UNIT CORPORATION
SEPARATION BENEFIT PLAN
FOR SENIOR MANAGEMENT
1
UNIT CORPORATION
SEPARATION BENEFIT PLAN
INDEX
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE ONE
Definitions . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 "Administrative Committee" . . . . . . . . . . . . . .1
1.2 "Base Salary". . . . . . . . . . . . . . . . . . . . .1
1.3 "Beneficiary". . . . . . . . . . . . . . . . . . . . .1
1.4 "Board of Directors" . . . . . . . . . . . . . . . . .1
1.5 "Bonus". . . . . . . . . . . . . . . . . . . . . . . .1
1.6 "Change in Control". . . . . . . . . . . . . . . . . .2
1.7 "Code" . . . . . . . . . . . . . . . . . . . . . . . .3
1.8 "Company". . . . . . . . . . . . . . . . . . . . . . .3
1.9 "Comparable Position". . . . . . . . . . . . . . . . .3
1.10 "Completed Year of Service". . . . . . . . . . . . . .3
1.11 "Discharge for Cause". . . . . . . . . . . . . . . . .3
1.12 "Employing Company". . . . . . . . . . . . . . . . . .4
1.13 "ERISA". . . . . . . . . . . . . . . . . . . . . . . .4
1.14 "Participant". . . . . . . . . . . . . . . . . . . . .4
1.15 "Plan" . . . . . . . . . . . . . . . . . . . . . . . .4
1.16 "Separation Benefit" . . . . . . . . . . . . . . . . .4
1.17 "Separation Period". . . . . . . . . . . . . . . . . .4
1.18 "Termination of Employment". . . . . . . . . . . . . .4
1.19 "Years of Service" . . . . . . . . . . . . . . . . . .5
ARTICLE TWO
Benefits. . . . . . . . . . . . . . . . . . . . . . . . . .5
2.1 Participants . . . . . . . . . . . . . . . . . . . . .5
2.2 Separation Benefit . . . . . . . . . . . . . . . . . .5
2.3 Separation Benefit Amount. . . . . . . . . . . . . . .5
2.4 Separation Benefit Limitation. . . . . . . . . . . . .7
2.5 Withholding Tax. . . . . . . . . . . . . . . . . . . .7
2.6 Reemployment of a Participant . . . . . . . . . . . .8
2.7 Integration with Disability Benefits . . . . . . . . .8
2.8 Plan Benefit Offset. . . . . . . . . . . . . . . . . .8
2.9 Recoupment . . . . . . . . . . . . . . . . . . . . . .8
2.10 Completion of Twenty Years of Service. . . . . . . . .9
2.11 Change in Control. . . . . . . . . . . . . . . . . . .9
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ARTICLE THREE
Method of Payment . . . . . . . . . . . . . . . . . . . . .9
3.1 Separation Benefit Payment . . . . . . . . . . . . . .9
3.2 Forfeiture of Separation Benefit Payments
By Competition . . . . . . . . . . . . . . . . . . .9
3.3 Death Subsequent to Termination of Employment. . . . 10
ARTICLE FOUR
Waiver and Release of Claims. . . . . . . . . . . . . . . 10
ARTICLE FIVE
Funding . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE SIX
Administration. . . . . . . . . . . . . . . . . . . . . . 11
6.1 Named Fiduciary. . . . . . . . . . . . . . . . . . . 11
6.2 Fiduciary Responsibilities . . . . . . . . . . . . . 11
6.3 Specific Fiduciary Responsibilities. . . . . . . . . 11
6.4 Allocations and Delegations of Responsibility. . . . 12
6.5 Advisors . . . . . . . . . . . . . . . . . . . . . . 12
6.6 Plan Determination . . . . . . . . . . . . . . . . . 12
6.7 Claims Review Procedure. . . . . . . . . . . . . . . 13
6.8 Modification and Termination . . . . . . . . . . . . 14
6.9 Indemnification. . . . . . . . . . . . . . . . . . . 14
6.10 Successful Defense . . . . . . . . . . . . . . . . . 15
6.11 Unsuccessful Defense . . . . . . . . . . . . . . . . 15
6.12 Advance Payments . . . . . . . . . . . . . . . . . . 16
6.13 Repayment of Advance Payments. . . . . . . . . . . . 16
6.14 Right of Indemnification . . . . . . . . . . . . . . 16
ARTICLE SEVEN
Effective Date and Plan Year. . . . . . . . . . . . . . . 16
ARTICLE EIGHT
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 17
8.1 Assignment . . . . . . . . . . . . . . . . . . . . . 17
8.2 Governing Law. . . . . . . . . . . . . . . . . . . . 17
8.3 Employing Company Records. . . . . . . . . . . . . . 17
8.4 Employment Non-Contractual . . . . . . . . . . . . . 17
8.5 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 17
8.6 Binding Effect . . . . . . . . . . . . . . . . . . . 18
8.7 Entire Agreement . . . . . . . . . . . . . . . . . . 18
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UNIT CORPORATION
SEPARATION BENEFIT PLAN
FOR SENIOR MANAGEMENT
Introduction
The purpose of The Unit Corporation Separation Benefit Plan for Senior
Management is to provide certain officers and key executives of Unit Corporation
or its subsidiaries with appropriate assurances of continued income and other
benefits for a reasonable period of time in the event that the individual's
employment ceases under the circumstances described herein.
The Administrative Committee shall, in its absolute discretion select the
individuals to be covered by this Plan from time to time. The Administrative
Committee may notify each selected individual of his or her selection and
provide him or her with a copy of this Plan.
Participation in the Plan shall not in any respect be deemed to grant the
Participant either a right to continued participation in the Plan or a right to
continued employment and such employment and participation remains terminable at
will by either the Employing Company or the Participant at any time for any
reason or for no reason.
ARTICLE ONE
Definitions
1.1 "Administrative Committee" means the Compensation Committee established and
appointed by the Board of Directors.
1.2 "Base Salary" means the regular basic cash remuneration before deductions
for taxes and other items withheld, and without regard to any salary
reduction pursuant to any plans maintained by an Employing Company under
Section 401(k) or 125 of the Code, payable to a Participant for services
rendered to an Employing Company, but not including pay for Bonuses,
incentive compensation, special pay, awards or commissions.
1.3 "Beneficiary" means the person designated by a the Participant in a written
instrument filed with the Administrative Committee to receive benefits
under this Plan.
1.4 "Board of Directors" means the board of directors of the Company.
1.5 "Bonus" means any annual incentive compensation paid to a Participant over
and above Base Salary earned and paid in cash or otherwise.
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1.6 "Change in Control" of the Company shall be deemed to have occurred as of
the first day that any one or more of the following conditions shall have
been satisfied:
(i) On the close of business on the tenth day following the time the
Company learns of the acquisition by any individual entity or group (a
"Person"), including any "person" within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
within the meaning of Rule 13d-3 promulgated under the Exchange Act,
of 15% or more of either (i) the then outstanding shares of Common
Stock of the Company (the "Outstanding Company Common Stock") or (ii)
the combined voting power of the then outstanding securities of the
Company entitled to vote generally in the election of Directors (the
"Outstanding Company Voting Securities"); excluding, however, the
following: (A) any acquisition directly from the Company (excluding
any acquisition resulting from the exercise of an exercise, conversion
or exchange privilege unless the security being so exercised,
converted or exchanged was acquired directly from the Company); (B)
any acquisition by the Company; (C) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company; and (D) any
acquisition by any corporation pursuant to a transaction with complies
with clauses (i), (ii) and (iii) of subsection (iii) of this
definition;
(ii) 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 such Board; provided that any individual who
becomes a Director of the Company subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders,
was approved by the vote of at least a majority of the Directors then
comprising the Incumbent Board shall be deemed a member of the
Incumbent Board; and provided further, that any individual who was
initially elected as a Director of the Company as a result of an
actual or threatened election contest, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange act, or any
other actual or threatened solicitation of proxies or consents by
or on behalf of any Person other than the Board shall not be deemed a
member of the Incumbent Board;
(iii) approval by the stockholders of the company of a reorganization,
merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Corporate
Transaction"); excluding, however, a Corporate Transaction
pursuant to which (i) all or substantially all of the individuals or
entities who are the beneficial owners, respectively, of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 70% of,
respectively, the outstanding shares of common stock, and the combined
voting power of the outstanding securities of such corporation
entitled to vote generally in the election of Directors, as the case
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may be, of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result
of such transaction owns the Company or all or substantially all of
the Company's assets either directly or indirectly) in substantially
the same proportions relative to each other as their ownership,
immediately prior to such Corporate Transaction, of the Outstanding
Company Common stock and the Outstanding Company Voting Securities, as
the case may be, (ii) no Person (other than: the Company; the
corporation resulting from such Corporate Transaction; and any Person
which beneficially owned, immediately prior to such Corporate
Transaction, directly or indirectly, 25% or more of the Outstanding
Company Common Stock or the Outstanding Voting Securities, as the case
may be) will beneficially own, directly or indirectly, 25% or more of,
respectively, the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the combined
voting power of the outstanding securities of such corporation
entitled to vote generally in the election of Directors and (iii)
individuals who were members of the Incumbent Board will constitute a
majority of the members of the Board of Directors of the corporation
resulting from such Corporate Transaction; or
(iv) approval by the stockholders of the Company of a plan of complete
liquidation or
dissolution of the Company.
1.7 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
1.8 "Company" means Unit Corporation, the sponsor of this Plan.
1.9 "Comparable Position" means a job with an Employing Company or successor
company at the same or higher Base Salary as a Participant's current job
and at a work location within reasonable commuting distance from a
Participant's home, as determined by such Participant's Employing Company.
1.10 "Completed Year of Service" means the period of time beginning with a
Participant's date of hire or the anniversary of such date of hire and
ending twelve months thereafter.
1.11 "Discharge for Cause" means termination of a Participant's employment by
the Employing Company due to:
(i) the willful failure of the Participant to perform the Participant's
prescribed duties to
the Employing Company (other than any such failure resulting from the
Participant's
incapacity due to physical or mental illness); or
(ii) the willful commission by the Participant of a wrongful act that
caused or was reasonably likely to cause damage to the Employing
Company; or
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(iii) an act of gross negligence, fraud, unfair competition, dishonesty or
misrepresentation in the performance of the Participant duties on
behalf of the Employing Company; or
(iv) the conviction of or the entry of a plea of nolo contendere by the
Participant to any felony or the conviction of or the entry of a plea
of nolo contendere to any offense involving dishonesty, breach of
trust or moral turpitude; or
(v) a breach of the Participant's fiduciary duty involving personal
profit; or
(vi) similar actions.
1.12 "Employing Company" with respect to a Participant, shall mean either the
Company or, if applicable, the subsidiary of the Company which employs the
Participant.
1.13 "ERISA" means the Employee Retirement Income Security Act of 1974, as from
time to time amended, and all regulations and rulings issued thereunder by
governmental administrative bodies.
1.14 "Participant" means an individual who is designated as such pursuant to
section 2.1.
1.15 "Plan" means the Unit Corporation Separation Benefit Plan for Senior
Management, as set forth herein and as hereafter amended from time to time.
1.16 "Separation Benefit" means the benefit provided for under this Plan as
determined under Article 2.
1.17 "Separation Period" means the period of time over which a Participant
receives Separation Benefits under the Plan in semimonthly or other
installment payments.
1.18 "Termination of Employment" means a Participant's separation from the
service of an Employing Company determined by the Employing Company,
provided that a Termination of Employment does not include any separation
from service resulting from:
(i) Discharge for Cause,
(ii) court decree or government action or recommendation having an effect
on an Employing Company operations or manpower involving rationing or
price control or any other similar type cause beyond the control of an
Employing Company,
(iii) an offer to the Participant of a position with an Employing Company or
affiliate,
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(iv) termination pursuant to which a Participant accepts any benefits under
an incentive retirement plan or other severance or separation plan, or
(v) termination of a Participant who has a written employment contract
which contains severance provisions.
Temporary work cessations due to strikes, lockouts or similar reasons shall
not be considered a Termination of Employment. An Participant's separation
from service in connection with the divestiture of any business of an
Employing Company shall not constitute a Termination of Employment if the
Participant is offered a Comparable Position by the purchaser or successor
of such business, an affiliate thereof, or an affiliate of an Employing
Company. A separation from service by an Participant who is offered a
Comparable Position arranged for or secured by an Employing Company does
not constitute a Termination of Employment.
A Termination or Employment shall be effective on the date specified by the
Employing Company (the "Termination Date").
1.19 "Years of Service" means the sum of the number of continuous Completed
Years of Service as an employee of an Employing Company during the
Participant's period of employment beginning with the Participant's most
recent hire date and ending with the Participant's most recent termination
date.
ARTICLE TWO
Benefits
2.1 Participants
Each individuals named on Schedule I hereto shall be a Participant in the
Plan. Schedule I may be amended by the Administrative Committee from time
to time to add individuals as a Participant.
2.2 Separation Benefit
A Separation Benefit shall be provided for a Participant under the
provisions of this Article 3.
2.3 Separation Benefit Amount
The Separation Benefit payable to a Participant under the Plan shall be
based, in part, on his/her Years of Service with the Company, or Employing
Company. The formula for determining a Participant's Separation Benefit
payment shall be calculated by dividing the Participant's annual Base
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Salary in effect immediately prior to the date of Termination of
Employment by 52 to calculate the weekly separation benefit (the "Weekly
Separation Benefit"). The amount of the Separation Benefit payable to the
Participant shall then be determined in accordance with the following
applicable provision:
2.3.1 Involuntary separation - In the event the Termination of
Employment is the result of an Employing Company terminating the
employment of the Participant, the Separation Benefit shall be
determined according to the following schedule:
Involuntary Separation
Schedule of Separation Benefits
Number of Weekly Number of Weekly
Years of Separation Benefit Years of Separation Benefit
Service Payments: Service Payments:
-------- ------------------ -------- ------------------
1 4 14 56
2 8 15 60
3 12 16 64
4 16 17 68
5 20 18 72
6 24 19 76
7 28 20 80
8 32 21 84
9 36 22 88
10 40 23 92
11 44 24 96
12 48 25 100
13 52 26 or more 104
The Administrative Committee reserves the right, in its sole and absolute
discretion and on a case by case basis, to increase the number of Weekly
Separation Benefit Payments a Participant may otherwise be entitled to
receive under this Section 2.3.1.
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2.3.2 Voluntary separation - In the event the Termination of Employment
is the result of the Participant's own action (such as by way of
example and not limitation, quitting, resignation or retirement)
the Separation Benefit shall be determined according to the
following Schedule:
Voluntary Separation
Schedule of Separation Benefits
Number of Weekly
Years of Separation Benefit
Service Payments
-------- ------------------
1-19 0
20 80
21 84
22 88
23 92
24 96
25 100
26 or more 104
Under certain exceptional circumstances the Administrative Committee may,
in its sole and absolute discretion, choose to treat a voluntary separation
as an involuntary separation and allow a Participant to receive Separation
Benefits in accordance with the schedule set forth in section 2.3.1.
2.4 Separation Benefit Limitation
Notwithstanding anything in the Plan to the contrary, the Separation
Benefit payable to any Participant under this Plan shall never exceed the
lesser of (i) 104 Weekly Separation Benefit payments; or (ii) the amount
permitted under ERISA to maintain this Plan as a welfare benefit plan. The
benefits payable under this Plan shall be inclusive of and offset by any
other severance or termination payments made by an Employing Company,
including, but not limited to, any amounts paid pursuant to federal, state,
local or foreign government worker notification (e.g., Worker Adjustment
and Retraining Notification Act) or office closing requirements.
2.5 Withholding Tax
The Employing Company shall deduct from the amount of any Separation
Benefits payable under the Plan, any amount required to be withheld by the
Employing Company by reason of any law or regulation, for the payment of
taxes or otherwise to any federal, state, local or foreign government. In
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determining the amount of any applicable tax, the Employing Company shall
be entitled to rely on the number of personal exemptions on the official
form(s) filed by the Participant with the Employing Company for purposes of
income tax withholding on regular wages.
2.6 Reemployment of a Participant
Entitlement to the unpaid balance of any Separation Benefit amount due a
Participant under this Plan shall be revoked immediately upon reemployment
of the person as an employee of an Employing Company. Such unpaid balance
shall not be payable in any future period.
However, if the person's re-employment is subsequently terminated and he or
she then becomes entitled to a Separation Benefit under this Plan, Years of
Service for the period of re-employment shall be added to that portion of
his or her prior service represented by the unpaid balance or the revoked
entitlement for the prior Separation Benefit.
2.7 Integration with Disability Benefits
The Separation Benefit payable to a Participant with respect to any
Separation Period shall be reduced (but not below zero) by the amount of
any disability benefit payable from any disability plan or program
sponsored or contributed to by an employing Company. The amount of any
such reduction shall not be paid to the Participant in any future period.
2.8 Plan Benefit Offset
The amount of any severance or separation type payment that an Employing
Company is or was obligated to pay to a Participant under any law, decree,
court award, contract, program or other arrangement because of the
Participant's separation from service from an Employing Company shall
reduce the amount of Separation Benefit otherwise payable under this Plan.
2.9 Recoupment
The Company may deduct from the Separation Benefit any amount owing to an
Employing Company from
(a) the Participant, or
(b) the executor or administrator of the Participant's estate.
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2.10 Completion of Twenty Years of Service
Any Participant who shall complete 20 Years of Service prior to the
termination of this Plan shall be vested in his/her Separation Benefit
notwithstanding the subsequent termination of this Plan prior to such
Participant's Termination of Employment. Any Separation Benefit deemed to
have vested pursuant to this section shall be payable upon such
Participant's Termination of Employment with the Employing Company and
shall be paid in accordance with the greater of (1) the Plan provisions in
effect immediately prior to the termination of this Plan, and (2) the Plan
provisions in effect on the date the Participant completed 20 Years of
Service.
2.11 Change in Control
Unless otherwise provided in writing by the Board of Directors prior to a
Change in Control of the Company, all Participant shall be vested in
his/her Separation Benefit as of the date of the Change in Control based on
such Participant's then Years of Service as determined by reference to the
schedule set forth in section 2.3.1 of this Plan. Any Separation Benefit
deemed to have vested pursuant to this section shall be payable upon the
Participant's Termination of Employment with the Employing Company and
shall be paid in accordance with the Plan provisions in effect immediately
prior to the Change in Control.
ARTICLE THREE
Method of Payment
3.1 Separation Benefit Payment
Separation Benefit payments shall, unless otherwise determined by the
Committee, be paid in the same manner as wages were paid to the
Participant.
3.2 Forfeiture of Separation Benefit Payments By Competition
Any Participant who receives Separation Benefits under section 2.3.2 of
this Plan agrees that, in consideration of the benefits provided herein,
the Participant will not without the consent of the Company enter into
competition with the Company or any of its subsidiaries. For purposes of
this paragraph, the Participant shall be deemed to be in competition if the
Participant directly or indirectly, whether as consultant, agent, officer,
director, employee or otherwise, enters into an association with another
business enterprise which then is one of the competitors of the Company or
its subsidiaries respecting one or more of the their business activities.
The parties agree that one of the essential considerations for benefits
provided the Participant hereunder is to protect and preserve the good will
of the Company and its subsidiaries and their respective enterprises, and
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that said good will would be substantially diminished in value if the
Participant were to enter into competition with the Company and its
subsidiaries during the Separation Period.
In the event the Participant is deemed to be in competition contrary to the
provisions of this section, thereupon the Participant shall forfeit all
rights to any further payments of benefits under this Plan and shall be
obligated to repay the Employing Company all benefit payments previously
received under this Plan.
In the event of a Change in Control, the Participant's obligations under
this section shall expire and be canceled, and the Participant shall be
entitled to the benefits provided under this Plan in accordance with the
terms of this Plan, notwithstanding whether the Participant thereafter
engages in competition described in this section.
3.3 Death Subsequent to Termination of Employment
If the death of a Participant occurs subsequent to the date of Termination
of Employment and before receipt of the full Separation Benefit to which he
or she was entitled, the computed lump sum value of the unpaid balance of
the Separation Benefit amount shall be paid to such Participant's
Beneficiary. If there is no designated living Beneficiary, the computed
lump sum value shall be paid to the executor or administrator of the
Participant's estate.
ARTICLE FOUR
Waiver and Release of Claims
It is a condition of this Plan that no Separation Benefit shall be paid to or
for any Participant except upon due execution and delivery to the Employing
Company by that Participant of a Separation Agreement, in substantially the form
attached to this Plan as Attachment A (except as may be modified from time to
time), by which the Participant waives and releases the Company, its
subsidiaries and their officers, directors, agents, employees, and affiliates
from all claims arising or alleged to arise out of his or her employment or the
termination of employment. Said waiver and release as provided in the
Separation Agreement being given in exchange for and in consideration of payment
of the Separation Benefit, to which the Participant would not otherwise be
entitled.
In connection therewith, the following procedures shall be followed (except as
modified from time to time): the Participant shall be advised in writing, by
receiving the written text of the Separation Agreement so stating, to consult a
lawyer before signing the Separation Agreement; the Participant shall be given
twenty-one days to consider the Separation Agreement before signing; after
signing, the Participant shall have seven days in which to revoke the Separation
Agreement; and the Separation Agreement shall not take effect until that seven
day period shall have passed.
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ARTICLE FIVE
Funding
This Plan is an unfunded employee welfare benefit plan under ERISA established
by the Company. Benefits payable to Participants shall be paid out of the
general assets of the Employing Company. The Employing Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Separation Benefits under the
Plan.
ARTICLE SIX
Administration
6.1 Named Fiduciary
This Plan shall be administered by the Company acting through the
Administrative Committee or such other person as may be designated by the
Company from time to time. The Administrative Committee shall be the
"Administrator" of the Plan and shall be, in its capacity as Administrator,
a "Named Fiduciary," as such terms are defined or used in ERISA.
6.2 Fiduciary Responsibilities
The named fiduciary shall fulfill the duties and requirements of such a
fiduciary under ERISA and is the Plan's agent for service of legal process.
The named fiduciary may designate other persons to carry out such fiduciary
responsibilities and may cancel such a designation. A person may serve in
more than one fiduciary or administrative capacity with respect to this
Plan. The named fiduciary shall periodically review the performance of the
fiduciary responsibilities by each designated person.
6.3 Specific Fiduciary Responsibilities
The Administrative Committee shall be responsible for the general
administration and interpretation of the Plan and the proper execution of
its provisions and shall have full discretion to carry out its duties. In
addition to any powers of the Administrative Committee specified elsewhere
in this Plan, the Administrative Committee shall have all discretionary
powers necessary to discharge its duties under this Plan, including, but
not limited to, the following discretionary powers and duties:
6.3.1 To interpret or construe the terms of the Plan, including eligibility
to participate, and resolve ambiguities, inconsistencies and
omissions;
6.3.2 To make and enforce such rules and regulations and prescribe the use
of such forms as it deems necessary or appropriate for the efficient
administration of the Plan; and
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6.3.3 To decide all questions concerning the Plan and the determination of
who shall be a Participate.
6.4 Allocations and Delegations of Responsibility
The Board of Directors and the Administrative Committee respectively shall
have the authority to delegate, from time to time, all or any part of its
responsibilities under this Plan to such person or persons as it may deem
advisable and in the same manner to revoke any such delegation of
responsibility. Any action of the delegate in the exercise of such
delegated responsibilities shall have the same force and effect for all
purposes hereunder as if such action had been taken by the Board of
Directors or the Administrative Committee. The Company, the Board of
Directors and the Administrative Committee shall not be liable for any
acts or omissions of any such delegate. The delegate shall report
periodically to the Board of Directors or the Administrative Committee, as
applicable, concerning the discharge of the delegated responsibilities.
The Board of Directors and the Administrative Committee respectively shall
have the authority to allocate, from time to time, all or any part of its
responsibilities under this Plan to one or more of its members as it may
deem advisable, and in the same manner to remove such allocation of
responsibilities. Any action of the member to whom responsibilities are
allocated in the exercise of such allocated responsibilities shall have the
same force and effect for all purposes hereunder as if such action had been
taken by the Board of Directors or the Administrative Committee. The
Company, the Board of Directors and the Administrative Committee shall not
be liable for any acts or omissions of such member. The member to whom
responsibilities have been allocated shall report periodically to the Board
of Directors or the Administrative Committee, as applicable, concerning the
discharge of the allocated responsibilities.
6.5 Advisors
The named fiduciary or any person designated by the named fiduciary to
carry out fiduciary responsibilities may employ one or more persons to
render advice with respect to any responsibility imposed by this Plan.
6.6 Plan Determination
The determination of the Administrative Committee as to any question
involving the general administration and interpretation or construction of
the Plan shall be within its sole discretion and shall be final, conclusive
and binding on all persons, except as otherwise provided herein or by law.
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6.7 Claims Review Procedure
Consistent with the requirements of ERISA and the regulations thereunder as
promulgated by the Secretary of Labor from time to time, the following
claims review procedure shall be followed with respect to the denial of
Separation Benefits to any Participant:
6.7.1 Within thirty (30) days from the date of a Participant's Termination
of Employment, the Employing Company shall furnish such Participant
with an agreement and release offering Separation Benefits under the
Plan or notice of such Participant's ineligibility for or denial of
Separation Benefits, either in whole or in part. Such notice from
the Employing Company will be in writing and sent to the
Participant's or the legal representatives of his estate stating the
reasons for such ineligibility or denial and, if applicable, a
description of additional information that might cause a
reconsideration by the Administrative Committee or its delegate of
the decision and an explanation for the Plan's claims review
procedure. In the event such notice is not furnished within
thirty (30) days, any claim for Separation Benefits shall be deemed
denied and the Participant shall be permitted to proceed to section
6.7.2 below.
6.7.2 Each Participant may submit a claim for benefits to the
Administrative Committee (or to such other person as may be
designated by the Administrative Committee) in writing in such form
as is permitted by the Administrative Committee. A Participant
shall have no right to seek review of a denial of benefits, or to
bring any action in any court to enforce a claim for benefits prior
to his filing a claim for benefits and exhausting his or her rights
to review under this section.
When claim for benefits has been filed properly, such claim for
benefits shall be evaluated and the Participant shall be notified of
the approval or the denial within ninety (90) days after the receipt
of such claim unless special circumstances require an extension of
time for processing the claim. If such an extension of time for
processing is required, written notice of the extension shall be
furnished to the Participant prior to the termination of the initial
ninety (90) day period which shall specify the special circumstances
requiring an extension and the date by which a final decision shall
be reached (which date shall not be later than one hundred and eighty
(180) days after the date on which the claim was filed). The
Participant shall be given a written notice in which the Participant
shall be advised as to whether the claim is granted or denied, in
whole or in part. If a claim is denied by the Administrative
Committee, in whole or in part, the Participant shall be given
written notice which shall contain (1) the specific reasons for the
denial, (2) references to pertinent Plan provisions upon which the
denial is based, (3) a description of any additional material or
information necessary to perfect the claim and an explanation of why
such material or information is necessary, and (4) the Participant's
rights to seek review of the denial.
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6.7.3 If a claim is denied, in whole or in part, the Participant shall have
the right to request that the Administrative Committee review the
denial, provided that the Participant files a written request for
review with the Administrative Committee within sixty (60) days after
the date on which the Participant received written notification of
the denial. The Participant (or his duly authorized representative)
may review pertinent documents and submit issues and comments in
writing to the Administrative Committee. Within sixty (60) days
after a request for review is received, the review shall be made and
the Participant shall be advised in writing of the decision on
review, unless special circumstances require an extension of time for
processing the review, in which case the Participant shall be given a
written notification within such initial sixty (60) day period
specifying the reasons for the extension and when such review shall
be completed (provided that such review shall be completed within one
hundred and twenty (120) days after the date on which the request for
review was filed). The decision on review shall be forwarded to the
Participant in writing and shall include specific reasons for the
decision and references to Plan provisions upon which the decision is
based. A decision on review shall be final and binding on all
persons.
6.7.4 If a Participant fails to file a request for review in accordance
with the procedures herein outlined, such Participant shall have no
rights to review and shall have no right to bring action in any court
and the denial of the claim shall become final and binding on all
persons for all purposes.
6.7.5 The determination whether to grant or to deny any claims for benefits
under this Plan shall be made by the Administrative Committee, in its
sole and absolute discretion, and all such determinations shall be
conclusive and binding on all persons to the maximum extent permitted
by law.
6.8 Modification and Termination
The Company by action of its Board of Directors may at any time, without
notice or consent of any person, terminate or modify this Plan in whole or
in part, and such termination or modification shall apply to existing as
well as to future Participants, but such actions shall not affect any
Separation Benefit that has become payable to an Participant, and such
benefit shall continue to be paid in accordance with the Plan provisions in
effect on the date of the Termination of Employment.
6.9 Indemnification
To the extent permitted by law, the Company shall indemnify and hold
harmless the members of the Board of Directors, the Administrative
Committee members, and any employee to whom any fiduciary responsibility
with respect to this Plan is allocated or delegated to, and against any and
14
all liabilities, costs and expenses incurred by any such person as a result
of any act, or omission to act, in connection with the performance of
his/her duties, responsibilities and obligations under this Plan, ERISA and
other applicable law, other than such liabilities, costs and expenses as
may result from the gross negligence or willful misconduct of any such
person. The foregoing right of indemnification shall be in addition to any
other right to which any such person may be entitled as a matter of law or
otherwise. The Company may obtain, pay for and keep current a policy or
policies of insurance, insuring the members of the Board of Directors, the
Administrative Committee members and any other employees who have any
fiduciary responsibility with respect to this Plan from and against any and
all liabilities, costs and expenses incurred by any such person as a result
of any act, or omission, in connection with the performance of his/her
duties, responsibilities and obligations under this Plan and under ERISA.
6.10 Successful Defense
A person who has been wholly successful, on the merits or otherwise, in the
defense of a civil or criminal action or proceeding or claim or demand of
the character described in section 6.9 above shall be entitled to
indemnification as authorized in such section 6.9.
6.11 Unsuccessful Defense
Except as provided in section 6.10 above, any indemnification under
section 6.9 above, unless ordered by a court of competent jurisdiction,
shall be made by the Company only if authorized in the specific case:
6.11.1 By the Board of Directors acting by a quorum consisting of
directors who are not parties to such action, proceeding, claim or
demand, upon a finding that the member of the Administrative
Committee has met the standard of conduct set forth in section 6.9
above; or
6.11.2 If a quorum under section 6.11.1 above is not obtainable with due
diligence:
6.11.2.1 By the Board of Directors upon the opinion in writing of
independent legal counsel (who may be counsel to any Employing
Company) that indemnification is proper in the circumstances
because the standard of conduct set forth in section 6.9 above has
been met by such member of the Administrative Committee; or
6.11.2.2 By the shareholders of the Company upon a finding that the member
of the Administrative Committee has met the standard of conduct
set forth in such section 7.9 above.
15
6.12 Advance Payments
Expenses incurred in defending a civil or criminal action or proceeding or
claim or demand may be paid by the Company or Employing Company, as
applicable, in advance of the final disposition of such action or
proceeding, claim or demand, if authorized in the manner specified in
section 6.11 above, except that, in view of the obligation of repayment set
forth in section 6.13 below, there need be no finding or opinion that the
required standard of conduct has been met.
6.13 Repayment of Advance Payments
All expenses incurred, in defending a civil or criminal action or
proceeding, claim or demand, which are advanced by the Company or Employing
Company, as applicable, under section 6.12 above shall be repaid in case
the person receiving such advance is ultimately found, under the procedures
set forth in this Article Six, not to be entitled to the extent the
expenses so advanced by the Company exceed the indemnification to which he
or she is entitled.
6.14 Right of Indemnification
Notwithstanding the failure of the Company or Employing Company, as
applicable, to provide indemnification in the manner set forth in sections
6.11 and 6.12 above, and despite any contrary resolution of the Board of
Directors or of the shareholders in the specific case, if the member of the
Administrative Committee has met the standard of conduct set forth in
section 6.9 above, the person made or threatened to be made a party to the
action or proceeding or against whom the claim or demand has been made,
shall have the legal right to indemnification from the Company or Employing
Company, as applicable, as a matter of contract by virtue of this Plan, it
being the intention that each such person shall have the right to enforce
such right of indemnification against the Company or Employing Company, as
applicable, in any court of competent jurisdiction.
ARTICLE SEVEN
Effective Date and Plan Year
This Plan shall be effective on and after October 28, 1997. The Plan Year is
the calendar year. The initial Plan Year is the period October 28, 1997 through
December 31, 1997.
16
ARTICLE EIGHT
Miscellaneous
8.1 Assignment
A Participant's right to benefits under this Plan shall not be assigned,
transferred, pledged, encumbered in any way or subject to attachment or
garnishment, and any attempted assignment, transfer, pledge, encumbrance,
attachment, garnishment or other disposition of such benefits shall be null
and void and without effect.
8.2 Governing Law
To the extent not governed by federal law, this Plan and all action taken
under it shall be governed by the laws of the State of Oklahoma.
8.3 Employing Company Records
The records of the Employing Company with regard to any person's
Participant status, Beneficiary status, employment history, Years of
Service and all other relevant matters shall be conclusive for purposes of
administration of the Plan.
8.4 Employment Non-Contractual
This Plan is not intended to and does not create a contract of employment,
express or implied, and an Employing Company may terminate the employment
of any employee with or without cause as freely and with the same effect as
if this Plan did not exist. Nothing contained in the Plan shall be deemed
to qualify, limit or alter in any manner the Employing Company's sole
and complete authority and discretion to establish, regulate, determined or
modify at all time, the terms and conditions of employment, including, but
not limited to, levels of employment, hours of work, the extent of hiring
and employment termination, when and where work shall be done, marketing of
its products, or any other matter related to the conduct of its business
or the manner in which its business is to be maintained or carried on, in
the same manner and to the same extent as if this Plan were not in
existence.
8.5 Taxes
Neither an Employing Company nor any fiduciary of this Plan shall be liable
for any taxes incurred by a Participant or Beneficiary for Separation
Benefit payments made pursuant to this Plan.
17
8.6 Binding Effect
This Plan shall be binding on the Company, any Employing Company and their
successors and assigns, and the Participant, Participant's heirs,
executors, administrators and legal representatives. As used in this Plan,
the term "successor" shall include any person, firm, corporation or other
business entity which at any time, whether by merger, purchase or
otherwise, acquires all or substantially all of the assets or business of
the Company or any Employing Company.
8.7 Entire Agreement
This Plan constitutes the entire understanding between the parties hereto
and may be modified only in accordance with the terms of this Plan.
18
To receive a Separation Benefit, a participant must sign the following
Separation Agreement provided by the Company:
SEPARATION AGREEMENT
[Name of Employing Company] ("Unit") and _______________________________________
("Participant") hereby agree as follows:
Participant's employment will end on __________________________, 19___.
Unit will pay to Participant a Separation Benefit of $_________________ in
accordance with and subject to the terms of the Unit Corporation Separation
Benefit Plan for Senior Management (the "Plan").
Participant knows that state and federal laws, including the Age
Discrimination in Employment Act, prohibit employment discrimination based
on age, sex, race, color, national origin, religion, handicap, disability,
or veteran status, and that these laws are enforced through the United
States Equal Employment Opportunity Commission ("EEOC"), United States
Department of Labor, and State Human Rights Agencies.
PARTICIPANT HAS BEEN ADVISED TO CONSULT AN ATTORNEY PRIOR TO
SIGNING THIS AGREEMENT.
PARTICIPANT HAS TWENTY-ONE DAYS AFTER RECEIVING THIS AGREEMENT
TO CONSIDER WHETHER TO SIGN IT.
AFTER SIGNING THIS AGREEMENT, PARTICIPANT HAS ANOTHER SEVEN
DAYS IN WHICH TO REVOKE IT, AND IT DOES NOT TAKE EFFECT UNTIL THOSE
SEVEN DAYS HAVE ENDED.
In exchange for the Separation Benefit described above, to which
Participant is not otherwise entitled, Participant forever releases and
discharges Unit Corporation, and its subsidiaries, their officers,
directors, agents, employees, and affiliates from all claims, liabilities,
and lawsuits arising out of Participant's employment or the termination of
that employment and agrees not to assert any such claim, liability, or
lawsuit. This includes any claim under the Age Discrimination in Employment
Act or under any other federal, state, or local statute or regulation
relating to employment discrimination. It also includes any claim under
any other statute or regulation or common law rule relating to
Participant's employment or the termination of that employment. This
Agreement does not have any effect with respect to acts or events occurring
19
after the date upon which Participant signs it. This Agreement does not
limit any benefits to which Participant is entitled under any retirement
plans, if any.
As further consideration for the payment of the Separation Benefit
described above, Participant agrees that if Participant's Separation
Benefit is received pursuant to section 2.3.2 "Voluntary Separation" of the
Plan, Participant will not without the consent of Unit enter into
competition with Unit Corporation or any of its subsidiaries. For purposes
of this paragraph, Participant shall be deemed to be in competition if
Participant directly or indirectly, whether as consultant, agent, officer,
director, employee or otherwise, enters into an association with another
business enterprise which then is one of the competitors of Unit
Corporation or any of its subsidiaries respecting one or more of Unit
Corporation or any of its subsidiaries business activities. The parties
agree that one of the essential considerations for benefits provided
Participant hereunder is to protect and preserve the good will of Unit
Corporation or any of its subsidiaries, and that said good will would be
substantially diminished in value if the Participant were to enter into
competition with Unit Corporation or any of its subsidiaries during the
period of time over which Participant is receiving payments or benefits
under this Plan.
In the event Participant is deemed to be in competition contrary to the
provisions hereof, thereupon Participant shall forfeit all rights to any
further payments of benefits under the Plan and shall be obligated to repay
Unit all benefit payments previously received under the Plan.
In the event of a Change in Control (as defined in the Plan), Participant's
obligations under this Paragraph shall expire and be canceled, and
Participant shall be entitled to the benefits provided under the Plan in
accordance with the terms of the Plan, notwithstanding whether Participant
thereafter engages in competition described in this Paragraph.
Participant has carefully read and fully understands all the provisions of
this Agreement. This is the entire Agreement between the parties and is
legally binding and enforceable. Participant has not relied upon any
representation or statement, written or oral, not set forth in this
Agreement.
This Agreement shall be governed and interpreted under federal law and the
laws of Oklahoma.
Participant knowingly and voluntarily signs this Agreement.
Date Delivered to Participant: [Name of Employing Company]
___________________________________ By: ______________________________
Date signed by Participant: Title: ______________________________
20
___________________________________ Date: ______________________________
Participant Signature: Seven-Day Revocation Period Ends:
___________________________________ ____________________________________
___________________________________
(Print Participant's Name)
21
SCHEDULE I
Dated as of October 28, 1997
Name of Participants
--------------------
King P. Kirchner
O. Earle Lamborn
John G. Nikkel
22