Executive Severance Program - Cooper Cameron Corp.
EXECUTIVE SEVERANCE PROGRAM
I. PURPOSE
To establish a severance program for senior level executives of the
company that recognizes the relatively more difficult employment transition
that occurs upon the termination of employment of higher paid individuals.
II. SCOPE
This policy applies to designated employees of Cooper Cameron
Corporation, including operating groups, divisions and plants.
III. POLICY
Because senior level executive employees, to a greater extent than
other salaried employees, serve at the pleasure of the company and are
decidedly "at will" - meaning that either the company or the executive may
terminate the employment relationship at any time for any reason without
liability one to the other - a higher level of severance benefits is
appropriate. The reference to "at will" employment status does not represent a
change in company policy, but is referred to here only to avoid a
misunderstanding.
The executive severance program is applicable to designated company
executives whose active full time employment is terminated by the company for
reasons other than cause. To assist senior executives in transitioning from one
employment situation to another, the following severance compensation will be
awarded in the form of salary continuation upon the condition of signing a full
and complete severance waiver and release in a form acceptable to the company.
(An example of such a waiver and release is attached as Exhibit A.)
Position Salary Continuation
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Category I 15 months
Category II 12 months
Category III 9 months
The salary continuation period includes the continuation of all
applicable benefits and benefits programs according to the respective program's
terms and conditions (including employee contributions where required). No
additional payments will be made for holidays or vacations earned or occurring
during the salary continuation period. Bonus payments will be prorated to the
date of original severance and determined on the basis of bonuses actually paid
to similarly situated employees. No further bonus entitlements will be earned
during the salary continuation period.
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Stock options granted to the executive shall be governed by the terms
of the Company's Long-Term Incentive Plan and the specific provisions of the
options with respect to vesting and exercise.
In addition to salary and benefit continuations as provided above,
outplacement services will be made available as appropriate.
If the division in which the executive is employed is sold, merged or
consolidated with another entity or business, any executive who continues
employment or is offered continued employment with a new owner of a former
Cooper Cameron operation in the same or reasonably comparable position, will
not be considered terminated within the meaning of this policy. Likewise, if
the Company is merged or consolidated with another entity or business, any
executive who continues employment or is offered continued employment in the
same or reasonably comparable position, will not be considered terminated
within the meaning of this policy except to the extent the Company's Change in
Control Policy may supersede.
IV. OTHER SEVERANCE RIGHTS
To the extent any participant under this policy is entitled to receive
benefits for severance pursuant to statutory or regulatory requirements or an
employment contract or arrangement, the benefits hereunder are not intended to
duplicate such prescribed benefits. The benefits hereunder shall be reduced
automatically to avoid such duplication, if any. The determination of the
reduction shall be in the sole determination of the Pension Administration
Committee which decision will be final and binding on both the Company and the
participant.
V. RESPONSIBILITIES
The general administration of the executive severance program is the
responsibility of the Pension Administration Committee, which has final and
binding authority to administer the plan in accordance with its stated terms.
The corporate senior vice president, general counsel and secretary has overall
responsibility for the day-to-day administration of this policy. It is his/her
responsibility to administer and effectuate the terms and conditions of this
policy. Exceptions to the policy may only be granted with the approval of the
president of the company. The senior vice president, general counsel and
secretary may delegate his/her responsibilities regarding this policy to any
person or persons that he/she chooses, including division and plant personnel
where appropriate.
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