EXHIBIT 10.17
[LETTERHEAD]
February 20, 2003
By Overnight Mail
Xxxxxxx X. Xxxxxxxx
000 Xxxxx Xxxxx Xxxx
Xxxxxxxx Xxxxx, XX 00000
Re: Your Retirement
Dear Xxxx:
I am saddened by your impending retirement from Nabors. I will have
many occasions still to thank you for your numerous contributions over the
years, but please know that I truly appreciate your friendship, your hard work,
and your dedication in helping to build Nabors into what it is today.
This letter will describe the agreement we have reached regarding your
retirement. Please review the understanding described below and, if it correctly
describes our agreement, please sign both copies of this letter below where
indicated and return one copy to me.
1. Resignation. Effective as of the date of this letter (your
"Retirement Date"), you resign as an officer, director, employee, trustee,
partner, fiduciary, member and any and all other positions held with Nabors
Industries Ltd. ("Nabors Bermuda"), Xxxxxx Industries, Inc. ("Xxxxxx Delaware"),
and any and all of their subsidiaries and affiliates.
2. Payments and Benefits. In consideration for your agreements
described in this letter, Nabors Bermuda and/or Nabors Delaware will pay you
bi-weekly payments through September 30, 2007, each in the gross amount of
Twelve Thousand, Five Hundred Seventy-Six Dollars and Four Cents ($12,576.04).
These payments will be paid in accordance with the company's normal payroll
cycle and we will withhold required tax deductions. The amount of payments may
be adjusted from time to time by mutual agreement.
3. Business Expenses. Please submit any outstanding business expenses
as soon as reasonably practicable. In the future, you should obtain either my or
Xxxx Xxxxxxxx'x approval before incurring any business expenses on behalf of the
company.
4. Benefit Plans. Except as described in this letter or required by
law, all benefit plans to which you are a party because of your employment shall
no longer be applicable to you and any benefits available to you will terminate,
as of your Retirement Date.
x. Xxxxxx Industries Retirement Savings Plan (the "Retirement
Savings Plan") - You are entitled to a distribution of your account and
one hundred percent (100%) of any applicable matching account. You have
the option of leaving both your
Xxxxxxx X. Xxxxxxxx
February 20, 2003
Page 2
and company matching accounts in the Retirement Savings Plan in
accordance with the terms of the plan. If you elect to receive a
distribution, you should complete and return the Final Distribution
Form which will be provided.
x. Xxxxxx Industries Non-Qualified Deferred Compensation Plan
(the "Deferred Compensation Plan") - You are entitled to a distribution
of your account and one hundred percent (100%) of any applicable
matching account. Your distribution from the Deferred Compensation Plan
will be a lump sum payment and will be made within ninety (90) days of
the Retirement Date. Your balance in the Deferred Compensation Plan as
of December 31, 2002 was Eight Hundred Eighty Four Thousand Seven
Hundred Forty Seven Dollars and Seventy-Two cents ($884,747.72).
x. Xxxxxx Industries Group Insurance Plan (the "Group
Insurance Plan") - You, your spouse and eligible children will be
entitled to participate under the medical and dental portions of the
Group Insurance Plan so long as you are receiving the payments
described in paragraph 2 of this letter. Your participation will be
solely at your cost and expense, which we agree shall be an amount
equal to the amount charged from time to time to individuals electing
continuation of insurance coverage in accordance with the Consolidated
Omnibus Reconciliation Act of 1985 ("COBRA"). As of the date of this
Agreement, those amounts are $1,122.52 per month (medical) and $121.17
per month (dental) for an employee, spouse and three children.
At any time during which you are receiving the payments described in
paragraph 2 and at Nabors Bermuda's or Nabors Delaware's sole option, we may
arrange for individual insurance policies for you and your family providing
benefits that are reasonably comparable to those provided under the Group
Insurance Plan. The cost of such individual policies shall be borne by you, but
you will not be responsible for any costs associated with such policies to the
extent that the costs are in excess of the amounts charged from time to time to
individuals electing continuation of insurance coverage under the Group
Insurance Plan in accordance with COBRA (it being our intention that Nabors
Bermuda and/or Nabors Delaware will be responsible for any excess costs). The
term of such policy shall not be less than the period of time during which you
are receiving the payments described in paragraph 2, plus an additional eighteen
months (the additional 18 months is intended to place you in the same position
as you would be in if you elected COBRA at the end of the period of time during
which you were covered by the Company plan).
At any such time as you are no longer covered under the Group Insurance
Plan, you will be entitled to continue health care coverage in accordance with
COBRA. A notice outlining your health care continuation rights will be sent to
your home address.
5. Stock Options. Notwithstanding any provision to the contrary, you
shall be entitled to exercise your stock option awards pursuant to the terms of
their initial award, as amended or modified from time to time prior to the date
of this letter. Our records reflect the following options outstanding:
Xxxxxxx X. Xxxxxxxx
February 20, 2003
Page 3
Grant Expiration Options Exercise
Date Date Outstanding Price
-------- ---------- ----------- -------
12-11-98 7-22-07 93,750 $12.50
12-11-98 1-9-08 172,500 $12.50
12-11-98 7-22-07 196,875 $12.50
12-30-98 12-30-08 300,000 $12.625
8-23-99 8-23-09 14,000 $28.125
8-23-99 8-23-09 23,400 $28.1875
8-23-99 8-23-09 50,100 $28.25
12-7-99 12-7-09 250,000 $24.75
9-21-00 1-7-07 315,943 $46.50
12-4-00 12-4-10 250,000 $45.55
1-22-02 1-22-12 400,000 $27.05
6. Repayment of Loan. You acknowledge that you are indebted to Nabors
Delaware in the principal amount of $104,375 pursuant to a demand note dated as
of June 11, 1990. You agree to repay the full amount of the loan as soon as
reasonably practicable.
7. Split Dollar Life Policy. You acknowledge that you are a party to a
Split-Dollar Life Insurance Agreement dated August 3, 1998 (the "Split-Dollar
Agreement") related to the The Equitable Policy Number 45258640 (the "Policy")
and that the Policy has been collaterally assigned to Xxxxxx Drilling USA, Inc.
As of the date hereof, the amount of the premiums advanced by Nabors Delaware
and/or Nabors Bermuda is $286,333 (the "Corporate Portion"). You are aware that
we have not made premium payments under the policy recently because of concern
that such payments might violate recent legislation. We agree that we will treat
you the same as other senior executives having such policies with respect to
future payments of the corporate portion of premiums so long as you are
receiving the bi-weekly payments described on Exhibit A. We agree that the
Split-Dollar Agreement and the documents evidencing the assignment of the
Policy, and each of the parties obligations under those agreements, shall
survive your retirement and this letter. We further agree and acknowledge that
Nabors Bermuda, Nabors Delaware or a Company Affiliate shall receive the
"Corporate Portion" described in the Split-Dollar Agreement upon the earlier to
occur of the events described in paragraph 6(b)(i) or 6(b)(ii) of the
Split-Dollar Agreement.
8. Release and Waiver of Claims. In return for the Payments, you hereby
release and forever discharge Nabors Bermuda, Nabors Delaware, and each of their
owners, officers, employees, former employees, shareholders, directors,
partners, agents and assigns, and all other persons, firms, partnerships, or
corporations in control of, under the direction of, or in any way presently or
formerly associated with Nabors Delaware and/or Nabors Bermuda (collectively,
"Company Affiliates") of and from all claims, obligations, agreements,
contracts, or other liabilities of any kind or character (including without
limitation your Employment Agreement dated as of October 1, 1996, as amended
from time to time) whether known or hereafter discovered, arising from or in any
way connected with or related to your employment with Nabors Delaware and/or
Nabors Bermuda and any Company Affiliate, but excluding any benefits which you
are entitled to receive under any Nabors Delaware and/or Nabors Bermuda plan or
Company Affiliate plan that is a qualified plan under IRC Section 401(a) or is a
group health plan
Xxxxxxx X. Xxxxxxxx
February 20, 2003
Page 4
subject to COBRA, to the extent you properly elect and pay for such COBRA
continuation coverage.
The foregoing release is not intended to, and does not, release any claims you
may have, now or in the future, for indemnity, including but not limited to
indemnification under any indemnification agreement by and between you and
Nabors Bermuda and/or Nabors Delaware, and/or for coverage under any directors
and officers ("D&O") insurance policy for acts or decisions or omissions to act
by you while performing services for Nabors Bermuda, Nabors Delaware, or any
Company Affiliate as an employee, officer, director, or in any other capacity.
9. Other Agreements.
Our agreement described in this letter will be governed by the laws of
the State of Texas. This letter constitutes the entire agreement between us and
supersedes any and all prior understandings, agreements or correspondence. This
agreement may only be modified in a writing signed by the parties.
For a period of five years from the date of this letter, you agree that
you will not accept any employment with, or render any services to, any person,
firm or corporation that competes with Nabors Bermuda, Nabors Delaware, or any
Company Affiliate. You agree that we may cease making the Payments described in
this letter if you do not abide by this paragraph.
If any provision of this letter shall be held to be invalid, illegal,
or unenforceable for any reason whatsoever, the validity, legality and
enforceability of the remaining provisions of this letter shall not in any way
be affected or impaired thereby. Any disputes arising in connection with this
letter shall be resolved through binding arbitration pursuant to the Nabors
Dispute Resolution Program.
If the foregoing correctly describes our agreement, please sign both
copies where indicated below and return one fully signed copy to me.
With best regards.
Sincerely yours,
/s/ Xxxxxx X. Xxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxx
AGREED AND ACKNOWLEDGED:
/s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxxx
