NAME} PERSONAL AND {ADDRESS} CONFIDENTIAL
Exhibit 10.3
January 7, 2008
{NAME} | PERSONAL AND | |
{ADDRESS} | CONFIDENTIAL |
Dear
Newpark Resources, Inc., a Delaware corporation (“Newpark”), considers you a valuable
executive, and the Board of Directors (the “Board”) has authorized certain actions to reinforce and
encourage your attention and dedication to your duties without distraction if Newpark should become
the target of a hostile takeover attempt or enter into negotiations that could lead to a change in
control of Newpark.
This letter (the “Agreement”) sets forth the understanding between you and Newpark concerning
the continuation of your employment in connection with a “Change in Control” or “Potential Change
in Control” and the “Termination Benefit” you will receive if your employment with Newpark is
terminated by Newpark without “Cause” or by you for “Good Reason” during an “Employment Period,” as
those terms are defined in Annex A attached to this letter.
This Agreement is entered into with the understanding between you and Newpark that you will
have knowledge or otherwise be notified of a Change in Control or Potential Change in Control, or
the termination thereof, at the time it occurs.
1. Definitions. Capitalized terms used in this Agreement are defined in Annex A attached
hereto and hereby incorporated into this Agreement by reference.
2. Consideration; Termination During Employment Period.
2.1 Subject to the terms and conditions of this Agreement, you agree that you will not resign
from Newpark during an Employment Period except for Good Reason.
2.2 If your employment with Newpark is terminated during an Employment Period, Newpark shall
pay you the Termination Benefit, unless such termination is (a) because of your death, (b) because
of your failure to resume full-time performance of your duties after the end of a Disability
Period, (c) by Newpark for Cause or (d) by your resignation other than for Good Reason.
2.3 If your employment with Newpark is terminated by Newpark during an Employment Period for
Cause, Newpark shall give you written notice of termination specifying the facts and circumstances
constituting such Cause.
3. Compensation Upon Termination or During Disability.
3.1 During any Disability Period occurring during an Employment Period, you shall continue to
receive your full base salary at the rate then in effect, unless and until your employment is
terminated.
{NAME}
January 7, 2008
Page 2
January 7, 2008
Page 2
3.2 If your employment is terminated by Newpark for Cause, Newpark shall pay you your full
base salary at the rate then in effect through the date of termination, together with any severance
pay, vacation pay and sick leave pay to which you are entitled in accordance with Newpark policy.
Neither this provision nor any payment made by Newpark in accordance herewith shall constitute
waiver of Newpark’s right to recover from you any damages caused by your conduct which constituted
Cause for such termination and any similar conduct.
3.3 If you become entitled to the Termination Benefit in accordance with Paragraph 2.2, you
shall receive, in addition to the Termination Benefit, your full base salary at the rate then in
effect through the date of termination, plus a pro-rated annual bonus through the date of
termination. The Termination Benefit shall be in lieu of any severance pay, vacation pay and sick
leave pay to which you would otherwise be entitled in accordance with Newpark policy.
3.4 If you become entitled to the Termination Benefit in accordance with Paragraph 2.2, all
unexpired unexercised stock options (“Options”), if any, granted to you prior to a Change in
Control under any stock option plan of Newpark or otherwise, shall become exercisable in full on
the day preceding the date of termination, whether or not they would have been fully exercisable
but for this provision, and shall remain exercisable during their original exercise period or for a
period of three (3) years from the date of termination whichever is the shorter, whether or not
they would remain exercisable for such period but for this provision.
3.5 If you become entitled to the Termination Benefit in accordance with Paragraph 2.2, all
unvested shares of restricted stock and all deferred compensation amounts, including restricted
stock or deferred compensation subject to vesting based on time or achieving performance criteria,
if any, granted or awarded to you prior to a Change in Control under any stock plan or deferred
compensation plan of Newpark or otherwise, shall become vested in full on the day preceding the
date of termination and all restrictions thereon shall lapse, whether or not they would have been
vested in full but for this provision. Newpark shall promptly deliver all such shares to you, and
all such deferred compensation shall be paid to you in a lump sum on the date of termination.
3.6 If you become entitled to the Termination Benefit in accordance with Paragraph 2.2,
Newpark shall continue to provide you and your eligible family members, based on the cost sharing
arrangement between you and Newpark on the date of termination, with life insurance, medical and
dental health benefits and disability coverage and benefits at least equal to those which would
have been provided to you if your employment had not terminated for a period of 24 months.
Notwithstanding the foregoing, if you become re-employed and are eligible to receive life
insurance, medical and dental health benefits and disability coverage and benefits under another
employer’s plans, Newpark’s obligations under this paragraph shall be reduced to the extent of any
such coverage and benefits. You agree to promptly report any such coverage and benefits to
Newpark. If you are ineligible under the terms of Newpark’s benefit plans or programs to continue
to be so covered, Newpark shall provide you with substantially equivalent coverage through other
sources or will reimburse you for the cost of obtaining such coverage and benefits.
{NAME}
January 7, 2008
Page 3
January 7, 2008
Page 3
3.7 If you become entitled to the Termination Benefit in accordance with Paragraph 2.2,
Newpark shall provide you with outplacement services, payable by Newpark, with an aggregate cost
not to exceed $10,000 with an executive outplacement service firm reasonably acceptable to you and
Newpark.
3.8 Except as provided in Paragraph 3.6, you shall not be required to mitigate the amount of
any Termination Benefit by seeking other employment or otherwise, nor shall the amount of any
Termination Benefit be reduced by any compensation earned by you as the result of employment by
another employer, or otherwise.
3.9 Except as expressly provided otherwise herein, none of the provisions of this Agreement is
intended to curtail or limit in any way any contractual rights which you may have under any plan in
which you are eligible to participate or under any agreement binding on Newpark to which you are a
party, and all such contractual rights shall survive the execution of this Agreement and any Change
in Control. The Termination Benefit shall not be considered compensation for any benefit
calculation or other purpose under any retirement plan or other benefit plan maintained by Newpark.
4. Successors; Binding Agreement. This Agreement shall be binding on and inure to the
benefit of Newpark and any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of Newpark.
This Agreement shall inure to the benefit of and be enforceable by your personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
5. Termination of Agreement. Note: For Officers with Employment Agreements this
contract may only be terminated in accordance with the provisions of that agreement. For other
employees. Newpark may terminate this Agreement effective at any time after March 31st 2009, by
notice to you, if no Change in Control has occurred prior to the giving of such notice, and no
Potential Change in Control then exists. Once terminated, this Agreement shall have no further
force or effect.
6. Notices. All notices and all other communications provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth on the first page of this Agreement, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt. Notices to Newpark shall be directed to the
attention of the Secretary of Newpark.
7. Amendments; Waivers. No provision or term of this Agreement may be supplemented,
amended, modified, waived or terminated except in a writing duly executed by all parties intended
to be bound thereby. No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided. Failure of a party to insist
on strict compliance with any of the terms and conditions of this Agreement shall not be deemed a
waiver of any such terms and conditions.
{NAME}
January 7, 2008
Page 4
January 7, 2008
Page 4
8. Coordination of Benefits. In the event that the Employee is entitled to benefits
following termination under any Employment Agreement with Newpark, the Employee shall have the
right to elect whether to receive such benefits under this Agreement or any Employment Agreement,
but not both.
9. Entire Agreement. This Agreement, including Annex A, constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and supersedes all
previous agreements, whether written or oral, relating to the same subject matter. All such
previous agreements between the parties hereto are hereby terminated and shall have no further
force or effect.
10. Attorneys’ Fees. In any litigation relating to this Agreement, including
litigation with respect to any instrument, document or agreement made under or in connection with
this Agreement, the prevailing party shall be entitled to recover its costs and reasonable
attorneys’ fees.
11. Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Delaware.
If this letter correctly sets forth our understanding on the subject matter hereof, kindly
sign and return to Newpark the enclosed copy of this letter, which will then constitute our
Agreement on this subject.
Very truly yours, NEWPARK RESOURCES, INC. |
||||
By | ||||
Xxxx X. Xxxxx | ||||
President and CEO | ||||
Agreed to this day of
ANNEX A TO LETTER AGREEMENT
DATED JANUARY 7, 2008
DATED JANUARY 7, 2008
The following terms used herein and in letter agreement (the “Agreement”) dated {DATE} between
Newpark Resources, Inc., and {NAME} (“Executive”) shall have the following meanings:
“Cause”, when used with reference to termination of the employment of Executive by Newpark for
“Cause”, shall mean:
a) Executive’s conviction by a court of competent jurisdiction of, or entry of a plea of
guilty or nolo contendere for an act on the Executive’s part constituting a felony dishonesty,
willful misconduct or material neglect by Executive of his obligations under this Agreement that
results in material injury to the Company;
b) appropriation (or an overt act attempting appropriation) of a material business opportunity
of the Company ;
c) theft, embezzlement or other similar misappropriation of funds or property of the Company
by Executive;
d) the failure of Executive to follow the reasonable and lawful written instructions or policy
of Newpark with respect to the services to be rendered and the manner of rendering such services by
Executive, provided Executive has been given reasonable and specific written notice of such failure
and opportunity to cure and no cure has been effected or initiated within a reasonable time, but
not less than 90 days, after such notice
A “Change of Control” shall be deemed to occur if: (i) a “Takeover Transaction” (as defined below)
occurs; or (ii) any election of directors of Newpark takes place (whether by the directors then in
office or by the stockholders at a meeting or by written consent) and a majority of the directors
in the office following such election are individuals who were not nominated by a vote of
two-thirds of the members of the Board of Directors or its nominating committee immediately
preceding such election; or (iii) Newpark effectuates a complete liquidation or a sale or
disposition of all or substantially all of its assets unless immediately following any such sale or
disposition of all or substantially all of its assets the individuals who were members of the Board
of Directors of Newpark immediately prior to such transaction continue to constitute a majority of
the Board of Directors or other governing body of the surviving corporation or entity (or, in the
case of an acquisition involving a holding company, constitute a majority of the Board of Directors
or other governing body of the holding company) for a period of not less than twelve (12) months
following the closing of such transaction. A “Takeover Transaction” shall mean (i) a merger or
consolidation of Newpark with, or an acquisition by Newpark of the equity interests or all or
substantially all of the assets of, any other corporation or entity, other than a merger,
consolidation or acquisition in which the individuals who were members of the Board of Directors of
Newpark immediately prior to such transaction continue to constitute a majority of the Board of
Directors or other governing body of the surviving corporation or entity (or, in the case of an
acquisition involving a holding company, constitute a majority of the Board of Directors or other
governing body of the holding company) for a period of not less than twelve (12) months following
the closing of such transaction, or (ii) one or more occurrences or events
as a result of which any individual, entity or group (as such term is used in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act) becomes the “beneficial owner” (as such term is defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of thirty percent (30%) or more of the
combined voting power of Newpark’s then outstanding securities.
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Company” or “Newpark” shall mean Newpark Resource, Inc., and its consolidated subsidiaries
and any successor to its business and/or assets which assumes or becomes subject to this Agreement
by operation of law or otherwise.
“Disability” shall mean Executive’s full-time absence from his duties with Newpark, as a
result of incapacity due to physical or mental illness.
“Disability Period” shall mean a period of six (6) months commencing on the first day of a
Disability occurring during the Employment Period.
“Employment Period” shall mean a period (a) commencing when a Potential Change in Control
occurs or, if no Potential Change in Control has occurred with respect to a Change in Control, when
such Change in Control occurs, and (b) ending two years after such Change in Control occurred. If
the event or agreement that gives rise to a Potential Change in Control terminates or is terminated
without the Change in Control contemplated thereby having occurred, the Employment Period shall
terminate upon termination of such event or agreement; however, a new Employment Period shall
commence under the same conditions upon any subsequent Potential Change in Control or Change in
Control.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Good Reason” shall mean any one or more of the following, occurring without Executive’s
express written consent during the Employment Period and within 90 days prior to Executive’s
resignation as a result thereof:
a) the Company adversely changes Executive’s title or changes in any material respect the
responsibilities, authority or status of Executive the substantial or material failure of the
Company to comply with its obligations under this Agreement or any other agreement that may be in
effect that is not remedied within a reasonable time after specific written notice thereof by
Executive to the Company;;
b) the diminution of the Executive’s salary, incentive and or a material diminution of the
Executive’s benefits Newpark’s requiring Executive to be based anywhere outside a 50 mile radius
from the Newpark office at which Executive had been based prior to the Change in Control or
Potential Change in Control, or a 50 mile radius from his present residence, whichever is farther,
except for required travel on Newpark’s business to an extent substantially consistent with
Executive’s present business travel obligations; or
c) the failure of the Company to obtain the assumption of this Agreement or other existing
employment agreement by any successor or assignee of the Company.
2
A “Potential Change in Control” shall be deemed to have occurred on the date that (a) Newpark
first has actual knowledge that any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) has become the beneficial owner (as defined in Rule 13(d)-3
under the Exchange Act), directly or indirectly, or has initiated an offer which has not expired
and which, if accepted by holders of a sufficient number of Newpark’s then outstanding securities,
would result in such person’s becoming the beneficial owner, directly or indirectly, of securities
of Newpark representing thirty percent (30%) or more of the combined voting power of Newpark’s then
outstanding securities, or (b) Newpark enters into an agreement (including a letter of intent) the
consummation of which would result in a Change in Control.
“Start Date” shall mean the first day of an Employment Period.
“Termination Benefit” shall mean the amount determined in accordance with paragraph (a) below.
If Executive is entitled to a Termination Benefit, it shall be paid to Executive no later than the
60th day following the date on which his employment terminates.
a) The Termination Benefit shall be an amount equal to (i) 2 times Executive’s annual base
salary for the fiscal year of Newpark immediately preceding the fiscal year in which the Start Date
occurs plus (ii) 2 time the higher of: a) the highest bonus actually received by the
Executive; or b) the “Target Award Opportunity” to which Executive would be entitled under the 2003
Executive Incentive Compensation Plan of Newpark for the fiscal year of Newpark immediately
preceding the fiscal year in which the Start Date occurs.
3
SCHEDULE TO EXHIBIT 10.3
FORM OF CHANGE OF CONTROL AGREEMENT
FORM OF CHANGE OF CONTROL AGREEMENT
The Change of Control Agreements between Newpark Resources, Inc. and the executive officers
listed below dated January 7, 2008 are identical in all material respects.
• | Xxxxx X. Xxxxx |
||
• | Xxxx X. Xxxxxx |
||
• | Xxxxx Xxxxx |
||
• | Xxxxx Xxxxxx |
4