EXHIBIT 10.1

 

SEPARATION AND GENERAL RELEASE AGREEMENT

 

THIS SEPARATION AND GENERAL RELEASE AGREEMENT (the “Agreement”) is entered into
as of the first date on the signature page hereto, by and between Warren
Resources, Inc., Warren E&P, Inc., and Warren Resources of California, Inc., as
their respective interests in the subject matter hereof appear (collectively,
the “Company” or “Warren”) and Stephen L. Heiter (“Executive”) (together, the
“Parties”).

 

WHEREAS, Executive has been employed by the Company pursuant to the terms of the
Offer Letter between the Company and Executive, dated as of June 29, 2011(the
“Offer Letter”), and

 

WHEREAS, the Company and Executive have mutually agreed to terminate the
employment relationship, as provided below, and the Parties desire to resolve,
fully and finally, all outstanding matters between them and to release and hold
each other harmless from any and all claims arising from or related to the
employment relationship

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
hereinafter, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties, intending to be
legally bound, hereby agree as follows:

 

1.                                      EXECUTIVE’S SEPARATION.

 

a.                                      The Parties hereto hereby agree that the
Executive’s employment with the Company shall terminate as of January 25, 2013
(the “Separation Date”). The Executive hereby resigns, effective as of the
Separation Date, all positions, titles, duties, authorities and responsibilities
with, arising out of or relating to his employment with the Company and any
subsidiaries and affiliates and agrees to execute any and all additional
documents and take such further steps as may be required to effectuate such
resignation.  The Offer Letter is hereby canceled and the parties shall have no
further obligations to each other thereunder except as specifically provided in
this Agreement.

 

b.                                      Regardless of whether Executive signs
the Waiver and Release of Claims attached as Exhibit A hereto (the “Release”),
upon the Separation Date, or as soon as practicable thereafter (to the extent
permitted by applicable law), Executive acknowledges that he has received and
been paid in full from the Company:

 

(i) unpaid base salary accrued up to and including the Separation Date;

 

(ii) pay for any accrued but unused vacation earned up to and including the
Separation Date (the Parties acknowledge and agree that Executive had 26.68
accrued but unused vacation days for which he shall be paid $35,062.32);

 

(iii) benefits or compensation as provided under the terms of any employee
benefit and compensation agreements or plans applicable to Executive and under
which he has a vested right (including any right that vests in connection with
the termination of his employment); and

 

(iv) any unreimbursed business expenses to which Executive is entitled to
reimbursement following submission of proper expense reports under the Company’s
expense reimbursement policy, and reimbursement for housing in the amount of
$3,096.77.

 

c.                                       On or before the Separation Date,
Executive shall return to the Company any and all property of the Company. Such
property includes, but is not limited to, keys, parking passes, passwords,

 

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access cards, credit or phone cards, any computer hardware or software,
vehicles, any non-public information relating to the Company or its competition,
any engineering, well results, vendor or customer information, pricing and cost
information, financial data or information,  management materials, including all
correspondence, manuals, letters, notes, notebooks, data report programs, plan
proposals, and other confidential, proprietary and/or trade secret information,
regardless of whether the information is in written, printed, electronic, or
other form and regardless of whether it was written or compiled by Executive or
other persons, as well as any and all other property that comprises property
owned by the Company.  Executive agrees that he will not retain any originals or
copies of any Company property, whether prepared or created by Executive or
otherwise coming into Executive’s possession or control in the course of her
employment with the Company.  Executive agrees to keep all such information
obtained from the Company confidential between himself and the Company, except
that he may tell his immediate family and attorney or accountant, if any, as
needed.

 

2.                                      CONSIDERATION.  In accordance with the
Offer Letter, and in consideration of the terms, representations, promises,
waivers and releases contained in this Agreement, the Company will provide
Executive with the following payments and benefits, conditioned upon
(i) Executive’s execution and return to the Company of the Release no earlier
than the Separation Date and no later than twenty-one (21) days following the
execution date hereof, and (ii) Executive’s not revoking, or attempting to
revoke the Release prior to the “Effective Date” (as defined in the Release):

 

a.                                      A severance payment in the amount of
$256,266.00, minus all tax withholdings required by law and other authorized
deductions, which amount is equal to nine months of Executive’s base salary, as
in effect immediately prior to the Separation Date, to be paid in a lump sum on
February 22, 2013.

 

b.                                      Executive shall receive his annual
incentive bonus (the “Annual Bonus”) for 2012 and prorated for 2013 which is in
the amount of $235,300.46, minus all tax withholdings required by law and other
authorized deductions, to be paid on February 22, 2013.

 

c.                                       Certain Restricted Stock Units (“RSUs”)
granted to Executive pursuant to the Warren Resources, Inc. 2010 Stock Incentive
Plan (the “Plan”) that are unvested and unexpired on the Separation Date and
that otherwise would have vested (solely by virtue of your continued employment
with the Company) shall vest time-prorated for the period of employment, which
vesting shares (“Shares”) total 71,474 shares, and as soon as administratively
practicable the Company shall thereupon cause to be issued fully paid and
non-assessable Shares of Warren common stock to the Executive with respect to
the vesting RSUs. The Company will withhold Shares otherwise issuable upon
vesting of the RSUs in accordance with prior practice to satisfy tax
withholdings required by law and other authorized deductions on account of the
vesting of the RSUs and delivery of the shares of common stock to Executive.

 

d.                                      Certain Stock Options granted to you
pursuant to the Plan to purchase Warren common stock that are unvested and
unexpired on the Separation Date and that otherwise would have vested (solely by
virtue of your continued employment with the Company) shall vest time-prorated
for the period of employment during such year, which vesting Stock Options total
18,618 Stock Options exercisable at $2.42 per share granted on March 5, 2010,
such Stock Option are non-forfeitable and immediately exercisable as of the
Separation Date continuing until January 25, 2014, at which time all unexercised
Stock Options granted to Executive shall expire.

 

e.                                       You shall pay 10% and the Company shall
pay 90% of the premiums otherwise payable by you and your eligible dependents
under Company provided coverage for health benefits through January 25, 2014 (or
until such earlier time as Executive ends his participation in such coverage)
provided you elect continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), within the time period
prescribed under COBRA. You hereby instruct the Company to take the 10% of the
premium portion payable by you from the cash severance payment

 

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described above in Section 2 a. Commencing January 26, 2014, you will be
responsible for the payment of any COBRA premiums. The Company will not
reimburse you for any taxable income imputed to you because the Company has paid
your COBRA premiums or those of your eligible dependents.

 

f.                                        Executive’s 401(k) retirement plan
contributions have been or will be made for the period ending on the Separation
Date. As required by applicable ERISA and 401(k) Plan rules and regulations, the
Company’s matching obligations and the Executive’s participation in the
Company’s 401(k) Plan will cease on or before February 22, 2013. Executive
instructs the Company to take from the severance payment described above in 2 a.
the maximum contribution which Executive can make for 2013 and the Company shall
make matching contributions by the end of the first quarter of 2013. Nothing in
this Agreement is intended to alter or modify Executive’s right to any benefit
to which Executive is entitled under the Company’s 401(k) Plan prior to the
Separation Date. All such contributions are and shall remain subject to the
terms of such plan and Executive’s rights thereunder, as well as all applicable
ERISA and Internal Revenue Service statutes, rules and regulations.

 

g.                                       The Company shall retain Executive as a
consultant as an independent contractor after the Separation Date (the
“Consulting Period”) to perform such services commensurate with his status and
experience as may be reasonably requested in writing by the Company (the
“Consulting Arrangement”) for a monthly retainer of $10,000, which shall be
payable in arrears on the last day of each month.  The Executive shall provide
consulting services to Company as needed and when reasonably requested, provided
that, without his prior consent, Executive shall not be required to devote more
than 50 hours in any calendar month to the performance of any consulting
services hereunder. The Executive shall also be reimbursed for direct, ordinary
and reasonable business expenses accounted to the Company related to travelling
to Long Beach, CA from Bakersfield, CA, if necessary during the Consulting
Period, with mileage from any use of Executive’s personal vehicle reimbursed at
the current rates established by the U.S. Internal Revenue Service. The Company
shall use its reasonable best efforts not to require the performance of
consulting services in any manner that unreasonably interferes with any other
business activity of the Executive. Either the Company or Executive may
terminate the Consulting Arrangement at any time at its option upon 5 days
advanced written notice to the other party.  During the Consulting Period, the
Company will make an office available to Executive on a month-to-month basis,
which arrangement can be terminated upon 5 days advanced written notice to
Executive by the Company.

 

h.                                      Other than as specifically provided for
in this Agreement, Executive represents, warrants and acknowledges that the
Company owes Executive no wages, salaries, commissions, bonuses, sick pay,
personal leave pay, severance pay, vacation pay or any other compensation,
benefits, payments or remuneration of any kind or nature.

 

3.                                      REPRESENTATIONS.  The Executive and the
Company make the following representations, each of which is an important
consideration to the other party’s willingness to enter into this Agreement:

 

a.                                      Executive understands and agrees that he
has been advised to consult with an attorney of his choice concerning the legal
consequences of this Agreement.  Executive hereby acknowledges that prior to
signing this Agreement, he had the opportunity to consult, and did consult, with
an attorney of his choosing regarding the effect of each and every provision of
this Agreement.

 

b.                                      Executive acknowledges and agrees that
he knowingly and voluntarily entered into this Agreement with complete
understanding of all relevant facts, and that he was neither fraudulently
induced nor coerced to enter into this Agreement.

 

c.                                       Each of the Parties represent and
warrant to the other that they have the capacity and authority to enter into
this Agreement and be bound by its terms and that, when executed, this Agreement

 

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will constitute a valid and binding agreement of such Party enforceable against
such Party in accordance with its terms.

 

d.                                      Regardless of any action the Company,
Executive acknowledges and agrees that the ultimate liability for all federal,
state, local or other taxes, including any fines or penalties, related to the
payments and consideration payable to Executive under this Agreement is and
remains Executive’s responsibility.

 

4.                                      CONTINUING OBLIGATIONS.  Executive
agrees that he will abide by the terms of “Confidentiality” contained in the
Warren Resources Employee Handbook and such obligations shall survive
termination of the employment relationship.

 

5.                                      MUTUAL NON-DISPARAGEMENT.  For the two
(2) years following the Separation Date, (i) Executive will not, and will cause
his relatives, agents, and representatives to not, knowingly disparage or make
any derogatory statements regarding the Company, its directors, or its officers,
and (ii) the Company will not knowingly disparage or make any derogatory
statements regarding Executive; provided, however, that the Company’s
obligations under this Section 5 shall be limited to communications by its
senior corporate executives having the rank of Vice President or above and
members of the Board; provided, further, that the foregoing restrictions shall
not apply to any statements by Executive or the Company that are made truthfully
in response to a subpoena or as otherwise required by applicable law or other
compulsory legal process.

 

6.                                      COOPERATION.  Executive agrees that,
upon written request of the Company, he will make himself reasonably available,
taking into account his other business and personal commitments, to cooperate
with the Company, its subsidiaries and affiliates and any of their officers,
directors, shareholders, or employees in connection with any investigation or
review by the Company or any federal, state or local regulatory,
quasi-regulatory or self-governing authority as any such investigation or review
relates to events or occurrences that transpired while Executive was employed by
the Company and in respect of which Executive has knowledge (collectively,
“Cooperation”). Executive’s Cooperation shall include, but not be limited to,
being available to meet with officers or employees of the Company and/or the
Company’s counsel at mutually convenient times and locations, executing accurate
and truthful documents and taking such other actions as may reasonably be
requested by the Company and/or the Company’s counsel to effectuate the
foregoing.  Executive shall be entitled to reimbursement, upon receipt by the
Company of suitable documentation, for his reasonable out-of-pocket expenses for
such Cooperation (including travel costs and reasonable legal fees to the extent
Executive reasonably believes that separate representation is warranted and
obtains the Company’s consent in writing, which consent shall not be
unreasonably withheld).

 

7.                                      COVENANTS NOT TO COMPETE OR SOLICIT.  In
consideration and recognition of the confidential and proprietary information
Executive received during his employment and the consideration provided within
this Agreement, Executive agrees that for a period of twelve (12) months
following the termination of his employment, he shall not, anywhere within ten
(10) miles of the Company’s existing oil and gas properties in California, other
than on behalf of the Company or with the prior written consent of the Company,
directly or indirectly:

 

(a)  perform services for (whether as an employee, agent, consultant, advisor,
independent contractor, proprietor, partner, officer, director or otherwise),
have any ownership interest in (except for passive ownership of five percent
(5%) or less of any entity whose securities have been registered under the
Securities Act or Section 12 of the Securities Exchange Act of 1934, as
amended), or participate in the financing, operation, management or control of,
any firm, partnership, corporation, entity or business that engages or
participates in the oil and gas exploration and production business (“Company
Business”);

 

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(b)  knowingly induce or attempt to induce any existing vendor, supplier,
customer, strategic partner, licensee, licensor or business relation of Company
to cease doing business with Company, or in any way knowingly interfere with the
relationship between the Company and any vendor, supplier, customer, strategic
partner, licensee, licensor or business relation of Company, whether or not
Executive had personal contact with such entity; and

 

(c)  act to solicit, encourage, hire or take any other action which is intended
to induce or encourage any employee of the Company or any subsidiary of the
Company to terminate his or her employment or relationship with the Company or
any subsidiary of the Company.

 

Notwithstanding the foregoing, nothing in this Agreement shall prohibit
Executive from working for an entity whose primary business does not have a
competing business purpose, but said company operates a subsidiary, business
unit or division which may compete with the Company Business, so long as
Executive does not directly work in or operate a company with a competing
business purpose.

 

8.                                      TAX MATTERS; SECTION 409A; CHANGE IN
CONTROL. Notwithstanding any provision of this Agreement, this Agreement shall
be construed and interpreted to comply with Section 409A of the Internal Revenue
Code of 1986 (the “Code”), as amended, and if necessary, any provision shall be
held null and void to the extent such provision (or part thereof) fails to
comply with Section 409A of the Code or regulations thereunder.  For purposes of
the limitations on nonqualified deferred compensation under Section 409A of the
Code, each payment of compensation under the Agreement shall be treated as a
separate payment of compensation for purposes of applying the Section 409A of
the Code deferral election rules and the exclusion from Section 409A of the Code
for certain short-term deferral amounts.  Any amounts payable solely on account
of an involuntary separation from service within the meaning of Section 409A of
the Code shall be excludible from the requirements of Section 409A of the Code,
either as involuntary separation pay or as short-term deferral amounts (e.g.,
amounts payable under the schedule prior to March 15 of the calendar year
following the calendar year of involuntary separation) to the maximum possible
extent.  If, as of the Separation Date, Executive is a “specified employee” as
determined by the Company, then to the extent that any amount or benefit that
would be paid or provided to Executive under this Agreement within six
(6) months of his “separation from service” (as determined under Section 409A)
constitutes an amount of deferred compensation for purposes of Section 409A and
is considered for purposes of Section 409A to be owed to Executive by virtue of
his separation from service, then such amount or benefit will not be paid or
provided during the six-month period following the date of Executive’s
separation from service and instead shall be paid or provided on the first
business day that is at least seven (7) months following the date of Executive’s
separation from service, except to the extent that, in the Company’s reasonable
judgment, payment during such six-month period would not cause Executive to
incur additional tax, interest or penalties under Section 409A.  Further, any
reimbursements or in-kind benefits provided under the Agreement shall be made or
provided in accordance with the requirements of Section 409A of the Code,
including, where applicable, the requirement that (i) any reimbursement is for
expenses incurred during the period of time specified in the Agreement, (ii) the
amount of expenses eligible for reimbursement, or in-kind benefits provided,
during a calendar year may not affect the expenses eligible for reimbursement,
or in-kind benefits to be provided, in any other calendar year, (iii) the
reimbursement of an eligible expense will be made no later than the last day of
the calendar year following the year in which the expense is incurred, and
(iv) the right to reimbursement or in-kind benefits is not subject to
liquidation or exchange for another benefit.

 

9.                                      ARBITRATION.  The Parties agree that any
and all disputes arising out of the terms of this Agreement, Executive’s
employment by the Company, Executive’s service as an officer or director of the
Company, or Executive’s compensation and benefits, their interpretation, and any
of the matters herein released, will be subject to binding arbitration in Los
Angeles, California, before the Judicial Arbitration

 

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and Mediation Services, Inc., under the American Arbitration Association’s
National Rules for the Resolution of Employment Disputes, supplemented by the
California Rules of Civil Procedure.  The Parties agree that the prevailing
party in any arbitration will be entitled to injunctive relief in any court of
competent jurisdiction to enforce the arbitration award.  The Parties agree to
waive their right to have any dispute between them resolved in a court of law by
a judge or jury.  This paragraph will not prevent either party from seeking
injunctive relief (or any other provisional remedy) from any court having
jurisdiction over the Parties and the subject matter of their dispute relating
to Executive’s obligations under this Agreement and his continuing obligations
under the Offer Letter.

 

10.                               GOVERNING LAW.  This Agreement, its Exhibit A,
and all rights, duties, and remedies hereunder shall be governed by and
construed and enforced in accordance with the laws of the State of California,
without reference to its choice of law rules, except as preempted by federal
law.

 

11.                               SUCCESSORS AND ASSIGNS.  This Agreement will
be binding upon and inure to the benefit of (a) the heirs, executors, and legal
representatives of Executive upon Executive’s death, and (b) any successor of
the Company.  Any such successor of the Company will be deemed substituted for
the Company under the terms of this Agreement for all purposes.  For this
purpose, “successor” means any person, firm, corporation, or other business
entity which at any time, whether by purchase, merger, or otherwise, directly or
indirectly acquires all or substantially all of the assets or business of the
Company.  None of the rights of Executive to receive any form of compensation
payable pursuant to this Agreement may be assigned or transferred except by will
or the laws of descent and distribution.  Any other attempted assignment,
transfer, conveyance, or other disposition of Executive’s right to compensation
or other benefits will be null and void.

 

12.                               AMENDMENTS.  This Agreement may not be amended
or modified other than by a written instrument signed by an authorized
representative of the Company and Executive.

 

13.                               DESCRIPTIVE HEADINGS.  The section headings
contained herein are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.

 

14.                               COUNTERPARTS.  This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.  Facsimile and .pdf
signatures will suffice as original signatures.

 

15.                               NOTICES.  All notices hereunder shall be in
writing and delivered personally or sent by United States registered or
certified mail, postage prepaid and return receipt requested:

 

If to the Company:

 

Attn: Chairman of the Compensation Committee

c/o David E. Fleming, General Counsel

Warren Resources, Inc.

1114 Avenue of the Americas

34th Floor

New York, NY 10036

 

If to Executive:

 

at the last residential address known by the Company.

 

16.                               ENTIRE AGREEMENT.  This Agreement and its
Exhibit A, together with the Confidential Information Agreement (as modified
herein), sets forth the entire agreement and

 

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understanding of the Parties relating to the subject matter hereof and merges
and supersedes all prior discussions, agreements, and understandings of every
kind and nature between the Parties hereto, and neither Party shall be bound by
any term or condition other than as expressly set forth or provided for in this
Agreement.  For purposes of all applicable Company policies, the Company will
comply with the work papers developed by the Parties in connection with this
Agreement and delivered to the Executive.

 

17.                               WAIVER OF BREACH.  The waiver of a breach of
any term or provision of this Agreement, which must be in writing, will not
operate as or be construed to be a waiver of any other previous or subsequent
breach of this Agreement.

 

18.                               SEVERABILITY.  If any provision hereof becomes
or is declared by a court of competent jurisdiction to be illegal,
unenforceable, or void, this Agreement will continue in full force and effect
without said provision; provided, however, that if the Release becomes or is so
declared to be illegal, unenforceable, or void, the Company shall be relieved of
its obligation to provide any of the consideration set forth in Section 2 of
this Agreement.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the first
date set forth below.

 

 

WARREN RESOURCES, INC.,
a Maryland corporation

 

STEPHEN L. HEITER

 

 

 

 

 

 

By:

/s/ David E. Fleming

 

/s/ Stephen L. Heiter

Printed Name:

David E. Fleming

 

 

Title:

Senior Vice President & General Counsel

 

Date:  January     , 2013

Date:

January 24, 2013

 

 

 

 

WARREN E&P, INC.,

 

 

a New Mexico corporation

 

 

 

 

 

 

 

 

By:

/s/ David E. Fleming

 

 

Printed Name:

David E. Fleming

 

 

Title:

Senior Vice President

 

 

 

 

WARREN RESOURCES OF CALIFORNIA, INC.,

 

 

a California corporation

 

 

 

 

 

 

 

 

By:

/s/ David E. Fleming

 

 

Printed Name:

David E. Fleming

 

 

Title:

Senior Vice President

 

 

 

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Exhibit A

 

WAIVER AND RELEASE OF CLAIMS

 

In exchange for the consideration described in Section 2 of the Separation and
General Release Agreement (the “Separation Agreement”) by and between WARREN
RESOURCES, INC., WARREN E&P, INC. and WARREN RESOURCES OF CALIFORNIA, INC.
(collectively, the “Company”) and STEPHEN L. HEITER (“Executive”) (together, the
“Parties”) and in accordance with the terms of the Offer Letter (as defined in
the Separation Agreement), Executive hereby agrees as follows:

 

1.                                      EXECUTIVE’S RELEASE.

 

(a)                                 Executive hereby forever releases and
discharges the Company and its parents, affiliates, successors, and assigns, as
well as each of their respective past, present, and future officers, directors,
employees, agents, attorneys, and shareholders (collectively, the “Company
Released Parties”), from any and all claims, charges, complaints, liens,
demands, causes of action, obligations, damages, and liabilities, known or
unknown, suspected or unsuspected, that Executive had, now has, or may hereafter
claim to have against the Company Released Parties arising out of or relating in
any way to Executive’s employment with, or resignation from, the Company, from
the beginning of time to the date Executive signs this Waiver and Release of
Claims (the “Executive’s Release”).

 

(b)                                 Executive’s Release specifically extends to,
without limitation, any and all claims or causes of action for wrongful
termination, breach of an express or implied contract, including, without
limitation, the Offer Letter, breach of the covenant of good faith and fair
dealing, breach of fiduciary duty, employment discrimination, including
harassment, fraud, misrepresentation, defamation, slander, infliction of
emotional distress, disability, loss of future earnings, and any claims under
any applicable state, federal, or local statutes and regulations, including, but
not limited to, the Civil Rights Act of 1964, as amended, the Equal Pay Act of
1963, as amended, the Fair Labor Standards Act, as amended, the Americans with
Disabilities Act of 1990, as amended (the “ADA”), the Rehabilitation Act of
1973, as amended, the Age Discrimination in Employment Act, as amended (“ADEA”),
as amended, the Older Workers Benefit Protection Act, as amended, the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), the Worker
Adjustment and Retraining Notification Act, as amended (the “WARN Act”),
Section 806 of the Sarbanes-Oxley Act, the Family and Medical Leave Act, as
amended, and the California Family Rights Act, as amended, the California Fair
Employment and Housing Act, as amended, and the California Labor Code or any
other federal or state laws relating to employment or employment discrimination,
and any claims for attorneys’ fees and costs (other than any claims arising
under the Separation Agreement for attorneys’ fees or costs); provided, however,
that Executive’s Release does not waive, release or otherwise discharge (i) any
claim or cause of action that cannot legally be waived by private agreement
between Executive and the Company, including, but not limited to, any claim for
unpaid wages, workers’ compensation benefits or unemployment benefits and any
claims under Section 2802 of the California Labor Code; (ii) any rights to
indemnification Executive may have under the Company’s Articles of
Incorporation, Bylaws, the Separation Agreement, or separate indemnification
agreement, as applicable, including any rights Executive may have under
directors and officers insurance policies and rights or claims of contribution
or advancement of expenses; (iii) any vested benefits provided under the terms
of any employee benefit plan applicable to Executive; (iv) any claim or cause of
action to enforce any of Executive’s rights under the Separation Agreement; or
(v) any claim or cause of action based on Executive’s rights as a shareholder of
the Company.  In addition, Executive’s Release will not release, waive or
discharge any rights or claims Executive may have that arise from actions or
omissions after the Effective Date (as defined in Section 3).

 

(c)                                  This release extends to any claims that may
be brought on Executive’s behalf by any person or agency, as well as any class
or representative action under which Executive may have any rights or benefits;
Executive agrees not to accept any recovery or benefits under any such claim or
action, and

 

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Executive assigns any such recovery or benefits to the Company.  For the purpose
of implementing a full and complete release, Executive understands and agrees
that this Agreement is intended to include all claims, if any, which Executive
may have and which Executive does not now know or suspect to exist in his favor
against the Company Released Parties and this Agreement extinguishes those
claims.  Accordingly, Executive expressly waives all rights afforded by
Section 1542 of the Civil Code of the State of California (“Section 1542”) and
any similar statute or regulation in any other applicable jurisdiction. 
Section 1542 states as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

(d)                                 Executive’s Release shall not prevent
Executive from filing a charge with the Equal Employment Opportunity Commission
(or similar state or local agency) or participating in any investigation
conducted by the Equal Employment Opportunity Commission (or similar state or
local agency); provided, however, that Executive acknowledges and agrees that
any claims by Executive for personal relief in connection with such a charge or
investigation (such as reinstatement or monetary damages) hereby are barred.

 

2.                                      ADEA WAIVER AND RELEASE.  Executive
understands and agrees that he is waiving his rights under the ADEA and thus:

 

(a)                                 Executive has been informed and understands
and agrees that he has the period of at least twenty-one (21) calendar days
after receipt of this Waiver and Release of Claims to consider whether to sign
it.

 

(b)                                 Executive has been informed and understands
and agrees that he may revoke this Waiver and Release of Claims at any time
during the seven (7) calendar days after it is signed and returned to the
Company, in which case none of the provisions of this Waiver and Release of
Claims and the Separation Agreement will have any effect.  Executive
acknowledges and agrees that if he wishes to revoke this Waiver and Release of
Claims, he must do so in writing, and that such revocation must be signed by
Executive and received by the General Counsel of the Company no later than the
seventh (7th) day after Executive has signed the Waiver and Release of Claims. 
Executive acknowledges and agrees that, in the event Executive revokes the
Waiver and Release of Claims, he shall have no right to receive any of the
consideration described in Section 2 of the Separation Agreement.

 

(c)                                  Executive agrees that prior to signing this
Waiver and Release of Claims, he read and understood each and every provision of
the document.

 

(d)                                 Executive understands and agrees that he has
been advised in this writing to consult with an attorney of his choice
concerning the legal consequences of this Waiver and Release of Claims and the
Separation Agreement and Executive hereby acknowledges that prior to signing
this Waiver and Release of Claims he had the opportunity to consult, and did
consult, with an attorney of his choosing regarding the effect of each and every
provision of both this Waiver and Release of Claims and the Separation
Agreement.

 

(e)                                  Executive acknowledges and agrees that he
knowingly and voluntarily entered into this Waiver and Release of Claims and the
Separation Agreement with complete understanding of all relevant facts, and that
he was neither fraudulently induced nor coerced to enter into this Waiver and
Release of Claims or the Separation Agreement.

 

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(f)                                   Executive understands that he is not
waiving, releasing or otherwise discharging any claims under the ADEA that may
arise after the date he signs this Waiver and Release of Claims.

 

3.                                      EFFECTIVE DATE.  For purposes of this
Waiver and Release of Claims, the “Effective Date” shall be the eighth (8th)
calendar day following the date that Executive signs and returns this Waiver and
Release of Claims to the Company, provided that Executive does not revoke or
attempt to revoke his acceptance prior to such date.  Executive understands and
agrees that, in order to receive the consideration provided under Section 2 of
the Separation Agreement, he must execute this Waiver and Release of Claims no
earlier than the Separation Date (as defined in the Separation Agreement) and no
later than twenty-one (21) days following the Separation Date and shall not have
revoked or attempted to revoke such acceptance prior to the Effective Date.

 

4.                                      MISCELLANEOUS.  Executive represents and
warrants that he has the full legal capacity, power and authority to execute and
deliver this Waiver and Release of Claims and to perform his obligations
hereunder.  This Waiver and Release of Claims is binding upon and shall inure to
the benefit of the Parties hereto as well as the Company Released Parties.  For
purposes of this Waiver and Release of Claims, a facsimile or electronic file
containing Executive’s signature printed by a receiving facsimile machine or
printer shall be deemed an original signature.

 

 

Accepted and agreed as of the date set forth below:

 

 

 

 

 

Stephen L. Heiter

 

 

 

Date:

 

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