EXHIBIT 10(l)
XXXXXX XXXXXX, INC.
RETENTION AGREEMENT
THIS RETENTION AGREEMENT (the "Agreement"), dated as of January 17th, 2002
("Effective Date"), is by and between Xxxxxx Xxxxxx, Inc., a Kansas corporation
(the "Company"), and C. Park Shaper (the "Executive").
WHEREAS, Executive is an employee of the Company; and
WHEREAS, effective January 17th, 2002, Executive has obtained a loan
from First Union National (the "Lender") in the principal amount of $5,000,000
(the "Loan"), the proceeds of which will be used by Executive to purchase shares
of common stock of the Company and/or limited partnership interests in Xxxxxx
Xxxxxx Energy Partners, L.P. (collectively, the "Shares") and the terms of which
are set forth in a promissory note.
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Loan Repayment. In addition to the base compensation, equity based
compensation and other benefits provided to Executive by the Company in
consideration of Executive's employment, the Company shall pay the Lender a
portion or all of the principal amount of the Loan on behalf of Executive in
accordance with the following provisions:
(a) Except as provided otherwise herein, beginning with the
fifth anniversary of the Effective Date and continuing on the sixth,
seventh, eighth and ninth anniversaries of the Effective Date, the
Company shall pay the Lender $1,000,000 of the principal amount of the
Loan on behalf of Executive on each such anniversary.
(b) If, prior to the fifth anniversary of the Effective Date,
Executive's employment is terminated by the Company "for cause" (as
defined below), the Agreement shall immediately terminate, and the
Company shall have no further obligations hereunder, including the
payment of any portion of the Loan.
As used in this Agreement, the term "for cause" means (i)
willful misconduct by Executive of his duties as an employee, officer
or director of the Company, (ii) gross neglect by Executive of his
duties as an employee, officer or director of the Company, which
continues for more than thirty (30) days after Executive's receipt of
written notice from the Board of Directors of the Company (the "Board")
to Executive specifically identifying the gross neglect of Executive
and directing Executive to discontinue the same, (iii) the conviction
of Executive of a crime constituting a felony, or (iv) the commission
by Executive of an act or
making by Executive of an omission, other than an act taken or omission
made in good faith within the course and scope of Executive's
employment, which the Board determines is directly detrimental to the
Company and exposes the Company to material liability.
(c) Subject to Sections 2(e) and 2(f), if, prior to the fifth
anniversary of the Effective Date, Executive voluntarily terminates his
employment with the Company, the Agreement shall immediately terminate,
and the Company shall have no further obligations hereunder, including
the payment of any portion of the Loan.
(d) If, prior to the fifth anniversary of the Effective Date,
Executive's employment is terminated because of Executive's death or
disability, or the Company terminates Executive's employment for any
reason other than (i) "for cause" or (ii) pursuant to Section 2(e)
below, the Company shall pay the Lender, on behalf of the Executive,
principal on the Loan in an amount in one lump sum equal to $5,000,000
multiplied by a fraction, the numerator of which is the number of years
(rounded to the nearest whole year) that have elapsed from the
Effective Date to the date of termination, and the denominator of which
is five (5). Upon such payment by the Company, the Agreement shall
immediately terminate, and the Company shall have no further
obligations hereunder.
(e) If Executive's employment is terminated for any reason
other than "for cause" after a "Change of Control" (as defined below),
the Company shall pay the Lender, on behalf of the Executive, principal
on the Loan in an amount equal to the lesser of (i) $5,000,000, or (ii)
the unpaid principal amount of the Loan at the time of such termination
in one lump sum. Upon such payment by the Company, the Agreement shall
immediately terminate, and the Company shall have no further
obligations hereunder.
For purposes of this Agreement, a "Change of Control" shall
occur if:
(A) (i) any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act") (other than the Company, any
trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any corporation owned,
directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock
of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the
Company's then outstanding securities, (ii) during any period
of two consecutive years (not including any period prior to
the Effective Date), individuals who at the beginning of such
period constitute the Board, and any new director (other than
a director designated by a person who has entered into an
agreement with the Company to effect a transaction described
in (i), (iii) or (iv) of this paragraph) whose election
-2-
by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for
any reason other than normal retirement, death or disability
to constitute at least a majority thereof, (iii) the
shareholders of the Company approve a merger or consolidation
of the Company with any other person, other than (1) a merger
or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or
being converted into voting securities for the surviving
entity) more than fifty percent (50%) of the combined voting
power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or (2) a merger in which the Company is the
surviving entity but no "person" (as defined above) acquires
more than fifty percent (50%) of the combined voting power of
the Company's then outstanding securities, or (iv) the
shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets (or any transaction having a similar effect),
and
(B) in connection with or as a result of an event
described in clause (A), neither Xxxxxxx X. Xxxxxx nor Xxxxxxx
X. Xxxxxx holds or continues to hold the office of Chairman or
Vice Chairman of the Company.
(f) If (i) at any time after a Change of Control and before
the date on which the Loan matures, the Executive is (A) assigned to a
position other than the position the Executive held at the time of the
Change of Control; (B) assigned duties materially inconsistent with his
duties at the time of the Change of Control; or (C) required, as a
condition to continued employment, to move to a location more than 50
miles from Houston, Texas, in any case, without the Executive's
consent, and (ii) the Executive voluntarily terminates his employment
with the Company during the period beginning ninety (90) days after the
Change of Control and ending on the date on which the Loan matures, the
Company shall pay the Lender an amount equal to the lesser of (A)
$5,000,000, or (B) the unpaid principal amount of the Loan at the time
of such termination of employment in one lump sum. Upon such payment by
the Company, the Agreement shall immediately terminate, and the Company
shall have no further obligations hereunder.
2. No Funding Requirement. Nothing contained in this Agreement and no
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Company and Executive or any other person. Any funds which may be used to repay
the Loan under the provisions of this Agreement shall continue for all purposes
to be a part of the general funds of the Company until paid, and no person other
than the Company shall by virtue
-3-
of the provisions of this Agreement have any interest in such funds. To the
extent that any person acquires a right to receive payments from the Company
under this Agreement or to have payments made by the Company on such person's
behalf, such right shall be no greater than the right of any unsecured general
creditor of the Company.
3. Non-Alienation. The right of Executive or any other person to the
payments by the Company toward the Loan or other benefits under this Agreement
may not be assigned, transferred, pledged or encumbered except by will or by the
laws of descent and distribution.
4. Arbitration. Any controversy or claim arising out of or relating to
this Agreement shall be settled by arbitration in accordance with the National
Rules for the Resolution of Employment Disputes of the American Arbitration
Association, as amended from time to time, before a panel of three neutral
arbitrators. Each party shall appoint one arbitrator within 30 days after demand
for arbitration is made and the two appointed arbitrators shall appoint a third
arbitrator within 30 days of their appointment. The arbitration proceedings
shall take place in Houston, Texas as soon as administratively possible after
the appointment of the third arbitrator and thereafter shall be conducted as
expeditiously as reasonably possible. The award rendered by the arbitrator shall
be final and binding on the parties, and judgment may be entered upon it in
accordance with Texas law in a Xxxxxx County court having jurisdiction of it. A
demand for arbitration shall be filed in writing with the other party to this
Agreement. A demand for arbitration shall be made within a reasonable time after
the claim, dispute or other matter in question has arisen. In no event shall the
demand for arbitration be made after the date when institution of legal or
equitable proceedings based upon the claim, dispute or other matter in question
would be barred by applicable statutes of limitations. The parties to this
Agreement will share the cost of the arbitrators and any costs related to the
location used for the arbitration.
5. Miscellaneous.
(a) Nothing contained herein shall be construed as conferring
upon Executive the right to continue in the employ of the Company as an
executive or in any other capacity.
(b) The amounts payable under this Agreement shall not be
deemed salary or other compensation to Executive for the purpose of
computing benefits to which he may be entitled under any pension plan
or other arrangement of the Company for the benefit of its employees.
(c) The Board shall have full power and authority to
interpret, construe, and administer this Agreement and the Board's
interpretations and construction thereof shall be binding and
conclusive on all persons for all purposes. No member of the Board
shall be liable to any person for any action taken or omitted in
connection with the interpretation and administration of this Agreement
unless attributable to his own willful misconduct or lack of good
faith.
-4-
(d) Any questions as to whether and when there has been a
termination of Executive's employment and the cause of such termination
shall be determined by the Board, and its determination shall be final.
(e) This Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns, and Executive and
his heirs, executors, administrators, and legal representatives.
(f) This Agreement shall be construed in accordance with and
governed by the law of the State of Texas unless otherwise pre-empted
by federal law.
-5-
IN WITNESS WHEREOF, the Company has executed this Agreement by its
officer thereto duly authorized, and Executive has executed this Agreement, all
effective as of the day and year first above written.
XXXXXX XXXXXX, INC.
By: /s/ Xxxxx X. Street
------------------------------
Print Name: Xxxxx X. Street
----------------------
Title: Vice President - Human
Resources
--------------------------
EXECUTIVE
/s/ C. Park Shaper
---------------------------------
-6-
