Exhibit 10.1
UNIT CORPORATION AMENDED AND
RESTATED
KEY EMPLOYEE CHANGE OF CONTROL
CONTRACT
This Agreement is entered into effective as of
the 19th day of August, 2008 by and between Unit Corporation, a
Delaware corporation (the “ Company ”)
and [●] (the “ Executive
”).
WHEREAS, 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 in Section
2) of the Company. The Board believes it is imperative
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 Company currently and in the
event of any threatened or pending Change of Control, and to
provide the Executive with compensation and benefits arrangements
upon a Change of Control which ensure that the compensation and
benefits expectations of the Executive will be satisfied and which
provide the Executive with compensation and benefits arrangements
that are competitive with those of other
corporations. Therefore, in order to accomplish these
objectives, the Board has caused the Company to enter into this
Agreement. [The Company previously entered into a Key
Employee Change of Control Contract with the Executive dated as of
[●] (the “Prior Agreement”). Due to
the adoption of Section 409A of the Internal Revenue Code of 1986,
as amended, the Prior Agreement must be amended, and in connection
with such review process, additional revisions to the Prior
Agreement have been made. In order to accomplish these
objectives, the Board has caused the Company to enter into this
Agreement, which upon execution will supersede and replace the
Prior Agreement.]
NOW, THEREFORE, it is hereby agreed as
follows:
(a) The “ Effective Date
” shall mean the first date during the Change
of Control Period (as defined in Section 1(b)) on which a Change of
Control (as defined in Section 2) 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 the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of
employment (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 (such a termination of employment, an “Anticipatory
Termination”), then for all purposes of this Agreement the
“Effective Date” shall mean the date immediately prior
to the date of such termination of employment.
(b) The “ Change of Control
Period ” shall mean the period commencing
on the date hereof and ending on the third anniversary of the date
hereof; 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 shall be hereinafter referred
to as the “ Renewal Date ”),
unless previously terminated, the Change of Control Period shall be
automatically extended so as to terminate three years from such
Renewal Date, unless at least 90 days prior to the Renewal Date the
Company shall give notice to the Executive that the Change of
Control Period shall not be so extended.
For the purpose of this Agreement, a “
Change of Control ” shall
mean:
(a) 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 ”)
becomes the beneficial owner (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 15% or more of
either (i) the then outstanding shares of common stock of the
Company (the “ Outstanding Company Common 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 Securities ”); provided,
however, that for purposes of this subsection (a), the following
shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company,
(iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any company
controlled by, controlling or under common control with the Company
(each, an “ Affiliated Company
”), (iv) any acquisition pursuant to a transaction
which complies with Sections 2(c)(i), 2(c)(ii) and 2(c)(iii) or (v)
if the Board determines in good faith that a Person became the
beneficial owner of 15% or more of the Outstanding Company Common
Stock inadvertently and without any intention of changing or
influencing control of the Company, unless and until such Person
shall have failed to divest itself, as soon as practicable (as
determined, in good faith, by the Board of Directors of the
Company), of beneficial ownership of a sufficient number of
Outstanding Company Common Stock so that such Person's beneficial
ownership of Outstanding Company Common Stock would no longer
otherwise qualify as a Change of Control; or
(b) Individuals who, as of the date hereof,
constitute the Board (the “ Incumbent Board ”)
cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual was a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(c) Consummation by the Company of a
reorganization, merger, statutory share exchange or consolidation
or similar transaction involving the Company or any of its
subsidiaries, a sale or other disposition of all or substantially
all of the assets of the Company or the acquisition of assets or
stock of another entity by the Company or any of its subsidiaries
(each, a “ Business Combination ”),
in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60%
of the then outstanding shares of common stock (or, for
a non-corporate entity, equivalent securities) and the combined
voting power of the then outstanding voting securities entitled to
vote generally in the election of directors (or, for a
non-corporate entity, equivalent governing body), as the case may
be, of the entity resulting from such Business Combination
(including, without limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (ii) no Person (excluding any
corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 15% or more of, respectively, the
then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members
of the board of directors (or, for a non-corporate entity,
equivalent governing body) of the entity resulting from such
Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or
(d) Approval by the shareholders of the
Company of a complete liquidation or dissolution of the
Company.
The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain
in the employ of the Company subject to the terms and conditions of
this Agreement, for the period commencing on the Effective Date and
ending on the third anniversary of the Effective Date (the “
Employment Period ”). The Employment Period
shall terminate upon the Executive’s termination of
employment for any reason.
(a) Position and Duties.
(i) During the Employment Period, (A) the
Executive’s position (including status, offices, 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 to the Executive
at any time during the 120-day period immediately preceding the
Effective Date, (B) the Executive’s services shall be
performed at the office where the Executive was employed
immediately preceding the Effective Date or any other location less
than 35 miles from such location, and (C) the Executive shall not
be required to travel on Company business to a substantially
greater extent than required during the 120-day period immediately
prior to the Effective Date.
(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 Executive 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 an annual base
salary (the “ Annual Base Salary ”),
at an annual rate, at least equal to twelve times the
highest monthly base salary paid or payable, including any base
salary which has been earned but deferred, to the Executive by the
Company and its Affiliated Companies in respect of the twelve-month
period immediately preceding the month in which the Effective Date
occurs. The Annual Base Salary shall be paid at such
intervals as the Company pays executive salaries
generally. During the Employment Period, the Annual Base
Salary shall be reviewed at least annually, beginning no more than
12 months after the last salary increase awarded to the Executive
prior to the Effective Date. Any increase in the Annual
Base Salary shall not serve to limit or reduce any other obligation
to the Executive under this Agreement. The Annual Base
Salary shall not be reduced after any such increase and the term
“Annual Base Salary” shall refer to the Annual Base
Salary as so increased.
(ii) Annual Bonus. In
addition to the Annual Base Salary, the Executive shall be awarded,
for each fiscal year ending during the Employment Period, an annual
bonus (the “ Annual Bonus ”) in
cash at least equal to the Executive’s highest annual bonus
earned by the Executive under the Company’s annual incentive
plans, or any comparable bonus under any predecessor or successor
plan, for the three full fiscal years prior to the
Effective
Date(or for such lesser number of full fiscal years prior to the
Effective Date for which the Executive was eligible to earn such a
bonus, and annualized in the case of any pro rata bonus earned for
a partial fiscal year) (the “Recent Annual
Bonus”). (If the Executive has not been eligible
to earn such a bonus for any period prior to the Effective Date,
the “Recent Annual Bonus” shall mean the
Executive’s bonus for the year in which the Effective Date
occurs.) Each such Annual Bonus shall be paid no later
than two and a half months following the fiscal year for
which the Annual Bonus is awarded, unless the Executive shall elect
to defer the receipt of such Annual Bonus pursuant to an
arrangement that meets the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the
“Code”).
(iii) Long-Term Cash and Equity
Incentives, Savings and Retirement Plans. During
the Employment Period, the Executive shall be entitled to
participate in all long-term cash incentive, equity incentive,
savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and
its Affiliated Companies, but in no event shall such plans,
practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company
and its Affiliated Companies for the Executive under such plans,
practices, policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or if
more favorable to the Executive, those provided generally at any
time after the Effective Date to other peer executives of the
Company and its Affiliated Companies.
(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 Affiliated Companies (including, without
limitation, medical, prescription, dental, disability, employee
life, group life, accidental death and travel accident insurance
plans and programs) to the extent applicable generally to other
peer executives of the Company and its Affiliated Companies, but in
no event shall such plans, practices, policies and programs provide
the Executive with benefits which are less favorable, in the
aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, those provided generally at
any time after the Effective Date to other peer executives of the
Company and its Affiliated Companies.
(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 Affiliated Companies in
effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to
the Executive,
as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its Affiliated Companies.
(vi) Fringe Benefits.
During the Employment Period, the Executive shall be entitled to
fringe benefits, including, without limitation, tax and financial
planning services, payment of club dues, and, if applicable, 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 Affiliated Companies in effect for the Executive at
any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its Affiliated Companies.
(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 exclusive personal
secretarial and other assistance, at least equal to the most
favorable of the foregoing provided to the Executive by the Company
and its Affiliated Companies at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and its Affiliated
Companies.
(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 Affiliated Companies
as in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
its Affiliated Companies.
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5.
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TERMINATION OF EMPLOYMENT.
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(a) Death or
Disability. The Executive’s employment shall
terminate automatically upon the Executive’s death during the
Employment Period. If the Company determines in good
faith that the Disability (as defined herein) of the Executive has
occurred during the Employment Period (pursuant to the definition
of “Disability”), it may give to the Executive written
notice in accordance with Section 12(b) of this Agreement 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 ” shall mean the absence of
the Executive from the Executive’s duties with the Company on
a full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness which 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 unreasonably withheld).
(b) Cause. The Company
may terminate the Executive’s employment during the
Employment Period with or without Cause. For purposes of
this Agreement, “ Cause ” shall
mean:
(i) the willful and continued failure of
the Executive to perform substantially the Executive’s duties
(as contemplated by Section 4(a)(i)) with the Company or any
Affiliated Company (other than any such failure resulting from
incapacity due to physical or mental illness or following the
Executive’s delivery of a Notice of Termination for Good
Reason), after a written demand for substantial performance is
delivered to the Executive by the Board or the Chief Executive
Officer of the Company which specifically identifies the manner in
which the Board or the Chief Executive Officer of the Company
believes that the Executive has not substantially performed the
Executive’s duties, or
(ii) the willful engaging by the Executive
in illegal conduct or gross misconduct that is materially and
demonstrably injurious to the Company.
For purposes of
this 5(b), no act or failure to act, on the part of the Executive,
shall be considered “ willful ”
unless it is done, or omitted to be done, by the Executive in bad
faith or without reasonable belief that the Executive’s
action or omission was in the best interests of the
Company. Any act, or failure to act, based upon (A)
authority given pursuant to a resolution duly adopted by the Board,
or if the Company is not the ultimate parent corporation of the
Affiliated Companies and is not publicly-traded, the board of
directors of the ultimate parent of the Company (the “
Applicable Board ”) or (B) the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted
to be done, by the Executive in good faith and in the best
interests of the Company. The cessation of employment of
the Executive shall not be deemed to be 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-quarters of the entire membership of the Applicable Board
(excluding the Executive, if the Executive is a member of the
Applicable Board) at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Executive
and the Executive is given an opportunity, together with counsel
for the Executive, to be heard before the Applicable Board),
finding that, in the good faith opinion of the Applicable Board,
the Executive is guilty of the conduct described in Sections
5(b)(i) or 5(b)(ii), and specifying the particulars thereof in
detail.
(c) Good Reason. The
Executive may voluntarily terminate the Executive’s
employment during the Employment Period for Good Reason or without
Good Reason. For purposes of this Agreement, “
Good Reason ” shall mean:
(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 action by
the Company which results in a diminution in such position,
authority, duties or responsibilities (whether or not occurring
solely as a result of the Company’s ceasing to be a publicly
traded entity), 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 as
provided in Section 4(a)(i)(B) of this Agreement or to be based at
a location other than the principal executive offices of the
Company if the Executive was employed at such location immediately
prior to the Effective Date;
(iv) any purported termination by the
Company of the Executive’s employment otherwise than as
expressly permitted by this Agreement; or
(v) any other action or inaction that
constitutes a material breach by the Company of this Agreement,
including 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. Anything in this Agreement to the contrary
notwithstanding, a termination by the Executive for any reason
during the 30-day period immediately following the first
anniversary of the Effective Date shall be deemed to be a
termination for Good Reason for all purposes of this
Agreement. The Executive’s mental or physical
incapacity following the occurrence of an event described above in
clauses (i) through (v) shall not affect the Executive’s
ability to terminate employment for Good Reason and the
Executive’s death following delivery of a Notice of
Termination for Good Reason shall not affect estate’s
entitlement to severance payments benefits provided hereunder upon
a termination of employment for Good Reason.
(d) Notice of
Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated
by Notice of Te
