Exhibit 10.2
October 15, 2010
| Jeffery Lynn Juergens | PERSONAL AND CONFIDENTIAL | |
Dear Jeff,
Newpark Resources, Inc., a Delaware corporation (“Newpark”), considers you a valuable executive, and the Board of Directors (the“Board”) has authorized certain actions to reinforce and encourage your attention and dedication to your duties without distraction ifNewparkshould become the target of a hostile takeover attempt or enter into negotiations that could lead to a change in control ofNewpark.
This letter (the“Agreement”) sets forth the understanding between you andNewparkconcerning the continuation of your employment in connection with a “Change in Control” or “Potential Change in Control” and the “Termination Benefit” you will receive if your employment withNewparkis“Terminated”byNewparkwithout “Cause” or by you for “Good Reason” during an “Employment Period,” as those terms are defined inAnnex Aattached to this letter.
ThisAgreementis entered into with the understanding between you andNewparkthat you will have knowledge or otherwise be notified of aChange in ControlorPotential Change in Control, or theTerminationthereof, at the time it occurs.
1. Definitions.Capitalized terms used in thisAgreementare defined inAnnex A attached hereto and hereby incorporated into thisAgreementby reference and in Section 14 hereof.
2.Consideration; Termination During Employment Period.
2.1Subject to the terms and conditions of thisAgreement, you agree that you will not resign fromNewparkduring anEmployment Periodexcept forGood Reason.
2.2 Newparkshall pay you theTermination Benefitif (1) your employment withNewparkisTerminatedby your resignation forGood Reasonor (2) your employment withNewparkisTerminatedbyNewpark(i) not forCause, (ii) by the independent exercise ofNewpark’sunilateral authority, (iii) not due to your implicit or explicit request, (iv) when you are both willing and able to continue the performance of your duties (and, without limiting the foregoing, therefore not by reason of your death or your failure to return to the full-time performance of your duties after the end of aDisability Period), and (v) suchTerminationotherwise constitutes an “involuntary separation from service” within the meaning of Section 409A of theCodeand the regulations thereunder.
Jeffery Lynn Juergens
October 15, 2010
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October 15, 2010
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2.3If your employment withNewparkisTerminatedbyNewparkduring anEmployment PeriodforCause,Newparkshall give you written notice ofTerminationspecifying the facts and circumstances constituting suchCause.
3. Compensation Upon Termination or During Disability.
3.1During anyDisability Periodoccurring during anEmployment Period, you shall continue to receive your full base salary at the rate then in effect and on the dates and at the intervals as your base salary would be payable underNewpark’spayroll practices at that time, unless and until your employment isTerminated.
3.2If your employment isTerminatedbyNewparkforCause,Newparkshall pay you your full base salary at the rate then in effect through the date ofTermination, together with any severance pay, vacation pay and sick leave pay to which you are entitled in accordance withNewparkpolicy. Unless otherwise required under Paragraph 9, all of the amounts to which you are entitled under this Paragraph 3.2 shall be paid in a single lump sum payment made to you on or before the thirtieth day following the date ofTermination. Neither this provision nor any payment made byNewparkin accordance herewith shall constitute waiver ofNewpark’sright to recover from you any damages caused by your conduct which constitutedCausefor suchTerminationand any similar conduct.
3.3If you become entitled to theTermination Benefitin accordance with Paragraph 2.2, you shall receive, in addition to theTermination Benefit, your full base salary at the rate then in effect through the date ofTermination, plus a pro-rated annual bonus through the date ofTermination. TheTermination Benefitshall be in lieu of any severance pay, vacation pay and sick leave pay to which you would otherwise be entitled in accordance withNewparkpolicy. Unless otherwise required under Paragraph 9, all of the amounts to which you are entitled under this Paragraph 3.3 shall be paid in a single lump sum payment made to you on or before the thirtieth day following the date ofTermination.
3.4If you become entitled to theTermination Benefitin accordance with Paragraph 2.2, all unexpired unexercised stock options (“Options”), if any, granted to you prior to aChange in Controlunder any stock option plan ofNewparkor otherwise, shall become exercisable in full on the day preceding the date ofTermination, whether or not they would have been fully exercisable but for this provision, and shall remain exercisable during their original exercise period or for a period of three (3) years from the date ofTerminationwhichever is the shorter, whether or not they would remain exercisable for such period but for this provision.
3.5If you become entitled to theTermination Benefitin accordance with Paragraph 2.2, all unvested shares of restricted stock and all deferred compensation amounts, including restricted stock or deferred compensation subject to vesting based on time or achieving performance criteria, if any, granted or awarded to you prior to aChange in Controlunder any stock plan or deferred compensation plan ofNewparkor otherwise, shall become vested in full on the day preceding the date ofTerminationand all restrictions thereon shall lapse, whether or not they would have been vested in full but for this provision.Newparkshall promptly deliver all such shares to you, and all such deferred compensation shall be paid to you in a lump sum on the date ofTermination.
Jeffery Lynn Juergens
October 15, 2010
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October 15, 2010
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3.6If you become entitled to theTermination Benefitin accordance with Paragraph 2.2,Newparkshall continue to provide you and your eligible family members, based on the cost sharing arrangement between you andNewparkon the date ofTermination, with life insurance, medical and dental health benefits andDisabilitycoverage and benefits at least equal to those which would have been provided to you if your employment had notTerminatedfor a period of24months. Notwithstanding the foregoing, if you become re-employed and are eligible to receive life insurance, medical and dental health benefits andDisabilitycoverage and benefits under another employer’s plans,Newpark’s obligations under this paragraph shall be reduced to the extent of any such coverage and benefits. You agree to promptly report any such coverage and benefits toNewpark. If you are ineligible under the terms ofNewpark’s benefit plans or programs to continue to be so covered,Newparkshall provide you with substantially equivalent coverage through other sources or will reimburse you for the cost of obtaining such coverage and benefits.
3.7If you become entitled to theTermination Benefitin accordance with Paragraph 2.2,Newparkshall provide you with outplacement services, payable byNewpark, with an aggregate cost not to exceed$10,000with an executive outplacement service firm reasonably acceptable to you andNewpark.
3.8Except as provided in Paragraph 3.6, you shall not be required to mitigate the amount of anyTermination Benefitby seeking other employment or otherwise, nor shall the amount of anyTermination Benefitbe reduced by any compensation earned by you as the result of employment by another employer, or otherwise.
3.9Except as expressly provided otherwise herein, none of the provisions of thisAgreementis intended to curtail or limit in any way any contractual rights which you may have under any plan in which you are eligible to participate or under any agreement binding onNewparkto which you are a party, and all such contractual rights shall survive the execution of thisAgreementand anyChange in Control. TheTermination Benefitshall not be considered compensation for any benefit calculation or other purpose under any retirement plan or other benefit plan maintained byNewpark.
4. Successors; Binding Agreement. ThisAgreementshall be binding on and inure to the benefit ofNewparkand any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets ofNewpark. ThisAgreementshall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
5. Termination of Agreement.For Officers with Employment Agreements this contract may only beTerminatedin accordance with the provisions of that agreement. For other employees.NewparkmayTerminatethisAgreementeffective at any time after March 31st 2009, by notice to you, if noChange in Controlhas occurred prior to the giving of such notice, and noPotential Change in Controlthen exists. OnceTerminated, thisAgreementshall have no further force or effect.
Jeffery Lynn Juergens
October 15, 2010
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October 15, 2010
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6. Notices. All notices and all other communications provided for in theAgreement 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 prepaid, addressed to the respective addresses set forth on the first page of thisAgreement, 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 receipt. Notices toNewparkshall be directed to the attention of the Secretary ofNewpark.
7. Amendments; Waivers. No provision or term of thisAgreementmay be supplemented, amended, modified, waived orTerminatedexcept in a writing duly executed by all parties intended to be bound thereby. No waiver of any of the provisions of thisAgreementshall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. Failure of a party to insist on strict compliance with any of the terms and conditions of thisAgreementshall not be deemed a waiver of any such terms and conditions.
8. Coordination of Benefits.In the event that the Employee is entitled to benefits followingTerminationunder any Employment Agreement withNewpark, the Employee shall have the right to elect whether to receive such benefits under thisAgreementor any Employment Agreement, but not both.
9.Section 409A.
9.1IfExecutiveis a “key employee,” as defined in Section 416(i) of theCode(without regard to paragraph 5 thereof), except to the extent permitted under Section 409A of theCode, no benefit or payment that is subject to Section 409A of theCode(after taking into account all applicable exceptions to Section 409A of theCode, including but not limited to the exceptions for short-term deferrals and for “separation pay only upon an involuntary separation from service”) shall be made under thisAgreementon account of theExecutive’s“separation from service,” as defined in Section 409A of theCode, with theCompanyuntil the later of the date prescribed for payment in thisAgreementand the first day of the seventh calendar month that begins after the date of theExecutive’sseparation from service (or, if earlier, the date of death of theExecutive).
9.2For purposes of Section 409A of theCode(including, but not limited to, to application of the exceptions for short-term deferrals and for “separation pay only upon an involuntary separation from service”), each payment provided for under thisAgreementis hereby designated as a separate payment, rather than a part of a larger single payment or one of a series of payments.
9.3Any amount thatExecutiveis entitled to be reimbursed under thisAgreementwill be reimbursed toExecutiveas promptly as practicable and in any event not later than the last day of the calendar year after the calendar year in which the expenses to be reimbursed are incurred, and the amount of the expenses eligible for reimbursement during any calendar year will not affect the amount of expenses eligible for reimbursement in any other calendar year. In addition, any such reimbursement payments described in this Section shall not be subject to liquidation or exchange for any other payment or benefit.
Jeffery Lynn Juergens
October 15, 2010
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October 15, 2010
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9.4In the event that Executive is required to execute a release to receive any payments from the Company that constitute nonqualified deferred compensation under Section 409A of the Code, payment of such amounts shall not commence until the sixtieth (60th) day following Executive’s separation from service with the Company. Any installment payments suspended during such sixty (60) day period shall be paid as a single lump sum payment on the first payroll date following the end of such suspension period.
10. No Guarantee of Tax Treatment. TheCompanymakes no representation or warranty, and undertakes no covenant, regarding any federal, state or local tax treatment of amounts or matters subject to this Agreement or any federal, state or local tax treatment applicable to or inapplicable toExecutive.
11. Entire Agreement. ThisAgreement, includingAnnex A, constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all previous agreements, whether written or oral, relating to the same subject matter. All such previous agreements between the parties hereto are herebyTerminatedand shall have no further force or effect.
12. Attorneys’ Fees. In any litigation relating to thisAgreement, including litigation with respect to any instrument, document or agreement made under or in connection with thisAgreement, the prevailing party shall be entitled to recover its costs and reasonable attorneys’ fees.
13. Choice of Law. The validity, interpretation, construction and performance of thisAgreementshall be governed by the laws of the State of Delaware.
Your rights hereunder shall terminate if theChange in Control Agreementamended hereby is terminated in accordance with the provisions of suchChange in Control Agreement.
Jeffery Lynn Juergens
October 15, 2010
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October 15, 2010
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If this letter correctly sets forth our understanding on the subject matter hereof, kindly sign and return toNewparkthe enclosed copy of this letter, which will then constitute ourAgreementon this subject.
| Very truly yours, NEWPARK RESOURCES, INC. | ||||
| By: | /s/ Paul L. Howes | |||
| Paul L. Howes | ||||
| President and CEO | ||||
Agreed to this15th day ofOctober, 2010
/s/ Jeffery Lynn Juergens
Jeffery Lynn Juergens
Jeffery Lynn Juergens
ANNEX A TO LETTER AGREEMENT
DATED OCTOBER 15, 2010
DATED OCTOBER 15, 2010
The following terms used herein and in letter agreement (the“Agreement”) dated October 15, 2010 between Newpark Resources, Inc., and Jeffery Lynn Juergens (“Executive”) shall have the following meanings:
“Cause”, when used with reference toTerminationof the employment ofExecutivebyNewparkfor“Cause”, shall mean:
a) Executive’sconviction by a court of competent jurisdiction of, or entry of a plea of guilty or nolo contendere for an act on theExecutive’spart constituting a felony dishonesty, willful misconduct or material neglect byExecutiveof his obligations under thisAgreementthat results in material injury to theCompany;
b)appropriation (or an overt act attempting appropriation) of a material business opportunity of theCompany;
c)theft, embezzlement or other similar misappropriation of funds or property of theCompany byExecutive;
d)the failure of Executive to follow the reasonable and lawful written instructions or policy ofNewparkwith respect to the services to be rendered and the manner of rendering such services by Executive, provided Executive has been given reasonable and specific written notice of such failure and opportunity to cure and no cure has been effected or initiated within a reasonable time, but not less than 90 days, after such notice
A“Change of Control”shall be deemed to occur if: (i) a“Takeover Transaction”(as defined below) occurs; or (ii) any election of directors ofNewparktakes place (whether by the directors then in office or by the stockholders at a meeting or by written consent) and a majority of the directors in the office following such election are individuals who were not nominated by a vote of two-thirds of the members of theBoard of Directorsor its nominating committee immediately preceding such election; or (iii)Newparkeffectuates a complete liquidation or a sale or disposition of all or substantially all of its assets unless immediately following any such sale or disposition of all or substantially all of its assets the individuals who were members of theBoard of DirectorsofNewparkimmediately prior to such transaction continue to constitute a majority of theBoard of Directorsor other governing body of the surviving corporation or entity (or, in the case of an acquisition involving a holding company, constitute a majority of theBoard of Directors or other governing body of the holding company) for a period of not less than twelve (12) months following the closing of such transaction. A“Takeover Transaction”shall mean (i) a merger or consolidation ofNewparkwith, or an acquisition byNewparkof the equity interests or all or substantially all of the assets of, any other corporation or entity, other than a merger, consolidation or acquisition in which the individuals who were members of theBoard of DirectorsofNewparkimmediately prior to such transaction continue to constitute a majority of theBoard of Directorsor other governing body of the surviving corporation or entity (or, in the case of an acquisition involving a holding company, constitute a majority of theBoard of Directorsor other governing body of the holding company) for a period of not less than twelve (12) months following the closing of such transaction, or (ii) one or more occurrences or events as a result of which any individual, entity or group (as such term is used in Section 13(d)(3) or Section 14(d)(2) of theExchange Act) becomes the“beneficial owner” (as such term is defined in Rule 13d-3 under theExchange Act), directly or indirectly, of thirty percent (30%) or more of the combined voting power ofNewpark’s then outstanding securities.
“Code”shall mean the Internal Revenue Code of 1986, as amended.
“Company” or “Newpark”shall mean Newpark Resource, Inc., and its consolidated subsidiaries and any successor to its business and/or assets which assumes or becomes subject to thisAgreement by operation of law or otherwise.
“Disability”shall mean Executive’s full-time absence from his duties withNewpark, as a result of incapacity due to physical or mental illness.
“Disability Period”shall mean a leave of absence forDisabilityfor a period of not more than six (6) months commencing on the first day of aDisabilityoccurring during theEmployment Period.
“Employment Period”shall mean a period (a) commencing when aPotential Change in Control occurs or, if noPotential Change in Controlhas occurred with respect to aChange in Control, when suchChange in Controloccurs, and (b) ending two years after suchChange in Controloccurred. If the event or agreement that gives rise to aPotential Change in Control Terminatesor isTerminated without theChange in Controlcontemplated thereby having occurred, theEmployment PeriodshallTerminateuponTerminationof such event or agreement; however, a newEmployment Periodshall commence under the same conditions upon any subsequentPotential Change in ControlorChange in Control.
“Exchange Act”shall mean the Securities Exchange Act of 1934, as amended.
“Good Reason”shall mean any one or more of the following occurring (i) during theEmployment Period, (ii) without Executive’s express written consent, (iii) for the first time within 45 days prior to the Executive’s written notice to the Company objecting to the condition or occurrence and remaining uncured by the Company for at least 30 days after such notice, and (iv) within 90 days prior to Executive’s resignation as a result thereof:
a)theCompanyadversely changes Executive’s title or changes in any material respect the responsibilities, authority or status of Executive the substantial or material failure of theCompanyto comply with its obligations under thisAgreementor any other agreement that may be in effect that is not remedied within a reasonable time after specific written notice thereof by Executive to theCompany;
b)the diminution of the Executive’s salary, incentive and or a material diminution of the Executive’s benefitsNewpark’s requiring Executive to be based anywhere outside a 50 mile radius from theNewparkoffice at which Executive had been based prior to theChange in ControlorPotential Change in Control, or a 50 mile radius from his present residence, whichever is farther, except for required travel onNewpark’s business to an extent substantially consistent with Executive’s present business travel obligations; or
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c)the failure of theCompanyto obtain the assumption of thisAgreementor other existing employment agreement by any successor or assignee of theCompany.
A “Potential Change in Control” shall be deemed to have occurred on the date that (a)Newpark first has actual knowledge that any person (as such term is used in Sections 13(d) and 14(d)(2) of theExchange Act) has become the beneficial owner (as defined in Rule 13(d)-3 under theExchange Act), directly or indirectly, or has initiated an offer which has not expired and which, if accepted by holders of a sufficient number ofNewpark’s then outstanding securities, would result in such person’s becoming the beneficial owner, directly or indirectly, of securities ofNewpark representing thirty percent (30%) or more of the combined voting power ofNewpark’s then outstanding securities, or (b)Newparkenters into an agreement (including a letter of intent) the consummation of which would result in aChange in Control.
“Start Date” shall mean the first day of anEmployment Period.
“Terminate”and“Termination”and all variants of the foregoing shall mean and refer to the termination ofExecutive’semployment with theCompany, other than by reason of death, that constitutes a “separation from service” within the meaning of Section 409A of theCodeand the regulations thereunder.
“Termination Benefit” shall mean the amount determined in accordance with subsection (a) below. If Executive is entitled to aTermination Benefit, it shall be paid to Executive no later than the 60th day following the date on which his employmentTerminates. TheTermination Benefit shall be an amount equal to (i)2times Executive’s annual base salary for the fiscal year ofNewparkimmediately preceding the fiscal year in which theStart Dateoccursplus (ii)2 times the higher of: a) the highest bonus actually received by the Executive; or b) the “Target Award Opportunity” to which Executive would be entitled under the 2010 Annual Cash Incentive Plan ofNewparkfor the fiscal year ofNewparkimmediately preceding the fiscal year in which theStart Dateoccurs.
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