Exhibit 10.24
BOX ENERGY CORPORATION SEVERANCE PLAN
I.
DEFINITIONS AND CONSTRUCTION
1.1 Definitions. Where the following words and phrases appear in the
Plan, they shall have the respective meanings set forth below, unless their
context clearly indicates to the contrary.
(a) "Base Pay" shall mean the annual rate of base compensation
paid by the Company to a Covered Employee (including amounts which the
Covered Employee could have received in cash had he not elected to
contribute to an employee benefit plan maintained by the Company),
excluding overtime pay, bonuses, employee benefits, automobile allowances,
added premiums, differentials, and all forms of incentive compensation.
Base Pay shall be determined effective as of the date of the Covered
Employee's Involuntary Termination. A "Month's Base Pay" shall mean Base
Pay divided by twelve.
(b) "Committee" shall mean the committee appointed by the
Company to administer the Plan.
(c) "Covered Employee" shall mean any individual who, on or
after the Effective Date, is a regular employee of the Company and who is
scheduled to work 80% or more of a full-time schedule other than (1) any
individual who is a nonresident alien, (2) any individual who is not on the
Company's United States payroll and (3) any individual who the President of
the Company determines is not eligible or is no longer eligible to be a
Covered Employee provided that such determination shall be effective only
upon delivery to such individual of written notice of such ineligibility
for Plan coverage.
(d) "Effective Date" shall mean November 1, 1997.
(e) "Company" shall mean Box Energy Corporation or its
successor, and, for the period from May 13, 1981 through April 15, 1992,
CKB & Associates, Inc.
(f) "Directors" shall mean the Board of Directors of the
Company.
(g) "Involuntary Termination" shall mean any termination, on or
after the Effective Date, of a Covered Employee's employment with the
Company which does not result from a resignation or retirement by the
Covered Employee; provided, however, the term "Involuntary Termination"
shall not include:
(1) a Termination for Cause;
(2) a termination as a result of the Covered Employee's
death;
(3) any termination as the result of the Covered Employee's
disability under circumstances entitling him to benefits under the
Company's short-term or long-term disability plans; or
(4) any termination which the Company expects to be of
short duration and pursuant to which the Covered Employee is subject to
reemployment with the Company within a reasonable period of time (as
determined by the Committee).
(h) "Severance Amount" shall mean:
(1) with respect to a particular Covered Employee who is
classified by the Company as a non-exempt employee, an amount equal to the
greater of (A) 2 Months' Base Pay or (B) 1/2 Month's Base Pay for each of
such Covered Employee's Years of Service up to 6 Years of Service;
(2) with respect to a particular Covered Employee who is
classified by the Company as an exempt employee but not classified as an
executive for purposes of the Plan, an amount equal to the greater of (A) 6
Months' Base Pay or (B) 1 Month's Base Pay for each of such Covered
Employee's Years of Service up to 9 Years of Service; and
(3) with respect to a Covered Employee who is an exempt
employee who is classified as an executive for purposes of the Plan, the
greater of (A) 12 Months' Base Pay or (B) 1 Month's Base Pay for each of
such Covered Employee's Years of Service up to 18 Years of Service.
(i) "Termination for Cause" shall mean any termination of a
Covered Employee's employment with the Company by reason of the Covered
Employee's (1) conviction of any felony or of a misdemeanor involving moral
turpitude, (2) material failure to perform his duties or responsibilities
in a manner satisfactory to the Company, (3) engagement in conduct which is
injurious (monetarily or otherwise) to the Company or any of its affiliates
(including, without limitation, misuse of the Company's or an affiliate's
funds or other property), (4) engagement in business activities which are
in conflict with the business interests of the Company, (5)
insubordination, (6) engagement in conduct which is in violation of the
Company's safety rules or standards or which otherwise causes injury to
another employee or any other person, (7) engagement in conduct which is in
violation of any policy or work rule of the Company or (8) engagement in
conduct which is in violation of the Company's guidelines for appropriate
employee conduct or which is otherwise inappropriate in the office or work
environment.
(j) "Year of Service" shall mean, with respect to a particular
Covered Employee, each full year of such Covered Employee's continuous
employment by the Company from his most recent date of hire to the date his
employment is subject to an Involuntary Termination.
1.2 Number and Gender. Wherever appropriate herein, words used in
the singular shall be considered to include the plural and the plural to
include the singular. The masculine gender, where appearing in this Plan,
shall be deemed to include the feminine gender.
1.3 Headings. The headings of Articles and Sections herein are
included solely for convenience and if there is any conflict between such
headings and the text of the Plan, the text shall control.
II.
SEVERANCE BENEFITS
2.1 Severance Benefits. Subject to the provisions of Section 2.2
hereof, if a Covered Employee's employment by the Company shall be subject
to an Involuntary Termination and such Covered Employee is not entitled to
severance benefits under an individual contract, agreement or arrangement,
then the Covered Employee shall be entitled to a lump sum cash payment
within a reasonable period of time after his termination of employment in
an amount equal to the Severance Amount. Severance Amount payments
provided herein shall be subject to any required tax withholding. If a
Covered Employee is entitled to severance benefits under an individual
contract, agreement or arrangement or claims entitlement to severance
benefits under such contract, agreement or arrangement, such Covered
Employee shall not be entitled to any Severance Amount pursuant to the
preceding sentence but shall instead be entitled to severance benefits in
such amount and form as are provided pursuant to the terms of such
contract, agreement or arrangement (which contract, agreement or
arrangement is hereby incorporated by reference and made a part of this
Plan).
2.2 Release and Full Settlement. As a condition to the receipt of
any severance payment hereunder, the Company, in its sole discretion, may
require a Covered Employee whose employment by the Company has been subject
to an Involuntary Termination to first execute a release, in the form
established by the Company, releasing the Company, its shareholders,
partners, officers, directors, employees, attorneys and agents from any and
all claims and from any and all causes of action of any kind or character,
including, but not limited to, all claims or causes of action arising out
of such Covered Employee's employment with the Company or the termination
of such employment, and the performance of the Company's obligations
hereunder and the receipt of the benefits provided hereunder by such
Covered Employee shall constitute full settlement of all such claims and
causes of action.
2.3 Mitigation. A Covered Employee shall not be required to mitigate
the amount of any payment provided for in this Article II by seeking other
employment or otherwise, nor shall the amount of any payment provided for
in this Article II be reduced by any compensation or benefit earned by the
Covered Employee as the result of employment by another employer or by
retirement benefits.
2.4 Repayment Upon Reemployment. If a Covered Employee who has
received severance benefits pursuant to the first sentence of Section 2.1
above is reemployed by the Company other than on a temporary or part-time
basis or as an independent contractor, he shall be required to repay to the
Company the following amount:
(a) The Severance Amount paid to him by the Company incident to
his Involuntary Termination; minus
(b) The amount of Months' Base Pay that he would have received
from the Company between the date of his Involuntary Termination and the
date of his reemployment by the Company had he remained employed by the
Company during such period.
Any repayment required pursuant to this Section 2.4 shall be made in a
single lump sum within thirty days of the Covered Employee's reemployment
with the Company; provided, however, that the Company, in its sole
discretion, may permit the Covered Employee to tender such repayment by
payroll deductions over such period of time as the Company may determine.
III.
ADMINISTRATION OF PLAN
3.1 Plan Administration. For the purposes of the Plan and the
Employee Retirement Income Security Act of 1974, as amended, the plan
administrator and named fiduciary of the Plan is the Committee. The
Committee shall hold such meetings and establish such rules and procedures
as may be necessary to enable it to discharge its duties hereunder. All
actions of the Committee shall be recorded by a secretary who need not be a
Committee member. The Committee shall have all powers necessary or proper
to administer the Plan and to discharge its duties under the Plan,
including, but not limited to, the following powers:
(a) To make and enforce such rules and regulations as it may
deem necessary or proper for the orderly and efficient administration of
the Plan;
(b) To interpret the Plan, its interpretation thereof in good
faith to be final and conclusive on all persons claiming benefits under the
Plan;
(c) To authorize the payment of benefits under the Plan;
(d) To prepare and distribute information explaining the Plan;
(e) To appoint or employ persons to assist in the administration
of the Plan; and
(f) To obtain such information as is necessary for the proper
administration of the Plan.
The Committee may allocate to others certain aspects of the management,
operation and responsibilities of the Plan, including the employment of
advisors and the delegation of any ministerial duties or functions to
qualified individuals. The Company agrees to indemnify the members of the
Committee against all liabilities, damages, costs and expenses (including
attorneys' fees and amounts paid in settlement of any claims approved by
the Company) occasioned by any act or omission to act in connection with
the Plan if such act or omission was in good faith.
3.2 Claims Review. In any case in which a Covered Employee's claim
for Plan benefits is denied or modified, the Committee shall:
(a) state the specific reason for the denial or modification;
(b) provide specific reference to pertinent Plan provisions on
which the denial or modification is based;
(c) provide a description of any additional material or
information necessary for the Covered Employee or his representative to
perfect the claim and an explanation of why such material or information is
necessary; and
(d) explain the Plan's claim review procedure as contained
herein.
In the event the request is denied or modified, if the Covered Employee or
his representative desires to have such denial or modification reviewed, he
must, within sixty days following receipt of the notice of such denial or
modification, submit a written request for review by the Committee of its
initial decision. Within sixty days following such request for review the
Committee shall render its final decision in writing to the Covered
Employee or his representative stating specific reasons for such decision.
If special circumstances require an extension of such sixty-day period, the
Committee's decision shall be rendered as soon as possible, but not later
than 120 days after receipt of the request for review. If an extension of
time for review is required, written notice of the extension shall be
furnished to the Covered Employee or representative prior to the
commencement of the extension period.
3.2 Mandatory Arbitration. Any controversy or claim arising from or
relating to a claim for benefits payable by the Plan of a Covered Employee
who is not satisfied with the decision of the Committee pursuant to the
Plan's claims review procedure, shall be settled by arbitration
administered by the American Arbitration Association under its Employee
Benefit Plan Claims Arbitration Rules, incorporated by reference herein.
The decision of the arbitrator shall be final and binding and judgment on
the award may be entered in any court having jurisdiction. In reviewing
the decision of the Committee, the arbitrator shall use the standard of
review which would be used by a Federal court in reviewing such decision
under the provisions of the Employee Retirement Income Security Act of
1974, as amended. The Covered Employee and the Company shall share equally
the cost of such arbitration.
IV.
GENERAL PROVISIONS
4.1 Funding. The benefits provided herein shall be unfunded and
shall be provided from the Company's general assets.
4.2 Cost of Plan. The entire cost of the Plan shall be borne by the
Company and no contributions shall be required of the Covered Employees.
4.3 Plan Year. The Plan shall operate on a plan year consisting of
the twelve consecutive month period commencing on January 1 of each year.
4.4 Amendment and Termination. The Plan may be amended from time to
time, or terminated and discontinued, at any time, in each case at the
discretion of the Directors; provided, however, that the Plan may not be
amended or terminated with respect to any Covered Employee who in October
of 1997 agreed to amend his or her individual severance benefit contract,
agreement or arrangement to modify the definition of events triggering
severance benefit entitlement. A Plan amendment shall be effected by
adoption of the Directors of a resolution setting forth such amendment and
by execution by the Company's president or his delegatee of a written
instrument of Plan amendment. Plan termination shall be effected by
adoption by the Directors of a resolution to terminate the Plan and by
execution of the Company's president or his delegatee of a written
instrument of Plan termination.
4.5 Not Contract of Employment. The adoption and maintenance of the
Plan shall not be deemed to be a contract of employment between the Company
and any person or to be consideration for the employment of any person.
Nothing herein contained shall be deemed to give any person the right to be
retained in the employ of the Company or to restrict the right of the
Company to discharge any person at any time nor shall the Plan be deemed to
give the Company the right to require any person to remain in the employ of
the Company or to restrict any person's right to terminate his employment
at any time.
4.6 Severability. Any provision in the Plan that is prohibited or
unenforceable in any jurisdiction by reason of applicable law shall, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating or affecting the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
4.7 Nonalienation. Covered Employees shall not have any right to
pledge, hypothecate, anticipate or assign benefits or rights under the
Plan, except by will or the laws of descent and distribution.
4.8 Governing Law. The Plan shall be interpreted and construed in
accordance with the laws of the State of Texas except to the extent
preempted by federal law.
IN WITNESS WHEREOF, the Company has executed this Plan this 22 day of
October, 1997.
BOX ENERGY CORPORATION
By /S/ James A. Watt