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EXHIBIT 10.9
EXECUTIVE SEVERANCE AGREEMENT, as amended and restated as of January
22, 1998, by and between Sonat Inc., a Delaware corporation ("Sonat"), and
Xxxxxx X. Xxxxxxx ("Executive").
WHEREAS, the Executive Compensation Committee of the Board of Directors
of Sonat has recommended, and the Board of Directors has approved, that Sonat
enter into severance agreements with key executives of Sonat who are from time
to time designated by the Executive Compensation Committee;
WHEREAS, Executive is a key executive of Sonat and has been selected by
the Executive Compensation Committee and the Board of Directors to enter into a
severance agreement with Sonat;
WHEREAS, should Sonat become subject to any proposed or threatened
Change of Control (as hereinafter defined), the Board of Directors believes it
imperative that Sonat and the Board of Directors be able to rely upon Executive
to continue in his position, and that Sonat be able to receive and rely upon his
advice, if requested, as to the best interests of Sonat and its stockholders
without concern that he might be distracted by the personal uncertainties and
risks created by such a proposal or threat;
WHEREAS, should Sonat receive any such proposals, in addition to
Executive's regular duties, he may be called upon to assist in the assessment of
such proposals, advise management and the Board of Directors as to whether such
proposals would be in the best interests of Sonat and its stockholders, and to
take such other actions as the Board of Directors might determine to be
appropriate; and
WHEREAS, Sonat and Executive wish to amend and restate the Executive
Severance Agreement dated as of December 1, 1995, as set forth herein;
NOW, THEREFORE, Sonat and Executive agree as follows:
1. Services During Certain Events. In the event a third person begins a
tender or exchange offer, circulates a proxy to stockholders, or takes other
steps to effect a Change of Control, Executive agrees that he will not
voluntarily leave the employ of Sonat, and will render the services contemplated
in the recitals to this Agreement, until the third person has abandoned or
terminated his efforts to effect a Change of Control or until a Change of
Control has occurred.
2. Termination Following Change of Control. Except as provided in
Section 4 hereof, Sonat will provide or cause to be provided to Executive the
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rights and benefits described in Section 3 hereof in the event that Executive's
employment by Sonat is terminated:
(a) at any time within three years following a Change of Control
by Sonat for reasons other than for "cause" (as such term is defined in
Section 4 hereof) or other than as a consequence of Executive's death,
permanent disability or retirement under the Sonat Inc. Retirement Plan
(the "Retirement Plan") on or after January 1, 2000 ("Normal Retirement
Date");
(b) At any time within three years following a Change of Control
by Executive following the occurrence of any of the following events
without Executive's written consent:
(i) the assignment of Executive to any duties or
responsibilities that are inconsistent with his position,
duties, responsibilities or status immediately preceding such
Change of Control, or a change in his reporting responsibilities
or titles in effect at such time resulting in a reduction of his
responsibilities or position at Sonat;
(ii) the reduction of Executive's annual salary
(including any deferred portions thereof) or level of benefits
or supplemental compensation; or
(iii) the transfer of Executive to a location requiring
a change in his residence or a material increase in the amount
of travel normally required of Executive in connection with his
employment by Sonat; or
(c) by Executive for any reason during the 30-day period
immediately following the first anniversary of the date of the Change
of Control.
For purposes of this Agreement, "Change of Control" shall
mean:
A. The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13(d)-3 promulgated under the Exchange Act) of 20% or more
of either (i) the then outstanding shares of common stock of Sonat (the
"Outstanding Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of Sonat entitled to vote generally in the
election of directors (the "Outstanding
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Voting Securities"); provided, however, that for purposes of this subsection A,
the following acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from Sonat, (ii) any acquisition by Sonat, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by Sonat or any corporation controlled by Sonat or (iv) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection C; or
B. Individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board of Directors; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by Sonat's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors; or
C. Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of Sonat (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Common Stock and
Outstanding Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns Sonat or all or substantially all of Sonat's assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination,
of the Outstanding Common Stock and Outstanding Voting Securities, as the case
may be, (ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of Sonat or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the
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corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board of Directors, providing for such Business Combination.
3. Rights and Benefits upon Termination. In the event of the
termination of Executive's employment under any of the circumstances set forth
in Section 2 hereof ("Termination"), Sonat agrees to provide or cause to be
provided to Executive the following rights and benefits:
(a) Salary and Other Payment at Termination. Executive shall be
entitled to receive within 30 days of Termination a lump-sum payment in cash in
the amount of three times Executive's highest Earnings (as such term is defined
in this Section 3 (a)) with respect to any 12 consecutive month period during
the three years ending with the date of Termination; provided, however, that if
there are fewer than 36 months remaining from the date of Termination to
Executive's Normal Retirement Date, the amount calculated pursuant to this
paragraph will be reduced by multiplying such amount by a fraction, the
numerator of which is the number of months (including any fraction of a month)
so remaining to Executive's Normal Retirement Date and the denominator of which
is 36.
For purposes of this Agreement, "Earnings" shall mean the sum
of (1) all base pay (including Before-Tax Contributions (as defined in Sonat's
Savings Plan) made on behalf of Executive under Sonat's Savings Plan, and
before-tax contributions by Executive to a plan established under Section 125 of
the Internal Revenue Code, as amended (the "Code"), and sponsored by Sonat),
overtime, cash bonuses (including bonuses paid under Sonat's Performance Award
Plan, Cash Bonus Plan, Performance Award and Cash Bonus Plan, and All-Employee
Incentive Program) and commissions paid to Executive for personal service
rendered to Sonat and its subsidiaries and (2) workers' compensation payments or
other comparable payments required to be made by law, received in lieu of base
pay, but only to the extent that such payments do not exceed the rate of base
pay of Executive immediately prior to the commencement of such payments.
Notwithstanding the provisions of the foregoing sentence,
Earnings shall not include (1) severance pay, bonuses, workers' compensation
payments, payment for unused vacation, and payments similar to any of the
foregoing, received after or on account of Executive's Termination, (2) any
income attributable to restricted stock, options, stock appreciation rights,
supplemental payments, or dividends on restricted stock, acquired pursuant to
Sonat's Executive Award Plan, or (3) any Choice Dollars (as defined in Sonat's
Choice Benefits Plan) allocated to
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Executive under Sonat's Choice Benefits Plan, regardless of whether any Choice
Dollars are paid to Executive in cash.
(b) Retirement Benefits. If Executive (i) has at Termination attained
the age of 50 and (ii) at Termination is not otherwise entitled to receive an
early retirement benefit under the terms of a qualified retirement plan of Sonat
or its subsidiaries, Sonat shall pay in cash to Executive a monthly benefit for
life (a "Severance Retirement Benefit") in an amount equal to the difference
between (a) the monthly benefit calculated under the early retirement provisions
of the Retirement Plan (as in effect immediately prior to the Change of
Control), using the early retirement benefit reduction factors applicable as of
the later of age 55 or the Executive's actual age at his date of Termination,
and (b) the monthly benefit payable to Executive under the Retirement Plan (as
in effect on the date of Executive's Termination), assuming the following for
purposes of clauses (a) and (b): (A) the benefit is payable in the form of a
single life annuity as of the later of the date Executive attains age 55 and the
date of Termination; (B) the benefit is calculated based on Executive's actual
service and actual earnings history at the date of Termination; (C) Executive is
fully vested in the benefit; and (D) the benefit is calculated under the
assumption that Code Sections 401(a)(17) and 415 are nonexistent and the
provisions of the Retirement Plan incorporating such Sections are inoperative.
The Severance Retirement Benefit shall be paid commencing on the first day of
the month following the later of the date Executive attains age 55 and the date
of Termination, and shall not be affected by the settlement option or date of
commencement of any benefit actually payable under the Retirement Plan or the
Sonat Inc. Supplemental Benefit Plan.
(c) Survivors' Benefits. If Executive is entitled to receive a
Severance Retirement Benefit under Section 3(b) and Executive is survived by one
or more Eligible Family Members (as such term is defined in the Retirement Plan
as in effect immediately prior to the Change of Control), Sonat shall pay in
cash to each such Eligible Family Member a monthly survivors' benefit (the
"Severance Survivors' Benefit") in an amount equal to the excess of (i) over
(ii), where
(i) is the monthly survivors benefit that would have been
payable to such Eligible Family Member under the Retirement Plan (as in
effect immediately prior to the Change of Control) with respect to
Executive if Executive's retirement benefit were calculated under the
early retirement provisions of such plan, using the early retirement
benefit reduction factors applicable as of the later of age 55 or
Executive's actual age at his date of Termination, and assuming (A) the
retirement benefit is payable in the form of
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a single life annuity as of the later of the date Executive attains age
55 and the date of Termination; (B) the retirement benefit is
calculated based on Executive's actual service and actual earnings
history at the date of Termination; (C) Executive is fully vested in
the retirement benefit; and (D) the retirement benefit is calculated
under the assumption that Code Sections 401(a)(17) and 415 are
nonexistent and the provisions of the Retirement Plan incorporating
such Sections are inoperative; and
(ii) is the amount actually paid to such Eligible Family
Member for such month as a Survivors' Benefit under the Retirement Plan
and as an Excess Retirement Plan Benefit under the Sonat Inc.
Supplemental Benefit Plan.
Payment of the Severance Survivors' Benefit shall commence on the first day of
the month following the death of Executive.
(d) Insurance and Other Special Benefits. To the extent
Executive is eligible thereunder, Executive shall continue to be
covered by the life and dependent life insurance, medical and dental
insurance, and accident and disability insurance plans of Sonat and its
subsidiaries or any successor plan or program in effect at Termination
for employees in the same class or category as Executive, subject to
the terms of such plans and to Executive's making any required
contributions thereto. In the event Executive is ineligible to continue
to be so covered under the terms of any such benefit plan or program,
or, in the event Executive is eligible but the benefits applicable to
Executive are not substantially equivalent to the benefits applicable
to Executive immediately prior to Termination, then, for a period of 36
months following Termination (or until Executive's Normal Retirement
Date, whichever is sooner), Sonat shall provide such substantially
equivalent benefits, or such additional benefits as may be necessary to
make the benefits applicable to Executive substantially equivalent to
those in effect before Termination, through other sources; provided,
however, that if during such period Executive should enter into the
employ of another company or firm which provides substantially similar
benefit coverage, Executive's participation in the comparable benefit
provided by Sonat either directly or through such other sources shall
cease. Nothing contained in this paragraph shall be deemed to require
or permit termination or restriction of Executive's coverage under any
plan or program of Sonat or any of its subsidiaries or any successor
plan or program thereto to which Executive is entitled
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under the terms of such plan or program, whether at the end of the
aforementioned 36-month period or at any other time.
(e) Relocation Assistance. Should Executive move his residence
in order to pursue other business opportunities within three years of
the date of Termination (or until his Normal Retirement Date, whichever
is sooner), Sonat shall reimburse him for any expenses incurred in that
relocation (including taxes payable on the reimbursement) which are not
reimbursed by another employer; provided, however, that Executive shall
be entitled to such reimbursement with respect to only one such
relocation, it being agreed that in the event of more than one such
relocation, Executive shall be entitled to specify the relocation for
which reimbursement hereunder is to be made. Benefits under this
provision will include the assistance, at no cost to Executive, in
selling his home and other assistance which was customarily provided to
executives transferred within Sonat or between Sonat and its
subsidiaries prior to the Change of Control.
(f) Other Benefit Plans. The specific arrangements referred to
in this Section 3 are not intended to exclude Executive's participation
in other benefit plans in which Executive currently participates or
which are available to executive personnel generally in the class or
category of Executive or to preclude other compensation or benefits as
may be authorized by the Board of Directors from time to time.
(g) Duty to Mitigate. Executive's entitlement to benefits
hereunder shall not be governed by any duty to mitigate his damages by
seeking further employment nor offset by any compensation which he may
receive from future employment.
(h) Payment Obligations Absolute. Sonat's obligation to pay or
cause to be paid to Executive the benefits and to make the arrangements
provided in this Section 3 shall be absolute and unconditional and
shall not be affected by any circumstances, including, without
limitation, any setoff, counterclaim, recoupment, defense or other
right, which Sonat may have against Executive or anyone else. All
amounts payable by or on behalf of Sonat hereunder shall be paid
without notice or demand. Each and every payment made hereunder by or
on behalf of Sonat shall be final and Sonat and its subsidiaries shall
not, for any reason whatsoever, seek to recover all or any part of such
payment from Executive or from whomever shall be entitled thereto.
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4. Conditions to the Obligations of Sonat. Sonat shall have no
obligation to provide or cause to be provided to Executive the rights and
benefits described in Section 3 hereof if either of the following events shall
occur:
(a) Termination for Cause. Sonat shall terminate Executive's
employment for "cause". For purposes of this Agreement, termination of
employment for "cause" shall mean termination solely for dishonesty,
conviction of a felony, or willful unauthorized disclosure of
confidential information of Sonat.
(b) Resignation as Director. Executive shall not, promptly
after Termination and upon receiving a written request to do so, resign
as a director and/or officer of each subsidiary and affiliate of Sonat
of which he is then serving as a director and/or officer.
5. Confidentiality; Non-Solicitation; Cooperation.
(a) Confidentiality. Executive agrees that at all times
following Termination, he will not, without the prior written consent
of Sonat, disclose to any person, firm or corporation any confidential
information of Sonat or its subsidiaries which is now known to him or
which hereafter may become known to him as a result of his employment
or association with Sonat and which could be helpful to a competitor,
unless such disclosure is required under the terms of a valid and
effective subpoena or order issued by a court or governmental body;
provided, however, that the foregoing shall not apply to confidential
information which becomes publicly disseminated by means other than a
breach of this Agreement.
(b) Non-Solicitation. Executive agrees that for a period of
three years following the date of Termination (or until Executive's
Normal Retirement Date, whichever is sooner) he will not induce, either
directly or indirectly, any employee of senior to manager level of
Sonat or any of its subsidiaries to terminate his or her employment.
(c) Cooperation. Executive agrees that, at all times following
Termination, he will furnish such information and render such
assistance and cooperation as may reasonably be requested in connection
with any litigation or legal proceedings concerning Sonat or any of its
subsidiaries (other than any legal proceedings concerning Executive's
employment). In connection with such cooperation, Sonat will pay or
reimburse Executive for reasonable expenses.
(d) Remedies for Breach. It is recognized that damages in the
event of breach of this Section 5 by Executive would be difficult, if
not impossible, to ascertain, and it is therefore agreed that Sonat, in
addition to and without limiting any other remedy or right it may have,
shall have
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the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such breach, and Executive hereby
waives any and all defenses he may have on the ground of lack of
jurisdiction or competence of the court to grant such an injunction or
other equitable relief. The existence of this right shall not preclude
Sonat from pursuing any other rights and remedies at law or in equity
which Sonat may have.
6. Certain Additional Payments by Sonat.
(a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that
any payment or distribution by Sonat to or for the benefit of Executive
(whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard
to any additional payments required under this Section 6) (a "Payment")
would be subject to the excise tax imposed by Section 4999 of the Code
or any interest or penalties are incurred by Executive with respect to
such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise
Tax"), then Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by
Executive of all federal income taxes (including any interest or
penalties imposed with respect to such taxes), including, without
limitation, any federal income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section 6(a), if it shall be determined that
Executive is entitled to a Gross-Up Payment, but that Executive, after
taking into account the Payments and the Gross-Up Payment, would not
receive a net after-tax benefit of at least $50,000 (taking into
account both federal income taxes and any Excise Tax) as compared to
the net after-tax proceeds to Executive resulting from an elimination
of the Gross-Up Payment and a reduction of the Payments, in the
aggregate, to an amount (the "Reduced Amount") such that the receipt of
Payments would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to Executive and the Payments, in the aggregate,
shall be reduced to the Reduced Amount.
(b) Subject to the provisions of Section 6(c), all
determinations required to be made under this Section 6, including
whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by Ernst & Young LLP or such other
certified public accounting firm as may be designated by Executive (the
"Accounting Firm"), which shall provide detailed supporting
calculations both to Sonat and Executive within 15 business days of the
receipt of
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notice from Executive that there has been a Payment or such earlier
time as is requested by Sonat. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or
group effecting a Change of Control, Executive shall appoint another
nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as
the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by Sonat. Any Gross-Up Payment shall be paid
by Sonat to Executive within five days of the receipt of the Accounting
Firm's determination. Any determination by the Accounting Firm shall be
binding upon Sonat and Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by Sonat should have
been made ("Underpayment"), consistent with the calculations required
to be made hereunder. In the event that Sonat exhausts its remedies
pursuant to Section 6(c) and Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment
shall be promptly paid by Sonat to or for the benefit of Executive.
(c) Executive shall notify Sonat in writing of any claim by
the Internal Revenue Service that, if successful, would require the
payment by Sonat of a Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten business days after
Executive is informed in writing of such claim and shall apprise Sonat
of the nature of such claim and the date on which such claim is
requested to be paid. Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which it gives
such notice to Sonat (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If Sonat
notifies Executive in writing prior to the expiration of such period
that it desires to contest such claim, Executive shall:
(i) give Sonat any information reasonably requested by Sonat
relating to such claim,
(ii) take such action in connection with contesting such
claim as Sonat shall reasonably request in writing from time to time,
including without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by Sonat,
(iii) cooperate with Sonat in good faith in order effectively
to contest such claim, and
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(iv) permit Sonat to participate in any proceedings
relating to such claim; provided, however, that Sonat shall bear and
pay directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall indemnify
and hold Executive harmless, on an after-tax basis, for any Excise Tax
or federal income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of
costs and expenses. Without limitation on the foregoing provisions of
this Section 6(c), Sonat shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may,
at its sole option, either direct Executive to pay the tax claimed and
xxx for a refund or to contest the claim in any permissible manner, and
Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as Sonat shall determine; provided,
however, that if Sonat directs Executive to pay such claim and xxx for
a refund, Sonat shall advance the amount of such payment to Executive,
on an interest-free basis, and shall indemnify and hold Executive
harmless on an after-tax basis, from any Excise Tax or federal income
tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for the taxable
year of Executive with respect to such contested amount is claimed to
be due is limited solely to such contested amount. Furthermore, Sonat's
control of the contest shall be limited to issues with respect to which
a Gross-Up Payment would be payable hereunder, and Executive shall be
entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by Executive of an amount advanced
by Sonat pursuant to Section 6(c), Executive becomes entitled to
receive any refund with respect to such claim, Executive shall (subject
to Sonat's complying with the requirements of Section 6(c)) promptly
pay to Sonat the amount of such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If, after the
receipt by Executive of an amount advanced by Sonat pursuant to Section
6(c), a determination is made that Executive shall not be entitled to
any refund with respect to such claim and Sonat does not notify
Executive in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.
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7. Term of Agreement. This Agreement shall terminate on April
30, 1999; provided, however, that this Agreement shall automatically
renew for successive one-year terms unless the Board of Directors
notifies Executive in writing at least 30 days prior to an April 30
expiration date that it does not desire to renew the Agreement for an
additional term; and provided further, however, that this Agreement
shall terminate prior to April 30, 1999 or, in the event of a renewal
of this Agreement, any subsequent April 30, if and when the Executive
Compensation Committee determines that Executive is no longer a key
executive for purposes of being a party to an executive severance
agreement with Sonat and so notifies Executive, except that such
determination shall not be made, and if made shall have no effect, (i)
within three years after a Change of Control or (ii) during any period
of time when Sonat has reason to believe that any third person has
begun a tender or exchange offer, circulated a proxy to stockholders,
or taken other steps or formulated plans to effect a Change of Control,
such period of time to end when, in the opinion of the Executive
Compensation Committee, the third person has abandoned or terminated
his efforts or plans to effect a Change of Control.
8. Expenses. Sonat shall pay or reimburse Executive for all
costs and expenses, including, without limitation, court costs and
attorneys' fees, incurred by Executive as a result of any claim, action
or proceeding (including, without limitation, a claim, action or
proceeding by Executive against Sonat) arising out of, or challenging
the validity or enforceability of, this Agreement or any provision
hereof.
9. Miscellaneous.
(a) Assignment. No right, benefit or interest hereunder shall
be subject to assignment, anticipation, alienation, sale, encumbrance,
charge, pledge, hypothecation or set-off in respect of any claim, debt
or obligation, or to execution, attachment, levy or similar process;
provided, however, that Executive may assign any right, benefit or
interest hereunder if such assignment is permitted under the terms of
any plan or policy of insurance or annuity contract governing such
right, benefit or interest.
(b) Construction of Agreement. Nothing in this Agreement shall
be construed to amend any provision of any plan or policy of Sonat.
This Agreement is not, and nothing herein shall be deemed to create, a
commitment of continued employment of Executive by Sonat or any of its
subsidiaries.
(c) Amendment. This Agreement may not be amended, modified or
canceled except by written agreement of the parties.
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(d) Waiver. No provision of this Agreement may be waived
except by a writing signed by the party to be bound thereby.
Executive may at any time or from time to time waive any
or all of the rights and benefits provided for herein which have not
been received by Executive at the time of such waiver. In addition,
prior to the last day of the calendar year in which Executive's
Termination occurs, Executive may waive any or all rights and benefits
provided for herein which have been received by Executive; provided
that prior to the end of such year Executive repays to Sonat (or, if
the benefit was received from an employee benefit plan trust, to such
trust) the amount of the benefit received together with interest
thereon at the minimum rate required to avoid imputed income. Any
waiver of benefits pursuant to this paragraph shall be irrevocable. If
Executive waives a right or benefit provided for herein and such waiver
is determined by the Internal Revenue Service not to be effective,
Sonat shall indemnify Executive for any federal income and excise taxes
he incurs as a result of that determination, so as to put Executive in
the position he would have been in had the waiver been given effect.
(e) Severability. In the event that any provision or portion
of this Agreement shall be determined to be invalid or unenforceable
for any reason, the remaining provisions of this Agreement shall remain
in full force and effect to the fullest extent permitted by law.
(f) Successors. This Agreement shall be binding upon and inure
to the benefit of Executive and his personal representative and heirs,
and Sonat and any successor organization or organizations which shall
succeed to substantially all of the business and property of Sonat,
whether by means of merger, consolidation, acquisition of substantially
all of the assets of Sonat or otherwise, including by operation of law.
(g) Taxes. Any payment or delivery required under this
Agreement shall be subject to all requirements of the law with regard
to withholding of taxes, filing, making of reports and the like, and
Sonat shall use its best efforts to satisfy promptly all such
requirements.
(h) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware.
(i) Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties hereto with respect to the
matters covered hereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of January 22, 1998.
SONAT INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
----------------------------------------
Xxxxxx X. Xxxxx, Xx.
Chairman of the Board, President
and Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxx
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