SEPARATION AGREEMENT AND GENERAL RELEASE
Exhibit
10.1
EXECUTION
COPY
AND
GENERAL RELEASE
TERMINATION
OF EMPLOYMENT AGREEMENT AND RELEASE (the “Agreement”), dated as
of July 6, 2007 (“Effective Date”) by and between
Rosetta Resources Inc., a Delaware corporation, (the
“Company”), and X.X. Xxxxxxxx
(“Executive”).
WHEREAS,
the Company and Executive entered into and are parties to an employment
agreement (the “Employment Agreement”);
WHEREAS,
the Company and Executive desire to terminate the Employment Agreement and
to
terminate Executive’s employment with the Company effective as of July 15, 2007,
subject to the terms and conditions set forth below;
NOW,
THEREFORE, in consideration of the mutual promises and agreements hereinafter
set forth, the Company and Executive agree as follows:
1. Definitions. As
used in this Agreement, the following terms have the following
meanings:
“Acquisition”
has the meaning set forth in the Employment Agreement.
“Affiliate”
means, with respect to any entity, any other corporation, organization,
association, partnership, sole proprietorship or other type of entity, whether
incorporated or unincorporated, directly or indirectly controlling or controlled
by or under direct or indirect common control with such entity.
“Benefit
Continuation Period” has the meaning set forth in Section
3.
“Code”
means the Internal Revenue Code of 1986, as amended from time to time, and
the
regulations promulgated thereunder.
“Company”
has the meaning set forth in the first paragraph hereof.
“Company
Group” has the meaning set forth in Section 4.
“Competitor”
means any person or entity that is engaged in acquisition, exploration,
development and production of oil and gas properties in competition with the
activities of Company or any of its Affiliates.
“Confidential
Information” means, without limitation, documents or information, in
whatever form or medium, concerning evidencing sales; costs; pricing;
strategies; forecasts and long range plans; financial and tax information;
personnel information; business, marketing operational projections, plans and
opportunities; customer, vendor, and supplier information; geological and
geophysical maps, data, interpretations, and analyses; and prospect locations
and leads; well logs, interpretations, and analyses; production information;
in
each case relating to the Company, but excluding any such information that
is or
becomes generally available to the public other than as a result of any breach
of this Agreement or the Employment Agreement or other unauthorized disclosure
by Executive.
“Effective
Date’ has the meaning set forth in the first paragraph
hereof.
“Employment
Agreement” has the meaning set forth in the Recitals
hereto.
“Executive”
has the meaning set forth in the Recitals hereto.
“Executive
Claim” means any claim set forth or referred to in, and which is the
subject of, Section 4..
“Installment
Payments” has the meaning set forth in Section 3.
“Offer”
has the meaning set forth in the Employment Agreement.
“Options”
means all of the options previously granted to Executives to purchase equity
securities of the Company.
“Resignation
Date” has the meaning set forth in Section 2.
“Restricted
Period” has the meaning set forth in Section 5.
“Restrictive
Covenants” has the meaning set forth in Section 6.
“Separation
Benefits” has the meaning set forth in Section 3.
“Tax
Liabilities” means any liabilities or obligations under Section 409A of
the Code arising out of or relating to this Agreement.
“Welfare
Continuation Benefits” has the meaning set forth in Section
3.
2. Resignation. Executive
shall cease to be an employee of the Company effective July 15, 2007 (the
“Resignation Date”) and hereby resigns on the Effective Date
from Executive’s positions as President and Chief Executive Officer of the
Company, director and Chairman of the Board of Directors of the Company and
from
all other positions, including service on any Board of Directors, which
Executive holds or occupies with any of the Company’s subsidiaries or
Affiliates, and the Company hereby accepts such resignations.
3. Separation
Benefits.
In
consideration of Executive’s agreements hereunder, the Company further agrees to
make the payments and provide the benefits set forth in Sections 3(a), (b)
and
(c) (the “Separation Benefits”). The Separation Benefits
supersede and replace any and all benefits to which Executive might otherwise
be
or become entitled under the Company’s compensation and employee benefit plans
(including severance plans and arrangements) and the Employment Agreement,
other
than benefit plans subject to Section 401(a) of the Code.
(a) Accrued
Obligations. Within ten business days after the Resignation
Date, the Company will pay Executive’s accrued and unpaid base salary and
accrued and unused vacation days, all through the Resignation
Date. In addition, in accordance with the Company’s policies and
procedures, the Company shall promptly reimburse Executive for all unreimbursed
documented reasonable business expenses properly incurred by Executive on or
before the Resignation Date.
(b) Separation
Payments. The Company shall pay to Executive (i) on the
Resignation Date a lump sum payment of $2,000,000 and (ii) for the eighteen
month period commencing on the Resignation Date $960,000 payable in twelve
equal
monthly installments of $80,000, commencing on January 15, 2008
(“Installment Payments”).
(c) Certain
Welfare Benefits. During the 36-month period beginning on the
Resignation Date (the “Benefit Continuation Period”), the
Company shall continue to provide on the same basis the medical, dental and
life
insurance benefits that Executive and his dependents were receiving or entitled
to receive immediately prior to the Resignation Date (“Welfare
Continuation Benefits”); provided, however, that if Executive
becomes employed and eligible for similar benefits during the Benefit
Continuation Period, Executive’s entitlement to benefit continuation under this
Section 3(c) shall immediately cease, subject to Executive’s rights to COBRA
continuation coverage under the Company’s welfare benefit plans by paying the
applicable premium therefor. If, for any period during which
Executive is entitled to Welfare Continuation Benefits, the Company reasonably
determines that Executive cannot receive such Benefits under any Company
sponsored welfare benefit plan then, in lieu of providing benefits under such
plan, the Company shall provide to Executive comparable benefits through other
arrangements or the cash equivalent of the cost thereof.
(d) Benefits
to Cease upon Breach of Restrictive Covenants. In all events, if
Executive breaches any of the Restrictive Covenants then, notwithstanding
anything herein to the contrary, Executive shall immediately cease to have
any
rights to any unpaid Separation Benefits and any Options outstanding shall
immediately terminate without any payment to Executive.
4. Release.
(a) In
exchange for this Agreement, Executive (on behalf of Executive and anyone
claiming through or on behalf of Executive), releases the Company and each
of
the Company’s subsidiaries and other Affiliates, its and their successors and
assigns, and all of their past and present employees, officers, directors and
stockholders (the “Company Group”), and their agents and
attorneys from any and all claims and potential claims, whether known or unknown
and whether or not matured or contingent, demands and causes of action Executive
has or may have had against any of them, including but not limited to,
Executive’s service or employment with the Company and the termination
thereof. This release includes, but is not limited to, any and all
claims, demands and causes of action which are related to or
concern: the Employment Agreement; service as a director or officer
of the Company; Executive’s acquisition or ownership of Company securities or
Options; Executive’ s employment and the prospective termination thereof as
contemplated hereby; Tax Liabilities; attorneys’ fees or costs; discrimination
under local, state or federal law; the Age Discrimination in Employment Act
(ADEA); the Older Workers Benefit Protection Act (OWBPA); Title VII of the
Civil
Rights Act of 1964; the Civil Rights Act of 1991; the Americans With
Disabilities Act; the Employee Retirement Income Security Act; severance pay;
tort claims including invasion of privacy, defamation, fraud and infliction
of
emotional distress; disputed wage claims; and all other claims, demands, and
causes of action, whether they arise in the United States of America or
elsewhere. This release does not apply to (i) any rights or benefits
as set forth in this Agreement, or (ii) any rights to indemnification to which
Executive is entitled as an officer or director.
(b) In
exchange for this Agreement, the Company (on behalf of the Company and the
Company’s subsidiaries and other Affiliates, their successors and assigns and
anyone claiming through or on behalf of the Company or any of the Company’s
subsidiaries or other Affiliates, their successors and assigns) release
Executive, Executive’s heirs, executors, personal representatives, attorneys,
agents, successors and assigns, from any and all claims and potential claims,
known or unknown and whether or not matured or contingent, demands and causes
of
action which they have or may have had against Executive arising out of, related
to or concerning Executive’s performance of his duties with the Company and with
respect to expenses reimbursed to Executive prior to the date hereof; provided,
however that this release does not release Executive from the obligation to
comply with Executive’s obligations under this Agreement nor from any claim,
right or cause of action that relates to Calpine or the Acquisition, all of
which obligations, claims, rights and causes of action are expressly
preserved.
5. Executive
Covenants.
(a) Confidentiality. Executive
acknowledges and agrees that (i) the Company and its Affiliates are engaged
in a
highly competitive business; (ii) the Company and its Affiliates have expended
considerable time and resources to develop goodwill with their customers,
vendors, and others, and to create, protect, and exploit Confidential
Information; (iii) the Company must continue to prevent the dilution of its
and
its Affiliates’ goodwill and unauthorized use or disclosure of its Confidential
Information to avoid irreparable harm to its legitimate business interests;
(iv)
given Executive’s position and responsibilities with the Company, Executive was
necessarily involved creating Confidential Information that belongs to the
Company and enhances the Company’s goodwill; (v) Executive had access to
Confidential Information that could be used by any Competitor of the Company
in
a manner that would irreparably harm the Company’s competitive position in the
marketplace and dilute its goodwill; and (vi) Executive will not directly or
indirectly use or disclose Confidential Information.
Executive
acknowledges and agrees that: (i) all Confidential Information is,
shall remain and be the sole and exclusive property of the Company and/or its
Affiliates; (ii) Executive will hold all Confidential Information in strictest
confidence and not, directly or indirectly, at any time disclose or divulge
any
Confidential Information to any person other than an officer, director or legal
counsel for the Company or its Affiliates, unless authorized to do so by the
Company or compelled to do so by law or valid legal process; (iii) if
Executive believes Executive is compelled by law or valid legal process to
disclose or divulge any Confidential Information, Executive will notify the
Company in writing sufficiently in advance of any such disclosure to allow
the
Company the opportunity to defend, limit, or otherwise protect its interests
against such disclosure; and (iv) concurrently with the execution of this
Agreement, Executive will return to the Company all Confidential Information
and
all copies thereof; in whatever tangible form or medium, including
electronic.
(b) Non-Disparagement. (i)
Executive agrees that Executive shall not at any time make negative statements
or representations, or otherwise communicate negatively, directly or
indirectly, in writing, orally, or otherwise, or take any action which may,
directly or indirectly, disparage or be damaging to the Company, its
subsidiaries, Affiliates, successors or their officers, directors, employees,
business or reputation. From and after the Resignation Date,
Executive shall communicate directly only with D. Xxxxx Xxxxxxx regarding any
matters relating to the Company and shall otherwise not contact or attempt
to
contact the Company, its officers, directors, shareholders, employees or agents
regarding any matters relating to the Company, unless such person first contacts
Executive.
(ii) The
Company agrees that neither the Company nor any of its directors shall at any
time make, or authorize the making of, and that the Company shall instruct
the
Company’s executive officers not to make or authorize the making of, statements
or representations, or other communications, directly or indirectly, in writing,
orally, or otherwise, or take any action which (A) except in the context of
legal or administrative proceedings, directly or indirectly, disparages
Executive or (B) is designed to be damaging to Executive’s
reputation.
(c) Nonsolicitation. (i)
Executive agrees that at no time during the two-year period beginning on the
Resignation Date the (“Restricted Period”) will Executive,
whether on his own behalf or on behalf of any other individual, partnership,
firm, corporation or business organization, either directly or indirectly
solicit, induce, persuade, or entice, or endeavor to solicit, induce, persuade,
or entice, any person who is then employed by or otherwise engaged to perform
services for the Company or its Affiliates to leave that employment or cease
performing those services; and
(ii) During
the Restricted Period, Executive will not, whether on his own behalf or on
behalf of any other individual, partnership, firm, corporation or business
organization, either directly or indirectly solicit, induce, persuade, or
entice, or endeavor to solicit, induce, persuade, or entice, any person who
is
then a customer, supplier, or vendor of the Company or any of its Affiliates
to
cease being a customer, supplier, or vendor of the Company or any of its
Affiliates or to divert all or any part of such person’s or entity’s business
from the Company or any of its Affiliates.
(d) Assistance;
Advice and Consultation. (i) Commencing on the Effective Date,
Executive shall, upon reasonable notice, furnish such information and proper
assistance to the Company or any of its Affiliates as may reasonably be required
by the Company in connection with any litigation in which the Company or any
of
its Affiliates is, or may become, a party. The Company shall
reimburse Executive for all documented reasonable out-of-pocket expenses
incurred by Executive in rendering such assistance, but shall have no obligation
to compensate Executive for his time in providing information and assistance
in
accordance with this Section 5.
(ii) Commencing
on the Effective Date, Executive shall provide reasonable advice and
consultation to the Company, including its Board of Directors and Chief
Executive Officer, (i) in connection with the Calpine matter, and (ii) to the
extent not inconsistent with any new employment undertaken by Executive, in
connection with the transition to his successors, joint ventures, drilling
programs, xxxxx and other similar matters. The Company shall
reimburse Executive for all documented, reasonable out-of-pocket expenses
incurred by Executive in connection with such advice and consultation (which,
for the avoidance of doubt, in the case of the Calpine matter will include
the
cost of legal counsel to the extent Executive reasonably asserts he is entitled
to indemnification therefor), but shall have no obligation to compensate
Executive for his time in providing such advice and consultation in accordance
with this Section 5.
(e) Acknowledgement. Executive
acknowledges and agrees that: (i) the restrictions contained in this
Section 5 are ancillary to an otherwise enforceable agreement; (ii) the
Company’s promises and undertakings set forth in Section 3 give rise to the
Company’s interest in restricting Executive’s post-employment activities; (iii)
such restrictions are designed to enforce Executive’s promises and undertakings
set forth in this Section 5 and Executive’s common-law obligations and duties
owed to the Company and its Affiliates; and (iv) the restrictions are reasonable
and necessary, are valid and enforceable under Texas law, and do not impose
a
greater restraint than necessary to protect the Company’s goodwill, Confidential
Information, and other legitimate business interests.
6. Remedies.
(a) Executive
acknowledges and agrees that the Company’s remedies at law for a breach or
threatened breach of any of the covenants set forth in Sections 5(a), (b),
(c)
and (d) (the “Restrictive Covenants”) would be inadequate and,
in recognition of this fact, Executive agrees that, in the event of a breach
or
threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to obtain equitable relief in the form
of
specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be
available.
(b) It
is
expressly understood and agreed that although Executive and the Company consider
the restrictions contained in Section 5 to be reasonable, if a final judicial
determination is made by a court of competent jurisdiction that the time or
territory or any other restriction contained in this Agreement is an
unenforceable restriction against Executive, the provisions of this Agreement
shall not be rendered void but shall be deemed amended to apply as to such
maximum time and territory and to such other maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any court
of competent jurisdiction finds that any restriction contained in this Agreement
is unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.
7. No
Admission of Wrongdoing. This Agreement is not an admission of
wrongdoing or liability by Executive, the Company, or any member of the Company
Group and any and all such wrongdoing or liability is expressly
denied.
8. Entire
Agreement; Amendment. This Agreement shall supersede the
Employment Agreement in its entirety any and all existing agreements between
Executive and the Company or any of its affiliates relating to the terms of
Executive’s employment with the Company and its Affiliates and contains the
entire understanding of the parties with respect to Executive’s resignation and
the termination of Executive’s employment. It may not be altered,
modified or amended except by a written agreement signed by both parties
hereto.
9. No
Waiver. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver
of
such party’s rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
10. Severability;
Section 409A; Withholdings.
(a) In
the
event that any one or more of the provisions of this Agreement shall be or
become invalid, illegal or unenforceable in any respect, the validity, legality
or enforceability of the remaining provisions of this Agreement shall
not be affected thereby.
(b) Any
provision of this Agreement to the contrary notwithstanding, all compensation
payable pursuant to Section 3(b)(i) of this Agreement that is determined by
the
Company in its sole judgment to be subject to the payment date requirements
of
Section 409A(a)(2)(B) of the Code shall be paid in a manner that the Company
in
its sole judgment determines meets such requirements of Code Section 409A and
any related rules, regulations or other guidance, even if meeting such
requirements would result in a delay in the time of payment of such
compensation.
(c) Any
payments or benefits provided to Executive hereunder shall be subject to make
all applicable withholdings.
11. Assignment. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, representatives, successors and
assigns. This Agreement shall not be assignable by
Executive.
12. Governing.
Law; Venue. This Agreement shall be governed by the laws of the
State of Texas except for its laws with respect to conflict of
laws. The exclusive forum for any lawsuit arising from or related to
the termination of Executive’s employment or this Agreement shall be any state
or federal court in Texas. This provision does not prevent the
Company from removing to an appropriate federal court any action brought in
state court. EXECUTIVE HEREBY CONSENTS TO, AND WAIVES ANY
OBJECTIONS TO, REMOVAL TO FEDERAL COURT BY THE COMPANY OF ANY ACTION BROUGHT
AGAINST IT BY EXECUTIVE.
13. JURY
TRIAL WAIVER. IN THE EVENT THAT ANY DISPUTE ARISING FROM OR
RELATED TO THIS AGREEMENT OR EXECUTIVE’S TERMINATION OF EMPLOYMENT WITH THE
COMPANY RESULTS IN A LAWSUIT, BOTH THE COMPANY AND EXECUTIVE MUTUALLY WAIVE
ANY
RIGHT THEY MAY OTHERWISE HAVE FOR A JURY TO DECIDE THE ISSUES IN
THE LAWSUIT, REGARDLESS OF THE PARTY OR PARTIES ASSERTING CLAIMS IN
THE LAWSUIT OR THE NATURE OF SUCH CLAIMS. THE COMPANY AND EXECUTIVE
IRREVOCABLY AGREE THAT ALL ISSUES IN SUCH A LAWSUIT SHALL BE DECIDED BY A JUDGE
RATHER THAN A JURY.
14. Further
Acknowledgement. By signing this agreement, in addition to
releasing all Executive Claims, Executive acknowledges
that:
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a.
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The
Company has advised Executive by this Agreement in writing to consult
with
an attorney and Executive
has
consulted with an attorney prior to signing this
Agreement.
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b.
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The
consideration for this Agreement is in addition to anything of value
to
which Executive already is
entitled.
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c.
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Executive
was
given at least 21 days to consider the actual terms of this
Agreement.
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d.
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Executive
agrees with the Company that changes, whether material or immaterial,
do
not restart the running of the 21-day consideration
period.
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e.
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Executive
understands that Executive
may
revoke this agreement within seven (7) calendar days from the date
of
signing, in which case this Agreement shall be null and void and
of no
force and effect on the Company or Executive.
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f.
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Executive
understands that this Agreement shall not become effective or enforceable
until the 7-day revocation period has expired. Executive
further understands and acknowledges that, to be effective, the revocation
must be in writing, delivered to D. Xxxxx Xxxxxxx c/o the Company,
on or
before 5:00 PM of the seventh (7th)
calendar
day after the date Executive
signs this Agreement.
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EXECUTIVE
ACKNOWLEDGES AND CONFIRMS THAT HE HAS CAREFULLY READ THIS TERMINATION OF
EMPLOYMENT AGREEMENT AND GENERAL RELEASE AND THAT IT CONTAINS A
COVENANT NOT TO XXX AND A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS
ARISING OUT OF EXECUTIVE’S EMPLOYMENT, INCLUDING, BUT NOT LIMITED TO, THE
RELEASE OF ALL CLAIMS UNDER TITLE VII OF THE 1964 CIVIL RIGHTS ACT, THE
AMERICANS WITH DISABILITIES ACT, THE AGE DISCRIMINATION IN EMPLOYMENT ACT AS
AMENDED BY THE OLDER WORKERS’ BENEFIT PROTECTION ACT, AND/OR ANY OTHER FEDERAL
OR STATE FAIR EMPLOYMENT OR ANTI-DISCRIMINATION STATUTES OR
REGULATIONS.
15. Counterparts.
This
Agreement may be executed in separate counterparts, each of which is deemed
to
be an original and all of which taken together constitute one and the same
agreement.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the
day and year first above written.
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/s/
X.X. Xxxxxxxx
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X.X.
Xxxxxxxx
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By:
/s/ D. Xxxxx Xxxxxxx
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Name:
D. Xxxxx Xxxxxxx
Title:
Director
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