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SEPARATION AGREEMENT
THIS AGREEMENT, dated as of August 27, 2008 (the "Agreement"),
by and between Southwestern Energy Company, a Delaware corporation
(the "Company"), and Richard F. Lane (the "Executive").
WHEREAS, the parties intend that this Agreement provide for the
Executive’s resignation from employment with the Company and
its subsidiaries;
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth in this Agreement, the parties hereto hereby
agree as follows:
1.
Resignation Date . Upon the expiration of
the Revocation Period (defined below), the Executive hereby agrees
that he will resign from his employment with the Company, including
from his position as Executive Vice President of the Company and
from all other offices and positions with the Company and all of
its subsidiaries, affiliates, joint ventures, partnerships or any
other business enterprises, as well as from any office or position
with any trade group or other industry organization which he holds
on behalf of the Company or its subsidiaries or affiliates,
effective as of September 3, 2008 (the "Resignation Date").
2.
Payments and Benefits . Subject to the
provisions of paragraph 14 of this Agreement and in consideration
for the Executive’s obligations under this Agreement, in
connection with the Executive’s resignation, the Company
shall pay and provide the Executive with the payments and benefits
described in this paragraph 2 (the "Payments and Benefits"), which
shall be payable as provided herein, provided that the Executive
does not revoke this Agreement during the Revocation Period (as
defined below). The Payments 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 Resignation Date (the
"Payment Date").
(ii)
The Company will provide the Executive coverage under the
Company’s standard medical, dental and vision plans in which
he participated prior to the Resignation Date, provided under COBRA
(and will pay all COBRA premiums in connection therewith (the
"COBRA Premiums")), for the period from the Resignation Date until
the earlier of (x) eighteen (18) months following the Resignation
Date; or (y) the date on which the Executive becomes eligible for
medical and dental coverage from a third party.
(iii)
The stock options listed on Schedule 2(iii) that were
granted to the Executive pursuant to the Company’s 2004 Stock
Incentive Plan and would have vested and become exercisable on or
before December 31, 2008 (the "Accelerated Options"), shall vest as
of the Resignation Date. The Accelerated Options and the
Executive’s previously outstanding vested stock options as
listed on Schedule 2(iii) will remain exercisable for a
period of two years following the Resignation Date. All stock
options heretofore granted to the Executive that are not scheduled
to vest on or before December 31, 2008 are forfeited as of the
Resignation Date.
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(iv)
The restricted stock listed on Schedule 2(iv) that
was granted to the Executive pursuant to the Company’s 2004
Stock Incentive Plan and would have vested and become exercisable
on or before December 31, 2008 (the "Accelerated Restricted
Stock"), shall vest as of the Resignation Date. All other
restricted stock heretofore granted to the Executive that are not
scheduled to vest on or before December 31, 2008 are forfeited as
of the Resignation Date.
(v)
With respect to the performance units granted to the Executive
under the Company’s 2002 Performance Unit Plan (the
"Performance Unit Plan"), the Executive shall be paid the amounts
to which he is entitled as of the Resignation Date under the
Performance Unit Plan relating to the vested portions of the
performance units granted to him on December 8, 2005 (the "2005
Grant") and December 11, 2006 (the "2006 Grant") on the date such
payments are due to be paid under the Performance Unit Plan.
With respect to the portions of (i) the 2005 Grant, (ii) the
2006 Grant and (iii) the performance units granted to the Executive
on December 13, 2007 (the "2007 Grant") under the Performance Unit
Plan that were not vested as of the Resignation Date but would have
vested on or before December 31, 2008 (as set forth on Schedule
2(v) hereto, each an "Accelerated PUP"), the Company shall pay the
Executive for such Accelerated PUP 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) at the time that
payment is due and required to be made under the Performance Unit
Plan.
(vi)
The Executive shall remain eligible for his cash incentive bonus
payable for fiscal 2008 under the Company’s Incentive
Compensation Plan, based upon his full 2008 salary (i.e., not
prorated) and the achievement by the Company of the previously
established performance objectives, with the discretionary
component of the Executive’s bonus to be at the level of
achievement of the performance objectives. This amount
shall be paid on or before March 15, 2009.
(vii)
The Company shall make a lump-sum payment to the Executive in
respect of any unused vacation time as of the Resignation Date
promptly after the expiration of the Revocation Period.
(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.
(ix)
Except as provided explicitly in this Agreement, the Executive
shall not be entitled to any other or further benefits from the
Company, including, without limitation, participation in health and
dental insurance plans, medical reimbursement plans, disability and
life insurance plans, stock plans, 401(k) plans, and other
plans.
3.
Release by the Executive .
(a)
Release . In consideration of the Payments
and Benefits 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,
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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 Americans with Disabilities Act of
1990, the Civil Rights Act of 1866, the Civil Rights Act of 1991,
the Employee Retirement Income Security Act of 1974, the Family
Medical Leave Act of 1993, or any other federal, state, local or
foreign law, that the Releasors may have, or in the future may
possess, arising out of the Executive’s employment
relationship with and service as an employee, officer or director
of the Company Group, and the termination of such relationship or
service; provided, however, that the release set forth in this
paragraph 3(a) shall not apply to (1) the obligations of the
Company under this Agreement or (2) any indemnification rights the
Executive may have (x) under the Amended and Restated Indemnity
Agreement between the Company and Executive or (y) in accordance
with the Company’s governance instruments or under any
director and officer liability insurance maintained by the Company
with respect to liabilities arising as a result of the
Executive’s service as an officer and employee of the Company
(collectively, the "Company’s Indemnification Obligations").
The Releasors further agree that the Payments and Benefits shall be
in full satisfaction of any and all Claims for payments or
benefits, whether express or implied, that the Releasors may have
against the Company Group arising out of the Executive’s
employment relationship or the Executive’s service as an
employee, officer and director of the Company Group and the
termination thereof.
(b)
Specific Release of ADEA Claims . In further
consideration of the Payments and Benefits, the Releasors hereby
unconditionally release and forever discharge the Company Group,
and each of their respective officers, employees, directors,
shareholders and agents from any and all Claims that the Releasors
may have as of the date the Executive signs this Agreement arising
under the Federal Age Discrimination in Employment Act of 1967, as
amended, and the applicable rules and regulations promulgated
thereunder ("
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