EMPLOYMENT AGREEMENT
This
Agreement is entered into effective as of the 15th day of
December, 2008, by and between Sonic Corp. (the “Corporation”), a Delaware
corporation, and Xxxxxxxx Xxxxxx (the “Employee”).
RECITALS
Whereas,
the Employee is currently serving as the Chief Executive Officer of the
Corporation and is an integral part of its management; and
Whereas,
the Employee and the Corporation acknowledge that they previously entered into
an Employment Agreement dated August 20, 1996, which is hereby canceled and
superseded in its entirety by this Agreement; and
Whereas,
the Corporation's Board of Directors (the “Board”) has determined that it is
appropriate to reinforce and encourage the continued attention and dedication of
certain key members of the Corporation's management, including Employee, to
their assigned duties without distraction and potentially disturbing
circumstances arising from the possibility of a Change in Control (herein
defined) of the Corporation; and
Whereas,
the Corporation desires to continue the services of Employee, whose experience,
knowledge and abilities with respect to the business and affairs of the
Corporation are extremely valuable to the Corporation; and
Whereas,
the parties hereto desire to enter into this Agreement setting forth the terms
and conditions of the continued employment relationship of the Corporation and
Employee.
Now,
therefore, it is agreed as follows:
ARTICLE
I
1.1 Term of
Employment. The Corporation shall employ Employee for a period
of two years from the date hereof (the “Initial Term”).
1.2 Extension of Initial
Term. Upon each anniversary date of this Agreement, this
Agreement shall be extended automatically for an additional one year period to
maintain successive terms of two years each, unless either the Corporation or
the Employee gives contrary written notice to the other not later than the
anniversary date. As used herein, “Term” shall mean the Initial Term
together with any renewal term(s) pursuant to this Section 1.2
1.3 Termination of Agreement and
Employment. The Corporation may terminate this Agreement and
the Employee’s employment at any time effective upon written notice to the
Employee. The Employee may terminate this Agreement and the
Employee’s employment only after at least 30 days’ written notice to the
Corporation, unless otherwise agreed by the Corporation.
ARTICLE
II
Duties of the
Employee
Employee
shall serve as the Chief Executive Officer of the
Corporation. Employee shall do and perform all services, acts, or
things necessary or advisable to manage and conduct the business of the
Corporation consistent with such position subject to such policies and
procedures as may be established by the Board.
ARTICLE
III
Compensation
3.1 Salary. For
Employee's services to the Corporation as the Chief Executive Officer, Employee
shall be paid a salary at the annual rate of $610,000 (herein referred to as
“Salary”), payable in twenty-four equal installments on the first and fifteenth
day of each month. On the first day of each calendar year during the
term of this Agreement with the Corporation, Employee shall be eligible for an
increase in Salary based on an evaluation of Employee’s performance during the
past year with the Corporation. During the term of this Agreement,
the Salary of the Employee shall not be decreased at any time from the Salary
then in effect unless agreed to in writing by the Employee.
3.2 Bonus. The
Employee shall be entitled to participate in an equitable manner with other
officers of the Corporation in discretionary cash bonuses as authorized by the
Board. Such bonuses shall be paid not later than the 15th day of the third month following the later of
the end of the Corporation’s tax year or the Employee’s tax year in which
the bonuses are no longer subject to a substantial risk of forfeiture (within
the meaning of Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”)).
ARTICLE
IV
Employee
Benefits
4.1 Use of Automobile.
The Corporation shall provide Employee with either the use of an automobile for
business and personal use or a cash car allowance in accordance with the
established company car policy of the Corporation. The Corporation
shall pay all expenses of operating, maintaining and repairing the automobile
and shall procure and maintain automobile liability insurance in respect
thereof, with such coverage insuring each Employee for bodily injury and
property damage. Reimbursement of
automobile-related expenses shall be made as soon as practicable after the
request for reimbursement is submitted, but in no event later than the last day
of the calendar year next following the calendar year in which such expense was
incurred. Additionally, neither the provision of in-kind benefits nor
the reimbursement of expenses in any one calendar year shall affect the level or
amount of in-kind benefits to be provided, or the expenses eligible for
reimbursement, in any other calendar year. The Employee’s right to
reimbursement or in-kind benefits under this Section 4.1 is not subject to
liquidation or exchange for another benefit.
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4.2 Medical, Life and Disability
Insurance Benefits. The Corporation shall provide Employee
with medical, life and disability insurance benefits in accordance with the
established benefit policies of the Corporation.
4.3 Working
Facilities. Employee shall be provided adequate office space,
secretarial assistance, and such other facilities and services suitable to
Employee’s position and adequate for the performance of Employee’s
duties.
4.4 Business
Expenses. Employee shall be authorized to incur reasonable
expenses for promoting the business of the Corporation, including expenses for
entertainment, travel, and similar items. The Corporation shall
reimburse Employee for all such expenses upon the presentation by Employee, from
time to time, of an itemized account of such expenditures. Reimbursement shall be made as soon as practicable after
the request for reimbursement is submitted, but in no event later than the last
day of the calendar year next following the calendar year in which such expense
was incurred. Additionally, the reimbursement of expenses in any one
calendar year shall not affect the expenses eligible for reimbursement in any
other calendar year. The Employee’s right to reimbursement under this
Section 4.4 is not subject to liquidation or exchange for another
benefit.
4.5 Vacations. Employee
shall be entitled to an annual paid vacation commensurate with the Corporation's
established vacation policy for officers. The timing of paid
vacations shall be scheduled in a reasonable manner by the
Employee.
4.6 Disability. Upon
disability (as defined herein) of the Employee, the Employee shall be entitled
to receive up to six months’ of Employee’s Salary (less any deductions required
by law) payable in twelve equal installments of 1/24 of the Salary, with the
first installment occurring on the first regularly scheduled payroll date
following the determination of disability and the remaining installments
occurring on a semi-monthly basis thereafter, provided that such disability
payments shall continue only so long as the disability continues, and provided
further that each such disability payment shall be reduced by any benefit
payment the Employee is entitled to receive under the Corporation’s group
disability insurance plans during the corresponding payroll
period..
4.7 Term Life
Insurance. The Corporation shall purchase term life insurance
on the life of the Employee having a face value of four times the Employee’s
Salary (to be changed as salary adjustments are made) or the face value of life
insurance that can be purchased based upon the Employee’s health history with
the Corporation paying the standard premium rate for term insurance under its
then current insurance program at the Employee’s age and assuming good health,
whichever amount is lesser; provided further that, such insurance can be
obtained by the Corporation in a manner which meets the requirements for
deductibility by the Corporation under Section 79 of the Internal Revenue Code
of 1986, or as hereafter amended.
4.8 Compensation
Defined. Compensation shall be defined as all monetary
compensation and all benefits described in Articles III and IV hereunder (as
adjusted during the term hereof).
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ARTICLE
V
Termination
5.1 Separation from
Service. For purposes of this
Agreement, the terms “terminate,” “terminated” and “termination” with respect to
the Employee’s employment mean a termination of the Employee’s employment that
constitutes a “separation from service” within the meaning of the default rules
of Section 409A of the Code.
5.2 Death. Employee's
employment hereunder shall be terminated upon the Employee's death.
5.3 Disability. The
Corporation may terminate Employee's employment hereunder in the event Employee
is disabled and such disability continues for more than 180
days. Disability shall be defined as the inability of Employee to
render the services required of him, with or without a reasonable accommodation,
under this Agreement as a result of physical or mental incapacity.
5.4 Cause.
(a) The
Corporation may terminate Employee's employment hereunder for
cause. For the purpose of this Agreement, “Cause” shall mean (i) the
willful and intentional failure by Employee to substantially perform Employee’s
duties hereunder, other than any failure resulting from Employee's incapacity
due to physical or mental incapacity, or (ii) commission by Employee, in
connection with Employee’s employment by the Corporation, of an illegal act or
any act (though not illegal) which is not in the ordinary course of the
Employee's responsibilities and exposes the Corporation to a significant level
of undue liability. For purposes of this paragraph, no act or failure
to act on Employee's part shall be considered to have met either of the
preceding tests unless done or omitted to be done by Employee not in good faith
without a reasonable belief that Employee’s action or omission was in the best
interest of the Corporation.
(b) Notwithstanding
the foregoing, Employee shall not be deemed to have been terminated for cause
unless and until there shall have been delivered to Employee a copy of a
resolution, duly adopted by the affirmative vote of not less than two-thirds of
the entire membership of the Board at a meeting held within 30 days of such
termination (after reasonable notice to Employee and an opportunity for Employee
to be heard by members of the Board) confirming that Employee was guilty of the
conduct set forth in this Section 5.3.
5.5 Compensation Upon
Termination for Cause or Upon Resignation By Employee. Except
as otherwise set forth in Section 5.7 hereof, if Employee's employment
shall be terminated for Cause or if Employee shall resign Employee’s position
with the Corporation, the Corporation shall pay Employee's Compensation only
through the last day of Employee's employment by the Corporation. The
Corporation shall then have no further obligation to Employee under this
Agreement.
5.6 Compensation Upon
Termination Other Than For Cause Or Disability. Except as
otherwise set forth in Section 5.8 hereof, if the Corporation shall terminate
Employee's employment other than for Cause or Disability, the Corporation shall
continue to be obligated to pay two years of
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Employee’s
Salary (payable in forty-eight equal installments, with the first installment
occurring on the first regularly scheduled payroll date following the date of
termination, and the remaining installments occurring on a semi-monthly basis
thereafter), but shall not be obligated to provide any other benefits described
in Articles III and IV hereof, except to the extent required by
law.
5.7 Compensation Upon
Non-Renewal of Agreement. Except as otherwise set forth in
Section 5.7 hereof, if the Company shall give notice to Employee in accordance
with Section 1.2 hereof that this Agreement will not be renewed but Employee’s
employment is not terminated, the Company shall continue to be obligated to pay
Employee’s Salary for a period of two years beginning on the date notice of
non-renewal is given, on regularly scheduled payroll dates, but shall not be
obligated to provide any other benefits described in Articles III and IV hereof,
except to the extent required by law.
5.8 Termination of Employee or
Resignation by Employee for Good Reason. If at any time within
the first twelve months subsequent to a Change in Control, the Employee’s
employment with the Corporation is terminated other than as provided for in
Section 5.1, 5.2 or 5.3 hereof, or the Corporation violates any provision of
this Agreement or Employee shall resign Employee's employment for Good Reason
(as defined herein), the Corporation shall be obligated to pay to Employee a
severance payment in an amount equal to one and one-half times the Employee's
compensation payable under paragraph 5.6 above, but in no event to exceed an
amount equal to $1.00 less than three (3) times the mean average annual
compensation paid to Employee by the Corporation and any of its subsidiaries
during the five calendar years ending before the date on which the Change in
Control occurred (or if Employee was not employed for that entire five year
period, then the mean average annual compensation paid to employee during such
shorter period, with the Employee's compensation annualized for any calendar
year during which the employee was not employed for the entire calendar year);
provided, however, that if the severance payment under this Section 5.7, either
alone or together with any other payments or compensation which Employee has a
right to receive from the Corporation, would constitute a “parachute payment”
(as defined in Section 280G (or any equivalent term defined in any successor or
equivalent provision) of the Code), then such severance payment shall be reduced
to the largest amount as will result in no portion of the severance payment
under this Section 5.8 being subject to the excise tax imposed by Section 4999
(or any successor or equivalent provision) of the Code. For the
purpose of this Section 5.8, the Employee's annual compensation from the
Corporation and its subsidiaries for a given year shall equal Employee’s
compensation as reflected on Employee’s Form W-2 for that year (unless the
Employee was not employed for the entire calendar year, in which case Employee’s
Form W-2 compensation for such year shall be annualized). The
determination of any reduction in severance payment under this Section 5.8
pursuant to the foregoing provision shall be conclusive and binding on the
Corporation.
If the Change in Control implicated by this Section 5.8
is also a “change in control event” within the meaning of the default rules of
the final regulations promulgated under Section 409A(a)(2)(A)(v) of the Code,
then the severance payment due under this Section 5.8 shall be made in a lump
sum, payable no later than not later than
the 15th day
of the third month following the later of the end of the Corporation’s tax year
or the Employee’s tax year in which occurs
the Employee’s effective date of termination under this Section
5.8. If the Change in Control is not a “change in control event”
within the meaning of the default rules of the xxxxx
0
regulations promulgated under Section 409A(a)(2)(A)(v)
of the Code, the severance payment contemplated by this Section 5.8 shall be
made in twelve semi-monthly installment payments, beginning on the first
regularly scheduled payroll date following the Employee’s effective date of
termination under this Section 5.8. For purposes of this Section 5.8,
the Employee’s effective date of termination shall mean, as applicable, (x) the
effective date of such termination of employment by the Corporation or (y) the
effective date of the Employee’s resignation for Good Reason, which date shall
be stated in the Employee’s written notice to the Corporation of his resignation
for Good Reason and shall be no later than 60 days following the date of such
notice.
“Good
Reason” shall mean any of the following which occur during the term of this
Agreement without Employee's express written consent:
In the Event of a Change in Control:
(a) the
assignment to Employee of duties inconsistent with Employee's position, office,
duties, responsibilities and status with the Corporation immediately prior to a
Change in Control; or, a change in Employee's titles or offices as in effect
immediately prior to a Change in Control; or, any removal of Employee from or
any failure to reelect Employee to any such position or office, except in
connection with the termination of Employee’s employment by the Corporation for
Disability or Cause or as a result of Employee's death or by Employee other than
for Good Reason as set forth in this Section 5.7(a); or
(b) a
reduction by the Corporation in Employee's Salary as in effect as of the date of
this Agreement or as the same may be increased from time-to-time during the term
of this Agreement or the Corporation's failure to increase (within twelve months
of the Employee's last increase in Salary) Employee's Salary after a Change in
Control in an amount which at least equals, on a percentage basis, the highest
percentage increase in salary for all officers of the Corporation or any parent
or affiliated company effected in the preceding twelve months; or
(c) the
failure of the Corporation to provide Employee with the same fringe benefits
(including, without limitation, life insurance plans, medical or disability
plans, retirement plans, incentive plans, stock option plans, stock purchase
plans, stock ownership plans, or bonus plans) that were provided to Employee
immediately prior to the Change in Control, or with a package of fringe benefits
that, if one or more of such benefits varies from those in effect immediately
prior to such Change in Control, is in Employee's sole judgment substantially
comparable in all material respects to such fringe benefits taken as a whole;
or
(d) relocation
of the Corporation's principal executive offices to a location outside of
Oklahoma City, Oklahoma, or Employee's relocation to any place other than the
location at which Employee performed Employee’s duties prior to a Change in
Control, except for required travel by Employee on the Corporation's business to
an extent substantially consistent with Employee's business travel obligations
at the time of the Change in Control; or
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(e) any
failure by the Corporation to provide Employee with the same number of paid
vacation days to which Employee is entitled at the time of the Change in
Control; or
(f) the
failure of a successor to the Corporation to assume the obligation of this
Agreement as set forth in Section 7.1 herein.
5.9 Change in
Control. For the purposes of this Agreement, the phrase
“change in control” shall mean any of the following events:
(a) Any
consolidation or merger of the Corporation in which the Corporation is not the
continuing or surviving corporation or pursuant to which shares of the
Corporation’s capital stock would convert into cash, securities or other
property, other than a merger of the Corporation in which the holders of the
Corporation’s capital stock immediately prior to the merger have the same
proportionate ownership of capital stock of the surviving corporation
immediately after the merger;
(b) Any
sale, lease, exchange or other transfer (whether in one transaction or a series
of related transactions) of all or substantially all of the assets of the
Corporation;
(c) The
stockholders of the Corporation approve any plan or proposal for the liquidation
or dissolution of the Corporation;
(d) Any
person (as used in Section 13(d) and 14(d)(2) of the Securities and Exchange Act
of 1934, as amended (the “Exchange Act”)) becomes the beneficial owner (within
the meaning of Rule 13D-3 under the Exchange Act) of 50% or more of the
Corporation’s outstanding capital stock;
(e) During
any period of two consecutive years, individuals who at the beginning of that
period constitute the entire Board of Directors of the Corporation cease for any
reason to constitute a majority of the Board of Directors unless the election or
the nomination for election by the Corporation’s stockholders of each new
director received the approval of the Board of Directors by a vote of at least
two-thirds of the directors then and still in office and who served as directors
at the beginning of the period; or
(f) The
Corporation becomes a subsidiary of any other corporation.
ARTICLE
VI
Obligation
to Mitigate Damages; No Effect
on Other Contractual
Rights
6.1 Mitigation. The
Employee shall not have any obligation to mitigate damages or the amount of any
payment provided for under this Agreement by seeking other employment or
otherwise. However, all payments required under the terms of this Agreement
shall cease 30 days after the acceptance by the Employee of employment by
another employer; provided that, this limitation shall not apply to payments due
under paragraph 5.7, above.
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6.2 Other Contractual
Rights. The provisions of this Agreement, and any payment
provided for hereunder shall not reduce any amount otherwise payable, or in any
way diminish Employee's existing rights, or rights which would accrue solely as
a result of passage of time under any employee benefit plan or other contract,
plan or arrangement of which Employee is a beneficiary or in which Employee
participates.
ARTICLE
VII
Successors to the
Corporation
7.1 Assumption. The
Corporation will require any successor or assignee (whether direct or indirect,
by purchase, merger, consolidation or otherwise) of all or substantially all of
the business and/or assets of the Corporation, by agreement in form and
substance reasonably satisfactory to Employee, to expressly, absolutely and
unconditionally assume and agree to perform this Agreement in the same manner
and to the same extent that the Corporation would be required to perform it if
no such succession or assignment had taken place. Any failure by the
Corporation to obtain such agreement prior to the effectiveness of any such
succession or assignment shall be a material breach of this
Agreement.
7.2 Employee's Successors and
Assigns. This Agreement shall inure to the benefit of and be
enforceable by Employee's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If Employee should die while any amounts are still payable
to Employee hereunder, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to Employee's devisee,
legatee or other designee or, if there is no such designee, to Employee's
estate.
ARTICLE
VIII
Restrictions on
Employee
8.1 Confidential
Information. During the term of the Employee’s employment and
for a period of twelve months thereafter, the Employee shall not divulge or make
accessible to any party any Confidential Information, as defined below, of the
Corporation or any of its subsidiaries, except to the extent authorized in
writing by the Corporation or otherwise required by law. The phrase
“Confidential Information” shall mean the unique, proprietary and confidential
information of the Corporation and its subsidiaries, consisting of: (1)
confidential financial information regarding the Corporation or its
subsidiaries, (2) confidential recipes for food products; (3) confidential and
copyrighted plans and specifications for interior and exterior signs, designs,
layouts and color schemes; (4) confidential methods, techniques, formats,
systems, specifications, procedures, information, trade secrets, sales and
marketing programs; (5) knowledge and experience regarding the operation and
franchising of Sonic drive-in restaurants; (6) the identities and locations of
Sonic’s franchisees, Sonic drive-in restaurants, and suppliers to Sonic’s
franchisees and drive-in restaurants; (7) knowledge, financial information, and
other information regarding the development of franchised and company-store
restaurants; (8) knowledge, financial information, and other information
regarding potential acquisitions and dispositions; and (9) any other
confidential business information of the Corporation or any of its subsidiaries.
The Employee shall give the Corporation written notice of any circumstances in
which Employee has actual notice of any access, possession or use of the
Confidential Information not authorized by this Agreement.
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8.2 Restrictive
Covenant. During the term of Employee’s employment, the
Employee shall not engage in or have any interest, directly or indirectly, in
any business competing with the business being conducted by the Corporation or
any of its subsidiaries, without the Corporation’s prior written
consent. For the six month period immediately following the
termination of Employee’s employment, the Employee shall not engage in or have
any interest, directly or indirectly, in any fast food restaurant business that
has a menu similar to that of a Sonic drive-in restaurant (such as hamburgers,
hot dogs, onion rings and similar items customarily sold by Sonic drive-in
restaurants), or which has an appearance similar to that of a Sonic drive-in
restaurant (such as color pattern, use of canopies, use of speakers and menu
housings for ordering food, or other items that are customarily used by a Sonic
drive-in restaurant), and which operates such restaurants within a three mile
radius of any Sonic drive-in restaurant.
ARTICLE
IX
Miscellaneous
9.1 Indemnification. To
the full extent permitted by law, the Board shall authorize the payment of
expenses incurred by or shall satisfy judgments or fines rendered or levied
against Employee in any action brought by a third-party against Employee
(whether or not the Corporation is joined as a party defendant) to impose any
liability or penalty on Employee for any act alleged to have been committed by
Employee while employed by the Corporation unless Employee was acting with gross
negligence or willful misconduct. Payments authorized hereunder shall
include amounts paid and expenses incurred in settling any such action or
threatened action.
9.2 Resolution of
Disputes. The following provisions shall apply to any
controversy between the Employee and the Corporation and its subsidiaries and
the Employee (including any director, officer, employee, agent or affiliate of
the Corporation and its subsidiaries) whether or not relating to this
Agreement.
(a) Arbitration. The
parties shall resolve all controversies by final and binding arbitration in
accordance with the Rules for Commercial Arbitration (the “Rules”) of the
American Arbitration Association in effect at the time of the execution of this
Agreement and pursuant to the following additional provisions:
(1) Applicable
Law. The Federal Arbitration Act (the “Federal Act”), as
supplemented by the Oklahoma Arbitration Act (to the extent not inconsistent
with the Federal Act), shall apply to the arbitration and all procedural matters
relating to the arbitration.
(2) Selection of
Arbitrators. The parties shall select one arbitrator within 10
days after the filing of a demand and submission in accordance with the
Rules. If the parties fail to agree on an arbitrator within that
10-day period or fail to agree to an extension of that period, the arbitration
shall take place before an arbitrator selected in accordance with the
Rules.
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(3) Location of
Arbitration. The arbitration shall take place in Oklahoma
City, Oklahoma, and the arbitrator shall issue any award at the place of
arbitration. The arbitrator may conduct hearings and meetings at any
other place agreeable to the parties or, upon the motion of a party, determined
by the arbitrator as necessary to obtain significant testimony or
evidence.
(4) Discovery. The
arbitrator shall have the power to authorize all forms of discovery (including
depositions, interrogatories and document production) upon the showing of (a) a
specific need for the discovery, (b) that the discovery likely will lead to
material evidence needed to resolve the controversy, and (c) that the scope,
timing and cost of the discovery is not excessive.
(5) Authority of
Arbitrator. The arbitrator shall not have the power (a) to
alter, modify, amend, add to, or subtract from any term or provision of this
Agreement; (b) to rule upon or grant any extension, renewal or continuance of
this Agreement; or (c) to grant interim injunctive relief prior to the
award.
(6) Enforcement of
Award. The prevailing party shall have the right to enter the
award of the arbitrator in any court having jurisdiction over one or more of the
parties or their assets. The parties specifically waive any right
they may have to apply to any court for relief from the provisions of this
Agreement or from any decision of the arbitrator made prior to the
award.
(b) Attorneys' Fees and
Costs. The prevailing party to the arbitration shall have the
right to an award of its reasonable attorneys' fees and costs (including the
cost of the arbitrator) incurred after the filing of the demand and
submission. If the Corporation or any of its subsidiaries prevails,
the award shall include an amount for that portion of the administrative
overhead reasonably allocable to the time devoted by the in-house legal staff of
the Corporation or any subsidiary.
(c) Excluded
Controversies. At the election of the Corporation or its
subsidiaries, the provisions of this Section 9.2 shall not apply to any
controversies relating to the enforcement of the covenant not to compete or the
use and protection of the trademarks, service marks, tradenames, copyrights,
patents, confidential information and trade secrets of the Corporation or its
subsidiaries, including (without limitation) the right of the Corporation or its
subsidiaries to apply to any court of competent jurisdiction for appropriate
injunctive relief for the infringement of the rights of the Corporation or its
subsidiaries.
(d) Other
Rights. The provisions of this Section 9.2 shall not prevent
the Corporation, its subsidiaries, or the Employee from exercising any of their
rights under this agreement, any other agreement, or under the common law,
including (without limitation) the right to terminate any agreement between the
parties or to end or change the party’s legal relationship.
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9.3 Entire
Agreement. This Agreement constitutes the entire agreement of
the parties with regard to the subject matter of this Agreement and replaces and
supersedes all other written and oral agreements and statements of the parties
relating to the subject matter of this Agreement.
9.4 Notices. Any
notices required or permitted to be given under this Agreement shall be
sufficient if in writing and sent by mail to Employee’s residence, in the case
of Employee, or to its principal office, in the case of the
Corporation.
9.5 Waiver of
Breach. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by any party.
9.6 Amendment. No
amendment or modification of this Agreement shall be deemed effective unless or
until executed in writing by the parties hereto.
9.7 Validity. This
Agreement, having been executed and delivered in the State of Oklahoma, its
validity, interpretation, performance and enforcement will be governed by the
laws of that state.
9.8 Section
Headings. Section and other headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
9.9 Counterpart
Execution. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
9.10 Exclusivity. Specific
arrangements referred to in this Agreement are not intended to exclude
Employee's participation in any other benefits available to executive personnel
generally or to preclude other compensation or benefits as may be authorized by
the Board from time to time.
9.11 Partial
Invalidity. If any provision in this Agreement is held by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
9.12 Section 409A of the
Code.
(a)
Notwithstanding anything herein to the
contrary, if, at the time of the Employee’s termination of employment with the
Corporation, the Employee is a “specified employee” within the meaning of
Section 409A of the Code, as determined under the Corporation’s established
methodology for determining specified employees, then, solely to the extent
necessary to avoid the imposition of additional taxes, penalties or interest
under Section 409A of the Code, any payments to the Employee hereunder which
provide for the deferral of compensation, within the meaning of Section 409A of
the Code (which shall not include any compensation that is exempt from Section
409A of the Code), and which are scheduled to be made as a result of the
Employee’s termination of employment during the period beginning on the date of
the Employee’s date of
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termination and ending on the six-month anniversary of
such date shall be delayed and not paid to the Participant until the first
business day following such sixth month anniversary date, at which time such
delayed amounts will be paid to the Employee in a cash lump sum. If
the Employee dies on or after the date of the Employee’s date of termination and
prior to the payment of the delayed amounts pursuant to this Section 9.12, any
amount delayed pursuant to this Section 9.12 shall be paid to the Employee’s
estate within 30 days following the Employee’s
death.
(b)
To the extent this Agreement is subject to Section
409A of the Code, the Corporation and Employee intend all payments under this
Agreement to comply with the requirements of such section, and this Agreement
shall, to the extent reasonably practicable, be operated and administered to
effectuate such intent.
In
witness whereof, the Corporation has caused this Agreement to be executed and
its seal affixed hereto by its officers thereunto duly authorized; and the
Employee has executed this Agreement, as of the day and year first above
written.
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The Corporation:
The
Employee:
|
By: /s/ W. Xxxxx
XxXxxx
Name: W. Xxxxx
XxXxxx
Title: President /s/ Xxxxxxxx
Xxxxx
Name: Xxxxxxxx
Xxxxxx |
12
