Exhibit 10.1
SEPARATION AND RELEASE AGREEMENT
This Separation and Release Agreement ("Release Agreement") is made and
entered into between Abraxas Petroleum Corporation ("Abraxas") and Robert W.
Carington, Jr., ("Carington") as follows:
W I T N E S S T H:
WHEREAS, Carington is presently employed by Abraxas as its Executive Vice
President pursuant to an Agreement dated December 21, 1999 (the "Agreement");
and
WHEREAS, Abraxas and Carington desire to amicably end the employment
relationship; and
WHEREAS, there are disputes and disagreements regarding Carington's rights
under the Agreement; and
WHEREAS, Carington and Abraxas (hereinafter together referred to as the
"Parties") want to avoid the expense, delay and destruction which would be
caused by litigating their disputes; and
WHEREAS, the Parties desire to reach an amicable resolution to these
disputes; and
WHEREAS, the Parties have agreed to the terms and conditions of Carington's
termination of employment; and
WHEREAS, in furtherance of such agreement, the Parties have agreed to the
terms and conditions of this Release Agreement as set forth below;
Therefore, as material considerations and inducements to the execution and
delivery of this Release Agreement and in consideration of the mutual promises
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby contract,
covenant, and agree as follows:
1. Separation from Employment: Carington's termination from employment
with Abraxas shall be effective as of October 14, 2005 (hereinafter
referred to as the "Separation Date"). On the Separation Date,
Carington's status as an employee and officer of Abraxas will cease in
its entirety.
2. Consideration: Carington shall be paid the following as consideration
for entering into this Release Agreement:
a. Lump sum payment: Wage continuation in the amount of Two Hundred and
Thirty Five Thousand Dollars ($235,000) which shall be paid in one lump
sum no sooner than the eighth (8th) day and no later than the twelfth
(12th) day after Carington executes and tenders this Release Agreement
to Abraxas. This payment shall be made by direct deposit in accordance
with Abraxas' standard payroll practices.
b. 401(k) Match: Abraxas shall pay Carington any 401(k) match that it
makes for its employees for 2005 at such times and from time to time as
Abraxas makes such payments;
c. Annual Bonus Plan for 2005: If, as and when any member of Senior
Management of Abraxas receives a bonus for calendar year 2005 as
provided under the Annual Bonus Plan, Abraxas agrees to pay Carington
5/6ths of the bonus he would have received if he had remained employed
through the end of 2005 and were an employee of Abraxas on the date of
such payment, if any;
d. Unused Vacation and Expense Reimbursements. Abraxas shall mail a check
to Carington's home no sooner than the 8th day and no later than the
12th day after Carington executes and delivers this Release Agreement
for four (4) days of accumulated but unused vacation and the amount of
any outstanding unpaid reimbursable business expenses incurred by
Carington through the Separation Date that have been incurred and
documented in accordance with Abraxas reimbursement policy.
e. Attorneys Fees. Abraxas shall pay reasonable attorneys fees and
expenses incurred by you in connection with the negotiation and
execution of this Release Agreement.
f. COBRA Payments: If Carington elects COBRA coverage, Abraxas shall pay
his monthly COBRA expenses until the earlier of (i) the date on which
it is determined that no bonus is payable; (ii) the date the bonus is
actually paid under Paragraph 2 (c) of this Release Agreement; or (iii)
the date on which Carington becomes eligible for coverage under another
employer's plan.
g. Taxes and withholding: All payments made to Carington under this
Release Agreement shall be less applicable tax withholding and payroll
deductions, with the exception of the attorney's fees payment in
Paragraph (e) above.
All of the payments delivered in (a) through (g) above are referred to as
the "Consideration". Abraxas is not obligated to pay any of the
Consideration if Carington revokes or breaches this Agreement. Carington
acknowledges the sufficiency of the Consideration as consideration to him
for executing this Release Agreement and agreeing to be bound by its terms.
Additionally, Carington acknowledges that upon payment of the lump sum
payment, he will have been paid all moneys owed to him related to or
resulting from his employment and/or the termination of his employment.
3. Release
a. Release and Assignment of All Claims By Carington: In consideration of
Abraxas' agreement to provide the Consideration described in Paragraph
3 of this Release Agreement, Carington his heirs, assigns, and
attorneys (collectively, the "Releasors"), hereby releases and forever
discharges Abraxas and all of this entity's past, present and future
officers, directors, shareholders, partners, representatives, board
members, subsidiaries, parent companies, related entities, insurance
carriers, agents, servants, employees, successors, assigns, heirs,
legatees, and attorneys (the "Released Parties"), from any and all
claims, causes of action, lawsuits, proceedings, damages, interests,
benefits, and all other demands of any kind or character whatsoever, in
law or in equity, in any way directly or indirectly related to or
connected with his employment or separation therefrom with the Released
Parties. This Release includes, without limitation, the following:
i. Claims related to Carington's employment and/or the termination
of his employment, including, without limitation, any allegation
of a violation of any employment, bonus, or other compensation
agreement with Abraxas, including, without limitation, the
Agreement;
ii. Claims that could have been asserted in any Charge of
Discrimination filed by him with the Equal Employment Opportunity
Commission and/or the Texas Workforce Commission--Civil Rights
Division;
iii. Claims arising under state or federal constitution or state or
federal statute (including, without limitation, all tort claims),
city ordinance, or public policy, including, without limitation,
the Securities Exchange Act of 1934, as amended, the Employee
Retirement Income Security Act of 1974, 29 U.S.C. ss. 1001 et
seq. and claims involving employment discrimination, harassment,
and/or retaliation of any form (including, without limitation,
claims under the Age Discrimination in Employment Act of 1967, 29
U.S.C. ss. 621 et seq., Title VII of the Civil Rights Act of 1964
as amended, 42 U.S.C. ss. 2000e et seq., the Civil Rights Act of
1870, 42 U.S.C. ss. 1981, the Americans with Disabilities Act of
1990, 42 U.S.C. ss. 12101 et seq., the Family and Medical Leave
Act of 1993, 29 U.S.C. ss. 2601 et seq., the Equal Pay Act, 29
U.S.C. ss. 206, the Texas Commission on Human Rights Act, Tex.
Lab. Code Ann. ss. 21.001 et seq., and/or the Texas Workers'
Compensation Act, Tex. Lab. Code ss. 451.001 et seq.);
iv. Claims arising under state or federal contract, tort, or common
law, including, without limitation, any claim of breach of
contract, promissory estoppel, detrimental reliance, wrongful
discharge, false imprisonment, assault, battery, intentional
infliction of emotional distress, defamation, slander, libel,
fraud, invasion of privacy, breach of the covenant of good faith
and fair dealing, breach of fiduciary duty, conversion, and
tortious interference with any type of third-party relationship,
as well as any and all damages that may arise out of any such
claims, including, without limitation, claims for economic loss,
lost profits, loss of capital, lost wages, lost earning capacity,
emotional distress, mental anguish, personal injuries, punitive
damages, or any future damages;
v. Claims of retaliation of any nature, including, but not limited
to, the anti-retaliatory provisions of the statues identified in
Paragraph 3(a)(iii) of this Release Agreement; and
vi. CLAIMS OF NEGLIGENCE OF ANY KIND, INCLUDING, WITHOUT LIMITATION,
GROSS NEGLIGENCE AGAINST ABRAXAS BASED UPON THE ACTION OR
INACTION OF ABRAXAS.
The claims described in Paragraph 4(a) through (f) are
hereinafter collectively referred to as the "Claims." This
Release Agreement may be pleaded as, and shall constitute, an
absolute and final bar to any and all lawsuits or administrative
claims now pending, or that may hereafter be filed or prosecuted
by Releasors against the Released Parties that arose out of or in
connection with any of the Claims. Additionally, Carington agrees
that at no time subsequent to the execution of this Release
Agreement will he permit the filing or maintenance, in any state,
federal, or foreign court, or before any local, state, federal,
or foreign administrative agency, or any other tribunal, of any
charge, claim, or action of any kind arising out of or in any way
related to any of the Claims. Finally, it is the intention of the
Parties this Release Agreement shall be construed as broadly and
all-encompassing as permitted by law and that, notwithstanding
such intention, if it is found that any claim of any kind has not
been released, Carington agrees that any such claim is hereby
assigned to Abraxas. Notwithstanding the foregoing release of
Claims, Abraxas shall continue in effect for Carington's benefit
all insurance or other provisions for indemnification and defense
of officers and directors of Abraxas which are in effect on the
Separation Date with respect to all acts and omissions while an
officer or director as fully and completely as if Carington's
employment had not terminated, and until the final expiration or
running of all periods of limitation against actions which may be
applicable to such acts or omissions.
b. Limited Release by Abraxas: In consideration of Carington's
termination of his employment, and in further consideration
of his execution of this Release Agreement, Abraxas, its
past, present and future officers, directors, shareholders,
partners, representatives, board members, subsidiaries,
parent companies, related entities, insurance carriers,
agents, servants, employees, successors, assigns, heirs,
legatees, and attorneys, hereby release Carington and forever
discharge him from any and all claims or causes of action
which it or any of them may have against him arising out of
or relating in any manner whatsoever to his employment with
Abraxas, except for breaches of fiduciary duty, violations of
securities laws or fraud.
4. Continuing Health Care Benefits - COBRA: A "qualifying event" for
purposes of the Consolidated Omnibus Benefits Reconciliation Act,
as amended (hereinafter referred to as "COBRA"), shall be deemed
to have occurred on the Separation Date. Carington shall receive
information under separate cover from the Plan Administrator
regarding his on-going rights under COBRA.
5. No Future Employment: Carington agrees that Abraxas has no
obligation, contractual or otherwise, to employ Carington as an
employee of the Company in the future. Carington hereby waives
any right to future employment as an employee of Abraxas.
6. Non-Disparagement: Carington agrees that he shall not make
derogatory or disparaging remarks regarding Abraxas, his
employment with Abraxas, or his separation from employment with
Abraxas unless compelled to do so by subpoena or court order
following written notice by Carington to Abraxas as provided in
this Release Agreement. Carington acknowledges and understands,
however, that none of the provisions of this Release Agreement
require him to alter or change his testimony, if any should be
required by subpoena or court order, for the benefit of Abraxas.
Abraxas agrees to provide a neutral reference in response to any
inquiries regarding Carington's employment.
7. Stock Options: In consideration of the execution and delivery of
this Release Agreement, Abraxas and Carington agree to amend the
terms of all stock option agreements between Abraxas and
Carington to provide (i) that Carington may exercise such options
until the date that is 90 days from and after the Separation Date
and (ii) that all such options shall be deemed to be fully
vested.
8. No Admission of Wrongdoing: Both parties acknowledge and agree
that this Release Agreement shall not be construed as an
admission by the other of any act of wrongdoing, liability, or
responsibility for any wrongdoing of any kind.
9. Taxation Consequences and Indemnity: Carington acknowledges and
agrees that he has requested that the Consideration be paid in
the manner described in Paragraph 2 of this Release Agreement.
Carington further acknowledges and agrees that Abraxas has made
no representations to him regarding the taxation of any portion
of the Consideration. Carington also understands that he is
solely responsible for the payment of all taxes, if any, related
to the Consideration and that Abraxas has no duty to defend him
against any such claims. Additionally, Carington understands and
agrees that the appropriate Internal Revenue Service form(s)
shall be issued to him for the full amount of the Consideration.
Finally, Carington understands and agrees that he shall fully
indemnify Abraxas for any claims brought by taxing authorities
against Abraxas seeking payment of taxes, penalties, and/or
interest related in any way to the assessment, determination,
and/or reporting of taxes under federal, state, and/or local law.
This agreement to indemnify Abraxas includes the agreement to pay
all attorneys' fees and other costs that Abraxas may reasonably
incur in the defense of such claims; additionally, the choice of
counsel to represent Abraxas in any such proceedings to which
this agreement to indemnify applies shall at all times rest
within the sole discretion of Abraxas. Finally, Carington agrees
that, if requested by Abraxas at any time following his execution
of this Release Agreement, he and/or his attorney shall complete,
execute, and deliver to Abraxas a Form W-4 and/or Form W-9
providing such information as may be necessary for any party
issuing the appropriate Internal Revenue Service form related to
the Consideration.
10. Confidential Information of Abraxas: Carington acknowledges that
during his employment with Abraxas, Abraxas disclosed to him
confidential affairs and proprietary information of Abraxas and
its subsidiaries and affiliates, all of which information belongs
to Abraxas and its subsidiaries and affiliates, including,
without limitation, the following information (collectively, the
"Confidential Information"): (i) any and all trade secrets
concerning the business and affairs Abraxas, and its subsidiaries
and affiliates, including without limitation, geological studies
and surveys, knowledge of reserves, production, environmental
surveys, research, planned or contemplated drilling sites, data,
know-how, formulae, compositions, processes, designs, sketches,
photographs, graphs, drawings, samples, inventions and ideas,
past, current and planned research and development, acquisition
opportunities, confidential investor information, market studies,
business plans, computer software and programs (including object
code and source code), computer software and database
technologies, systems, structures and architectures (and related
processes, formulae, compositions, improvements, devices,
know-how, inventions, discoveries, concepts, ideas, designs,
methods and information) and any other information, however
documented, that is a trade secret, (ii) any and all information
concerning the business and affairs of Abraxas and it
subsidiaries and affiliates (which includes historical financial
statements, financial projections and budgets, historical and
projected revenues, capital spending budgets and plans, the names
and backgrounds of key personnel, personnel training and
techniques and materials), however documented, and (iii) any and
all notes, analyses, compilations, studies, summaries, and other
material prepared by or for Abraxas and its subsidiaries and
affiliates or containing or based, in whole or in part, on any
information included in the foregoing.
Carington acknowledges that Abraxas would not provide the
Consideration herein without the promises made by Carington in
this Paragraph. In light of the foregoing, Carington covenants
and agrees:
a. To keep secret all Confidential Information of Abraxas, or
its subsidiaries and affiliates, and not to disclose
Confidential Information to anyone outside of Abraxas, or
otherwise use this information or use his knowledge of it for
his own benefit or for the benefit of any third party,
whether Carington has such information in his memory or
embodied in writing or other physical form, including,
without limitation, use of the trade secrets, trade names or
trademarks of Abraxas and
b. To deliver promptly to Abraxas on the Separation Date all
memoranda, notices, records, reports and other documents (and
all copies thereof) relating to the business of Abraxas or
any of its subsidiaries or affiliates, including, but not
limited to, Confidential Information, which you possess or
have under your control.
11. Entire Agreement: Carington acknowledges that, except as
expressly set forth herein, no representations of any kind or
character have been made by or on behalf of Abraxas to induce his
execution of this document and that this Release Agreement
constitutes the complete understanding and agreement between him
and Abraxas. Carington also acknowledges that this Release
Agreement supersedes any and all prior agreements, promises, or
inducements concerning this subject matter, including the
Agreement. By signing this Release Agreement, Carington expressly
disclaims any reliance on any representations, promises, or other
statements by Abraxas, except to the extent such representations,
promises, or other statements are expressly contained in this
Release Agreement.
12. No Presumption Against Interest: This Release Agreement has been
jointly negotiated, drafted, and reviewed by Carington and
Abraxas and, therefore, no provision arising directly or
indirectly herefrom may be construed against any Party as being
drafted by that Party.
13. Captions: The captions contained in this Release Agreement are
intended for convenience only and should not be considered in
interpreting the terms of this Release Agreement.
14. Arbitration: All disputes related to the terms and conditions of
this Release Agreement, including interpretation of those terms
and conditions and claims that this Release Agreement has in any
way been breached, shall be submitted to final and binding
arbitration in accordance with the provisions of the Federal
Arbitration Act (the "FAA"), 9 U.S.C. ss. 1 et seq. The terms of
the National Employment Dispute Resolution Rules of the American
Arbitration Association (the "AAA"), in effect at the time the
arbitration is commenced, shall apply, except to the extent they
conflict with the provisions of this Release Agreement. A neutral
arbitrator shall be selected by the parties in accordance with
the rules of the AAA. Any arbitrator selected shall be
knowledgeable in the subject matter of the dispute. The
arbitrator shall have the exclusive authority to determine the
arbitrability of any dispute that the Releasors or the Released
Parties assert is subject to this Paragraph 15. The arbitrator
shall also have the exclusive authority to resolve any dispute
relating to the interpretation, applicability, enforceability or
formation of this Release Agreement, including but not limited to
any claim that all or part of the Release Agreement is void or
voidable. All costs, fees and expenses associated with any
arbitration proceeding shall be borne by the party incurring the
same, except that the arbitrator shall have the authority to
assess costs against the losing party and to award reasonable
attorneys' fees to the prevailing party where such an award would
be permitted under the law governing the claims involved. The
award of the arbitrator shall be final and judgment upon the
award rendered may be entered in any state or federal court
having jurisdiction. Each of the parties hereto knowingly and
voluntarily waives any right to a trial by jury of any dispute
pertaining to or relating in any way to this Release Agreement,
its breach, interpretation or enforcement, the provisions of any
federal, state or local law, regulation or ordinance
notwithstanding.
15. Understanding of Agreement: By signing this Release Agreement,
Carington acknowledges that he has fully and carefully read this
Release Agreement, that he fully understands and agrees to its
contents and effects, and that he is entering into this Release
Agreement of his own free will and accord. Carington further
agrees and acknowledges that:
[] He has read and considered the terms of this Release
Agreement, including the Release and Assignment of All
Claims;
[] He understands and agrees to such terms of his own free
will and accord;
[] He has had an opportunity to consult with an attorney prior
to executing this Release Agreement;
[] The release and assignment of all claims specifically
refers to rights and/or claims that may arise under the Age
Discrimination in Employment Act, 29 U.S.C. ss. 621 et seq.,
and any similar state or local protective statute;
[] He has been given at least twenty-one (21) days to consider
this Release Agreement (but remains free to execute this
Release Agreement before the expiration of the twenty-one
(21) days);
[] For a seven (7) day period following his execution of this
Release Agreement, he may revoke it and it will not become
effective or enforceable until the expiration of the seven
(7) day period; and
[] His revocation, if any, must be in writing and sent to
Donna K. McElroy, Cox Smith Matthews Incorporated, 112 East
Pecan Street, Suite 1800, San Antonio, Texas 78205, via
facsimile on or before the close of business on the seventh
day after this Release Agreement is executed by him at (210)
226-8395 and hand delivery at the same address or e-mail to
Donna K. McElroy at dkm@coxsmith.com.
Signed this 14th day of October, 2005, at San Antonio, Bexar County, Texas.
/s/ Robert W. Carington, Jr.
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Robert W. Carington, Jr.
THE STATE OF TEXAS
COUNTY OF BEXAR
Before me, the undersigned authority, on this day personally appeared Robert W.
Carington, Jr., known to me to be the person whose name is subscribed to the
foregoing Release Agreement, and acknowledged to me that he executed the same
for the purposes and consideration therein expressed.
Given under my hand and seal of office on this 14th day of October, 2005.
/s/ Barbara M. Stuckey
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Notary Public, State of Texas
Signed this 14th day of October, 2005, at San Antonio, Bexar County, Texas.
ABRAXAS PETROLEUM CORPORATION
/s/ Robert L. G. Watson
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Robert L. G. Watson
President and Chief Executive Officer