Energy XXI exec leaves, but not empty-handed…

Just over a month ago, Energy XXI (Bermuda) Limited (Nasdaq: EXXI) announced a management realignment. Headquartered in Bermuda with an office in Houston, the company’s stated goal is to —acquire and exploit producing oil and gas reserves, primarily in the Gulf of Mexico.

Characterized as a —streamlining of the organization, the management realignment included the departure of Steve Weyel, a company co-founder who served as its president, Chief Operating Officer, and director. At the time, Chairman/CEO John Schiller said Weyel was —leaving to pursue personal interests. Simultaneously, the reorg shuffled four other executives into roles with increased responsibilities.

But although the reorg happened in July, a month passed before the company and Weyel agreed to the terms of a Separation Agreement on August 20.

The agreement provides that Energy XXI will place a lump sum payment of $2.94 million (less taxes) into a rabbi trust for Weyel’s benefit. He—ll also get his full bonus for FY 2010, the remaining balance of which is $245,000, as well as another $56,538 for unused vacation.

The company also agreed to pay for continued medical and dental insurance for Weyel and his dependants for up to 36 months.

Energy XXI agreed that Weyel’s outstanding awards under its Long-Term Incentive Plan —shall become immediately exercisable and payable in full, and it gave Weyel a 180-day extension (starting July 23, 2010) in which to exercise his stock options. All told, (based on Attachment A to the Separation Agreement), the gross value of Weyel’s equity interests is more than $4.28 million.

Weyel further gets to keep his company car (a 2010 Range Rover), his company-installed home security system, and his company-issued laptop, iPad, and BlackBerry. Last, but not least, the company will continue to pay the premiums on Weyel’s $3 million life insurance policy for the next 36 months.

In exchange, Weyel agreed to waive any claims he might have against the company, avoid disparaging it, disclose confidential information, and not solicit employees or business contacts for a year. He also has to help the company occasionally with litigation, investigations, and other proceedings.

Whatever Weyel’s personal interests may be, it’s likely that he’s now got the wherewithal to pursue them.

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