SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (this "Agreement") is entered into as of
April 17, 1997, by and between Xxxxxx Oil Corporation, a Delaware corporation
("SOCO"), and Xxxxxx X.
Xxxxxxx ("Xx. Xxxxxxx");
W I T N E S S E T H:
WHEREAS, Xx. Xxxxxxx was a co-founder and has been a principal officer
of SOCO since 1981; and
WHEREAS, Xx. Xxxxxxx is currently an employee of the Company (as such
term is hereinafter defined) and will remain an employee of the Company through
April 30, 1997 (the "Resignation Date"); and
WHEREAS, Xx. Xxxxxxx and SOCO are contemporaneously with the execution
of this Agreement entering into that certain Advisory Agreement (the "Advisory
Agreement"), which Advisory Agreement sets forth the terms and conditions
pursuant to which Xx. Xxxxxxx will perform certain advisory services for SOCO
after the Resignation Date; and
WHEREAS, Xx. Xxxxxxx and SOCO have agreed to certain terms and
conditions concerning Xx. Xxxxxxx'x termination of employment with the Company;
NOW, THEREFORE, for and in consideration of the amounts and benefits to
be paid and provided to Xx. Xxxxxxx under this Agreement and the mutual
promises, covenants, and undertakings contained in this Agreement, and intending
to be legally bound, SOCO and Xx. Xxxxxxx agree as follows:
1. Resignation; Transition From Employee to Contractor: Effective as of
February 20, 1997, Xx. Xxxxxxx resigned as (a) an officer and director of the
Company and (b) a fiduciary and member of any committee established with respect
to any employee benefit plan maintained by the Company. For purposes of this
Agreement, the term "Company" shall mean SOCO and each of its subsidiaries
(other than Patina Oil & Gas Corporation and its subsidiaries (collectively,
"Patina")). From the date hereof through the Resignation Date, (1) Xx. Xxxxxxx
shall continue to be an employee of the Company, (2) Xx. Xxxxxxx shall receive
compensation from the Company at Xx. Xxxxxxx'x rate of base salary as in effect
on the date hereof, and (3) the Company shall continue to maintain and staff its
office in New York City. Effective as of the Resignation Date, Xx. Xxxxxxx'x
employment with the Company shall terminate. As of May 1, 1997, there shall be
an independent contractor relationship between SOCO and Xx. Xxxxxxx, which
relationship shall be governed by the Advisory Agreement. Upon (A) the payment
of Xx. Xxxxxxx'x base salary through the Resignation Date, (B) the payment of
the amounts specified in paragraph 4 hereof, and (C) subject to the provisions
of paragraph 7(a) hereof, the payment of the amounts and provision of the
benefits specified in paragraphs 2 and 3 hereof, the Company shall have no
further obligations
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to Xx. Xxxxxxx for any salary, bonus, or other compensation of any type for
services rendered by Xx. Xxxxxxx to the Company on or before the Resignation
Date.
2. Severance Payment: Subject to the provisions of paragraph 7(a)
hereof, in consideration of his services over the past sixteen (16) years, SOCO
shall pay to Xx. Xxxxxxx a xxxxxxxxx payment in the form of thirty six (36)
consecutive monthly installments of Thirty Thousand Dollars ($30,000.00) each,
with such monthly installments being due and payable on the 15th day of each
month beginning on May 15, 1997. In the event of Xx. Xxxxxxx'x death prior to
his receipt of all thirty six (36) of such installments, Xx. Xxxxxxx'x heirs,
administrators, legatees, or permitted assignees shall be entitled under this
Agreement to all of the remaining unpaid installments that otherwise would have
been due Xx. Xxxxxxx, which shall continue to be paid in monthly installments.
Xx. Xxxxxxx waives, and the Company shall not be required to pay, any other
severance pay or severance benefits in connection with the termination of the
employment relationship, whether from a severance plan sponsored by the Company
or the general assets of the Company. The consideration and remuneration
provided for under this Agreement are in lieu of and take the place of any other
severance pay or severance benefit, which Xx. Xxxxxxx forfeits.
3. Stock Options and Deferred Compensation: Subject to the provisions
of paragraph 7(a) hereof and pursuant to the actions taken by the Board of
Directors of SOCO on February 20, 1997, each agreement evidencing a stock option
awarded to Xx. Xxxxxxx under SOCO's 1989 Stock Option Plan, as amended (the
"1989 Plan"), which agreements provide for stock options covering an aggregate
of 292,600 shares of SOCO's common stock, shall be and hereby is amended,
effective as of the expiration of the seven-day revocation period referred to in
paragraph 7(a) hereof, to provide that such stock options (a) are 100% vested
and exercisable in full, (b) shall remain exercisable until March 1, 2002, and
(c) shall terminate and cease to be exercisable on March 2, 2002. Termination of
Xx. Xxxxxxx'x employment with the Company and SOCO's Affiliates (as such term is
defined in the 1989 Plan) for any reason whatsoever shall not affect the
exercisability of any such stock option. Xx. Xxxxxxx understands and agrees that
the actions taken pursuant to this paragraph 3 constitute a modification and/or
extension of the Incentive Options (as such term is defined in the 1989 Plan)
that have heretofore been awarded to Xx. Xxxxxxx, and, accordingly, such actions
will cause some or all of such options to no longer qualify as incentive stock
options pursuant to section 422 of the Internal Revenue Code of 1986, as
amended. Subject to the provisions of paragraph 7(a) hereof and effective as of
the expiration of the seven-day revocation period referred to in paragraph 7(a)
hereof, all of the Company contributions made through the Resignation Date to
Xx. Xxxxxxx'x account under SOCO's Deferred Compensation Plan for Select
Employees shall be fully vested. In addition, the Company hereby confirms that,
pursuant to the terms of SOCO's Savings and Profit Sharing Plan, all of the
amounts credited to Xx. Xxxxxxx'x accounts under such plan through the
Resignation Date will be fully vested.
4. Additional Payments. SOCO has agreed to pay Xx. Xxxxxxx (a) the sum
of $7,074.90, which amount approximates 50% of the Company's estimated cost of
providing Xx. Xxxxxxx and his family with health insurance benefits for a
three-year period beginning on the Resignation Date, and (b) the sum of
$6,346.15 in respect of his unused 1997 vacation time. The amounts referred to
in the preceding sentence shall be paid in a single lump sum cash payment on the
Resignation Date.
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5. Nonsolicitation of Employees: From the date hereof through May 1,
1998, Xx. Xxxxxxx agrees that he shall not, directly or indirectly, for himself
or for others, induce any employee of the Company(other than an employee in the
Company's New York City office from and after the Resignation Date) to terminate
his or her employment with the Company, or hire or assist in the hiring of any
such employee by any person, association, or entity not affiliated with the
Company without the written consent of the Chairman or Chief Executive Officer
of SOCO.
6. Publishing Statements: Each party hereto shall refrain, during the
remaining portion of the employment relationship, during the advisory
relationship, and after the advisory relationship terminates, from publishing
any oral or written statements about the other party, any of its subsidiaries,
or any of such entities' officers, directors, employees, agents or
representatives that are slanderous, libelous, or defamatory; or that disclose
private or confidential information about such other party or any of its
subsidiaries, or any of such entities' business affairs, officers, directors,
employees, agents, or representatives; or that constitute an intrusion into the
seclusion or private lives of such other party or any of its subsidiaries, or
any of such parties' officers, directors, employees, agents, or representatives;
or that give rise to unreasonable publicity about the private lives of such
other party or any of its subsidiaries, or any of such entities' officers,
directors, employees, agents, or representatives; or that place such other party
or any of its subsidiaries, or any of such entities' officers, directors,
employees, agents, or representatives in a false light before the public; or
that constitute a misappropriation of the name or likeness of such other party
or any of its subsidiaries, or any of such entities' officers, directors,
employees, agents, or representatives. A violation or threatened violation of
this paragraph 6 may be enjoined by the courts. The rights afforded such other
party under this paragraph 6 are in addition to any and all rights and remedies
otherwise afforded by law. Notwithstanding the foregoing, (a) nothing in this
paragraph 6 shall be interpreted to mean that Xx. Xxxxxxx will be constrained
from making responsible statements as to his business judgment on material
corporate matters affecting the Company and (b) the provisions of this paragraph
6 shall cease to apply after March 1, 2002.
7. Mutual Release and Indemnity:
(a) Xx. Xxxxxxx, on his behalf and on behalf of his
representatives, heirs, administrators, executors, and assigns, and on behalf of
any other persons or entities claiming by, through, or under Xx. Xxxxxxx, does
hereby fully release, acquit and forever discharge the Company and its
employees, officers, directors, trustees, committee-members, Boards, members of
such Boards, chairmen of the boards, shareholders, contractors, consultants,
agents, representatives, attorneys, successors, and assigns (the "Released
Entities"), from and against any and all of Xx. Xxxxxxx'x rights, claims,
charges, demands, and causes of action against the Released Entities of any kind
or character, both past and present, known or unknown, including but not limited
to those arising 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, and the Employee Retirement Income Security Act of 1974, all as amended,
and any other state or federal statute, regulation or the common law (contract,
tort or other), which relate to Xx. Xxxxxxx'x employment or termination of
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employment with the Company, including but not limited to any alleged
discriminatory or retaliatory employment practices, any matter relating to or
arising under any employment agreement with the Company, any and all prior
discussions, representations, understandings, or agreements between, on the one
hand, the Company and/or its agents, representatives, attorneys, or contractors,
and, on the other hand, Xx. Xxxxxxx or his agents or representatives, regarding
his employment and termination of employment with the Company or services
heretofore rendered to the Company, or any other matter whatsoever.
Notwithstanding the preceding provisions of this paragraph 7(a), this release
(1) shall not serve to waive or release any of Xx. Xxxxxxx'x rights or claims
that may arise after the date this Agreement is executed and (2) shall not
affect any future obligation which the Company may have to Xx. Xxxxxxx under the
terms of this Agreement or the Advisory Agreement. Xx. Xxxxxxx acknowledges and
agrees that all of the requirements of applicable law pertaining to the waiver
of his rights under the Age Discrimination in Employment Act have been complied
with, including that he has been given twenty-one (21) days to consider this
Agreement and this release, that he was advised by the Company to consult an
attorney, and that he has in fact consulted an attorney prior to executing this
Agreement and this release. For a period of seven (7) days following the
execution of this Agreement, Xx. Xxxxxxx may revoke the portion of this release
that relates to any claims he may have under the Age Discrimination in
Employment Act. If Xx. Xxxxxxx does not within seven (7) days following the
execution of this Agreement provide SOCO with a written notice of such
revocation, then Xx. Xxxxxxx shall no longer have such revocation right. If Xx.
Xxxxxxx does within seven (7) days following the execution of this Agreement
provide SOCO with a written notice of such revocation, then (A) the Company
shall have no obligation to make any payment under paragraph 2 hereof or provide
the indemnification provided for in paragraph 7(d) hereof, (B) Xx. Xxxxxxx'x
stock option agreements shall not be amended as provided in paragraph 3 hereof,
and (C) the vesting of Xx. Xxxxxxx'x account under SOCO's Deferred Compensation
Plan for Select Employees shall not be accelerated as provided in paragraph 3
hereof.
(b) The Company hereby unconditionally and irrevocably forever
releases and discharges Xx. Xxxxxxx from all claims, charges, complaints,
obligations, liabilities, promises, agreements, contracts, damages, causes of
action, suits, accrued benefits or other liabilities of any kind or character,
whether known or hereafter discovered, arising from or in any way connected with
or related to Xx. Xxxxxxx'x past service as (1) an officer, director, employee,
or agent of the Company (including Xx. Xxxxxxx'x services relating to Patina
taken on behalf of the Company prior to his resignation as an officer of the
Company) or (2) a fiduciary or member of any committee established with respect
to any employee benefit plan maintained by the Company; provided, however, that
such release (A) shall not apply to any claims, demands or causes of action that
the Company may have against Xx. Xxxxxxx for past conduct that constitutes a
felony, (B) shall not serve to waive or release any rights or claims of the
Company that may arise after the date this Agreement is executed, and (C) shall
not affect any future obligation which Xx. Xxxxxxx may have to the Company under
the terms of this Agreement or the Advisory Agreement.
(c) It is expressly agreed that no future disputes between (1)
any of the Company or any of the Released Entities, and (2) Xx. Xxxxxxx, whether
under this Agreement or otherwise, shall in any way affect the enforceability of
the releases granted above.
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(d) Subject to the provisions of paragraph 7(a) hereof, the
Company hereby agrees to indemnify and hold harmless Xx. Xxxxxxx from and
against all losses, claims, damages, liabilities and expenses incurred by him
(including reasonable fees and disbursements of counsel) that arise out of or in
connection with Xx. Xxxxxxx'x past service as (1) an employee, officer,
director, or agent of the Company (including Xx. Xxxxxxx'x services relating to
Patina taken on behalf of the Company prior to his resignation as an officer of
the Company) or (2) a fiduciary or member of any committee established with
respect to any employee benefit plan maintained by the Company, in each case to
the same extent that Xx. Xxxxxxx was indemnified with respect to such matters by
the Company while he served in such capacities.
8. Notices: For purposes of this Agreement, notice, demands and all
other communica tions between the parties shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed as follows:
If to Xx. Xxxxxxx:
Xx. Xxxxxx X. Xxxxxxx
000 Xxxx Xxxxxx, Xxx. 0X
Xxx Xxxx, Xxx Xxxx 00000
If to SOCO or the Company:
Xxxxxx Oil Corporation
Attn: Xxxx X. Xxxxxx, Chairman
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
or to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
9. Withholding of Taxes: The Company may withhold from any benefits
and payments made pursuant to this Agreement all federal, state, city and other
taxes as may be required pursuant to any law or governmental regulation or
ruling.
10. Successor Obligations and Assignment: The rights and obligations of
the Company under this Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the Company. Xx. Xxxxxxx can freely assign
any rights accruing to him under this Agreement (other than pursuant to
paragraph 3 hereof) to any associated party subject to the consent of SOCO,
which consent shall not be unreasonably withheld.
11. Amendment: This Agreement may not be modified except by an
agreement in writing executed by both SOCO and Xx. Xxxxxxx.
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12. Governing Laws: This Agreement shall be subject to and governed by
the laws of the State of Texas, without giving effect to principles of conflicts
of law.
13. Validity: In the event that any portion or provision of this
Agreement is found to be invalid or unenforceable, such invalid or unenforceable
portion shall be severed and the remainder of this Agreement shall remain valid
and enforceable.
14. Counterparts: This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
15. Effect of Agreement: The terms of this Agreement shall supersede
any obligations and rights of the Company and Xx. Xxxxxxx relating to the
subject matter hereof. However, nothing in this Agreement shall be construed to
diminish in any way the rights of Xx. Xxxxxxx or the Company pursuant to the
Advisory Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
XXXXXX OIL CORPORATION
By: /s/Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, Chairman
/s/Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX
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