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EXHIBIT 10.17(b)
AGREEMENT
THIS AGREEMENT, dated February 4, 1997, is made by and between UNION
PACIFIC RESOURCES GROUP INC., a Utah corporation (the "Company"), and XXXXXX
XXXXXXX, III (the "Executive").
WHEREAS, the Company considers it essential to the best interests of
its shareholders to facilitate the recruitment and xxxxxx the continuous
employment of senior executive officers; and
WHEREAS, the Board recognizes that, as is the case with many publicly
held corporations, the possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it raises, may result in
the departure or distraction of the Company's senior executive officers to the
detriment of the Company and its shareholders; and
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of the
Company's senior executive officers, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
1. DEFINED TERMS. The definitions of capitalized terms used in
this Agreement are provided in the last Section hereof.
2. COMPANY'S COVENANTS SUMMARIZED. In order to induce the
Executive to remain in the employ of the Company and in consideration of the
Executive's covenants set forth in Section 3 hereof, the Company agrees, under
the conditions described herein, to pay the Executive
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the Severance Payments and the other payments and benefits described herein in
the event the Executive's employment with the Company is (or, under the terms
of this Agreement, is deemed to have been) terminated following a Change in
Control and during the term of this Agreement. Except as provided herein, no
amount or benefit shall be payable under this Agreement unless there shall have
been (or, under the terms of this Agreement, there shall be deemed to have
been) a termination of the Executive's employment with the Company following a
Change in Control and during the term of this Agreement. This Agreement shall
not be construed as creating an express or implied contract of employment and,
except as otherwise agreed in writing between the Executive and the Company,
the Executive shall not have any right to be retained in the employment of the
Company.
3. THE EXECUTIVE'S COVENANTS. The Executive agrees that, subject
to the terms and conditions of this Agreement, in the event of a Potential
Change in Control during the term of this Agreement, the Executive will remain
in the employ of the Company until the earliest of (i) a date which is six (6)
months following the date of such Potential Change in Control, (ii) the date of
a Change in Control, (iii) the date of termination by the Executive of the
Executive's employment for Good Reason or by reason of death, Disability or
Retirement, or (iv) the termination by the Company of the Executive's
employment for any reason.
4. TERM OF AGREEMENT. This Agreement shall commence on the date
hereof and shall continue in effect for a period of thirty-six (36) months
beyond the month in which a Change in Control occurs (or, if later, thirty-six
(36) months beyond the consummation of the transaction the approval of which by
the Company's shareholders constitutes a Change in Control under Section
15(E)(III) or (IV) hereof).
5. COMPENSATION OTHER THAN SEVERANCE PAYMENTS.
5.1 Following a Change in Control and during the term of
this Agreement, if the Executive fails to perform the Executive's full-time
duties with the Company as a result of
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incapacity due to physical or mental illness, the Company shall pay the
Executive's full salary to the Executive at the rate in effect at the
commencement of the relevant period, together with all compensation and
benefits payable to the Executive under the terms of any compensation or
benefits plan, program or arrangement maintained by the Company during such
period, until the Executive's employment is terminated by the Company for
Disability.
5.2 If the Executive's employment is terminated for any
reason following a Change in Control and during the term of this Agreement, the
Company shall pay the Executive's full salary to the Executive through the Date
of Termination at the rate in effect at the time the Notice of Termination is
given, together with all compensation and benefits to which the Executive is
entitled in respect of all periods preceding the Date of Termination under the
terms of the Company's compensation and benefits plans, programs or
arrangements.
5.3 If the Executive's employment is terminated for any
reason following a Change in Control and during the term of this Agreement, the
Company shall pay the Executive's normal post-termination compensation and
benefits to the Executive as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
with, the Company's retirement, insurance and other compensation or benefit
plans, programs and arrangements.
6. SEVERANCE PAYMENTS.
6.1 Subject to Section 6.2 hereof, the Company shall pay
the Executive the payments described in this Section 6.1 (the "Severance
Payments") upon the termination of the Executive's employment following a
Change in Control and during the term of this Agreement, in addition to any
payments and benefits to which the Executive is entitled under Section 5
hereof, unless such termination is (i) by the Company for Cause, (ii) by reason
of the Executive's death or Disability, or (iii) by the Executive without Good
Reason. For purposes of this Agreement, the Executive's employment shall be
deemed to have been terminated by the Company without Cause
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or by the Executive with Good Reason following a Change in Control if,
following a Potential Change in Control, (i) the Executive's employment is
terminated without Cause prior to a Change in Control and such termination was
at the request or direction of a Person who has entered into an agreement with
the Company the consummation of which would constitute a Change in Control,
(ii) the Executive terminates his employment with Good Reason prior to a Change
in Control and the circumstance or event which constitutes Good Reason occurs
at the request or direction of such Person, or (iii) the Executive's employment
is terminated without Cause prior to a Change in Control and such termination
is otherwise in connection with or in anticipation of a Change in Control which
actually occurs. For purposes of any determination regarding the applicability
of the immediately preceding sentence, any position taken by the Executive
shall be presumed to be correct unless the Company establishes to the Board by
clear and convincing evidence that such position is not correct.
Notwithstanding the foregoing, if the Executive terminates employment with the
Company by means of a Discretionary Termination, he shall be entitled to 50% of
the Severance Benefits set forth in (A) - (F) below.
(A) In lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in
lieu of any severance benefit otherwise payable to the Executive, the
Company shall pay to the Executive a lump sum severance payment, in
cash, equal to two and one-half (2.5) times the sum of (i) the greater
of the Executive's annual base salary in effect immediately prior to
the occurrence of the event or circumstance upon which the Notice of
Termination is based or the Executive's annual base salary in effect
immediately prior to the Change in Control, and (ii) the greater of
the average of the annual bonuses earned or received by the Executive
from the Company or its subsidiaries in respect of the two (2)
consecutive fiscal years immediately preceding that in which the Date
of Termination occurs or the average of the annual bonuses so earned
or received in respect of the two (2) consecutive fiscal years
immediately preceding that in which the Change in Control occurs.
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(B) Notwithstanding any provision of any annual
or long-term incentive plan to the contrary, the Company shall pay to
the Executive a lump sum amount, in cash, equal to the sum of (i) any
incentive compensation which has been allocated or awarded to the
Executive for a completed fiscal year or other measuring period
preceding the Date of Termination under any such plan but which, as of
the Date of Termination, is contingent only upon the continued
employment of the Executive to a subsequent date or otherwise has not
been paid, and (ii) a pro rata portion to the Date of Termination of
the aggregate value of all contingent incentive compensation awards to
the Executive for all then uncompleted periods under any such plan,
calculated as to each such award by multiplying the award that the
Executive would have earned on the last day of the performance award
period, assuming the achievement, at the target level, of the
individual and corporate performance goals established with respect to
such award, by the fraction obtained by dividing the number of full
months and any fractional portion of a month during such performance
award period through the Date of Termination by the total number of
months contained in such performance award period.
(C) Notwithstanding any provision of the
Company's supplemental pension and thrift plans (the "Supplemental
Plans") to the contrary, upon the termination of the Executive's
employment by the Executive for Good Reason or by the Company, in
either case at any time following the occurrence of a Change in
Control and during the term of this Agreement, the Executive shall be
deemed to have an additional thirty (30) months of benefit credit
under each of the Supplemental Plans and shall be entitled to receive
such additional credit either (1) as part of the benefit otherwise
payable under the Supplemental Plan or (2) as a lump sum.
(D) For the thirty (30) month period immediately
following the Date of Termination, the Company shall arrange to
provide the Executive with life, disability, accident and health
insurance benefits substantially similar to those which the Executive
is receiving immediately prior to the Notice of Termination (without
giving effect to any
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amendment to such benefits made subsequent to a Change in Control
which amendment adversely affects in any manner the Executive's
entitlement to or the amount of such benefits); provided, however,
that, unless the Executive consents to a different method (after
taking into account the effect of such method on the calculation of
"parachute payments" pursuant to Section 6.2 hereof), such health
insurance benefits shall be provided though a third-party insurer.
Benefits otherwise receivable by the Executive pursuant to this
Section 6.1(D) shall be reduced to the extent comparable benefits are
actually received by the Executive without cost during the thirty (30)
month period following the Executive's termination of employment (and
any such benefits actually received by the Executive shall be reported
to the Company by the Executive).
(E) If the Executive would have become entitled
to benefits under the Company's post-retirement health care or life
insurance plans had the Executive's employment terminated at any time
during the period of thirty (30) months after the Date of Termination,
the Company shall provide such post-retirement health care or life
insurance benefits to the Executive commencing on the later of (i) the
date that such coverage would have first become available and (ii) the
date that like benefits described in subsection (D) of this Section
6.1 terminate.
(F) From and after the occurrence of Change in
Control and notwithstanding any provision in the Company's 1995 Stock
Option and Retention Stock Plan (or any agreement entered into
thereunder or any successor stock compensation plan or agreement
thereunder) to the contrary, any Option held by the Executive shall be
fully exercisable and any restriction on any Retention Share held by
the Executive shall lapse or be deemed fully satisfied, as applicable.
6.2 (A) Whether or not the Executive becomes entitled
to the Severance Payments, if any payment or benefit received or to be received
by the Executive in connection with a Change in Control or the termination of
the Executive's employment (whether pursuant to
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the terms of this Agreement or any other plan, arrangement or agreement with
the Company, any Person whose actions result in a Change in Control or any
Person affiliated with the Company or such Person) (all such payments and
benefits, including the Severance payments, being hereinafter called "Total
Payments") will be subject (in whole or part) to the Excise Tax, then the
Company shall pay to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the Executive, after deduction
of any Excise Tax on the Total Payments and any federal, state and local income
and employment tax and Excise Tax upon the Gross-Up-Payment, shall be equal to
the Total Payments. For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay federal income and employment
taxes at the highest marginal rate of federal income and employment taxation in
the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of the Executive's residence on the Date of Termination, net of the
maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes.
(B) For purposes of determining whether any of
the Total Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (i) all of the Total Payments shall be treated as "parachute
payments" within the meaning of section 280G(b)(2) of the Code, unless in the
opinion of tax counsel (the "Tax Counsel") reasonably acceptable to the
Executive and selected by the accounting firm (the "Auditor") which was,
immediately prior to the Change in Control, the Company's independent auditor,
such other payments or benefits (in whole or in part) do not constitute
parachute payments, including by reason of section 280G(b)(4)(A) of the Code,
(ii) all "excess parachute payments" within the meaning of section 280G(b)(1)
of the Code shall be treated as subject to the Excise Tax unless, in the
opinion of Tax Counsel, such excess parachute payments (in whole or part)
represent reasonable compensation for services actually rendered, within the
meaning of section 280G(b)(4)(B) of the Code, in excess of the Base Amount
allocable to such reasonable compensation, or are otherwise not subject to the
Excise Tax, and (iii) the value of any noncash benefits or any deferred payment
or benefit shall be determined by the Auditor in accordance with the principles
of section 280G(d)(3) and (4) of the Code. Prior to the payment
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date set forth in Section 6.3 hereof, the Company shall provide the Executive
with its calculation of the amounts referred to in this Section 6.2(B) and such
supporting materials as are reasonably necessary for the Executive to evaluate
the Company's calculations. If the Executive disputes the Company's
calculations (in whole or in part), the reasonable opinion of Tax Counsel with
respect to the matter in dispute shall prevail.
(C) In the event that (i) amounts are paid to the
Executive pursuant to subsection (A) of this Section 6.2, and (ii) the Excise
Tax is subsequently determined to be less than the amount taken into account
hereunder at the time of termination of the Executive's employment, the
Executive shall repay to the Company, at the time that the amount of such
reduction in Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction plus interest on the amount of such
repayment at the rate provided in section 1274(b)(2)(B) of the Code. In the
event that the Excise Tax is determined to exceed the amount taken into account
hereunder at the time of the termination of the Executive's employment
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment to the Executive in respect of such excess (plus
any interest, penalties or additions payable by the Executive with respect to
such excess and such portion) at the time that the amount of such excess is
finally determined.
6.3 The payments provided for in subsections (A), (B)
and, if applicable, (C) of Section 6.1 hereof and Section 6.2 hereof shall be
made not later than the fifth day following the Date of Termination; provided,
however, that if the amounts of such payments, or, if applicable, the Excise
Tax, cannot be finally determined on or before such day, the Company shall pay
to the Executive on such day an estimate, as determined in good faith by the
Executive or, in the case of Gross-Up Payments under Section 6.2 hereof, in
accordance with Section 6.2 hereof, of the minimum amount of such payments to
which the Executive is clearly entitled and shall pay the remainder of such
payments (together with interest at the rate provided in section 1274(b)(2)(B)
of the Code) as soon as the amount thereof can be determined but in no event
later than the thirtieth
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(30th) day after the Date of Termination. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to the Executive, payable on
the fifth (5th) business day after demand by the Company (together with
interest at the rate provided in section 1274(b)(2) (B) of the Code). At the
time that payments are made under this Section, the Company shall provide the
Executive with a written statement setting forth the manner in which such
payments were calculated and the basis for such calculations including, without
limitation, any opinions or other advice the Company has received from outside
counsel, auditors or consultants (and any such opinions or advice which are in
writing shall be attached to the statement). In the event the Company should
fail to pay when due the amounts described in subsections (A), (B) and, if
applicable, (C) of Section 6.1 hereof or Section 6.2 hereof, the Executive
shall also be entitled to receive from the Company an amount representing
interest on any unpaid or untimely paid amounts from the due date, as
determined under this Section 6.3 (without regard to any extension of the Date
of Termination pursuant to Section 7.3 hereof), to the date of payment at a
rate equal to the prime rate of Citibank as in effect from time to time after
such due date.
6.4 The Company also shall pay to the Executive all legal
fees and expenses incurred by the Executive in disputing in good faith any
issue relating to the termination of the Executive's employment following a
Change in Control (including a termination of employment following a Potential
Change in Control if the Executive alleges in good faith that such termination
will be deemed to have occurred following a Change in Control pursuant to the
second sentence of Section 6.1 hereof) or in seeking in good faith to obtain or
enforce any benefit or right provided by this Agreement or in connection with
any tax audit or proceeding to the extent attributable to the application of
section 4999 of the Code to any payment or benefit provided hereunder. Such
payments shall be made as such fees and expenses are incurred by the Executive,
but in no event later than five (5) business days after delivery of the
Executive's written requests for payment accompanied with such evidence of fees
and expenses incurred as the Company reasonably may require.
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7. TERMINATION PROCEDURES AND COMPENSATION DURING DISPUTE.
7.1 NOTICE OF TERMINATION. After a Change in Control and
during the term of this Agreement, any purported termination of the Executive's
employment (other than by reason of death) shall be communicated by written
Notice of Termination from one party hereto to the other party hereto in
accordance with Section 10 hereof. For purpose of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so indicated. Further, a
Notice of Termination for Cause is required to include a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters (3/4) of
the entire membership of the Board at a meeting of the Board which was called
and held for the purpose of considering such termination (after reasonable
notice to the Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, the Executive was guilty of conduct set forth in
clause (i) or (ii) of the definition of Cause herein, and specifying the
particulars thereof in detail.
7.2 DATE OF TERMINATION. "Date of Termination," with
respect to any purported termination of the Executive's employment after a
Change in Control and during the term of this Agreement, shall mean (i) if the
Executive's employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that the Executive shall not have
returned to the full-time performance of the Executive's duties during such
thirty (30) day period), and (ii) if the Executive's employment is terminated
for any other reason, the date specified in the Notice of Termination (which,
in the case of a termination by the Company, shall not be less than thirty (30)
days (except in the case of a termination for Cause) and, in the case of a
termination by the Executive, shall not be less than fifteen (15) days nor more
than sixty (60) days, respectively, from the date such Notice of Termination is
given).
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7.3 DISPUTE CONCERNING TERMINATION. If within fifteen
(15) days after any Notice of Termination is given, or, if later, prior to the
Date of Termination (as determined without regard to this Section 7.3), the
party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be
extended until the earlier of (i) the date on which the term of this Agreement
ends (taking into account any extensions thereof that shall have occurred) or
(ii) the date on which the dispute is finally resolved, either by mutual
written agreement of the parties or by a final judgment, order or decree of a
court of competent jurisdiction (which is not appealable or with respect to
which the time for appeal therefrom has expired and no appeal has been
perfected); provided, however, that the Date of Termination shall be extended
by a notice of dispute given by the Executive only if such notice is given in
good faith and the Executive pursues the resolution of such dispute with
reasonable diligence.
7.4 COMPENSATION DURING DISPUTE. If a purported
termination occurs following a Change in Control and during the term of this
Agreement and the Date of Termination is extended in accordance with Section
7.3 hereof, the Company shall continue to pay the Executive the full
compensation in effect when the notice giving rise to the dispute was given
(including, but not limited to, salary) and continue the Executive as a
participant in all compensation, benefit and insurance plans in which the
Executive was participating when the notice giving rise to the dispute was
given, until the Date of Termination, as determined in accordance with Section
7.3 hereof. Amounts paid under this Section 7.4 are in addition to all other
amounts due under this Agreement s and shall not be offset against or reduce
any other amounts due under this Agreement.
8. NO MITIGATION. The Company agrees that, if the Executive's
employment with the Company terminates during the term of this Agreement, the
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company pursuant to Section
6 hereof or Section 7.4 hereof. Further, the amount of any payment or benefit
provided for in this Agreement (other than Section 6.1(D) hereof) shall not be
reduced
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by any compensation earned by the Executive as the result of employment by
another employer, by retirement benefits, by offset against any amount claimed
to be owed by the Executive to the Company, or otherwise.
9. SUCCESSORS; BINDING AGREEMENT.
9.1 In addition to any obligations imposed by law upon
any successor to the Company, the Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle the Executive to compensation from the
Company in the same amount and on the same terms as the Executive would be
entitled to hereunder if the Executive were to terminate the Executive's
employment for Good Reason after a Change in Control, except that, for purposes
of implementing the foregoing, the date on which such succession becomes
effective shall be deemed the Date of Termination.
9.2 This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death
of the Executive) if the Executive had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the executors, personal representatives or administrators of
the Executive's estate.
10. NOTICES. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage
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prepaid, addressed, if to the Executive, to the address shown for the Executive
in the personnel records of the Company and, if to the Company, to the address
set forth below, or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon actual receipt:
To the Company:
Union Pacific Resources Group Inc.
000 Xxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
Attention: Vice President and General Counsel
11. MISCELLANEOUS. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. This Agreement supersedes any
other agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof (i.e., benefits payable to the
Executive by reason of the occurrence of a Change in Control) which have been
made by either party. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Texas. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any
payments provided for hereunder shall be paid net of any applicable withholding
required under federal, state or local law and any additional withholding to
which the Executive has agreed. The obligations of the Company and the
Executive under Sections 6 and 7 hereof shall survive the expiration of the
term of this Agreement. All obligations of the Company under this Agreement
shall remain unfunded and unsecured for federal income tax purposes and the
Executive's right to any payments shall be that of a general creditor of the
Company. Nevertheless, the Company shall establish a so-called "rabbi trust"
for purposes of providing payments hereunder and, in the event of a Potential
Change
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in Control, the Company shall immediately transfer to such rabbi trust
sufficient funds to satisfy all payment obligations to the Executives
hereunder.
12. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. SETTLEMENT OF DISPUTES; ARBITRATION. All claims by the
Executive for benefits under this Agreement shall be directed to and determined
by the Board and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to the Executive in writing
and shall set forth the specific reasons for the denial and the specific
provisions of this Agreement relied upon. The Board shall afford a reasonable
opportunity to the Executive for a review of the decision denying a claim and
shall further allow the Executive to appeal to the Board a decision of the
Board within sixty (60) days after notification by the Board that the
Executive's claim has been denied. Any further dispute, controversy or claim
arising out of or relating to this Agreement, or the interpretation or alleged
breach thereof, shall be settled by arbitration in accordance with the Center
for Public Resources, Inc. Non-Administered Arbitration Rules, by three
arbitrators, none of whom shall be appointed by either party. The arbitration
shall be governed by United States Arbitration Act 9 U.S.C. Section 1-16, and
judgment upon the award rendered by the arbitrators may be entered by any court
having jurisdiction thereof. The place of the arbitration shall be Ft. Worth,
Texas. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. Notwithstanding any provision of this Agreement to the contrary,
the Executive shall be entitled to seek specific performance of the Executive's
right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
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15. DEFINITIONS. For purposes of this Agreement, the following
terms shall have the meanings indicated below:
(A) "Base Amount" shall have the meaning set
forth in section 280G(b)(3) of the Code.
(B) "Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.
(C) "Board" shall mean the Board of Directors of
the Company.
(D) "Cause" for termination by the Company of the
Executive's employment shall mean (i) the willful and continued failure by the
Executive to substantially perform the Executive's duties with the Company
(other than any such failure resulting from the Executive's incapacity due to
physical or mental illness or any such actual or anticipated failure after the
issuance of a Notice of Termination for Good Reason by the Executive pursuant
to Section 7.1 hereof) after a written demand for substantial performance is
delivered to the Executive by the Board, which demand specifically identifies
the manner in which the Board believes that the Executive has not substantially
performed the Executive's duties, or (ii) the willful engaging by the Executive
in conduct which is demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise. For purposes of clauses (i) and (ii) of
this definition, (x) no act, or failure to act, on the Executive's part shall
be deemed "willful" unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that the Executive's act, or failure
to act, was in the best interest of the Company and (y) in the event of a
dispute concerning the application of this provision, no claim by the Company
that Cause exists shall be given effect unless the Company establishes to the
Board by clear and convincing evidence that Cause exists.
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(E) A "Change in Control" shall be deemed to have
occurred if the event set forth in any one of the following paragraphs shall
have occurred:
(I) any Person is or becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such Person any
securities acquired directly from the Company or its
affiliates other than in connection with the
acquisition by the Company or its affiliates of a
business) representing 15% or more of either the then
outstanding shares of common stock of the Company or
the combined voting power of the Company's then
outstanding securities; or
(II) the following individuals cease for
any reason to constitute a majority of the number of
directors then serving: individuals who, on the date
hereof, constitute the Board and any new director
(other than a director whose initial assumption of
office is in connection with an actual or threatened
election contest, including but not limited to a
consent solicitation, relating to the election of
directors of the Company (as such terms are used in
Rule 14a-11 of Regulation 14A under the Exchange
Act)) whose appointment or election by the Board or
nomination for election by the Company's shareholders
was approved by a vote of at least two-thirds ( 2/3)
of the directors then still in office who either were
directors on the date hereof or whose appointment,
election or nomination for election was previously so
approved; or
(III) the shareholders of the Company
approve a merger or consolidation of the Company with
any other corporation or approve the issuance of
voting securities of the Company in connection with a
merger or consolidation of the Company (or any direct
or indirect subsidiary of the Company) pursuant to
applicable stock exchange requirements, other than
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(i) a merger or consolidation which would result in
the voting securities of the Company outstanding
immediately prior to such merger or consolidation
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving entity or any parent
thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under
an employee benefit plan of the Company, at least 50%
of the combined voting power of the voting securities
of the Company or such surviving entity or any parent
thereof outstanding immediately after such merger or
consolidation, or (ii) a merger or consolidation
effected to implement a recapitalization of the
Company (or similar transaction) in which no Person
is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not
including in the securities Beneficially Owned by
such Person any securities acquired directly from the
Company or its affiliates other than in connection
with the acquisition by the Company or its affiliates
of a business) representing 15% or more of either the
then outstanding shares of common stock of the
Company or the combined voting power of the Company's
then outstanding securities; or
(IV) the shareholders of the Company
approve a plan of complete liquidation or dissolution
of the Company or an agreement for the sale or
disposition by the Company of all or substantially
all of the Company's assets, other than a sale or
disposition by the Company of all or substantially
all of the Company's assets to an entity, at least
50% of the combined voting power of the voting
securities of which are owned by Persons in
substantially the same proportions as their ownership
of the Company immediately prior to such sale.
Notwithstanding the foregoing, no "Change in Control" shall be deemed to have
occurred if there is consummated any transaction or series of integrated
transactions immediately following which
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the record holders of the common stock of the Company immediately prior to such
transaction or series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or substantially all of the
assets of the Company immediately following such transaction or series of
transactions.
(F) "Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
(G) "Company" shall mean Union Pacific Resources
Group Inc. and, except in determining under Section 15(E) hereof whether or not
any Change in Control of the Company has occurred, shall include its
subsidiaries and any successor to its business and/or assets which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
(H) "Date of Termination" shall have the meaning
stated in Section 7.2 hereof.
(I) "Disability" shall be deemed the reason for
the termination by the Company of the Executive's employment, if, as a result
of the Executive's incapacity due to physical or mental illness, the Executive
shall have been absent from the full-time performance of the Executive's duties
with the Company for a period of six (6) consecutive months, the Company shall
have given the Executive a Notice of Termination for Disability following such
consecutive six (6) month period, and within thirty (30) days after such Notice
of Termination is given, the Executive shall not have returned to the full-time
performance of the Executive's duties.
(J) "Discretionary Termination" shall mean a
voluntary termination of employment by the Executive at any time during the
30-day period immediately following the first anniversary of the Change in
Control.
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19
(K) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(L) "Excise Tax" shall mean any excise tax
imposed under section 4999 of the Code.
(M) "Executive" shall mean the individual named
in the first paragraph of this Agreement.
(N) "Good Reason" for termination by the
Executive of the Executive's employment shall mean the occurrence (without the
Executive's express written consent) after any Change in Control, or after any
Potential Change in Control under the circumstances described in the second
sentence of Section 6.1 hereof (treating all references in paragraphs (I) and
(VII) below to a "Change in Control" as references to a "Potential Change in
Control"), of any one of the following acts by the Company, or failures by the
Company to act, unless, in the case of any act or failure to act described in
paragraph (I), (V), (VI) or (VII) below, such act or failure to act is
corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:
(I) the assignment to the Executive of
any duties inconsistent with the Executive's status
as a senior executive officer of the Company or a
substantial alteration in the nature or status of the
Executive's responsibilities from those in effect
immediately prior to the Change in Control other than
any such alteration primarily attributable to the
fact that the Company may no longer be a public
company;
(II) a reduction by the Company in the
Executive's compensation (annual base salary plus
bonus) as in effect on the date hereof or as the same
may be increased from time to time;
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20
(III) the relocation of the Company's
principal executive offices to a location more than
50 miles from the location of such offices
immediately prior to the Change in Control or the
Company's requiring the Executive to be based
anywhere other than the Company's principal executive
offices except for required travel on the Company's
business to an extent substantially consistent with
the Executive's present business travel obligations;
(IV) the failure by the Company to pay to
the Executive any portion of the Executive's current
compensation or to pay to the Executive any portion
of an installment of deferred compensation under any
deferred compensation program of the Company, within
seven (7) days of the date such compensation is due;
(V) the failure by the Company to
continue in effect any compensation plan in which the
Executive participates immediately prior to the
Change in Control which is material to the
Executive's total compensation, including but not
limited to the Company's stock option, restricted
stock, stock appreciation right, incentive
compensation, bonus and other plans or any substitute
plans adopted prior to the Change in Control, unless
an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with
respect to such plan, or the failure by the Company
to continue the Executive's participation therein (or
in such substitute or alternative plan) on a basis
not materially less favorable, both in terms of the
amount of benefits provided and the level of the
Executive's participation, relative to other
participants, as existed immediately prior to the
Change in Control;
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21
(VI) the failure by the Company to
continue to provide the Executive with benefits
substantially similar to those enjoyed by the
Executive under any of the Company's pension, life
insurance, medical, health and accident, or
disability plans in which the Executive was
participating immediately prior to the Change in
Control, the taking of any action by the Company
which would directly or indirectly materially reduce
any of such benefits or deprive the Executive of any
material fringe benefit enjoyed by the Executive at
the time of the Change in Control, or the failure by
the Company to maintain a vacation policy with
respect to the Executive that is at least as
favorable as the vacation policy (whether formal or
informal) in place with respect to the Executive
immediately prior to the Change in Control; or
(VII) any purported termination of the
Executive's employment which is not effected pursuant
to a Notice of Termination satisfying the
requirements of Section 7.1 hereof; for purposes of
this Agreement, no such purported termination shall
be effective.
The Executive's right to terminate the Executive's employment
for Good Reason shall not be affected by the Executive's incapacity due to
physical or mental illness. The Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder.
For purposes of any determination regarding the existence of
Good Reason, any claim by the Executive that Good Reason exists shall be
presumed to be correct unless the Company establishes to the Board by clear and
convincing evidence that Good Reason does not exist.
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22
(O) "Gross-Up Payment" shall have the meaning set
forth in Section 6.2 hereof.
(P) "Notice of Termination" shall have the
meaning stated in Section 7.1 hereof.
(Q) "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof, except that such term shall not include (i) the Company or any
of its affiliated (as defined in Rule 12b-2 promulgated under the Exchange
Act), (ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any of its affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities, or
(iv) a corporation owned, directly or indirectly, by the shareholders of the
Company in substantially the same proportions as their ownership of stock of
the Company.
(R) "Potential Change in Control" shall be deemed
to have occurred if the event set forth in any one of the following paragraphs
shall have occurred:
(I) the Company enters into an
agreement, the consummation of which would result in
the occurrence of a Change in Control;
(II) the Company or any Person publicly
announces an intention to take or to consider taking
actions which, if consummated, would constitute a
Change in Control;
(III) any Person becomes the Beneficial
Owner, directly or indirectly, or securities of the
Company representing 10% or more of either the then
outstanding shares of common stock of the Company or
the combined voting power of the Company's then
outstanding securities; or
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(IV) the Board adopts a resolution to the
effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
(S) "Retirement" shall be deemed the reason for
the termination of the Executive's employment if such employment is terminated
in accordance with the Company's retirement policy generally applicable to its
salaried employees, as in effect immediately prior to the Change in Control, or
in accordance with any retirement arrangement established with the Executive's
consent with respect to the Executive.
(T) "Severance Payments" shall mean those
payments described in Section 6.1 hereof.
(U) "Total Payments" shall mean those payments
described in Section 6.2 hereof.
UNION PACIFIC RESOURCES GROUP INC.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
XXXX X. XXXXXXX
EXECUTIVE
By: /s/ Xxxxxx Xxxxxxx, III
------------------------------------
XXXXXX XXXXXXX, III
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