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Exhibit 10.1
 
EXECUTION COPY
 
SEPARATION AGREEMENT
 
AND GENERAL RELEASE
 
TERMINATION OF EMPLOYMENT AGREEMENT AND RELEASE (the “Agreement”), dated as of
July 6, 2007 (“Effective Date”) by and between Rosetta Resources Inc., a
Delaware corporation, (the “Company”), and B.A. Berilgen (“Executive”).
 
WHEREAS, the Company and Executive entered into and are parties to an employment
agreement (the “Employment Agreement”);
 
WHEREAS, the Company and Executive desire to terminate the Employment Agreement
and to terminate Executive’s employment with the Company effective as of July
15, 2007, subject to the terms and conditions set forth below;
 
NOW, THEREFORE, in consideration of the mutual promises and agreements
hereinafter set forth, the Company and Executive agree as follows:
 
1.  Definitions.  As used in this Agreement, the following terms have the
following meanings:
 
“Acquisition” has the meaning set forth in the Employment Agreement.
 
“Affiliate” means, with respect to any entity, any other corporation,
organization, association, partnership, sole proprietorship or other type of
entity, whether incorporated or unincorporated, directly or indirectly
controlling or controlled by or under direct or indirect common control with
such entity.
 
“Benefit Continuation Period” has the meaning set forth in Section 3.
 
“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the regulations promulgated thereunder.
 
“Company” has the meaning set forth in the first paragraph hereof.
 
“Company Group” has the meaning set forth in Section 4.
 
“Competitor” means any person or entity that is engaged in acquisition,
exploration, development and production of oil and gas properties in competition
with the activities of Company or any of its Affiliates.
 
“Confidential Information” means, without limitation, documents or information,
in whatever form or medium, concerning evidencing sales; costs; pricing;
strategies; forecasts and long range plans; financial and tax information;
personnel information; business, marketing operational projections, plans and
opportunities; customer, vendor, and supplier information; geological and
geophysical maps, data, interpretations, and analyses; and prospect locations
and leads; well logs, interpretations, and analyses; production information; in
each case relating to the Company, but excluding any such information that is or
becomes generally available to the public other than as a result of any breach
of this Agreement or the Employment Agreement or other unauthorized disclosure
by Executive.
 
“Effective Date’ has the meaning set forth in the first paragraph hereof.
 
“Employment Agreement” has the meaning set forth in the Recitals hereto.
 
“Executive” has the meaning set forth in the Recitals hereto.
 
“Executive Claim” means any claim set forth or referred to in, and which is the
subject of, Section 4..
 
“Installment Payments” has the meaning set forth in Section 3.
 
“Offer” has the meaning set forth in the Employment Agreement.
 
“Options” means all of the options previously granted to Executives to purchase
equity securities of the Company.
 
“Resignation Date” has the meaning set forth in Section 2.
 
“Restricted Period” has the meaning set forth in Section 5.
 
“Restrictive Covenants” has the meaning set forth in Section 6.
 
“Separation Benefits” has the meaning set forth in Section 3.
 
“Tax Liabilities” means any liabilities or obligations under Section 409A of the
Code arising out of or relating to this Agreement.
 
“Welfare Continuation Benefits” has the meaning set forth in Section 3.
 
2.  Resignation.  Executive shall cease to be an employee of the Company
effective July 15, 2007 (the “Resignation Date”) and hereby resigns on the
Effective Date from Executive’s positions as President and Chief Executive
Officer of the Company, director and Chairman of the Board of Directors of the
Company and from all other positions, including service on any Board of
Directors, which Executive holds or occupies with any of the Company’s
subsidiaries or Affiliates, and the Company hereby accepts such resignations.
 
3.  Separation Benefits.
 
In consideration of Executive’s agreements hereunder, the Company further agrees
to make the payments and provide the benefits set forth in Sections 3(a), (b)
and (c) (the “Separation Benefits”).  The Separation Benefits supersede and
replace any and all benefits to which Executive might otherwise be or become
entitled under the Company’s compensation and employee benefit plans (including
severance plans and arrangements) and the Employment Agreement, other than
benefit plans subject to Section 401(a) of the Code.
 
(a)  Accrued Obligations.  Within ten business days after the Resignation Date,
the Company will pay Executive’s accrued and unpaid base salary and accrued and
unused vacation days, all through the Resignation Date.  In addition, in
accordance with the Company’s policies and procedures, the Company shall
promptly reimburse Executive for all unreimbursed documented reasonable business
expenses properly incurred by Executive on or before the Resignation Date.
 
(b)  Separation Payments.  The Company shall pay to Executive (i) on the
Resignation Date a lump sum payment of $2,000,000 and (ii) for the eighteen
month period commencing on the Resignation Date $960,000 payable in twelve equal
monthly installments of $80,000, commencing on January 15, 2008 (“Installment
Payments”).
 
(c)  Certain Welfare Benefits.  During the 36-month period beginning on the
Resignation Date (the “Benefit Continuation Period”), the Company shall continue
to provide on the same basis the medical, dental and life insurance benefits
that Executive and his dependents were receiving or entitled to receive
immediately prior to the Resignation Date (“Welfare Continuation Benefits”);
provided, however, that if Executive becomes employed and eligible for similar
benefits during the Benefit Continuation Period, Executive’s entitlement to
benefit continuation under this Section 3(c) shall immediately cease, subject to
Executive’s rights to COBRA continuation coverage under the Company’s welfare
benefit plans by paying the applicable premium therefor.  If, for any period
during which Executive is entitled to Welfare Continuation Benefits, the Company
reasonably determines that Executive cannot receive such Benefits under any
Company sponsored welfare benefit plan then, in lieu of providing benefits under
such plan, the Company shall provide to Executive comparable benefits through
other arrangements or the cash equivalent of the cost thereof.
 
(d)  Benefits to Cease upon Breach of Restrictive Covenants.  In all events, if
Executive breaches any of the Restrictive Covenants then, notwithstanding
anything herein to the contrary, Executive shall immediately cease to have any
rights to any unpaid Separation Benefits and any Options outstanding shall
immediately terminate without any payment to Executive.
 
4.  Release.
 
(a)  In exchange for this Agreement, Executive (on behalf of Executive and
anyone claiming through or on behalf of Executive), releases the Company and
each of the Company’s subsidiaries and other Affiliates, its and their
successors and assigns, and all of their past and present employees, officers,
directors and stockholders (the “Company Group”), and their agents and attorneys
from any and all claims and potential claims, whether known or unknown and
whether or not matured or contingent, demands and causes of action Executive has
or may have had against any of them, including but not limited to, Executive’s
service or employment with the Company and the termination thereof.  This
release includes, but is not limited to, any and all claims, demands and causes
of action which are related to or concern:  the Employment Agreement; service as
a director or officer of the Company; Executive’s acquisition or ownership of
Company securities or Options; Executive’ s employment and the prospective
termination thereof as contemplated hereby; Tax Liabilities; attorneys’ fees or
costs; discrimination under local, state or federal law; the Age Discrimination
in Employment Act (ADEA); the Older Workers Benefit Protection Act (OWBPA);
Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the
Americans With Disabilities Act; the Employee Retirement Income Security Act;
severance pay; tort claims including invasion of privacy, defamation, fraud and
infliction of emotional distress; disputed wage claims; and all other claims,
demands, and causes of action, whether they arise in the United States of
America or elsewhere.  This release does not apply to (i) any rights or benefits
as set forth in this Agreement, or (ii) any rights to indemnification to which
Executive is entitled as an officer or director.
 
(b)  In exchange for this Agreement, the Company (on behalf of the Company and
the Company’s subsidiaries and other Affiliates, their successors and assigns
and anyone claiming through or on behalf of the Company or any of the Company’s
subsidiaries or other Affiliates, their successors and assigns) release
Executive, Executive’s heirs, executors, personal representatives, attorneys,
agents, successors and assigns, from any and all claims and potential claims,
known or unknown and whether or not matured or contingent, demands and causes of
action which they have or may have had against Executive arising out of, related
to or concerning Executive’s performance of his duties with the Company and with
respect to expenses reimbursed to Executive prior to the date hereof; provided,
however that this release does not release Executive from the obligation to
comply with Executive’s obligations under this Agreement nor from any claim,
right or cause of action that relates to Calpine or the Acquisition, all of
which obligations, claims, rights and causes of action are expressly preserved.
 
5.  Executive Covenants.
 
(a)  Confidentiality.  Executive acknowledges and agrees that (i) the Company
and its Affiliates are engaged in a highly competitive business; (ii) the
Company and its Affiliates have expended considerable time and resources to
develop goodwill with their customers, vendors, and others, and to create,
protect, and exploit Confidential Information; (iii) the Company must continue
to prevent the dilution of its and its Affiliates’ goodwill and unauthorized use
or disclosure of its Confidential Information to avoid irreparable harm to its
legitimate business interests; (iv) given Executive’s position and
responsibilities with the Company, Executive was necessarily involved creating
Confidential Information that belongs to the Company and enhances the Company’s
goodwill; (v) Executive had access to Confidential Information that could be
used by any Competitor of the Company in a manner that would irreparably harm
the Company’s competitive position in the marketplace and dilute its goodwill;
and (vi) Executive will not directly or indirectly use or disclose Confidential
Information.
 
Executive acknowledges and agrees that:  (i) all Confidential Information is,
shall remain and be the sole and exclusive property of the Company and/or its
Affiliates; (ii) Executive will hold all Confidential Information in strictest
confidence and not, directly or indirectly, at any time disclose or divulge any
Confidential Information to any person other than an officer, director or legal
counsel for the Company or its Affiliates, unless authorized to do so by the
Company or compelled to do so by law or valid  legal process; (iii) if Executive
believes Executive is compelled by law or valid legal process to disclose or
divulge any Confidential Information, Executive will notify the Company in
writing sufficiently in advance of any such disclosure to allow the Company the
opportunity to defend, limit, or otherwise protect its interests against such
disclosure; and (iv) concurrently with the execution of this Agreement,
Executive will return to the Company all Confidential Information and all copies
thereof; in whatever tangible form or medium, including electronic.
 
(b)  Non-Disparagement.  (i) Executive agrees that Executive shall not at any
time make negative statements or  representations, or otherwise communicate
negatively, directly or indirectly, in writing, orally, or otherwise, or take
any action which may, directly or indirectly, disparage or be damaging to the
Company, its subsidiaries, Affiliates, successors or their officers, directors,
employees, business or reputation.  From and after the Resignation Date,
Executive shall communicate directly only with D. Henry Houston regarding any
matters relating to the Company and shall otherwise not contact or attempt to
contact the Company, its officers, directors, shareholders, employees or agents
regarding any matters relating to the Company, unless such person first contacts
Executive.
 
(ii)           The Company agrees that neither the Company nor any of its
directors shall at any time make, or authorize the making of, and that the
Company shall instruct the Company’s executive officers not to make or authorize
the making of, statements or representations, or other communications, directly
or indirectly, in writing, orally, or otherwise, or take any action which (A)
except in the context of legal or administrative proceedings, directly or
indirectly, disparages Executive or (B) is designed to be damaging to
Executive’s reputation.
 
(c)  Nonsolicitation.  (i) Executive agrees that at no time during the two-year
period beginning on the Resignation Date the (“Restricted Period”) will
Executive, whether on his own behalf or on behalf of any other individual,
partnership, firm, corporation or business organization, either directly or
indirectly solicit, induce, persuade, or entice, or endeavor to solicit, induce,
persuade, or entice, any person who is then employed by or otherwise engaged to
perform services for the Company or its Affiliates to leave that employment or
cease performing those services; and
 
(ii)  During the Restricted Period, Executive will not, whether on his own
behalf or on behalf of any other individual, partnership, firm, corporation or
business organization, either directly or indirectly solicit, induce, persuade,
or entice, or endeavor to solicit, induce, persuade, or entice, any person who
is then a customer, supplier, or vendor of the Company or any of its Affiliates
to cease being a customer, supplier, or vendor of the Company or any of its
Affiliates or to divert all or any part of such person’s or entity’s business
from the Company or any of its Affiliates.
 
(d)  Assistance; Advice and Consultation.  (i) Commencing on the Effective Date,
Executive shall, upon reasonable notice, furnish such information and proper
assistance to the Company or any of its Affiliates as may reasonably be required
by the Company in connection with any litigation in which the Company or any of
its Affiliates is, or may become, a party.  The Company shall reimburse
Executive for all documented reasonable out-of-pocket expenses incurred by
Executive in rendering such assistance, but shall have no obligation to
compensate Executive for his time in providing information and assistance in
accordance with this Section 5.
 
(ii)  Commencing on the Effective Date, Executive shall provide reasonable
advice and consultation to the Company, including its Board of Directors and
Chief Executive Officer, (i) in connection with the Calpine matter, and (ii) to
the extent not inconsistent with any new employment undertaken by Executive, in
connection with the transition to his successors, joint ventures, drilling
programs, wells and other similar matters.  The Company shall reimburse
Executive for all documented, reasonable out-of-pocket expenses incurred by
Executive in connection with such advice and consultation (which, for the
avoidance of doubt, in the case of the Calpine matter will include the cost of
legal counsel to the extent Executive reasonably asserts he is entitled to
indemnification therefor), but shall have no obligation to compensate Executive
for his time in providing such advice and consultation in accordance with this
Section 5.
 
(e)  Acknowledgement.  Executive acknowledges and agrees that:  (i) the
restrictions contained in this Section 5 are ancillary to an otherwise
enforceable agreement; (ii) the Company’s promises and undertakings set forth in
Section 3 give rise to the Company’s interest in restricting Executive’s
post-employment activities; (iii) such restrictions are designed to enforce
Executive’s promises and undertakings set forth in this Section 5 and
Executive’s common-law obligations and duties owed to the Company and its
Affiliates; and (iv) the restrictions are reasonable and necessary, are valid
and enforceable under Texas law, and do not impose a greater restraint than
necessary to protect the Company’s goodwill, Confidential Information, and other
legitimate business interests.
 
6.  Remedies.
 
(a)  Executive acknowledges and agrees that the Company’s remedies at law for a
breach or threatened breach of any of the covenants set forth in Sections 5(a),
(b), (c) and (d) (the “Restrictive Covenants”) would be inadequate and, in
recognition of this fact, Executive agrees that, in the event of a breach or
threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to obtain equitable relief in the form of
specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available.
 
(b)  It is expressly understood and agreed that although Executive and the
Company consider the restrictions contained in Section 5 to be reasonable, if a
final judicial determination is made by a court of competent jurisdiction that
the time or territory or any other restriction contained in this Agreement is an
unenforceable restriction against Executive, the provisions of this Agreement
shall not be rendered void but shall be deemed amended to apply as to such
maximum time and territory and to such other maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any court
of competent jurisdiction finds that any restriction contained in this Agreement
is unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.
 
7.  No Admission of Wrongdoing.  This Agreement is not an admission of
wrongdoing or liability by Executive, the Company, or any member of the Company
Group and any and all such wrongdoing or liability is expressly denied.
 
8.  Entire Agreement; Amendment.  This Agreement shall supersede the Employment
Agreement in its entirety any and all existing agreements between Executive and
the Company or any of its affiliates relating to the terms of Executive’s
employment with the Company and its Affiliates and contains the entire
understanding of the parties with respect to Executive’s resignation and the
termination of Executive’s employment.  It may not be altered, modified or
amended except by a written agreement signed by both parties hereto.
 
9.  No Waiver.  The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver of such
party’s rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
 
10.  Severability; Section 409A; Withholdings.
 
(a)  In the event that any one or more of the provisions of this Agreement shall
be or become invalid, illegal or unenforceable in any respect, the validity,
legality or enforceability of the remaining provisions of this Agreement shall
not  be affected thereby.
 
(b)  Any provision of this Agreement to the contrary notwithstanding, all
compensation payable pursuant to Section 3(b)(i) of this Agreement that is
determined by the Company in its sole judgment to be subject to the payment date
requirements of Section 409A(a)(2)(B) of the Code shall be paid in a manner that
the Company in its sole judgment determines meets such requirements of Code
Section 409A and any related rules, regulations or other guidance, even if
meeting such requirements would result in a delay in the time of payment of such
compensation.
 
(c)  Any payments or benefits provided to Executive hereunder shall be subject
to make all applicable withholdings.
 
11.  Assignment.  This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, representatives, successors
and assigns.  This Agreement shall not be assignable by Executive.
 
12.  Governing. Law; Venue.  This Agreement shall be governed by the laws of the
State of Texas except for its laws with respect to conflict of laws.  The
exclusive forum for any lawsuit arising from or related to the termination of
Executive’s employment or this Agreement shall be any state or federal court in
Texas.  This provision does not prevent the Company from removing to an
appropriate federal court any action brought in state court.  EXECUTIVE HEREBY
CONSENTS TO, AND WAIVES ANY OBJECTIONS TO, REMOVAL TO FEDERAL COURT BY THE
COMPANY OF ANY ACTION BROUGHT AGAINST IT BY EXECUTIVE.
 
13.  JURY TRIAL WAIVER.  IN THE EVENT THAT ANY DISPUTE ARISING FROM OR RELATED
TO THIS AGREEMENT OR EXECUTIVE’S TERMINATION OF EMPLOYMENT WITH THE COMPANY
RESULTS IN A LAWSUIT, BOTH THE COMPANY AND EXECUTIVE MUTUALLY WAIVE ANY RIGHT
THEY MAY OTHERWISE HAVE FOR A JURY TO DECIDE THE ISSUES IN THE  LAWSUIT,
REGARDLESS OF THE PARTY OR PARTIES ASSERTING CLAIMS IN THE LAWSUIT OR THE NATURE
OF SUCH CLAIMS.  THE COMPANY AND EXECUTIVE IRREVOCABLY AGREE THAT ALL ISSUES IN
SUCH A LAWSUIT SHALL BE DECIDED BY A JUDGE RATHER THAN A JURY.
 
14.  Further Acknowledgement.  By signing this agreement, in addition to
releasing all Executive Claims, Executive acknowledges that:
 
a.  
The Company has advised Executive by this Agreement in writing to consult with
an attorney and Executive has consulted with an attorney prior to signing this
Agreement.

 
b.  
The consideration for this Agreement is in addition to anything of value to
which Executive already is entitled.

c.  
Executive was given at least 21 days to consider the actual terms of this
Agreement.

 
d.  
Executive agrees with the Company that changes, whether material or immaterial,
do not restart the running of the 21-day consideration period.

e.  
Executive understands that Executive may revoke this agreement within seven (7)
calendar days from the date of signing, in which case this Agreement shall be
null and void and of no force and effect on the Company or Executive.

f.  
Executive understands that this Agreement shall not become effective or
enforceable until the 7-day revocation period has expired.  Executive further
understands and acknowledges that, to be effective, the revocation must be in
writing, delivered to D. Henry Houston c/o the Company, on or before 5:00 PM of
the seventh (7th) calendar day after the date Executive signs this Agreement.

EXECUTIVE ACKNOWLEDGES AND CONFIRMS THAT HE HAS CAREFULLY READ THIS TERMINATION
OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE AND THAT  IT CONTAINS A COVENANT NOT
TO SUE AND A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS ARISING OUT OF
EXECUTIVE’S EMPLOYMENT, INCLUDING, BUT NOT LIMITED TO, THE RELEASE OF ALL CLAIMS
UNDER TITLE VII OF THE 1964 CIVIL RIGHTS ACT, THE AMERICANS WITH DISABILITIES
ACT, THE AGE DISCRIMINATION IN EMPLOYMENT ACT AS AMENDED BY THE OLDER WORKERS’
BENEFIT PROTECTION ACT, AND/OR ANY OTHER FEDERAL OR STATE FAIR EMPLOYMENT OR
ANTI-DISCRIMINATION STATUTES OR REGULATIONS.

15.  Counterparts.
 
This Agreement may be executed in separate counterparts, each of which is deemed
to be an original and all of which taken together constitute one and the same
agreement.
 
[SIGNATURE PAGE FOLLOWS]
 

 
 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
 

 
 
/s/ B.A. Berilgen
B.A. Berilgen
 
 
Rosetta Resources Inc.
By: /s/ D. Henry Houston
Name: D. Henry Houston
Title: Director
 

 

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