RETIREMENT
AGREEMENT
THIS AGREEMENT, dated as of August 11,
2009 (the “Agreement”), by and between Southwestern
Energy Company, a Delaware corporation (the “Company”),
and Harold M. Korell (the “Executive”).
WHEREAS, in order to further induce
Executive to continue as the Executive Chairman of the Company
until at least March 31, 2010, the parties intend that this
Agreement establish the terms and conditions of Executive’s
future retirement from employment with the Company and continuation
thereafter solely as a director of the Company;
NOW, THEREFORE, in consideration of the
covenants and agreements set forth in this Agreement, the Company
and the Executive hereby agree as follows:
1.
Retirement Date and
Duties . Effective
as of May 19, 2009, the Executive resigned his position as Chief
Executive Officer of the Company, and agreed to remain a director
of certain of the Company’s subsidiaries and a director and
the Executive Chairman of the Company’s Board of Directors
until the later of (i) March 31, 2010 or (ii) the date upon which
the Executive discontinues service in such capacity (the
“Retirement Date”). Effective on the Retirement
Date, the Executive’s employment shall terminate, and the
Executive shall cease to be an officer and employee of the Company
but shall remain a director of the Company and its subsidiaries, so
long as the Executive agrees to stand for re-election and subject
to his re-election and removal.
2.
Compensation and Benefits as
Executive Chairman .
From the date hereof through the Retirement Date:
(i)
the Company shall continue to pay the
Executive the annual base salary of $600,000 established for the
position of Executive Chairman, payable on a prorated basis
according to the Company’s normal payroll practices, less
normal and appropriate withholdings;
(ii)
the Executive shall remain eligible for
his cash incentive bonus payable for fiscal 2009 under the
Company’s Incentive Compensation Plan, based upon his 2009
salaries and the achievement by the Company of the previously
established performance objectives;
(iii)
at a minimum, and in lieu of the regular
long-term incentives granted to executives of the Company in
accordance with past compensation practices, the Compensation
Committee of the Board of Directors shall grant the Executive as
Executive Chairman of the Company special long-term incentive
awards under the Company’s 2004 Stock Incentive Plan (the
“Stock Plan”) equivalent in nature and amount to the
long-term incentive awards granted to non-employee directors, which
amount may be increased at the discretion of the Compensation
Committee of the Board of Directors to reflect the
Executive’s continuing duties as both an employee and
director of the Company;
(iv)
the Executive shall be entitled to
vacation, holiday and benefit time and shall continue to
participate in the Company’s health and dental insurance
plans, medical reimbursement plans, disability and life insurance
plans, 401(k) plans, pension and retirement
plans and any other plans in which the
Executive was eligible to participate as the Company’s Chief
Executive Officer, with the same Company contributions, if any, as
in effect prior to his resignation as the Company’s Chief
Executive Officer; and
(v)
the Executive shall receive with other
similarly situated executives of the Company, all of the
perquisites to be established by the Company, including but not
limited the payment of dues for one social club, an annual car
allowance, an annual estate and financial planning allowance,
participation in a medical reimbursement plan that covers all
out-of-pocket expenses, an annual complete personal physical exam
and use the Company’s corporate aircraft for
business-associated personal use on limited occasions.
3.
Retirement Payment and
Benefits . Subject
to the provisions of Section 15 of this Agreement and in
consideration for the Executive’s obligations under this
Agreement, effective upon the Retirement Date, the Company shall
pay and provide the Executive with the payments and benefits
described in this Section 3 (the “Retirement Payments and
Benefits”). The Retirement Payment and Benefits shall
consist of the following:
(i)
The Executive’s balance in his
account as of the Payment Date (as hereinafter defined) under the
Company’s Nonqualified Retirement Plan will be paid to him in
a single lump sum as promptly as practicable after the first
business day following the six-month anniversary of the Retirement
Date (the “Payment Date”).
(ii)
For so long as the Executive is a
director of the Company, the Executive shall receive the same
compensation as the other non-employee directors of the Company and
the Company will provide the Executive with coverage under the
Company’s standard medical, dental and vision plans to the
same extent, and offering the same benefits, as the Company
provides to the other non-employee directors.
(iii)
All unvested stock options granted to the
Executive pursuant to the Stock Plan shall vest and become
exercisable as of the Retirement Date (the “Accelerated
Options”) and all of the Executive’s outstanding
options, including the Accelerated Options, will remain exercisable
until their respective original expiration dates as set forth in
the stock option agreements.
(iv)
All restricted stock granted to the
Executive pursuant the Stock Plan that is unvested shall vest as of
the Retirement Date (the “Accelerated Restricted
Stock”).
(v)
With respect to the performance units
granted to the Executive under the Company’s 2002 Performance
Unit Plan (the “Performance Unit Plan”) and vested as
of the Retirement Date, the Executive shall be paid, at the time
that payment is due and required to be made under the Performance
Unit Plan, the amounts to which he is entitled under the
performance units in accordance with the overall level of
achievement under the original grant or upon a Change of Control
(as defined in the Performance Unit Plan).
(vii)
The Company shall make a lump-sum payment
to the Executive in respect of any unused vacation time as of the
Retirement Date.
2
(viii)
To the extent that the Executive elects
to receive a lump-sum payment under the Company’s
Supplemental Retirement Plan, such amount will be paid to him in a
single lump sum on the Payment Date.
4.
Other . If at any time following the Retirement Date,
the Executive provides any advisory or consulting services to the
Company, the Company will reimburse the Executive for any and all
reasonable and proper expenses that are permitted under the
Company’s business expense and travel policies incident to
the rendition of the advisory and consultative services requested
and rendered hereunder, including usage of Company aircraft in
connection with acting as the Company’s representative with
respect to industry-related organizations. In addition, for a
period of five (5) years following the Retirement Date, the Company
will provide the Executive with fully equipped office space (which
office space may be located at a location separate from the
Company’s Houston headquarters), including computers,
telephones, portable communication devices and secretarial and IT
support, in each case at the Company’s expense and the same
as or similar to what the Company provides to the Executive at the
date of this Agreement.
5.
Release by the
Executive .
(i)
Release . In consideration of the Retirement Payment
and Benefits under Section 3, and after consultation with counsel,
the Executive, and each of the Executive’s respective heirs,
executors, administrators, representatives, agents, successors and
assigns (collectively, the “Releasors”) hereby
irrevocably and unconditionally release and forever discharge the
Company and any of its subsidiaries, affiliates or predecessors
(collectively, the “Company Group”) and each of their
respective officers, employees, directors, shareholders and agents
from any and all claims, actions, causes of action, rights,
judgments, obligations, damages, demands, accountings or
liabilities of whatever kind or character (collectively,
“Claims”), including, without limitation, any Claims
arising under Title VII of the Civil Rights Act of 1964, the
Rehabilitation Act of 1973, the Americ
