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Exhibit
10.15
CHAPARRAL ENERGY,
INC.
FORM OF CHANGE OF CONTROL
SEVERANCE AGREEMENT
FOR CORPORATE
OFFICERS
THIS CHANGE OF CONTROL
SEVERANCE AGREEMENT (this “Agreement”), dated as of
, is made and entered by and between Chaparral Energy, Inc., a
Delaware corporation (the “Company”), and
(the “Executive”).
WITNESSETH:
WHEREAS, the Executive is a
key employee of the Company or one or more of its Subsidiaries (as
defined below) and has made and is expected to continue to make
major contributions to the short and long-term profitability,
growth and financial strength of the Company;
WHEREAS, the Company
recognizes that the possibility of a Change in Control (as defined
below) exists and that such possibility, and the uncertainty it may
create among management, may result in the distraction or departure
of management personnel, to the detriment of the Company and its
stockholders;
WHEREAS, the Company desires
to assure itself of both present and future continuity of
management and desires to establish certain minimum severance
benefits for certain of its senior executives, including the
Executive, applicable in the event of a Change in Control;
and
WHEREAS, the Company wishes
to ensure that its senior executives are not unduly distracted by
the circumstances attendant to the possibility of a Change in
Control and to encourage the continued attention and dedication of
such executives, including the Executive, to their assigned duties
with the Company, and
WHEREAS, the Company desires
to provide additional inducement for the Executive to remain in the
employ of the Company.
NOW, THEREFORE, the Company
and the Executive agree as follows:
1. Certain Defined
Terms . In addition to terms defined elsewhere herein, the
following terms have the following meanings when used in this
Agreement with initial capital letters:
(a) “Affiliate”
means any entity in which the Company has a fifty percent
(50%) or greater capital, profits or voting
interest.
(b) “Base Salary”
means the Executive’s annual base salary rate as in effect
from time to time.
(c) “Board” means
the Board of Directors of the Company.
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(d) “ Bonus
” means an annual bonus, incentive or other payment of
compensation, in addition to Base Salary, made or to be made in
regard to services rendered in any year or other period pursuant to
any bonus, incentive, profit-sharing, performance, discretionary
pay or similar agreement, policy, plan, program or arrangement
(whether or not funded) of the Company or a Subsidiary, or any
successor thereto. “Bonus” does not include any stock
option, stock appreciation, stock purchase, restricted stock or
similar plan, program, arrangement or grant, whether or not
provided under an arrangement described in the preceding
sentence.
(e) “ Cause
” means, prior to any termination pursuant to
Section 3(b), (A) the Executive’s conviction by a
court of competent jurisdiction as to which no further, appeal can
be taken of a crime involving moral turpitude or a felony or
entering the plea of nolo contendere to such crime by the
Executive; (B) the commission by the Executive of a material
act of fraud upon the Company or any Affiliate; (C) the
material misappropriation of funds or property of the Company or
any Affiliate by the Executive; (D) the knowing engagement by
the Executive, without the written approval of the Board in any
material activity which directly competes with the business of the
Company or any Affiliate, or which the Board determines in good
faith would directly result in a material injury to the business or
reputation of the Company or any Affiliate; or
(E) (i) the material breach by Executive of any material
provision of this Agreement, or (ii) the willful, material and
repeated nonperformance of Executive’s duties to the Company
or any Affiliate (other than by reason of Executive’s illness
or incapacity), but only under clause (E) (i) or
(E) (ii) after written notice from the Board of such
material breach or nonperformance (which notice specifically
identifies the manner and sets forth specific facts, circumstances
and examples in which the Board believes that Executive has
breached the Agreement or not substantially performed his duties)
and his continued willful failure to cure such breach or
nonperformance within the time period set by the Board but in no
event less than thirty (30) business days after his receipt of
such notice; and, for purposes of this clause (E), no act or
failure to act on Executive’s part shall be deemed
“willful” unless it is done or omitted by Executive
without his reasonable belief that such action or omission was in
the best interest of the Company (assuming disclosure of the
pertinent facts, any action or omission by Executive after
consultation with, and in accordance with the advice of, legal
counsel reasonably acceptable to the Company shall be deemed to
have been taken in good faith and to not be willful under this
Agreement).
(f) “ Change in
Control ” means the occurrence during the Term of any one
of the following events:
(i) The acquisition by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”) (a
“ Person ”)) other than Mark A. Fischer, Fischer
Investments LLC, or their Affiliates (the “Excluded
Persons”) of beneficial ownership (within the meaning of
Rule 13d-3 under the Exchange Act) of fifty percent (50%) or
more of either (i) the then outstanding shares of common stock
of the Company (the “ Outstanding Company Stock
”) or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding
Company Voting
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Securities ”);
provided, however, the following acquisitions shall not constitute
a Change in Control: (i) any acquisition directly from the
Company by any subsidiary thereof (a “ Subsidiary
”), (ii) any acquisition by the Company or any
Subsidiary or by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Subsidiary, or
(iii) any acquisition by any corporation pursuant to a
reorganization, merger, consolidation or similar business
combination involving the Company (a “ Merger ”)
which, for purposes of this definition of Change in Control, shall
be subject to subparagraph (ii) (below); or
(ii) Approval by the
shareholders of the Company of a Merger, unless immediately
following such Merger, substantially all of the holders of the
Outstanding Company Voting Securities immediately prior to Merger
beneficially own, directly or indirectly, more than 50% of the
common stock of the corporation resulting from such Merger (or its
parent corporation) in substantially the same proportions as their
ownership of Outstanding Company Voting Securities immediately
prior to such Merger; or
(iii) The sale or other
disposition of all or substantially all of the assets of the
Company, unless immediately following such sale or other
disposition, substantially all of the holders of the Outstanding
Company Voting Securities immediately prior to the consummation of
such sale or other disposition beneficially own, directly or
indirectly, more than 50% of the common stock of the corporation
acquiring such assets in substantially the same proportions as
their ownership of Outstanding Company Voting Securities
immediately prior to the consummation of such sale or
disposition.
(g) “ Disability
” shall mean that Executive is entitled to receive long term
disability (“ LTD ”) income benefits under the
LTD plan or policy maintained by the Company that covers Executive.
If, for any reason, Executive is not covered under such LTD plan or
policy, then “Disability” shall mean a “permanent
and total disability” as defined in Section 22(e)(3) of
the Internal Revenue Code of 1986, as amended (the “
Code ”), and Treasury regulations thereunder. Evidence
of such Disability shall be certified by a physician acceptable to
both the Company and Executive. In the event that the Parties are
not able to agree on the choice of a physician, each shall select
one physician who, in turn, shall select a third physician to
render such certification. All costs relating to the determination
of whether Executive has incurred a Disability shall be paid by the
Company. Executive agrees to submit to any examinations that are
reasonably required by the attending physician or other healthcare
service providers to determine whether he has a
Disability.
(h) “ Employee
Benefits ” means the perquisites, benefits and service
credit for benefits as provided under any and all employee
retirement income and Welfare Benefit policies, plans, programs or
arrangements in which Executive is entitled to participate,
including without limitation any stock option, performance share,
performance unit, stock purchase, stock appreciation, savings,
pension, supplemental executive retirement, or other retirement
income or Welfare Benefit, deferred compensation, incentive
compensation, group or other life, health,
medical/hospital,
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dental or other insurance
(whether funded by actual insurance or self-insured by the Company
or a Subsidiary), disability, salary continuation, expense
reimbursement and other employee benefit policies, plans, programs
or arrangements that may now exist or any equivalent successor
policies, plans, programs or arrangements that may be adopted
hereafter by the Company or a Subsidiary, providing perquisites,
benefits and service credit for benefits at least as great in the
aggregate as are payable thereunder immediately prior to a Change
in Control.
(i) “Good
Reason” means the occurrence of any of the following
events, except in connection with termination of the
Executive’s employment for Cause or Disability, without
Executive’s express written consent:
(i) A reduction by more than
10% in Executive’s Base Salary and Target Bonus, as compared
with the Base Salary and most recently established Target Bonus, or
if no Target Bonus has been set then the Bonus most recently paid,
prior to the Change in Control or the termination or denial of the
Executive’s rights to Employee Benefits or a reduction in the
scope or value thereof, unless any such adverse change to Employee
Benefits applies on the same terms to all of the then-current
senior officers of the Company;
(ii) A relocation of
Executive’s principal office with the Company or its
successor that increases the Executive’s commute by more than
thirty-five (35) miles per day;
(iii) A substantial and
adverse change in the Executive’s duties, control, authority,
status or position, or the assignment to the Executive of duties or
responsibilities which are materially inconsistent with such status
or position, or a material reduction in the duties and
responsibilities previously exercised by the Executive, or a loss
of title, loss of office, loss of significant authority, power or
control, or any removal of Executive from, or any failure to
reappoint or reelect him to, such positions, except in connection
with the termination of his employment for Cause;
(iv) Any material breach by
the Company or its successor of any other material provision of
this Agreement; or
(v) Any failure by the
Company to obtain an assumption of this Agreement by its successor
in interest pursuant to Section 12.
Notwithstanding the foregoing
definition of “Good Reason”, the Executive cannot
terminate his employment hereunder for Good Reason unless he
(A) first notifies the Board in writing of the event (or
events) which the Executive believes constitutes a Good Reason
event under subparagraphs (i), (ii), (iii) or (iv) (above)
within 120 days from the date of such event, and (B) provides
the Company with at least 30 days to cure, correct or mitigate the
Good Reason event so that it either (1) does not constitute a
Good Reason event hereunder or (2) Executive agrees, in
writing, that after any such modification or accommodation made by
the Company that such event shall not constitute a Good Reason
event hereunder.
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(j) “ Retirement
” means the termination of Executive’s employment for
normal retirement at or after attaining age sixty-five
(65) provided that, on the date of his retirement, Executive
has accrued at least five years of active service with the
Company.
(k) “ Retirement
Plans ” means the benefit plans of the Company that are
intended to be qualified under Section 401(a) of the Code
and any supplemental executive retirement benefit plan or any other
plan that is a successor thereto if the Executive was a participant
in such Retirement Plan on the date of the Change in
Control.
(1) “ Severance
Period ” means the period of time commencing on the date
of the first occurrence of a Change in Control and continuing until
the earlier of (i) the second anniversary of the occurrence of
the Change in Control, or (ii) the Executive’s death;
provided, however, that commencing on each anniversary of the
Change in Control, the Severance Period will automatically be
extended for an additional year unless, not later than 90 calendar
days prior to such anniversary date, either the Company or the
Executive shall have given written notice to the other that the
Severance Period is not to be so extended.
(m) “ Subsidiary
” means any subsidiary as defined in Section
l(f)(i).
(n) “ Term
” means the period commencing as of the date hereof and
expiring on the close of business on December 31,
[2009]; provided, however, that (i) commencing on
January 1, [2009] and each January 1 thereafter, the
term of this Agreement will automatically be extended for an
additional year unless, not later than September 30 of the
immediately preceding year, the Company or the Executive shall have
given notice that it or the Executive, as the case may be, does not
wish to have the Term extended; (ii) if a Change in Control
occurs during the Term, the Term shall expire and this Agreement
will terminate on the last day of the Severance Period; and
(iii) subject to Section 3(c), if, prior to a Change in
Control, the Executive ceases for any reason to be an employee of
the Company or any Subsidiary (including termination arising in
connection with the Company ceasing to beneficially own 50% or more
of the Voting Stock of a Subsidiary), or ceases to be an employee
at a level previously designated for the benefits set forth in
Annex A hereto, thereupon without further action the Term
shall be deemed to have expired and this Agreement will immediately
terminate and be of no further effect. For purposes of this Section
l(n), the Executive shall not be deemed to have ceased to be an
employee of the Company and any Subsidiary by reason of the
transfer of Executive’s employment between the Company and
any Subsidiary, or among any Subsidiaries.
(o) “ Termination
Date ” means the date on which the Executive’s
employment is terminated (the effective date of which shall be the
date of termination, or such other date that may be specified by
the Executive if the termination is pursuant to
Section 3(b)).
(p) “ Voting
Stock ” means securities entitled to vote generally in
the election of directors of the Board.
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(q) “ Welfare
Benefits ” means Employee Benefits that are provided
under any “welfare plan” (within the meaning of
Section 3(1) of the Employee Retirement Income Security Act of
1974, as amended) of the Company, including, but not necessarily
limited to, group or other life, health, medical/hospital, dental
or other insurance (whether funded by actual insurance or
self-insured by the Company or a Subsidiary).
2. Operation of
Agreement . This Agreement will be effective and binding
immediately upon its execution, but, anything in this Agreement to
the contrary notwithstanding, except as provided in
Section 3(c), this Agreement will not be operative unless and
until a Change in Control occurs. Upon the occurrence of a Change
in Control at any time during the Term, without further action,
this Agreement will become immediately operative.
3. Termination Following a
Change in Control .
(a) In the event of the
occurrence of a Change in Control, the Executive’s employment
may be terminated by the Company or a Subsidiary during the
Severance Period and the Executive will be entitled to the benefits
provided by Section 4 unless such termination is the result of
the occurrence of one or more of the following events:
(i) The Executive’s
death, Disability or Retirem
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