EXECUTIVE SEVERANCE
AGREEMENT
THIS
EXECUTIVE SEVERANCE AGREEMENT (“Agreement”),
effective as of September 9,
2009 , the Effective Date”), by and between Frontier Oil
Corporation, a Wyoming corporation (the “Company”), and
Kevin D. Burke (the “Executive”).
WITNESSETH:
WHEREAS , the Company and the Executive desire to
provide the Executive with certain benefits upon a Qualified
Termination of Employment, as defined below;
NOW, THEREFORE , in consideration of the premises and covenants
herein contained and other good, valuable and binding
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1.01 This Agreement is
effective as of the Effective Date and, unless terminated earlier
as provided herein, shall terminate on the first anniversary of the
Effective Date; provided, however, on each anniversary of the
Effective Date the term of this Agreement (“Term”)
shall be extended automatically for an additional one-year period
unless the Company shall have delivered to the Executive written
notice of non-renewal at least 90 days prior to the applicable
anniversary.
1.02 Notwithstanding
any provision of this Agreement to the contrary, termination of
this Agreement shall not alter or impair any rights, benefits or
obligations of the Executive (or his estate or beneficiaries) that
have arisen under this Agreement on or prior to such
termination.
1.03 Nothing in this
Agreement shall operate or be construed to create any right or duty
on the part of the Company or the Executive to remain in the
employment of the Company for any period of time, each reserving
all rights to terminate the “at will” employment
relationship of the Executive at any time.
2.
Qualified Termination of
Employment.
2.01 In the event of
the Executive’s Qualified Termination of Employment, as
defined in paragraph 2.02 below, during the Term of this Agreement,
the Executive shall be entitled to receive the following payments
and benefits, provided the Executive timely executes and returns to
the Company a Waiver and Release in the form attached hereto as
Attachment A and does not revoke such Waiver and
Release:
(a) Continuation of
Base Salary : the Company shall pay to the Executive, beginning
on the 15th day of the calendar month that is 60 days after such
Qualified Termination of Employment occurs and continuing
thereafter on the last day of such initial calendar month and on
the 15th day and the last day of each calendar month thereafter
until the earlier of the Executive’s date of death or the
24th payment made under this paragraph 2.01(a) has been paid an
amount equal to 50% of his monthly base salary, as determined
immediately prior to the Qualified Termination of Employment, but
disregarding any reductions in such monthly base salary made in the
preceding three months unless equal percentage reductions were made
in the base salaries of all other comparable executives of the
Company. In accordance with Treasury Regulation
§1.409A-2(b)(iii), the Executive’s right to this series
of installment payments shall at all times be treated as a right to
a series of separate payments, and in the event of a “change
in control event”, within the meaning of Section
409A(a)(2)(A)(v) of the Internal Revenue Code (“Code”)
and Treas. Reg. §1.409A-3(i)(5), all remaining installment
payments shall be accelerated and paid in a lump sum, subject to
paragraph 2.01(e)(v).
(i) With respect to a
bonus that is intended to qualify as “performance-based
compensation” under Section 162(m) of the Code at its time of
grant (“Bonus”), such Bonus shall continue pursuant to
its terms except as provided herein. Notwithstanding
anything in the Bonus agreement to the contrary, to the extent that
all or a part of the Bonus becomes payable (x) pursuant to its
terms as a result of the achievement of the performance targets or
goals applicable to such Bonus award (based on actual results
compared to target(s)), or (y) due to a change in control event, a
prorated portion thereof (based on the number of days in the
performance period that have lapsed through the Executive’s
Qualified Termination of Employment date over the total number of
days in the performance period) shall be paid to the Executive in a
lump sum on or as soon as practical following the end of the
performance period, or, if earlier, the date of the change in
control event, and in no event later than 2½ months
following the end of the performance period or the date of the
change in control event, if earlier.
(ii) With respect to a
bonus that is not intended to be “performance-based
compensation” under Section 162(m) of the Code, the Company
shall pay the Executive, in lieu of such bonus, an amount equal to
the product of (1) his annual base salary (his monthly base salary
as determined above multiplied by 12) and (2) his target bonus
percentage for the bonus year in which the qualified Termination of
Employment occurs or for the immediately preceding bonus year, if a
higher target percentage, with such product prorated based on the
number of days the Executive was an employee of the Company during
the bonus year in which his employment terminated over
365. Such prorated bonus shall be paid on the 60th day
after the Qualified Termination of Employment.
(c) COBRA
Premiums : if the Executive timely elects COBRA
continuation coverage on his Qualified Termination of Employment,
then, until the earliest of (i) the end of the 12 month period
following the Qualified Termination, (ii) the termination of COBRA
continuation coverage for the Executive for any reason, or (iii)
the Executive becomes employed by another employer, regardless of
whether he is covered under a group health plan of such other
employer, the Company shall remit on behalf of the Executive the
full monthly premium for the COBRA coverage elected by the
Executive under the Company’s plan; provided, however, such
premium payment by the Company on behalf of the Executive shall
constitute and be treated by the parties as additional taxable
severance compensation to the Executive for all
purposes.
(d)
Outplacement : the Company will provide the
Executive with outplacement services (to the extent reasonable with
the Executive’s position as determined by the Company, but in
no event to exceed $15,000) during the 12 month period following
the Qualified Termination of Employment, through an outplacement
services provider selected or approved by the Company.
(e) Company Equity
Awards:
(i) All Company stock
options and stock appreciation rights (“SARs”) granted
to the Executive shall, upon a Qualified Termination of Employment,
become fully vested upon such Qualified Termination of Employment
and shall remain exercisable until the earliest of (i) the third
anniversary of the date of the Qualified Termination of Employment
(but in no event later than the earlier of (x) the 10
th anniversary of the original grant date of the
Option or SAR or (y) the latest date on which the option or SAR
could have expired by its original terms under any circumstances),
(ii) the date the option or SAR would have expired by its terms if
the Executive had not incurred a termination of employment, and
(iii) the date options and SARs granted under the Company’s
equity plan are terminated in connection with a change in control
event of the Company;
(ii) Except as provided
in clause (i) above, all Company equity-based awards that are
intended to qualify as “performance-based compensation”
under Section 162(m) of the Code (“Performance Awards”)
on the date of grant shall, upon a Qualified Termination of
Employment, continue pursuant to their
terms. Notwithstanding anything in a Performance Award
agreement to the contrary, to the extent that all or a part of the
Performance Award becomes payable pursuant to (x) its terms as a
result of the achievement of the performance targets or goals
applicable to such Performance Award (based on actual results
compared to target(s)) or (y) the occurrence of a change in control
event, a prorated portion (based on the number of days in the
performance period that have lapsed through the Executive’s
Qualified Termination of Employment date over the total number of
days in the performance period) of such Performance Amount shall be
paid to the Executive in a lump sum on or as soon as practical
following the end of the performance period or the date of the
change in control event; but in no event later than 2½
months following the end of the performance period or the date of
the change in control event, if earlier; and
(iii) Except as provided
in clause (i) above, all other Company equity-based awards that are
not intended to be Performance Awards shall vest in full (except as
provided below) (notwithstanding anything in such award’s
grant agreement to the contrary) upon a Qualified Termination of
Employment (at their target level for those awards with target
levels and/or performance criteria) and shall be paid to the
Executive on the 60th day after his
