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EXHIBIT 10.8
AMENDED AND RESTATED
BURLINGTON RESOURCES INC.
EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN
WHEREAS, the Board of Directors of the Company recognizes that the
possibility of a Change in Control exists and that the threat or the occurrence
of a Change in Control can result in significant distractions of its key
executive personnel because of the uncertainties inherent in such a situation;
and
WHEREAS, the Board has determined that it is essential and in the best
interest of the Company and its stockholders to retain the services of its key
executive personnel in the event of a threat of a Change in Control and to
ensure their continued dedication and efforts in such event without undue
concern for their personal financial and employment security.
NOW, THEREFORE, in order to fulfill the above purposes, the following plan
has been developed and is hereby adopted.
ARTICLE I
ESTABLISHMENT OF AMENDED AND RESTATED PLAN
As of the Effective Date, the Company hereby amends and restates the
Burlington Resources Inc. Key Executive Severance Protection Plan as set forth
in this document.
ARTICLE II
DEFINITIONS
As used herein, the following words and phrases shall have the following
respective meanings unless the context clearly indicates otherwise.
2.1 Affiliate. The term "Affiliate" shall mean with respect to any person
or entity, any entity, directly or indirectly, controlled by, controlling or
under common control with such person or entity.
2.2 Base Salary. The amount a Participant is entitled to receive as wages
or salary on an annualized basis, calculated immediately prior to a Change in
Control or, if greater, at any time thereafter.
2.3 Benefits Protection Trust. The Burlington Resources Inc. Benefits
Protection Trust.
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2.4 Board. The Board of Directors of Burlington Resources Inc.
2.5 Bonus Amount. The term "Bonus Amount" shall mean for any Participant
the greater of (i) an amount equal to the Participant's annual bonus which would
have been payable under the Burlington Resources Inc. Incentive Compensation
Plan (or any other bonus plan or program that is a successor to the Incentive
Compensation Plan) (the "ICP") for the fiscal year in which a Change of Control
occurs had he continued in employment until the end of such fiscal year and had
bonuses been payable at the "excellent" level of performance and (ii) the
highest annual bonus paid or payable to the Participant under the ICP in respect
of any of the three (3) fiscal years of the Company preceding the Participant's
termination of employment, but in the case of each of (i) and (ii) excluding any
single or one time "spot" award.
2.6 Cause. The Employer may terminate the Participant's employment for
"Cause." A termination for Cause is a termination evidenced by a resolution
adopted in good faith by two-thirds (2/3) of the Board that the Participant (i)
willfully and continually failed to substantially perform his duties with the
Employer (other than a failure resulting from the Participant's incapacity due
to physical or mental illness) which failure continued for a period of at least
thirty (30) days after a written notice of demand for substantial performance
has been delivered to the Participant specifying the manner in which the
Participant has failed to substantially perform, or (ii) willfully engaged in
conduct which is demonstrably and materially injurious to the Employer or any of
its Affiliates, monetarily or otherwise; provided, however, that no termination
of the Participant's employment shall be for Cause as set forth in clause (ii)
above until (x) there shall have been delivered to the Participant a copy of a
written notice setting forth that the Participant was guilty of the conduct set
forth in clause (ii) and specifying the particulars thereof in detail, and (y)
the Participant shall have been provided an opportunity to be heard by the Board
(with the assistance of the Participant's counsel if the Participant so
desires). No act, nor failure to act, on the Participant's part shall be
considered "willful" unless he has acted, or failed to act, with an absence of
good faith and without a reasonable belief that his action or failure to act was
in the best interest of the Employer and its Affiliates. Notwithstanding
anything contained in this Plan to the contrary, no failure to perform by the
Participant after Notice of Termination is given by the Participant shall
constitute Cause.
2.7 Change In Control. A "Change in Control" shall mean the occurrence of
any of the following:
(a) An acquisition (other than directly from the Company) of any
voting securities of the Company (the "Voting Securities") by any "Person" (as
the term person is used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), immediately after which
such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of
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twenty percent (20%) or more of the then outstanding shares of its common stock
("Shares") or the combined voting power of the Company's then outstanding Voting
Securities; provided, however, in determining whether a Change in Control has
occurred pursuant to this Section 2.7(a), Shares or Voting Securities which are
acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a
trust forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its voting power or its
voting equity securities or equity interest is owned, directly or indirectly, by
the Company (for purposes of this definition, a "Related Entity"), (ii) the
Company or any Related Entity, or (iii) any Person in connection with a
"Non-Control Transaction" (as hereinafter defined).
(b) The consummation of:
(i) A merger, consolidation or reorganization with or into the
Company or in which securities of the Company are issued ( a "Merger"), unless
such Merger is a "Non-Control Transaction." A "Non-Control Transaction" shall
mean a Merger where:
(A) the stockholders of the Company, immediately before
such Merger own directly or indirectly immediately following such Merger
at least fifty percent (50%) of the combined voting power of the
outstanding voting securities of (x) the corporation resulting from such
Merger (the "Surviving Corporation") if fifty percent (50%) or more of the
combined voting power of the then outstanding voting securities of the
Surviving Corporation is not Beneficially Owned, directly or indirectly by
another Person (a "Parent Corporation"), or (y) if there is one or more
Parent Corporations, the ultimate Parent Corporation;
(B) the individuals who were members of the Incumbent
Board (as hereinafter defined) immediately prior to the execution of the
agreement providing for such Merger constitute at least a majority of the
members of the board of directors of (x) the Surviving Corporation, if
there is no Parent Corporation, or (y) if there is one or more Parent
Corporations, the ultimate Parent Corporation; and
(C) no Person other than (1) the Company, (2) any
Related Entity, (3) any employee benefit plan (or any trust forming a part
thereof) that, immediately prior to such Merger, was maintained by the
Company or any Related Entity, or (4) any Person who, immediately prior to
such Merger, had Beneficial Ownership of twenty percent (20%) or more of
the then outstanding Voting Securities or Shares has Beneficial Ownership
of twenty percent (20%) or more of the combined voting power of the
outstanding voting securities or common stock
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of (x) the Surviving Corporation if there is no Parent Corporation, or (y)
if there is one or more Parent Corporations, the ultimate Parent
Corporation;
(ii) A complete liquidation or dissolution of the Company; or
(iii) The sale or other disposition of all or substantially
all of the assets of the Company to any Person (other than a transfer to a
Related Entity or under conditions that would constitute a Non-Control
Transaction with the disposition of assets being regarded as a Merger for this
purpose or the distribution to the Company's stockholders of the stock of a
Related Entity or any other assets).
(c) The individuals who, as of the Effective Date, are members of
the Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the members of the Board or, following a Merger which results in a
Parent Corporation, the board of directors of the ultimate Parent Corporation;
provided, however, that if the election, or nomination for election by the
Company's common stockholders, of any new director was approved by a vote of at
least two-thirds of the Incumbent Board, such new director shall, for purposes
of this Plan, be considered as a member of the Incumbent Board; provided
further, however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a
"Proxy Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest.
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Shares or
Voting Securities as a result of the acquisition of Shares or Voting Securities
by the Company which, by reducing the number of Shares or Voting Securities then
outstanding, increases the proportional number of shares Beneficially Owned by
the Subject Persons, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of Shares or
Voting Securities by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of any additional
Shares or Voting Securities which increase the percentage of the then
outstanding Shares or Voting Securities Beneficially Owned by the Subject
Person, then a Change in Control shall occur.
2.8 Company. Burlington Resources Inc.
2.9 Effective Date. The date this Amended and Restated Plan is approved by
the Board.
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2.10 Employer. As applicable to any Participant, the Company or a
subsidiary of the Company that employs the Participant.
2.11 Executive Employee. Each employee of the Company or any of its
wholly-owned subsidiaries, in each case who is at the level of vice president or
higher in the Company or Burlington Resources Oil & Gas Company.
2.12 Good Reason. "Good Reason" shall mean the occurrence of any of the
following events or conditions:
(a) a change in the Participant's status, title, position or
responsibilities (including reporting responsibilities) which, in the
Participant's reasonable judgment, represents a substantial reduction of the
status, title, position or responsibilities as in effect immediately prior
thereto; the assignment to the Participant of any duties or responsibilities
which, in the Participant's reasonable judgment, are inconsistent with such
status, title, position or responsibilities; or any removal of the Participant
from or failure to reappoint or reelect him to any of such positions, except in
connection with the termination of his employment for Cause, Permanent
Disability, as a result of his death, or by the Participant other than for Good
Reason;
(b) a reduction in the Participant's annual base salary;
(c) the Employer's requiring the Participant (without the consent of
the Participant) to be based at any place outside a thirty-five (35) mile radius
of his place of employment prior to a Change in Control, except for reasonably
required travel on the Employer's business which is not materially greater than
such travel requirements prior to the Change in Control;
(d) the failure by the Employer to (A) continue in effect (without
reduction in benefit level and/or reward opportunities) any material
compensation or benefit plan, program or practice in which the Participant was
participating at the time of the Change in Control, including, but not limited
to, the Company's Stock Incentive Plans, Performance Share Unit Plan, Pension
Plan, Retirement Savings Plan, Health Plan (Medical, Dental and Vision), Basic
Employer Life Plan, Deferred Compensation Plan (and including, without
limitation, The Louisiana Land and Exploration Company Deferred Compensation
Arrangement), Supplemental Benefits Plan, Senior Executive Survivor Benefit Plan
(if applicable to the Participant) and Incentive Compensation Plan, unless a
substitute or replacement plan has been implemented which provides substantially
similar compensation or benefits to the Participant or (B) provide the
Participant with compensation and benefits at least equal (in terms of benefit
levels and/or reward opportunities) to those provided for under each employee
benefit plan, program and practice as in effect immediately prior to the Change
in Control (or as in effect following the Change in Control, if greater);
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(e) any material breach by the Company of any provision of this
Plan; or
(f) any purported termination of the Participant's employment for
Cause by the Employer which does not otherwise comply with the terms of this
Plan.
Any event described in Section 2.12(a) through (f) which occurs
prior to a Change in Control but which the Participant reasonably demonstrates
(1) was at the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change in Control and who effectuates a
Change in Control or (2) otherwise arose in connection with, or in anticipation
of, a Change in Control which actually occurs, shall constitute Good Reason for
purposes of this Agreement notwithstanding that it occurred prior to a Change in
Control. Any such action which occurs subsequent to the execution of an
agreement providing for a transaction or transactions which if consummated would
constitute a Change in Control shall conclusively be presumed to be in
connection with a Change in Control.
2.13 Notice of Termination. "Notice of Termination" shall mean a notice
which indicates the specific provisions in this Plan relied upon as the basis
for any termination of employment and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of a
Participant's employment under the provision so indicated. No purported
termination of employment shall be effective without such Notice of Termination.
2.14 Operating Unit. Any subsidiary, division or other operating unit of
the Company or any of its subsidiaries.
2.15 Participant (i) An Executive Employee who meets the eligibility
requirements of Article III and (ii) such other employees of the Company and its
subsidiaries who are designated on Schedule A to this Plan as Participants in
this Plan by the Company's Chief Executive Officer or by the Compensation
Committee of the Board.
2.16 Permanent Disability. A Participant shall be deemed to have become
permanently disabled for purposes of this Plan if the Chief Executive Officer of
the Company (or in the case of the Chief Executive Officer, the Compensation
Committee of the Board) finds, upon the basis of medical evidence satisfactory
to him (or it), that the Participant is totally disabled, whether due to
physical or mental condition, so as to be prevented from engaging in further
employment by the Employer and that such disability will be permanent and
continuous during the remainder of his life; provided, that no Participant shall
be deemed to have become permanently disabled unless prior to the determination
by the Company's Chief Executive Officer or Compensation Committee of the Board,
as applicable, the Participant has been determined to qualify for long-term
disability benefits under an applicable long-term disability benefit plan of the
Employer.
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2.17 Pro-Rata Bonus. With respect to the fiscal year in which a
Participant's Termination Date occurs, an amount equal to the Bonus Amount
multiplied by a fraction the numerator of which is the number of days that have
elapsed in such fiscal year through the Termination Date and the denominator of
which is 365; provided, however, that the Pro-Rata Bonus shall be reduced, but
not below zero, to the extent of any bonus the Participant is entitled to
receive pursuant to the Incentive Compensation Plan in respect of the fiscal
year in which the Termination Date occurs.
2.18 Severance Benefit. The benefit payable in accordance with Article IV
of the Plan.
2.19 Termination Date. The date of the termination of a Participant's
employment with the Employer as determined in accordance with Article V.
ARTICLE III
ELIGIBILITY
3.1 Participation. Each Executive Employee shall automatically be entitled
to be a Participant in the Plan as of the Effective Date or his date of hire by
the Employer, whichever occurs later. Each other employee designated in writing
as a Participant in the Plan pursuant to Section 2.15 hereof shall be entitled
to be a Participant in the Plan as of the Effective Date or the date of such
designation, whichever occurs later.
3.2 Duration of Participation. A Participant who is an Executive Employee
shall cease to be a Participant in the Plan (i) if, prior to a Change in
Control, he ceases to be an Executive Employee, or (ii) if his employment is
terminated under circumstances where he is not entitled to a Severance Benefit
under the terms of this Plan. An employee who is a Participant in the Plan by
reason of the designation pursuant to Section 2.15 hereof shall cease to be a
Participant in the Plan (i) if, prior to a Change in Control, the Company's
Chief Executive Officer or the Compensation Committee of the Board shall remove
him from participation, or (ii) if his employment is terminated under
circumstances where he is not entitled to a Severance Benefit under the terms of
this Plan. A Participant entitled to payment of a Severance Benefit shall remain
a Participant in the Plan until the full amount of the Severance Benefit has
been paid to him.
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ARTICLE IV
SEVERANCE BENEFITS
4.1 Right to Severance Benefit.
(a) A Participant shall be entitled to receive from the Company a
Severance Benefit in the amount provided in Section 4.2 if (i) a Change in
Control has occurred and (ii) within two years thereafter, the Participant's
employment with the Employer terminates for any reason, except that
notwithstanding the foregoing provisions of this Section 4.1(a), no benefits
under this Plan will be payable should the Participant's termination of
employment be (A) for Cause, (B) by reason of Permanent Disability, (C)
initiated by the Participant for other than Good Reason, (D) by reason of the
Participant's death or (E) an Excluded Termination (as defined in Section
4.1(c)).
(b) Notwithstanding anything to the contrary contained herein, if
the employment of a Participant is terminated prior to a Change in Control but
the Participant reasonably demonstrates that such termination (i) was at the
request of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control and who effectuates a Change
in Control or (ii) was otherwise in connection with, or in anticipation of, a
Change in Control which actually occurs, then for purposes of this Plan the date
of a Change in Control with respect to that Participant shall be deemed to be
the date immediately prior to the Participant's Termination Date. If any such
termination occurs while an agreement is pending and the effective provisions of
such agreement provide for a transaction or transactions which if consummated
would constitute a Change in Control, then such termination shall conclusively
be presumed to be in connection with a Change in Control.
(c) If, following a Change in Control, a Participant's employment
with the Employer terminates in connection with the sale, divestitute or other
disposition of the stock or assets of any Operating Unit (or part thereof) (a
"Transaction"), such termination shall not be a termination of employment of the
Participant for purposes of the Plan, and (notwithstanding the rights provided
to the Participant by Section 4.1(a)) the Participant shall not be entitled to a
Severance Benefit as a result of such termination of employment if (i) the
Participant is offered continued employment, or continues in employment, with
the divested Operating Unit (or part thereof) or the purchaser of the stock or
assets of the Operating Unit (or part thereof), as the case may be, or one of
their respective Affiliates (the "Post-Transaction Employer") on terms and
conditions that would not constitute Good Reason and (ii) the Company obtains an
agreement from the acquiror of the stock or assets of the divested Operating
Unit (or part thereof), enforceable by the Participant, to provide or cause the
Post-Transaction Employer to provide severance pay and benefits, if the
Participant accepts the offered employment or continues in employment with the
Post-Transaction Employer or its Affiliates following the Transaction, (A) at
least equal
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to the Severance Benefit and (B) payable upon a termination of the Participant's
employment with the Post-Transaction Employer and its Affiliates within the
period described in Section 4.1(a)(ii) (or such part of it as is then remaining)
for any reason other than Cause, Permanent Disability, the Participant's death
or a termination by the Participant without Good Reason. For purposes of this
Section 4.1(c), the terms Cause, Good Reason and Permanent Disability shall have
the meanings ascribed to them in Sections 2.6, 2.12 and 2.16 respectively, but
the term Employer as it is used in those Sections shall be deemed to refer to
the entity employing the Participant after the Transaction, and the terms Board,
Chief Executive Officer and Compensation Committee as used in those Sections
shall be deemed to refer to the individuals or bodies serving those functions
for such employer or, if applicable, the ultimate parent corporation of such
employer.
A termination of employment described in this Section 4.1(c)
is herein referred to as an "Excluded Termination." In the circumstances
described in this Section 4.1(c), the Participant shall not be entitled to
receive any Severance Benefit under this Plan whether or not the Participant
accepts the offered employment or continues in employment. The provisions of
this Section 4.1(c) do not create any entitlement to any Severance Benefit from
the Company and its subsidiaries in any circumstances whatsoever and are to be
construed solely as a limitation on such entitlement in the circumstances herein
set forth.
4.2 Amount of Severance Benefit. If a Participant's employment is
terminated in circumstances entitling him to a Severance Benefit as provided in
Section 4.1, such Participant shall be entitled to the following benefits:
(a) the Company shall pay to the Participant a Pro-Rata Bonus;
(b) the Company shall pay to the Participant, as severance pay and
in lieu of any further salary for periods subsequent to the Termination Date (as
specified in Section 5.2), in a single payment (without any discount for
accelerated payment), an amount in cash equal to three (3) times the sum of (A)
the Participant's Base Salary and (B) the Bonus Amount;
(c) for a period of thirty six (36) months subsequent to the
Participant's Termination Date, the Company shall at its expense continue, on
behalf of the Participant and his dependents and beneficiaries, the benefits
listed on Schedule B to this Plan which were being provided to the Participant
at the time of the Change in Control or at any time thereafter. The benefits
provided in this Subsection 4.2(c) shall be no less favorable to the
Participant, in terms of amounts and deductibles and costs to him, than the
coverage provided the Participant under the plans providing such benefits
immediately prior to the Change in Control or, if greater, at any time
thereafter. The obligation under this Section 4.2(c) with respect to the
foregoing benefits shall be limited if the Participant obtains any
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such benefits pursuant to a subsequent employer's benefit plans, in which case
the Company may reduce or eliminate the coverage and benefits it is required to
provide the Participant hereunder as long as the aggregate coverages and
benefits of the combined benefit plans are no less favorable to the Participant
than the coverages and benefits required to be provided hereunder. The Company
also shall pay a lump sum equal to the amount of any additional income tax
payable by the Participant and attributable to the benefits provided under this
subparagraph (c) at the time such tax is imposed upon the Participant;
(d) the Company shall pay a lump sum pension supplement payable
under the terms of the Burlington Resources Supplemental Benefit Plan (the
"Supplemental Plan") equal to a pension calculated (i) by adding three (3) years
of additional credited pension service to the Participant's existing credited
pension service as of the termination of the Participant's employment, (ii) by
assuming that for each of the three (3) years of service added pursuant to
clause (i) that the Participant's compensation was equal to the sum of the
Participant's Base Salary and Bonus Amount and (iii) then by calculating the
Participant's pension in accordance with the formula provided in the pension
plan. A Participant who is entitled to a pension supplement under any other
agreement between such Participant and the Company may elect, in writing, to
receive the pension supplement provided under this subparagraph (d) in lieu of,
but not in addition to, such other pension supplement as may be provided by such
other agreement. In the event that no election is made, the Participant shall
forego his right to receive the pension supplement provided under this
subparagraph;
(e) the Company shall transfer to the Participant, all right, title
or other ownership interest it may have in any automobile then being provided
for use by the Participant;
(f) the Company shall transfer to the Participant, any right, title
or ownership in any club memberships provided by the Company;
(g) the Company shall pay or reimburse the Participant for costs,
fees and expenses of executive outplacement assistance services provided to the
Participant during the one (1) year period following the Participant's
Termination Date by any outplacement service provider selected by the
Participant; and
(h) the amounts provided for in Sections 4.2(a), (b), (d), (e) and
(f) shall be paid or transferred within thirty (30) days after the Participant's
Termination Date.
The Participant shall not be required to mitigate the amount of any payment
provided for in this Plan by seeking other employment or otherwise and no such
payment shall be offset or reduced by the amount of any compensation or benefits
provided to the Executive in any subsequent employment.
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4.3 Reduction of Severance Benefit. Notwithstanding any of the other
provisions of this Plan, any Severance Benefits paid or payable to a Participant
shall be reduced by any severance, termination or similar payment to which such
Participant is entitled under (i) the Burlington Resources Inc. Severance
Benefit Plan for Certain Employees of The Louisiana Land and Exploration
Company, (ii) The LL&E Change in Control Severance Plan for Key Executives,
(iii) a Termination Agreement to which the Participant and The Louisiana Land
and Exploration Company are parties or (iv) any letter agreement or similar
arrangement to which the Participant is a party.
ARTICLE V
TERMINATION OF EMPLOYMENT
5.1 Written Notice Required. Any purported termination of employment,
either by the Employer or by the Participant, shall be communicated by written
Notice of Termination to the other.
5.2 Termination Date. In the case of the Participant's death, the
Participant's Termination Date shall be his date of death. In all other cases,
the Participant's Termination Date shall be the date specified in the Notice of
Termination subject to the following:
(a) If the Participant's employment is terminated by the Employer
for Cause or due to Permanent Disability, the date specified in the Notice of
Termination shall be at least thirty (30) days from the date the Notice of
Termination is given to the Participant, provided that in the case of Permanent
Disability the Participant shall not have returned to the full-time performance
of his duties during such period of at least thirty (30) days; and
(b) If the Participant terminates his employment for Good Reason,
the date specified in the Notice of Termination shall not be more than sixty
(60) days from the date the Notice of Termination is given to the Employer.
ARTICLE VI
ADDITIONAL PAYMENTS BY THE COMPANY
6.1 Gross-Up Payment. In the event it shall be determined that any payment
or distribution of any type by the Company to or for the benefit of the
Participant, whether paid or payable or distributed or distributable pursuant to
the terms of this Plan or otherwise (the "Total Payments"), would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code") or any interest or
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penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are collectively referred to as the "Excise Tax"),
then the Participant shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the Participant of
all taxes (including any interest or penalties imposed with respect to such
taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the
Participant retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Total Payments. Payment of the Gross-Up Payment shall be made
in accordance with Section 6.3.
6.2 Determination By Accountant. All determinations required to be made
under this Section 6, including whether a Gross-Up Payment is required and the
amount of such Gross-Up Payment, shall be made by one of the largest five (5)
independent accounting firms in the United States selected by the Company or if
the Participant objects to such accounting firm, as selected by the Participant
(the "Accounting Firm"), which shall provide detailed supporting calculations
both to the Company and the Participant within 15 business days of the date of
termination, if applicable, or such earlier time as is requested by the Company.
If the Accounting Firm determines that no Excise Tax is payable by the
Participant, it shall furnish the Participant with an opinion that he has
substantial authority not to report any Excise Tax on his federal income tax
return. Any determination by the Accounting Firm shall be binding upon the
Company and the Participant. 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 the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 6.3 and the Participant
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 the Company to or for the benefit of the
Participant. The cost of all determinations made pursuant to this Section 6.2
shall be paid by the Company.
6.3 Notification Required. The Participant shall notify the Company in
writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such notification
shall be given as soon as practicable but no later than ten business days after
the Participant knows of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Participant shall not pay such claim prior to the expiration of the thirty-day
period following the date on which it gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Participant in writing prior to the
expiration of such period that it desires to contest such claim, the Participant
shall:
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(a) give the Company any information reasonably requested by the
Company relating to such claim;
(b) take such action in connection with contesting such claim as the
Company 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 the Company;
(c) cooperate with the Company in good faith in order to effectively
contest such claim; and
(d) permit the Company to participate in any proceedings relating to
such claim, provided, however, that the Company 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 the Participant
harmless, on an after-tax basis, for any Excise Tax or 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 6.3, the Company 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 the Participant to pay the tax claimed and sue for a
refund, or contest the claim in any permissible manner, and the Participant
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 the Company shall determine; provided, however, that if the Company
directs the Participant to pay such claim and sue for a refund, the Company
shall advance the amount of such payment to the Participant, on an interest-free
basis and shall indemnify and hold the Participant harmless, on an after-tax
basis, from any Excise Tax or 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 provided, further, that any
extension of the statute of limitations relating to payment of taxes for the
taxable year of the Participant with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Participant shall be
entitled to mettle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
6.4 Repayment. If, after the receipt by the Participant of an amount
advanced by the Company pursuant to Section 6.3, the Participant becomes
entitled to receive any refund with respect to such claim, the Participant shall
(subject to the Company's complying with the requirements of Section 6.3)
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes
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applicable thereto). If, after the receipt by the Participant of an amount
advanced by the Company pursuant to Section 6.3, a determination is made that
the Participant shall not be entitled to any refund with respect to such claim
and the Company does not notify the Participant in writing of its intent to
contest such denial of refund prior to the expiration of thirty 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.
ARTICLE VII
SUCCESSORS TO COMPANY
7.1 Successors. This Plan shall bind any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, in the same
manner and to the same extent that the Company would be obligated under this
Plan if no succession had taken place. In the case of any transaction in which a
successor would not by the foregoing provision or by operation of law be bound
by this Plan, the Company shall require such successor expressly and
unconditionally to assume and agree to perform the obligations of the Company
and each Employer under this Plan, in the same manner and to the same extent
that the Company and each Employer would be required to perform if no such
succession had taken place.
ARTICLE VIII
DURATION, AMENDMENT AND PLAN TERMINATION
8.1 Duration. This Plan shall continue in effect until terminated in
accordance with Section 8.2. If a Change in Control occurs, this Plan shall
continue in full force and effect, and shall not terminate or expire until after
all Participants who have become entitled to a Severance Benefit hereunder shall
have received such payments in full.
8.2 Amendment and Termination. Prior to a Change in Control, the Plan may
be amended or modified in any respect, and may be terminated, in any such case,
by resolution adopted by two-thirds of the Board; provided, however, that no
such amendment, modification or termination which would adversely affect the
benefits or protections hereunder of any individual who is a Participant as of
the date such amendment, modification or termination is adopted shall be
effective as it relates to such individual unless no Change in Control occurs
within one (1) year after such adoption, any such attempted amendment,
modification or termination adopted within one (1) year prior to a Change in
Control being null and void ab initio as it relates to all such individuals who
were Participants prior to such adoption (it being understood that (i) the
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modification of Schedule A to remove Participants therefrom shall, for purposes
of this proviso, constitute an adverse action for the Participants so removed,
and (ii) the modification of Schedule B to remove plans therefrom shall, for
purposes of this proviso, also constitute an adverse action); provided, further,
however, that the Plan may not be amended, modified or terminated, (i) at the
request of a third party who has indicated an intention or taken steps to effect
a Change in Control and who effectuates a Change in Control or (ii) otherwise in
connection with, or in anticipation of, a Change in Control which actually
occurs, any such attempted amendment, modification or termination being null and
void ab initio. Any action taken to amend, modify or terminate the Plan which is
taken subsequent to the execution of an agreement providing for a transaction or
transactions which, if consummated, would constitute a Change in Control shall
conclusively be presumed to have been taken in connection with a Change in
Control. From and after the occurrence of a Change in Control, the Plan may not
be amended or modified in any manner that would in any way adversely affect the
benefits or protections provided hereunder to any individual who is a
Participant in the Plan on the date the Change in Control occurs.
8.3 Form of Amendment. The form of any amendment or termination of the
Plan in accordance with Section 8.2 hereof shall be a written instrument signed
by a duly authorized officer or officers of the Company, certifying that the
amendment or termination has been approved by the Board (or, in the case of the
schedules to the Plan, by the Company's Chief Executive Officer or the
Compensation Committee of the Board).
8.4 Schedules. The schedules to the Plan constitute part of the Plan, and,
without limiting the generality of other provisions of the Plan, the amendment
or modification thereof shall comply with Section 8.2 hereof (except that such
amendment or modification shall be by action of the Company's Chief Executive
Officer or the Compensation Committee of the Board, rather than by the Board).
ARTICLE IX
MISCELLANEOUS
9.1 Legal Fees and Expenses; Indemnification. (a) The Company shall pay
all legal fees and related expenses (including the costs of experts, evidence
and counsel) reasonably and in good faith incurred by a Participant as they
become due as a result of the Participant seeking to obtain or enforce any right
or benefit provided by this Plan.
(b) The Company agrees to fully indemnify each Participant to the fullest
extent permitted by law and by the Company's certificate of incorporation and
by-laws for any liability the Participant may incur by reason of his employment
with the Employer and his activities as an officer or director of the Company
and its affiliates.
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9.2 Employment Status. This Plan does not constitute a contract of
employment or impose on any Employer any obligation to retain any Participant as
an employee, to change the status of any Participant's employment as an
Executive Employee (if applicable), or to change any employment policies of any
Employer.
9.3 Validity and Severability. The invalidity or unenforceability of any
provision of the Plan shall not affect the validity or enforceability of any
other provision of the Plan, which shall remain in full force and effect, and
any prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
9.4 Settlement of Claims. The Company's obligation to make the payments
provided for in this Plan and otherwise to perform its obligations hereunder
shall not be affected by any circumstances, including, without limitation, any
set-off, counterclaim, defense, recoupment, or other right which the Company may
have against a Participant or others.
9.5 Governing Law. The validity, interpretation, construction and
performance of the Plan shall in all respects be governed by the laws of the
State of Texas.
9.6 Payment to Benefits Protection Trust. Notwithstanding any other
provision of the Plan, the Company shall not be required to make any payment to
a Participant under the terms of this Plan if such payment is otherwise made to
the Benefits Protection Trust in accordance with the provisions of said Benefits
Protection Trust.
9.7 Choice of Forum. A Participant shall be entitled to enforce the
provisions of this Plan in any federal court located in the State of Texas, in
addition to any other appropriate forum.
IN WITNESS WHEREOF, Burlington Resources Inc. has caused these presents to
be executed by its duly authorized officer on the ___ day of ______________,
2000.
BURLINGTON RESOURCES INC.
By:_____________________________
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Schedule A-- List of Certain Participants
Schedule B--List of Plans
Health Plan (Medical, Dental and Vision)
Basic Employer Life Plan
Long-Term Disability Plan
Senior Executive Survivor Benefit Plan
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