EXHIBIT 2.1
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT dated as of [ ], 1996 (the "Agreement")
between Xxxxxx Oil Corporation, a Delaware corporation ("Xxxxxx") and Deltic
Timber Corporation, a Delaware corporation ("Deltic").
W I T N E S S E T H:
WHEREAS, Deltic is a wholly owned Subsidiary of Xxxxxx;
WHEREAS, the Board of Directors of Xxxxxx has determined that it
is in the best interest of Xxxxxx, its stockholders and Deltic that all shares
of Deltic Common Stock owned by Xxxxxx be distributed pro rata to Xxxxxx'x
stockholders;
WHEREAS, Xxxxxx and Deltic are concurrently herewith entering into
the Tax Sharing Agreement;
WHEREAS, the parties hereto desire to set forth herein the
principal corporate transactions to be effected in connection with the
Distribution and certain other matters relating to the relationship and the
respective rights and obligations of the parties following the Distribution;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. The following terms, as used herein,
have the following meanings:
"Action" means any claim, suit, action, arbitration, inquiry,
investigation or other proceeding by or before any court, governmental or
other regulatory or administrative agency or commission or any other tribunal.
"Administrative Services" has the meaning set forth in Schedule
6.01.
"Affiliate" means, with respect to any Person, any Person directly
or indirectly controlling, controlled by, or under common control with, such
other Person. For the purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Commission" means the Securities and Exchange Commission.
"Costs" has the meaning set forth in Section 6.04.
"Deltic Business" means the businesses and operations of the
Deltic Group whether conducted prior to, on or after the Distribution Date.
"Deltic Common Stock" means the common stock, par value $.01 per
share, of Deltic, including any associated preferred stock purchase rights.
"Deltic Group" means Deltic and its Subsidiaries as of (and,
except where the context clearly indicates otherwise, after) the Distribution
Date (including all predecessors to such Persons).
"Deltic Indemnitees" has the meaning set forth in Section 4.02.
"Deltic Liabilities" means all (i) Liabilities of the Deltic Group
under this Agreement, (ii) except as otherwise specifically provided herein or
in the Tax Sharing Agreement, other Liabilities, whether arising before, on or
after the Distribution Date, of or relating to the Deltic Group or arising
from or in connection with the conduct of the Deltic Business or the ownership
or use of assets in connection therewith, including without limitation any
Liabilities arising under or relating to Environmental Laws, and (iii)
Liabilities of the Deltic Group set forth in Schedule 5.01 hereto.
Notwithstanding the foregoing, "Deltic Liabilities" shall exclude: (x) any
Liabilities for Taxes (since such Liabilities shall be governed by the Tax
Sharing Agreement) and (y) any Liabilities specifically retained or assumed by
Xxxxxx pursuant to this Agreement.
"Distribution" means a distribution by Xxxxxx on the Distribution
Date of all Deltic Common Stock owned by it to the holders of Xxxxxx Common
Stock as of the Record Date.
"Distribution Agent" means Xxxxxx Trust and Savings Bank.
"Distribution Date" means the business day as of which the
Distribution shall be effected.
"Distribution Documents" means all of the agreements and other
documents entered into in connection with the Distribution as contemplated
hereby, including, without limitation, this Agreement and the Tax Sharing
Agreement.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, codes, plans, permits, licenses and governmental
restrictions, whether now or hereafter in effect, relating to the environment,
the effect of the environment on human health or to emissions, discharges,
releases, manufacturing, storage, processing, distribution, use, treatment,
disposal, transportation or handling of pollutants, contaminants, petroleum or
petroleum products, chemicals or industrial, toxic, radioactive or hazardous
substances or wastes or the clean-up or other remediation thereof.
"Finally Determined" or "Final Determination" means, with respect
to any Action or other matter, that the outcome or resolution of such Action
or matter has been judicially determined by judgment or order not subject to
further appeal or discretionary review.
"Force Majeure" has the meaning set forth in Section 6.05(b).
"Form 10" means the registration statement on Form 10 filed by
Deltic with the Commission on September 9, 1996 to effect the registration of
Deltic Common Stock pursuant to the 1934 Act in connection with the
Distribution, as such registration statement may be amended from time to time.
"Group" means, as the context requires, the Deltic Group or the
Xxxxxx Group.
"Indemnified Party" has the meaning set forth in Section 4.04.
"Indemnifying Party" has the meaning set forth in Section 4.04.
"Information Statement" means the information statement to be sent
to each holder of Xxxxxx Common Stock in connection with the Distribution.
"Liabilities" means any and all claims, debts, liabilities and
obligations, absolute or contingent, matured or not matured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising,
including all costs and expenses relating thereto, and including, without
limitation, those debts, liabilities and obligations arising under this
Agreement, any law, rule, regulation, any action, order, injunction or consent
decree of any governmental agency or entity, or any award of any arbitrator of
any kind, and those arising under any agreement, commitment or undertaking.
"Losses" means, with respect to any Person, any and all damage,
loss, liability and expense incurred or suffered by such Person (including,
without limitation, reasonable expenses of investigation and reasonable
attorneys' fees and expenses in connection with any and all Actions or
threatened Actions).
"Xxxxxx Common Stock" means the common stock, par value $1 per
share, of Xxxxxx.
"Xxxxxx Group" means Xxxxxx and its Subsidiaries (other than any
Subsidiary or member of, or other entity in, the Deltic Group).
"Xxxxxx Indemnitees" has the meaning set forth in Section 4.01.
"Xxxxxx Liabilities" means all (i) Liabilities of the Xxxxxx Group
under this Agreement and (ii) except as otherwise specifically provided herein
or in the Tax Sharing Agreement, other Liabilities, whether arising before, on
or after the Distribution Date, of or relating to the Xxxxxx Group or arising
from or in connection with the conduct of the businesses of the Xxxxxx Group
(other than the Deltic Business) or the ownership or use of assets in
connection therewith, including without limitation any Liabilities arising
under or relating to Environmental Laws. Notwithstanding the foregoing,
"Xxxxxx Liabilities" shall exclude: (x) any Liabilities for Taxes (since such
Liabilities shall be governed by the Tax Sharing Agreement) and (y) any
Liabilities specifically retained or assumed by Deltic pursuant to this
Agreement.
"1933 Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Office Facilities" has the meaning set forth in Schedule 6.01.
"Person" means an individual, corporation, limited liability
company, partnership, association, trust or other entity or organization,
including a governmental or political subdivision or an agency or
instrumentality thereof.
"Record Date" means the date determined by Xxxxxx'x Board of
Directors (or determined by a committee of such Board of Directors or by any
person pursuant to authority delegated to such committee or such person) as
the record date for determining the holders of Xxxxxx Common Stock entitled to
receive Deltic Common Stock pursuant to the Distribution.
"Representatives" has the meaning set forth in Section 7.06.
"Restated Deltic Charter" has the meaning set forth in Section
3.02.
"Services" has the meaning set forth in Schedule 6.01.
"Subsidiary" means, with respect to any Person, any other entity
of which securities or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such Person.
"Tax" means Tax as such term is defined in the Tax Sharing
Agreement.
"Tax Sharing Agreement" means the Tax Sharing Agreement dated as
of the date hereof between Xxxxxx and Deltic.
"Termination Notice" has the meaning set forth in Section 6.02(b).
"Third-Party Claim" has the meaning set forth in Section 4.05.
"Transition Period" has the meaning set forth in Section 6.02(a).
ARTICLE II
ASSET TRANSFERS
Section 2.01. Transfers of Certain Other Assets. Effective prior
to or as of the Distribution Date or as soon as practicable after the
Distribution Date, subject to receipt of any necessary consents or approvals
of third parties or of governmental or regulatory agencies or authorities and
subject to Section 8.02, (a) Xxxxxx shall, or shall cause the relevant member
of the Xxxxxx Group to, assign, contribute, convey, transfer and deliver to
Deltic or to one or more members of the Deltic Group all of the right, title
and interest of Xxxxxx or such member of the Xxxxxx Group in and to all
assets, if any, held by any member of the Xxxxxx Group that relate solely to
the Deltic Business (and not to the businesses of the Xxxxxx Group) and Deltic
shall assume and take transfer of all liabilities associated with such assets,
and (b) Deltic shall, or shall cause the relevant member of the Deltic Group
to, assign, convey, transfer and deliver to Xxxxxx or to one or more members
of the Xxxxxx Group all of the right, title and interest of Deltic or such
member of the Deltic Group in and to all assets, if any, held by any member of
the Deltic Group that relate solely to the businesses of the Xxxxxx Group (and
not to the Deltic Business) and Xxxxxx shall assume and take transfer of all
liabilities associated with such assets.
Section 2.02. Agreement Relating To Consents Necessary To
Transfer Assets. Notwithstanding anything in this Agreement to the contrary,
this Agreement shall not constitute an agreement to transfer or assign any
asset or any claim or right or any benefit arising thereunder or resulting
therefrom if an attempted assignment thereof, without the necessary consent of
a third party, would constitute a breach or other contravention thereof or in
any way adversely affect the rights of Deltic or Xxxxxx thereunder. Deltic
and Xxxxxx will, subject to Section 8.02, use their reasonable efforts to
obtain the consent of any third party or any governmental or regulatory agency
or authority, if any, required in connection with the transfer or assignment
pursuant to Section 2.01 of any such asset or any claim or right or any
benefit arising thereunder. If such required consent is not obtained, or if
an attempted assignment thereof would be ineffective or would adversely affect
the rights of the transferor thereunder so that the intended transferee would
not in fact receive all such rights, Deltic and Xxxxxx will cooperate in a
mutually agreeable arrangement under which the intended transferee would
obtain the benefits and assume the obligations thereunder in accordance with
this Agreement, including sub-contracting, sub-licensing or sub-leasing to
such transferee, or under which the transferor would enforce for the benefit
of the transferee, with the transferee assuming the transferor's obligations,
any and all rights of the transferor against a third party thereto.
ARTICLE III
THE DISTRIBUTION
Section 3.01. Cooperation Prior to the Distribution.
(a) Xxxxxx and Deltic shall prepare, and Deltic shall file with
the Commission, the Form 10, which shall include or incorporate by reference
the Information Statement which shall set forth appropriate disclosure
concerning Deltic and the Distribution. Xxxxxx and Deltic shall use
reasonable efforts to cause the Form 10 to become effective under the 1934 Act
as soon as practicable. After the Form 10 has become effective, Xxxxxx shall
mail the Information Statement to the holders of Xxxxxx Common Stock as of the
Record Date.
(b) Xxxxxx and Deltic shall cooperate in preparing, filing with
the Commission and causing to become effective any registration statements or
amendments thereto that are appropriate to reflect the establishment of or
amendments to any employee benefit and other plans contemplated by this
Agreement.
(c) Xxxxxx and Deltic shall take all such action as may be
necessary or appropriate under the securities or blue sky laws of states or
other political subdivisions of the United States in connection with the
transactions contemplated by this Agreement.
(d) Deltic shall prepare, file and pursue an application to
permit listing of the Deltic Common Stock on the New York Stock Exchange.
Section 3.02. Xxxxxx Board Action; Conditions Precedent to the
Distribution. Xxxxxx'x Board of Directors shall, in its discretion, establish
(or delegate authority to establish) the Record Date and the Distribution Date
and any appropriate procedures in connection with the Distribution. In no
event shall the Distribution occur unless the following conditions shall have
been satisfied:
(i) the Form 10 shall have become effective under the 1934 Act;
(ii) the Deltic Common Stock to be delivered in the Distribution
shall have been approved for listing on the New York Stock Exchange,
subject to official notice of issuance;
(iii) the Board of Directors of Xxxxxx shall be satisfied that
(a) both before and after giving effect to the Distribution, Xxxxxx is
not and would not be insolvent, (b) after giving effect to the
Distribution, Xxxxxx would be able to pay its liabilities as they mature
and become absolute, and Xxxxxx would not have unreasonably small
capital with which to engage in its business and (c) the Distribution
will be made out of surplus within the meaning of Section 170 of the
Delaware General Corporation Law.
(iv) Xxxxxx'x Board of Directors shall have approved the
Distribution and shall not have abandoned, deferred or modified the
Distribution at any time prior to the Distribution Date;
(v) Deltic's Board of Directors, as named in the Information
Statement, shall have been elected by Xxxxxx, as sole stockholder of
Deltic, and Deltic's certificate of incorporation (the "Restated Deltic
Charter") and bylaws, in substantially the forms filed as exhibits to
the Form 10, shall be in effect;
(vi) the Tax Sharing Agreement shall have been duly executed and
delivered by the parties thereto;
(vii) Xxxxxx shall have received an appropriate private letter
ruling issued by the Internal Revenue Service, or an opinion of counsel
satisfactory to Xxxxxx, as to the tax-free nature of the Distribution;
and
(viii) a credit facility shall have been made available to Deltic
by its lenders on terms and in an amount satisfactory to Xxxxxx and
Deltic.
Section 3.03. The Distribution. Subject to the terms and
conditions set forth in this Agreement, (i) prior to the Distribution Date,
Xxxxxx shall deliver to the Distribution Agent for the benefit of holders of
record of Xxxxxx Common Stock on the Record Date, a stock certificate or
certificates, endorsed by Xxxxxx in blank, representing all of the then
outstanding shares of Deltic Common Stock owned by Xxxxxx, (ii) the
Distribution shall be effective as of the close of business, New York time, on
the Distribution Date and (iii) Xxxxxx shall instruct the Distribution Agent
to distribute, on or as soon as practicable after the Distribution Date, to
each holder of record of Xxxxxx Common Stock as of the Record Date one share
of Deltic Common Stock for each 3.5 shares of Xxxxxx Common Stock so held.
Deltic agrees to provide all certificates for shares of Deltic Common Stock
that Xxxxxx shall require (after giving effect to Section 3.04) in order to
effect the Distribution.
Section 3.04. Subdivision of Deltic Common Stock to Accomplish
the Distribution. Effective upon the filing of the Restated Deltic Charter
with the Secretary of State of the State of Delaware, each share of Deltic
Common Stock then issued and outstanding shall, without any action on the part
of the holder thereof, be subdivided and converted into that number of fully
paid and non-assessable shares of Deltic Common Stock issued and outstanding
equal to the number of shares of Xxxxxx Common Stock outstanding on the Record
Date (excluding shares of restricted stock) times 1/3.5 divided by the number
of shares of Deltic Common Stock outstanding immediately prior to such filing.
Section 3.05. Fractional Shares. No certificates representing
fractional shares of Deltic Common Stock will be distributed in the
Distribution. The Distribution Agent will be directed to determine the number
of whole shares and fractional shares of Deltic Common Stock allocable to each
holder of Xxxxxx Common Stock as of the Record Date. Upon the determination
by the Distribution Agent of such number of fractional shares, as soon as
practicable after the Distribution Date, the Distribution Agent, acting on
behalf of the holders thereof, shall sell such fractional shares for cash on
the open market and shall disburse the appropriate portion of the resulting
cash proceeds to each holder entitled thereto.
ARTICLE IV
INDEMNIFICATION
Section 4.01. Deltic Indemnification of the Xxxxxx Group.
(a) Subject to Section 4.03, on and after the Distribution Date,
Deltic shall indemnify, defend and hold harmless the Xxxxxx Group and the
respective directors, officers, employees and Affiliates of each Person in the
Xxxxxx Group (the "Xxxxxx Indemnitees") from and against any and all Losses
incurred or suffered by any of the Xxxxxx Indemnitees (i) arising out of, or
due to the failure of any Person in the Deltic Group to pay, perform or
otherwise discharge, any of the Deltic Liabilities, or (ii) arising out of or
in connection with the provision by the Xxxxxx Group of the Services to the
Deltic Group under Article VI.
(b) Subject to Section 4.03, Deltic shall indemnify, defend and
hold harmless each of the Xxxxxx Indemnitees and each Person, if any, who
controls any Xxxxxx Indemnitee within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act from and against any and all Losses
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Form 10 or any amendment thereof or the Information Statement
(as amended or supplemented if Deltic shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except
insofar as such Losses are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information furnished to
Deltic in writing by Xxxxxx expressly for use therein.
Section 4.02. Xxxxxx Indemnification of Deltic Group.
(a) Subject to Section 4.03, on and after the Distribution Date,
Xxxxxx shall indemnify, defend and hold harmless the Deltic Group and the
respective directors, officers, employees and Affiliates of each Person in the
Deltic Group (the "Deltic Indemnitees") from and against any and all Losses
incurred or suffered by any of the Deltic Indemnitees and arising out of, or
due to the failure of any Person in the Xxxxxx Group to pay, perform or
otherwise discharge, any of the Xxxxxx Liabilities.
(b) Subject to Section 4.03, Xxxxxx shall indemnify, defend and
hold harmless each of the Deltic Indemnitees and each Person, if any, who
controls any Deltic Indemnitee within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act from and against any and all Losses
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Form 10 or any amendment thereof or the Information Statement
(as amended or supplemented if Deltic shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, in each case
to the extent, but only to the extent, that such Losses are caused by any such
untrue statement or omission or alleged untrue statement or omission based
upon information furnished to Deltic in writing by Xxxxxx expressly for use
therein.
Section 4.03. Insurance; Third Party Obligations. Any
indemnification pursuant to Sections 4.01 or 4.02 shall be paid net of the
amount of any insurance or other amounts that would be payable by any third
party to the Indemnified Party (as defined below) in the absence of this
Agreement (irrespective of time of receipt of such insurance or other
amounts). It is expressly agreed that no insurer or any other third party
shall be (i) entitled to a benefit it would not be entitled to receive in the
absence of the foregoing indemnification provisions, (ii) relieved of the
responsibility to pay any claims to which it is obligated or (iii) entitled to
any subrogation rights with respect to any obligation hereunder.
Section 4.04. Notice and Payment of Claims. If any Xxxxxx
Indemnitee or Deltic Indemnitee (the "Indemnified Party") determines that it
is or may be entitled to indemnification by any party (the "Indemnifying
Party") under Article IV (other than in connection with any Action subject to
Section 4.05), the Indemnified Party shall deliver to the Indemnifying Party a
written notice specifying, to the extent reasonably practicable, the basis for
its claim for indemnification and the amount for which the Indemnified Party
reasonably believes it is entitled to be indemnified. Within 30 days after
receipt of such notice, the Indemnifying Party shall pay the Indemnified Party
such amount in cash or other immediately available funds unless the
Indemnifying Party objects to the claim for indemnification or the amount
thereof. If the Indemnifying Party does not give the Indemnified Party
written notice objecting to such indemnity claim and setting forth the grounds
therefore within such 30-day period, the Indemnifying Party shall be deemed to
have acknowledged its liability for such claim and the Indemnified Party may
exercise any and all of its rights under applicable law to collect such
amount. In the event of such a timely objection by the Indemnifying Party,
the amount, if any, that is Finally Determined to be required to be paid by
the Indemnifying Party in respect of such indemnity claim shall be paid by
the Indemnifying Party to the Indemnified Party in cash within 15 days
after such indemnity claim has been so Finally Determined.
Section 4.05. Notice and Defense of Third-Party Claims.
Promptly following the earlier of (i) receipt of notice of the commencement by
a third party of any Action against or otherwise involving any Indemnified
Party or (ii) receipt of information from a third party alleging the existence
of a claim against an Indemnified Party, in either case, with respect to which
indemnification may be sought pursuant to this Agreement (a "Third-Party
Claim"), the Indemnified Party shall give the Indemnifying Party written
notice thereof. The failure of the Indemnified Party to give notice as
provided in this Section 4.05 shall not relieve the Indemnifying Party of its
obligations under this Agreement, except to the extent that the Indemnifying
Party is prejudiced by such failure to give notice. Within 30 days after
receipt of such notice, the Indemnifying Party may (i) by giving written
notice thereof to the Indemnified Party, acknowledge liability for such
indemnification claim and at its option elect to assume the defense of such
Third-Party Claim at its sole cost and expense or (ii) object to the claim for
indemnification set forth in the notice delivered by the Indemnified Party
pursuant to the first sentence of this Section 4.05; provided that if the
Indemnifying Party does not within such 30-day period give the Indemnified
Party written notice objecting to such indemnification claim and setting forth
the grounds therefor, the Indemnifying Party shall be deemed to have
acknowledged its liability for such indemnification claim. If the
Indemnifying Party has elected to assume the defense of a Third-Party Claim,
(x) the defense shall be conducted by counsel retained by the Indemnifying
Party and reasonably satisfactory to the Indemnified Party, provided that the
Indemnified Party shall have the right to participate in such proceedings and
to be represented by counsel of its own choosing at the Indemnified Party's
sole cost and expense; and (y) the Indemnifying Party may settle or compromise
the Third Party Claim without the prior written consent of the Indemnified
Party so long as such settlement includes an unconditional release of the
Indemnified Party from all claims that are the subject of such Third Party
Claim, provided that the Indemnifying Party may not agree to any such
settlement pursuant to which any remedy or relief, other than monetary damages
for which the Indemnifying Party shall be responsible hereunder, shall be
applied to or against the Indemnified Party, without the prior written consent
of the Indemnified Party, which consent shall not be unreasonably withheld.
If the Indemnifying Party does not assume the defense of a Third-Party Claim
for which it has acknowledged liability for indemnification hereunder, the
Indemnified Party may require the Indemnifying Party to reimburse it on a
current basis for its reasonable expenses of investigation, reasonable
attorney's fees and reasonable out-of-pocket expenses incurred in defending
against such Third-Party Claim and the Indemnifying Party shall be bound by
the result obtained with respect thereto by the Indemnified Party; provided
that the Indemnifying Party shall not be liable for any settlement effected
without its consent, which consent shall not be unreasonably withheld. The
Indemnifying Party shall pay to the Indemnified Party in cash the amount, if
any, for which the Indemnified Party is entitled to be indemnified hereunder
within 15 days after such Third Party Claim has been Finally Determined, in
the case of a Third-Party Claim as to which the Indemnifying Party has
acknowledged liability or, in the case of any Third-Party Claim as to which
the Indemnifying Party has not acknowledged liability, within 15 days after
such Indemnifying Party's objection to liability hereunder has been Finally
Determined.
Section 4.06. Contribution. If for any reason the
indemnification provided for in Section 4.01 or 4.02 is unavailable to any
Indemnified Party, or insufficient to hold it harmless, then the Indemnifying
Party shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Losses in such proportion as is appropriate to reflect all
relevant equitable considerations.
Section 4.07. Non-Exclusivity of Remedies. The remedies provided
for in this Article IV are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any Indemnified Party at law or
in equity.
ARTICLE V
EMPLOYEE MATTERS
Section 5.01. Employee Matters Generally. With respect to
employee matters and employee benefits arrangements, the parties hereto agree
as set forth in Schedule 5.01.
ARTICLE VI
CERTAIN TRANSITIONAL SERVICES
Section 6.01. Provision of Services. On the terms and conditions
set forth in this Agreement, in order to assist in effecting an orderly
transition following the Distribution, the Xxxxxx Group will provide to or
perform for the Deltic Group and the Deltic Group will purchase from the
Xxxxxx Group, for the Transition Period, the Services set forth in Schedule
6.01.
Section 6.02. Duration of Provision and Purchase of Services.
(a) The Services shall be provided by the Xxxxxx Group and
purchased by Deltic for a period (the "Transition Period") commencing on the
Distribution Date and ending on the earlier of (i) six (6) months after the
Distribution Date and (ii) with respect to any Service, thirty (30) days after
delivery of a Termination Notice pursuant to Section 6.02(b).
(b) At any time during the Transition Period, Deltic may, at its
election, terminate the provision of any Service by delivery of a notice to
Xxxxxx (a "Termination Notice"), which termination shall become effective with
respect to such Service thirty (30) days after the date of delivery of a
Termination Notice.
Section 6.03. Nature and Scope of Provision of Services. The
nature, scope and timing of provision of the Services to be provided by the
Xxxxxx Group to the Deltic Group hereunder shall be substantially consistent
with the nature, scope and timing of the Xxxxxx Group's comparable services
provided to the Deltic Group prior to the Distribution; provided that Xxxxxx
shall not be obligated to hire additional or replacement employees, or
increase the compensation of its existing employees, in order to provide
the Services to the Deltic Group.
Section 6.04. Charges and Payment for Services. Deltic shall pay
or reimburse Xxxxxx for all costs attributable to the provision or performance
by the Xxxxxx Group of the Services hereunder as set forth in Schedule 6.01
(the "Costs"). All Costs required to be paid or reimbursed to Xxxxxx
hereunder shall be invoiced monthly by Xxxxxx and (ii) invoiced amounts shall
be due and payable by Deltic in cash within thirty (30) days from date of
receipt of such invoice therefor.
Section 6.05. Exculpation; Force Majeure.
(a) No Xxxxxx Indemnitee shall be liable to any other Person for
any Losses directly or indirectly arising out of, relating to or in connection
with the performance or non-performance of the Services hereunder, except to
the extent such Losses are attributable to the Xxxxxx Group's gross negligence
or willful misconduct.
(b) Without limiting the provisions of Section 6.05(a), the
Xxxxxx Group shall not be liable to the Deltic Group for any delay or default
in performance of the Services where occasioned by any cause of any kind or
extent beyond the Xxxxxx Group's control including, by way of example, but not
limitation, any act of God, any act, regulation or law of any government, war,
civil commotion, destruction of production facilities or materials by fire,
earthquake or storm, labor disturbance, epidemic, equipment breakdown or
failure, failure to obtain any consent or approval of a third party necessary
to provide the Services, or failure of suppliers, public utilities or common
carriers ("Force Majeure"). In claiming relief hereunder Xxxxxx shall
promptly notify Deltic in writing of the Force Majeure causing delay or
default in performance, the probable extent to which it will be unable to
perform, and the actions it intends to take to remove such Force Majeure, to
the extent reasonably possible to do so. The Xxxxxx Group shall take
reasonable action within its control to alleviate the Force Majeure causing
delay or default in performance.
ARTICLE VII
ACCESS TO INFORMATION
Section 7.01. Provision of Corporate Records. Immediately prior
to or as soon as practicable following the Distribution Date, each Group
shall provide to the other Group all documents, contracts, books, records
and data (including but not limited to minute books, stock registers, stock
certificates and documents of title) in its possession relating to such
other Group or such other Group's business and affairs; provided that if
any such documents, contracts, books, records or data relate to both Groups
or the business and operations of both Groups, each such Group shall
provide to the other Group true and complete copies of such documents,
contracts, books, records or data.
Section 7.02. Access to Information. From and after the
Distribution Date, each Group shall afford promptly to the other Group and its
accountants, counsel and other designated representatives reasonable access
during normal business hours to all documents, contracts, books, records,
computer data and other data in such Group's possession relating to such other
Group or the business and affairs of such other Group (other than data and
information subject to an attorney/client or other privilege), insofar as such
access is reasonably required by such other Group, including, without
limitation, for audit, accounting, litigation and disclosure and reporting
purposes.
Section 7.03. Litigation Cooperation. Each Group shall use
reasonable efforts to make available, upon written request, its directors,
officers, employees and representatives as witnesses to the other Group and
its accountants, counsel, and other designated representatives, and shall
otherwise cooperate with the other Group, to the extent reasonably required in
connection with any legal, administrative or other proceedings arising out of
either Group's business and operations prior to the Distribution Date in which
the requesting party may from time to time be involved.
Section 7.04. Reimbursement. Each Group providing information or
witnesses to the other Group, or otherwise incurring any expense in connection
with cooperating, under Sections 7.01, 7.02 or 7.03 shall be entitled to
receive from the recipient thereof, upon the presentation of invoices
therefor, payment for all costs and expenses as may be reasonably incurred in
providing such information, witnesses or cooperation.
Section 7.05. Retention of Records. Except as otherwise required
by law or agreed to in writing, each party shall, and shall cause the members
of its respective Group to, retain all information relating to the other
Group's business and operations in accordance with the past practice of such
party. Notwithstanding the foregoing, any party may destroy or otherwise
dispose of any such information at any time, provided that, prior to such
destruction or disposal, (i) such party shall provide not less than 90 days'
prior written notice to the other party, specifying the information proposed
to be destroyed or disposed of, and (ii) if the recipient of such notice shall
request in writing prior to the scheduled date for such destruction or
disposal that any of the information proposed to be destroyed or disposed of
be delivered to such requesting party, the party proposing the destruction or
disposal shall promptly arrange for the delivery of such of the information as
was requested at the expense of the requesting party.
Section 7.06. Confidentiality. Each party shall hold and shall
cause its directors, officers, employees, agents, consultants and advisors
("Representatives") to hold in strict confidence all information (other than
any such information relating solely to the business or affairs of such party)
concerning the other party unless (i) such party is compelled to disclose such
information by judicial or administrative process or, in the opinion of its
counsel, by other requirements of law or (ii) such information can be shown to
have been (A) in the public domain through no fault of such party or (B)
lawfully acquired after the Distribution Date on a non-confidential basis from
other sources. Notwithstanding the foregoing, such party may disclose such
information to its Representatives so long as such Persons are informed by
such party of the confidential nature of such information and are directed by
such party to treat such information confidentially. If such party or any of
its Representatives becomes legally compelled to disclose any documents or
information subject to this Section, such party will promptly notify the other
party so that the other party may seek a protective order or other remedy or
waive such party's compliance with this Section. If no such protective order
or other remedy is obtained or waiver granted, such party will furnish only
that portion of the information which it is advised by counsel is legally
required and will exercise its reasonable efforts to obtain reliable assurance
that confidential treatment will be accorded such information. Such party
agrees to be responsible for any breach of this Section by it and its
Representatives.
Section 7.07. Inapplicability of Article VII to Tax Matters.
Notwithstanding anything to the contrary in Article VII, Article VII shall not
apply with respect to information, records and other matters relating to
Taxes, all of which shall be governed by the Tax Sharing Agreement.
ARTICLE VIII
CERTAIN OTHER AGREEMENTS
Section 8.01. Intercompany Accounts. Except as otherwise
provided in the Tax Sharing Agreement, all intercompany receivable, payable
and loan balances in existence as of the Distribution Date between the Xxxxxx
Group and Deltic Group will be eliminated by payment in full by the party
owing any such obligation.
Section 8.02. Further Assurances and Consents. In addition to
the actions specifically provided for elsewhere in this Agreement, each of the
parties hereto shall use its reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things, reasonably necessary,
proper or advisable under applicable laws, regulations and agreements or
otherwise to consummate and make effective the transactions contemplated by
this Agreement, including but not limited to using its reasonable efforts to
obtain any consents and approvals and to make any filings and applications
necessary or desirable in order to consummate the transactions contemplated by
this Agreement; provided that no party hereto shall be obligated to pay any
consideration therefor (except for filing fees and other similar charges) to
any third party from whom such consents or approvals are requested or to take
any action or omit to take any action if the taking of or the omission to take
such action would be unreasonably burdensome to the party, its Group or its
Group's business.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Notices. All notices and other communications to
any party hereunder shall be in writing (including telex, telecopy or similar
writing) and shall be deemed given when received addressed as follows:
If to Xxxxxx, to:
Xxxxxx Oil Corporation
000 Xxxxx Xxxxxx
Xx Xxxxxx, Xxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: General Counsel
If to Deltic, to:
Deltic Timber Corporation
000 Xxxxx Xxxxxx
Xx Xxxxxx, Xxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: General Counsel
Any party may, by written notice so delivered to the other parties, change the
address to which delivery of any notice shall thereafter be made.
Section 9.02. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived if,
and only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by Xxxxxx and Deltic, or in the case of a waiver, by the party
against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
Section 9.03. Expenses. Except as specifically provided
otherwise in this Agreement or the Tax Sharing Agreement (including, without
limitation, in Articles IV and VI, Sections 7.04, 7.05, 8.01 and 9.07(c) and
Schedules 5.01 and 6.01 of this Agreement), all costs and expenses incurred in
connection with the preparation, execution and delivery of the Distribution
Documents and the consummation of the Distribution and the other transactions
contemplated hereby (including the fees and expenses of all counsel,
accountants and financial and other advisors of both Groups in connection
therewith, and all expenses in connection with preparation, filing and
printing of the Form 10 and the Information Statement) shall be paid by
Xxxxxx; provided that Deltic shall be responsible for and pay the fees,
expenses and other amounts payable to the lenders under Deltic's credit
facilities and all other fees and expenses incurred in connection therewith
(including the fees and expenses of Deltic's counsel in connection with the
preparation and negotiation of all documentation relating to such credit
facilities).
Section 9.04. Successor and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that neither party may
assign, delegate or otherwise transfer any of its rights or obligations under
this Agreement without the consent of the other parties hereto.
Section 9.05. Governing Law. This Agreement shall be construed
in accordance with and governed by the law of the State of Arkansas, without
regard to the conflicts of laws rules of such State.
Section 9.06. Entire Agreement. This Agreement and the other
Distribution Documents constitute the entire understanding of the parties with
respect to the subject matter hereof and thereof and supersedes all prior
agreements, understandings and negotiations, both written and oral, between
the parties with respect to the subject matter hereof and thereof. No
representation, inducement, promise, understanding, condition or warranty not
set forth herein or in the other Distribution Documents has been made or
relied upon by any party hereto. Neither this Agreement nor any provision
hereof is intended to confer upon any Person other than the parties hereto any
rights or remedies hereunder. To the extent that the provisions of this
Agreement are inconsistent with the provisions of any other Distribution
Document, the provisions of such other Distribution Document shall prevail.
Section 9.07. Tax Sharing Agreement; Set-Off; Certain Transfer
Taxes.
(a) Except as otherwise provided herein, this Agreement shall not
govern any Tax, and any and all claims, losses, damages, demands, costs,
expenses or liabilities relating to Taxes shall be exclusively governed by the
Tax Sharing Agreement.
(b) If, at the time Deltic is required to make any payment to
Xxxxxx under this Agreement, Xxxxxx owes Deltic any amount under this
Agreement or the Tax Sharing Agreement, then such amounts shall be offset and
the excess shall be paid by the party liable for such excess. Similarly, if
at the time Xxxxxx is required to make any payment to Deltic under this
Agreement, Deltic owes Xxxxxx any amount under this Agreement or the Tax
Sharing Agreement, then such amounts shall be offset and the excess shall be
paid by the party liable for such excess.
(c) All transfer, documentary, sales, use, stamp, registration
and other such Taxes and fees (including any penalties and interest) incurred
in connection with Section 2.01 of this Agreement shall be borne and paid by
the Person who is receiving the property being transferred. The party that is
required by applicable law to file any Return (as defined in the Tax Sharing
Agreement) or make any payment with respect to any such Tax shall do so, and
the other party shall cooperate with respect thereto as necessary. The
non-paying party shall reimburse the paying party in accordance with this
Section 9.08 within 5 business days after it receives notice of the payment of
such Tax.
Section 9.09. Existing Arrangements. Except as otherwise
contemplated hereby, all prior agreements and arrangements, including those
relating to goods, rights or services provided or licensed, between the Deltic
Group and the Xxxxxx Group shall be terminated effective as of the
Distribution Date, if not theretofore terminated. No such agreements or
arrangements shall be in effect after the Distribution Date unless embodied in
the Distribution Documents.
Section 9.10. Termination Prior to the Distribution. The Xxxxxx
Board of Directors may at any time prior to the Distribution abandon the
Distribution and, by notice to Deltic, terminate this Agreement (whether or
not the Xxxxxx Board of Directors has theretofore approved this Agreement
and/or the Distribution).
Section 9.11. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
IN WITNESS WHEREOF the parties hereto have caused this
Distribution Agreement to be duly executed by these respective authorized
officers as of the date first above written.
XXXXXX OIL CORPORATION
By ____________________________
Name:
Title:
DELTIC TIMBER CORPORATION
By ____________________________
Name:
Title:
Schedule 5.01
EMPLOYEE MATTERS
Section 1. General. Except as otherwise set forth in this
Schedule 5.01, (a) Xxxxxx shall retain any and all liabilities relating to or
arising out of any employee benefit or compensation arrangement (a "Plan") in
respect of any employee or former employee of Xxxxxx and any Affiliate of
Xxxxxx who is not a Transferred Employee (as hereinafter defined), and (b)
Xxxxxx shall have no liability relating to or arising out of any Plan in
respect of Transferred Employees to the extent that any such liability is
incurred or otherwise relates to any period after the Distribution Date.
Section 2. Employees. Except as provided in the following two
sentences, with respect to each individual who is listed on Exhibit A hereto
(collectively, the "Transferred Employees"), Deltic shall cause the
employment of such Transferred Employee to be continued on the Distribution
Date, provided that nothing stated herein shall limit the right of Deltic
or any Subsidiary to terminate the employment of any Transferred Employee
following the Distribution Date or to reduce or otherwise modify the
position, responsibilities, compensation or benefits of any Transferred
Employee at any time. Any individual who is listed on Exhibit A hereto
who is not actively employed, as of the Distribution Date, by reason of
disability, shall not be considered a Transferred Employee as of the
Distribution Date. Upon the return of any such individual to active
employment, Deltic shall cause the employment of such individual to be
continued, consistent with the terms of the first sentence of this Section
2, and such individual shall thereafter be considered a Transferred
Employee. The employee benefit plans and arrangements maintained by Deltic
shall give full service credit for purposes of eligibility and vesting (and
in connection with any such severance or vacation plan or policy, for
purposes of determining the level of benefit) for any service on or prior
to the Distribution Date (or, if later, becoming a Transferred Employee) of
a Transferred Employee with Xxxxxx and its Subsidiaries.
Section 3. Defined Benefit Retirement Plan.
(a) Effective as of the Distribution Date, Xxxxxx shall take all
necessary actions to cause the Retirement Plan of Xxxxxx Oil Corporation (the
"Xxxxxx XX Plan") to be amended (i) to freeze, effective immediately prior to
the Distribution Date, future benefit accruals with respect to Transferred
Employees, and (ii) to provide for the direct trust-to-trust transfer of
assets and the assumption of liabilities as contemplated herein.
(b) Prior to the Distribution Date, Deltic shall establish a
defined benefit pension plan which shall be qualified under Section 401(a) of
the Code (the "Deltic DB Plan") effective as of the Distribution Date covering
Transferred Employees. The Deltic DB Plan shall contain provisions comparable
in all material respects to those of the Xxxxxx XX Plan immediately prior to
the time of adoption of the Deltic DB Plan. As soon as practicable following
the establishment of the Deltic DB Plan, Xxxxxx and Deltic shall file with the
IRS proper notice on IRS Forms 5310 regarding the transfer of assets and
liabilities from the Xxxxxx XX Plan to the Deltic DB Plan.
(c) As soon as practical after the Distribution Date, following
receipt by Deltic and Xxxxxx of favorable determination letters or Deltic's
certification to Xxxxxx, and Xxxxxx'x certification to Deltic, in a manner
reasonably acceptable to both Xxxxxx and Deltic, that the Xxxxxx XX Plan and
Deltic DB Plan are qualified under the applicable provisions of the Code, the
assets and liabilities associated with all Transferred Employees shall be
transferred from the Xxxxxx XX Plan to the Deltic DB Plan. The amount of
assets to be transferred shall be equal to that amount which bears the same
ratio to the assets of the Xxxxxx XX Plan, as of the Distribution Date, as the
accrued liability of the Transferred Employees bears to the accrued liability
of all participants in the Xxxxxx XX Plan, as of the Distribution Date. For
purposes of the preceding sentence, the "accrued liability" of any participant
in the Xxxxxx XX Plan shall be calculated under the entry age normal actuarial
method using the same actuarial assumptions employed for purposes of the most
recent annual valuation of the Xxxxxx XX Plan. The assets and liabilities to
be transferred shall be credited with interest on the balance outstanding from
time to time from the Distribution Date to the actual date of transfer, at the
rate of earnings on assets of the Xxxxxx XX Plan during the period from the
Distribution Date to the last day of the month ending prior to the actual date
of transfer. Notwithstanding the above, the transfer of assets and liabilities
from the Xxxxxx XX Plan to the Deltic DB Plan shall satisfy the requirements
of Code Section 414(l). Deltic and Xxxxxx shall each use best efforts to
effect the asset and liability transfers contemplated in this Section 3 as
soon as practicable.
(d) Following the transfers of assets and liabilities as provided
in paragraph (c) above, Deltic shall have no further liability whatsoever
(either under this Agreement or otherwise) with respect to the participants
under the Xxxxxx XX Plan, and Xxxxxx shall have no further liability
whatsoever (either under this Agreement or otherwise) with respect to the
participants under the Deltic DB Plan.
Section 4. Defined Contribution Retirement Plans.
(a) Effective as of the Distribution Date, Xxxxxx shall amend the
Thrift Plan for Employees of Xxxxxx Oil Corporation (the "Xxxxxx XX Plan") (i)
to cause the active participation of the Transferred Employees therein to
cease as of the Distribution Date, and (ii) to provide for the direct
trust-to-trust transfer of plan accounts as contemplated herein.
(b) Prior to the Distribution Date, Xxxxxx or Deltic shall
establish a defined contribution retirement plan which shall be qualified
under Section 401(a) of the Code (the "Deltic DC Plan") effective as of the
Distribution Date covering Transferred Employees. The Deltic DC Plan shall
contain provisions comparable in all material respects to those of the Xxxxxx
XX Plan immediately prior to the time of adoption of the Deltic DC Plan.
(c) No later than the date of the transfer described herein,
Xxxxxx shall make all applicable 401(k), profit sharing, matching
contributions and qualified non-elective contributions payable under the
Xxxxxx XX Plan with respect to Transferred Employees for periods on or prior
to the Distribution Date and shall be entitled to retain any applicable
reserves or accruals relating thereto. As soon as practicable following the
Distribution Date, Xxxxxx shall cause the trustee of the Xxxxxx XX Plan to
transfer the full account balances of Transferred Employees (and beneficiaries
thereof) under the Xxxxxx XX Plan (which account balances will have been
credited with appropriate earnings attributable to the period from the
Distribution Date to the date of transfer described herein), reduced by any
necessary benefit or withdrawal payments to or in respect of Transferred
Employees occurring during the period from the Distribution Date to the date
of transfer described herein, to the appropriate trustee as designated by
Deltic under the trust agreement forming a part of the Deltic DC Plan. Xxxxxx
and Deltic agree to take such actions and enter into such agreements, if any,
that may be necessary to effect the transfer described herein. In
consideration for the transfer of assets described herein, Deltic shall,
effective as of the date of transfer described herein, assume all of the
obligations of Xxxxxx in respect of the account balances accumulated by
Transferred Employees under the Xxxxxx XX Plan (exclusive of any portion of
such account balances which are paid or otherwise withdrawn prior to the date
of transfer described herein) with respect to the account balances transferred
to the Deltic DC Plan. Xxxxxx hereby indemnifies Deltic against and agrees to
hold it harmless from any liabilities or claims (including claims for benefits
or for breach of fiduciary duties, but excluding claims for benefits to the
extent of the assets transferred hereunder) relating to the Xxxxxx XX Plan (or
the qualified status of that Plan) which arose prior to the transfer of assets
described herein or which relate to the operation or administration of that
Plan prior to the transfer of assets. Deltic hereby indemnifies Xxxxxx
against and agrees to hold it harmless from any liabilities or claims relating
to the qualified status of the Deltic DC Plan or the operation or
administration of that Plan following the transfer of assets described herein.
(d) As of the Distribution Date, Deltic shall assume sponsorship
of the Thrift Plan for Employees of Deltic Farm & Timber, Inc. (the "Deltic
Hourly Plan") and, except as provided in the succeeding sentence, Xxxxxx shall
have no further liability with respect to such Plan. Xxxxxx hereby
indemnifies Deltic against and agrees to hold it harmless from any liabilities
or claims (excluding claims for benefits but including claims for breach of
fiduciary duties relating to the Deltic Hourly Plan or the qualified status of
that Plan) which arose prior to the assumption of sponsorship described herein
or which relate to the operation or administration of that Plan prior to such
assumption of sponsorship. Deltic hereby indemnifies Xxxxxx against and
agrees to hold it harmless from any liabilities or claims relating to the
qualified status of the Deltic Hourly Plan or the operation or administration
of that Plan following the assumption of sponsorship described herein.
Section 5. Welfare Plans and Worker Compensation.
(a) As soon as practicable after the Distribution Date, Deltic
shall establish or designate welfare benefit plans, within the meaning of
Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended, for the benefit of the Transferred Employees. Xxxxxx shall retain
liability for all incurred but unpaid claims of Transferred Employees and
their beneficiaries as of the Distribution Date (or, if later, the date
such persons become Transferred Employees), under the health and life
insurance benefit plans maintained by Xxxxxx. Deltic shall assume as of
the Distribution Date all the obligations of Xxxxxx and any of its
Affiliates for any obligation to provide coverage and benefits for
Transferred Employees and their qualified beneficiaries under Title X of
the Consolidated Omnibus Budget Reconciliation Act of 1985 and Section
4980B of the Code.
(b) Deltic shall be responsible for all workers compensation
claims, whether arising before or after the Distribution Date, with respect to
any Transferred Employee. In addition, Deltic shall be entitled to retain any
applicable reserves or accruals relating thereto.
Section 6. Bonus and Profit Incentive Plans. Xxxxxx shall bear
the full cost of any bonus or short-term incentive award for calendar 1996 for
any Transferred Employee (the amount of which shall be determined in the
ordinary course, consistent with past practice), and Deltic shall have no
liability therefor. Xxxxxx shall have no liability for, and Deltic shall bear
the cost of, any bonus or short-term incentive awards relating to periods
beginning on or after January 1, 1997.
Section 7. Severance. The continued employment by Deltic and its
Affiliates of Transferred Employees after the Distribution Date shall not be
deemed a severance of employment of such Transferred Employees from Xxxxxx
for purposes of any policy, plan, program or agreement of Xxxxxx or any of its
Subsidiaries that provides for the payment of severance, salary continuation or
similar benefits.
Section 8. Nonqualified Deferred Compensation. Deltic and its
Affiliates shall assume as of the Distribution Date all of the obligations and
liabilities of Xxxxxx and any of its Affiliates for any Transferred Employee
under any nonqualified deferred compensation plan or arrangement maintained by
Xxxxxx.
Section 9. No Third Party Beneficiaries. Neither Transferred
Employees nor any current, former or retired employee of Xxxxxx or its
affiliates shall be entitled to enforce the provisions of this Schedule
against the respective parties as third party beneficiaries thereof.
Exhibit A to Schedule 5.01
Transferred Employees
Schedule 6.01
SERVICES DURING TRANSITION PERIOD
Set forth below are the services (each numbered item, a "Service" and
collectively, the "Services") that the Xxxxxx Group will provide to the Deltic
Group during the Transition Period and the Costs related thereto.
Services Costs (per month)
-------- -----------------
Office Facilities - Rental.
1. Xxxxxx shall provide the Deltic Group with use $ 4,200
of the office facilities at 000 Xxxxx Xxxxxx,
Xx Xxxxxx, Xxxxxxxx that are occupied and in use
by the Deltic Group as of the Distribution Date (the
"Office Facilities").
Office Facilities - Usage.
2. The Xxxxxx Group shall provide the Deltic Group with $15,750
services substantially similar to those provided to the
Deltic Group prior to the Distribution Date in connection
with the Deltic Group's usage of the Office Facilities in
the ordinary course of business. Such services shall
include, without limitation: (i) janitorial service; (ii)
telephone service; (iii) provision of utilities, including
electricity, gas and water; (iv) provision of office
equipment for use by the Deltic Group, including
photocopying equipment, fax machines and personal
computers; (v) contract mechanical maintenance service;
(vi) contract fire system maintenance; (vii) contract
elevator maintenance; (viii) payment of property taxes
related to the Office Facilities; (ix) provision of insurance
for the Office Facilities; and (x) provision of building
engineers and maintenance supplies related to the Office
Facilities.
Administrative Functions.
The Xxxxxx Group shall provide the Deltic Group with such
administrative services as are reasonably required by the
Deltic Group and are substantially similar to those provided
to the Deltic Group by the Xxxxxx Group prior to the
Distribution Date in the following areas (the "Administrative
Services"):
3. Controllers $ 6,900
4. Environmental Affairs 6,700
5. Human Resources 14,250
6. Information Systems 5,725
7. Insurance 8,000
8. Law 14,400
9. Purchasing 1,500
10. Treasury and Tax(1) 15,200
-------
$72,675
=======
In the event that there
is a significant
increase or decrease in
the level of activity
required by Xxxxxx
personnel in
providing any of the
Administrative
Services, Xxxxxx and
Deltic hereby agree
to renegotiate in
good faith the Costs
associated therewith.
__________
(1) Includes preparation and filing of consolidated Federal Tax Returns for
all Pre-Distribution Periods (in each case, as defined in the Tax
Sharing Agreement) pursuant to Section 2(c) of the Tax Sharing
Agreement.
11. Insurance
The insurance policies listed below (with In the event that Xxxxxx
applicable expiration dates) have been incurs any retroactive
purchased by Xxxxxx and provide coverage premium adjustments or
for various activities and assets of the refunds attributable to
Deltic Group. Xxxxxx has previously claims or coverage
collected from Deltic its pro rata portion applicable to the Deltic
of the initial premiums under such policies. Group, Xxxxxx shall
For each policy, prior to expiration Xxxxxx invoice or credit Deltic
shall assist Deltic in processing claims for such charges, as
and such other matters as may be requested applicable.
by Deltic. Following expiration of each policy,
Xxxxxx shall not be obligated to renew or
replace such policy for the benefit of Deltic
and Deltic may procure any replacement or
other policy as it may desire.
Expiration
Policy Insurance Carrier Date
------ ----------------- ----------
Workers' Reliance National 06/01/97
Compensation Indemnity Company
Automobile Reliance National 06/01/97
Liability Indemnity Company
General Reliance National 06/01/97
Liability Indemnity Company
Excess Lloyds/XL/OCIL/AC 04/30/97
Liability
Business Life Insurance 07/02/97
Travel/ Company of North
Accident America
Directors & National Union Fire 09/30/97
Officers Insurance Company
Liability
