Employment Agreement - Cooper Cameron Corp. and Franklin Myers
September 1, 1999
Mr. Franklin Myers
President, Cooper Energy Services Division
Cooper Cameron Corporation
515 Post Oak Boulevard
Houston, Texas 77027
Dear Mr. Myers:
Cooper Cameron Corporation (the "Company") considers the establishment
and maintenance of a sound and vital management to be essential for the
protection and enhancement of the best interests of the Company and its
stockholders. In view of your experience and performance in the business of the
Company and its subsidiaries, the Company desires to secure your services for an
extended period. In addition, the Company recognizes that, as is the case with
many publicly-held corporations, the possibility of a change in control may
arise and that such possibility, and the uncertainty and questions which it may
raise among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its stockholders.
Accordingly, the board of directors of the Company (the "Board") has
determined that appropriate steps should be taken to assure the Company of the
continuation of your services and to reinforce and encourage the attention and
dedication of members of the Company's management to their assigned duties
without distraction in circumstances arising from the possibility of a change in
control of the Company. In particular the Board believes it important, should
the Company or its stockholders receive a proposal for or notice of transfer of
control of the Company, that you be able to assess and advise the Board whether
such transfer would be or is in the best interests of the Company and its
stockholders, and to take such other action regarding such proposal or transfer
as the Board might determine to be appropriate without being influenced by the
uncertainties of your own situation.
In order to induce you to remain in the employ of the Company, this
agreement (the "Agreement"), which has been approved by the Board and which
supersedes the previous letter agreement between you and the Company dated
November 30, 1995 in its entirety, sets forth the terms of your continued
employment by the Company and the compensation and severance benefits which the
Company agrees will be provided to you in the event your employment with the
Company should be terminated under the circumstances described below.
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Reference is made to Annex I hereto for definitions of certain terms
used in this Agreement, and such definitions are incorporated herein by such
reference with the same effect as if set forth herein. Certain capitalized terms
used in this Agreement in connection with the description of various Plans are
defined in the respective Plans, but if any conflicts with a definition herein
contained, the latter shall prevail.
35. Term of Employment. The Company hereby agrees to continue your
employment and you hereby agree to serve the Company for an employment
period commencing on the date hereof and initially ending August 31, 2000;
provided, however, that on each successive September 1 commencing in 2000,
the employment period shall automatically be extended for one additional
year (with the date to which the employment period has most recently been
so extended being hereinafter referred to as the "Expiration Date" and the
period commencing the date hereof and ending on the Expiration Date being
hereinafter referred to as the "Employment Period"), subject to prior
termination of the Employment Period pursuant to Section 4 of this
Agreement.
36. Duties.
(a) During the Employment Period, you shall serve the Company as
its Senior Vice President and as President, Cooper Energy Services Division, and
perform your duties and responsibilities diligently, faithfully and loyally and
devote such time to the Company's affairs as may be necessary to the end of
achieving the proper, efficient and successful operation of the Company's
business. In such capacities you shall (i) generally have the duties of such
offices as may be specified in the Bylaws, (ii) report directly to the Chief
Executive Officer and (iii) have general executive management of the business
and affairs of the Division, subject to the direction of the Chairman, President
and Chief Executive Officer, the Board or any Committee thereof. The foregoing
shall not, however, be deemed to restrict you from attending to matters or
engaging in activities not directly related to the business of the Company, if
reasonable in scope and time commitment and not otherwise in violation of this
Agreement.
(b) If during the Employment Period, (i) a tender offer or exchange
offer is made for 20% or more of the Company's outstanding Voting Securities or
(ii) a transaction is proposed which, if consummated, would result in a Change
of Control, you agree that you will not leave your employment with the Company
(other than as a result of Disability or upon Retirement) and will also render
the services contemplated in the introductory paragraphs of this Agreement until
such time as such tender offer, exchange offer or proposed transaction is
abandoned or terminated or a Change of Control has occurred.
37. Compensation.
(a) Base Salary. As compensation for your services, the Company
agrees to pay you basic compensation at the rate of $252,000 per annum through
December 31, 1999 and at the rate of $265,000 per annum beginning January 1,
2000 ("Base Salary"), payable on a current basis in equal installments not less
frequently than monthly, subject only to such payroll and withholding deductions
as may be required by law or the terms of Plans in which you are a participant.
For periods subsequent to January 1, 2000, your Base Salary shall be established
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annually by the Compensation Committee of the Board and paid on the same basis
as for the prior year, but no such adjustment shall result in a Base Salary for
any year of less than the highest annual rate so authorized by the Committee to
be paid to you during any previous calendar year(s) of the Company ended during
the Employment Period, except upon your prior written consent. The Company's
obligations to you hereunder shall remain unaffected by any election (such as
that made for the twelve month period ending December 31, 1999) by you to
receive your Base Salary in other than cash, and for all purposes of this
Agreement, such election shall apply only to the period for which it is made by
written agreement between the Company and you.
(b) Plans. In addition to your Base Salary, you will participate
in the Bonus Plan, Defined Benefit Plan and LTIP Plan, and be eligible to
participate in the Defined Contribution Plan, Purchase Plan and Other Plans,
including the Perquisites, for each year during the Employment Period.
(c) Other. The Company shall reimburse you for all expenses paid
or incurred by you in the performance of your duties under this Agreement in
accordance with the Company's normal expense reimbursement policies applicable
to senior executives.
38. Termination. Upon compliance by the initiating party with any
applicable procedures set forth in Section 5 hereof, your employment with the
Company:
(a) shall terminate automatically upon your death or Retirement;
(b) may be terminated prior to the Expiration Date at the
discretion of the Chief Executive Officer upon your Disability;
(c) may be terminated prior to the Expiration Date at the
discretion of the Chief Executive Officer for Cause;
(d) may be terminated prior to the Expiration Date at your
discretion, other than for Good Reason;
(e) may be terminated prior to the Expiration Date at the discretion
of the Chief Executive Officer prior to a Change of Control without Cause;
(f) may be terminated prior to the Expiration Date at the discretion
of the Chief Executive Officer in conjunction with a Change of Control
without Cause;
(g) may be terminated prior to the Expiration Date at your discretion
for Good Reason prior to a Change of Control; or
(h) may be terminated prior to the Expiration Date at your discretion
for Good Reason in conjunction with a Change of Control.
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39. Procedures for Termination. If it is intended that your
employment be terminated:
(a) pursuant to Section 4(b), the Company shall transmit to you
written notice setting forth the particulars upon which the Company bases
its determination that a Disability exists, together with a written request
of the Chief Executive Officer that you resume your duties within 30 days
following the date thereof, failing which a "final discharge" shall then
occur;
(b) pursuant to Section 4(c), the Company shall transmit to you
written notice setting forth the Cause for which you are proposed to be
dismissed in sufficient detail to permit a reasonable assessment of the
bona fides thereof, and setting a meeting with the Chief Executive Officer
not less than 30 days following the date of such notice at which the Chief
Executive Officer shall consider your termination and at which you and your
counsel shall have the opportunity to be heard, following which the Chief
Executive Officer shall either withdraw the notice, or if he so finds in
his good faith opinion, issue his report within ten days thereafter that
Cause exists and specifying the particulars of his findings, in which
latter event a "final discharge" shall occur. After receipt of a notice of
intended termination for Cause, you shall not have any authority to incur
any obligation of any kind whatsoever on behalf of the Company pending
withdrawal of such notice or "final discharge;"
(c) pursuant to Section 4(d), you shall transmit to the Company
written notice specifying that your resignation is other than for Good
Reason;
(d) pursuant to Section 4(e) or 4(f) the Company shall transmit
to you written notice specifying that your termination is without Cause;
(e) pursuant to Section 4(g) or 4(h), you shall transmit to the
Company written notice setting forth the particulars upon which you base
your determination that Good Reason exists and, only if the stated basis
therefor is capable of being cured, requesting a cure within 10 days,
failing which a "final separation" shall then occur, and if such stated
basis is not capable of cure by the Company, "final separation" shall occur
co-extensive with delivery of the notice.
For purposes of this Agreement, a "Termination Date" shall be deemed
to have occurred upon (i) the happening of any event contemplated by Section
4(a) [death or Retirement], (ii) the date of "final discharge" in the case of
termination initiated under Sections 5(a) [Disability] or 5(b)[Cause], (iii) the
date of "final separation" in the case of a termination initiated under Section
5(e) [Good Reason], or (iv) the 30th day following the date of any notice
contemplated by Sections 5(c) [resignation without Good Reason] or 5(d)
[discharge without Cause]; provided, that any proceeding initiated pursuant to
Section 11 hereof within 15 days after the giving of any notice under this
Section 5 shall (anything else in this Agreement to the contrary
notwithstanding) automatically toll the effectiveness of any Termination Date
until final resolution of such proceeding. Each notice which complies with the
requirements of this Section 5 is hereinafter referred to as a "Termination
Notice".
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40. Effect of Termination. If your employment is terminated:
(a) pursuant to Sections 4(a) [death or Retirement], 4(b)
[Disability], 4(c) [Cause], or 4(d) [resignation without Good Reason], then
you shall be entitled to receive (i) payment when due of your Base Salary
through the end of the first monthly pay period ended after the Termination
Date and (ii) all benefits under the Plans in which you are at the time a
participant, to the extent the same are vested under the terms thereof at
the Termination Date, and (except as otherwise provided herein) all other
obligations of the Company under this Agreement shall thereupon cease
provided, however, that in the event that your employment is terminated
pursuant to Section 4(a) as a result of your death, without prejudice to
your rights under the LTIP Plan or any option grant made pursuant thereto,
all outstanding options, rights and other forms of contingent incentive
compensation granted to you under the LTIP Plan shall receive the treatment
as provided for in subsection (d) of the definition of Severance Package
herein; or
(b) pursuant to Sections 4(e) [discharge without Cause prior to
Change of Control] or 4(g) [resignation for Good Reason prior to Change of
Control], then you shall become entitled to all benefits conferred upon you
by the Termination Package, and (except as otherwise provided herein) all
other obligations of the Company under this Agreement shall thereupon
cease.
(c) pursuant to Sections 4(f) [discharge without Cause after a
Change of Control] or 4(h) [resignation for Good Reason after a Change of
Control], then you shall become entitled to all benefits conferred upon you
by the Severance Package, and (except as otherwise provided herein) all
other obligations of the Company under this Agreement shall thereupon
cease.
You shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment, nor shall the amount of any
payment provided for in this Agreement be reduced by any compensation earned by
you as the result of employment by another employer after any Effective Date or
Termination Date.
41. LTIP Benefit Acceleration at Effective Date. Immediately upon
any Effective Date, all contingent compensation rights issued to you under
the LTIP Plan (including an option granted under the options in lieu of pay
program) which are then outstanding shall become vested, exercisable,
distributable and unrestricted (any contrary provision in the LTIP Plan
notwithstanding) for a period of 183 days following the Effective Date (the
"Exercise Period") whether or not during such period you continue to be
employed by the Company. During the Exercise Period, you shall have the
right immediately upon any written request by you to the Company, if
approved in writing by any person (acting solely in his individual capacity
and when so acting, such concurring person shall do so without any contrary
"fiduciary" or other duty to the Company) who was at the Effective Date an
officer or director of the Company, to (i) exercise all or any portion of
all your options covered (including, at your sole election, any associated
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Tandem SAR) by the LTIP Plan and to have the underlying Shares issued to
you, (ii) have issued to you on a non-forfeitable basis any or all Shares
covered by Restricted Stock Awards held by you under the LTIP Plan, (iii)
have issued to you any or all Performance Shares and/or Performance Units
held by you in the LTIP Plan, (iv) exercise all or any portion of any LTIP
Plan Freestanding SAR held by you, and (v) obtain the full benefit of any
other contingent compensation rights to which you may be entitled under the
LTIP Plan, in each case as though all applicable Performance Targets had
been met for all Performance Periods (including those extending beyond the
Effective Date) and any and all other LTIP Plan contingencies had been
satisfied in full at the Effective Date and the maximum possible benefit
thereunder had been earned in full at the Effective Date. To the extent you
have not exercised or requested performance of such benefits following the
Effective Date and prior to expiration of the Exercise Period, all terms
applicable to any such benefit prior to the Effective Date shall again
become fully applicable as though an Effective Date had never occurred.
42. Excise Tax. To the extent that the acceleration of vesting
or any payment, distribution or issuance made to you pursuant to this
Agreement or otherwise is subject to federal income, excise, or other tax
at a rate above the rate ordinarily applicable to like payments paid in the
ordinary course of business ("Penalty Tax"), whether as a result of the
provisions of Section 280G(b)(1) and 4999(a) of the Internal Revenue Code
of 1986, as amended, any similar or analogous provisions of any statute
adopted subsequent to the date hereof, or otherwise, then the Company shall
pay you an additional amount of cash (the "Additional Amount") such that
the net amount received by you, after paying any applicable Penalty Tax and
any federal or state taxes on such Additional Amount, shall be equal to the
amount that you would have received if such Penalty Tax were not
applicable.
43. Deferral of Payments; Early Payments. At any time prior to a
Termination Date, you may irrevocably direct the Company that any amounts
which are or should become payable to you under the Termination Package,
the Severance Package or pursuant to Section 7 hereof shall be paid to you
in three equal installments, payable on or within ten days following the
Termination Date, and on the first and second anniversaries of the initial
installment payment. In addition, if any payment to you in respect of a
stock-based benefit which is precipitated by the occurrence of an Effective
Date or a Termination Date and which would, in and of itself, give rise to
a short-swing profit under Section 16(b) of the Exchange Act, then both the
payment and the entitlement to payment thereof, shall automatically be
deferred until the earliest date (not later than 183 days following a
Termination Date) at which the payment of such benefit would not, in and of
itself, result in a short-swing profit. The Company and you further agree
that when it has become apparent in our collective best judgment (as
expressed by the Compensation Committee of the Board, in the case of the
Company) that a Change of Control is likely to occur and further, that a
likely consequence thereof will be the occurrence of a Termination Date,
the Company and you will use reasonable good faith efforts to undertake and
conclude negotiations intended to result in the payment to you of a portion
of the Termination Package or Severance Package earlier than would
otherwise be the case hereunder, thereby increasing the benefit conferred
upon you and the tax
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efficiency of such payments to the Company, with any consequent tax savings
to be allocated between you and the Company in such reasonable proportions
as we shall agree; unless so agreed to by both parties in writing, no such
negotiation or agreement shall affect the Company's obligations to you
under any other provision of this Agreement.
44. Conditional Share Purchase Obligation.
(a) If a Change of Control occurs as a consequence of a tender offer
or exchange offer (the "Tender Offer"), the Company shall, if requested by you,
purchase from you (whether a Termination Date has occurred following the Change
of Control) for cash on any business day selected by you upon not less than ten
days' notice to the Company, which day shall not be less than ten days following
consummation of the Tender Offer nor more than three years after the Effective
Date, up to that number of Shares which shall be equal to the product of (x) the
number of Shares acquired by you upon exercise or distribution of any benefit
under the Bonus Plan or LTIP Plan (including an option granted under the options
in lieu of pay program) prior to consummation of the Tender Offer, multiplied by
(y) the decimal equivalent of (I) the number of Shares accepted for purchase or
exchange in the Tender Offer, divided by (II) the number of Shares timely and
validly tendered pursuant to the Tender Offer. In the event the above obligation
to purchase Shares occurs by reason of a cash tender offer or a combination cash
tender offer and exchange offer, the cash price per share to be paid to you
hereunder shall be equal to the highest price paid in cash pursuant to the
Tender Offer. In the event such obligation occurs by reason of an exchange
offer, the cash price per share to be paid to you hereunder shall be equal to
the closing price, if traded on a stock exchange, or the average bid and asked
prices, if traded in the over-the-counter market, of the security of the person
so exchanged for the Shares (the "Exchange Security") on the first day on which
the Exchange Security could have been sold by you on such exchange or in the
over-the-counter market, as the case may be, in a regular broker's transaction
had your Shares been tendered and accepted, multiplied by the number of Exchange
Securities (or fraction thereof) issued in the Tender Offer for each Company
Share; and
(b) if a Change of Control occurs pursuant to a Tender Offer and (i) a
merger, consolidation, reorganization, sale, spin-off, or purchase of assets
under which all remaining outstanding Shares will be converted into or become
exchangeable for cash, or for securities ("Merger Security") issued or to be
issued by the Person who made the Tender offer (or a subsidiary or affiliate of
such Person), is thereafter proposed to the Company or its stockholders, and
(ii) such merger, consolidation, reorganization or purchase of assets occurs
less than three years after the Effective Date, and (iii) the amounts of cash
into which each Share would be converted if the transaction is effected wholly
for cash, or the Merger Security Value (as defined below) if such transaction is
effected wholly for Merger Securities, or the sum of the cash and the Merger
Security Value if the Transaction is effected partly for cash and partly for
Merger Securities, as the case may be, is less than 95% of the per share price
that would have been paid by the Company for such portion of your Shares had you
exercised your option to require the Company to purchase such Shares under
Section 10(a) above, the Company shall pay you (whether or not a Termination
Date has occurred following a Change of Control), an amount in
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cash equal to the difference between the aggregate price you would have received
from the number of Shares the Company would have been required to purchase from
you had you exercised such option under Section 10(a) and the amount of cash
and/or the Merger Security Value received for the same number of Shares in such
merger, consolidation, reorganization or purchase of assets. Such cash payment
shall be made to you on a business day selected by you upon no less than ten-
calendar days' notice to the Company or its Successor (as hereinafter defined).
For purposes of this Section 10(b), "Merger Security Value" shall mean the
closing price, if traded on a stock exchange, or the average bid and asked
prices if traded in the over-the-counter market, of the Merger Security on the
first day on which the Merger Security could have been sold by you on such
exchange or in the over-the-counter market, as the case may be, in a regular
broker's transaction, multiplied by the number of Merger Securities (or fraction
thereof) for which each Share was exchangeable or into which each Share was
convertible. If no public market develops for the Merger Security within 30 days
from the date of its issue, however, "Merger Security Value" shall mean the fair
market value of such Merger Security (on a per unit basis) in the written
opinion of a nationally recognized investment banking firm acceptable to you) on
the effective date of the merger, consolidation, reorganization or purchase of
assets, as the case may be, multiplied by the number of Merger Securities (or
fraction thereof) for which each Share was exchangeable or into which each Share
was convertible.
10A. Certain Rights with Respect to Options.
(a) In addition to any other rights or privileges held by a holder
with respect to an option (including an option granted under the options in lieu
of pay program) covered by the LTIP Plan ("LTIP Option") (including the
provisions of Section 7 and Section 10), upon a Change in Control of the
Company, the holder shall have the right to exchange such option for a new
option ("New Option"), that shall be issued according to the following:
(1) the New Option shall be immediately exercisable;
(2) the New Option shall have a term equal to the remaining
term of the LTIP Option it replaces (and shall be exercisable through
such term);
(3) the New Option will give the holder the right to acquire
shares of the publicly traded common equity of the Company or any
successor or direct or indirect parent of either ("Replacement Common
Stock") (in the event of two or more classes of common equity, the
common equity used shall be determined by the Compensation Committee
of the Board of Directors of the Company existing prior to a Change in
Control);
(4) the exercise price used for the New Option ("New Exercise
Price") for acquiring a share of Replacement Common Stock shall be
determined at the time of the Change in Control by taking (i) the
higher of (a) the aggregate value (as of the date of the Change in
Control) equal to the merger or acquisition consideration paid or
payable in the Change in
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Control, on a per share basis, or (b) the highest price paid for a
share of Cooper Cameron common stock over the New York Stock Exchange
(or other primary exchange) during the 12 months prior to the Change
in Control, and (ii) dividing such amount into the per share exercise
price of the LTIP Option; with the result multiplied by the
Replacement Common Stock closing price on its principal stock exchange
on the day of the Change in Control, or if traded in the over-the-
counter market and not on an exchange, the last bid price in such
market;
(5) the number of shares of Replacement Common Stock subject
to the New Option shall be the number necessary, using the New
Exercise Price, to provide an aggregate value (as of the date of the
Change in Control) equal to the higher of (a) the merger or
acquisition consideration paid or payable in the Change in Control on
a per share basis, or (b) the highest price paid for a share of Cooper
Cameron common stock over the New York Stock Exchange (or other
primary exchange) during the 12 months prior to the Change in Control;
(6) if there is no publicly traded common equity of the Company,
or any successor or any direct or indirect parent of either, then the
New Option shall be with respect to shares of the direct or indirect
parent of the Company, and if no such parent then the Company, and if
the Company no longer exists, then the successor to the Company;
(b) In addition to any other rights or privileges held by a holder
with respect to an option covered by the LTIP Plan (including the provisions of
Section 7 and Section 10), if a Change in Control occurs, each holder of an
option shall have the right, but not the obligation, to tender, within 30 days
of such a Change in Control, any option to the Company (or any successor to the
Company) and receive in exchange therefor a lump sum cash amount equal to the
Black-Scholes value of the option, without discount for risk of forfeiture and
nontransferability determined by using the highest Black-Scholes valuation
during the one-year period prior to the Change in Control. Any Black-Scholes
valuation shall be performed on a basis consistent with the methodology set
forth on Exhibit A to this Agreement.
45. Dispute Resolution. It is irrevocably agreed that if any
dispute arises between us under this Agreement, or as to any interpretive
matter under or alleged breach of this Agreement, the exclusive remedy of
each of us shall be to commence binding arbitration proceedings under the
rules of the American Arbitration Association (the "Rules"), with any such
arbitration proceeding to be conducted in Houston, Texas, applying the
substantive law of the State of Texas ("Arbitration"). If Arbitration is
commenced prior to an Effective Date, each of us will deposit with the
arbitrator(s), 50% of the arbitrator's preliminary estimate of the costs of
arbitration (excluding counsel fees and expenses) as security for costs; if
Arbitration is commenced after an Effective Date, the Company will be
solely responsible for all costs thereof and shall deposit with the
arbitrator(s) 100% of the arbitrator(s) preliminary estimate thereof.
Notwithstanding any contrary provision of the Rules or Texas law, the
Company shall have the burden of proof
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with respect to any of the following which are at issue in Arbitration: (i)
that Cause or Disability existed at the time any notice was given to you
under Section 5 based upon either them and/or the sufficiency of such
notice; and (ii) that Good Reason did not exist at the time notice was
given to the Company under Section 5 based upon Good Reason (but only if
such notice was dated on or after an Effective Date) and/or the sufficiency
of such notice; and (iii) that a Change of Control has not occurred. Any
final ruling of the arbitrator(s) in an Arbitration shall be final and
binding for all purposes, and judgment on any Arbitration award may be
entered and enforced in any court having jurisdiction.
The Company and you irrevocably agree that in the event the arbitrator(s)
shall determine (after hearing) that any matter presented in Arbitration is one
which under Texas law is not susceptible to arbitration, in such event (and only
in such event), (i) exclusive jurisdiction over the non-arbitrable issue shall
be in the lowest Texas state court of general jurisdiction sitting in Harris
County, Texas, (ii) we are each at the time present in Texas for the purpose of
conferring personal jurisdiction; (iii) any such action may be brought in such
courts, and any objection that the Company or you may now or hereafter have to
the venue of such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court is waived, and we each agree not
to plead or claim the same, (iv) service of process in any such proceeding or
action may be effected by mailing a copy thereof by registered or certified
mail, return receipt requested (or any substantially similar form of mail),
postage prepaid, to such party at the address provided in Section 14 hereof, (v)
no punitive or consequential damages shall be awarded in any such action or
proceeding and we each agree not to plead or claim the same; and (vi) prior to
any trial on the merits, we will submit any such non-arbitrable issue to court
supervised, non-binding mediation.
If proceedings are commenced prior to an Effective Date, all actual costs
of Arbitration or court proceedings involving any non-arbitrable issue
(excluding, in each case, counsel fees and expenses), shall be apportioned by
the arbitrator(s) or the court in such manner as shall be deemed equitable in
light of any final Arbitration award or judgment; if commenced on or after an
Effective Date, all such costs shall be borne exclusively by the Company.
Anything else in this Section to the contrary notwithstanding, nothing in
this Agreement shall impair your ability to seek specific performance of your
right to be paid under, and to receive all other benefits conferred by, Section
3 of this Agreement during the pendency of any dispute or proceeding concerning
Sections 5, 6, 7 and/or 9 hereof.
46. Successors; Binding Agreement.
(a) Upon your written request, the Company will seek to have any
Successor (as defined below), by agreement in form and substance satisfactory to
you, expressly assume 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 there
has been a Change of Control prior to, or a Change of Control will result from,
any such succession, then failure of the Company to obtain at your request such
agreement prior to or upon the effectiveness of any such succession (other than
by merger or consolidation) shall constitute Good Reason for termination by you
of your employment and, upon delivery of a Notice of Termination by you to the
Company, you shall be
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entitled to the benefits provided in Section 6(c) hereof. "Successor" shall mean
any Person that succeeds to, or has the ability to control, the Company's
business as a whole, directly by merger, consolidation or spin-off or indirectly
by purchase of the Company's Voting Securities or acquisition of all or
substantially all of the assets of the Company.
(b) This Agreement shall inure to the benefit of and be
enforceable by your personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
47. Fees and Expenses. The Company shall pay all legal fees and
reasonable expenses incurred by you (including costs of arbitration) as a
result of (a) your termination following a Change of Control (including all
such fees and expenses, if any, incurred in contesting or disputing any
such termination) or (b) your seeking to obtain, assert or enforce any
right or benefit conferred upon you by this Agreement.
48. Notices. Any and all notices required or permitted to be given
hereunder shall be in writing and shall be deemed to have been given when
delivered in person to the persons specified below or deposited in the
United States mail, certified or registered mail, postage prepaid and
addressed as follows:
If to the Company: Cooper Cameron Corporation
515 Post Oak Boulevard
Houston, Texas 77027
Attention: Chairman, Compensation
Committee of the Board of Directors
If to you: Franklin Myers
10,022 Park Trail
Houston, Texas 77024
Either party may change, by the giving of notice in accordance with this
Section 14, the address to which notices are thereafter to be sent.
49. Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, which shall remain in full force and
effect.
50. Survival. All obligations undertaken and benefits conferred
pursuant to this Agreement, except those set forth in Sections 1 and 2,
shall survive the Employment Period and continue thereafter until performed
in full.
51. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or
discharge is agreed to in writing signed by you and the Chairman of the
Compensation Committee of the Board. No waiver by either party hereto at
any time of any breach by the other party hereto of, or of compliance with,
any condition or provision of this Agreement to be performed by such
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other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not
expressly set forth in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the
internal laws of the State of Texas.
If this letter correctly sets forth our understanding with respect to the
subject matter hereof, please sign and return one copy of this letter to the
Company.
Sincerely,
COOPER CAMERON CORPORATION
BY:
-------------------------------------
Sheldon R. Erikson
Chairman, President and Chief Executive
Officer
Agreed to as of the ___
day of September, 1999:
-----------------------
Franklin Myers
<PAGE>
ANNEX I TO AGREEMENT DATED SEPTEMBER 1, 1999
BETWEEN
COOPER CAMERON CORPORATION
AND
FRANKLIN MYERS
Definition of
Certain Terms
"BONUS PLAN" means for each year, the Company's Management Incentive
Compensation Plan or any other Plan adopted by the Board which provides for the
payment of additional compensation on an annual basis to senior executive
officers contingent upon the Company's results of operations for that specific
year, in either case as such Plan shall be amended or modified to, but not on or
after, any Effective Date.
"BYLAWS" means the bylaws of the Company as in effect at the date hereof
and as the same shall be amended or otherwise modified to, but not on or after,
any Effective Date.
"CAUSE" means (i) your conviction by a court of competent jurisdiction,
from which conviction no further appeal can be taken, of a felony-grade crime
involving moral turpitude, or (ii) your willful failure to perform substantially
your duties with the Company (other than a failure due to physical or mental
illness) which is materially and demonstrably injurious to the Company, or (iii)
only prior to an Effective Date, the engaging by you in any "business" engaged
in activities in direct competition with the Company, whether as an employee,
officer or director or through the beneficial ownership by you of 10% or more of
the Voting Securities of such "business." No act or failure to act on your part
shall be considered "willful" unless done, or omitted to be done, by you in bad
faith and without reasonable belief that your action or omission was in, or not
opposed to, the best interests of the Company.
"CHANGE OF CONTROL" means the earliest date at which:
(i) any Person is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the Company's
outstanding Voting Securities, other than through the purchase of Voting
Securities directly from the Company through a private placement; or
(ii) individuals who constitute the Board on the date hereof (the
"Incumbent Board") cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company's stockholders,
was approved by a vote of at least two-thirds of the directors comprising the
Incumbent Board shall from and after such election be deemed to be a member of
the Incumbent Board; or
<PAGE>
(iii) the Company is merged or consolidated with another corporation
or entity and as a result of such merger or consolidation less than 80% of the
outstanding Voting Securities of the surviving or resulting corporation or
entity shall then be owned by the former stockholders of the Company; or
(iv) a tender offer or exchange offer is made and consummated by a
Person other than the Company for the ownership of 20% or more of the Voting
Securities of the Company then outstanding; or
(v) all or substantially all of the assets of the Company are sold or
transferred to a Person as to which (A) the Incumbent Board does not have
authority (whether by law or contract) to directly control the use or further
disposition of such assets and (B) the financial results of the Company and such
Person are not consolidated for financial reporting purposes.
Anything else in this definition to the contrary notwithstanding, no
Change of Control shall be deemed to have occurred by virtue of any transaction
which results in you, or a group of Persons which includes you, acquiring 20% or
more of either the combined voting power of the Company's outstanding Voting
Securities or the Voting Securities of any other corporation or entity which
acquires all or substantially all of the assets of the Company, whether by way
of merger, consolidation, sale of such assets or otherwise.
"DEFINED BENEFIT PLAN" means the Company's Retirement Plan and
Supplemental Excess Defined Benefit Plan, as the same shall be amended or
modified to, but not on or after, any Effective Date.
"DEFINED CONTRIBUTION PLAN" means the Company's Retirement Savings Plan
and Supplemental Excess Defined Contribution Plan, as the same shall be amended
or modified to, but not on or after, any Effective Date.
"DISABILITY" means your continuing full-time absence from your duties
with the Company for 180 days or longer as a result of physical or mental
incapacity.
"EFFECTIVE DATE" means the earliest date upon which (i) any of the events
set forth under the definition of Change of Control shall have occurred, (ii)
the receipt by the Company of a Schedule 13D stating the intention of any Person
to take actions which, if accomplished, would constitute a Change of Control, or
(iii) the public announcement by any Person of its intention to take any such
action, in each case without regard for any contingency or condition which has
not been satisfied on such date.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
<PAGE>
"GOOD REASON" means any of the following:
(i) except as a result of your death or Retirement, or following
the receipt by you of a Notice of Termination for Cause or due to
Disability, a change in your status, title(s) or position(s) as an officer
of the Company which, in your reasonable judgment, does not represent a
promotion, with commensurate adjustment of compensation, from your status,
title(s) and position(s); or the assignment to you of any duties or
responsibilities which, in your reasonable judgment, are inconsistent with
such status, title(s) or position(s); or the withdrawal from you of any
duties or responsibilities which in your reasonable opinion are consistent
with such status, title(s) or position(s); or any removal of you from or
any failure to reappoint or reelect you to such position(s); or
(ii) a reduction by the Company in your base salary; or
(iii) the failure by the Company to continue in effect any Plan
in which you were then participating other than as a result of the normal
expiration or amendment of any such Plan in accordance with its terms, or
the taking of any action, or the failure to act, by the Company which would
adversely affect your continued participation in any such Plan on at least
as favorable a basis to you as is the case on the date hereof or which
would materially reduce your benefits under any of such Plan or deprive you
of any material benefit enjoyed by you on the date hereof, except as
proposed by you to the Board or the Compensation Committee thereof; or
(iv) the Company's requiring you to be based anywhere outside a
twenty-five (25) mile radius of your office as it was located as of the
date hereof except for required travel on the Company's business to an
extent substantially consistent with your business travel obligations on
behalf of the Company prior to the date hereof; or
(v) the failure by the Company upon a Change of Control to obtain
the assumption of this Agreement by any Successor (other than by merger or
consolidation); or
(vi) any purported termination by the Company of your employment
which is not effected pursuant to a Notice of Termination; and for purposes
of this Agreement, no such purported termination shall be effective; or
(vii) any refusal by the Company to continue to allow you to attend
to matters or engage in activities not directly related to the business of
the Company which you attended to or were engaged in prior to the date
hereof and which do not otherwise violate your obligations hereunder; or
(viii) any continuing material default by the Company in the
performance of its obligations under this Agreement, whether before or
after a Change of Control.
"LTIP PLAN" means the Company's Long-Term Incentive Plan adopted as the
same shall be amended or modified to, but not on or after, any Effective Date.
<PAGE>
"OTHER PLANS" means any thrift; bonus or incentive; stock option or
stock accumulation; pension; medical, disability, accident or life insurance
plan, program or policy of the Company which is intended to benefit the chief
executive officer and/or executive officers of the Company (other than the Bonus
Plan, Defined Benefit Plan, Defined Contribution Plan, LTIP Plan or Purchase
Plan).
"PERSON" means any individual, corporation, partnership, group,
association or other "person," as such term is used in Sections 13(d) and 14(d)
of the Exchange Act, other than the Company or any Plans sponsored by the
Company.
"PERQUISITES" means individual perquisites benefits received by
executives, including, but not limited to, the use of company aircraft for 50
hours per year and club membership dues.
"PLANS" means the Bonus Plan, Defined Benefit Plan, Defined
Contribution Plan, LTIP Plan, Purchase Plan, Compensation Deferral Plan and
Other Plans.
"PURCHASE PLAN" means the Company's Employee Stock Purchase Plan
adopted as the same shall be amended or modified to, but not on or after, any
Effective Date.
"RETIREMENT" means termination of your employment on the "normal
retirement date" as set forth in the Defined Benefit Plan.
"SEVERANCE PACKAGE" means your right to receive, and the Company's
obligation to pay and/or perform on, the following:
(a) on or within ten days following an applicable Termination
Date, the Company shall pay to you a lump sum, cash amount equal to the sum
of (i) three times the highest annual rate of Base Salary in effect during
the current year or any of the three years preceding the Termination Date
and (ii) three times the greater of (A) the maximum award you would have
been eligible to receive under the Bonus Plan in respect of the current
year, regardless of any limitations otherwise applicable to the Bonus Plan
(i.e., the failure to have completed any vesting period or the current
measurement period, or the failure to achieve any performance goal
applicable to all or any portion of the measurement period) or (B) the
largest award earned (whether or not paid) under the Bonus Plan in respect
of any of the three years preceding the Termination Date, or (C) 100% of
your Base Salary at the applicable Termination Date, and (iii) three times
the Black-Scholes value at the time of grant of the most valuable one-year
option grant (excluding any option you received at your election in lieu of
salary) you had received from the Company during the five years prior to
your Termination Date with any such Black-Scholes valuation performed on a
basis consistent with the methodology set forth on Exhibit A to the
Agreement. In the event you shall have received for any relevant period,
Shares or rights to acquire the same, in lieu of salary or bonus, then such
Shares shall be valued for all purposes at the higher of aggregate market
value at the date(s) of issue or the Termination Date, without discount in
either case for (u) "blockage," (v) any restriction against transfer, or
(w) any forfeiture provision; and any such "rights"
<PAGE>
(whether denominated as warrants, options, rights or otherwise) shall be
valued at the highest of the aggregate Black-Scholes' value (with any
assumptions used in such valuation determined by an independent investment
banker not associated with either party) or the aggregate "in the money"
value at the date(s) of issue or the Termination Date, without discount in
any case for (x) terms of vesting, forfeiture or exercise, or (y)
"blockage" or (z) any restriction against transfer; and
(b) in addition to your entitlement to the vested portion of your
interest in the Defined Contribution Plan in accordance with the terms of
that plan, the Company shall pay to you, on or within ten days following
the applicable Termination Date, an amount in cash equal to the unvested
portion of the Company's contributions to your account, which unvested
portion shall be valued on the same basis as the Shares contributed by the
Company in respect of the unvested portion were valued at the date(s) of
contribution; and
(c) in addition to any vested retirement benefits to which you
are entitled on the Termination Date under the Defined Benefit Plan, the
Company shall pay to you, on or within ten days following an applicable
Termination Date, an amount in cash equal to the product of (i) a number
equal to your years of life expectancy beyond age 65 as of the Termination
Date determined in accordance with the actuarial assumptions utilized under
the Defined Benefit Plan immediately prior to the Termination Date, times
(ii) an amount equal to the difference between (A) the annual benefit to
which you would have been entitled at age 65 determined (s) as if you were
fully vested thereunder (and without regard to (I) whether you shall
actually have completed the period of "vesting service" required to qualify
for benefits under the Defined Benefit Plan, (II) any limitation on the
amount used in the calculation of the annual benefit thereunder, (III) any
offset thereunder for severance allowances payable thereunder, or (IV) any
amendment to the Defined Benefit Plan made in connection with a Change of
Control and on or prior to the Termination Date, which amendment adversely
affects in any manner the computation of retirement benefits under such
plan), (t) you had continued in employment with the Company as a "salaried
employee" for three years beyond the Termination Date, and (u) based on
"compensation" as defined as the highest annual rate of Base Salary in
effect during the current year or any of the three years preceding the
Termination Date plus the highest award (either earned or paid) under the
Bonus Plan in respect of any of the three years preceding the Termination
Date and (B) the annual benefit, if any, to which you would be entitled
under the single life annuity method of distribution under the Defined
Benefit Plan as of the Termination Date; and
(d) immediately upon an applicable Termination Date, all options
and rights to other forms of contingent incentive compensation granted to
you under the LTIP Plan which are not then fully vested, exercisable,
distributable or otherwise performable by the Company shall immediately
become fully vested, exercisable, distributable or otherwise performable by
the Company as though all applicable Performance Targets had been met or
achieved at maximum levels for all Performance Periods (including those
extending beyond the Termination Date) and any and all other LTIP Plan
contingencies had been
<PAGE>
satisfied in full at the Termination Date and the maximum benefits
thereunder had been earned at the Termination Date;
(e) following an applicable Termination Date, you shall receive
all benefits under and in accordance with the terms of the Plans (other
than the Bonus, Defined Contribution, Defined Benefit and LTIP Plans and
medical, disability, accident and life insurance plans and programs for all
of which separate provision is made herein) in which you are at the time a
participant, but only to the extent the same are vested under the terms of
such Plans at the Termination Date; and
(f) unless you give notice to the Company pursuant to the next
sentence within 90 days following an applicable Termination Date, the
Company shall maintain in full force and effect, at its sole expense for
the continued benefit of you and your dependents during the period from the
Termination Date through the earlier of (i) three years from the
Termination Date or (ii) the commencement date of equivalent benefits from
a new employer, all insured and self-insured employee welfare benefit Plans
and Perquisites in which you were entitled to participate immediately prior
to the Termination Date. Alternatively, if you notify the Company that you
so elect, the Company shall pay you within five days of such notification
an amount in cash equal to three times the average annual cost incurred by
the Company during the preceding three calendar years as a result of your
participation in such welfare benefit Plans (or such fewer whole calendar
years as you have so participated). If your participation in any such
welfare benefit Plan is barred, the Company, at its sole cost and expense,
shall arrange to have issued for the benefit of you and your dependents
individual policies of insurance providing benefits substantially similar
(on an after-tax basis) to those which you are entitled to receive under
such Plans. You shall not be required to pay any premiums or other charges
for such policies. At the end of three years after the Termination Date,
the Company, provided you have not previously received or are not then
receiving equivalent benefits from a new employer, shall arrange, at its
sole cost and expense, to enable you to convert you and your dependents'
coverage under such Plans to individual policies or programs upon the same
terms as employees of the Company may apply for such conversions.
Anything else in this Agreement to the contrary notwithstanding, if an
applicable Termination Date results from a merger or a tender offer or an
exchange offer, then unless otherwise agreed to by both parties in writing, all
amounts to which you shall at the closing thereof, or which you may upon
subsequent notice or lapse of time, become entitled under this Severance Package
or Section 10 shall be accelerated to, and become immediately due and payable
contemporaneously with, such closing.
"SHARES" means shares of Common Stock, $.01 par value, of the Company
at the date of this Agreement, as the same shall be subsequently amended,
modified or changed. The term "market value," when used with respect to a Share
means the closing price therefor on the New York Stock Exchange or if not listed
thereon, on such other exchange as shall at the time constitute the principal
exchange for trading in Shares.
<PAGE>
"TERMINATION PACKAGE" means your right to receive, and the Company's
obligation to pay and/or perform on, the following:
(a) on or within ten days following an applicable Termination Date,
the Company shall pay to you a lump sum, cash amount equal to the sum of
(i) two times the highest annual rate of Base Salary in effect during the
current year or any of the two years preceding the Termination Date and
(ii) two times the greater of (A) the maximum award you would have been
eligible to receive under the Bonus Plan in respect of the current year,
regardless of any limitations otherwise applicable to the Bonus Plan (i.e.,
the failure to have completed any vesting period or the current measurement
period, or the failure to achieve any performance goal applicable to all or
any portion of the measurement period) or (B) the largest award earned
(whether or not paid) under the Bonus Plan in respect of any of the three
years preceding the Termination Date; and
(b) following an applicable Termination Date, you shall receive all
benefits under and in accordance with the terms of the Plans (other than
the Bonus Plans for which separate provision is made above) in which you
are at the time a participant, but only to the extent the same are vested
under the terms of such Plans at the Termination Date.
"VOTING SECURITIES" means, with respect to any corporation or business
enterprise, those securities which under ordinary circumstances are entitled to
vote for the election of directors or others charged with comparable duties
under applicable law.