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EXHIBIT 10(dd)
ALEXANDER ENERGY CORPORATION
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") entered into between
ALEXANDER ENERGY CORPORATION, an Oklahoma corporation (the "Company" ), and
, an individual ( the "Executive"), dated as of the
8th day of December, 1994.
The Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat, or occurrence of a Change of Control
(as defined below) of the Company. The Board believes it is important to
diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control,
and to encourage the Executive's full attention and dedication to the affairs
of the Company during the term of this Agreement and upon the occurrence of
such event. The Board also believes the Company is best served by providing the
Executive with compensation arrangements upon a Change of Control which provide
the Executive with individual financial security and which are competitive with
those of other corporations. In order to accomplish these objectives, the Board
has caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
(a) The "Effective Date" shall be the first date during
the "Change of Control Period" (as defined below) on which a Change of Control
(as defined below) occurs. Anything in this Agreement to the contrary
notwithstanding, if the Executive's employment with the Company is terminated
prior to the date on which a Change of Control occurs, and it is reasonably
demonstrated that such termination (i) was at the request of a third party who
has taken steps reasonably calculated to effect a Change of Control or (ii)
otherwise arose in connection with or anticipation of a Change of Control, then
for all purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination.
(b) The "Change of Control Period" is the period
commencing on the date hereof and ending on the earlier to occur of (i) the
third anniversary of such date or (ii) the first day of the month next
following the Executive's attainment of age 65 ("Normal Retirement Date");
provided, however, that commencing on the date one year after the date hereof,
and on each annual anniversary of such date (such date and each annual
anniversary thereof is hereinafter referred to as the "Renewal Date"), the
Change of Control Period shall be automatically extended so as to terminate on
the earlier of (i) three years from such Renewal Date or (ii)
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the first day of the month coinciding with or next following the Executive's
Normal Retirement Date, unless at least 60 days prior to the Renewal Date, the
Company shall give notice that the Change of Control Period shall not be so
extended.
2. Change of Control. For the purpose of this Agreement, a
"Change of Control" shall mean:
(i) The acquisition in a transaction or a series of
transactions by any person, entity or "group," within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities and Exchange Act of 1934 (the "Exchange
Act") (excluding, for this purpose, any employee benefit plan of the Company or
its subsidiaries) which acquires beneficial ownership of voting securities of
the Company with the approval of a majority of the Incumbent Board (as defined
below) of beneficial ownership, (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 30% or more of either the then outstanding shares of
common stock or the combined voting power of the Company's then outstanding
voting securities; provided, however, that any acquisition of beneficial
ownership of common stock or voting securities of the Company which would
otherwise come within this Section 2(i) shall not be deemed to be a change of
control if a majority of the Incumbent Board determines (either before or
within twenty (20) business days after such acquisition) that such acquisition
has not caused a "change of control" to occur; provided further, if acquisition
of securities as described in this Section 2(i) is 40% or more, such
acquisition shall be deemed to be a "change of control" and the Board shall
have no right to make a determination that a "change of control" has not
occurred.
(ii) Individuals who, as of the date hereof, constitute
the Board of Directors of the Company (as of the date hereof the "Incumbent
Board") cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to the date hereof
whose election, appointment, or nomination for election by the Company's
shareholders, was approved by a vote of a majority of the directors comprising
the Incumbent Board (other than an election, appointment, or nomination of an
individual whose initial assumption of office is in connection with an actual
or threatened election contest relating to the election of the Directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of this Agreement, considered as
though such person were a member of the Incumbent Board; or
(iii) Approval by the stockholders of the Company of a
reorganization, share exchange, merger or consolidation, in each case, with
respect to which the stockholders of the Company do not, immediately
thereafter, own more than 50% of the combined voting power of the reorganized,
merged or consolidated company's then outstanding voting securities, or a
liquidation or dissolution of
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the Company or the sale of all or substantially all of the assets of the
Company.
3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the
employ of the Company, for the period commencing on the Effective Date and
ending on the earlier to occur of (a) the third anniversary of such date or (b)
the first day of the month coinciding with or next following the Executive's
Normal Retirement Date (the "Employment Period").
4. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, (A) the
Executive's position (including status, offices, secretarial and
administrative support, titles and reporting requirements), authority, duties
and responsibilities shall be at least commensurate in all material respects
with the most significant of those held, exercised and assigned at any time
during the 12-month period immediately preceding the Effective Date and (B) the
Executive's services shall be performed at the location where the Executive was
employed immediately preceding the Effective Date or any office or location
less than 25 miles from such location.
(ii) During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote reasonable attention and time during normal business
hours to the business and affairs of the Company and, to the extent necessary
to discharge the responsibilities assigned to the Executive hereunder, to use
the Executive's reasonable best efforts to perform faithfully and efficiently
such responsibilities. During the Employment Period it shall not be a violation
of this Agreement for the Executive to (A) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an employee of the Company
in accordance with this Agreement. It is expressly understood and agreed that
to the extent that any such activities have been conducted by the employee
prior to the Effective Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto) subsequent to the
Effective Date shall not thereafter be deemed to interfere with the performance
of the Executive's responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period,
the Executive shall receive a base salary ("Base Salary")
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at a monthly rate at least equal to the highest monthly base salary paid or
payable to the Executive by the Company during the 36-month period immediately
preceding the month in which the Effective Date occurs before reduction (i) for
any deferrals of compensation made pursuant to Sections 125 and 401(k) of the
Internal Revenue Code of 1986, as amended (the "Code") and (ii) any
withholding for income or employment taxes. During the Employment Period, the
Base Salary shall be reviewed at least annually and shall be increased at any
time and from time to time as shall be substantially consistent with increases
in base salary awarded in the ordinary course of business to other key
management employees of the Company and its subsidiaries. Any increase in Base
Salary shall not serve to limit or reduce any other obligation to the Executive
under this Agreement. Base Salary shall not be reduced after any such increase.
(ii) Annual Bonus. In addition to Base Salary,
the Executive shall be awarded, for each fiscal year during the Employment
Period, an annual bonus (an "Annual Bonus") (either pursuant to the incentive
compensation plan of the Company or otherwise) in cash at least equal to the
highest bonus paid or payable to the Executive from the Company and its
subsidiaries during any of the last five fiscal years immediately preceding the
fiscal year in which the Effective Date occurs.
(iii) Incentive, Savings and Retirement Plans. In
addition to Base Salary and Annual Bonus payable as hereinabove provided, the
Executive shall be entitled to participate during the Employment Period in all
incentive, savings and retirement plans, practices, supplemental retirement
plan policies and programs applicable to other key management employees of the
Company and its subsidiaries, in each case providing benefits which are the
economic equivalent to those in effect or as subsequently amended. Such plans,
practices, policies and programs, in the aggregate, shall provide the Executive
with compensation, benefits and reward opportunities at least as favorable as
the most favorable of such compensation, benefits and reward opportunities
provided by the Company for the Executive under such plans, practices, policies
and programs as in effect at any time during the 12-month period immediately
preceding the Effective Date or, if more favorable to the Executive, as
provided at any time thereafter with respect to other key management employees
of the Company and its subsidiaries.
(iv) Welfare Benefit Plans. During the Employment
Period, the Executive and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and its
subsidiaries (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs), at least as favorable as the
most favorable of such plans,
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practices, policies and programs in effect at any time during the 12-month
period immediately preceding the Effective Date or, if more favorable to the
Executive and/or the Executive's family, as in effect at any time thereafter
with respect to other key management employee of the Company and its
subsidiaries.
(v) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its subsidiaries in
effect at any time during the 12-month period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect at any time
thereafter with respect to other key management employees of the Company and
its subsidiaries.
(vi) Fringe Benefits. During the Employment
Period, the Executive shall be entitled to fringe benefits, including use of an
automobile and payment of related expenses, in accordance with the most
favorable plans, practices, programs and policies of the Company and its
subsidiaries in effect at any time during the 12-month period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect at any time thereafter with respect to other key management employees of
the Company and its subsidiaries.
(vii) Office and Support Staff. During the
Employment Period, the Executive shall be entitled to an office or offices of a
size and with furnishings and other appointments, and to secretarial and other
assistance, at least equal to the most favorable of the foregoing provided to
the Executive by the Company and its subsidiaries at any time during the
12-month period immediately preceding the Effective Date or, if more favorable
to the Executive, as provided at any time thereafter with respect to other key
management employees of the Company and its subsidiaries.
(viii) Vacation. During the Employment Period, the
Executive shall be entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of the Company and its
subsidiaries as in effect at any time during the 12-month period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect at any time thereafter with respect to other key management employees of
the Company and its subsidiaries.
(ix) Effect of Increases. Any increase in Base
Salary, Annual Bonus or any other benefit or perquisite described in the
foregoing Sections (i)-(viii) shall in no way diminish any obligation of the
Company under the Agreement.
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5. Termination.
(a) Death or Disability. This Agreement shall terminate
automatically upon the Executive's death. If the Company determines in good
faith that the Disability of the Executive has occurred (pursuant to the
definition of "Disability" set forth below), it may give to the Executive
written notice of its intention to terminate the Executive's employment. In
such event, the Executive's employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the Executive (the
"Disability Effective Date"), provided that, within the 30 days after such
receipt, the Executive shall not have returned to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability" means
disability (either physical or mental) which, at least 26 weeks after its
commencement, is determined to be total and permanent by a physician selected
by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative (such agreement as to acceptability not to be
withheld unreasonably).
(b) Cause. The Company may terminate the Executive's
employment for "Cause." For purposes of this Agreement, termination of the
Executive's employment by the Company for Cause shall mean termination for one
of the following reasons: (i) the conviction of the Executive of a felony by a
federal or state court of competent jurisdiction; (ii) an act or acts of
dishonesty taken by the Executive and intended to result in substantial
personal enrichment of the Executive at the material expense of the Company; or
(iii) the Executive's "willful" failure to follow a direct, reasonable, lawful
written order from his supervisor, within the reasonable scope of the
Executive's duties, which failure is not cured within 30 days. Further, for
purposes of this Section (b):
(1) No act or failure to act, on the Executive's
part shall be deemed "willful" unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive's
action or omission was in the best interest of the Company.
(2) The Executive shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
the Executive a copy of a resolution duly adopted by the affirmative vote of
not less than three-fourths (3/4ths) of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after reasonable notice
to the Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board), finding that in the good
faith opinion of the Board the Executive was guilty of conduct set forth in
clauses (i), (ii), or (iii) above and specifying the particulars thereof in
detail.
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(c) Good Reason. The Executive's employment may be
terminated by the Executive for Good Reason. For purposes of this Agreement,
"Good Reason" means:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 4(a) of this Agreement, or any
other action by the Company which results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Company to comply with
any of the provisions of Section 4(b) of this Agreement, other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company promptly after receipt of notice thereof given
by the Executive;
(iii) the Company's requiring the Executive to be
based at any office or location other than that described in Section 4(a)(i)(B)
hereof, except for travel reasonably required in the performance of the
Executive's responsibilities;
(iv) any purported termination by the Company of
the Executive's employment otherwise than as expressly permitted by this
Agreement; or
(v) any failure by the Company to comply with
and satisfy Section 11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of
"Good Reason" made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company
for Cause or by the Executive for Good Reason shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section
13(b) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
termination provisions in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date shall be not
more than 15 days after the giving of such notice). The failure by the
Executive to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason shall
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not waive any right of the Executive hereunder or preclude the Executive from
asserting such fact or circumstance in enforcing his rights hereunder.
(e) Date of Termination. "Date of Termination" means the
date of receipt of the Notice of Termination or any later date specified
therein, as the case may be; provided, however, that (i) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (ii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the
case may be.
6. Obligations of the Company upon Termination.
(a) Death. If the Executive's employment is terminated
by reason of the Executive's death, this Agreement shall terminate without
further obligations to the Executive's legal representatives under this
Agreement, other than those obligations accrued or earned and vested (if
applicable) by the Executive as of the Date of Termination, including, for this
purpose (i) the Executive's full Base Salary through the Date of Termination
at the rate in effect on the Date of Termination or, if higher, at the highest
rate in effect at any time from the 36-month period preceding the Effective
Date through the Date of Termination (the "Highest Base Salary"), (ii) the
product of the Annual Bonus as defined in Section 4(b)(ii) or if higher, the
Annual Bonus paid during any fiscal year during the Employment Period and a
fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365 and
(iii) any compensation previously deferred by the Executive (together with any
accrued interest thereon) and not yet paid by the Company and any accrued
vacation pay not yet paid by the Company (such amounts specified in clauses
(i), (ii) and (iii) are hereinafter referred to as "Accrued Obligations"). All
such Accrued Obligations shall be paid to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of
Termination. Anything in this Agreement to the contrary notwithstanding, the
Executive's family shall be entitled to receive benefits at least equal to the
most favorable benefits provided by the Company and any of its subsidiaries to
surviving families of employees of the Company and such subsidiaries under such
plans, programs, practices and policies relating to family death benefits, if
any, in accordance with the most favorable plans, programs, practices and
policies of the Company and its subsidiaries in effect at any time during the
12-month period immediately preceding the Effective Date or, if more favorable
to the Executive and/or the Executive's family, as in effect on the date of the
Executive's death with respect to other key management employees of the Company
and its subsidiaries and their families.
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(b) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability, this Agreement shall
terminate without further obligations to the Executive, other than those
obligations accrued or earned and vested (if applicable) by the Executive as of
the Date of Termination, including for this purpose, all Accrued Obligations.
All such Accrued Obligations shall be paid to the Executive in a lump sum in
cash within 30 days of the Date of Termination. Anything in this Agreement to
the contrary notwithstanding, the Executive shall be entitled after the
Disability Effective Date to receive disability and other benefits at least
equal to the most favorable of those provided by the Company and its
subsidiaries to disabled employees and/or their families in accordance with
such plans, programs, practices and policies relating to disability, if any, in
accordance with the most favorable plans, programs, practices and policies of
the Company and its subsidiaries in effect at any time during the 12-month
period immediately preceding the Effective Date or, if more favorable to the
Executive and/or the Executive's family, as in effect at any time thereafter
with respect to other key management employees of the Company and its
subsidiaries and their families.
(c) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause, this Agreement shall terminate
without further obligations to the Executive other than the obligation to pay
to the Executive the Highest Base Salary through the Date of Termination plus
the amount of any compensation previously deferred by the Executive (together
with accrued interest thereon). If the Executive terminates employment other
than for Good Reason, this Agreement shall terminate without further
obligations to the Executive, other than those obligations accrued or earned
and vested (if applicable) by the Executive through the Date of Termination,
including for this purpose, all Accrued Obligations. All such Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination.
(d) Good Reason; Termination Other Than for Cause or
Disability. If, during the Employment Period, the Company shall terminate the
Executive's employment other than for Cause, Disability, or death or if the
Executive shall terminate his employment for Good Reason:
(i) the Company shall pay to the Executive in a
lump sum in cash within 30 days after the Date of Termination the aggregate of
the following amounts:
A. to the extent not theretofore paid,
the Executive's Highest Base Salary through the Date of Termination; and
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B. the product of (i) the Annual Bonus
paid to the Executive for the last full fiscal year (if any) ending during the
Employment Period or, if higher, the Annual Bonus paid to the Executive as
defined under Section 4(b)(ii) (as applicable, the "Recent Bonus") and (ii) a
fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination and the denominator of which is 365; and
C. the product obtained by multiplying
three times the sum of (i) 12-months of the Highest Base Salary and (ii) the
Recent Bonus; and
D. in the case of compensation
previously deferred by the Executive, all amounts previously deferred (together
with any accrued interest thereon) and not yet paid by the Company, and any
accrued vacation pay not yet paid by the Company; and
(ii) for the remainder of the Employment Period,
or such longer period as any plan, program, practice or policy may provide, the
Company shall continue benefits to the Executive and/or the Executive's family
at least equal to those which would have been provided to them in accordance
with the plans, programs, practices and policies described in Section 4(b)(iv)
of this Agreement if the Executive's employment had not been terminated,
including health insurance and life insurance, in accordance with the most
favorable plans, practices, programs or policies of the Company and its
subsidiaries during the 12-month period immediately preceding the Effective
Date or, if more favorable to the Executive, as in effect at any time
thereafter with respect to other key management employees and their families
and for purposes of eligibility for retiree benefits pursuant to such plans,
practices, programs and policies, the Executive shall be considered to have
remained employed until the end of the Employment Period and to have retired on
the last day of such period.
7. Non-Exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plans, programs, policies or practices,
provided by the Company or any of its subsidiaries and for which the Executive
may qualify, nor shall anything herein limit or otherwise affect such rights as
the Executive may have under any stock option or other agreements with the
Company or any of its subsidiaries. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan, policy, practice
or program of the Company or any of its subsidiaries at or subsequent to the
Date of Termination shall be payable in accordance with such plan, policy,
practice or program.
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8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any setoff, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement. The Company
agrees to pay, to the full extent permitted by law, all legal fees and expenses
which the Executive may reasonably incur as a result of any contest (regardless
of the outcome thereof) by the Company or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the month of any payment pursuant to Section 9 of this
Agreement), plus in each case interest at the applicable Federal rate provided
for in Section 7872(f)(2) of the Code.
9. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of the Executive, whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise including, by example and not by limitation,
acceleration of the date of vesting or payment or rate of payment under any
plan, program or arrangement of the Company (a "Payment"), would be subject to
the excise tax imposed by Section 4999 of the Code, or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive 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 Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including whether a
Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be
made by Ernst & Young (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Executive within 15
business days of the Date of Termination, if applicable, or such earlier time
as is requested by the Company. The initial Gross-Up Payment, if any, as
determined pursuant to this Section 9(b), shall be paid to the Executive
within five days of the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is
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payable by the Executive, it shall furnish the Executive 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 Executive. 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 9(c) and the
Executive 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 Executive.
(c) The Executive 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
Executive 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
Executive shall not pay such claim prior to the expiration of the 30-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 Executive in writing prior to
the expiration of such period that it desires to contest such claim, the
Executive shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) 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,
(iii) cooperate with the Company in good faith in
order effectively to contest such claim,
(iv) 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 Executive 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
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costs and expenses. Without limitation on the foregoing provisions of this
Section 9(c), 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 Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive 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 Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and
hold the Executive 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 further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
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 Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 9(c), the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall
(subject to the Company's complying with the requirements of Section 9(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by the Executive of an amount advanced by the Company pursuant to
Section 9(c), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the
Executive 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.
10. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its
subsidiaries, and their respective businesses, which shall have been obtained
by the Executive during the Executive's employment by the Company or any of its
subsidiaries and which shall not be or become public knowledge (other than by
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acts by the Executive or his representatives in violation of this Agreement).
After termination of the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company, communicate or
divulge any such information, knowledge or data to anyone other than the
Company and those designated by it. In no event shall an asserted violation of
the provisions of this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this
Agreement.
11. Successors.
(a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require 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 to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
12. Indemnification. The Executive shall be (i) covered by the
Company's "Officers and Directors Errors and Omissions Insurance Policy" and
(ii) indemnified and held harmless by the Company during the term of this
Agreement and following any termination of this Agreement for any reason
whatsoever in the same manner as would any other key management employee of the
Company with respect to acts or omissions occurring prior to (a) the
termination of this Agreement or (b) the termination of employment of the
Executive. Provided, in no event will the obligation of the Company to
indemnify the Executive under this Section 12 be less than the obligation which
the Company had to the Executive immediately prior to the occurrence of a
Change of Control.
13. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Oklahoma, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall
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have no force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(b) All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
If to the Company: Alexander Energy Corporation
701 Cedar Lake Boulevard
Oklahoma City, Oklahoma 73114
Attn: Bob G. Alexander, President
and Chief Executive Officer
With a copy to: McAfee & Taft A Professional Corporation
10th Floor, Two Leadership Square
Oklahoma City, Oklahoma 73102
Attention: Jerry A. Warren, Esq.
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable
under this Agreement such federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(e) The Executive's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a waiver of such
provision or any other provision thereof.
(f) This Agreement contains the entire understanding of
the Company and the Executive with respect to the subject matter hereof.
(g) The Executive and the Company acknowledge that the
employment of the Executive by the Company is "at will," and, prior to the
Effective Date, may be terminated by either the Executive or the Company at any
time. Upon a termination of the
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Executive's employment or upon the Executive's ceasing to be an officer of the
Company, in each case, prior to the Effective Date, there shall be no further
rights under this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
________________________________
, an individual
"EXECUTIVE"
ALEXANDER ENERGY CORPORATION, an
Oklahoma corporation
By _____________________________
Bob G. Alexander, President
and Chief Executive Officer
"COMPANY"
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