respectively, shall instruct its officers, directors, managerial
personnel, or other employees not to make any statement, oral or
written, which directly or indirectly impugns the quality or integrity
of you or any of the Xxxx Released Parties' business practices, or to
make any other disparaging or derogatory remarks or statements, oral
or written, about you or any of the Xxxx Released Parties to any other
parties., and nothing shall be contained in personnel files of the
Company pertaining to you of a derogatory or denigrating nature or
disseminated by the Company or the Company Released Parties to third
parties.
8. Agreement Regarding Solicitation of Employees. In consideration of
the monetary payments and other benefits provided to you or on your
behalf by the Company in this Separation Agreement, you acknowledge
and agree that for a period of one (1) year following the termination
of your employment with the Company, you will not, directly or
indirectly, for your own account or for the benefit of any other
person or party, solicit, induce, entice, or attempt to entice any
employee, or independent contractor of the Company to terminate his or
her employment relationship, agreements or contracts with the Company.
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9. Nonadmission of Liability and Wrongdoing. It is acknowledged that
this Separation Agreement does not in any manner constitute an
admission of liability or wrongdoing on the part of the Company or
you, but that each of the Company and you expressly deny any such
liability or wrongdoing, and enter into this Separation Agreement for
the sole purpose of avoiding further trouble and expense; and that,
except to the extent necessary to enforce this Separation Agreement,
neither this Separation Agreement, nor any part of it may be
construed, used, or admitted into evidence in any judicial,
administrative, or arbitral proceedings as an admission of any kind by
the Company or you or any of the Company Released Parties or the Xxxx
Released Parties.
10. Authority to Execute. Each of the parties hereto warrants and agrees
that it (i) has full power and authority to execute, deliver and
perform the obligations contained in this Separation Agreement, (ii)
is a legally binding and enforceable agreement in accordance with its
terms and conditions, (iii) has the power and authority to bind its
respective Released Parties, (iv) does not violate, conflict with or
constitute a breach or default under any statute, rule, ordinance,
regulation or administrative order of any federal, state, county or
municipal court, board, office, agency or commission, and (v) is not
contemplating, nor are any bankruptcy or insolvency proceedings
threatened against such party of which it is aware.
11. GOVERNING LAW AND INTERPRETATION. THIS SEPARATION AGREEMENT AND THE
RIGHTS AND DUTIES OF THE PARTIES UNDER IT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND
PERFORMED IN DALLAS COUNTY, TEXAS. If any provision of this
Separation Agreement is held to be unenforceable, such provision shall
be considered separate, distinct, and severable from the other
remaining provisions and shall not affect the validity or
enforceability of such other remaining provisions, and that, in all
other respects, this Separation Agreement shall remain in full force
and effect. If any provision of this Separation Agreement is held to
be unenforceable as written and may be made to be enforceable by
limitation thereof, then such provision shall be enforceable to the
maximum extent permitted by applicable law and to the extent the
remaining provisions further accomplish the goals, benefits and intent
of this Separation Agreement. The language of all parts of this
Separation Agreement shall in all cases be construed as a whole,
according to its fair meaning, and not strictly for or against any of
the parties.
12. Expiration of Offer. The Company's offer of the proposed Special
Separation Benefits will expire at 4:00 P.M. local Dallas time on
October 31, 1997. You may accept this offer at any
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October 31, 1997
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time before the Expiration of Offer by executing this Separation
Agreement and returning it to the designated representative of the
Company.
13. The Effective Date. This Separation Agreement will become effective
as of the date of execution hereof.
14. Consultation With Counsel. You have the right to consult, and are
encouraged to consult, an attorney before executing this Separation
Agreement.
15. Voluntary Agreement. You and the Company acknowledge that execution
of this Separation Agreement is knowing and voluntary, that you and
the Company have had reasonable time to deliberate regarding its
terms, and that you and the Company have had the right to consult with
an attorney.
16. Legal Fees. Each of the Company and you agree to pay its own legal
fees and expenses with respect to the preparation, negotiation,
execution and delivery of this Separation Agreement, and further agree
to indemnify and hold harmless the other with respect thereto.
17. Entire Agreement. This Separation Agreement contains and constitutes
the entire understanding and agreement between you and the Company and
may be modified only by a writing of contemporaneous or subsequent
date executed by both you and an authorized officer of the Company.
18. Press Release. The parties hereto agree that any statement and/or
press release regarding your employment with the Company and/or
separation or resignation therefrom shall be limited to the effect
that you have resigned to pursue personal or other interests.
19. ARBITRATION/MEDIATION. IN THE EVENT OF A DISPUTE BETWEEN THE PARTIES
TO THIS AGREEMENT, THE PARTIES AGREE TO PARTICIPATE IN GOOD FAITH IN A
MINIMUM OF FOUR (4) HOURS OF MEDIATION IN DALLAS, TEXAS WITH AN
ATTORNEY- MEDIATOR TRAINED AND CERTIFIED BY THE AMERICAN ARBITRATION
ASSOCIATION, THE UNITED STATES ARBITRATION AND MEDIATION SERVICE, OR
ANY COMPARABLE ORGANIZATION, AND TO ABIDE BY THE MEDIATION PROCEDURES
AND DECISION OF SUCH ORGANIZATION. THE PARTIES AGREE TO EQUALLY BEAR
THE COSTS OF THE MEDIATION. IN THE EVENT THE PARTIES CANNOT RESOLVE
THEIR DISPUTE THROUGH MEDIATION AS DESCRIBED
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HEREIN, THE PARTIES AGREE TO PARTICIPATE IN BINDING ARBITRATION
PURSUANT TO THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION OR
MUTUALLY AGREEABLE SIMILAR ORGANIZATION. SUCH ARBITRATION SHALL BE
HELD IN DALLAS, TEXAS, SHALL BE BINDING AND NONAPPEALABLE AND A
JUDGMENT ON THE AWARD TO THE PREVAILING PARTY (INCLUSIVE OF REASONABLE
ATTORNEY'S FEES AND COSTS) MAY BE ENTERED IN ANY COURT HAVING COMPETENT
JURISDICTION.
If you are in agreement with the foregoing provisions, please execute the
attached duplicate copy of this letter in the space provided below. This
Separation Agreement shall then constitute a valid and binding agreement by and
between the Company and you enforceable in accordance with its terms as of the
date of your and the Company's execution hereof and delivery to the Company and
you.
Sincerely,
National Energy Group, Inc. ACCEPTED AND AGREED THIS
31ST DAY OF OCTOBER, 1997.
By: /s/ XXXXX X. XXXXXX /s/ XXXXXX X. XXXX
-------------------------- ---------------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxx,
Title: President and CEO an Individual
