1
EXHIBIT 10.14
[NATIONAL ENERGY GROUP, INC. LOGO]
November 24, 1998
Mr. Miles X. Xxxxxx
0000 Xxxxxx
Xxxxxx, XX 00000
Re: Separation Agreement
Dear Miles:
National Energy Group, Inc. (the "Company") recognizes the issues you have
raised with respect to the Company's termination of your employment. This
letter confirms the discussions we have held concerning the termination of your
employment from the Company, and the Company's offer and your acceptance of
this proposed settlement and separation agreement (this "Separation Agreement")
on the terms set forth below.
1. Resignation; Termination of Employment. Your employment with the Company
as President and Chief Executive Officer is terminated effective November
24, 1998 (hereinafter the "Separation Date"), at which time your
Executive Employment Agreement effective January 1, 1996 (the "Employment
Agreement") 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 through November 30, 1998;
and
(b) Payment of accrued and unused vacation leave, if any, through
the Separation Date.
The amounts paid in accordance with subparagraphs (a) and (b) of
this Paragraph 2 are gross amounts, subject to lawful deductions,
including any deductions you have previously authorized or
authorize prior to your Separation Date.
2
Mr. Miles X. Xxxxxx
November 24, 1998
Page 2
Your paid group health insurance benefits are paid through December 31,
1998. After the Separation Date, you are entitled at your option to
continue your group health insurance coverage at your expense in
accordance with applicable law. Please complete the COBRA election form
which will be furnished to you if you elect to continue such insurance
coverage.
Payment of any benefits to which you have vested entitlements under the
terms of the employee benefit plans established by the Company (including
but not limited to the Company 401(k) Plan and Employee Stock Purchase
Plan) shall be paid to you in accordance with the provisions of such
plans.
The Company will settle promptly all authorized reimbursable business
expenses, if any, when you have submitted appropriate expense reports
along with the required receipts and documenting information. To be
eligible for reimbursement of these expenses, they must be submitted by
the close of business on or before December 7, 1998.
3. Settlement Consideration. 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 in this Separation Agreement, and contingent upon your acceptance
of the terms contained herein, the Company offers you the following
Settlement Consideration, in addition to the compensation you will
receive pursuant to Paragraph 2:
(a) Settlement Payment. A lump-sum, cash settlement payment of
$395,764.43, payable concurrently with the execution and delivery
to the Company of both this Separation Agreement and the
Reaffirmation of Separation Agreement described in Paragraph 13
hereof;
(b) Stock Options. Any stock options granted to you shall continue to
vest in accordance with the 1996 Incentive Compensation Plan for so
long as you continue as a member of the Board of Directors of the
Company;
(c) Cellular Telephone; Laptop Computer. The Company shall allow you to
retain your cellular telephone and laptop computer;
(d) Transfer of Vehicle. Concurrent with the execution and delivery to
the Company of both this Separation Agreement and the Reaffirmation
of Separation Agreement described in Paragraph 13 hereof, the
Company shall transfer to you the ownership of that certain 1996
Infinity, VIN Xx. XXXXXX0X0XX000000; provided that you
3
Mr. Miles X. Xxxxxx
November 24, 1998
Page 3
shall pay all transfer, license, sales and other taxes, fees and/or
assessments payable in connection with such transfer of ownership;
(e) Indemnification for Official Acts. The Company shall, to the
fullest extent permitted under applicable law, defend and indemnify
you and hold you harmless against any costs or expense (including
reasonable attorneys' fees), judgments, fines, losses, claims,
damages and liabilities incurred in connection with, and amounts
paid in settlement of, any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or
investigative and wherever asserted, brought or filed, arising out
of or pertaining to any acts or omissions or alleged acts or
omissions by you in your capacity as an officer and/or director of
the Company or any of its subsidiaries. The foregoing shall be in
addition to and not in lieu of any indemnification rights you may
currently have by virtue of the Company's certificate of
incorporation, bylaws, resolutions or otherwise, which shall
continue in full force and effect notwithstanding any other
provisions of this Separation Agreement. EXCEPT FOR WILLFUL
CRIMINAL ACTS BY YOU, THE FOREGOING INDEMNIFICATION PROVISIONS
SHALL APPLY NOTWITHSTANDING YOUR SOLE OR CONTRIBUTORY NEGLIGENCE OR
STRICT LIABILITY; and
(f) Directors' and Officers' Liability Insurance. To the extent the
Company maintains any policy of insurance applicable to directors
and officers of the Company following the date of execution of this
Separation Agreement, it shall arrange for your continued coverage
under such policy for so long as you remain a director of the
Company.
4. Return of Property. Whether or not you accept the terms of this
Separation Agreement, except as provided in Paragraph 3, you must return
to the Company any and all items of its property, including without
limitation: office keys, security access cards, 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 December
2, 1998, 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-
4
Mr. Miles X. Xxxxxx
November 24, 1998
Page 4
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(a) 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 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
Settlement Consideration described above, you and your family
members, heirs, successors, and assigns (collectively, the
"Employee 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
5
Mr. Miles X. Xxxxxx
November 24, 1998
Page 5
assigns of National Energy Group, Inc. (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 Employee 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 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 Employee 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,
the termination of your employment relationship with the Company,
or your service as an officer or director of the Company or any of
its subsidiaries.
(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 Employee 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 or your service
6
Mr. Miles X. Xxxxxx
November 24, 1998
Page 6
as an officer or director of the Company or any of its
subsidiaries. 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
Employee 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, (ii) any rights,
claims or obligations which may accrue as between the parties after
the date of this Separation Agreement, or (iii) any rights, claim
or obligation to defend, indemnify (and any related rights by
virtue of Company insurance arrangements) in favor of you and any
Employee Released Party in connection with your service as an
officer and/or director of the Company or any of its subsidiaries.
(d) The parties acknowledge that the general release provisions of
subsection (a) of this paragraph and the obligations of Paragraph 7
and Paragraph 8 of this Separation Agreement are contingent upon
and undertaken by you in exchange for the Settlement Consideration
described in Paragraph 3. Accordingly, notwithstanding anything
herein to the contrary, if you are required, for any reason, to
return any material portion of the Settlement Consideration
described in Paragraph 3, then your obligations under the foregoing
General Release provision and under the provisions of Paragraph 7
and Paragraph 8 shall be deemed, at your option, null and void, and
upon your return of such material portion of the Settlement
Consideration, you shall be entitled to assert any rights and
claims you may have against the Company, including the Employment
Agreement, as if this Separation Agreement had never been executed
and delivered.
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 Employee 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 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
7
Mr. Miles X. Xxxxxx
November 24, 1998
Page 7
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 Employee Released 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; provided, however, that nothing
herein shall limit your right to provide full and truthful testimony as
required by subpoena or other legal process. You agree and acknowledge
that should you breach this obligation, in addition to any other remedy
the Company may have at law or in equity, you may be required to repay
the Settlement Consideration provided to you pursuant to this Separation
Agreement, but all other provisions of this Separation Agreement shall
remain in full force and effect.
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 Employee Released Parties' business practices, or to make any
other disparaging or derogatory remarks or statements, oral or written,
about you or your employment with the Company; provided, however, that
nothing herein shall limit the Company Released Parties' right to provide
full and truthful testimony as required by subpoena or other legal
process. Any material breach of this obligation will, in addition to any
other remedy you may have at law or in equity, relieve you of the duties
and obligations provided for in this Separation Agreement.
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
8
Mr. Miles X. Xxxxxx
November 24, 1998
Page 8
attempt to entice any employee, or independent contractor of the Company
to terminate his or her employment relationship, agreements or contracts
with the Company.
9. Nonadmission of Liability and Wrongdoing. This Separation Agreement is
entered into for the purpose of resolving and settling any and all
disputed issues between you and the Company, including without
limitation, issues related to the Employment Agreement. Accordingly, it
is acknowledged that this Separation Agreement does not in any manner
constitute an admission of liability or wrongdoing on your part or that
of the Company, but that you and the Company expressly deny any such
liability or wrongdoing, and enter into this Separation Agreement for the
sole purpose of avoiding further trouble and expense, including potential
litigation; and, 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, the Company Released Parties, or you or any of the Employee
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, and (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.
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. Subject to Paragraph 6(d), 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.
9
Mr. Miles X. Xxxxxx
November 24, 1998
Page 9
12. Expiration of Offer. The Company's offer of the proposed Settlement
Consideration will expire at midnight on the 21st day (the "Expiration of
Offer") following the date of this correspondence You may accept this
offer at any time before the Expiration of Offer by executing this
Separation Agreement and returning it to the designated representative of
the Company. Whether or not you execute this Separation Agreement, you
will receive the items set forth in Paragraph 2 and are required to
follow the obligations set forth in Paragraphs 4 and 5 hereof.
13. The Effective Date. This Separation Agreement will become effective and
enforceable seven (7) days after your execution hereof (the "Effective
Date"). At any time prior to the Effective Date, you may revoke your
acceptance of this Separation Agreement by delivering written notice
thereof to the Company. You further agree to execute and deliver to the
Company the Reaffirmation of this Separation Agreement, attached hereto
as Exhibit "A", within seven (7) days of the execution and delivery of
this Separation Agreement.
14. Consultation With Counsel. You have the right to consult, and are
encouraged by the Company 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. 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.
17. In the event of a dispute between the parties to this Separation
Agreement, the parties agree not to file any action or petition in any
court of law or equity for any relief, but to participate in good faith
in a minimum of four (4) hours of mediation in Dallas, Texas with an
attorney-mediator who 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 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 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
10
Mr. Miles X. Xxxxxx
November 24, 1998
Page 10
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 terms of this Separation Agreement,
please execute the attached duplicate of this letter in the space provided
below. By executing this Separation Agreement, you acknowledge that (a) you
have been offered at least twenty-one (21) days to consider the terms of this
Separation Agreement, (b) you were advised by the Company to consult with an
attorney regarding the terms of this Separation Agreement, (c) you have
consulted with, or have had sufficient opportunity to consult with, an attorney
of your own choosing regarding the terms of this Separation Agreement, (d) any
and all questions regarding the terms of this Separation Agreement have been
asked and answered to your complete satisfaction, (e) you have read this
Separation Agreement and fully understand its terms and their importance, (f)
the Settlement Consideration described in Paragraph 3 of this Separation
Agreement is good and valuable and of a kind to which you were not otherwise
entitled, and (g) you are entering into this Separation Agreement voluntarily,
of your own free will, and without any coercion, undue influence, threat or
intimidation of any kind or type whatsoever.
Sincerely,
National Energy Group, Inc. ACCEPTED AND AGREED THIS
24th DAY OF NOVEMBER, 1998.
By: /s/ XXX X. XXXXXXXXX /s/ MILES X. XXXXXX
---------------------------- -------------------------------
Name: Xxx X. Xxxxxxxxx Name: Miles X. Xxxxxx,
Title: President and an Individual
Chief Executive Officer
11
EXHIBIT "A"
REAFFIRMATION OF SEPARATION AGREEMENT
I, Miles X. Xxxxxx, acknowledge that I executed that certain
separation agreement (the "Separation Agreement") with National Energy Group,
Inc. (the "Company") and that during the seven (7) day period immediately
following my execution of the Separation Agreement, I had the right to revoke
the Separation Agreement at any time. By executing the Separation Agreement, I
also understand that I agreed that I would receive no benefits thereunder
unless and until I executed this reaffirmation agreement (this
"Reaffirmation").
By executing this Reaffirmation, I now affirm and attest that I (a)
have not heretofore, or contemporaneously with the execution of this
Reaffirmation, revoked, or attempted to revoke the Separation Agreement, either
by notice to the Company, or otherwise, and (b) am now, by virtue of my
execution of this Reaffirmation, within seven (7) days after the execution of
the Separation Agreement, fully bound by all of the terms and conditions of the
Separation Agreement.
EXECUTED this 2nd day of December, 1998.
/s/ MILES X. XXXXXX
------------------------------------
Miles X. Xxxxxx,
an Individual
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, the undersigned, a Notary Public, on this day personally
appeared Miles X. Xxxxxx, known to me to be the person whose name is subscribed
to the foregoing instrument and acknowledged to me that he executed the same
for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 2nd day of December, 1998.
/s/ XXXXXXX X. XXXXXX
------------------------------------
[SEAL] Notary Public, State of Texas
