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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
(AS AMENDED AND RESTATED EFFECTIVE AS OF OCTOBER 19, 2000)
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TABLE OF CONTENTS
PAGE
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1. Employment Period........................................................................................1
2. Terms of Employment......................................................................................1
(a) Position and Duties..............................................................................1
(b) Compensation.....................................................................................2
(i) Base Salary.............................................................................2
(ii) Annual Bonus............................................................................2
(iii) Incentive, Savings and Retirement Plans.................................................2
(iv) Welfare Benefit Plans...................................................................3
(v) Expenses................................................................................3
(vi) Fringe Benefits and Perquisites.........................................................3
(vii) Office and Support Staff................................................................3
(viii) Vacation................................................................................3
(ix) Long-Term Incentive Compensation........................................................3
(x) Financial and Tax Planning..............................................................3
(xi) Life Insurance..........................................................................4
3. Termination of Employment................................................................................4
(a) Death or Disability..............................................................................4
(b) Cause............................................................................................4
(c) Good Reason; Window Period.......................................................................5
(d) Other Termination by the Executive...............................................................6
(e) Notice of Termination............................................................................6
(f) Date of Termination..............................................................................6
4. Obligations of the Company upon Termination..............................................................6
(a) Good Reason; During a Window Period; Other than for Cause or Death or Disability.................6
(b) Death or Disability (Including After a Change of Control and During a Window Period).............9
(c) Cause Outside a Window Period....................................................................9
(d) Other Termination by the Executive..............................................................10
(e) Expiration of Employment Period.................................................................10
(f) Chairman Compensation Period....................................................................10
5. Non-Exclusivity of Rights...............................................................................10
6. Full Settlement; Resolution of Disputes.................................................................11
7. Certain Additional Payments by the Company..............................................................12
8. Confidential Information................................................................................14
9. Change of Control.......................................................................................14
10. Successors..............................................................................................18
11. Miscellaneous...........................................................................................18
(i)
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EMPLOYMENT AGREEMENT
This AGREEMENT (the "Agreement"), by and between CONOCO INC.,
a Delaware corporation (the "Company"), and XXXXXX X. XXXXXX (the "Executive"),
is dated as of the 19th day of October, 2000, and is to be effective as of that
date (the "Agreement Effective Date").
The Company and the Executive entered into an Employment
Agreement effective as of August 17, 1999 (the "Employment Agreement") pursuant
to authorization by the Board of Directors of the Company (the "Board") to
provide the Executive with substantial incentives to continue to serve the
Company as Chairman of the Board, President and Chief Executive Officer and a
member of the Board performing at the highest level of leadership and
stewardship, without distraction or concern over compensation, benefits or
tenure, to manage the Company's future growth and development, and to maximize
the returns to the Company's stockholders.
The Company and the Executive have agreed that certain of the
terms and conditions of the Employment Agreement should be amended effective as
of October 19, 2000 and evidence their mutual agreement to such changes in this
Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. As of the Agreement Effective Date, the
Company hereby agrees to continue to employ the Executive, and the Executive
hereby agrees to accept employment with the Company, in accordance with, and
subject to, the terms and provisions of this Agreement, for the period
commencing on October 19, 2000 and ending on the date the Executive attains age
65. As used herein, the term "Employment Period" means the period commencing on
August 17, 1999 and ending on the date the Executive attains age 65.
2. Terms of Employment.
(a) Position and Duties.
(i) Except as is otherwise expressly provided herein, during
the Employment Period, the Executive shall be the Company's Chairman of
the Board, President and Chief Executive Officer. The Executive shall
be based in the Company's principal offices within the Houston, Texas
metropolitan area, but it is contemplated that the Executive will be
required to travel outside that area, with frequency and duration no
more onerous than is consistent with the travel required of the
Executive during the one-year period preceding the Agreement Effective
Date.
(ii) During the Employment Period, excluding any periods of
vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote substantially full attention and time during
normal business hours to the business and affairs of the Company and,
to the extent necessary to discharge the responsibilities assigned to
the Executive hereunder, to use the Executive's reasonable best efforts
to perform faithfully and efficiently such responsibilities. During the
Employment Period, it shall not be a
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violation of this Agreement for the Executive to (A) serve on
corporate, civic or charitable boards or committees, (B) deliver
lectures, fulfill speaking engagements or teach on a part-time basis at
educational institutions and (C) manage personal investments, so long
as such activities do not interfere with the performance of the
Executive's responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and agreed
that to the extent that any such activities have been conducted by the
Executive during employment with the Company prior to the Agreement
Effective Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto) subsequent
to the Agreement Effective Date shall not thereafter be deemed to
interfere with the performance of the Executive's responsibilities to
the Company.
(b) Compensation.
(i) Base Salary. Commencing on October 19, 2000, during the
Employment Period, the Executive shall receive an annual base salary of
not less than $1,200,000 ("Annual Base Salary"), which shall be paid in
accordance with the Company's regular payroll practices. Commencing on
January 1, 2001, and thereafter during the Employment Period, the
Annual Base Salary shall be reviewed at least annually and shall be
increased at any time and from time to time as shall be substantially
consistent with competitive industry practice but in no event less than
increases consistent with increases in base salary generally awarded in
the ordinary course of business to other executives of the Company,
taking into account the Executive's unique position with the Company.
Any increase in Annual Base Salary shall not serve to limit or reduce
any other obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase, and the term
"Annual Base Salary," as utilized in this Agreement, shall refer to
Annual Base Salary as so increased.
(ii) Annual Bonus. In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year or portion thereof
during the Employment Period, an Annual Bonus opportunity (the "Annual
Bonus") in an amount substantially consistent with competitive industry
practice, prorated for any period consisting of less than 12 full
months.
(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in
all incentive, savings and retirement plans that are tax-qualified
under Section 401(a) of the Internal Revenue Code of 1986, as amended
("Code"), and in all plans that are supplemental to any such
tax-qualified plans, in each case to the extent that such plans are
applicable generally to other executives of the Company, but in no
event shall such plans provide the Executive with incentive
opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction
is applicable), savings opportunities and retirement benefit
opportunities that are, in each case, less favorable to the Executive,
in the aggregate, than the most favorable plans of the Company. As used
in this Agreement, the term "most favorable" shall, when used with
reference to any plans, practices, policies or programs of the Company,
be deemed to refer to the plans, practices, policies or programs of the
Company, as in effect at any time during the
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Employment Period and provided generally to other executives of the
Company, that are most favorable to the Executive.
(iv) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be
eligible for participation in and shall receive all benefits under all
welfare benefit plans, practices, policies and programs provided by the
Company (including, without limitation, medical, prescription, dental,
vision, disability, salary continuance, group life and supplemental
group life, accidental death and travel accident insurance plans and
programs) to the extent applicable generally to other executives of the
Company, but in no event shall such plans, practices, policies and
programs provide the Executive with benefits that are less favorable,
in the aggregate, than the most favorable such plans, practices,
policies and programs of the Company.
(v) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the most
favorable policies, practices and procedures of the Company.
(vi) Fringe Benefits and Perquisites. During the Employment
Period, the Executive shall be entitled to fringe benefits and
perquisites in accordance with the most favorable plans, practices,
programs and policies of the Company.
(vii) Office and Support Staff. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments at least equal to the most
favorable of the foregoing provided to the Executive by the Company at
any time during the Employment Period, and to secretarial and other
assistance to the extent needed to fulfill his corporate
responsibilities at least equal to the most favorable of the foregoing
provided to the Executive by the Company at any time during the
Employment Period.
(viii) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of the Company.
(ix) Long-Term Incentive Compensation. In addition to Base
Salary, Annual Bonus and other elements of compensation described in
Section 2(b) or otherwise in this Agreement, during the Employment
Period, the Executive periodically shall be awarded incentive
compensation awards consisting of one or more of stock options, stock
appreciation rights, restricted stock, stock units or performance
awards, having in the aggregate target values consistent with each of
(A) the Executive's position and (B) competitive industry practice.
(x) Financial and Tax Planning. During the Employment Period,
the Executive shall be entitled to reimbursement of (A) reasonable
expenses incurred with respect to preparation of his personal income
tax returns and (B) reasonable costs of financial counseling.
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(xi) Life Insurance. During the Employment Period, the Company
shall provide the Executive with term life insurance in an amount equal
to the Executive's Annual Base Salary multiplied by four, which
insurance may be provided through one or more group policies and/or the
purchase of an individual policy. The Executive agrees to submit to
physical examinations as reasonably requested by the Company for
purposes of obtaining such insurance.
Notwithstanding the foregoing provisions of this Section 2(b), prior to a Change
of Control, the Company may reduce or modify amounts and benefits described in
this Section 2(b) to the extent that such changes are applicable to all of the
Company's senior executives.
3. Termination of Employment.
(a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment Period.
If the Company determines in good faith that a Disability of the Executive has
occurred during the Employment Period, it may give to the Executive written
notice in accordance with Section 11(d) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the later of (i) the date the
Executive would otherwise be placed on permanent disability status under the
Company's disability programs for United States salaried employees and (ii) the
30th day after receipt of such notice by the Executive, provided that, within
the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties (such later date being the
"Disability Effective Date"). For purposes of this Agreement, "Disability" shall
mean the absence of the Executive from the Executive's duties with the Company
on a full-time basis for 180 consecutive business days as a result of incapacity
due to mental or physical illness or injury which is determined to be total and
permanent by a physician selected by the Company or its insurers and acceptable
to the Executive or the Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably).
(b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean the Company's termination of the Executive's
employment for any of the following: (i) the Executive's final conviction of a
felony crime against the Company involving moral turpitude or (ii) the
Executive's deliberate and intentional continuing failure to substantially
perform his duties and responsibilities hereunder (except by reason of the
Executive's incapacity due to physical or mental illness or injury) for a period
of 45 days after the Required Board Majority has delivered to the Executive a
written demand for substantial performance hereunder which specifically
identifies the bases for the Required Board Majority's determination that the
Executive has not substantially performed his duties and responsibilities
hereunder (that 45-day period being the "Grace Period"); provided, that for
purposes of this clause (ii), the Company shall not have Cause to terminate the
Executive's employment unless (A) at a meeting of the Board called and held
following the Grace Period in the city in which the Company's principal
executive offices are located, of which the Executive was given not less than 10
days' prior written notice and at which the Executive was afforded the
opportunity to be represented by counsel, to appear and to be heard, the
Required Board Majority shall adopt a written resolution that (1) sets forth the
Required Board Majority's determination that the failure of the Executive to
substantially perform his duties and responsibilities hereunder has (except by
reason of his
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incapacity due to physical or mental illness or injury) continued past the Grace
Period and (2) specifically identifies the bases for that determination, and (B)
the Company, at the written direction of the Required Board Majority, shall
deliver to the Executive a Notice of Termination for Cause to which a copy of
that resolution, certified as being true and correct by the secretary or any
assistant secretary of the Company, is attached. "Required Board Majority"
means, at any time, a majority of the members of the Board at that time, which
majority includes at least a majority of those members of the Board who have
never been employed by the Company or any subsidiary of the Company.
(c) Good Reason; Window Period. The Executive's employment may
be terminated during the Employment Period by the Executive for Good Reason, or
during a Window Period by the Executive without any reason. For purposes of this
Agreement, "Window Period" shall mean the 30-day period immediately following
elapse of six months after the occurrence of any Change of Control as defined in
Section 9 of this Agreement. For purposes of this Agreement, commencing on
October 19, 2000, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including
status, offices, titles and reporting requirements), authority, duties
or responsibilities as contemplated by Section 2 of this Agreement, or
any other action by the Company which results in a diminution in such
position, authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in
bad faith that is remedied by the Company promptly after receipt of
notice thereof given by the Executive; provided that the elimination of
the Executive's title and responsibilities as President of the Company
(but not as Chief Executive Officer of the Company) following a Change
of Control shall be not be considered Good Reason;
(ii) any failure by the Company to comply with any of
the provisions of this Agreement not specifically addressed in parts
(iii) through (vi) below, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith that is remedied by the
Company promptly after receipt of notice thereof given by the
Executive;
(iii) the Company's requiring the Executive to be
based at any office outside the Houston metropolitan area;
(iv) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this
Agreement;
(v) the failure to continue the Executive as Chairman
of the Board; or
(vi) any failure by the Company to comply with and
satisfy the requirements of Section 10 of this Agreement; provided that
(A) the successor described in Section 10(c) has received, at least 10
days prior to the Date of Termination (as defined in subparagraph (f)
below), written notice from the Company or the Executive of the
requirements of such provision, and (B) such failure to be in
compliance with and satisfy the requirements of Section 10 continues as
of the Date of Termination.
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Anything in this Agreement to the contrary notwithstanding, if a Change of
Control occurs and if the Executive's employment with the Company is terminated
within one year prior to the date on which the Change of Control occurs, unless
it is reasonably demonstrated by the Company that such termination of employment
(x) was not at the request of a third party who has taken steps reasonably
calculated to effect the Change of Control and (y) otherwise did not arise in
connection with or anticipation of the Change of Control, then any such
termination shall be deemed for Good Reason.
(d) Other Termination by the Executive. The Executive's
employment (and status as a member of the Board) may be terminated voluntarily
by the Executive at any time during the Employment Period and, if other than (i)
during a Window Period, (ii) at a time when the Executive is eligible to
terminate his employment for Good Reason or (iii) by retirement on or after the
date that the Executive has attained age 65 ("Normal Retirement"), is referred
to herein as an "Other Termination by the Executive." The Executive agrees not
to cause termination of employment to occur within six months following a Change
of Control, except by reason of a Normal Retirement, for Good Reason or
Disability.
(e) Notice of Termination. Any termination shall be
communicated by Notice of Termination to the other party hereto given in
accordance with Section 11(d) of this Agreement. The failure by the Executive or
the Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any right
of the Executive or the Company hereunder or preclude the Executive or the
Company from asserting such fact or circumstance in enforcing the Executive's or
the Company's rights hereunder.
(f) Date of Termination. For purposes of this Agreement, the
term "Date of Termination" means (i) if the Executive's employment is terminated
by the Company for Cause, by the Executive during a Window Period or for Good
Reason, or as an Other Termination by the Executive, the date of receipt of the
Notice of Termination or any later date specified therein, as the case may be,
(ii) if the Executive's employment is terminated by the Company other than for
Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
4. Obligations of the Company upon Termination.
(a) Good Reason; During a Window Period; Other than for Cause
or Death or Disability. If, during the Employment Period and on or after October
19, 2000, (x) the Company shall terminate the Executive's employment other than
for Cause or death or Disability, (y) the Executive shall terminate employment
for Good Reason or (z) the Executive's employment shall be terminated during a
Window Period by the Company or by the Executive for any reason other than death
or Disability:
(i) the Company shall pay or provide to or in respect of the
Executive the following amounts and benefits:
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A. in a lump sum in cash, within 10 days after the
Date of Termination, an amount equal to the sum of (1) the
Executive's Annual Base Salary through the Date of
Termination, (2) any deferred compensation previously awarded
to or earned by the Executive (together with any accrued
interest or earnings thereon) and (3) any compensation for
unused vacation time for which the Executive is eligible in
accordance with the most favorable plans, policies, programs
and practices of the Company, in each case to the extent not
theretofore paid (the sum of the amounts described in clauses
(1), (2) and (3) shall be hereinafter referred to as the
"Accrued Obligation");
B. in a lump sum in cash, undiscounted, within 10
days after the Date of Termination, an amount equal to the
amount of Annual Base Salary that would have been paid to the
Executive pursuant to this Agreement for the period (the
"Remaining Employment Period") beginning on the Date of
Termination and ending on the date that is three years
following the Termination Date (the "Final Expiration Date")
if the Executive's employment had not been terminated plus the
Annual Bonus that would have been paid or awarded to or for
the benefit of the Executive during the Remaining Employment
Period if the Executive's employment had not been terminated
and if the amount of the Annual Bonus for each fiscal year or
portion thereof during such period were equal to the average
of the two highest Annual Bonuses paid or awarded to or for
the benefit of the Executive in respect of the three full
fiscal years preceding the Date of Termination, prorated in
the case of any period of less than a full fiscal year;
C. in a lump sum in cash, undiscounted, within 30
days after the Date of Termination, an amount equal to the
economic equivalent of the benefits the Executive (and his
dependents or beneficiaries) would have received or become
entitled to under Section 2(b)(iii) of this Agreement for the
Remaining Employment Period if the Executive's employment had
not been terminated;
D. effective as of the Date of Termination, (1) if
the Executive has not received a grant of stock options in
respect of any calendar year during the Employment Period or
the Remaining Employment Period, for each such calendar year,
a stock option grant covering the same number of shares and on
the same terms and conditions as the average of the prior
stock option grants to the Executive for the three full fiscal
years preceding the Date of Termination, prorated in the case
of any period of less than a full fiscal year, and (2) if the
Executive has not received a grant of restricted stock and/or
restricted stock units and/or other similar equity-based
awards in respect of any calendar year during the Employment
Period or the Remaining Employment Period, for each such
calendar year, a grant covering the same number of shares and
on the same terms and conditions as the average of the prior
grants of such awards to the Executive for the three full
fiscal years preceding the Date of Termination, prorated in
the case of any period of less than a full fiscal year;
provided that any awards required by (1) or (2) shall be
prorated based on the length of the Remaining Employment
Period as compared to the customary terms of such awards for
purposes of a recipient becoming entitled to full vesting in
such award; and
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E. effective as of the Date of Termination, (1)
immediate vesting and exercisability of, and termination of
any restrictions on sale or transfer (other than any such
restriction arising by operation of law) with respect to, each
and every stock option, restricted stock award, restricted
stock unit award and other equity-based award and performance
award (each, a "Compensatory Award") that is outstanding as of
a time immediately prior to the Date of Termination, (2) the
extension of the term during which each and every Compensatory
Award may be exercised by the Executive until the earlier of
(x) the first anniversary of the Date of Termination or (y)
the date upon which the right to exercise any Compensatory
Award would have expired if the Executive had continued to be
employed by the Company under the terms of this Agreement
until the Final Expiration Date and (3) if a Change of Control
precedes or occurs within one year following the Date of
Termination, at the sole election of the Executive, in
exchange for any or all Compensatory Awards that are either
denominated in or payable in Common Stock (as defined in
Section 9 hereof), an amount in cash equal to the excess of
(x) the Highest Price Per Share over (y) the exercise or
purchase price, if any, of such Compensatory Awards. As used
herein, the term "Highest Price Per Share" shall mean the
highest price per share that can be determined to have been
paid or agreed to be paid for any share of Common Stock by a
Covered Person (as defined below) at any time during the
six-month period immediately preceding any Change of Control.
As used herein, the term "Covered Person" shall mean any
Person other than an Exempt Person (in each case as defined in
Section 9 hereof) who (I) is the Beneficial Owner (as defined
in Section 9 hereof) of 20% or more of the outstanding shares
of Common Stock or 20% or more of the combined voting power of
the outstanding Voting Stock (as defined in Section 9 hereof)
of the Company at any time during the Employment Period, (II)
is a Person who has any material involvement in proposing or
effectuating the Change of Control (as defined in Section 9
hereof), (III) is an assignee of or has otherwise succeeded to
any shares of Common Stock or Voting Stock of the Company
which were at any time during the Employment Period
"beneficially owned" (as defined in Section 9 hereof) by any
Person identified in clause (I) or (II) of this definition, if
such assignment or succession shall have occurred in the
course of a privately negotiated transaction rather than an
open market transaction, or (IV) is described in Section
3(c)(vi) hereof. For purposes of determining whether a Person
is a Covered Person, the number of shares of Common Stock or
Voting Stock of the Company deemed to be outstanding shall
include shares of which the Person is deemed the Beneficial
Owner, but shall not include any other shares which may be
issuable pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights, warrants
or options. In determining the Highest Price Per Share, the
price paid or agreed to be paid by a Covered Person will be
appropriately adjusted to take into account (W) distributions
paid or payable in stock, (X) subdivisions of outstanding
stock, (Y) combinations of shares of stock into a smaller
number of shares and (Z) similar events.
(ii) for the Remaining Employment Period, or such longer
period as any plan, program, practice or policy may provide, the
Company shall continue benefits to the Executive and/or the Executive's
family at least equal to those which would have been provided to them
in accordance with the most favorable plans, programs, practices and
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policies described in Sections 2(b)(iv) of this Agreement if the
Executive's employment had not been terminated (such continuation of
such benefits for the applicable period herein set forth shall be
hereinafter referred to as "Welfare Benefit Continuation"). For
purposes of determining eligibility of the Executive for retiree
benefits pursuant to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed until the Final
Expiration Date and to have retired on such date;
(iii) for the Remaining Employment Period, to the extent not
previously paid or provided, the Company shall timely pay or provide to
the Executive and/or the Executive's family any other amounts or
benefits required to be paid or provided, or which the Executive and/or
the Executive's family is eligible to receive, pursuant to this
Agreement and under any plan, program, policy or practice or contract
or agreement of the Company as in effect and applicable generally to
other executives and their families on the Agreement Effective Date or,
if more favorable to the Executive, as in effect generally thereafter
with respect to other executives of the Company and their families
(such other amounts and benefits shall be hereinafter referred to as
the "Other Benefits");
(iv) if the Executive's termination of employment described in
Section 4(a) follows or is in contemplation of a Change of Control,
either (A) for the three-year period following the Date of Termination
(the "Chairman Period"), the Executive shall be maintained as the
nonexecutive Chairman of the Board and receive Chairman Compensation
(as defined in Section 4(f) herein) during such period or (B) if the
Executive is not so maintained as of any date in the Chairman Period,
all Chairman Compensation shall be paid or provided as described in
Section 4(f); and
(v) unless otherwise provided herein, until the Executive (or
any family member or family entity assignee of the Executive) no longer
holds any stock options granted by the Company to the Executive, the
Company will provide to the Executive at no cost to the Executive
(including a complete gross up for any taxes incurred by the Executive
as a result of receiving such benefits), the benefits described in
Sections 2(b)(x) and 2(b)(xi), but in no event beyond the date of death
of the Executive.
(b) Death or Disability (Including After a Change of Control
and During a Window Period). If the Executive's employment is terminated by
reason of the Executive's death or Disability during the Employment Period
(regardless of whether a Change of Control has occurred or whether such
termination occurs during a Window Period), this Agreement shall terminate
without further obligations to the Executive under this Agreement, other than
the payment of Accrued Obligations which shall be paid to the Executive, or the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
30 days after the Date of Termination.
(c) Cause Outside a Window Period. If the Executive's
employment shall be terminated for Cause during the Employment Period and other
than during a Window Period, this Agreement shall terminate without further
obligations to the Executive under this Agreement, other than the payment of the
Accrued Obligations. In such case, all Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days after the Date of Termination.
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(d) Other Termination by the Executive: If an Other
Termination by the Executive occurs during the Employment Period and on or after
October 19, 2000, this Agreement shall terminate without further obligations to
the Executive under this Agreement, other than the payment of Accrued
Obligations. In such case, all Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days after the Date of Termination.
(e) Expiration of Employment Period. Notwithstanding any other
provision of this Agreement, if the Executive remains employed until the
expiration of the Employment Period, upon any termination of employment
thereafter, (i) the Executive shall be entitled to payment of the Accrued
Obligation as described in Section 4(a)(i)(A) as though the termination of
employment was a termination by the Executive with Good Reason and (ii) each and
every Compensatory Award, as defined in Section 4(a)(i)(E)(1), shall be
immediately vested and exercisable, and any restrictions on sale or transfer
(other than any such restrictions arising by operation of law) with respect to
such awards shall lapse.
(f) Chairman Compensation. As used herein, Chairman
Compensation shall mean:
(i) an annual cash payment of $1,000,000, payable on the first
day of the Chairman Period as defined in Section 4(a)(iv) and on the
first and second anniversaries thereof; and
(ii) participation in the Directors' Charitable Gift Plan
during the Chairman Period; and
(iii) during the Chairman Period, (A) continued participation
in the benefit plans described in Sections 2(b)(iv) and 2(b)(vi), (B)
continued reimbursement for expenses under Section 2(b)(v), (C)
coverage under the same comprehensive security program the Executive
participated in pursuant to Section 11(b) during employment, in the
same manner as if he had continued employment as Chief Executive
Officer during the Chairman Period, including a complete gross up for
any taxes incurred by the Executive as a result of such continued
coverage, and (D) continued participation in the Conoco Domestic
Relocation Policy with respect to a single relocation, at the election
of the Executive.
In the event that the Company fails to maintain the Executive as nonexecutive
Chairman of the Board during the Chairman Period, all Chairman Compensation
shall continue to be provided during the Chairman Period as though the Executive
had continued as nonexecutive Chairman during the Chairman Period, except that
(x) coverage described in item (iii)(C) above shall be discontinued and (y) all
cash compensation payable pursuant to item (i) above shall be immediately due
and payable, without any discounting for accelerated payment.
5. Non-Exclusivity of Rights. Except as provided in Section 4
of this Agreement, nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any plan, program, policy or
practice provided by the Company and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as the Executive may
have under any contract or agreement with the Company. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan,
policy,
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13
practice or program of, or any contract or agreement with, the Company at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as such plan,
policy, practice or program or contract or agreement is superseded by this
Agreement.
6. Full Settlement; Resolution of Disputes.
(a) The Company's obligation to make payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set off, counterclaim, recoupment, defense, mitigation or other
claim, right or action which the Company may have against the Executive or
others. The Company agrees to pay promptly as incurred, to the fullest extent
permitted by law, all legal fees and expenses that the Executive may reasonably
incur as a result of any contest (regardless of the outcome thereof) by the
Company, the Executive or others as to the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any such payment pursuant to this Agreement) plus, in each case, interest on
any delayed payment at the annual percentage rate which is three percentage
points above the interest rate shown as the Prime Rate in the Money Rates column
in the then most recently published edition of The Wall Street Journal
(Southwest Edition), or, if such rate is not then so published on at least a
weekly basis, the interest rate announced by Chase Bank Texas, N.A. (or its
successor), from time to time, as its "Base Rate" (or prime lending rate), from
the date those amounts were required to have been paid or reimbursed to the
Executive until those amounts are finally and fully paid or reimbursed;
provided, however, that in no event shall the amount of interest contracted for,
charged or received hereunder exceed the maximum non-usurious amount of interest
allowed by applicable law.
(b) If there shall be any dispute between the Company and the
Executive concerning (i) in the event of any termination of the Executive's
employment by the Company, whether such termination was for Cause or Disability,
(ii) in the event of any termination of employment by the Executive, whether
Good Reason existed, (iii) whether termination occurred during a Window Period
or after expiration of the Employment Period or in contemplation of or following
a Change of Control, or (iv) the compensation or benefits to be provided in
respect of any termination of the Executive's employment with the Company or as
Chairman Compensation or upon failure to retain the Executive as nonexecutive
Chairman of the Board during the Chairman Period, then, unless and until there
is a final, nonappealable judgment by a court of competent jurisdiction
declaring that such termination was for Cause or Disability or that the
determination by the Executive of the existence of Good Reason was improper or
that the termination did not occur during a Window Period or in contemplation of
or following a Change of Control or after expiration of the Employment Period,
or that the Executive or the Executive's beneficiary or estate claimed improper
benefits upon termination or as Chairman Compensation or upon failure to retain
the Executive as nonexecutive Chairman of the Board, the Company shall pay all
amounts, and provide all benefits, to the Executive and/or the Executive's
family or other beneficiaries, as the case may be, that the Company would be
required to pay or provide pursuant to the applicable provisions of Section 4
hereof as though such termination were by the Company without Cause or in
contemplation of or following a Change of Control or by the Executive with Good
Reason or by either party during a Window Period or after expiration of the
Employment Period, or the benefits that the Executive or the Executive's
beneficiary or estate claimed were properly payable hereunder.
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7. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution to or for the benefit of the 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 7 (a "Payment")) would be subject to the excise tax imposed
by Section 4999 of the Code or any interest or penalties are incurred by the
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 the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes) with respect to Payments, including, without limitation, any
income taxes (and any interest and penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 7(c), all
determinations required to be made under this Section 7, 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 PricewaterhouseCoopers LLP (the "Accounting Firm"); provided, however, that
the Accounting Firm shall not determine that no Excise Tax is payable by the
Executive unless it delivers to the Executive a written opinion (the "Accounting
Opinion") that failure to report the Excise Tax on the Executive's applicable
federal income tax return would not result in the imposition of a negligence or
similar penalty. In the event that PricewaterhouseCoopers LLP has served, at any
time during the two years immediately preceding a Change of Control Date, as
accountant or auditor for the individual, entity or group that is involved in
effecting or has any material interest in a Change of Control, the Executive
shall appoint another nationally recognized accounting firm to make the
determinations and perform the other functions specified in this Section 7
(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 the Company. Within 15 business days of the receipt of notice from the
Executive that there has been a Payment, or such earlier time as is requested by
the Company, the Accounting Firm shall make all determinations required under
this Section 7, shall provide to the Company and the Executive a written report
setting forth such determinations, together with detailed supporting
calculations, and, if the Accounting Firm determines that no Excise Tax is
payable, shall deliver the Accounting Opinion to the Executive. Any Gross-Up
Payment, as determined pursuant to this Section 7, shall be paid by the Company
to the Executive within five days of the receipt of the Accounting Firm's
report. Subject to the remainder of this Section 7, any determination by the
Accounting Firm shall be binding upon the Company and the 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 the Company should have been
made ("Underpayment") consistent with the calculations required to be made
hereunder. In the event that it is ultimately determined in accordance with the
procedures set forth in Section 7(c) that the Executive is required to make a
payment of any Excise Tax, the Accounting Firm shall
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determine the amount of the Underpayment that has occurred, and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.
(c) The Executive shall notify the Company in writing of any
claims by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than 30 days after the Executive actually
receives notice in writing of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid;
provided, however, that the failure of the Executive to notify the Company of
such claim (or to provide any required information with respect thereto) shall
not affect any rights granted to the Executive under this Section 7 except to
the extent that the Company is materially prejudiced in the defense of such
claim as a direct result of such failure. The Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on which he
gives such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Company notifies
the Executive in writing prior to the expiration of such period that it desires
to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim;
(ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by the Company and
reasonably acceptable to the Executive;
(iii) cooperate with the Company in good faith in order to
effectively contest such claim; and
(iv) if the Company elects not to assume and control the
defense of such claim, permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company 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 the Executive harmless, on an
after-tax basis, for any Excise Tax or 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 7(c), the Company shall have the right, at its sole option, to
assume the defense of and control all proceedings in connection with such
contest, in which case it may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may either direct the Executive to pay the tax claimed
and xxx for a refund or contest the claim in any permissible manner, and the
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 the Company shall determine; provided, however, that if the
Company directs the Executive to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis, and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or 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
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further provided, that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's right to assume the defense of and control
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder, and the 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 the Executive of an amount
advanced by the Company pursuant to Section 7(c), the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall (subject
to the Company's complying with the requirements of Section 7(c)) promptly pay
to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 7(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim, and the Company does not notify the 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.
8. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement) (referred to herein as "Confidential Information"). After
termination of the Executive's employment with the Company, the Executive shall
not, without the prior written consent of the Company or as may otherwise be
required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.
In no event shall an asserted violation of the provisions of this Section 8
constitute a basis for deferring or withholding any amounts otherwise payable to
the Executive under this Agreement. Also, within 14 days after the termination
of Executive's employment for any reason, the Executive shall return to Company
all documents and other tangible items containing Company information which are
in the Executive's possession, custody or control.
9. Change of Control.
As used in this Agreement, the terms set forth below shall
have the following respective meanings:
"Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Agreement.
"Associate" shall mean, with reference to any Person, (a) any
corporation, firm, partnership, association, unincorporated organization or
other entity (other than the Company or a subsidiary of the Company) of which
such Person is an officer or general partner (or officer or
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general partner of a general partner) or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of equity securities, (b) any trust
or other estate in which such Person has a substantial beneficial interest or as
to which such Person serves as trustee or in a similar fiduciary capacity and
(c) any relative or spouse of such Person, or any relative of such spouse, who
has the same home as such Person.
"Beneficial Owner" shall mean, with reference to any
securities, any Person if:
(a) such Person or any of such Person's Affiliates and
Associates, directly or indirectly, is the "beneficial owner" of (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act, as in effect on the date of this Agreement)
such securities or otherwise has the right to vote or dispose of such
securities, including pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subsection (a) as a result
of an agreement, arrangement or understanding to vote such security if
such agreement, arrangement or understanding: (i) arises solely from a
revocable proxy or consent given in response to a public (i.e., not
including a solicitation exempted by Rule 14a-2(b)(2) of the General
Rules and Regulations under the Exchange Act) proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the Exchange Act
and (ii) is not then reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or successor report);
(b) such Person or any of such Person's Affiliates and
Associates, directly or indirectly, has the right or obligation to
acquire such securities (whether such right or obligation is
exercisable or effective immediately or only after the passage of time
or the occurrence of an event) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, other rights, warrants or options,
or otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to "beneficially own," (i) securities tendered
pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange or (ii) securities issuable upon
exercise of Exempt Rights; or
(c) such Person or any of such Person's Affiliates or
Associates (i) has any agreement, arrangement or understanding (whether
or not in writing) with any other Person (or any Affiliate or Associate
thereof) that beneficially owns such securities for the purpose of
acquiring, holding, voting (except as set forth in the proviso to
subsection (a) of this definition) or disposing of such securities or
(ii) is a member of a group (as that term is used in Rule 13d-5(b) of
the General Rules and Regulations under the Exchange Act) that includes
any other Person that beneficially owns such securities;
provided, however, that nothing in this definition shall cause a Person engaged
in business as an underwriter of securities to be the Beneficial Owner of, or to
"beneficially own," any securities acquired through such Person's participation
in good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition. For purposes hereof, "voting" a security
shall include voting, granting a proxy, consenting or making a request or demand
relating to corporate action (including, without limitation, a demand for a
stockholder list, to call
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a stockholder meeting or to inspect corporate books and records) or otherwise
giving an authorization (within the meaning of Section 14(a) of the Exchange
Act) in respect of such security.
The terms "beneficially own" and "beneficially owning" shall
have meanings that are correlative to this definition of the term "Beneficial
Owner."
"Change of Control" shall mean any of the following occurring
on or after the Agreement Effective Date:
(a) any Person (other than an Exempt Person) shall become the
Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding or 20% or more of the combined voting power of the Voting
Stock of the Company then outstanding; provided, however, that no
Change of Control shall be deemed to occur for purposes of this
subsection (a) if such Person shall become a Beneficial Owner of 20% or
more of the shares of Common Stock or 20% or more of the combined
voting power of the Voting Stock of the Company solely as a result of
(i) an Exempt Transaction or (ii) an acquisition by a Person pursuant
to a reorganization, merger or consolidation, if, following such
reorganization, merger or consolidation, the conditions described in
clauses (i), (ii) and (iii) of subsection (c) of this definition are
satisfied;
(b) individuals who, as of the Agreement Effective Date,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the Agreement
Effective Date whose election, or nomination for election by the
Company'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; provided, further, that there shall be excluded, for this
purpose, any such individual whose initial assumption of office occurs
as a result of any actual or threatened election contest that is
subject to the provisions of Rule 14a-11 of the General Rules and
Regulations under the Exchange Act;
(c) the shareholders of the Company shall approve a
reorganization, merger or consolidation, in each case, unless,
following such reorganization, merger or consolidation, (i) more than
70% of the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation and the
combined voting power of the then outstanding Voting Stock of such
corporation beneficially owned, directly or indirectly, by all or
substantially all of the Persons who were the Beneficial Owners of the
outstanding Common Stock immediately prior to such reorganization,
merger or consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger or
consolidation, of the outstanding Common Stock, (ii) no Person
(excluding any Exempt Person or any Person beneficially owning,
immediately prior to such reorganization, merger or consolidation,
directly or indirectly, 20% or more of the Common Stock then
outstanding or 20% or more of the combined voting power of the Voting
Stock of the Company then outstanding) beneficially owns, directly or
indirectly, 20% or more of the then outstanding shares of common stock
of the corporation resulting from such reorganization, merger or
consolidation or the combined voting power of the then
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outstanding Voting Stock of such corporation and (iii) at least a
majority of the members of the board of directors of the corporation
resulting from such reorganization, merger or consolidation were
members of the Incumbent Board at the time of the execution of the
initial agreement or initial action by the Board providing for such
reorganization, merger or consolidation; or
(d) the shareholders of the Company shall approve (i) a
complete liquidation or dissolution of the Company unless such
liquidation or dissolution is approved as part of a plan of liquidation
and dissolution involving a sale or disposition of all or substantially
all of the assets of the Company to a corporation with respect to
which, following such sale or other disposition, all of the
requirements of clauses (ii)(A), (B) and (C) of this subsection (d) are
satisfied, or (ii) the sale or other disposition of all or
substantially all of the assets of the Company, other than to a
corporation, with respect to which, following such sale or other
disposition, (A) more than 70% of the then outstanding shares of common
stock of such corporation and the combined voting power of the Voting
Stock of such corporation is then beneficially owned, directly or
indirectly, by all or substantially all of the Persons who were the
Beneficial Owners of the outstanding Common Stock immediately prior to
such sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other disposition,
of the outstanding Common Stock, (B) no Person (excluding any Exempt
Person and any Person beneficially owning, immediately prior to such
sale or other disposition, directly or indirectly, 20% or more of the
Common Stock then outstanding or 20% or more of the combined voting
power of the Voting Stock of the Company then outstanding) beneficially
owns, directly or indirectly, 20% or more of the then outstanding
shares of common stock of such corporation and the combined voting
power of the then outstanding Voting Stock of such corporation and (C)
at least a majority of the members of the board of directors of such
corporation were members of the Incumbent Board at the time of the
execution of the initial agreement or initial action of the Board
providing for such sale or other disposition of assets of the Company.
"Common Stock" shall mean the Class A common stock, par value
$.01 per share, of the Company and the Class B common stock, par value $.01 per
share, of the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exempt Person" shall mean any of the Company, any subsidiary
of the Company, any employee benefit plan of the Company or any subsidiary of
the Company, and any Person organized, appointed or established by the Company
for or pursuant to the terms of any such plan.
"Exempt Rights" shall mean any rights to purchase shares of
Common Stock or other Voting Stock of the Company if at the time of the issuance
thereof such rights are not separable from such Common Stock or other Voting
Stock (i.e., are not transferable otherwise than in connection with a transfer
of the underlying Common Stock or other Voting Stock), except upon the
occurrence of a contingency, whether such rights exist as of the Agreement
Effective Date or are thereafter issued by the Company as a dividend on shares
of Common Stock or other Voting Securities or otherwise.
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"Exempt Transaction" shall mean an increase in the percentage
of the outstanding shares of Common Stock or the percentage of the combined
voting power of the outstanding Voting Stock of the Company beneficially owned
by any Person solely as a result of a reduction in the number of shares of
Common Stock then outstanding due to the repurchase of Common Stock or Voting
Stock by the Company, unless and until such time as (a) such Person or any
Affiliate or Associate of such Person shall purchase or otherwise become the
Beneficial Owner of additional shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock or additional Voting Stock
representing 1% or more of the combined voting power of the then outstanding
Voting Stock, or (b) any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of the
then outstanding shares of Common Stock or Voting Stock representing 1% or more
of the combined voting power of the then outstanding Voting Stock shall become
an Affiliate or Associate of such Person.
"Person" shall mean any individual, firm, corporation,
partnership, association, trust, unincorporated organization or other entity.
"Voting Stock" shall mean, with respect to a corporation, all
securities of such corporation of any class or series that are entitled to vote
generally in the election of directors of such corporation (excluding any class
or series that would be entitled so to vote by reason of the occurrence of any
contingency, so long as such contingency has not occurred).
10. Successors.
(a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of, and be enforceable by, the Executive's
heirs, executors and other legal representatives.
(b) This Agreement shall inure to the benefit of, and be
binding upon, the Company and may only be assigned to a successor described in
Section 10(c).
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly 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 taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
11. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without reference to principles
of conflict of laws that would require the application of the laws of any other
state or jurisdiction.
(b) The Executive acknowledges that the Company currently has
and may in the future institute comprehensive security programs associated with
the Executive and his
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position with the Company. The Executive further acknowledges that such programs
are instituted by the Company to protect the Company's interest in the
Executive's continued performance of his responsibilities as Chairman of the
Board, President and Chief Executive Officer. To that end, the Executive agrees
to comply with such programs and, to the extent practicable, to cause members of
his family to comply with such programs if such individuals are covered thereby.
The Executive further acknowledges that the Company has a substantial interest
in the health of the Executive and agrees to comply with preventive medical
policies and programs established by the Company. Such policies currently
include a requirement that the Executive annually obtain a complete physical
examination at the Mayo Clinic (or another facility of similar stature at the
election of the Executive).
(c) This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and heirs, executors and other legal representatives.
(d) All notices and other communications hereunder shall be in
writing and shall be given, if by the Executive to the Company, by telecopy or
facsimile transmission at the telecommunications number set forth below and, if
by either the Company or the Executive, either by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
Xx. Xxxxxx X. Xxxxxx
Conoco Inc.
000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxx Xxxxxxxx, Xxxxx XX0000
Xxxxxxx, Xxxxx 00000-0000
If to the Company:
Conoco Inc.
000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Telecommunications Number: (000) 000-0000
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(e) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f) The Company may withhold from any amounts payable under
this Agreement such federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
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(g) The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
or during a Window Period pursuant to Section 3(c) of this Agreement, shall not
be deemed to be a waiver of such provision or right or any other provision or
right of this Agreement.
(h) This Agreement supersedes that certain Severance
Agreement, dated May 10, 1998, between the parties and the Employment Agreement
(as defined in the recitals to this Agreement). The provisions of this Agreement
shall govern in the event of a conflict or inconsistency with respect to any
other agreement concerning Executive's employment relationship with the Company,
including the provisions of any benefit plan, program or practice.
(i) This Agreement shall be effective as of October 19, 2000
(the "Agreement Effective Date").
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf.
CONOCO INC.
By:
--------------------------------------
Xxxxxx X. Xxxxxxx
Vice President, Human Resources
-----------------------------------------
Xxxxxx X. Xxxxxx
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