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 Xxxxx X. Xxxxxxxx (the “Employee”).
RECITALS
Whereas, the Employee is currently
serving as the Vice President and Controller 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Agreement dated January 19, 2000, which is hereby canceled and superseded in its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 support and
encourage the 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 will be extremely
valuable to the Corporation; and
Whereas,
the parties hereto desire to enter into this Agreement setting forth the terms
and conditions of the employment relationship of the Corporation and
Employee.
Now, therefore, it is agreed as
follows:
ARTICLE
I
Term of
Employment
1.1 Term of
Employment. The Corporation shall employ Employee for a period
of one year from the date hereof (the “Initial Term”).
1.2 Extension of Initial
Term. Upon each annual anniversary date of this Agreement,
this Agreement shall be extended automatically for successive terms of one year
each, unless either the Corporation or the Employee gives contrary written
notice to the other not later than the annual 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 Vice
President and Controller 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 Vice President and Controller,
Employee shall be paid a salary at the annual rate of $160,000 (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 provided by the Corporation
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.
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.
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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
Benefit. 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 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 Code.
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).
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.
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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
under this Agreement, with or without a reasonable accommodation, 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 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 such action is ratified 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 5.4. Ratification by
the Board will be effective as of the original date of termination of
Employee.
5.5 Compensation Upon
Termination for Cause or Upon Resignation By Employee. Except
as otherwise set forth in Section 5.8 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. If the Board, pursuant to Section 5.4(b), votes to
classify Employee’s termination as “not for cause,” then Employee shall be
compensated pursuant to Section 5.6 below.
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 six months’ of
Employee’s Salary (payable in 12 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.
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5.7 Compensation
Upon Non-Renewal of Agreement. Except as
otherwise set forth in Section 5.8 hereof, if the Corporation 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 Corporation shall continue to be obligated to pay
Employee’s Salary for a period of six
months 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 Following
a Change in Control. 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 5.2, 5.3 or 5.4 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 two 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 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 5.8, 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 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
final 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.
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“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 5.8(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
(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:
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(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 5.8, above.
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
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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.
8.2 Restrictive
Covenant. During the term of Employee’s employment, the
Employee shall not retain 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.
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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.
(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) 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
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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, trade names, 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.
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.
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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 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.
|
The Corporation:
The
Employee:
|
By: /s/ W. Xxxxx
XxXxxx
Name: W. Xxxxx
XxXxxx
Title: President /s/ Xxxxx X.
Xxxxxxxx
Name: Xxxxx X.
Xxxxxxxx |
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