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EXHIBIT 10.7
EXECUTIVE SEVERANCE AGREEMENT, dated as of December 1, 1995, by and
between Sonat Inc., a Delaware
corporation ("Sonat"), and Xxxxxxx X. Xxxxx ("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; and
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;
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
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
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retirement at or after the normal retirement date as provided under the
Sonat Inc. Retirement Plan (the "Retirement Plan") as in effect
immediately preceding such date ("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 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
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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 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
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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 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 (i)
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 (ii) 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 (i) and (ii): (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
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and the date of Termination, and shall not be affected by the
settlement option or date of commencement of any benefits 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
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,
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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 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 Benefits 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
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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.
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
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may have, shall have 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 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
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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
(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
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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 which 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.
7. Term of Agreement. This Agreement shall terminate on April 30, 1996;
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, 1996 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.
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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 cancelled
except by written agreement of the parties.
(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.
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(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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
1st day of December, 1995.
SONAT INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
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Xxxxxx X. Xxxxx, Xx.
Chairman of the Board, President
and Chief Executive Officer
/s/ Xxxxxxx X. Xxxxx
----------------------------------
Xxxxxxx X. Xxxxx
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SCHEDULE
SONAT INC. EXECUTIVES SIGNING NEW SEVERANCE AGREEMENT
The following executives of Sonat Inc. executed severance agreements
substantially identical to the Executive Severance Agreement dated December 1,
1995, between Sonat Inc. and Xxxxxxx X. Xxxxx:
Xxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxx, Xx.
Xxxxx X. Xxxxxxxx
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