Document:

maxxam_8k-0806ex101.htm

    
 

    Exhibit
10.1

    

    SEPARATION, RELEASE AND
CONFIDENTIALITY AGREEMENT

    

    THIS
SEPARATION, RELEASE AND CONFIDENTIALITY AGREEMENT (“Agreement”) is made and
entered into on this 31st day of July, 2008 by and between J. Kent Friedman
hereinafter referred to as (“Employee”) and MAXXAM Inc. (hereinafter referred to
as the “Company”).

    

    Employee
and the Company have maintained an employer-employee relationship for a period
of time and the now mutually desire to terminate that aspect of their
relationship.

     

    Employee
and the Company desire to enter into a written separation agreement to establish
their respective rights, duties and obligations and to avoid and resolve any
actual and potential differences between them, including, without limitation,
differences arising out of Employee’s employment with the Company and the end of
that employment.

    

    THEREFORE, in consideration of
the mutual promises, conditions and covenants in this Agreement, the parties
hereby agree as follows:

    

    1.      Termination
Date. The employment
relationship between the parties shall terminate as of the close of business on
July 31, 2008 (the “Termination Date”), and neither party shall have any further
rights or obligations with respect to or arising from such employment
relationship except as provided in this Agreement or the Separation Agreement
Addendum affixed hereto (the “Addendum”).

    

    2.      Severance
Payment.  Under the terms
of the MAXXAM Inc. Severance Pay Plan and conditioned upon Employee’s execution
of this Agreement, the Company shall pay Employee sixteen (16) weeks of
severance pay at Employee’s base rate of compensation (the “Severance
Payment”).  All necessary taxes and withholdings will be deducted from
this amount.  This sum shall be paid to Employee six months following
the effective date of this Agreement.  (The effective date of this
Agreement is discussed in paragraph 7 below.)  The Severance Payment
amount is included in paragraph 4 of the Addendum.  The severance
payment is in addition to any pension benefits Employee might be entitled to
under any Company defined benefit pension plan in effect at the time of the
Termination Date, and other employee benefits Employee may be entitled to under
any Company Plan in effect at the time of the Termination
Date.  Receipt of any pension benefits to which Employee is entitled
shall in no way preclude or reduce Employee’s entitlement to severance pay in an
amount equivalent to the level of severance benefits which Employee would have
otherwise been entitled to under the terms of the MAXXAM Inc. Severance Pay
Plan.

    

    3.      Group
Health Insurance Benefits. Under the terms of the
MAXXAM Inc. Severance Pay Plan, the Employee is entitled to up to fifty-two (52)
weeks of continued group health and managed mental health insurance, provided
the Employee pays for 50% of the total cost of the coverage.  Such
coverage will terminate prior to the expiration of the fifty-two weeks if
Employee becomes covered by any other group program.   If after
the expiration of this initial continuation, Employee has not obtained
alternative coverage, Employee will be eligible for the remaining time under the
rules of COBRA up to the maximum of 18 months.  The initial period of
coverage under the terms of the Severance Plan counts toward the COBRA
eligibility period, which eligibility period shall commence on the Termination
Date.

    
       

      
        
          

        

      

       

    

     

    4.      Stock
Options. The Company and Employee
acknowledge that (a) Employee has previously been granted non-qualified stock
options/stock appreciation rights (collectively, the “Options”) pursuant to the
Company’s 1994 and 2002 Omnibus Employee Incentive Plans (collectively, the
“Option Plans”), as set forth on Exhibit 2 hereto, and (b) the last column of
each page of Exhibit 2 sets forth those Options that are currently outstanding
and exercisable or will become exercisable prior to the Termination Date
(collectively, the “Vested Options”).  The Employee acknowledges that
(x) any Options that are not Vested Options shall be cancelled effective as of
the Termination Date, (y) notwithstanding the terms of the December 1, 1999
Rights Agreement referred to below, he has until November 30, 2009 to exercise
any or all the Options covered by such Rights Agreement, and (z) notwithstanding
the terms of the other Rights Agreements referred to below, he has until
December 31, 2009to exercise any or all of the Vested Options covered by such
other Rights Agreements.  Any Vested Options not exercised by 5:00
p.m., Houston time, on the applicable termination dates noted above shall be
cancelled immediately thereafter.

    

    In order
to exercise any of the Vested Options, the Employee must complete and sign the
exercise form attached hereto as Exhibit 3 and deliver such form to the Company
either:  (i)  by means of U.S. mail, overnight delivery or
in person to the attention of the Corporate Secretary, MAXXAM Inc., 1330 Post
Oak Boulevard, Suite 2000, Houston, Texas 77056-3058, or (ii) via e-mail to both
Bernie Birkel (bernie.birkel@mxmin.com)
and Valencia McNeil (valencia.mcneil@mxminc.com),
provided that the form must be received by the Company prior to
the  applicable termination date noted above.  Except as
noted in items (y) and (z) of the immediately preceding paragraph, the Company,
Employee and the Options shall continue to be subject to the terms and
provisions of the Option Plans and any outstanding Rights Agreements between the
Company and Employee, including those dated December 1, 1999, December 18, 2000,
December 12, 2001, December 10, 2002, December 10, 2003, December 20, 2004,
December 7, 2005,  December 11, 2006 and December 17,
2007.

    

    5.      Confidentiality.  Employee
acknowledges that in the course of his employment with the Company, he acquired
confidential information of a special and unique nature and value relating to
such matters as the Company’s trade secrets, strategic plans, programs,
confidential reports and communications, clients and business
prospects.  Employee hereby agrees that he shall not, at any time
following the date of this Agreement, except with the prior written consent of
the Company, directly or indirectly, disclose, divulge, reveal, report, publish,
transfer, or use for any purpose, any such information.

               

    6.      Release
and Waiver. In consideration for the
benefits provided above and in the Addendum, Employee fully and completely
releases, waives and discharges any and all suits, causes of action, demands,
claims, charges, complaints, liabilities, costs, losses, damages, injuries,
bonds, judgments, and attorneys’ fees and expenses of any kind, in law or in
equity, whether known or unknown (collectively, “Claims”), arising out of his
employment by the Company, or otherwise, that Employee has ever asserted, or
could assert, against the Company, any other entities that are affiliated with
the Company, as well as the Company’s directors, officers, employees, owners,
agents, representatives, successors and assigns (collectively,
“Releases”).  These released Claims are intended to and do include,
without limitation, any and all Claims that Employee can or could assert against
one or more of the Releases for wrongful discharge, discrimination, harassment,
breach of contract, retaliation, defamation or other torts arising under any
federal, state or local law.  These released Claims are further
intended to and do include, without limitation, any and all Claims that Employee
can or could assert against one or more of the Releases under Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, the Fair Labor Standards Act, ERISA, the Texas
Commission on Human Rights, the Texas Labor Code and any and all laws regulating
employment, wages, back or front pay, employee benefits, compensatory damages,
punitive damages, liquidated damages, attorneys’ fees, and expenses and
costs.  This release and waiver also applies to any Claims brought by
any person, agency or class action under which Employee might have any right or
benefit.  The waivers in this paragraph do not affect Employee’s
rights, if any, under the Company’s benefit plans in accordance with the terms
of those plans, to make a complaint to any state or federal agency with respect
to issues related to Employee’s employment with the Company.

    

    For
purposes of this release, waiver and discharge of Claims, Employee expressly
understands and acknowledges that he:

    

    
      	
               
      

            	
              A)

            	
              has
      had a full forty-five (45) days within which to consider this Agreement
      and the Addendum before executing
it;

            

    

    

    
      	
               
      

            	
              B)

            	
              has
      carefully read and fully understands all the provisions of this Agreement
      and the Addendum;

            

    

    

    
      	
               
      

            	
              C)

            	
              has
      carefully read Exhibit 1 of this Agreement.  As required by the
      Older Workers’ Benefit Protection Act for employees age 40 and older,
      Exhibit 1 contains a list of the job titles and ages of the individuals
      who are eligible to receive severance benefits under the MAXXAM Inc.
      Severance Pay Plan as a result of the reduction-in-force at MAXXAM Inc.,
      and the job titles and ages of the individuals who are not
      eligible;

            

    

    

    
      	
               
      

            	
              D)

            	
              is,
      through this Agreement, releasing the Company from any and all claims
      Employee may have against the Company other than with respect to
      obligations to be performed by it hereunder or in the
      Addendum;

            

    

    

    
      	
               
      

            	
              E)

            	
              knowingly
      and voluntarily agrees to and voluntarily intends to be bound by all the
      terms set forth in this Agreement;

            

    

    

    
      	
               
      

            	
              F)

            	
              was
      advised and hereby is advised in writing to consider the terms of this
      Agreement and the Addendum and consult with an attorney of his choice
      prior to executing this Agreement;

            

    

    

    
      	
               
      

            	
              G)

            	
              shall
      have a full seven (7) days following the execution of this Agreement to
      revoke this Agreement and has been and hereby is advised in writing that
      this Agreement shall not become effective or enforceable until the
      revocation period has expired;

            

    

    

    
      	
               
      

            	
              H)

            	
              will
      forfeit the Severance Payment and all of the amounts provided for in
      paragraph 3 and 6 of the Addendum in the event that he violates the terms
      of this Agreement;

            

    

    

    
      	
              I)            

            	
              understands
      that rights or claims under the Age Discrimination in Employment Act of
      1967 (29 U.S.C. § 621 et
      seq.) that may arise after the date of this Agreement is executed
      are not waived; and

            

    

    

    
      	
               
      

            	
              J)

            	
              understands
      that if the Company did not have this Agreement, the
      employee   would not be getting severance pay or the group
      health insurance benefits outlined in this Agreement or the benefits set
      forth in the Addendum.  

            

    

    

    7.           Effective
Date of Agreement. Employee may revoke this
Agreement during the seven calendar days following the day he signs the
Agreement.  The Agreement will not become effective until the eighth
calendar day after Employee signs it (the "Effective Date").  If
Employee wishes to revoke the Agreement, he must do so in writing and the
written notice of revocation must be sent to M. Emily Madison, Vice President,
Finance, at MAXXAM Inc., 1330 Post Oak Boulevard, Suite 2000, Houston,
Texas  77056-3058.  To be effective, the revocation must be
received by Ms. Madison during the seven calendar days after the day Employee
signs this Agreement.

    

    8.      Non-admission
of Liability. Employee and Company
agree that the fact that they are making this Agreement or the Addendum does not
mean that the Company has any liability to him.

    

    9.      Choice of
Law and Interpretation. This Agreement is made
and entered into in the State of Texas, and shall in all respects be
interpreted, enforced and governed under the laws of the State of
Texas.  The language of all parts of this Agreement shall in all cases
be construed as a whole, according to its fair meaning, and not strictly for or
against any of the parties.

    

    10.         Severability
of Provisions.  Should any provision of this Agreement or the
Addendum be declared or be determined by any court to be unenforceable or
invalid as drafted, each may and shall be reformed or modified by a court of
competent jurisdiction to the form of an enforceable and valid provision that
achieves, to the greatest extent possible, the result intended by the parties in
drafting and agreeing to the unenforceable and invalid
provision.  Should a court of competent jurisdiction decline to so
reform or modify such a provision or determine that no enforceable and valid
provision can be created to achieve the intended result, the enforceability and
validity of the remaining parts, terms or provisions of this Agreement or the
Addendum shall not be affected thereby and said unenforceable or invalid part,
term or provision shall be deemed not to be a part of this
Agreement.

    

    11.         Arbitration.  Any disputes
arising in connection with this Agreement or the Addendum shall be resolved by
binding arbitration in accordance with the rules and procedures of the American
Arbitration Association concerning employment disputes.  Judgment upon
any award rendered by the arbitrator may be entered in any court having
jurisdiction of this matter.  Costs of the arbitration shall be borne
equally by the parties.  Unless the arbitrator otherwise determines,
the party that does not prevail in any such action shall reimburse the
prevailing party for the prevailing party’s attorneys’ fees incurred with
respect to such arbitration.

    

    12.         Entire
Agreement. This Agreement together
with the Addendum sets forth the entire agreement between the parties, and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof, and may only be modified by a
subsequent written agreement that is signed by the parties.

    

    EXECUTED
this 31st day of July , 2008.

    

                                  
MAXXAM Inc.

    

                                   
By: /s/ M. Emily
Madison

                                   
Printed Name:  M. Emily
Madison

                                   
As Its: V.P.
Finance

    

    

                                   
Agreed: /s/ J. Kent
Friedman

                                   
Printed Name: J. Kent
Friedman

    
       

      
        
          

        

      

       

    

     Separation,
Release and Confidentiality Agreement Addendum

    

    This
letter will complement the terms of the Separation, Release and Confidentiality
Agreement of even date (the “Separation Agreement”) annexed hereto with respect
to the termination of your employment with MAXXAM Inc. (“Maxxam”).

     

    1.      Resignation. You will retire from
your employment with Maxxam effective July 31, 2008, but will remain a member of
the Board of Directors and related companies and become a “non-employee
Director”.  You will be compensated in a manner consistent with other
non-employee board members.

    

    2.      Titles;
Billing.  You will retain
the titles of General Counsel and, subject to Maxxam’s By-Laws, of Vice Chairman
of the Board of Maxxam, but will not be deemed an employee or be entitled to any
rights as such.  The law firm with whom you associate will bill Maxxam
for your future services.  You agree to make yourself available as
needed by Maxxam, at your standard hourly billing rate, at at a 10%
discount.

    

    3.      Vested
Stock Options.  You will be
entitled to retain your existing 64,387 vested stock options/stock appreciation
rights (“the Options’) as shown on Exhibit 2 to the Separation
Agreement.  While a participant normally has three months from date of
termination to exercise such Options, you will be entitled, consistent with the
terms of the Separation Agreement and subject to the approval of the Board of
Directors of Maxxam or its Compensation Committee, to exercise such vested
Options until December 31, 2009 (except for the 17,500 Options granted on
December 1, 1999 and which must be exercised on or before November 30,
2009).  All unvested Options will be cancelled as of July 31,
2008.

    

    4. Other
Contractual Obligations.  Upon
termination from employment, you will be entitled to receive, in accordance with
the pay-out terms shown below (and subject to applicable IRS regulations and
withholding requirements consistent with the terms of the Separation Agreement),
the following amounts:

     

    
      	
               
      

            	
              Severance
      Payment (per Section 2 of the Separation Agreement) – 100% of contractual
      obligation ($156,923); Termination Date plus six
  months

            

    

    

    
      	
               
      

            	
              Capital
      Accumulation Plan – 100% of vested balance ($550,648); Termination Date
      plus six months

            

    

    

    
      	
               
      

            	
              Supplemental
      Savings Plan – 100% of accrued balance ($102,363); Termination Date plus
      six months; and

            

    

    

    
      	
               
      

            	
              Unused
      Vacation time – 100% of balance ($49,038), upon
  termination

            

    

     

    5. Retirement
Plans.  Upon termination
of employment you will be entitled to receive (in accordance with their terms
and consistent with and subject to applicable IRS regulations), the amounts
credited to you in the following:

     

    Pension
Plan;

    Supplemental
Employee Retirement Plan; and

    401(k)
Plan

    

    6.      Video
Lottery Terminals.  If, prior to December 31, 2009, (i) the
Texas Legislature allows Video Lottery Terminals (or any reasonable facsimile
thereof) to be utilized at Texas horse and dog tracks, and (ii) if required,
such legislation is approved by the voters, you will receive a cash payment of
either [the remainder of this sentence has been omitted as confidential
treatment is being requested with respect to the balance of such sentence, which
is being filed separately with the Securities and Exchange Commission].
 Any such payment will be made by no later than  (sixty (60) days
after the date such obligation “vests” (i.e., after the legislation is passed if
no vote is required, or after a vote if one is required).  You agree
to devote such time to this effort (without charge for your time for meetings
with elected officials in Houston) as Maxxam may request.

    

    7.      Miscellaneous.  You
have acknowledged that you have consulted with your own counsel with respect to
the Agreement and this Addendum.  We expect that you will not be
required to spend more than 20% of your time (compared to the amount of time
devoted to Maxxam matters during the final 36-month period of your employment
with Maxxam) for Maxxam legal matters.  Nonetheless, you have agreed
to assume the risk of any determination by government authorities as to the
termination of your status as a Maxxam employee.

    

     

    If the
foregoing is in accord with your understanding of our agreement, kindly sign and
return to Emily Madison the enclosed copy of this letter, which will become
effective upon effectiveness of the Separation Agreement.

     

    MAXXAM
Inc.

    

    By:       
 /s/ Charles E.
Hurwitz                                                                           

          
  Charles E. Hurwitz, CEO

    

    

    Agreed:  /s/ J. Kent
Friedman                                                                           

      J.
Kent Friedman

    

    

    
      
        
           

          W:\Corporate\BIRKEL\0229MIS8.Exhibit
10.1.BLB.DOCUnassociated Document

    

      Exhibit
10.1

      PG&E
CORPORATION

      2006
LONG-TERM INCENTIVE PLAN

      AMENDMENT
- RESTRICTED STOCK AGREEMENT

      

      PG&E CORPORATION, a
California corporation, and Peter A. Darbee (the “Recipient”)
hereby agree to amend the terms of the Restricted Stock Agreement (as
amended,  the “Agreement”) describing the January 3, 2007 grant of
21,155 shares of PG&E Corporation restricted common stock (the “Restricted
Stock”) to the Recipient under the PG&E Corporation 2006 Long-Term Incentive
Plan, as amended on February 15, 2006, December 20, 2006, and October 17, 2007
(the “LTIP”).  The effective date of this amendment is May 9,
2008.

      

      

      The
following sections of the Agreement are amended to read as set forth
below.

      

      
        	
                SECTION OF
      AGREEMENT

                 

              	
                NEW
      LANGUAGE

              
	
                The
      LTIP and Other

                Agreements

              	
                This
      Agreement (as amended) constitutes the entire understanding between you
      and PG&E Corporation regarding the Restricted Stock, subject to the
      terms of the LTIP.  Any prior agreements, commitments or
      negotiations are superseded.  In the event of any conflict or
      inconsistency between the provisions of this Agreement and the LTIP, the
      LTIP shall govern.  In the event of any conflict or
      inconsistency between the provisions of the Agreement and the Officer
      Severance Policy, this Agreement shall govern.  Capitalized
      terms that are not defined in this Agreement are defined in the LTIP. For
      purposes of the Agreement, employment with PG&E Corporation shall mean
      employment with any member of the Participating Company
Group.

                 

              
	
                Lapse
      of Restrictions

              	
                So
      long as you remain employed with PG&E Corporation, on December 31,
      2008 the restrictions will lapse as to forty percent of the
      total  number of shares of Restricted Stock (8,462
      shares).

                 

                The
      remaining sixty percent of the total number of shares of Restricted Stock
      (12,693 shares) will be canceled on December 31, 2008.  In lieu
      of these 12,693 shares of canceled Restricted Stock, PG&E Corporation
      has agreed to grant you an equal number of restricted stock units,
      effective on the first business day of January 2009, on terms
      substantially similar to those that would have applied to such canceled
      shares.

                 

                To
      the extent this Agreement provides for continued lapse of restrictions
      following the termination of employment, such continued vesting shall be
      subject to your continued compliance with certain post-employment
      restrictions.

                        

              
	
                Release
      of Shares and

                Withholding
      Taxes

              	
                The
      shares of Restricted Stock held in escrow hereunder shall be subject to
      the following terms and conditions relating to their release from escrow
      or their surrender to PG&E Corporation:

                	
                    When
        the restrictions as to your shares of Restricted Stock lapse as
        described above, the certificates for such shares shall be released from
        escrow and delivered to you, at your request within thirty (30) days of
        the date the restrictions lapsed.

                  
	
                    Upon
        termination of your employment, any shares of Restricted Stock as to
        which the restrictions have not lapsed in accordance with the provisions
        of this Agreement shall be forfeited and automatically surrendered to
        PG&E Corporation as provided herein.

                  

                Note
      that you must make arrangements acceptable to PG&E Corporation to
      satisfy withholding or other taxes that may be due before the certificates
      for your shares will be released from escrow.

                	
                    If
        you so elect, PG&E Corporation will assist you in selling your
        shares through a broker so that you can use the sales proceeds to
        satisfy applicable taxes.  You will receive the remaining
        proceeds in cash.

                  
	
                    If
        you wish to receive the stock certificates in lieu of selling your
        shares, you will need to make arrangements to pay the applicable taxes
        either by check or through payroll deduction.

                  
	
                    If
        you so elect, you may instruct PG&E Corporation to use a portion of
        the shares held in escrow on your behalf to satisfy applicable taxes,
        provided the restrictions have lapsed as to such shares. The number of
        shares that you tender PG&E Corporation to satisfy taxes must have
        an aggregate value, based on the closing price of PG&E Corporation
        common stock on the New York Stock Exchange on the date the restrictions
        lapse, equal to the amount of applicable taxes due.   If
        you intend to tender shares held in escrow to satisfy your applicable
        taxes, please deliver the attached election form to the Manager of
        Executive Compensation, Human Resources by December 1,
        2008.

                  

                 

                 

              

      

      

      

      

       

      All other
terms of the Agreement remain unchanged, except to the extent changes may be
necessary or appropriate in order to conform to the terms of this
amendment.

      

       

      By
signing this amendment, you agree to all of the terms and conditions described
above, in the Agreement, and in the LTIP.

      

      

      

      Recipient                                         PETER
A.
DARBEE                          
                                                                 (Signature)

      

      

       

      Please
sign and return to PG&E Corporation, Human Resources,

      One
Market, Spear Tower, Suite 400, San Francisco, California 94105

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      PG&E
CORPORATION

      2006
LONG-TERM INCENTIVE PLAN

      

      ELECTION
TO DELIVER SHARES TO SATISFY WITHHOLDING TAXES

      UPON
VESTING OF RESTRICTED STOCK

      

      

      
        	
                Name
      of Award Recipient

              	 
      

      

      

      

      On
January 3, 2007, I received a grant of 21,155 shares of PG&E Corporation
common stock (the “Shares”) under the LTIP subject to the restrictions and terms
of the Restricted Stock Award Agreement dated January 3, 2007 and amended as of
May 9, 2008.

      

      I
understand that I will recognize taxable income when the restrictions to which
the Shares are subject lapse and that I will be required to satisfy applicable
withholding taxes.

      

      I hereby
elect to deliver to PG&E Corporation a number of Shares having an aggregate
fair market value on the date the restrictions lapse equal to the amount of
withholding taxes due.  PG&E Corporation is instructed to withhold
such number of Shares from the total number of Shares otherwise to be released
from escrow and delivered to me after the restrictions lapse. The value of the
Shares delivered to PG&E Corporation will be based on the closing price of
PG&E Corporation common stock on the New York Stock Exchange on the date the
restrictions lapse.

      

      To be
effective, I understand that this election must be delivered to the Manager,
Executive Compensation, Human Resources, PG&E Corporation, One Market
Street, Suite 400, San Francisco, California 94104 by December 1,
2008.

      

      I
understand that I may not revoke or modify my election.

      

      

      ______________________                               ________________________________

      (Date)                                                                            (Signature)

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