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EXHIBIT 10.1
EXECUTIVE EMPLOYMENT SEVERANCE AGREEMENT
THIS EXECUTIVE EMPLOYMENT SEVERANCE AGREEMENT (this "Severance
Agreement") dated as of April 3, 2000 by and between Coho Energy, Inc., a Texas
Corporation (the "Company"), and Xxxxxxx Xxxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Executive has been providing services to the Company and
the Company has been compensating the Executive in accordance with an
Employment Agreement dated as of November 11, 1994, as amended (the "Employment
Agreement");
WHEREAS, the Company is a debtor-in-possession, in a bankruptcy case
styled "In re Coho Energy, Inc., et al.," pending before the United States
Bankruptcy Court for the Northern District of Texas, Dallas Division (the
"Bankruptcy Case");
WHEREAS, the Company has filed a Plan of Reorganization (the "Plan");
WHEREAS, the Employment Agreement provides that if the Executive is
terminated he would be entitled to benefits totalling in excess of $1.6 million;
WHEREAS, the Company and the Executive wish to compromise and settle
the entitlements of the Executive under the Employment Agreement by entering
into this Severance Agreement;
WHEREAS, the Employment Agreement is being modified and restated
pursuant to this Severance Agreement which will be approved as an integral part
of the Plan; and
WHEREAS, the Company desires to enter into this Severance Agreement
since it is imperative that the Company be able to receive and rely upon the
Executive's advice, if requested, as to the best interest of the Company;
NOW, THEREFORE, to assure that the Company will have the continued
dedication of the Executive and availability of Executive's advice and counsel,
and to induce Executive to remain in the employ of the Company, and for other
good and valuable consideration, the Company and Executive agree as follows:
1. Employment and Term of Employment. Subject to the terms and
conditions of this Severance Agreement, the Company hereby agrees to employ the
Executive, and the Executive hereby agrees to serve the Company in the role of
consultant, for up to two (2) days per week for a period of three (3) months
following the Effective Date (as that term is defined in the Plan)("Term of
Employment"). Executive shall cooperate with and make himself reasonably
available to consult with and to support the Company's prosecution of the HM4
lawsuit until such time as the HM4 lawsuit is fully litigated either through
final non-appealable judgement or settlement.
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2. Scope of Employment. During the term of Employment, the Executive
agrees to provide consulting services reasonably requested by the Company's
Board of Directors.
3. Compensation. In consideration of the consulting services to be
provided by the Executive and the compromise of the Employment Agreement, the
Executive shall receive cash payment in the following amounts:
(i) $600,000 (representing two times his previous annual
salary of $300,000 per annum)
(ii) $125,000 (representing payment of the average
aggregate bonus received by Executive during his
previous four years of employment with the Company);
and
(iii) $150,000 (representing one-half of his previous
annual salary, hereinafter referred to as the "Stay
Bonus"). (This shall not be a duplication of the
amount referenced in the Disclosure Statement.)
The Stay Bonus shall be paid as follows: thirty-three percent (33%) shall be
paid on the first business day following the Effective Date (as defined in the
Plan); with remaining sixty-seven percent (67%) being paid on the two hundred
seventieth (270th) day following the Effective Date. The balance of the cash
payments shall be paid as follows: $362,500 on the Effective Date, and $362,500
on the two hundred seventieth (270th) day following the Effective Date.
4. Additional Compensation and Benefits. As additional compensation for
the Executive's services under this Severance Agreement, the Executive's
covenant regarding confidentiality in Section 5 hereof and non-competition in
Section 7 hereof, the Company agrees to provide the Executive with the following
non-cash benefits:
(i) payment of two years of medical, life insurance and
disability payments, the cost of which is estimated
as follows:
(a) annual life insurance premiums ($18,200);
(b) annual disability insurance premiums
($14,456); and
(c) annual medical cost (COBRA)(in the
approximate of $10,918).
(ii) Executive shall be released by the Company for any
claims the Company may have in connection with the
sole stock purchase loan previously made to the
Executive.
(iii) the Company shall forgive the interest-free housing
loan from the Company to the Executive in the amount
of $205,000 in return for the Executive's continued
cooperation with the HM4 lawsuit as set forth in
Paragraph 1
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above. Such forgiveness shall occur on the date the HM4 lawsuit
is fully litigated either through final non-appealable judgement
or settled.
(iv) the Company shall provide tail directors and officers
insurance as set forth in the plan of reorganization.
(v) in addition to the benefits afforded Executive pursuant to the
plan, Company's By-Laws and other constituent documents, the
Company agrees that it will not assign to any other person or
entity any claims that the Company may have against Executive,
if any.
5. Confidentiality. The Executive shall hold in a fiduciary capacity for
the benefit of the Company all maps, data, reports, including results of
exploration, drilling, drill cores, cuttings and other samples, and other
information relating to the business of the Company (such information being
collectively referred to herein as the "Confidential Information"). During the
term of the Employment and after termination of the Executive's employment
hereunder, the Executive agrees:
(i) to take all such precautions as may be reasonably necessary to
prevent the disclosure to any third party of any of the
Confidential Information;
(ii) not to use for the Executive's own benefit any of the
Confidential Information; and
(iii) not to aid any other person or entity in the use of the
Confidential Information in competition with the Company.
Notwithstanding any provision contained herein to the contrary,
the term Confidential Information shall not be deemed to include
any general knowledge, skills or experience acquired by the
Executive or any knowledge or information known to the public in
general. The Executive further agrees that upon termination of
his employment for any reason, he shall surrender to the Company
all Confidential Information, and any copies thereof, produced
by him or coming into his possession and agrees that all such
materials, and copies thereof, are at all times the property of
the Company. The Executive further agrees that he shall not
otherwise knowingly act or conduct himself (i) to the material
detriment of the Company, its subsidiaries or affiliates, or
(ii) in a manner which is inimical or contrary to the interests
thereof.
6. Definitions; Remedies. For purposes of this Section 6, the Company
shall be defined as the Company and its affiliated companies including (without
limitation) its successors and assigns and its subsidiaries and each of their
respective successors and assigns. In the event of a breach or threatened
breach by the Executive of the provisions of this Section 6, the Company shall
be entitled to an injunction restraining the Executive from violating such
provisions without the necessity of posting a bond therefor. Nothing herein
shall be construed as prohibiting the Company from
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pursuing any other remedies available to it at law or in equity. Except as
specifically set forth herein, the parties agree that the provisions of this
Section 6 shall survive the earlier termination of the Executive's employment
with the Company, as the continuation of this covenant is necessary for the
protection of the Company.
7. Noncompetition
(a) Noncompetition Activities. The Executive acknowledges that the
nature of the employment under this Agreement is such as will bring the
Executive in personal contact with patrons or customers of the Company and will
enable him to acquire valuable information as to the nature and character of
the business of the Company, thereby enabling him, by engaging in a competing
business in his own behalf, or for another, to take advantage of such knowledge
and thereby gain an unfair advantage. Accordingly, the Executive covenants and
agrees that he will not, without the prior written consent of the Company
during the Term of Employment and for the period of one (1) year thereafter,
engage directly or indirectly for himself, or as an agent, representative,
officer, director or employee of others, in the exploration for hydrocarbons in
areas covered by plays or prospects on which the Executive worked or of which
the Executive had knowledge at the time of the cessation of the Executive's
employment hereunder.
(b) Scope. In the event that the provisions of this Section 7 should
ever be deemed to exceed the time, geographic or actively related limitations
permitted by applicable law, then such provisions shall be reformed to the
maximum time, geographic or activity related limitations permitted by applicable
law. In the event of a breach or threatened breach by Executive of the
provisions of this Section 7, the Company shall be entitled to an injunction
restraining the Executive from violating such provisions without the necessity
of posting a bond therefor. Nothing herein shall be construed as prohibiting the
Company from pursuing any other remedies available to it at law or in equity.
Except as specifically set forth herein, the parties agree that this Section 7
shall remain in effect for its full term notwithstanding the earlier termination
of the Executive's employment with the Company, as the continuation of his
covenant is necessary for the protection of the Company. For purposes of this
Section 7, the Company shall be defined as the Company and its affiliated
companies including (without limitation) its successors and assigns and its
subsidiaries and each of their respective successors and assigns.
8. Expenses. In the event any litigation is initiated after the date of
this Severance Agreement with respect to this Severance Agreement or its
subject matter, any prevailing party as determined by a court of competent
jurisdiction shall be entitled to recover such party's reasonable attorney's
fees from and against any non-prevailing party.
9. Governing Law. This Severance Agreement shall be governed by and
construed in accordance with the internal laws of the State of Texas. Venue
and jurisdiction of any action relating to this Agreement shall lie in Dallas
County, Texas.
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10. Notice. Any notice, payment, demand or communication required or
permitted to be given by this Severance Agreement shall be deemed to have
sufficiently given or served for all purposes if delivered personally or if
sent by registered or certified mail, return receipt requested, postage
prepaid, addressed to such party at its address set forth below such party's
signature to this Agreement or to such other address as shall have been
furnished in writing by such party for whom the communication is intended. Any
such notice shall be deemed to be given on the date so delivered.
11. Severability. In the event any provisions hereof shall be modified or
held ineffective by any court, such adjudication shall not invalidate or render
ineffective the balance of the provisions hereof.
12. Entire Agreement. Other than the Release of even date herewith by and
between Executive and the Company, Coho Resources, Inc., its employees,
officers, agents, subsidiaries, affiliates and all related entities, this
Severance Agreement constitutes the sole agreement between the parties with
respect to the employment of the Executive by the Company and the terms and
conditions of executive's severance, and supersedes any and all other
agreements, oral or written, between the parties. This Severance Agreement may
not be modified or amended except by a writing signed by the parties.
13. Waiver. Any waiver or breach of any of the terms of this Severance
Agreement shall not operate as a waiver of any other breach of such terms or
conditions, or any other terms or conditions, nor shall any failure to enforce
any provisions hereof operate as a waiver of such provision or any other
provision hereof.
14. Assignment. This Severance Agreement is a personal employment
contract and the rights and interests of the Executive hereunder may not be
sold, transferred, assigned or pledged. Subject to Section 7(d) hereof, the
Company may assign its rights under this Agreement to (i) any entity into or
with which the Company is merged or consolidated or to which the Company
transfers all or substantially all of its assets or (ii) any entity, which at
the time of such assignment, controls, is under the common control with, or is
controlled by the Company.
15. Successors. This Severance Agreement shall be binding upon and inure
to the benefit of the Executive and his heirs, executors, administrators and
legal representatives. This Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns.
16. Section Headings. The section headings in this Severance Agreement
have been inserted for convenience and shall not be used for interpretative
purposes or to otherwise construe this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Severance
Agreement as of the date first written above and intend that this Severance
Agreement have the effect of a sealed instrument.
COHO ENERGY, INC., Debtor and
00000 Xxxxxxx Xxxx, Xxxxx 000 Xxxxxx-xx-Xxxxxxxxxx
Xxxxxx, Xxxxx 00000
By: /s/ XXXXXXX X. XxXXXXXX
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Name: XXXXXXX X. XxXXXXXX
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Title: PRESIDENT
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/s/ XXXXXXX XXXXXX
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XXXXXXX XXXXXX
