AGREEMENT
Agreement made as of October 1, 1991 between XXXX-XxXXX CORPORATION, a
Delaware corporation having its executive offices at Oklahoma City, Oklahoma
(the "Company"), and XXXXXX X. XXXXXX residing at Edmond, Oklahoma (the
"Executive"). Unless otherwise indicated, terms used herein and defined in
Schedule A hereto shall have the meanings assigned to them in said Schedule.
WHEREAS, the Executive is currently employed by the Company and/or its
Subsidiaries; and
WHEREAS, the Company's Board of Directors has determined that it is
appropriate to reinforce the continued attention and dedication of certain
members of the Company's management, including the Executive, to their assigned
duties without distraction in potentially disturbing circumstances arising from
the possibility of a Change of Control of the Company;
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the Company and the Executive agree as follows:
1. OPERATION OF AGREEMENT
This Agreement shall become effective immediately upon the occurrence of
a Change of Control, provided that the Executive is employed by the Company
immediately prior to such Change of Control. Once it be comes effective, this
Agreement shall not terminate until the third anniversary of the Change of
Control. Notwithstanding the termination of this Agreement, the Company shall
remain liable for any rights or payments arising prior to such termination to
which the Executive is entitled under this Agreement.
2. SERVICE AFTER CHANGE OF CONTROL
Following a Change of Control, the Company will not terminate the
Executive's employment with the Company except on account of Cause prior to the
third anniversary of the Change of Control. Upon any termination of employment
of the Executive, other than for Cause or upon death, a Notice of Termination
shall be provided by the party causing such termination of employment.
3. BENEFITS UPON CHANGE OF CONTROL
(a) Stock Plans. Notwithstanding the terms and conditions of any benefit
plan or compensation program of the Company or any Subsidiary that employs the
Executive including but not limited to any purchase plan, stock grant plan,
stock option plan, employee stock ownership plan or similar plan or program
(excluding any plan qualified under Section 401(a) of the Code), the Company
shall, upon the occurrence of the Change of Control which cause this Agreement
to become effective (i) accelerate, vest and make immediately exercisable in
full (to the extent not already provided for under the terms of such applicable
plans or programs) all unexercisable installments of all options to acquire
securities of the Company and any accompanying stock appreciation rights, of
which the Executive is the Beneficial Owner on the date of such Change of
Control and (ii) waive any applicable restrictions including resale restrictions
or rights of repurchase, relating to or imposed on securities granted by the
Company to the Executive pursuant to such plans or programs which securities the
Executive is the Beneficial Owner of on the date of such Change of Control.
(b) Pension Plan. Following a Change of Control, the Executive may elect
early retirement under a retirement plan available to salaried employees or
employees generally of the Company or any Subsidiary that employs the Executive
upon giving the Company (or a Subsidiary employing the Executive) two days'
written notice.
(c) Benefits Restoration Plan. To the extent that the Executive is or
becomes a participant in the Benefits Restoration Plan, the Company shall amend
or have amended the Benefits Restoration Plan, which amendment shall thereafter
remain in effect, to provide in the event of an Executive's Termination for the
benefits specified in Section 4(b) hereof.
(d) Death of an Executive. In the event of the Executive's death prior
to Termination, but while employed by the Company or any Subsidiary, as the case
may be, his spouse or personal representative, if such spouse shall have died,
shall be entitled to receive his salary at the rate then in effect through the
date of his death, plus one additional pay period, as provided under the
Company's pay policy, as well as any amounts previously earned and not paid for
the periods of service prior to his date of death.
4. PAYMENTS AND BENEFITS UPON TERMINATION
The Executive shall be entitled to the following payments and benefits
following Termination:
(a) Termination Payment. In recognition of past services to the Company
by the Executive and in consideration for the undertaking by the Executive to
provide services to the Company, pursuant to Paragraph 2 hereof, the Company
shall make a lump sum payment in cash to the Executive as severance pay on the
fifth day following the Date of Termination equal to three times the Executive's
annual base salary (including for these purposes any amounts previously deferred
under any qualified or nonqualified deferred compensation plan, program or
arrangement (in effect immediately prior to the date that either a Change of
Control shall occur or such Date of Termination, whichever salary is higher.
Notwithstanding the foregoing, if all or any portion of the payments or
benefits provided under this Section 4(a), either alone or together with other
payments and benefits which the Executive receives or is then entitled to
receive from the Company or any Subsidiary, would constitute a Parachute
Payment, then the payments and benefits provided to the Executive under this
Section 4(a) shall be reduced but only to the extent necessary to ensure that no
portion thereof shall be subject to the excise tax imposed by Section 4999 of
the Code; but only if, by reason of such reduction, the Executive's Net After
Tax Benefit shall exceed the Net After Tax Benefit if such reduction were not
made. The foregoing calculations (and any calculations required under the
definition of Net After Tax Benefit) shall be made, at the Company's expense, by
the Company and the Executive. If no agreement on the calculations is reached
within five days of the Date of Termination, then the Executive and the Company
will agree to the selection of an accounting firm to make the calculations. If
no agreement can be reached regarding the selection of an accounting firm, the
Company shall select a "big eight" accounting firm which has no current or
recent business relationship with the Company or with the Person or Group
responsible for the Change of Control. The determination of any such firm
selected will be conclusive and binding on all parties.
(b) Benefits Restoration Plan. The Executive shall be entitled to
additional years of credit for purposes of calculating the years of service and
age of such Executive under the terms of the Benefits Restoration Plan equal to
the lesser of (i) five years or (ii) the number of years necessary to bring the
Executive to age 65 under the terms of the Benefits Restoration Plan, and the
Executive shall have a nonforfeitable right to any and all benefits credited to
such Executive under the Benefits Restoration Plan.
(c) Death of the Executive. In the event of the Executive's death
subsequent to Termination, all payments and benefits required by this Agreement
shall be paid to the Executive's designated beneficiary or beneficiaries or, if
he has not designated a beneficiary or beneficiaries, to his estate.
5. CONFIDENTIALITY
The Executive agrees to hold in confidence any and all confidential
information known to him concerning the Company and its Subsidiaries and their
respective businesses so long as such information is not otherwise publicly
disclosed.
6. ARBITRATION
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Oklahoma City,
Oklahoma, or, at the option of the Executive, in the county where the Executive
resides, in accordance with the Rules of the American Arbitration Association
then in effect; provided, however, that if the Executive institutes an action
relating to this Agreement the Executive may, at his option, bring such action
in an Oklahoma court of competent jurisdiction. Judgment may be entered on the
arbitrator's award in any such court having jurisdiction.
7. CONFLICT IN BENEFITS
This Agreement is not intended to and shall not adversely affect, limit
or terminate any other agreement or arrangement between the Executive and the
Company presently in effect or hereafter entered into, including any employee
benefit plan under which the Executive is entitled to benefits.
8. MISCELLANEOUS
(a) No Mitigation. All payments and benefits to which the Executive is
entitled under this Agreement shall be made and provided without offset,
deduction or mitigation on account of income the Executive could or may receive
from other employment or otherwise.
(b) Legal Expenses. The Company shall pay all costs and expenses,
including reasonable attorneys' fees and disbursements, of the Executive, at
least monthly, in connection with any litigation, arbitration or similar
proceeding, whether or not instituted by the Company or the Executive, with
respect to the interpretation or enforcement of any provision of this Agreement.
(c) Notices. Any notices required under the terms of this Agreement
shall be effective when mailed, postage prepaid, by certified mail and addressed
to, in the case of the Company:
X. X. Xxxxxx, Xx.
Vice President and General Counsel
Xxxx-XxXxx Corporation
Xxxx-XxXxx Center
Xxxxxxxx Xxxx, Xxxxxxxx 00000
and to, in the case of the Executive:
Xxxxxx X. Xxxxxx
Senior Vice President
Xxxx-XxXxx Corporation
Xxxx-XxXxx Center
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Either party may designate a different address by giving written notice
of change of address in the manner provided above.
(d) Waiver. No waiver or modification in whole or in part of this
Agreement, or any term or condition hereof, shall be effective against any party
unless in writing and duly signed by the party sought to be bound. Any waiver of
any breach of any provision hereof or any right or power by any party on one
occasion shall not be construed as a waiver of, or a bar to, the exercise of
such right or power on any other occasion or as a waiver of any subsequent
breach.
(e) Binding Effect; Successors. Subject to the provisions hereof,
nothing in the Agreement shall prevent the consolidation of the Company with, or
its merger into, any other corporation or the sale by the Company of all or
substantially all of its properties and assets, or the assignment of this
Agreement by the Company in connection with any of the foregoing actions. This
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the Company and the Executive and their respective heirs, legal representatives,
successors and assigns. If the Company shall be merged into or consolidated with
another entity, the provisions of this Agreement shall be binding upon and inure
to the benefit of the entity surviving such merger or resulting from such
consolidation. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, by agreement in form
and substance satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had take place.
The provisions of this Paragraph 8(e) shall continue to apply to each subsequent
employer of the Executive hereunder in the event of any subsequent merger,
consolidation or transfer of assets of such subsequent employer.
(f) Separability. Any provision of this Agreement which is held to be
unenforceable or invalid in any respect in any jurisdiction shall be ineffective
in such jurisdiction to the extent that is unenforceable or invalid without
affecting the remaining provisions hereof, which shall continue in full force
and effect. The enforceability or invalidity of a provision of this Agreement in
one jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
(g) Controlling Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oklahoma applicable to contracts made
and to be performed therein.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the day and year first above written.
XXXX-XxXXX CORPORATION
(X. X. XxXxxxxxx)
X. X. XxXxxxxxx
Chairman of the Board and
Chief Executive Officer
(Xxxxxx X. Xxxxxx)
Xxxxxx X. Xxxxxx
CERTAIN DEFINITIONS
As used in this Agreement, and unless the context requires a different
meaning, the following terms have the meanings indicated:
"Affiliate" has the meaning set forth in Rule 12b-2 of the General Rules
and Regulations promulgated under the Securities Exchange Act of 1934, as
amended.
"Beneficial Owner" has the meaning set forth in Rules 13d-3 and 13d-5 of
the General Rules and Regulations promulgated under the Securities Exchange Act
of 1934, as amended.
"Benefits Restoration Plan" means the Company's Benefits Restoration
Plan, effective January 1, 1985, as amended.
"Cause" means willful and gross misconduct on the part of the Executive
that has a materially adverse effect on the Company and its Subsidiaries, taken
as a whole, or the conviction of the Executive of a felony under United Stated
federal, state or local criminal law, as determined in good faith by the written
resolution duly adopted by the affirmative vote of not less than two-thirds of
all of the directors who are not employees, officers, or otherwise Affiliates of
the Company.
"Change of Control" means any one of the following: (a) a change in any
two year period in a majority of the members of the Board of Directors of the
Company resulting from the election of directors who were not directors at the
beginning of such period (other than the election of directors to fill vacancies
created by death or Disability, or the election of a director to replace a
director who by virtue of his age is not eligible for election under the by-laws
of the Company as in effect on the date of this Agreement); (b) any Person or
Group together with its Affiliates, becomes the Beneficial Owner, directly or
indirectly, of 25% or more of the Company's then outstanding Common Stock or 25%
or more of the voting power of the Company's then outstanding Common Stock or
25% or more of the voting power of the Company's then outstanding securities,
entitled to vote generally for the election of the Company's directors; (c) the
approval by the Company's stockholders of (i) the merger or consolidation of the
Company with any other corporation (other than a merger or consolidation of the
Company and a wholly-owned Subsidiary in which the holders of the Company's
Common Stock immediately prior to such merger or consolidation have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger or consolidation, (ii) the sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all, of the assets of the Company; or (d) a majority of the
members of the Board of Directors in office immediately prior to a proposed
transaction determined by written resolution that such proposed transaction, if
taken, will be deemed a Change of Control and such proposed transaction is
affected.
"Code" means the Internal Revenue Code of 1986, as amended.
"Date of Termination" means if the Executive's employment is terminated
during the term of this Agreement, the date on which a Notice of Termination is
given; provided, however, that if within thirty days after any Notice of
Termination is given to the Executive, the Executive notifies the Company or the
Subsidiary that employs the Executive that a dispute exists concerning the
termination, the Date of Termination shall be the date the dispute is finally
determined, whether by mutual agreement by the parties or upon final judgment,
order or decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected).
"Disability" means that (i) a person has been totally incapacitated by
bodily injury or physical or mental disease so as to be prevented thereby from
engaging in a comparable occupation or employment for remuneration or profit,
(ii) such person will be subject to such total incapacity for a period of at
least eighteen consecutive months and (iii) such person is disabled for purposes
of any and all of the plans or programs of the Company or any Subsidiary that
employs the Executive under which benefits, compensation or awards are
contingent upon a finding of disability. The determination with respect to
whether the Executive is suffering from a Disability will be determined by a
mutually acceptable physician or, if there is no physician mutually acceptable
to the Company and the Executive, by a physician selected by the Xxxx of the
University of Oklahoma Medical School.
"Good Reason" means (a) without the Executive's express written consent,
(i) the assignment to the Executive of any duties, or any limitation of the
Executive's responsibilities, inconsistent with the Executive's positions,
duties, responsibilities and status with the Company or any Subsidiary that
employs the Executive immediately prior to the date of the Change of Control, or
(ii) any removal of the Executive from or any failure to re-elect the Executive
to, any of the Executive's positions with the Company or any Subsidiary that
employs the Executive immediately prior to the Change of Control, except in
connection with the involuntary termination of the Executive's employment by the
Company for Cause or as a result of the Executive's death or Disability; (b) any
failure by the Company to pay, or any reduction by the Company of, the
Executive's base annual salary or bonus compensation in effect immediately prior
to the Change of Control; (c) any failure by the Company or any Subsidiary that
employs the Executive to (i) continue to provide the Executive with the
opportunity to participate, on terms no less favorable than those in effect
immediately prior to the Change of Control, in any benefit plans and
compensation programs in which the Executive was participating immediately prior
to the Change of Control, or their equivalent, including, but not limited to,
participation in pension, profit-sharing, stock grants, stock option, savings,
employee stock ownership, incentive compensation, group insurance plans or
similar plans or programs, or (ii) provide the Executive with all other fringe
benefits (or their equivalent) including paid vacation, from time to time in
effect for the benefit of any executive, management or administrative group
which customarily includes a person holding the employment position with the
Company or its Subsidiaries then held by the Executive; (d) without the
Executive's express written consent, the relocation of the Company's
headquarters or of the principal place of the Executive's employment to a
location that is more than 35 miles further from the Executive's principal
residence than such principal place of employment immediately prior to the
Change of Control; (e) any change in the sick leave policy for salaried
employees or employees generally of the Company or any Subsidiary that employs
the Executive which has an adverse effect on the Executive's rights and benefits
pursuant to such policy; (f) any reduction to the extent applicable in benefits
offered under an income protection insurance plan for salaried employees or
employees generally of the Company or any Subsidiary that employs the Executive;
(g) any change in the pay policy for salaried employees or employees generally
of the Company or any Subsidiary that employs the Executive which has an adverse
effect on the Executive's rights and benefits pursuant to such policy; (h) with
respect to a Subsidiary that employs the Executive, the sale by the Company of
25% or more of such Subsidiary's common stock or 25% or more of the Subsidiary's
then outstanding securities entitled to vote generally for the election of the
Subsidiary's directors, or the sale by the Company of all or substantially all
of the assets of such Subsidiary; (i) the breach of any provision of this
Agreement by the Company or (j) the failure of any successor company to the
Company to expressly assume this Agreement.
"Group" has the meaning set forth in Rule 13d-5 of the General Rules and
Regulations promulgated under the Securities Exchange Act of 1934, as amended.
"Net After Tax Benefit" means the sum of (i) the total amounts payable
to the Executive under Section 4(a) of this Agreement, plus (ii) all other
payments and benefits which the Executive receives or is then entitled to
receive from the Company or any Subsidiary that would constitute a Parachute
Payment, less (iii) the amount of federal income taxes payable with respect to
the foregoing calculated at the maximum marginal income tax rate for each year
in which the foregoing shall be paid to the Executive (based upon the rate in
effect for such year as set forth in the Code at the time of termination of his
employment), less (iv) the amount of excise taxes imposed with respect to the
payments and benefits described in (i) and (ii) above by Section 4999 of the
Code.
"Note of Termination" means a written notice to the Executive or to the
Company, as the case may be, which shall indicate those specific provisions in
this Agreement relief upon and which sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for the termination of the
Executive's employment constituting a Termination under the provision so
indicated.
"Parachute Payment" means any payment deemed to constitute a "parachute
payment" as defined in Section 280G of the Internal Revenue Code of 1986, as
amended.
"Person" means any individual firm, corporation, group (as such term is
sued in Rule 13d of the General Rules and Regulations promulgated under the
Securities Exchange Act of 1934, as amended) or other entity.
"Subsidiary" with respect to the Company has the meaning set forth in
Rule 12b-2 of the General Rules and Regulations promulgated under the Securities
Exchange Act of 1934, as amended.
"Termination" means following the occurrence of any Change of Control by
the Company (i) the involuntary termination of the employment of the Executive
for any reason other than for Cause, death or Disability, or (ii) the
termination of employment by the Executive for Good Reason; provided, however,
that any retirement under a retirement plan available to salaried employees or
employees generally of the Company or any Subsidiary that employs the Executive
that is coincident with or subsequent to a Termination, will not preclude
payments under this Agreement to which the Executive is entitled in respect of
such Termination.
