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EXHIBIT 10.10B
EXECUTIVE SEVERANCE AGREEMENT, dated as of December 1, 1995, by and
between Sonat Inc., a Delaware corporation ("Sonat"), and Xxxxxx X. Xxxxxxx
("Executive").
WHEREAS, the Executive Compensation Committee of the Board of Directors of
Sonat has recommended, and the Board of Directors has approved, that Sonat
enter into severance agreements with key executives of Sonat who are from time
to time designated by the Executive Compensation Committee;
WHEREAS, Executive is a key executive of Sonat and has been selected by
the Executive Compensation Committee and the Board of Directors to enter into a
severance agreement with Sonat;
WHEREAS, should Sonat become subject to any proposed or threatened Change
of Control (as hereinafter defined), the Board of Directors believes it
imperative that Sonat and the Board of Directors be able to rely upon Executive
to continue in his position, and that Sonat be able to receive and rely upon
his advice, if requested, as to the best interests of Sonat and its
stockholders without concern that he might be distracted by the personal
uncertainties and risks created by such a proposal or threat; and
WHEREAS, should Sonat receive any such proposals, in addition to
Executive's regular duties, he may be called upon to assist in the assessment
of such proposals, advise management and the Board of Directors as to whether
such proposals would be in the best interests of Sonat and its stockholders,
and to take such other actions as the Board of Directors might determine to be
appropriate;
NOW, THEREFORE, Sonat and Executive agree as follows:
1. SERVICES DURING CERTAIN EVENTS. In the event a third person begins a
tender or exchange offer, circulates a proxy to stockholders, or takes other
steps to effect a Change of Control, Executive agrees that he will not
voluntarily leave the employ of Sonat, and will render the services
contemplated in the recitals to this Agreement, until the third person has
abandoned or terminated his efforts to effect a Change of Control or until a
Change of Control has occurred.
2. TERMINATION FOLLOWING CHANGE OF CONTROL. Except as provided in Section
4 hereof, Sonat will provide or cause to be provided to Executive the rights
and benefits described in Section 3 hereof in the event that Executive's
employment by Sonat is terminated:
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(a) at any time within three years following a Change of Control by
Sonat for reasons other than for "cause" (as such term is defined in
Section 4 hereof) or other than as a consequence of Executive's death,
permanent disability or retirement at or after the Executive attains age
67 ("Normal Retirement Date") as provided under the Sonat Inc. Retirement
Plan (the "Retirement Plan");
(b) at any time within three years following a Change of Control by
Executive following the occurrence of any of the following events without
Executive's written consent:
(i) the assignment of Executive to any duties or
responsibilities that are inconsistent with his position, duties,
responsibilities or status immediately preceding such Change of
Control, or a change in his reporting responsibilities or titles in
effect at such time resulting in a reduction of his
responsibilities or position at Sonat;
(ii) the reduction of Executive's annual salary (including any
deferred portions thereof) or level of benefits or supplemental
compensation; or
(iii) the transfer of Executive to a location requiring a
change in his residence or a material increase in the amount of
travel normally required of Executive in connection with his
employment by Sonat; or
(c) by Executive for any reason during the 30-day period immediately
following the first anniversary of the date of the Change of Control.
For purposes of this Agreement, "Change of Control" shall mean:
A. The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13(d)-3 promulgated under the Exchange Act) of 20% or more
of either (i) the then outstanding shares of common stock of Sonat (the
"Outstanding Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of Sonat entitled to vote generally in the
election of directors (the "Outstanding Voting Securities"); provided, however,
that for purposes of this subsection A, the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from Sonat, (ii)
any acquisition by Sonat, (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by Sonat or any corporation
controlled by Sonat or (iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of subsection C; or
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B. Individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board of Directors; provided, however that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by Sonat's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors; or
C. Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of Sonat (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Common Stock and
Outstanding Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which as a
result of such transaction owns Sonat or all or substantially all of Sonat's
assets either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Common Stock and Outstanding Voting Securities,
as the case may be, (ii) no Person (excluding any corporation resulting from
such Business Combination or any employee benefit plan (or related trust) of
Sonat or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (iii) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board of Directors,
providing for such Business Combination.
3. RIGHTS AND BENEFITS UPON TERMINATION. In the event of the termination
of Executive's employment under any of the circumstances set forth in Section 2
hereof ("Termination"), Sonat agrees to provide or cause to be provided to
Executive the following rights and benefits:
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(A) SALARY AND OTHER PAYMENT AT TERMINATION. Executive shall be
entitled to receive within 30 days of Termination a lump-sum payment in
cash in the amount of three times Executive's highest Earnings (as such
term is defined in this Section 3(a)) with respect to any 12 consecutive
month period during the three years ending with the date of Termination;
provided, however, that if there are fewer than 36 months remaining from
the date of Termination to Executive's Normal Retirement Date, the amount
calculated pursuant to this paragraph will be reduced by multiplying such
amount by a fraction, the numerator of which is the number of months
(including any fraction of a month) so remaining to Executive's Normal
Retirement Date and the denominator of which is 36.
For purposes of this Agreement, "Earnings" shall mean the sum of
(1) all base pay (including Before-Tax Contributions (as defined in
Sonat's Savings Plan) made on behalf of Executive under Sonat's Savings
Plan, and before-tax contributions by Executive to a plan established
under Section 125 of the Internal Revenue Code, as amended (the "Code"),
and sponsored by Sonat), overtime, cash bonuses (including bonuses paid
under Sonat's Performance Award Plan, Cash Bonus Plan, Performance Award
and Cash Bonus Plan, and All-Employee Incentive Program) and commissions
paid to Executive for personal service rendered to Sonat and its
subsidiaries and (2) workers' compensation payments or other comparable
payments required to be made by law, received in lieu of base pay, but
only to the extent that such payments do not exceed the rate of base pay
of Executive immediately prior to the commencement of such payments.
Notwithstanding the provisions of the foregoing sentence,
Earnings shall not include (1) severance pay, bonuses, workers'
compensation payments, payment for unused vacation, and payments similar
to any of the foregoing, received after or on account of Executive's
Termination, (2) any income attributable to restricted stock, options,
stock appreciation rights, supplemental payments, or dividends on
restricted stock, acquired pursuant to Sonat's Executive Award Plan, or
(3) any Choice Dollars (as defined in Sonat's Choice Benefits Plan)
allocated to Executive under Sonat's Choice Benefits Plan, regardless of
whether any Choice Dollars are paid to Executive in cash.
(B) RETIREMENT BENEFITS. If Executive (i) has at Termination
attained the age of 50 and (ii) at Termination is not otherwise entitled
to receive an early retirement benefit under the terms of a qualified
retirement plan of Sonat or its subsidiaries, Sonat shall pay in cash to
Executive a monthly benefit for life (a "Severance Retirement Benefit")
in an amount equal to the difference between (i) the monthly benefit
calculated under the early retirement provisions of the Retirement Plan
(as in effect immediately prior to the Change of Control), using the
early retirement benefit reduction factors applicable as of the later of
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age 55 or the Executive's actual age at his date of Termination, and (ii)
the monthly benefit payable to Executive under the Retirement Plan (as in
effect on the date of Executive's Termination), assuming the following
for purposes of clauses (i) and (ii): (A) the benefit is payable in the
form of a single life annuity as of the later of the date Executive
attains age 55 and the date of Termination; (B) the benefit is calculated
based on Executive's actual service and actual earnings history at the
date of Termination; (C) Executive is fully vested in the benefit; and
(D) the benefit is calculated under the assumption that Code Sections
401(a)(17) and 415 are nonexistent and the provisions of the Retirement
Plan incorporating such Sections are inoperative. The Severance
Retirement Benefit shall be paid commencing on the first day of the month
following the later of the date Executive attains age 55 and the date of
Termination, and shall not be affected by the settlement option or date
of commencement of any benefits actually payable under the Retirement
Plan or the Sonat Inc. Supplemental Benefit Plan.
(C) SURVIVORS' BENEFITS. If Executive is entitled to receive a
Severance Retirement Benefit under Section 3(b) and Executive is survived
by one or more Eligible Family Members (as such term is defined in the
Retirement Plan as in effect immediately prior to the Change of Control),
Sonat shall pay in cash to each such Eligible Family Member a monthly
survivors' benefit (the "Severance Survivors' Benefit") in an amount
equal to the excess of (i) over (ii), where
(i) is the monthly survivors benefit that would have been
payable to such Eligible Family Member under the Retirement Plan
(as in effect immediately prior to the Change of Control) with
respect to Executive if Executive's retirement benefit were
calculated under the early retirement provisions of such plan,
using the early retirement benefit reduction factors applicable
as of the later of age 55 or Executive's actual age at his date
of Termination, and assuming (A) the retirement benefit is payable
in the form of a single life annuity as of the later of the date
Executive attains age 55 and the date of Termination; (B) the
retirement benefit is calculated based on Executive's actual
service and actual earnings history at the date of Termination;
(C) Executive is fully vested in the retirement benefit; and
(D) the retirement benefit is calculated under the assumption that
Code Sections 401(a)(17) and 415 are nonexistent and the provisions
of the Retirement Plan incorporating such Sections are inoperative;
and
(ii) is the amount actually paid to such Eligible Family
Member for such month as a Survivors' Benefit under the Retirement
Plan and as an Excess Retirement Plan Benefit under the Sonat Inc.
Supplemental Benefit Plan.
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Payment of the Severance Survivors' Benefit shall commence on the first day of
the month following the death of Executive.
(D) INSURANCE AND OTHER SPECIAL BENEFITS. To the extent Executive
is eligible thereunder, Executive shall continue to be covered by the
life and dependent life insurance, medical and dental insurance, and
accident and disability insurance plans of Sonat and its subsidiaries or
any successor plan or program in effect at Termination for employees in
the same class or category as Executive, subject to the terms of such
plans and to Executive's making any required contributions thereto. In
the event Executive is ineligible to continue to be so covered under the
terms of any such benefit plan or program, or, in the event Executive is
eligible but the benefits applicable to Executive are not substantially
equivalent to the benefits applicable to Executive immediately prior to
Termination, then, for a period of 36 months following Termination (or
until Executive's Normal Retirement Date, whichever is sooner), Sonat
shall provide such substantially equivalent benefits, or such additional
benefits as may be necessary to make the benefits applicable to Executive
substantially equivalent to those in effect before Termination, through
other sources; provided, however, that if during such period Executive
should enter into the employ of another company or firm which provides
substantially similar benefit coverage, Executive's participation in the
comparable benefit provided by Sonat either directly or through such
other sources shall cease. Nothing contained in this paragraph shall be
deemed to require or permit termination or restriction of Executive's
coverage under any plan or program of Sonat or any of its subsidiaries or
any successor plan or program thereto to which Executive is entitled
under the terms of such plan or program, whether at the end of the
aforementioned 36-month period or at any other time.
(E) RELOCATION ASSISTANCE. Should Executive move his residence in
order to pursue other business opportunities within three years of the
date of Termination (or until his Normal Retirement Date, whichever is
sooner), Sonat shall reimburse him for any expenses incurred in that
relocation (including taxes payable on the reimbursement) which are not
reimbursed by another employer; provided, however, that Executive shall
be entitled to such reimbursement with respect to only one such
relocation, it being agreed that in the event of more than one such
relocation, Executive shall be entitled to specify the relocation for
which reimbursement hereunder is to be made. Benefits under this
provision will include the assistance, at no cost to Executive, in
selling his home and other assistance which was customarily provided to
executives transferred within Sonat or between Sonat and its subsidiaries
prior to the Change of Control.
(F) OTHER BENEFITS PLANS. The specific arrangements referred to in
this Section 3 are not intended to exclude Executive's participation in
other benefit
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plans in which Executive currently participates or which are available
to executive personnel generally in the class or category of Executive
or to preclude other compensation or benefits as may be authorized by
the Board of Directors from time to time.
(G) DUTY TO MITIGATE. Executive's entitlement to benefits hereunder
shall not be governed by any duty to mitigate his damages by seeking
further employment nor offset by any compensation which he may receive
from future employment.
(H) PAYMENT OBLIGATIONS ABSOLUTE. Sonat's obligation to pay or
cause to be paid to Executive the benefits and to make the arrangements
provided in this Section 3 shall be absolute and unconditional and shall
not be affected by any circumstances, including, without limitation, any
setoff, counterclaim, recoupment, defense or other right, which Sonat may
have against Executive or anyone else. All amounts payable by or on
behalf of Sonat hereunder shall be paid without notice or demand. Each
and every payment made hereunder by or on behalf of Sonat shall be final
and Sonat and its subsidiaries shall not, for any reason whatsoever, seek
to recover all or any part of such payment from Executive or from
whomever shall be entitled thereto.
4. CONDITIONS TO THE OBLIGATIONS OF SONAT. Sonat shall have no
obligation to provide or cause to be provided to Executive the rights and
benefits described in Section 3 hereof if either of the following events shall
occur:
(A) TERMINATION FOR CAUSE. Sonat shall terminate Executive's
employment for "cause". For purposes of this Agreement, termination of
employment for "cause" shall mean termination solely for dishonesty,
conviction of a felony, or willful unauthorized disclosure of
confidential information of Sonat.
(B) RESIGNATION AS DIRECTOR. Executive shall not, promptly after
Termination and upon receiving a written request to do so, resign as a
director and/or officer of each subsidiary and affiliate of Sonat of
which he is then serving as a director and/or officer.
5. CONFIDENTIALITY; NON-SOLICITATION; COOPERATION.
(A) CONFIDENTIALITY. Executive agrees that at all times following
Termination, he will not, without the prior written consent of Sonat, disclose
to any person, firm or corporation any confidential information of Sonat or its
subsidiaries which is now known to him or which hereafter may become known to
him as a result of his employment or association with Sonat and which could be
helpful to a competitor, unless such disclosure is required under the terms of
a valid and effective subpoena
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or order issued by a court or governmental body; provided, however,
that the foregoing shall not apply to confidential information which becomes
publicly disseminated by means other than a breach of this Agreement.
(B) NON-SOLICITATION. Executive agrees that for a period of three years
following the date of Termination (or until Executive's Normal Retirement Date,
whichever is sooner) he will not induce, either directly or indirectly, any
employee of senior to manager level of Sonat or any of its subsidiaries to
terminate his or her employment.
(C) COOPERATION. Executive agrees that, at all times following
Termination, he will furnish such information and render such assistance and
cooperation as may reasonably be requested in connection with any litigation or
legal proceedings concerning Sonat or any of its subsidiaries (other than any
legal proceedings concerning Executive's employment). In connection with such
cooperation, Sonat will pay or reimburse Executive for reasonable expenses.
(D) REMEDIES FOR BREACH. It is recognized that damages in the event of
breach of this Section 5 by Executive would be difficult, if not impossible, to
ascertain, and it is therefore agreed that Sonat, in addition to and without
limiting any other remedy or right it may have, shall have the right to an
injunction or other equitable relief in any court of competent jurisdiction,
enjoining any such breach, and Executive hereby waives any and all defenses he
may have on the ground of lack of jurisdiction or competence of the court to
grant such an injunction or other equitable relief. The existence of this
right shall not preclude Sonat from pursuing any other rights and remedies at
law or in equity which Sonat may have.
6. CERTAIN ADDITIONAL PAYMENTS BY SONAT. (a) Anything in this
Agreement to the contrary notwithstanding and except as set forth below, in the
event it shall be determined that any payment or distribution by Sonat to or
for the benefit of Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 6) (a "Payment") would be subject to the excise tax imposed by Section
4999 of the Code or any interest or penalties are incurred by Executive with
respect to such excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the "Excise Tax"),
then Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by Executive of all federal
income taxes (including any interest or penalties imposed with respect to such
taxes), including, without limitation, any federal income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Notwithstanding the
foregoing provisions of this Section 6(a), if it shall be determined that
Executive is entitled to a Gross-Up
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Payment, but that Executive, after taking into account the Payments and
the Gross-Up Payment, would not receive a net after-tax benefit of at least
$50,000 (taking into account both federal income taxes and any Excise Tax) as
compared to the net after-tax proceeds to Executive resulting from an
elimination of the Gross-Up Payment and a reduction of the Payments, in the
aggregate, to an amount (the "Reduced Amount") such that the receipt of
Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall
be made to Executive and the Payments, in the aggregate, shall be reduced to
the Reduced Amount.
(b) Subject to the provisions of Section 6(c), all determinations required
to be made under this Section 6, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Ernst & Young LLP
or such other certified public accounting firm as may be designated by
Executive (the "Accounting Firm"), which shall provide detailed supporting
calculations both to Sonat and Executive within 15 business days of the receipt
of notice from Executive that there has been a Payment or such earlier time as
is requested by Sonat. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting a Change of
Control, Executive shall appoint another nationally recognized accounting firm
to make the determinations required hereunder (which accounting firm shall then
be referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by Sonat. Any Gross-Up Payment shall be
paid by Sonat to Executive within five days of the receipt of the Accounting
Firm's determination. Any determination by the Accounting Firm shall be
binding upon Sonat and Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by Sonat should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that Sonat exhausts its remedies pursuant to Section
6(c) and Executive thereafter is required to make a payment of any Excise Tax,
the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by Sonat to or for
the benefit of Executive.
(c) Executive shall notify Sonat in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by Sonat of a
Gross-Up Payment. Such notification shall be given as soon as practicable but
no later than ten business days after Executive is informed in writing of such
claim and shall apprise Sonat of the nature of such claim and the date on which
such claim is requested to be paid. Executive shall not pay such claim prior
to the expiration of the 30-day period following the date on which it gives
such notice to Sonat (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If Sonat notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive shall:
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(i) give Sonat any information reasonably requested by Sonat
relating to such claim,
(ii) take such action in connection with contesting such claim as
Sonat shall reasonably request in writing from time to time, including
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by Sonat,
(iii) cooperate with Sonat in good faith in order effectively to
contest such claim, and
(iv) permit Sonat to participate in any proceedings relating to such
claim;
provided, however, that Sonat shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or federal income tax (including interest
and penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses. Without limitation on the foregoing
provisions of this Section 6(c), Sonat shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct Executive to pay the tax claimed and xxx for a refund or to contest the
claim in any permissible manner, and Executive agrees to prosecute such contest
to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as Sonat shall determine;
provided, however, that if Sonat directs Executive to pay such claim and xxx
for a refund, Sonat shall advance the amount of such payment to Executive, on
an interest-free basis, and shall indemnify and hold Executive harmless on an
after-tax basis, from any Excise Tax or federal income tax (including interest
or penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment
of taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, Sonat's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder, and Executive
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by Executive of an amount advanced by Sonat
pursuant to Section 6(c), Executive becomes entitled to receive any refund with
respect to such claim, Executive shall (subject to Sonat's complying with the
requirements of Section 6(c)) promptly pay to Sonat the amount of such refund
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(together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by Executive of an amount advanced by Sonat
pursuant to Section 6(c), a determination is made that Executive shall not be
entitled to any refund with respect to such claim and Sonat does not notify
Executive in writing of its intent to contest such denial of refund prior to
the expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
7. TERM OF AGREEMENT. This Agreement shall terminate on April 30, 1996;
provided, however, that this Agreement shall automatically renew for successive
one-year terms unless the Board of Directors notifies Executive in writing at
least 30 days prior to an April 30 expiration date that it does not desire to
renew the Agreement for an additional term; and provided further, however, that
this Agreement shall terminate prior to April 30, 1996 or, in the event of a
renewal of this Agreement, any subsequent April 30, if and when the Executive
Compensation Committee determines that Executive is no longer a key executive
for purposes of being a party to an executive severance agreement with Sonat
and so notifies Executive, except that such determination shall not be made,
and if made shall have no effect, (i) within three years after a Change of
Control or (ii) during any period of time when Sonat has reason to believe that
any third person has begun a tender or exchange offer, circulated a proxy to
stockholders, or taken other steps or formulated plans to effect a Change of
Control, such period of time to end when, in the opinion of the Executive
Compensation Committee, the third person has abandoned or terminated his
efforts or plans to effect a Change of Control.
8. EXPENSES. Sonat shall pay or reimburse Executive for all costs and
expenses, including, without limitation, court costs and attorneys' fees,
incurred by Executive as a result of any claim, action or proceeding
(including, without limitation, a claim, action or proceeding by Executive
against Sonat) arising out of, or challenging the validity or enforceability
of, this Agreement or any provision hereof.
9. MISCELLANEOUS.
(A) ASSIGNMENT. No right, benefit or interest hereunder shall be subject
to assignment, anticipation, alienation, sale, encumbrance, charge, pledge,
hypothecation or set-off in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process; provided, however, that
Executive may assign any right, benefit or interest hereunder if such
assignment is permitted under the terms of any plan or policy of insurance or
annuity contract governing such right, benefit or interest.
(B) CONSTRUCTION OF AGREEMENT. Nothing in this Agreement shall be
construed to amend any provision of any plan or policy of Sonat. This
Agreement is
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not, and nothing herein shall be deemed to create, a commitment of
continued employment of Executive by Sonat or any of its subsidiaries.
(C) AMENDMENT. This Agreement may not be amended, modified or cancelled
except by written agreement of the parties.
(D) WAIVER. No provision of this Agreement may be waived except by a
writing signed by the party to be bound thereby.
Executive may at any time or from time to time waive any or all of the
rights and benefits provided for herein which have not been received by
Executive at the time of such waiver. In addition, prior to the last day of
the calendar year in which Executive's Termination occurs, Executive may waive
any or all rights and benefits provided for herein which have been received by
Executive; provided that prior to the end of such year Executive repays to
Sonat (or, if the benefit was received from an employee benefit plan trust, to
such trust) the amount of the benefit received together with interest thereon
at the minimum rate required to avoid imputed income. Any waiver of benefits
pursuant to this paragraph shall be irrevocable. If Executive waives a right
or benefit provided for herein and such waiver is determined by the Internal
Revenue Service not to be effective, Sonat shall indemnify Executive for any
federal income and excise taxes he incurs as a result of that determination, so
as to put Executive in the position he would have been in had the waiver been
given effect.
(E) SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason,
the remaining provisions of this Agreement shall remain in full force and
effect to the fullest extent permitted by law.
(F) SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of Executive and his personal representative and heirs, and Sonat and
any successor organization or organizations which shall succeed to
substantially all of the business and property of Sonat, whether by means of
merger, consolidation, acquisition of substantially all of the assets of Sonat
or otherwise, including by operation of law.
(G) TAXES. Any payment or delivery required under this Agreement shall be
subject to all requirements of the law with regard to withholding of taxes,
filing, making of reports and the like, and Sonat shall use its best efforts to
satisfy promptly all such requirements.
(H) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
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(I) ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the matters covered hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the 1st
day of December, 1995.
SONAT INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
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Xxxxxx X. Xxxxx, Xx.
Chairman of the Board, President
and Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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