Exhibit 10.1
SEPARATION AND RELEASE AGREEMENT
     THIS SEPARATION AND RELEASE AGREEMENT (this “Agreement”) is made as of the
5th day of July, 2011, by and between G. Michael Morgan (the “Executive”) and
Harvest Natural Resources, Inc. (the “Company”).
     WHEREAS, the Executive’s employment as an executive and employee of the
Company terminated on July 5, 2011 (the “Termination Date”);
     WHEREAS, pursuant to Section 4(a)(2) of the Employment Agreement by and
between the Company and the Executive dated effective January 1, 2009 (the
“Employment Agreement”), the Company has agreed to pay the Executive certain
amounts which are described further in this Agreement; and
     WHEREAS, the Executive and the Company are executing this Agreement to
evidence the termination of the Executive’s employment with the Company and all
affiliates, the payments and other obligations of the Company in connection with
the termination of the Executive’s employment and the Executive’s obligations in
connection with the termination of the Executive’s employment.
     NOW THEREFORE, in consideration of these premises and the mutual promises
contained herein, and intending to be legally bound hereby, the parties agree as
follows:
     1. Termination Payments and Consideration.
          1.1 The Executive and the Company acknowledge and agree that the
Executive incurred a Separation from Service, as that term is defined in
Section 4(a)(2) of the Employment Agreement, from the Company on the Termination
Date.
          1.2 The Executive acknowledges that: (i) the payments and terms (which
are summarized on Appendix 1 hereto) set forth in Section 4(a)(2) of the
Employment Agreement constitute full settlement of all his rights under the
Employment Agreement, (ii) he has no entitlement under any other severance or
similar arrangement maintained by the Company, including the Company’s Policy
for Termination and Separation of Employment and (iii) except as otherwise
provided specifically in this Agreement, the Company does not and will not have
any other liability or obligation to the Executive.
          1.3 Prior to the Termination Date, the Company has issued to the
Executive (i) a Stock Unit Award Agreement dated as of June 18, 2009 (the “Stock
Unit Award Agreement”) which grants as of June 18, 2009 to the Executive 12,500
Stock Units (the “Stock Units”) and (ii) a Stock Appreciation Right Award
Agreement dated as of June 18, 2009 (the “SAR Award Agreement”) which grants as
of June 18, 2009 to the Executive a stock appreciation right (the “SAR”) with
respect to 25,000 shares of the Company’s common stock, par value $0.01 per
share (the “Company’s Common Stock”). The Company agrees that in consideration
for the Executive executing this Agreement that (i) the Stock Unit Award
Agreement has been amended to provide that all of the Forfeiture Restrictions
(as that term is defined in the Stock Unit Award Agreement) to which the Stock
Units are subject on the Termination Date shall lapse effective as of the
Termination Date if this Agreement is not

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revoked or rescinded by the Executive and the Company shall pay the amount
payable with respect to the Stock Units on July 15, 2011, and (ii) the SAR Award
Agreement has been amended to provide that all of the vesting restrictions to
which the SAR is subject on the Termination Date shall lapse effective as of the
Termination Date if this Agreement is not revoked or rescinded by the Executive
in which case the SAR will become fully vested on the Termination Date and may
be exercised before 5:00 p.m. (Central Time) on July 5, 2012 and otherwise in
accordance with the terms of the SAR Award Agreement. Notwithstanding any other
provision of this Agreement, the Stock Unit Award Agreement or the SAR to the
contrary, (i) the Executive will not be paid any amount under the Stock Unit
Award Agreement with respect to any of the Stock Units and the Executive shall
forfeit all rights to any such payment unless the period for revoking this
Agreement shall have expired prior to July 15, 2011 and the Executive has not
revoked or rescinded this Agreement prior to July 15, 2011, (ii) the Executive
will not be entitled to exercise the SAR or receive any payment under the SAR or
the SAR Award Agreement during the period that the Executive may revoke or
rescind this Agreement and (iii) if the Executive revokes or rescinds this
Agreement the Executive shall forfeit all rights to exercise the SAR or receive
any payment under the SAR or the SAR Award Agreement and the SAR and the SAR
Award Agreement shall terminate effective as of July 5, 2011. The Executive
acknowledges that the vesting rights described above in this Section 1.3
constitute good and sufficient consideration of the mutual promises contained in
this Agreement.
     2. Release and Covenant Not to Sue.
          2.1 The Executive, his heirs and representatives release, waive and
forever discharge the Company, its predecessors and successors, assigns,
stockholders, subsidiaries, parents, affiliates, officers, directors, trustees,
current and former employees, agents and attorneys, past and present and in
their respective capacities as such (the Company and each such person or entity
is each referred to as a “Released Person”) from all pending or potential
claims, counts, causes of action and demands of any kind whatsoever or nature
for money or anything else, whether such claims are known or unknown, that arose
prior to the Executive’s signing this Agreement or that relate in any way to the
Executive’s employment or termination of employment with the Company. This
release includes, but is not limited to, any and all claims of race
discrimination, sexual discrimination, national origin discrimination, religious
discrimination, disability discrimination, age discrimination and unlawful
retaliation and any and all claims under the following: Title VII of the Civil
Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq.; Civil Rights Act of
1866, 42 U.S.C. § 1981 et seq.; the Family and Medical Leave Act, as amended, 29
U.S.C. § 2601, et seq.; the Americans with Disabilities Act, as amended, 42
U.S.C. § 12101, et seq.; the Age Discrimination in Employment Act, as amended by
the Older Workers Benefit Protection Act, 29 U.S.C. § 621, et seq.; Employee
Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001, et seq.;
Rehabilitation Act of 1973, 29 U.S.C. § 706, et seq.; any state, municipal and
other local anti-discrimination statutes; any and all claims for alleged breach
of an express or implied contract; any and all tort claims including, but not
limited to, alleged retaliation for assertion of workers’ compensation rights;
any and all claims under workers’ compensation law; and any and all claims for
attorney’s fees.
          2.2 The Executive expressly represents that he has not filed a lawsuit
or initiated any other administrative proceeding against a Released Person and
that he has not assigned any claim against a Released Person. The Executive
further promises not to initiate a

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lawsuit or to bring any other claim against any Released Person arising out of
or in any way related to the Executive’s employment by the Company or the
termination of that employment. This Agreement will not prevent the Executive
from filing a charge with the Equal Employment Opportunity Commission (or
similar state agency) or participating in any investigation conducted by the
Equal Employment Opportunity Commission (or similar state agency); provided,
however, that any claims by the Executive for personal relief in connection with
such a charge or investigation (such as reinstatement or monetary damages) would
be barred. In addition, this release shall not affect the Executive’s rights
under the Older Workers Benefit Protection Act to have a judicial determination
of the validity of this release and waiver.
          2.3 The foregoing will not be deemed to release the Company from
(a) claims solely to enforce this Agreement, (b) claims for indemnification
under the Company’s By-Laws and/or any applicable indemnification agreements,
and/or (c) claims to continue health care coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended or similar state law. The
foregoing will not be deemed to release any person or entity from claims arising
after the date of this Agreement, whether under this Agreement, under the
Employment Agreement or otherwise, including any additional benefits payable
under Section 4.2(a)(3)(t), (y) and (z) if a Change of Control (as that term is
defined in the Employment Agreement) occurs within 240 days after the
Termination Date.
     3. Restrictive Covenants. The Executive acknowledges that the restrictive
covenants contained in Section 5 of the Employment Agreement (the “Restrictive
Covenants”) will survive the termination of Executive’s employment. The
Executive affirms that the Restrictive Covenants are reasonable and necessary to
protect the legitimate interests of the Company, that he received adequate
consideration in exchange for agreeing to those restrictions and that he will
abide by those restrictions and all provisions of Section 5 of the Employment
Agreement.
     4. Return of Company Property. The Executive represents and warrants that
he has returned all property belonging to the Company, including, but not
limited to, all keys, access cards, office equipment, computers, cellular
telephones, notebooks, documents, records, files, written materials, electronic
information, credit cards bearing the Company’s name, and other Company property
(originals or copies in whatever form) in the Executive’s possession or under
the Executive’s control.
     5. Cooperation. The Executive further agrees that, subject to reimbursement
of his reasonable expenses, he will cooperate fully with the Company and its
counsel with respect to any matter (including litigation, investigations, or
governmental proceedings) in which the Executive was in any way involved during
his employment with the Company; provided that such cooperation shall not
unreasonably interfere with Executive’s employment with another employer after
termination of his employment with the Company. The Executive shall render such
cooperation in a timely manner on reasonable notice from the Company.
     6. Rescission Right. The Executive expressly acknowledges and recites that
(a) he has read and understands the terms of this Agreement in its entirety;
(b) he has entered into this Agreement knowingly and voluntarily, without any
duress or coercion; (c) he has been advised orally and is hereby advised in
writing to consult with an attorney with respect to this Agreement before
signing it; (d) he was provided twenty-one (21)

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calendar days after receipt of the Agreement to consider its terms before
signing it; and (e) he is provided seven (7) calendar days from the date of
signing to terminate and revoke this Agreement, in which case this Agreement
shall be unenforceable, null and void. The Executive may revoke this Agreement
during those seven (7) days by providing written notice of revocation to the
Vice President of Human Resources and Administration of the Company.
     7. Challenge. If the Executive violates or challenges the enforceability of
any provisions of the Restrictive Covenants or this Agreement, no further
payments, rights or benefits under Section 4(a)(2) of the Employment Agreement
will be due to the Executive.
     8. Miscellaneous.
          8.1 No Admission of Liability. This Agreement is not to be construed
as an admission of any violation of any federal, state or local statute,
ordinance or regulation or of any duty owed by the Company to the Executive.
There have been no such violations, and the Company specifically denies any such
violations.
          8.2 Arbitration. The parties agree that Section 6(c) of the Employment
Agreement shall survive and be applicable to this Agreement.
          8.3 No Reinstatement. The Executive agrees that he will not without
the consent of the Company apply for reinstatement with the Company or seek in
any way to be reinstated, re-employed or hired by the Company in the future.
          8.4 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the Company and the Executive and their respective
successors, permitted assigns, executors, administrators and heirs. The
Executive may not make any assignment of this Agreement or any interest herein,
by operation of law or otherwise. The Company may assign this Agreement to any
successor to all or substantially all of its assets and business by means of
liquidation, dissolution, merger, consolidation, transfer of assets, or
otherwise.
          8.5 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law. However, if any provision of this Agreement is held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
will not affect any other provision, and this Agreement will be reformed,
construed and enforced as though the invalid, illegal or unenforceable provision
had never been herein contained.
          8.6 Entire Agreement; Amendments. Except as otherwise provided herein,
this Agreement contains the entire agreement and understanding of the parties
hereto relating to the subject matter hereof, and merges and supersedes all
prior and contemporaneous discussions, agreements and understandings of every
nature relating to the subject matter hereof. This Agreement may not be changed
or modified, except by an agreement in writing signed by each of the parties
hereto.

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          8.7 Governing Law. This Agreement shall be governed by, and enforced
in accordance with, the laws of the State of Texas, without regard to the
application of the principles of conflicts of laws.
          8.8 Counterparts and Facsimiles. This Agreement may be executed,
including execution by facsimile signature, in multiple counterparts, each of
which shall be deemed an original, and all of which together shall be deemed to
be one and the same instrument.

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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer, and the Executive has executed this Agreement, in
each case effective as of the date first above written.

             
 
  EMPLOYEE:        
 
                          G. Michael Morgan    
 
                Date:
                                                                                ,
2011    
 
                COMPANY:    
 
                HARVEST NATURAL RESOURCES, INC.    
 
           
 
  By:      
 
     
 
     
 
  Name:  
 
   
 
     
 
     
 
  Title:  
 
   
 
     
 
   
 
     
 
   
 
                Date:
                                                                                
, 2011    

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APPENDIX 1 TO
SEPARATION AND RELEASE AGREEMENT
Payments
Pursuant to Section 4(a)(2) of the Employment Agreement, the Executive is
entitled to the following payments upon termination of his employment by the
Company pursuant to Section 4(a)(1):

                      Amount of   Date Amount to be Description of Payment  
Payment   Paid
An amount equal to 24 months of the Executive’s $25,500 monthly base salary,
which shall be paid on the date that is six months following the Termination
Date
  $ 612,000     January 2, 2012
 
               
An amount equal to 24 months of the maximum contribution the Company may make
for the Executive under the Company’s 401(k) profit sharing plan, which shall be
paid on the date that is six months following the Termination Date
  $ 19,600     January 2, 2012

Vesting of Stock Option and Restricted Stock Awards
Below is a list of the stock options granted by the Company to the Executive
that are outstanding as of the Termination Date (the “Stock Options”). Pursuant
to Section 4(a)(2) of the Employment Agreement, the Stock Options became fully
vested on the Termination Date and are exercisable before 5:00 p.m. (Central
Time) on July 5, 2012, in accordance with the terms of the applicable award
agreements for the Stock Options:

                              Number of   Number of Shares     Title of
Applicable Award   Shares Subject   Not Vested as of Grant Date   Agreement   to
Award   Termination Date
May 19, 2008
  Harvest Natural Resources
Stock Option Agreement     100,000       0  
 
                   
June 18, 2009
  Harvest Natural Resources
2006 Long Term Incentive Plan
Stock Option Agreement     13,000       8,667  
 
                   
May 20, 2010
  Harvest Natural Resources
2010 Long Term Incentive Plan
Stock Option Award Agreement     12,000       8,000  

Appendix 1 — Page 1

 

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Below is a list of the awards of restricted shares of the Company’s Common Stock
granted by the Company to the Executive that are outstanding as of the
Termination Date (the “Restricted Stock Awards”). Pursuant to Section 4(a)(2) of
the Employment Agreement, the restriction period for each of the Restricted
Stock Awards lapsed and the Restricted Stock Awards became fully vested on the
Termination Date. On or before August 4, 2011, the Company will deliver to the
Executive certificates representing the shares of the Company’s Common Stock to
be delivered to the Executive under and in accordance with the Restricted Stock
Awards.

                              Number of   Number of Shares     Title of
Applicable Award   Shares Subject   Not Vested as of Grant Date   Agreement   to
Award   Termination Date
June 18, 2009
  Harvest Natural Resources
2004 Long Term Incentive
Plan Employee Restricted
Stock Agreement     12,500       12,500  
 
                   
May 20, 2010
  Harvest Natural Resources
2010 Long Term Incentive
Plan Employee Restricted
Stock Award Agreement     4,400       4,400  

Reimbursements
Pursuant to Section 4(a)(2) of the Employment Agreement, the Executive shall be
reimbursed by the Company for up to $20,000 of outplacement services with an
outplacement service approved by the Vice President of Human Resources and
Administration of the Company provided that the expenses for the outplacement
services are reasonable and are incurred no later than December 31, 2013.
Additional Benefits — Consideration for Annual Performance Bonus
The Employee will be evaluated as part of the Company’s discretionary annual
performance bonus program for the year 2011 and may receive a prorated amount of
the annual performance bonus for the year 2011 the Employee could have received
under the program if he had remained an employee of the Company, as determined
in the sole discretion of the Company and payable at the time determined by
Company.
Appendix 1 — Page 2