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EXHIBIT 10.8
EXECUTIVE SEVERANCE AGREEMENT, as amended and restated as of January 22,
1998, by and between Sonat Inc., a Delaware corporation ("Sonat"), and Xxxxxx X.
Xxxxx, Xx. ("Executive").
WHEREAS, the Executive Compensation Committee of the Board of Directors of
Sonat has recommended, and the Board of Directors has approved, that Sonat enter
into severance agreements with key executives of Sonat who are from time to time
designated by the Executive Compensation Committee;
WHEREAS, Executive is a key executive of Sonat and has been selected by the
Executive Compensation Committee and the Board of Directors to enter into a
severance agreement with Sonat;
WHEREAS, should Sonat become subject to any proposed or threatened Change
of Control (as hereinafter defined), the Board of Directors believes it
imperative that Sonat and the Board of Directors be able to rely upon Executive
to continue in his position, and that Sonat be able to receive and rely upon his
advice, if requested, as to the best interests of Sonat and its stockholders
without concern that he might be distracted by the personal uncertainties and
risks created by such a proposal or threat;
WHEREAS, should Sonat receive any such proposals, in addition to
Executive's regular duties, he may be called upon to assist in the assessment of
such proposals, advise management and the Board of Directors as to whether such
proposals would be in the best interests of Sonat and its stockholders, and to
take such other actions as the Board of Directors might determine to be
appropriate; and
WHEREAS, Sonat and Executive wish to amend and restate the Executive
Severance Agreement dated as of December 1, 1995, as set forth herein;
NOW, THEREFORE, Sonat and Executive agree as follows:
1. Services During Certain Events. In the event a third person begins a
tender or exchange offer, circulates a proxy to stockholders, or takes other
steps to effect a Change of Control, Executive agrees that he will not
voluntarily leave the employ of Sonat, and will render the services contemplated
in the recitals to this Agreement, until the third person has abandoned or
terminated his efforts to effect a Change of Control or until a Change of
Control has occurred.
2. Termination Following Change of Control. Except as provided in Section 4
hereof, Sonat will provide or cause to be provided to Executive the
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rights and benefits described in Section 3 hereof in the event that Executive's
employment by Sonat is terminated:
(a) at any time within three years following a Change of Control by
Sonat for reasons other than for "cause" (as such term is defined in
Section 4 hereof) or other than as a consequence of Executive's death,
permanent disability or retirement under the Sonat Inc. Retirement Plan
(the "Retirement Plan") on or after April 1, 2001 ("Normal Retirement
Date");
(b) At any time within three years following a Change of Control by
Executive following the occurrence of any of the following events without
Executive's written consent:
(i) the assignment of Executive to any duties or responsibilities
that are inconsistent with his position, duties, responsibilities or
status immediately preceding such Change of Control, or a change in
his reporting responsibilities or titles in effect at such time
resulting in a reduction of his responsibilities or position at Sonat;
(ii) the reduction of Executive's annual salary (including any
deferred portions thereof) or level of benefits or supplemental
compensation; or
(iii) the transfer of Executive to a location requiring a change
in his residence or a material increase in the amount of travel
normally required of Executive in connection with his employment by
Sonat; or
(c) by Executive for any reason during the 30-day period immediately
following the first anniversary of the date of the Change of Control.
For purposes of this Agreement, "Change of Control" shall mean:
A. The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13(d)-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of Sonat (the
"Outstanding Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of Sonat entitled to vote generally in the
election of directors (the "Outstanding
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Voting Securities"); provided, however, that for purposes of this subsection A,
the following acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from Sonat, (ii) any acquisition by Sonat, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by Sonat or any corporation controlled by Sonat or (iv) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection C; or
B. Individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board of Directors; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by Sonat's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors; or
C. Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of Sonat (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Common Stock and
Outstanding Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns Sonat or all or substantially all of Sonat's assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination,
of the Outstanding Common Stock and Outstanding Voting Securities, as the case
may be, (ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of Sonat or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the
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corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board of Directors, providing for such Business Combination.
3. Rights and Benefits upon Termination. In the event of the termination of
Executive's employment under any of the circumstances set forth in Section 2
hereof ("Termination"), Sonat agrees to provide or cause to be provided to
Executive the following rights and benefits:
(a) Salary and Other Payment at Termination. Executive shall be entitled
to receive within 30 days of Termination a lump-sum payment in cash in the
amount of three times Executive's highest Earnings (as such term is defined in
this Section 3 (a)) with respect to any 12 consecutive month period during the
three years ending with the date of Termination; provided, however, that if
there are fewer than 36 months remaining from the date of Termination to
Executive's Normal Retirement Date, the amount calculated pursuant to this
paragraph will be reduced by multiplying such amount by a fraction, the
numerator of which is the number of months (including any fraction of a month)
so remaining to Executive's Normal Retirement Date and the denominator of
which is 36.
For purposes of this Agreement, "Earnings" shall mean the sum of (1)
all base pay (including Before-Tax Contributions (as defined in Sonat's Savings
Plan) made on behalf of Executive under Sonat's Savings Plan, and before-tax
contributions by Executive to a plan established under Section 125 of the
Internal Revenue Code, as amended (the "Code"), and sponsored by Sonat),
overtime, cash bonuses (including bonuses paid under Sonat's Performance Award
Plan, Cash Bonus Plan, Performance Award and Cash Bonus Plan, and All-Employee
Incentive Program) and commissions paid to Executive for personal service
rendered to Sonat and its subsidiaries and (2) workers' compensation payments or
other comparable payments required to be made by law, received in lieu of base
pay, but only to the extent that such payments do not exceed the rate of base
pay of Executive immediately prior to the commencement of such payments.
Notwithstanding the provisions of the foregoing sentence, Earnings shall
not include (1) severance pay, bonuses, workers' compensation payments, payment
for unused vacation, and payments similar to any of the foregoing, received
after or on account of Executive's Termination, (2) any income attributable to
restricted stock, options, stock appreciation rights, supplemental payments, or
dividends on restricted stock, acquired pursuant to Sonat's Executive Award
Plan, or (3) any Choice Dollars (as defined in Sonat's Choice Benefits Plan)
allocated to
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Executive under Sonat's Choice Benefits Plan, regardless of whether any Choice
Dollars are paid to Executive in cash.
(b) Retirement Benefits. If Executive (i) has at Termination attained the
age of 50 and (ii) at Termination is not otherwise entitled to receive an early
retirement benefit under the terms of a qualified retirement plan of Sonat or
its subsidiaries, Sonat shall pay in cash to Executive a monthly benefit for
life (a "Severance Retirement Benefit") in an amount equal to the difference
between (a) the monthly benefit calculated under the early retirement provisions
of the Retirement Plan (as in effect immediately prior to the Change of
Control), using the early retirement benefit reduction factors applicable as of
the later of age 55 or the Executive's actual age at his date of Termination,
and (b) the monthly benefit payable to Executive under the Retirement Plan (as
in effect on the date of Executive's Termination), assuming the following for
purposes of clauses (a) and (b): (A) the benefit is payable in the form of a
single life annuity as of the later of the date Executive attains age 55 and the
date of Termination; (B) the benefit is calculated based on Executive's actual
service and actual earnings history at the date of Termination; (C) Executive is
fully vested in the benefit; and (D) the benefit is calculated under the
assumption that Code Sections 401(a)(17) and 415 are nonexistent and the
provisions of the Retirement Plan incorporating such Sections are inoperative.
The Severance Retirement Benefit shall be paid commencing on the first day of
the month following the later of the date Executive attains age 55 and the date
of Termination, and shall not be affected by the settlement option or date of
commencement of any benefit actually payable under the Retirement Plan or the
Sonat Inc. Supplemental Benefit Plan.
(c) Survivors' Benefits. If Executive is entitled to receive a Severance
Retirement Benefit under Section 3(b) and Executive is survived by one or more
Eligible Family Members (as such term is defined in the Retirement Plan as in
effect immediately prior to the Change of Control), Sonat shall pay in cash to
each such Eligible Family Member a monthly survivors' benefit (the "Severance
Survivors' Benefit") in an amount equal to the excess of (i) over (ii), where
(i) is the monthly survivors benefit that would have been payable to
such Eligible Family Member under the Retirement Plan (as in effect
immediately prior to the Change of Control) with respect to Executive if
Executive's retirement benefit were calculated under the early retirement
provisions of such plan, using the early retirement benefit reduction
factors applicable as of the later of age 55 or Executive's actual age at
his date of Termination, and assuming (A) the retirement benefit is payable
in the form of
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a single life annuity as of the later of the date Executive attains age 55
and the date of Termination; (B) the retirement benefit is calculated based
on Executive's actual service and actual earnings history at the date of
Termination; (C) Executive is fully vested in the retirement benefit; and
(D) the retirement benefit is calculated under the assumption that Code
Sections 401(a)(17) and 415 are nonexistent and the provisions of the
Retirement Plan incorporating such Sections are inoperative; and
(ii) is the amount actually paid to such Eligible Family Member for
such month as a Survivors' Benefit under the Retirement Plan and as an
Excess Retirement Plan Benefit under the Sonat Inc. Supplemental Benefit
Plan.
Payment of the Severance Survivors' Benefit shall commence on the first day of
the month following the death of Executive.
(d) Insurance and Other Special Benefits. To the extent Executive is
eligible thereunder, Executive shall continue to be covered by the life and
dependent life insurance, medical and dental insurance, and accident and
disability insurance plans of Sonat and its subsidiaries or any successor
plan or program in effect at Termination for employees in the same class or
category as Executive, subject to the terms of such plans and to
Executive's making any required contributions thereto. In the event
Executive is ineligible to continue to be so covered under the terms of any
such benefit plan or program, or, in the event Executive is eligible but
the benefits applicable to Executive are not substantially equivalent to
the benefits applicable to Executive immediately prior to Termination,
then, for a period of 36 months following Termination (or until Executive's
Normal Retirement Date, whichever is sooner), Sonat shall provide such
substantially equivalent benefits, or such additional benefits as may be
necessary to make the benefits applicable to Executive substantially
equivalent to those in effect before Termination, through other sources;
provided, however, that if during such period Executive should enter into
the employ of another company or firm which provides substantially similar
benefit coverage, Executive's participation in the comparable benefit
provided by Sonat either directly or through such other sources shall
cease. Nothing contained in this paragraph shall be deemed to require or
permit termination or restriction of Executive's coverage under any plan or
program of Sonat or any of its subsidiaries or any successor plan or
program thereto to which Executive is entitled
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under the terms of such plan or program, whether at the end of the
aforementioned 36-month period or at any other time.
(e) Relocation Assistance. Should Executive move his residence in
order to pursue other business opportunities within three years of the date
of Termination (or until his Normal Retirement Date, whichever is sooner),
Sonat shall reimburse him for any expenses incurred in that relocation
(including taxes payable on the reimbursement) which are not reimbursed by
another employer; provided, however, that Executive shall be entitled to
such reimbursement with respect to only one such relocation, it being
agreed that in the event of more than one such relocation, Executive shall
be entitled to specify the relocation for which reimbursement hereunder is
to be made. Benefits under this provision will include the assistance, at
no cost to Executive, in selling his home and other assistance which was
customarily provided to executives transferred within Sonat or between
Sonat and its subsidiaries prior to the Change of Control.
(f) Other Benefit Plans. The specific arrangements referred to in this
Section 3 are not intended to exclude Executive's participation in other
benefit plans in which Executive currently participates or which are
available to executive personnel generally in the class or category of
Executive or to preclude other compensation or benefits as may be
authorized by the Board of Directors from time to time.
(g) Duty to Mitigate. Executive's entitlement to benefits hereunder
shall not be governed by any duty to mitigate his damages by seeking
further employment nor offset by any compensation which he may receive from
future employment.
(h) Payment Obligations Absolute. Sonat's obligation to pay or cause
to be paid to Executive the benefits and to make the arrangements provided
in this Section 3 shall be absolute and unconditional and shall not be
affected by any circumstances, including, without limitation, any setoff,
counterclaim, recoupment, defense or other right, which Sonat may have
against Executive or anyone else. All amounts payable by or on behalf of
Sonat hereunder shall be paid without notice or demand. Each and every
payment made hereunder by or on behalf of Sonat shall be final and Sonat
and its subsidiaries shall not, for any reason whatsoever, seek to recover
all or any part of such payment from Executive or from whomever shall be
entitled thereto.
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4. Conditions to the Obligations of Sonat. Sonat shall have no obligation
to provide or cause to be provided to Executive the rights and benefits
described in Section 3 hereof if either of the following events shall occur:
(a) Termination for Cause. Sonat shall terminate Executive's
employment for "cause". For purposes of this Agreement, termination of
employment for "cause" shall mean termination solely for dishonesty,
conviction of a felony, or willful unauthorized disclosure of confidential
information of Sonat.
(b) Resignation as Director. Executive shall not, promptly after
Termination and upon receiving a written request to do so, resign as a
director and/or officer of each subsidiary and affiliate of Sonat of which
he is then serving as a director and/or officer.
5. Confidentiality; Non-Solicitation; Cooperation.
(a) Confidentiality. Executive agrees that at all times following
Termination, he will not, without the prior written consent of Sonat,
disclose to any person, firm or corporation any confidential information of
Sonat or its subsidiaries which is now known to him or which hereafter may
become known to him as a result of his employment or association with Sonat
and which could be helpful to a competitor, unless such disclosure is
required under the terms of a valid and effective subpoena or order issued
by a court or governmental body; provided, however, that the foregoing
shall not apply to confidential information which becomes publicly
disseminated by means other than a breach of this Agreement.
(b) Non-Solicitation. Executive agrees that for a period of three
years following the date of Termination (or until Executive's Normal
Retirement Date, whichever is sooner) he will not induce, either directly
or indirectly, any employee of senior to manager level of Sonat or any of
its subsidiaries to terminate his or her employment.
(c) Cooperation. Executive agrees that, at all times following
Termination, he will furnish such information and render such assistance
and cooperation as may reasonably be requested in connection with any
litigation or legal proceedings concerning Sonat or any of its subsidiaries
(other than any legal proceedings concerning Executive's employment). In
connection with such cooperation, Sonat will pay or reimburse Executive for
reasonable expenses.
(d) Remedies for Breach. It is recognized that damages in the event of
breach of this Section 5 by Executive would be difficult, if not
impossible, to ascertain, and it is therefore agreed that Sonat, in
addition to and without limiting any other remedy or right it may have,
shall have
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the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such breach, and Executive hereby
waives any and all defenses he may have on the ground of lack of
jurisdiction or competence of the court to grant such an injunction or
other equitable relief. The existence of this right shall not preclude
Sonat from pursuing any other rights and remedies at law or in equity which
Sonat may have.
6. Certain Additional Payments by Sonat.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any
payment or distribution by Sonat to or for the benefit of Executive
(whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 6) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment")
in an amount such that after payment by Executive of all federal income
taxes (including any interest or penalties imposed with respect to such
taxes), including, without limitation, any federal income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding
the foregoing provisions of this Section 6(a), if it shall be determined
that Executive is entitled to a Gross-Up Payment, but that Executive, after
taking into account the Payments and the Gross-Up Payment, would not
receive a net after-tax benefit of at least $50,000 (taking into account
both federal income taxes and any Excise Tax) as compared to the net
after-tax proceeds to Executive resulting from an elimination of the
Gross-Up Payment and a reduction of the Payments, in the aggregate, to an
amount (the "Reduced Amount") such that the receipt of Payments would not
give rise to any Excise Tax, then no Gross-Up Payment shall be made to
Executive and the Payments, in the aggregate, shall be reduced to the
Reduced Amount.
(b) Subject to the provisions of Section 6(c), all determinations
required to be made under this Section 6, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be
made by Ernst & Young LLP or such other certified public accounting firm as
may be designated by Executive (the "Accounting Firm"), which shall provide
detailed supporting calculations both to Sonat and Executive within 15
business days of the receipt of
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notice from Executive that there has been a Payment or such earlier time as
is requested by Sonat. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting a
Change of Control, Executive shall appoint another nationally recognized
accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm
hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by Sonat. Any Gross-Up Payment shall be paid by Sonat to Executive
within five days of the receipt of the Accounting Firm's determination. Any
determination by the Accounting Firm shall be binding upon Sonat and
Executive. As a result of the uncertainty in the application of Section
4999 of the Code at the time of the initial determination by the Accounting
Firm hereunder, it is possible that Gross-Up Payments which will not have
been made by Sonat should have been made ("Underpayment"), consistent with
the calculations required to be made hereunder. In the event that Sonat
exhausts its remedies pursuant to Section 6(c) and Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by Sonat to or for the benefit of
Executive.
(c) Executive shall notify Sonat in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by
Sonat of a Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after Executive is informed
in writing of such claim and shall apprise Sonat of the nature of such
claim and the date on which such claim is requested to be paid. Executive
shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to Sonat (or such shorter
period ending on the date that any payment of taxes with respect to such
claim is due). If Sonat notifies Executive in writing prior to the
expiration of such period that it desires to contest such claim, Executive
shall:
(i) give Sonat any information reasonably requested by Sonat relating
to such claim,
(ii) take such action in connection with contesting such claim as
Sonat shall reasonably request in writing from time to time, including
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by Sonat,
(iii) cooperate with Sonat in good faith in order effectively to
contest such claim, and
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(iv) permit Sonat to participate in any proceedings relating to such
claim;
provided, however, that Sonat shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold Executive
harmless, on an after-tax basis, for any Excise Tax or federal income tax
(including interest and penalties with respect thereto) imposed as a result
of such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 6(c), Sonat shall
control all proceedings taken in connection with such contest and, at its
sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect
of such claim and may, at its sole option, either direct Executive to pay
the tax claimed and xxx for a refund or to contest the claim in any
permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as Sonat shall determine;
provided, however, that if Sonat directs Executive to pay such claim and
xxx for a refund, Sonat shall advance the amount of such payment to
Executive, on an interest-free basis, and shall indemnify and hold
Executive harmless on an after-tax basis, from any Excise Tax or federal
income tax (including interest or penalties with respect thereto) imposed
with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for the taxable year of
Executive with respect to such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, Sonat's control of
the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder, and Executive shall be entitled to
settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by Executive of an amount advanced by Sonat
pursuant to Section 6(c), Executive becomes entitled to receive any refund
with respect to such claim, Executive shall (subject to Sonat's complying
with the requirements of Section 6(c)) promptly pay to Sonat the amount of
such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by Executive of an amount
advanced by Sonat pursuant to Section 6(c), a determination is made that
Executive shall not be entitled to any refund with respect to such claim
and Sonat does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.
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7. Term of Agreement. This Agreement shall terminate on April 30, 1999;
provided, however, that this Agreement shall automatically renew for successive
one-year terms unless the Board of Directors notifies Executive in writing at
least 30 days prior to an April 30 expiration date that it does not desire to
renew the Agreement for an additional term; and provided further, however, that
this Agreement shall terminate prior to April 30, 1999 or, in the event of a
renewal of this Agreement, any subsequent April 30, if and when the Executive
Compensation Committee determines that Executive is no longer a key executive
for purposes of being a party to an executive severance agreement with Sonat and
so notifies Executive, except that such determination shall not be made, and if
made shall have no effect, (i) within three years after a Change of Control or
(ii) during any period of time when Sonat has reason to believe that any third
person has begun a tender or exchange offer, circulated a proxy to stockholders,
or taken other steps or formulated plans to effect a Change of Control, such
period of time to end when, in the opinion of the Executive Compensation
Committee, the third person has abandoned or terminated his efforts or plans to
effect a Change of Control.
8. Expenses. Sonat shall pay or reimburse Executive for all costs and
expenses, including, without limitation, court costs and attorneys' fees,
incurred by Executive as a result of any claim, action or proceeding (including,
without limitation, a claim, action or proceeding by Executive against Sonat)
arising out of, or challenging the validity or enforceability of, this Agreement
or any provision hereof.
9. Miscellaneous.
(a) Assignment. No right, benefit or interest hereunder shall be subject to
assignment, anticipation, alienation, sale, encumbrance, charge, pledge,
hypothecation or set-off in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process; provided, however, that
Executive may assign any right, benefit or interest hereunder if such assignment
is permitted under the terms of any plan or policy of insurance or annuity
contract governing such right, benefit or interest.
(b) Construction of Agreement. Nothing in this Agreement shall be construed
to amend any provision of any plan or policy of Sonat. This Agreement is not,
and nothing herein shall be deemed to create, a commitment of continued
employment of Executive by Sonat or any of its subsidiaries.
(c) Amendment. This Agreement may not be amended, modified or canceled
except by written agreement of the parties.
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(d) Waiver. No provision of this Agreement may be waived except by a
writing signed by the party to be bound thereby.
Executive may at any time or from time to time waive any or all of
the rights and benefits provided for herein which have not been received by
Executive at the time of such waiver. In addition, prior to the last day of
the calendar year in which Executive's Termination occurs, Executive may
waive any or all rights and benefits provided for herein which have been
received by Executive; provided that prior to the end of such year
Executive repays to Sonat (or, if the benefit was received from an employee
benefit plan trust, to such trust) the amount of the benefit received
together with interest thereon at the minimum rate required to avoid
imputed income. Any waiver of benefits pursuant to this paragraph shall be
irrevocable. If Executive waives a right or benefit provided for herein and
such waiver is determined by the Internal Revenue Service not to be
effective, Sonat shall indemnify Executive for any federal income and
excise taxes he incurs as a result of that determination, so as to put
Executive in the position he would have been in had the waiver been given
effect.
(e) Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions of this Agreement shall remain in full
force and effect to the fullest extent permitted by law.
(f) Successors. This Agreement shall be binding upon and inure to the
benefit of Executive and his personal representative and heirs, and Sonat
and any successor organization or organizations which shall succeed to
substantially all of the business and property of Sonat, whether by means
of merger, consolidation, acquisition of substantially all of the assets of
Sonat or otherwise, including by operation of law.
(g) Taxes. Any payment or delivery required under this Agreement shall
be subject to all requirements of the law with regard to withholding of
taxes, filing, making of reports and the like, and Sonat shall use its best
efforts to satisfy promptly all such requirements.
(h) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware.
(i) Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the matters covered
hereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
January 22, 1998.
SONAT INC.
By:/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Executive Vice President and
General Counsel
/s/ Xxxxxx X. Xxxxx, Xx.
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Xxxxxx X. Xxxxx, Xx.
14
