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[CHASE MANHATTAN BANK LOGO]
THE CHASE MANHATTAN BANK CHASE SECURITIES INC.
270 Park Avenue 270 Park Avenue
New York, New York 10017 New York, New York 10017
August 13, 1998
Rutherford-Moran Oil Corporation
Commitment Letter
Rutherford-Moran Oil Corporation
5 Greenway Plaza
Suite 220
Houston, Texas 77046
Attention: David Chavenson
Vice President
and Chief Financial Officer
Ladies and Gentlemen:
You have advised Chase Manhattan Bank ("CHASE") and Chase Securities
Inc. ("CSI") that Rutherford-Moran Oil Corporation, a Delaware corporation (the
"BORROWER") desires to amend and restate its existing $150,000,000 revolving
credit facilities (as so amended, the "FACILITIES") to, among other things,
increase the aggregate principal amount thereof to up to $200,000,000. In that
connection, you have requested that CSI agree to structure, arrange and
syndicate the Facilities and that Chase commit to provide the entire principal
amount of the Facilities and to serve as Administrative Agent for the
Facilities.
CSI is pleased to advise you that it is willing to act as exclusive
advisor, arranger and book manager for the Facilities.
Furthermore, Chase is pleased to advise you of its commitment to
provide the entire amount of the Facilities upon the terms and subject to the
conditions set forth or referred to in this commitment letter (the "COMMITMENT
LETTER") and in the Summary of Terms and Conditions attached hereto as Exhibit A
(the "TERM SHEET"). We intend to syndicate the Facilities to a group of
financial institutions (together with Chase, the "LENDERS") identified by us in
consultation with you. Chase shall be relieved of its obligation to provide the
entire amount of
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the Facilities to the extent that the offers of Lenders other than Chase to
provide any portion of the Facilities are accepted.
CSI intends to commence syndication efforts promptly upon the
execution of this Commitment Letter (but in any event within 30 days), and you
agree actively to assist CSI in completing a syndication satisfactory to it.
Such assistance shall include (a) your using commercially reasonable efforts to
ensure that the syndication efforts benefit materially from your existing
lending relationships, (b) direct contact between senior management and
advisors of the Borrower and the proposed Lenders, (c) assistance in the
preparation of a Confidential Information Memorandum and other marketing
materials to be used in connection with the syndication and (d) the hosting,
with CSI, of one or more meetings of prospective Lenders.
It is agreed that Chase will act as the sole and exclusive
Administrative Agent and Collateral Agent, and that CSI will act as the sole
and exclusive advisor, arranger and book manager, for the Facilities, and each
will, in such capacities, perform the duties and exercise the authority
customarily performed and exercised by it in such roles. You agree that no
other agents, co-agents or arrangers will be appointed, no other titles will be
awarded and no compensation (other than that expressly contemplated by the Term
Sheet) will be paid in connection with the Facilities unless you and we shall
so agree.
CSI will manage all aspects of the syndication, including decisions
as to the selection of institutions to be approached and when they will be
approached, when their commitments will be accepted, which institutions will
participate, the allocations of the commitments among the Lenders and the
amount and distribution of fees among the Lenders. To assist CSI in its
syndication efforts, you agree promptly to prepare and provide to CSI and Chase
all information with respect to the Borrower and its subsidiaries and the other
transactions contemplated hereby, including all financial information and
projections (the "PROJECTIONS"), as we may reasonably request in connection
with the arrangement and syndication of the Facilities. You hereby represent
and covenant that (a) all information other than the Projections (the
"INFORMATION") that has been or will be made available to Chase or CSI by you
or any of your representatives is or will be, when furnished, complete and
correct in all material respects and does not or will not, when furnished,
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements are made
and (b) the Projections that have been or will be made available to Chase or
CSI by you or any of your representatives have been or will be prepared in good
faith based upon reasonable assumptions. You understand that in arranging and
syndicating the Facilities we may use and rely on the Information and
Projections without independent verification thereof.
As consideration for Chase's commitment hereunder and CSI's agreement
to perform the services described herein, you agree to pay to Chase the
non-refundable fees set forth in the Term Sheet.
Chase's commitment hereunder and CSI's agreement to perform the
services described herein are subject to (a) there not occurring or becoming
known to us any material adverse condition or material adverse change in or
affecting the business, operations, property, condition (financial or
otherwise) or prospects of the Borrower and its subsidiaries, taken as a
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whole, (b) our not becoming aware after the date hereof of any information or
other matter affecting the Borrower and its subsidiaries or the transactions
contemplated hereby which is inconsistent in a material and adverse manner with
any such information or other matter disclosed to us prior to the date hereof,
(c) there not having occurred a material disruption of or material adverse
change in financial, banking or capital market conditions that, in our
judgment, could materially impair the syndication of the Facilities, (d) our
satisfaction that prior to and during the syndication of the Facilities there
shall be no competing offering, placement or arrangement of any debt securities
or bank financing by or on behalf of the Borrower or any affiliate thereof, (e)
the negotiation, execution and delivery on or before September 29, 1998 of
definitive documentation with respect to the Facilities satisfactory to Chase
and its counsel ("Closing") and (f) the other conditions set forth or referred
to in the Term Sheet. The terms and conditions of Chase's commitment hereunder
and of the Facilities are not limited to those set forth herein and in the Term
Sheet. Those matters that are not covered by the provisions hereof and of the
Term Sheet are subject to the approval and agreement of Chase, CSI and the
Borrower.
You agree (a) to indemnify and hold harmless Chase, CSI, their
affiliates and their respective officers, directors, employees, advisors, and
agents (each, an "INDEMNIFIED PERSON") from and against any and all losses,
claims, damages and liabilities to which any such indemnified person may become
subject arising out of or in connection with this Commitment Letter, the
Facilities, the use of the proceeds thereof or any related transaction or any
claim, litigation, investigation or proceeding relating to any of the
foregoing, regardless of whether any indemnified person is a party thereto, and
to reimburse each indemnified person upon demand for any legal or other
expenses incurred in connection with investigating or defending any of the
foregoing, provided that the foregoing indemnity will not, as to any
indemnified person, apply to losses, claims, damages, liabilities or related
expenses to the extent they arise from the willful misconduct or gross
negligence of such indemnified person, and (b) to reimburse Chase, CSI and
their affiliates on demand for all out-of-pocket expenses (including,
syndication expenses, travel expenses, and reasonable fees, charges and
disbursements of counsel) incurred in connection with the Facilities and any
related documentation (including this Commitment Letter, the Term Sheet and the
definitive financing documentation) or the administration, amendment,
modification or waiver thereof. No indemnified person shall be liable for any
damages arising from the use by others of Information or other materials
obtained through electronic, telecommunications or other information
transmission systems or for any special, indirect, consequential or punitive
damages in connection with the Facilities.
You acknowledge that Chase and/or CSI may be providing debt financing,
equity capital or other services (including financial advisory services) to
other companies in respect of which you may have conflicting interests
regarding the transactions described hereby and otherwise. Neither Chase nor
CSI will use confidential information obtained from you by virtue of the
transactions contemplated hereby or other relationships with you in connection
with the performance by Chase or CSI of services for other companies, and
neither Chase nor CSI will furnish any such information to other companies.
You also acknowledge that neither Chase nor CSI has any obligation to use in
connection with the transactions contemplated hereby, or to furnish to you,
confidential information obtained from other companies.
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This Commitment Letter shall not be assignable by you without the prior
written consent of Chase and CSI (and any purported assignment without such
consent shall be null and void), is intended to be solely for the benefit of the
parties hereto and is not intended to confer any benefits upon, or create any
rights in favor of, any person other than the parties hereto. This Commitment
Letter may not be amended or waived except by an instrument in writing signed by
you, Chase and CSI. This Commitment Letter may be executed in any number of
counterparts, each of which shall be an original, and all of which, when taken
together, shall constitute one agreement. Delivery of an executed signature page
of this Commitment Letter by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof. This Commitment Letter is
the only agreement that has been entered into among us with respect to the
Facilities and set forth the entire understanding of the parties with respect
thereto. This Commitment Letter shall be governed by, and construed in
accordance with, the laws of the State of New York.
This Commitment Letter is delivered to you on the understanding that
neither this Commitment Letter or the Term Sheet nor any of their terms or
substance shall be disclosed, directly or indirectly, to any other person except
(a) to your officers, agents and advisors who are directly involved in the
consideration of this matter or (b) as may be compelled in a judicial or
administrative proceeding or as otherwise required by law (in which case you
agree to inform us promptly thereof), provided, that the foregoing restrictions
shall cease to apply after this Commitment Letter his been accepted by you.
If the foregoing correctly sets forth our agreement, please indicate your
acceptance of the terms hereof and of the Term Sheet by returning to as executed
counterparts hereof not later than 6:00 p.m., New York City time, on August 13,
1998. Chase's commitment and CSI's agreements herein will expire at such time in
the event Chase has not received such executed counterparts in accordance with
the immediately preceding sentence.
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CONFIDENTIAL RUTHERFORD-MORAN OIL CORPORATION
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EXHIBIT A
This Summary of Terms and Conditions is for discussion purposes only. Any
commitment to lend is subject to completion of The Chase Manhattan Bank's due
diligence review and is further contingent upon formal approval by The Chase
Manhattan Bank and the execution and delivery of mutually acceptable legal
documentation. No commitment should be construed or implied herein until such
notice of formal approval is conveyed in writing to the Borrower.
RUTHERFORD MORAN OIL CORPORATION
US$200,000,000 REVOLVING CREDIT FACILITY
SUMMARY OF TERMS AND CONDITIONS
FACILITY
AMOUNT: US$200,000,000 Revolving Credit Facility (the "Facility").
BORROWER: Rutherford-Moran Oil Corporation, a Delaware corporation
(the "Borrower").
GUARANTORS: Rutherford-Moran Exploration Company, a Delaware
corporation ("RMEC"), Thai Romo Holdings, Inc., a Delaware
corporation ("TRH"), and Thai Romo Limited, a subsidiary of
the Borrower organized as a limited liability company under
the laws of the Kingdom of Thailand ("Thai Romo").
ARRANGER: Chase Securities Inc.("CSI")
AGENT: The Chase Manhattan Bank, or its successor, as sole agent.
REVOLVING CREDIT
AND FINAL MATURITY: The Facility will be fully revolving with advances limited
to the aggregate commitment amount. The final maturity of
the Facility ("Final Maturity") will be December 31, 1999.
DRAWDOWNS: Draws may be made in integral multiples of US$1,000,000.
Drawdown notices for the advance of funds will be supported
by affirmations and bring-downs of representations and
warranties.
SECURITY: Security for the Facility will consist of perfected, first
priority security Interests in the capital stock of RMEC and
TRH, the holders of all but five qualifying shares of Thai
Romo and all of the capital stock of Thai Romo and the
Borrower's indirect ownership interest in B8/32 Partners,
Limited, other than the five qualifying shares.
AMENDMENT FEE: 1.0% of the Existing Facility Amount of US$150,000,000
shall be due and payable to the Agent upon Closing of the
credit agreement.
TERMINATION
FEE: If at any time prior to September 29, 1998, the Company
elects to terminate this commitment and repays all
outstandings under the Existing Facility or does not close
the Facility on or before September 29, 1998, a $1,500,000
Termination Fee shall be immediately due and payable to the
Agent.
ARRANGEMENT FEE: 2.0% of the incremental US$50,000,000 shall be due and
payable to the Agent upon Closing of the credit agreement.
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CONFIDENTIAL RUTHERFORD-MORAN OIL CORPORATION
________________________________________________________________________________
DRAWDOWN
FEE: 2.0% of the amount drawn above US$150,000,000 shall be
payable to the Agent upon Funding.
COMMITMENT
FEE: O.50% of the unused Commitment will be payable quarterly in
arrears.
THRESHOLD
AMOUNT: If, at any time after October 31, 1999, the aggregate
principal amount of the Loans shall exceed the Threshold
Amount at such time, the Borrower shall immediately prepay
Loans in an amount equal to such excess.
COMMITMENT
REDUCTION: The Borrower shall have the right at any time from time to
time (a) so long as no loans are outstanding, to terminate
the Commitment and (b) to reduce the aggregate unused amount
of the Commitment to an amount not less than the aggregate
principal amount of the loans outstanding.
INTEREST RATE: The Borrower may elect loans under the Facility at the Base
Rate or the Eurodollar Rate. A Base Rate loan shall bear
interest at a rate per annum equal to the higher of (a) the
Federal Funds Rate plus .50% and (b) the Agent's Prime Rate
for such day, plus a margin of 3.00%. A Eurodollar Rate loan
shall bear interest at a reserve-adjusted Eurodollar Rate,
plus a margin of 4.50%. Provided, however, that beginning
January 1, 1999, such margin shall increase by 100 basis
points and by an additional 100 basis points quarterly
thereafter.
Interest on Eurodollar loans and commitment fees shall be
computed on the basis of a year of 360 days and actual days
elapsed. Interest on Base Rate loans shall be computed on
the basis of year of 365 or 366 days, as the case may be,
and actual days elapsed.
EQUITY: Warrants representing 10% of the outstanding Common Shares
of the Company shall be placed into escrow and earned by the
Agent in accordance with the following schedule:
% of Common Shares so long as anything
remains outstanding under the Facility, Date
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1 at Closing
1 10/31/98
3 11/30/98
5 12/31/98
However, to the extent the Company has a signed Purchase and
Sales Agreement with firm financing satisfactory to the
Agent, all non-vested equity will be deferred and held in
escrow. If the Company has not closed the Purchase and Sales
Agreement by December 31, 1998, all deferred equity held in
escrow shall vest to the Agent. If the Company closes the
Purchase and Sales Agreement by December 31, 1998, then all
deferred equity held in escrow will be returned to the
Company.
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CONFIDENTIAL RUTHERFORD-MORAN OIL CORPORATION
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EXISTING
WARRANTS: Existing warrants will be repriced to $10.50 per share.
INTEREST PERIODS
AND BORROWING
NOTICES: On Eurodollar loans interest periods of, 30, 60 and 90 days
will be available, provided, however, that no interest
period shall extend beyond Final Maturity. Borrowings of
Base Rate loans shall require one business day notice, and
borrowings of Eurodollar loans shall require three business
days' notice.
REQUIRED
PREPAYMENTS: If the aggregate amount outstanding under the Facility
exceeds the Commitment amount at any time the Borrower
will be required to reduce outstandings immediately.
OPTIONAL
PREPAYMENTS: The Borrower may elect to repay borrowings at any time
without penalty, except for Eurodollar loan breakage costs.
CUSTOMARY
LOAN
PROVISIONS: The documentation pertaining to the Facility will contain
customary provisions for the Agent's and Lenders' benefit
relating to yield protection; withholding and other tax
protection, illegality, market disruption or unavailability
of Eurodollar Rate funds (including a prime rate of
interest to be used as the default rate until such
disruption or unavailability ceases); general and special
indemnities; capital adequacy protection; break funding
protection; maintenance of margin; currency indemnities;
submission to jurisdiction of courts (federal and state)
sitting in New York City; customary waivers of immunities
and service of process; appointment of CT Corp. as process
agent In New York City; recovery of enforcement and
modification expenses; Eurodollar Rate setting provisions;
assignability/participation clauses in favor of the Agent
and the Lenders; and failure to fund provisions.
REPRESENTATIONS
AND WARRANTIES: Substantially the same as Existing Facility.
CONDITIONS
PRECEDENT: Substantially the same as Existing Facility.
AFFIRMATIVE
COVENANTS. Substantially the same as Existing Facility.
In addition, the Interest Coverage Ratio shall not be
calculated until 3/31/99 and shall be amended as follows:
The Borrower will not permit the Interest Coverage Ratio to
be less than (i) 1.25 to 1.0 as of the end of the fiscal
quarter ending 3/31/99 (ii) 1.50 to 1.0 as of the end of the
fiscal quarter ending 6/30/99 and (iii) 2.0 to 1.0 as of the
end of any fiscal quarter thereafter.
NEGATIVE
COVENANTS: Substantially the same as Existing Facility.
EVENTS OF
DEFAULT: Substantially the same as Existing Facility.
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CONFIDENTIAL RUTHERFORD-MORAN OIL CORPORATION
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APPLICABLE
LAW: The credit agreement, notes and security instruments shall
be governed by the laws of the State of New York.
OTHER: The Borrower shall be responsible for the fees of outside
independent engineers in connection with their preparation
of reports hereunder and the legal fees of Milbank, Tweed,
Hadley & McCloy (and to the extent necessary, legal counsel
in Thailand) incurred by the Agent and the Lenders in
connection with the negotiation, structuring, documentation,
administration or enforcement of the Facility, as supported
by detailed statements for said fees. The foregoing fees are
the sole obligation of the Borrower, whether or not the
transaction is closed.
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Chase and CSI are pleased to have been given the opportunity to assist you
in connection with this financing.
Very truly yours,
THE CHASE MANHATTAN BANK
By: /s/ MARY JO WOODFORD
----------------------------
Name: Mary Jo Woodford
Title: Vice President
CHASE SECURITIES INC.
By:
----------------------------
Name:
Title:
Accepted and agreed to
as of the date first
written above by:
RUTHERFORD-MORAN OIL CORPORATION
By: /s/ [ILLEGIBLE]
--------------------------------
Name:
Title: VP
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Chase and CSI are pleased to have been given the opportunity to assist you
in connection with this financing.
Very truly yours,
THE CHASE MANHATTAN BANK
BY:
--------------------------
Name:
Title:
CHASE SECURITIES INC.
By: TOD C. BENTON
--------------------------
Name: Tod C. Benton
Title: Managing Director
Accepted and agreed to
as of the date first
written above by:
RUTHERFORD-MORAN OIL CORPORATION
By: [ Illegible]
------------------------
Name:
Title: VP
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REVISED 7/31/98
RUTHERFORD-MORAN INCENTIVE BONUS PLAN
1. PURPOSE
The purpose of this Plan is to continue the success of Rutherford-Moran Oil
corporation (the "Company") for the benefit of the Company and its shareholders
by encouraging and rewarding the continued employment of its officers and
employees in light of the possible change in ownership of the Company and to
reward such employees for prior and continued services to the Company. The
Company believes that participation under this Plan will provide these
employees an additional incentive to continue employment with the Company and
to perform effectively.
2. DEFINITIONS
"AWARD" means an award made to a Participant under Section 6.
"BOARD OF DIRECTORS" or "BOARD" means the Board of Directors of the
Company.
"CAUSE" means any of the following events:
(a) an act or acts of personal dishonesty made by a Participant and
intended to result in substantial personal enrichment of the Participant at
the expense of the Company;
(b) repeated violations by a Participant of a Participant's
obligations under this Plan or under written policies of the Company which
are demonstrably willful on a Participant's part, and for which said
Participant has received more than one written warning that specifies each
area of said Participant's violations;
(c) a Participant's conviction or plea of nolo contendere or
equivalent plea of a felony in a court of competent jurisdiction;
(d) a Participant's use of illegal drugs as evidenced by a drug test
authorized by the Company; or
(e) a Participant's conviction or the entry of a plea of nolo
contendere or equivalent plea in a court of competent jurisdiction of any
crime or offense involving moral turpitude.
"CHANGE OF CONTROL" means the occurrence of one or more of the following
events:
(a) Any "person" (other than the Company or a subsidiary thereof or
any employee benefit plan thereof or any entity which is owned 50% or more
by John A. Moran and/or Patrick R. Rutherford), including a "syndicate" or
"group" as those terms are used in Section 13(d) of the Securities Exchange
Act of 1934
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(the "Exchange Act"), is or becomes the "beneficial owner" (as that term is
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting
power of the Company's then outstanding Stock; or
(b) The Company is merged or consolidated or combined in any other
manner with another corporation or entity and immediately after giving
effect to the merger or consolidation either (i) less than 80% of the
outstanding Stock of the surviving or resulting entity is then beneficially
owned in the aggregate by (x) the stockholders of the Company immediately
prior to such merger or consolidation, or (y) if a record date has been set
to determine the stockholders of the Company entitled to vote on such
merger or consolidation, the stockholders of the Company as of such record
date.
"COMMITTEE" means the Compensation Committee of the Board of Directors, or
any successor committee or members named by the Board of Directors.
"PARTICIPANT" means an employee of the Company named in Section 5, who is
eligible to participate in the Plan and who receives an Award under this Plan.
"PLAN" means this Rutherford--Moran Incentive Bonus Plan, as amended from
time to time.
"STOCK" means the common stock of the Company, $.01 par value or, in the
event the outstanding shares of common stock are later changed into or
exchanged for a different class of stock or securities of the Company or
another Corporation, that other stock or security.
3. TERM
This Plan and any Award issued hereunder shall be effective for one year
from March 1, 1998, unless amended by the Committee.
4. PLAN ADMINISTRATION
The Committee shall be responsible for administering this Plan. The
Committee shall have full and exclusive discretionary power to construe all
terms, provisions, conditions and limitations of this Plan, determine
eligibility for Awards, and adopt such rules, regulations and guidelines for
administering this Plan as the Committee may deem necessary or proper. Such
power shall include, but not be limited to, selecting Award recipients and
establishing terms and conditions of each Award, which need not be identical.
The Committee may employ attorneys, consultants, accountants and other
persons, and the Committee, the Company and its officers and directors shall be
entitled to rely upon the advice, opinions, calculations, or valuations of any
such persons. No member of the Committee shall be personally liable for any
action, determination, or interpretation made in good faith with respect to
this Plan or Awards, and all members of the Committee shall be fully protected
by the Company, to
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the fullest extent permitted by applicable law, in respect of any such action,
determination or interpretation.
The Committee, in exercising any power or authority granted under this
Plan, or in making any determination under this Plan, shall perform or refrain
from performing such acts using its sole discretion and judgment. Any decision
made by the Committee, or any act taken by the Committee in good faith, shall
be final and binding on all parties. The Committee's decision shall never be
subject to de novo review.
The Committee members shall serve without any additional compensation for
their services under this Plan, but shall be reimbursed by the Company for all
expenses properly and actually incurred in the performance of their duties
under this Plan.
5. ELIGIBILITY
The following employees are eligible to participate in the Plan:
Greg Nelson Rick Parson Kari Work
Daven Chavenson Greg Kirkland Tommy Williams
Don Charbula Tom Rankin
The Committee may delete an employee from this list and may add additional
employees to this list. Eligible employees who are designated by the Committee
to participate will receive an Award outlining the terms of the bonus payment
which could become payable if the specified terms are satisfied.
6. AWARDS
A. BONUS POOL. An Award granted under this Plan shall be based on a Bonus
Pool which is calculated as follows:
(SP) x (TNS) x (FP) = Bonus Pool
Where;
(SP) equals the sales or exchange price per share of Stock in a
transaction (sale, exchange, or merger) which constitutes a Change of
Control; and
(TNS) equals the total number of shares of Stock of the Company on the
Change of Control date on a fully diluted basis, which includes all
outstanding shares of Stock plus outstanding options to purchase shares
of Stock; and
(FP) equals the funding percentage used to calculate the Bonus Pool
determined as follows:
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If the Sale/Exchange Price Is: The Funding Percentage Is:
----------------------------- -------------------------
Below $25.00 0.434%
$25.00 - $29.99 0.463%
$30.00 - $34.99 0.499%
$35.00 - $39.99 0.524%
$40.00 - $44.99 0.543%
$45.00 and above 0.588%
If a sale/exchange agreement for the Company is not executed on or before
October 1, 1998, the Bonus Pool calculated under this Section 6.A. shall be
increased by 15%.
B. TERMS OF AN AWARD. The terms of each Award shall be set forth in an
Award notice provided to each Participant. The Award notice will be
substantially in the form attached as Exhibit A; provided that the Committee
has discretion to modify each Award. Notwithstanding any other provision of
this Plan, each employee entitled to receive a bonus payment under this Plan
shall receive the greater of (1) the amount determined under Section 6.A. and
the Award granted to the employee or (2) an amount equal to twice the
employee's annualized base salary during the month preceding the month in which
a Change of Control occurs, plus twice the amount of the employee's last
annual bonus payment.
C. TIME AND METHOD OF PAYMENT. The bonus payment is due and payable in
cash as follows: (1) 50% of the bonus shall be paid at the Change of Control
date, and (2) 50% of the bonus shall be paid within 180 days after the Change
of Control date, subject to the provisions of Section 7.
7. TERMINATION OF EMPLOYMENT
PRIOR TO A BONUS BECOMING DUE
If a Participant's employment with the Company and all its Subsidiaries is
terminated for any reason other than death, disability, or without Cause at any
time before a Change of Control occurs, he shall not be entitled to a bonus
payment under this Plan. If a Participant's employment with the Company and all
Subsidiaries is terminated at any time before a Change of Control occurs by
reason of death or disability or without Cause, he shall be entitled to the
bonus payment as provided in Section 6.C., provided that the 50% of the bonus
described in Section 6.C.(2) shall be paid within 30 days of the Change of
Control date. Except as provided herein, each Participant must be employed by
the Company at the date of a Change of Control to be entitled to receive any
bonus under this Plan.
If a Participant's employment with the Company and all its Subsidiaries is
terminated for any reason other than death or disability, by the Company
without Cause, or by the Participant with Good Reason at any time between the
Change of Control date and 180 days thereafter, he shall not be entitled to
receive the remaining 50% of the bonus described in Section 6.C.(2). If a
Participant's employment with the Company and all Subsidiaries is terminated by
reason of death or disability, by the Company without Cause, or by the
Participant with Good Reason at any time between the Change of Control date and
180 days thereafter, he shall be entitled to receive the remaining 50% of the
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bonus described in Section 6.C.(2) on the date specified or within 30 days of
such termination of employment, if earlier.
As used in this Plan, "Good Reason" shall mean: (A) any material change by
the Company of the Participant's function, duties or responsibilities that
would cause the Participant's position with the Company to become of less
dignity, responsibility, importance or scope from the position held at the
Change of Control date, (B) a reduction in the Participant's compensation or
benefits, or (C) the Company requires the Participant to re-locate his/her
primary office to a location that is greater than 50 miles from the location of
the Company as of the Change of Control date.
As used in this Plan, "Cause" shall mean (A) any material failure of the
Participant, after written notice, to perform his/her normal duties when such
failure shall have continued for 10 days after receipt of such notice, (B)
commission of fraud by the Participant against the Company, its affiliates or
customers, (C) conviction of the Participant of a felony offense or a crime
involving moral turpitude.
The fact that any Participant fails to qualify or be entitled to an Award
under this Plan shall not increase the amount of any bonus amount paid to any
other Participant.
8. NONALIENATION OF AWARD
No Award, right or benefit under the Plan shall be assignable, alienable,
saleable or otherwise transferable or pledged in any way, other than by will or
the laws of descent and distribution.
9. AMENDMENT AND TERMINATION
The Committee may modify or amend the Plan in its sole discretion. However,
no amendment of this plan shall adversely affect any bonus which might be earned
during the period for which a Participant has been issued an Award.
10. TAX WITHHOLDING
The Company shall have the right to make appropriate deductions or require
cash be withheld from any bonus payment under an Award, in each case in an
amount sufficient to satisfy withholding of any federal, state or local taxes
required by law, or take such other action as may be necessary or appropriate to
comply with any withholding obligations.
11. LIMITATION OF RIGHTS
Nothing in this Plan shall be construed:
a. to give any employee of the Company any right to be designated a
Participant in the Plan or to receive an Award under this Plan;
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b. to give a Participant any right with respect to any benefit
except in accordance with the terms of this Plan;
c. to limit in any way the right of the Company to terminate a
Participant's employment with the Company at any time;
d. to evidence any agreement or understanding, expressed or implied,
that the Company will employ a Participant in any particular position or
for any particular remuneration; or
e. to give a Participant or any other person claiming through him
any interest or right under this Plan other than that of any unsecured
general creditor of the Company.
12. GOVERNING LAW
The validity, construction and effect of the Plan, and any actions taken or
relating to the Plan, shall be determined in accordance with the laws of the
State of Texas and applicable federal law.
13. SUCCESSORS AND ASSIGNS
The Plan shall be binding on all successors and assigns of a Participant,
including, without limitation, the estate of such Participant and the executor
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the Participant's creditors.
14. FORFEITURE FOR CAUSE
If the Committee finds, at any time before payment of an amount due under
an Award, after full consideration of the facts presented on behalf of both the
Company and a Participant or former Participant, that the Participant committed
fraud, embezzlement, theft, commission of a felony, or proven dishonesty in the
course of his employment by the Company, which damaged the Company, or
disclosed trade secrets of the Company, the entire amount due under any Award
which remains unpaid by the Company to the Participant and/or his Beneficiaries
shall be forfeited. The decision of the Committee as to the actions of a former
Participant and the damage done to the Company shall be final. No decision of
the Committee shall affect the finality of the discharge of a Participant by
the Company in any manner.
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