Exhibit 10.1
Restricted Stock Units
SUPPLEMENTAL
2011 RESTRICTED STOCK UNIT AGREEMENT
This
Supplemental 2011 Restricted Stock Unit Agreement (this “Agreement”) is between
Oceaneering
international, inc.
(the “Company”) and ______________ (the “Participant”), an employee of the Company or one
of its Subsidiaries, regarding an award (“Award”) of ______________ units (“Restricted Stock Units”) representing
shares of Common Stock (as defined in the
2010 Incentive plan of oceaneering international,
inc.
(the “Plan”), awarded to the Participant
effective May 6, 2011 (the “Award Date”), such number
of Restricted Stock Units subject to adjustment as provided in Section 15 of the Plan, and further
subject to the following terms and conditions:
1.
Relationship to Plan.
This Award is subject to all of the terms, conditions and
provisions of the Plan and administrative interpretations thereunder, if any, which have been
adopted by the Committee thereunder and are in effect on the date hereof. Except as defined or
otherwise specifically provided herein, capitalized terms shall have the same meanings ascribed to
them under the Plan.
2.
Vesting
.
(a) All Restricted Stock Units subject to this Award shall vest in full on February 25,
2014, provided the Participant is in Service on such anniversary.
(b) Restricted Stock Units subject to this Award shall vest, irrespective of the
provisions set forth in Subparagraph (a) above, provided that the Participant has been in
continuous Service from the Award Date until the December 15th following the later of (i)
the Award Date, and (ii) his attainment of Retirement Age, in the following amounts provided
the Participant is in Service on the applicable December 15th:
(i) if such December 15th occurs within one year following the Award
Date, on such December 15th, one-third of the Award shall be thereupon
vested and an additional one-third of the Award shall vest on each of the
two subsequent anniversaries of such December 15th;
(ii) if such December 15th occurs between one and two years following
the Award Date, on such December 15th, two-thirds of the Award shall
thereupon be vested and an additional one-third of the Award shall vest on
the subsequent anniversary of such December 15th; and
(iii) if such December 15th occurs between two and three years
following the Award Date, on such December 15th, the entire Award shall
thereupon be vested.
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(c) All Restricted Stock Units (and any substitute security and cash component
distributed in connection with a Change of Control) subject to this Award shall vest in
full, irrespective of the provisions set forth in Subparagraphs (a) or (b) above, provided
that the Participant has been in continuous Service since the Award Date, upon the earliest
to occur of:
(i) the date that the Participant terminates employment with the
Company and its Subsidiaries after the Company or any successor to the
Company terminates the Participant’s Service for any reason on or after a
Change of Control;
(ii) the date that the Participant’s aggregate value of total annual
compensation (including salary, bonuses, long and short-term incentives,
deferred compensation and award of stock options, as well as all other
benefits in force on the date immediately prior to a Change of Control) as
an employee of the Company or one of its subsidiaries is reduced to a value
that is ninety-five percent (95%) or less of the value thereof on the date
immediately prior to the Change of Control, or the Participant’s scope of
work responsibility as an employee of the Company or one of its subsidiaries
is materially reduced from that existing on the date immediately prior to
the Change of Control, or the Participant as an employee of the Company or
one of its subsidiaries is requested to relocate more than 25 miles from his
place of Service with the Company on the date immediately prior to the
Change of Control, in each case, on or after a Change of Control;
(iii) a Change of Control if the Participant is then a Non-employee
Director; or
(iv) the Participant’s termination of Service by reason of Disability
or death.
(d) For purposes of this Agreement:
(i) “Change of Control” means:
(A) any Person is or becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act and the rules and regulations promulgated
thereunder), 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
(B) 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
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shareholders, 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
(C) the Company is merged or consolidated with another corporation or
entity, and as a result of such merger or consolidation less than 60% of the
outstanding Voting Securities of the surviving or resulting corporation or
entity shall then be owned by the former shareholders of the Company; or
(D) the consummation of a (i) tender offer or (ii) exchange offer by a
Person other than the Company for the ownership of 20% or more of the Voting
Securities of the Company then outstanding; or
(E) all or substantially all of the assets of the Company are sold or
transferred to a Person as to which:
(1) the Incumbent Board does not have authority (whether by law
or contract) to directly control the use or further disposition of
such assets; and
(2) the financial results of the Company and such Person are not
consolidated for financial reporting purposes.
(F) Anything else in this definition to the contrary notwithstanding:
(1) no Change of Control shall be deemed to have occurred by
virtue of any transaction which results in the Participant, or a
group of Persons which includes the Participant, acquiring more than
20% 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; and
(2) no Change of Control shall be deemed to have occurred unless
such event constitutes an event specified in Code Section
409A(2)(A)(v) and the Treasury regulations promulgated thereunder.
(ii) “Disability” means the Participant is unable to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
can be expected to last for a continuous period of not less than 12 months.
The Participant’s inability and its anticipated duration shall be determined
solely by a medical physician of the Participant’s choice to be approved by
the Company, which approval shall not be unreasonably withheld.
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(iii) “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time.
(iv) “Service” means (a) employment with the Company or any of its
Subsidiaries and (b) service as a nonemployee member of the board of
directors of the Company (“Nonemployee Director”).
(v) “Person” means, any individual, corporation, partnership, “group”
(as such term is used in Rule 13d-5 under the Exchange Act), association or
other “person,” as such term is used in Sections 13(d) and 14(d) of the
Exchange Act, and the related rules and regulations promulgated thereunder.
(vi) “Retirement Age” means the earlier to occur of:
(A) age 65 or more, or
(B) age 60 or more with at least 15 years of continuous Service,
provided that the Participant has remained in Service until the earlier to
occur of (A) or (B).
(vii) “Voting Securities” means, with respect to any corporation or
other 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.
3.
Forfeiture of Award.
If the Participant’s Service terminates under any circumstances
(except those provided in Paragraph 2 of this Agreement or in any other written agreement between
the Participant and the Company which provides for vesting of the Restricted Stock Units granted
hereby), all unvested Restricted Stock Units as of the termination date shall be forfeited.
4.
Registration of Units.
The Participant’s right to receive the Restricted Stock Units shall
be evidenced by book entry registration (or by such other manner as the Committee may determine).
5.
No Dividend Equivalent Payments.
The Company will not pay dividend equivalents on any
outstanding Restricted Stock Units.
6.
Shareholder Rights.
The Participant shall have no rights of a shareholder with respect to
shares of Common Stock subject to this Award unless and until such time as the Award has been
settled by the transfer of shares of Common Stock to the Participant.
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7.
Settlement and Delivery of Shares.
(a)
February 25, 2014; Termination After Disability or Death; Certain Terminations of
Employee by Company After Change of Control; Change of Control for Nonemployee Director
.
Settlement of vested Restricted Stock Units that vest in accordance with Subparagraph 2(a)
or 2(c) shall be made as soon as administratively practicable after vesting, but in no case
later than the March 15th following the year in which vesting occurs. Settlement will be
made by payment in shares of Common Stock.
(b)
Termination After Attainment of Retirement Age.
Settlement of vested Restricted
Stock Units that vest in accordance with Subparagraph 2(b) to a Participant who terminates
Service after attainment of his Retirement Age (whether or not there has been a Change of
Control) shall be made as soon as administratively practicable after termination, but in no
case later than the March 15th following the year in which termination occurs, provided that
in the case of a specified employee who vested in accordance with Subparagraph 2(b) such
settlement shall be paid six months after termination. Settlement will be made by payment
in shares of Common Stock.
(c)
Attainment of Retirement Age Without Termination.
Settlement of vested Restricted
Stock Units that vest in accordance with Subparagraph 2(b) to a Participant who continues
Service through the third anniversary of the Award Date shall be made as soon as
administratively practicable after the Restricted Stock Units would have otherwise vested by
reason of Subparagraphs 2(a) or 2(c), but in no event after the later of (i) the 15th day of
the third calendar month following the applicable date in Subparagraph 2(a) or 2(c), or (ii)
the end of the calendar year in which the applicable date in Subparagraph 2(a) or 2(c)
occurred, provided that in the case of a specified employee who vested in accordance with
Subparagraph 2(b) such settlement shall be paid six months after termination. Settlement
will be made by payment in shares of Common Stock.
The Company shall not be obligated to deliver any shares of Common Stock if counsel to the
Company determines that such sale or delivery would violate any applicable law or any rule or
regulation of any governmental authority or any rule or regulation of, or agreement of the Company
with, any securities exchange or association upon which the Common Stock is listed or quoted. The
Company shall in no event be obligated to take any affirmative action in order to cause the
delivery of shares of Common Stock to comply with any such law, rule, regulation or agreement.
8.
Notices.
Unless the Company notifies the Participant in writing of a different procedure,
any notice or other communication to the Company with respect to this Agreement or the Plan shall
be in writing addressed to the Corporate Secretary of the Company and shall be: (a) by registered
or certified United States mail, postage prepaid, to 11911 FM 529, Houston, Texas 77041-3011; or
(b) by hand delivery or otherwise to 11911 FM 529, Houston, Texas 77041-3011
.
Any such notice
shall be deemed effectively delivered or given upon receipt.
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Notwithstanding the foregoing, in the event that the address of the Company’s principal
executive offices is changed prior to the date of any settlement of this Award, notices shall
instead be made pursuant to the foregoing provisions at the then current address of the Company’s
principal executive offices.
Any notice or other communication to the Participant with respect to this Agreement or the
Plan shall be given in writing and shall be deemed effectively delivered or given upon receipt or,
in the case of notices mailed by the Company to the Participant, five days after deposit in the
United States mail, postage prepaid, addressed to the Participant at the address specified at the
end of this Agreement or at such other address as the Participant hereafter designates by written
notice to the Company.
9.
Assignment of Award.
Except as otherwise permitted by the Committee and as provided in the
immediately following paragraph, the Participant’s rights under the Plan and this Agreement are
personal, and no assignment or transfer of the Participant’s rights under and interest in this
Award may be made by the Participant other than by a domestic relations order. This Award is
payable during his lifetime only to the Participant, or in the case of the Participant being
mentally incapacitated, this Award shall be payable to his guardian or legal representative.
The Participant may designate a beneficiary or beneficiaries (the “Beneficiary”) to whom the
Award under this Agreement, if any, will pass upon the Participant’s death and may change such
designation from time to time by filing with the Company a written designation of Beneficiary on
the form attached hereto as Exhibit A, or such other form as may be prescribed by the Committee;
provided that no such designation shall be effective unless so filed prior to the death of the
Participant and no such designation shall be effective as of a date prior to receipt by the
Company. The Participant may change his Beneficiary without the consent of any prior Beneficiary
by filing a new designation with the Company. The last such designation that the Company receives
in accordance with the foregoing provisions will be controlling. Following the Participant’s
death, the Award, if any, will pass to the designated Beneficiary and such person will be deemed
the Participant for purposes of any applicable provisions of this Agreement. If no such
designation is made or if the designated Beneficiary does not survive the Participant’s death, the
Award shall pass by will or, if none, then by the laws of descent and distribution.
10.
Withholding.
The Company’s obligations under this Agreement shall be subject to the
satisfaction of all applicable withholding requirements including those related to federal, state
and local income and Service taxes (the “Required Withholding”). The Company may withhold an
appropriate amount of cash (with respect to the payment of dividend equivalents) or number of
shares from the Common Stock that would otherwise have been delivered to the Participant (with
respect to the settlement of the Award) necessary to satisfy the Participant’s Required
Withholding, and deliver the remaining amount of cash or shares of Common Stock to the Participant,
unless the Participant has made arrangements with the Company for the Participant to deliver to the
Company cash, check, other available funds or shares of previously owned Common Stock for the full
amount of the Required Withholding by 5:00 p.m. Central Standard Time on the date an amount is
included in the income of the Participant. The amount of the Required Withholding and the number
of shares to satisfy the Participant’s Required
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Withholding shall be based on the Fair Market Value of the shares on the date prior to the
applicable date of income inclusion.
11.
Stock Certificates
. Any certificates representing the Common Stock issued pursuant to the
settlement of an Award will bear all legends required by law and necessary or advisable to
effectuate the provisions of the Plan and this Award. The Company may place a “stop transfer”
order against shares of the Common Stock issued pursuant to this Award until all restrictions and
conditions set forth in the Plan or this Agreement and in the legends referred to in this Paragraph
11 have been complied with.
12.
Successors and Assigns.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Participant, the Company and their respective permitted successors and assigns
(including personal representatives, heirs and legatees), except that the Participant may not
assign any rights or obligations under this Agreement except to the extent and in the manner
expressly permitted in Paragraph 9 of this Agreement.
13.
No Service Guaranteed.
No provision of this Agreement shall confer any right upon the
Participant to continued Service with the Company or any Subsidiary.
14.
Code Section 409A Compliance
. If any provision of this Agreement would result in the
imposition of an additional tax under Code Section 409A and related regulations and Treasury
pronouncements (“Section 409A”), that provision will be reformed to avoid imposition of the
additional tax, including that any Award subject to Section 409A held by a specified employee that
is settled by reason of termination of employment (other than death) shall be delayed in payment
until the expiration of six months, and no action taken to comply with Section 409A shall be deemed
to adversely affect the Participant’s rights to an Award. This Award is intended to comply with or
be exempt from Section 409A, and ambiguous provisions hereof, if any, shall be construed and
interpreted consistent with such intent.
15.
Governing Law.
This Agreement shall be governed by, construed, and enforced in accordance
with the laws of the State of Texas, excluding any choice of law provision thereof that would
result in the application of the laws of any other jurisdiction.
16.
Amendment.
Except as set forth herein, this Agreement cannot be modified, altered or
amended except by an agreement, in writing, signed by both the Company and the Participant.
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OCEANEERING INTERNATIONAL, INC.
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Award Date: May 6, 2011
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By:
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George R. Haubenreich, Jr.
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Senior Vice President, General Counsel
and Secretary
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The
Participant hereby accepts the foregoing Supplemental 2011 Restricted Stock Unit Agreement, subject to
the terms and provisions of the Plan and administrative interpretations thereof referred to above.
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PARTICIPANT:
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Date: __________________
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Participant’s Address:
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Exhibit A
to Supplemental 2011
Restricted Stock Unit Agreement
Designation of Beneficiary
I, _____________________________ (“Participant”), hereby declare that upon my death,
___________________________________ (the “Beneficiary”) of
______________________________________________________________ (address), who is my
________________________ (relationship), will be entitled to the Award which may become payable
under the Plan and all other rights accorded the Participant under
the Participant’s Supplemental 2011
Restricted Stock Unit Agreement (capitalized terms used but not defined herein have the respective
meanings assigned to them in such agreement).
It is understood that this designation of Beneficiary is made pursuant to the Agreement and is
subject to the conditions stated therein, including the Beneficiary’s survival of Participant. If
any such condition is not satisfied, such rights shall devolve according to the Participant’s last
will and testament, or if none, then the laws of descent and distribution.
It is further understood that all prior designations of beneficiary under the Agreement are
hereby revoked upon the filing of this designation with the Company. This designation of
Beneficiary may only be revoked in writing, signed by the Participant, and filed with the Corporate
Secretary of the Company prior to the Participant’s death.
______________________________________________
Participant
______________________________________________
Date
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Exhibit 10.2
___ Performance Units
SUPPLEMENTAL
2011 PERFORMANCE UNIT AGREEMENT
This Supplemental 2011 Performance Unit Agreement (this “Agreement”) is between
Oceaneering
international, inc.
(the “Company”) and
(
the “Participant”), an employee of
the Company or one of its Subsidiaries, regarding an award (“2011 Performance Award”) of ___ units (“Performance Units”), each representing an initial notional value of $100.00, under the
2010 Incentive plan of oceaneering international, inc.
(the “Plan”), awarded to the
Participant effective May 6, 2011 (the “Award Date”), and subject to the following terms and conditions:
1.
Relationship to Plan.
This Award is subject to all of the terms, conditions and provisions
of the Plan and administrative interpretations thereunder, if any, which have been adopted by the
Committee thereunder and are in effect on the date hereof. Except as defined or otherwise
specifically provided herein, capitalized terms shall have the same meanings ascribed to them under
the Plan.
2.
Vesting
.
(a) The 2011 Performance Award hereby granted shall become vested in full on February
25, 2014, provided the Participant is in Service on such anniversary date.
(b) Performance Units subject to this 2011 Performance Award shall vest, irrespective
of the provisions set forth in Subparagraph (a) above, provided that the Participant has
been in continuous Service from the Award Date until the December 15th following the later
of (i) the Award Date, and (ii) his attainment of Retirement Age, in the following amounts
provided the Participant is in Service on the applicable December 15th:
(i) if such December 15th occurs within one year following the Award
Date, on such December 15th, one-third of the 2011 Performance Award shall
be thereupon vested and an additional one-third of the 2011 Performance
Award shall vest on each of the two subsequent anniversaries of such
December 15th;
(ii) if such December 15th occurs between one and two years following
the Award Date, on such December 15th, two-thirds of the 2011 Performance
Award shall thereupon be vested and an additional one-third of the 2011
Performance Award shall vest on the subsequent anniversary of such December
15th; and
(iii) if such December 15th occurs between two and three years
following the Award Date, on such December 15th, the entire 2011 Performance
Award shall thereupon be vested.
Page 1 of 8
(c) All Performance Units subject to this 2011 Performance Award shall vest,
irrespective of the provisions set forth in Subparagraphs (a) or (b) above, provided that
the Participant has been in continuous Service since the Award Date, upon the earliest to
occur of the applicable of the following:
(i) the date that the Company or any successor to the Company
terminates the Participant’s employment with the Company and its
Subsidiaries for any reason on or after a Change of Control;
(ii) the date that the Participant’s employment with the Company and
its Subsidiaries is terminated after the Participant’s aggregate value of
total annual compensation (including salary, bonuses, long and short-term
incentives, deferred compensation and award of stock options, as well as all
other benefits in force on the date immediately prior to a Change of
Control) as an employee of the Company or one of its Subsidiaries is reduced
to a value that is ninety-five percent (95%) or less of the value thereof on
the date immediately prior to the Change of Control, or the Participant’s
scope of work responsibility as an employee of the Company or one of its
Subsidiaries is materially reduced from that existing on the date
immediately prior to the Change of Control, or the Participant as an
employee of the Company or one of its Subsidiaries is requested to relocate
more than 25 miles from his place of Service with the Company on the date
immediately prior to the Change of Control, in each case, on or after a
Change of Control;
(iii) a Change of Control if the Participant is then a Non-employee
Director; or
(iv) the Participant’s termination of Service by reason of Disability
or death.
(d) For purposes of this Agreement:
(i) “Change of Control” means:
(A) any Person is or becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act and the rules and regulations promulgated
thereunder), 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
(B) 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
shareholders, 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
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(C) the Company is merged or consolidated with another corporation or
entity, and as a result of such merger or consolidation less than 60% of the
outstanding Voting Securities of the surviving or resulting corporation or
entity shall then be owned by the former shareholders of the Company; or
(D) the consummation of a (i) tender offer or (ii) exchange offer by a
Person other than the Company for the ownership of 20% or more of the Voting
Securities of the Company then outstanding; or
(E) all or substantially all of the assets of the Company are sold or
transferred to a Person as to which:
(1) the Incumbent Board does not have authority (whether by law
or contract) to directly control the use or further disposition of
such assets; and
(2) the financial results of the Company and such Person are not
consolidated for financial reporting purposes.
(F) Anything else in this definition to the contrary notwithstanding:
(1) no Change of Control shall be deemed to have occurred by
virtue of any transaction which results in the Participant, or a
group of Persons which includes the Participant, acquiring more than
20% 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; and
(2) no Change of Control shall be deemed to have occurred unless
such event constitutes an event specified in Code Section
409A(2)(A)(v) and the Treasury regulations promulgated thereunder.
(ii) “Disability” means the Participant is unable to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
can be expected to last for a continuous period of not less than 12 months.
The Participant’s inability and its anticipated duration shall be determined
solely by a medical physician of the Participant’s choice to be approved by
the Company, which approval shall not be unreasonably withheld.
(iii) “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time.
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(iv) “Service” means (a) employment with the Company or any of its
Subsidiaries and (b) service as a nonemployee member of the board of
directors of the Company (“Nonemployee Director”).
(v) “Person” means, any individual, corporation, partnership, “group”
(as such term is used in Rule 13d-5 under the Exchange Act), association or
other “person,” as such term is used in Sections 13(d) and 14(d) of the
Exchange Act, and the related rules and regulations promulgated thereunder.
(vi) “Retirement Age” means the earlier to occur of:
(A) age 65 or more, or
(B) age 60 or more with at least 15 years of continuous Service,
provided that the Participant has remained in Service until the earlier to occur of
(A) or (B).
(vii) “Voting Securities” means, with respect to any corporation or
other 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.
3.
Forfeiture of 2011 Performance Award.
If the Participant’s Service terminates under any
circumstances (except those provided in Paragraph 2 of this Agreement or in any other written
agreement between the Participant and the Company which provides for vesting of Performance Units
granted hereby), all unvested Performance Units as of the termination date shall be forfeited.
4.
Determination of Final Value of Performance Units
. The Committee shall, as soon as
practicable after the close of the 2011-2013 Performance Period, determine the final value of each
Performance Unit granted hereunder in accordance with the 2011 Performance Award: Goals and
Measures (a copy of which has been furnished to the Participant). Such final value may range from
$0 to $150.
5.
Settlement and Payment
. Settlement of all 2011 Performance Awards will be made by payment in cash.
(a)
February 25, 2014; Attainment of Retirement Age, Termination After Disability or
Death.
Payment of vested 2011 Performance Awards that vest by reason of Subparagraphs 2(a),
(b) or (c)(iii) of this Agreement shall be made as soon as administratively practicable
after the close of the 2011-2013 Performance Period. In no event shall such payment be made
later than the 15th day of the third calendar month of the year following the year in which
the third anniversary of the Award Date occurs. Any payment made pursuant to this
Subparagraph 5(a) will be made based on the actual attainment of the Performance Goals.
(b)
Change of Control.
Payment of vested 2011 Performance Awards that vest by reason
of Subparagraph 2(a) after a Change of Control has occurred shall be made as soon as
administratively practicable after the close of the 2011-2013
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Performance Period. Payment of vested Performance Awards that vest; (i) in accordance
with Subparagraph 2(b) to a Participant who has attained Retirement Age at any time and who
then terminates Service after a Change of Control; (ii) upon termination as contemplated by
Subparagraph 2(c)(i) or Subparagraph 2(c)(ii) of this Agreement; (iii) upon a Change of
Control if Subparagraph 2(c)(iii) of this Agreement is applicable; or (iv) upon termination
as described in Subparagraph 2(c)(iv) after a Change of Control, shall be made as soon as
administratively practicable after termination occurs, provided that in the case of a
specified employee who vests in accordance with clause (i) such payment shall be paid six
months after termination. Payment of vested Performance Awards that vest (i) in accordance
with Subparagraph 2(b) to a Participant who had attained Retirement Age at any time and who
then terminated Service prior to a Change of Control, or (ii) upon termination as described
in Subparagraph 2(c)(iv) prior to a Change of Control, shall be made as soon
administratively practicable after a Change of Control occurs. Any payment made pursuant to
this Subparagraph 5(b) will be made as if each Performance Goal had been satisfied at the
Target level, with no reduction for such payment date occurring prior to the close of the
2011-2013 Performance Period.
6.
Notices.
Unless the Company notifies the Participant in writing of a different procedure,
any notice or other communication to the Company with respect to this Agreement or the Plan shall
be in writing addressed to the Corporate Secretary of the Company and shall be: (a) by registered
or certified United States mail, postage prepaid, to 11911 FM 529, Houston, Texas 77041-3011; or
(b) by hand delivery or otherwise to 11911 FM 529, Houston, Texas 77041-3011
.
Any such notice
shall be deemed effectively delivered or given upon receipt.
Notwithstanding the foregoing, in the event that the address of the Company’s principal
executive offices is changed prior to the date of any settlement of this 2011 Performance Award,
notices shall instead be made pursuant to the foregoing provisions at the then current address of
the Company’s principal executive offices.
Any notice or other communication to the Participant with respect to this Agreement or the
Plan shall be given in writing and shall be deemed effectively delivered or given upon receipt or,
in the case of notices mailed by the Company to the Participant, five days after deposit in the
United States mail, postage prepaid, addressed to the Participant at the address specified at the
end of this Agreement or at such other address as the Participant hereafter designates by written
notice to the Company.
7.
Assignment of 2011 Performance Award.
Except as otherwise permitted by the Committee and
as provided in the immediately following paragraph, the Participant’s rights under the Plan and
this Agreement are personal, and no assignment or transfer of the Participant’s rights under and
interest in this 2011 Performance Award may be made by the Participant other than by a domestic
relations order. This 2011 Performance Award is payable during his lifetime only to the
Participant, or in the case of the Participant being mentally incapacitated, this 2011 Performance
Award shall be payable to his guardian or legal representative.
The Participant may designate a beneficiary or beneficiaries (the “Beneficiary”) to whom the
2011 Performance Award under this Agreement, if any, will pass upon the Participant’s death and may
change such designation from time to time by filing with the Company a written designation of
Beneficiary on the form attached hereto as Exhibit A, or such other form as may be prescribed by
the Committee; provided that no such designation shall be
Page 5 of 8
effective unless so filed prior to the death of the Participant and no such designation shall
be effective as of a date prior to receipt by the Company. The Participant may change his
Beneficiary without the consent of any prior Beneficiary by filing a new designation with the
Company. The last such designation that the Company receives in accordance with the foregoing
provisions will be controlling. Following the Participant’s death, the 2011 Performance Award, if
any, will pass to the designated Beneficiary and such person will be deemed the Participant for
purposes of any applicable provisions of this Agreement. If no such designation is made or if the
designated Beneficiary does not survive the Participant’s death, the 2011 Performance Award shall
pass by will or, if none, then by the laws of descent and distribution.
8.
Withholding.
The Company’s obligations under this Agreement shall be subject to the
satisfaction of all applicable withholding requirements including those related to federal, state
and local income and Service taxes (the “Required Withholding”). The Company may withhold an
appropriate amount of cash necessary to satisfy the Participant’s Required Withholding, and deliver
the remaining amount of cash to the Participant, unless the Participant has made arrangements with
the consent of the Company for the Participant to deliver to the Company cash, check, other
available funds or shares of previously owned Common Stock for the full amount of the Required
Withholding by 5:00 p.m. Central Standard Time on the date an amount is included in the income of
the Participant. The amount of the Required Withholding and the number of shares to satisfy the
Participant’s Required Withholding shall be based on the Fair Market Value of the shares on the
date prior to the applicable date of income inclusion.
9.
Successors and Assigns.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Participant, the Company and their respective permitted successors and assigns
(including personal representatives, heirs and legatees), except that the Participant may not
assign any rights or obligations under this Agreement except to the extent and in the manner
expressly permitted in Paragraph 7 of this Agreement.
10.
No Service Guaranteed.
No provision of this Agreement shall confer any right upon the
Participant to continued Service with the Company or any Subsidiary.
11.
Code Section 409A Compliance
. If any provision of this Agreement would result in the
imposition of an additional tax under Code Section 409A and related regulations and Treasury
pronouncements (“Section 409A”), that provision will be reformed to avoid imposition of the
additional tax, including that any Award subject to Section 409A held by a specified employee that
is settled by reason of termination of employment (other than death) shall be delayed in payment
until the expiration of six months, and no action taken to comply with Section 409A shall be deemed
to adversely affect the Participant’s rights to an Award. This Award is intended to comply with or
be exempt from Section 409A, and ambiguous provisions hereof, if any, shall be construed and
interpreted consistent with such intent.
12.
Participant Limit.
The 2011 Performance Award made hereunder shall not be in an amount
greater than $10,000,000 for any Participant.
13.
Governing Law.
This Agreement shall be governed by, construed, and enforced in accordance
with the laws of the State of Texas, excluding any choice of law provision thereof that would
result in the application of the laws of any other jurisdiction.
Page 6 of 8
14.
Amendment.
Except as set forth herein, this Agreement cannot be modified, altered or
amended except by an agreement, in writing, signed by both the Company and the Participant.
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OCEANEERING INTERNATIONAL, INC.
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Award Date: May 6, 2011
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By:
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George R. Haubenreich, Jr.
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Senior Vice President, General Counsel
and Secretary
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The Participant hereby accepts the foregoing Supplemental 2011 Performance Unit Agreement, subject to the
terms and provisions of the Plan and administrative interpretations thereof referred to above.
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Date:
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PARTICIPANT:
________________________________________
Participant’s Address:
________________________________________
________________________________________
________________________________________
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Page 7 of 8
Exhibit A to Supplemental 2011 Performance Unit
Agreement
Designation of Beneficiary
I, __________________________ (“Participant”), hereby declare that upon my death,
______________________ (the “Beneficiary”) of ___________________________________________________ (address), who is my
________________________ (relationship), will be entitled to the 2011 Performance Award which may
become payable under the Plan and all other rights accorded the Participant under the Participant’s
2011 Supplemental Performance Unit Agreement (capitalized terms used but not defined herein have the respective
meanings assigned to them in such agreement).
It is understood that this designation of Beneficiary is made pursuant to the Agreement and is
subject to the conditions stated therein, including the Beneficiary’s survival of Participant. If
any such condition is not satisfied, such rights shall devolve according to the Participant’s last
will and testament, or if none, then the laws of descent and distribution.
It is further understood that all prior designations of beneficiary under the Agreement are
hereby revoked upon the filing of this designation with the Company. This designation of
Beneficiary may only be revoked in writing, signed by the Participant, and filed with the Corporate
Secretary of the Company prior to the Participant’s death.
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________________________________________
Participant
________________________________________
Date
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Page 8 of 8
Exhibit 10.4
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of May 6, 2011 by and between
Oceaneering International, Inc., a Delaware corporation (the “Company”), and _____________________
(“Indemnitee”).
PRELIMINARY STATEMENT
Highly competent persons have become more reluctant to serve corporations as directors or in
other capacities unless they are provided with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of corporations and other enterprises.
The Board of Directors of the Company (the “Board”) has determined that, in order to attract
and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its
sole expense, liability insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of that insurance has been a customary and widespread
practice among United States-based corporations and other enterprises, the Board believes that,
given current market conditions and trends, that insurance may be available to it in the future
only at higher premiums and with more exclusions. At the same time, directors, officers and other
persons in service to corporations or other enterprises increasingly are being subjected to
expensive and time-consuming litigation relating to, among other matters, matters that
traditionally would have been brought only against the corporation or enterprise itself. The
uncertainties relating to liability insurance and to indemnification have increased the difficulty
of attracting and retaining those persons, and the Board has determined that (1) this increased
difficulty is detrimental to the best interests of the Company’s stockholders and that the Company
should act to assure those persons that increased certainty of that protection will exist in the
future and (2) it is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify those persons to the fullest extent applicable law permits so that they will
serve or continue to serve the Company free from undue concern that they will not be so
indemnified.
NOW THEREFORE, in consideration of the premises and the covenants herein, the parties to this
Agreement agree as follows:
Section 1.
Services by Indemnitee.
Indemnitee will serve, or continue to serve, as a
Functionary of the Company and, as mutually agreed by Indemnitee and the Company, as a Functionary
of one or more Related Enterprises. Indemnitee may at any time and for any reason resign from any
such service, subject to any other contractual obligation or any obligation applicable law imposes.
This Agreement is not and is not to be construed as an employment contract by the Company or any
other Related Enterprise with Indemnitee or as otherwise affecting Indemnitee’s status, if any, as
an employee of the Company or any Related Enterprise.
Section 2.
Indemnification.
(a) If and whenever:
(1) Indemnitee was or is, or is threatened to be made, a party to any Proceeding by
reason of:
(A) the fact that Indemnitee serves or served as (1) a Functionary of the
Company or, at the request of the Company, (2) a Functionary of a Related
Enterprise; or
(B) the actual or alleged service or conduct of Indemnitee in Indemnitee’s
capacity as that Functionary, including any act actually or allegedly done or not
done by Indemnitee;
and
(2) Indemnitee (A) engaged in the service or conduct at issue in that Proceeding in
good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company and, in the event that Proceeding was or is a criminal action
or proceeding involving Indemnitee’s conduct, (B) had no reasonable cause to believe that
that conduct was unlawful,
the Company will, or will cause another Company Entity to, indemnify Indemnitee against, and hold
Indemnitee harmless from and in respect of:
(1) in the case of each Claim in that Proceeding, other than a Company Claim, all
liabilities and losses, including the amounts of all judgments, penalties and fines,
including excise taxes, and amounts paid in settlement, Indemnitee has suffered or will
suffer, and all Expenses Indemnitee reasonably has incurred or will incur, as a result of or
in connection with that Claim; and
(2) in the case of each Company Claim in that Proceeding, all Expenses Indemnitee
reasonably has incurred or will incur as a result of or in connection with that Company
Claim; provided, however, that the Company will not have any obligation under this clause
(2) to, or to cause another Company Entity to, indemnify Indemnitee against, or hold
Indemnitee harmless from or in respect of, any Company Claim as to which Indemnitee was or
is adjudged to be liable to the Company or any Related Enterprise unless, and only to the
extent that, the Court of Chancery or the court in which that Company Claim was or is
brought determines on application that, despite the adjudication of liability, but in view
of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such of those Expenses as the Court of Chancery or that other court shall deem
proper.
(b) If and whenever Indemnitee was or is, or is threatened to be made, a party to any
Proceeding of any type of which Section 2(a) refers and has been successful, on the merits or
otherwise, in defense of that Proceeding, or in defense of any Claim therein, the Company will, or
will cause another Company Entity to, indemnify Indemnitee against, and hold Indemnitee harmless
from and in respect of, all Expenses Indemnitee reasonably has incurred in connection therewith.
For purposes of this Section 2(b), the termination of any Claim in any Proceeding by dismissal,
with or without prejudice, will be deemed a successful result as to that Claim.
-2-
(c) If and whenever Indemnitee was, or reasonably could have been expected to have been, or
is, or reasonably could be expected to be, by reason of the knowledge of facts Indemnitee actually
or allegedly has obtained in the course of his service as (1) a Functionary of the Company or, at
the request of the Company, (2) a Functionary of a Related Enterprise, a witness in or a deponent
in connection with any Proceeding to which Indemnitee was or is not a party, the Company will, or
will cause another Company Entity to, indemnify Indemnitee against, and hold Indemnitee harmless
from and in respect of, all Expenses Indemnitee reasonably has incurred or will incur in connection
therewith.
Section 3.
Advancement of Expenses.
(a) If and whenever Indemnitee is, or is threatened to
be made, a party to any proceeding that may give rise to a right of Indemnitee to indemnification
under Section 2(a), the Company will advance all Expenses reasonably incurred by or on behalf of
Indemnitee in connection with that Proceeding within 10 days after the Company receives a statement
or statements from Indemnitee requesting the advance or advances from time to time, whether prior
to or after final disposition of that Proceeding. Each such statement must reasonably evidence the
Expenses incurred by or on behalf of Indemnitee and include or be preceded or accompanied by an
undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company under Section 2(a)
against those Expenses. The Company will accept any such undertaking without reference to the
financial ability of Indemnitee to make repayment. If the Company advances Expenses in connection
with any Claim as to which Indemnitee has requested or may request indemnification under Section
2(a) and a determination is made under Section 5(c) that Indemnitee is not entitled to that
indemnification, Indemnitee will not be required to reimburse the Company for those advances until
the 180
th
day following the date of that determination; provided, however, that if
Indemnitee timely commences and thereafter prosecutes in good faith a judicial proceeding or
arbitration under Section 7(a) or otherwise to obtain that indemnification, Indemnitee will not be
required to reimburse the Company for those Expenses until a determination in that proceeding or
arbitration that Indemnitee is not entitled to that indemnification has become final and
nonappealable.
(b) The Company may advance Expenses under Section 3(a) to Indemnitee or, at the Company’s
option, directly to the Person to which those Expenses are owed, and Indemnitee hereby consents to
any such direct payment, to Indemnitee’s legal counsel or any other Person.
Section 4.
Notification and Defense of Claims.
(a) If Indemnitee receives notice, otherwise
than from the Company, that Indemnitee is or will be made, or is threatened to be made, a party to
any Proceeding in respect of which Indemnitee intends to seek indemnification hereunder, Indemnitee
must promptly notify the Company in writing of the nature and, to Indemnitee’s knowledge, status of
that Proceeding. If this Section 4(a) requires Indemnitee to give such a notice, but Indemnitee
fails to do so, that failure will not relieve the Company from the obligations the Company may have
to indemnify Indemnitee under this Agreement, unless the Company can establish that the failure has
resulted in actual prejudice to the Company.
(b) Except as this Section 4(b) otherwise provides below, in the case of any Proceeding in
respect of which Indemnitee seeks indemnification hereunder:
-3-
(1) the Company and any Related Enterprise that also may be obligated to indemnify
Indemnitee in respect of that Proceeding will be entitled to participate at its own expense
in that Proceeding;
(2) the Company or that Related Enterprise, or either of them, will be entitled to
assume the defense of all Claims, other than (A) Company Claims, if any, and (B) other
Claims, if any, as to which Indemnitee shall reasonably reach the conclusion clause (3) of
the next sentence describes, in that Proceeding against Indemnitee by prompt written notice
of that election to Indemnitee; and
(3) if clause (2) above entitles the Company or that Related Enterprise to assume the
defense of any of those Claims and it delivers to Indemnitee notice of that assumption under
clause (2), the Company will not be liable to Indemnitee hereunder for any fees or expenses
of legal counsel for Indemnitee which Indemnitee incurs after Indemnitee receives that
notice.
Indemnitee will have the right to employee Indemnitee’s own legal counsel in that Proceeding, but,
as clause (3) of the preceding sentence provides, will bear the fees and expenses of that counsel
unless:
(1) the Company has authorized Indemnitee in writing to retain that counsel;
(2) the Company shall not within a reasonable period of time actually have employed
counsel to assume the defense of those Claims; or
(3) Indemnitee shall have (A) reasonably concluded that a conflict of interest may
exist between Indemnitee and the Company as to the defense of one or more of those Claims
and (B) communicated that conclusion to the Company in writing.
(c) The Company will not be obligated hereunder to, or to cause another Company Entity to,
indemnify Indemnitee against or hold Indemnitee harmless from and in respect of any amounts paid,
or agreed to be paid, by Indemnitee in settlement of any Claim against Indemnitee which Indemnitee
effects without the Company’s prior written consent. The Company will not settle any Claim against
Indemnitee in any manner that would impose any penalty or limitation on Indemnitee without
Indemnitee’s prior written consent. Neither the Company nor Indemnitee will unreasonably delay or
withhold consent to any such settlement the other party proposes to effect.
Section 5.
Procedure for Determination of Entitlement to Indemnification.
(a) To obtain
indemnification under this Agreement, Indemnitee must submit to the Company a written request
therefor which specifies the Section or Sections under which Indemnitee is seeking indemnification
and which includes, or is accompanied by, such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to that indemnification. Indemnitee may request indemnification hereunder
at any time and from time to time as Indemnitee deems appropriate in Indemnitee’s sole discretion.
In the case of any request for indemnification under Section 2(a) as to any Claim which is pending
or threatened at the time Indemnitee delivers that request to the Company and would not be resolved
with finality, whether by judgment, order, settlement or
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otherwise, on payment of the indemnification requested, the Company may defer the
determination under Section 5(c) of Indemnitee’s entitlement to that indemnification to a date that
is no later than 45 days after the effective date of that final resolution if the Board concludes
in good faith that an earlier determination would be materially prejudicial to the Company or a
Related Enterprise.
(b) On written request by Indemnitee under section 5(a) for indemnification under Section
2(a), the determination of Indemnitee’s entitlement to that indemnification will be made:
(1) if Indemnitee will be a director or officer of the Company at the time that
determination is made, under Section 5(c) in each case; or
(2) if Indemnitee will not be a director or officer of the Company at the time that
determination is made, under Section 5(c) in any case, if so requested in writing by
Indemnitee or so directed by the Board, or, in the absence of that request and direction, as
the Board shall duly authorize or direct.
(c) Each determination of Indemnitee’s entitlement to indemnification under Section 2(a) to
which this Section 5(c) applies will be made as follows:
(1) by a majority vote of the Disinterested Directors, even though less than a quorum;
or
(2) by a committee of Disinterested Directors a majority vote of the Disinterested
Directors may designate, even though less than a quorum; or
(3) if (A) there are no Disinterested Directors or (B) a majority vote of the
Disinterested Directors so directs, by an Independent Counsel in a written opinion to the
Board, a copy of which the Company will deliver to Indemnitee;
provided, however, that if Indemnitee has so requested in Indemnitee’s request for indemnification,
an Independent Counsel will make that determination in a written opinion to the Board, a copy of
which the Company will deliver to Indemnitee.
(d) If it is determined that Indemnitee is entitled to indemnification under Section 2(a), the
Company will, or will cause another Company Entity to, subject to the provisions of Section 5(f):
(1) within 10 days after that determination pay to Indemnitee all amounts (A)
theretofore incurred by or on behalf of Indemnitee in respect of which Indemnitee is
entitled to that indemnification by reason of that determination and (B) requested from the
Company in writing by Indemnitee; and
(2) thereafter on written request by Indemnitee, pay to Indemnitee within 10 days after
that request such additional amounts theretofore incurred by or on behalf of Indemnitee in
respect of which Indemnitee is entitled to that indemnification by reason of that
determination.
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Indemnitee will cooperate with the person, persons or entity making the determination under Section
5(c) with respect to Indemnitee’s entitlement to indemnification under Section 2(a), including
providing to such person, persons or entity, on reasonable advance request, any documentation or
information that is:
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(1)
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not privileged or otherwise protected from disclosure;
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(2)
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reasonably available to Indemnitee; and
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(3)
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reasonably necessary to that determination.
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(e) If an independent Counsel is to make a determination under Section 5(c) of entitlement to
indemnification under Section 2(a), it will be selected as this Section 5(e) provides. If a Change
of Control has not occurred within the period of two years prior to the date of Indemnitee’s
written request for that indemnification, the Board will select the Independent Counsel. If a
Change of Control has occurred within that period, Indemnitee will select the Independent Counsel,
unless Indemnitee requests that the Board make the selection, in which event the Board will do so.
The party entitled initially to select the Independent Counsel must give written notice to the
other party which names the person or firm it has selected, whereupon the other party may, within
10 days after its receipt of that notice, deliver to the selecting party a written objection to the
selection; provided, however, that any such objection may be asserted only on the ground that the
person or firm selected is not an “Independent Counsel” as Section 14 defines that term, and the
objection must set forth with particularity the factual basis for that assertion. Absent a proper
and timely objection, the person or firm so selected will act as Independent Counsel under Section
5(c). If any such written objection is so made and substantiated, the person or firm so selected
may not serve as Independent Counsel unless and until the objection is withdrawn or a court of
competent jurisdiction has determined that the objection is without merit.
If the person or firm that will act as Independent Counsel has not been determined within 30
days after Indemnitee’s submission of the related request for indemnification, either the Company
or Indemnitee may petition the Court of Chancery for resolution of any objection that has been made
by the Company or Indemnitee to the other’s selection of Independent Counsel or for the appointment
as Independent Counsel of a person or firm selected by the Court of Chancery or by such other
person or firm as the Court of Chancery designates, and the person or firm with respect to whom all
objections are so resolved or the person or firm so appointed will act as Independent Counsel under
Section 5(c).
The Company will pay any and all reasonable fees and expenses the Independent Counsel incurs
in connection with acting under Section 5(c), and the Company will pay all reasonable fees and
expenses incident to the procedures this Section 5(e) sets forth, regardless of the manner in which
the Independent Counsel is selected or appointed.
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If Indemnitee becomes entitled to, and does, initiate any judicial proceeding or arbitration
under Section 7, the Company will terminate its engagement of the person or firm acting as
Independent Counsel, whereupon that person or firm will be, subject to the applicable standards of
professional conduct then prevailing, relieved of any further responsibility in the capacity of
Independent Counsel.
(f) The amount of any indemnification against Expenses to which Indemnitee becomes entitled
under any provision hereof, including Section 2(a), will be determined subject to the provisions of
this Section 5(f). Indemnitee will have the burden of showing that Indemnitee actually has
incurred the Expenses for which Indemnitee requests indemnification. If the Company or a Company
Entity has made any advance in respect of any Expense without objecting in writing to Indemnitee at
the time of the advance to the reasonableness thereof, the incurrence of that Expense by Indemnitee
will be deemed for all purposes hereof to have been reasonable. In the case of any Expense as to
which such an objection has been made, or any Expense for which no advance has been made, the
incurrence of that Expense will be presumed to have been reasonable, and the Company will have the
burden of proof to overcome that presumption.
Section 6.
Presumptions and Effect of Certain Proceedings.
(a) In making a determination
under Section 5(c) with respect to entitlement to indemnification under Section 2(a), the person,
persons or entity making that determination must presume that Indemnitee is entitled to that
indemnification if Indemnitee has submitted a request for indemnification in accordance with
Section 5(a), and the Company will have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination contrary to that
presumption.
(b) The termination of any Proceeding or of any Claim therein, by judgment, order, settlement
or conviction, or on a plea of nolo contendere or its equivalent, will not, except as this
Agreement otherwise expressly provides, of itself adversely affect the right of Indemnitee to
indemnification hereunder or, in the case of any determination under Section 5(c) of Indemnitee’s
entitlement to indemnification under Section 2(a), create a presumption that Indemnitee did not act
in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal action or proceeding, that Indemnitee had
reasonable cause to believe that Indemnities’ conduct was unlawful.
(c) Any service of Indemnitee as a Functionary of the Company or any Related Enterprise which
imposes duties on, or involves services by, Indemnitee with respect to any Related Enterprise that
is an employee benefit or welfare plan or related trust, if any, or that plan’s participants or
that trust’s beneficiaries, will be deemed for all purposes hereof as service at the request of the
Company. Any action Indemnitee takes or omits to take in connection with any such plan or trust
will, if taken or omitted in good faith by Indemnitee and in a manner Indemnitee reasonably
believed to be in the interest of the participants in or beneficiaries of that plan or trust, be
deemed to have been taken or omitted in a manner “not opposed to the best interests of the Company”
for all purposes hereof.
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(d) For purposes of any determination hereunder as to whether Indemnitee has performed
services or engaged in conduct on behalf of any Enterprise in good faith, Indemnitee will be deemed
to have acted in good faith if Indemnitee acted in reliance on the records of the Enterprise or on
information, opinions, reports or statements, including financial statements and other financial
information, concerning the Enterprise or any other Person which were prepared or supplied to
Indemnitee by:
(1) one or more of the officers or employees of the Enterprise;
(2) appraisers, engineers, investment bankers, legal counsel or other Persons as to
matters Indemnitee reasonably believed were within the professional or expert competence of
those Persons; and
(3) any committee of the board of directors or equivalent managing body of the
Enterprise of which Indemnitee is or was, at the relevant time, not a member;
provided, however, that if Indemnitee has actual knowledge as to any matter that makes any such
reliance unwarranted as to that matter, this Section 6(d) will not entitle Indemnitee to any
presumption that Indemnitee acted in good faith respecting that matter.
(e) For purposes of any determination hereunder as to whether Indemnitee is entitled to
indemnification under Section 2(a), neither the knowledge nor the conduct of any Functionary of the
Company or any Related Enterprise, other than Indemnitee, shall be imputed to Indemnitee.
(f) Indemnitee will be deemed a party to a Proceeding for all purposes hereof if Indemnitee is
named as a defendant or respondent in a complaint or petition for relief in that Proceeding,
regardless of whether Indemnitee ever is served with process or makes an appearance in that
Proceeding.
(g) If Indemnitee serves or served as a Functionary of a Related Enterprise, that service will
be deemed to be “at the request of the Company” for all purposes hereof notwithstanding that the
request is not evidenced by a writing or shown to have been made orally. In the event the Company
were to extend the rights of indemnification and advancement of Expenses hereunder to Indemnitee’s
serving at the request of the Company as a Functionary of any Enterprise other than the Company or
a Related Enterprise, Indemnitee must show that the request was made by the Board or at its
authorization.
Section 7.
Remedies of Indemnitee in Certain Cases.
(a) If indemnitee makes a written
request in compliance with Section 5(a) for indemnification under Section 2(a) and either:
(1) no determination as to the entitlement of Indemnitee to that indemnification is
made before the last to occur of (A) the close of business on the date, if any, the Company
has specified under Section 5(a) as the outside date for that determination or (B) the
elapse of the 45-day period beginning the day after the date the Company receives that
request; or
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(2) a determination is made under Section 5(c) that Indemnitee is not entitled to that
indemnification in whole or in any part in respect of any Claim to which that request
related,
Indemnitee will be entitled to an adjudication from the Court of Chancery of Indemnitee’s
entitlement to that indemnification. Alternatively, Indemnitee, at Indemnitee’s option, may seek
an award in arbitration to be conducted by a single arbitrator in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. In the case of any determination under
Section 5(c) that is adverse to Indemnitee, Indemnitee must commence any such judicial proceeding
or arbitration with 180 days following the date on which Indemnitee first has the right to commence
that proceeding under this Section 7(a) or Indemnitee will be bound by that determination for all
purposes of this Agreement.
(b) If a determination has been made under Section 5 that Indemnitee is not entitled to
indemnification hereunder, any judicial proceeding or arbitration commenced under this Section 7
will be conducted in all respects as a de novo trial or arbitration on the merits, and Indemnitee
will not be prejudiced by reason of that adverse determination. In any judicial proceeding or
arbitration commenced under this Section 7, the Company will have the burden of proving that
Indemnitee is not entitled to indemnification hereunder, and the Company may not, for any purposes,
refer to or introduce into evidence any determination under Section 5(c) which is adverse to
Indemnitee.
(c) If a determination has been made under Section 5 that Indemnitee is entitled to
indemnification hereunder, the Company will be bound by that determination in any judicial
proceeding or arbitration Indemnitee thereafter commences under this Section 7 or otherwise,
absent:
(1) a misstatement by Indemnitee of a material fact, or an omission by Indemnitee of a
material fact necessary to make Indemnitee’s statements not materially misleading, in
connection with the request for indemnification; or
(2) a prohibition of that indemnification under applicable law.
(d) If Indemnitee, under this Section 7 or otherwise, seeks a judicial adjudication of or an
award in arbitration to enforce his rights under, or to recover damages for breach of, this
Agreement, Indemnitee will be entitled to recover from the Company, and will be indemnified by the
Company against, any and all expenses, of the types the definition of Expenses in Section 14
describes, reasonably incurred by or on behalf of Indemnitee in that judicial adjudication or
arbitration, but only if Indemnitee prevails therein. If it is determined in that judicial
adjudication or arbitration that Indemnitee is entitled to receive part of, but not all, the
indemnification or advancement of expenses sought, the expenses incurred by Indemnitee in
connection with that Judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Agreement entitles Indemnitee to indemnification and those
Indemnitee must bear.
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(e) In any judicial proceeding or arbitration under this Section 7, the Company:
(1) will not, and will not permit any other Person acting on its behalf to, assert that
the procedures or presumptions this Agreement establishes are not valid, binding and
enforceable; and
(2) will stipulate that it is bound by all the provisions hereof.
Section 8.
Non-exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of
indemnification and advancement of Expenses and the remedies this Agreement provides are not and
will not be deemed exclusive of any other rights or remedies to which Indemnitee may at any time be
entitled under applicable law, the Company’s Charter Documents, any agreement, a vote of
stockholders or Disinterested Directors, or otherwise, but each such right or remedy hereunder will
be cumulative with all such other rights and remedies. No amendment, alteration or termination of
this Agreement or any provision hereof will limit or restrict any right of Indemnitee hereunder in
respect of any action Indemnitee has taken or omitted in Indemnitee’s capacity as a Functionary of
the Company or any Related Enterprise prior to that amendment, alteration or termination. To the
extent that a change in Delaware law, whether by statute or judicial decision, permits greater
indemnification by agreement than would be afforded currently under this Agreement, it is the
intent and agreement of the parties hereto that Indemnitee will enjoy by this Agreement the greater
benefits that change affords.
(b) If the Company maintains an insurance policy or policies providing liability insurance for
Functionaries of the Company or of any Related Enterprise who serve or served in the same
capacities as Indemnitee, Indemnitee will be covered by the policy or policies in accordance with
its or their terms to the maximum extent of the coverage available for any such Functionary under
the policy or policies. If the Company receives written notice from any source of a pending
Proceeding to which Indemnitee is a party and in respect of which Indemnitee might be entitled to
indemnification under Section 2(a) and the Company then maintains any such policy of which
Indemnitee is a beneficiary, the Company will:
(1) promptly give notice of that Proceeding to the relevant insurers in accordance with
the applicable policy procedures; and
(2) thereafter take all action necessary to cause those insurers to pay, on behalf of
Indemnitee, all amounts payable in accordance with the applicable policy terms as a result
of that Proceeding;
provided, however that the Company need not comply with the provisions of this sentence if its
failure to do so would not actually be prejudicial to Indemnitee in any material respect.
(c) The Company will not be liable under this Agreement to make or cause to be made any
payment of amounts otherwise indemnifiable hereunder, or to make or cause to be made any advance
this Agreement otherwise requires it to make or cause to be made, if and to the extent that
Indemnitee has otherwise actually received or had applied for Indemnitee’s benefit that payment or
advance or obtained the entire benefit therefrom under any insurance policy, any other contract or
agreement or otherwise.
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(d) If the Company makes or causes to be made any payment hereunder, it will be subrogated to
the extent of that payment to all the rights of recovery of Indemnitee, who will execute all papers
required and take all action necessary to secure those rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce those rights.
(e) The Company’s obligation to make or cause to be made any payment or advance hereunder to
or for the account of Indemnitee with respect to Indemnitee’s service at the request of the Company
as a Functionary of any Related Enterprise will be reduced by any amount Indemnitee has actually
received as indemnification or advancement of expenses from that Related Enterprise.
Section 9.
Duration of Agreement; Binding Effect.
This Agreement will continue until and
terminate on the later of:
(1) 10 years after the date that Indemnitee has ceased to serve as a Functionary of the
Company and each Related Enterprise that Indemnitee served at the request of the Company; or
(2) one year after the final, nonappealable termination of any Proceeding then pending
in respect of which Indemnitee is granted rights of indemnification or advancement or
Expenses hereunder and of any proceeding commenced by Indemnitee under Section 7 or
otherwise.
This Agreement will be binding on the Company and its successors and assigns and will inure to the
benefit of Indemnitee and his spouse, if Indemnitee resides in Texas or another community property
state, heirs, executors and administrators.
Section 10.
Severability.
If any provision or provisions hereof is or are invalid, illegal
or unenforceable for any reason whatsoever:
(1) the validity, legality and enforceability of the remaining provisions hereof,
including each portion of any Section containing any such invalid, illegal or unenforceable
provision which is not itself invalid, illegal or unenforceable, will not in any way be
affected or impaired thereby;
(2) such provision or provisions will be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the parties
hereto; and
(3) to the fullest extent possible, the provisions hereof, including each portion of
any Section containing any such invalid, illegal or unenforceable provision which is not
itself invalid, illegal or unenforceable, will be construed so as to give effect to the
intent manifested thereby.
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Section 11.
Exceptions to Right of Indemnification or Advancement of Expenses.
No provision in this Agreement will obligate the Company to pay or cause to be paid any indemnity
to or for the account of Indemnitee, or to advance Expenses under Section 3, in connection with or
as a result of:
(1) any Claim made against Indemnitee for an accounting of profits, under Section 16(b)
of the Exchange Act or similar provision of state statutory or common law, from the purchase
and sale, or sale and purchase, by Indemnitee of securities of the Company or any Related
Enterprise; or
(2) except for any Claim initiated by Indemnitee, whether as a cause of action or as a
defense to a cause of action under Section 7 or otherwise, to enforce or establish, by
declaratory judgment or otherwise, Indemnitee’s rights or remedies hereunder, any Claim
initiated by Indemnitee without the prior authorization of the Board against the Company or
any Related Enterprise or any of their respective present or former Functionaries.
Section 12.
Identical Counterparts.
This Agreement may be executed in one or more
counterparts, each of which will for all purposes be deemed to be an original but all of which
together will constitute one and the same agreement. Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 13.
Headings.
The headings of the Sections hereof are inserted for convenience only
and do not and will not be deemed to constitute part of this Agreement or to affect the
construction thereof.
Section 14.
Definitions and Definitional Provisions.
(a) For purposes of this Agreement:
“Acquiring Person”
means any Person who or which, together with all its Affiliates and
Associates, is or are the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, but does not include any Exempt Person provided, however, that a Person will
not be or become an Acquiring Person if that Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding solely as a result of a reduction in the number of shares of Common Stock
outstanding which results from the Company’s direct or indirect repurchase of Common Stock,
unless and until such time as that Person or any Affiliate or Associate of that Person
purchases or otherwise becomes the Beneficial Owner of additional shares of Common Stock
constituting 1% or more of the then outstanding shares of Common Stock or any other Person
or Persons who is or collectively are the Beneficial Owner of shares of Common Stock
constituting 1% or more of the then outstanding shares of Common Stock becomes an Affiliate
or Associate of that Person, unless, in either such case, that Person, together with all its
Affiliates and Associates, is not then the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding.
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“Affiliate”
has the meaning Exchange Act Rule 12b-2 specifies.
“Associate”
means, with reference to any Person:
(1) any corporation, firm, partnership, limited liability company,
association, unincorporated organization or other entity, other than the Company or
a Related Enterprise, of which that Person is an officer or general partner, or
officer or general partner of a general partner, or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of its equity securities or interests;
(2) any trust or other estate in which that Person has a substantial beneficial
interest or for or of which that Person serves as trustee or in a similar fiduciary
capacity; and
(3) any relative or spouse of that Person, or any relative of that spouse, who
has the same home as that Person.
A specified Person is deemed the
“Beneficial Owner”
of, and is deemed to “beneficially
own,” any securities:
(1) of which that Person or any of that Person’s Affiliates or Associates,
directly or indirectly, is the “beneficial owner,” as determined under Exchange Act
rule 13d-3, or otherwise has the right to vote or dispose of, including under any
agreement, arrangement or understanding, whether or not in writing; provided,
however, that a Person will not be deemed the “Beneficial Owner” of, or to
“beneficially own,” any security under this subparagraph (1) as a result of an
agreement, arrangement or understanding to vote that security if that agreement,
arrangement or understanding: (A) arises solely from a revocable proxy or consent
given in response to a public, that is, not including a solicitation exempted by
Exchange Act Rule 14a-2(b)(2), proxy or consent solicitation made under, and in
accordance with, the applicable provisions of the Exchange Act; and (B) is not then
reportable by that Person on Exchange Act Schedule 13D or any comparable or
successor report;
(2) which that Person or any of that Person’s Affiliates or Associates,
directly or indirectly, has the right or obligation to acquire, whether that right
or obligation is exercisable or effective immediately or only after the passage of
time or the occurrence of an event, under any agreement, arrangement or
understanding, whether or not in writing, or on the exercise of conversion rights,
exchange rights, other rights, warrants or options, or otherwise; provided, however,
that a Person will not be deemed the “Beneficial Owner” of, or to “beneficially
own,” securities tendered in response to a tender or exchange offer made by that
Person or any of that Person’s Affiliates or Associates until those tendered
securities are accepted for purchase or exchange; or
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(3) which are beneficially owned, directly or indirectly, by (A) any other
Person, or any Affiliate or Associate thereof, with which the specified Person or
any of the specified Person’s Affiliates or Associates has any agreement,
arrangement or understanding, whether or not in writing, for the purpose of
acquiring, holding, voting, except by a revocable proxy or consent as described in
the proviso to subparagraph (1) of this definition, or disposing of any voting
securities of the Company or (B) any group, as Exchange Act Rule 13d-5(b) uses that
term, of which that specified Person is a member;
provided, however, that nothing in this definition will cause a Person engaged in business
as an underwriter of securities to be the “Beneficial Owner” of, or to “beneficially own,”
any securities that Person acquires through its participation in good faith in a firm
commitment underwriting, including securities acquired in stabilizing transactions to
facilitate a public offering in accordance with Exchange Act Regulation M or to cover
overallotments created in connection with a public offering, until the expiration of 40 days
after the date of that acquisition. For purposes of this definition, “voting” a security
includes voting, granting a proxy, acting by consent, making a request or demand relating to
corporate action, including calling a stockholder meeting, or otherwise giving an
authorization, within the meaning of Section 14(a) of the Exchange Act, in respect of that
security.
“Board”
has the meaning the Preliminary Statement specifies.
“Change of Control”
means the occurrence of any of the following events that occurs
after the date of this Agreement:
(1) any Person becomes an Acquiring Person;
(2) at any time the then Continuing Directors cease to constitute a majority of
the members of the Board; or
(3) a merger of the Company with or into, or a sale by the Company of its
properties and assets substantially as an entirety to, another Person occurs and,
immediately after that occurrence, any Person, other than an Exempt Person, together
with all Affiliates and Associates of that Person, other than Exempt Persons, will
be the Beneficial Owner of 15% or more of the total voting power of the then
outstanding Voting Shares of the Person surviving that transaction, in the case of a
merger or consolidation, or the Person acquiring those properties and assets
substantially as an entirety unless that Person, together with all its Affiliates
and Associates, other than Exempt Persons, was the Beneficial Owner of 15% or more
of the shares of Common Stock outstanding prior to that transaction.
“Charter Documents”
means, with respect to any corporation or other entity at any time,
in each case as amended, modified and supplemented at that time:
(1) the articles or certificate of formation, incorporation or organization, or
the equivalent organizational documents, of that entity;
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(2) the bylaws or limited liability company agreement or regulations, or the
equivalent governing documents, of that entity; and
(3) each document setting forth the designation, amount and relative rights,
limitations and preferences of any class or series of that entity’s capital stock or
other equity interests.
“Claim”
means any claim for damages or a declaratory, equitable or other substantive
remedy, or any other issue or matter, in any Proceeding.
“Common Stock”
means:
(1) the common stock, par value $0.25 per share, of the Company; and
(2) any other class of capital stock of the Company which is (A) except for
different voting rights or par value, identical to the common stock clause (1) of
this definition describes and (B) convertible into that common stock on a share for
share basis on the occurrence of a Change of Control.
“Company Entity”
means any Related Enterprise, other than an employee benefit or
welfare plan or its related trust, if any.
“Company Claim”
means any Claim brought by or in the right of the Company or a Related
Enterprise against Indemnitee.
“Continuing Director”
means at any time any individual who then:
(1) is a member of the Board on the date hereof or whose nomination for his
first election, or that first election, to the Board following that date was
recommended or approved by a majority of the then Continuing Directors, acting
separately or as a part of any action taken by the Board or any committee thereof;
and
(2) is not an Acquiring Person, an Affiliate or Associate of an Acquiring
Person or a nominee or representative of an Acquiring Person or of any such
Affiliate or Associate.
“Court of Chancery”
means the Court of Chancery of the State of Delaware.
“DGCL”
means the General Corporation Law of the State of Delaware, as amended.
“Disinterested Director”
means a director of the Company who is not and was not a party
to the Proceeding, or any Claim therein, in respect of which indemnification is sought by
Indemnitee hereunder.
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“Enterprise”
means any business trust, corporation, joint venture, limited liability
company, partnership or other entity or enterprise, including any operational division of
any entity, or any employee benefit or welfare plan or related trust.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended.
“Exempt Person”
means:
(1) (A) the Company, any subsidiary of the Company, any employee benefit plan
of the Company or of any subsidiary of the Company and (B) any Person organized,
appointed or established by the Company for or pursuant to the terms of any such
plan or for the purpose of funding any such plan or funding other employee benefits
for employees of the Company or any subsidiary of the Company; and
(2) Indemnitee, any Affiliate or Associate of Indemnitee or any group, as
Exchange Act Rule 13d-5(b) uses that term, of which Indemnitee or any Affiliate or
Associate of Indemnitee is a member.
“Expenses”
include all attorneys’ fees, retainers, court costs, transcript costs, fees
of experts, witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, all other disbursements or expenses of
the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding. Should any payments by the Company under this Agreement be
determined to be subject to any federal, state or local income or excise tax, “Expenses”
also will include such amounts as are necessary to place Indemnitee in the same after-tax
position, after giving effect to all applicable taxes, Indemnitee would have been in had no
such tax been determined to apply to those payments.
“Functionary”
of any Enterprise means any director, officer, manager, administrator,
employee, agent, representative or other functionary of that Enterprise, including, in the
case of any employee benefit or welfare plan, any member of any committee administering that
plan or any individual to whom the duties of that committee are delegated.
“Independent Counsel”
means a law firm, or a member of a law firm, that or who is
experienced in matters of corporation law and neither presently is, nor in the past five
years has been, retained to represent:
(1) the Company or any of its Affiliates or Indemnitee in any matter material
to any such party; or
(2) any other party to the Proceeding giving rise to a claim for
indemnification hereunder.
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Notwithstanding the foregoing, the term “Independent Counsel” does not include at any time
any Person who, under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or a Related Enterprise
or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
“Person”
means any natural person, sole proprietorship, corporation, partnership,
limited liability company, business trust, unincorporated organization or association,
mutual company, joint stock company, joint venture or any other entity of any kind having a
separate legal status or any estate, trust, union or employee organization or governmental
authority.
“Proceeding”
includes:
(1) any threatened, pending or completed action, suit, arbitration, alternate
dispute resolution procedure, investigation, inquiry or other threatened, actual or
completed proceeding, whether of a civil, criminal, administrative, investigative or
private nature and irrespective of the initiator thereof; and
(2) any appeal in any such proceeding.
“Related Enterprise”
means at any time any Enterprise:
(1) 50% or more of the outstanding capital stock or other ownership interests
of which, or the assets of which, the Company owns or controls, or previously owned
or controlled, directly or indirectly, at that time;
(2) 50% or more of the outstanding voting power of the outstanding capital
stock or other ownership interests of which the Company owns or controls, or
previously owned or controlled, directly or indirectly, at that time;
(3) that is, or previously was, an Affiliate of the Company which the Company
controls, or previously controlled, by ownership, contract or otherwise and whether
alone or together with another Person, directly or indirectly, at that time; or
(4) if that Enterprise is an employee benefit or welfare plan or related trust,
whose participants or beneficiaries are present or former employees of the Company
or any other Related Enterprise.
“Voting Shares”
means:
(1) in the case of any corporation, stock of that corporation of the class or
classes having general voting power under ordinary circumstances to elect a majority
of that corporation’s board of directors; and
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(2) in the case of any other entity, equity interests of the class or classes
having general voting power under ordinary circumstances equivalent to the Voting
Shares of a corporation.
(b) This Agreement uses the words “herein,” “hereof” and “hereunder” and words of similar
import to refer to this Agreement as a whole and not to any provision of this Agreement, and the
words “Section” and “Preliminary Statement” refer to Sections of and the Preliminary Statement in
this Agreement, unless it otherwise specifies.
(c) Whenever the context so requires, the singular number includes the plural and vice versa,
and a reference to one gender includes the other gender and the neuter.
(d) The word “including,” and, with correlative meaning, the word “include,” means including,
without limiting the generality of any description preceding that word, and the words “shall” and
“will” are used interchangeably and have the same meaning.
(e) The language this Agreement uses will be deemed to be the language the parties hereto have
chosen to express their mutual intent, and no rule of strict construction will be applied against
either party hereto.
Section 15.
Modification and Waiver.
No supplement to or modification or amendment of this
Agreement will be binding unless executed in writing by both parties hereto. No waiver of any
provision hereof will be deemed or will constitute a waiver of any other provision hereof, whether
or not similar, nor will any such waiver constitute a continuing waiver.
Section 16.
Reliance.
The Company confirms and agrees with Indemnitee that it has entered
into this Agreement and assumed the obligations this Agreement imposes on it in order to induce
Indemnitee to serve, or continue to serve, as a Functionary of the Company or a Related Enterprise.
The Company acknowledges that Indemnitee is relying on this Agreement in so serving.
Section 17.
Notices.
All notices, requests, demands and other communications hereunder must
be in writing or by electronic transmission and will be deemed delivered and received:
(1) if personally delivered or if delivered by telex, telegram, facsimile,
electronic transmission or courier service, when actually received by the party to
whom the notice or communication is sent; or
(2) if delivered by mail, whether actually received or not, at the close of
business on the third business day in the city in which the Company’s principal
executive office is located next following the day when placed in the U.S. mail,
postage prepaid, certified or registered, addressed to the appropriate party at the
address of that party set forth below, or at such other address as that party may
designate by notice in writing or by electronic transmission to the other party in
accordance herewith:
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(3) If to Indemnitee, to:
____________________________
____________________________
____________________________
with a copy, which will not constitute notice for purposes of this
Agreement, to such legal counsel, if any, as Indemnitee may designate in
writing or by electronic transmission; and
(4) If to the Company, to:
Oceaneering International, Inc.
11911 FM 529
Houston, Texas 77041
Attention: Corporate Secretary
Fax No.: (713) 329-4654
Section 18.
Contribution.
If it is established, under Section 5(c) or otherwise,
that Indemnitee has the right to be indemnified under Section 2(a) in respect of any claim, but
that right is unenforceable by reason of any applicable law or public policy, then, to the fullest
extent applicable law permits, the Company, in lieu of indemnifying or causing the indemnification
of Indemnitee under Section 2(a), will, or will cause a Company Entity to, contribute to the amount
Indemnitee has incurred, whether for judgments, fines, penalties, excise taxes, amounts paid or to
be paid in settlement or for Expenses reasonably incurred, in connection with that Claim, in such
proportion as is deemed fair and reasonable in light of all the circumstances of that Claim in
order to reflect:
(1) the relative benefits Indemnitee and the Company have received as a result of the
event(s) or transaction(s) giving rise to that Proceeding; or
(2) the relative fault of Indemnitee and of the Company and its other Functionaries in
connection with those event(s) or transaction(s).
Section 19.
Governing Law; Submission to Jurisdiction.
This Agreement and the legal
relations among the parties will be governed by, and construed and enforced in accordance with, the
laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect
to any arbitration Indemnitee commences under Section 7 or as Section 2(a) expressly contemplates
otherwise, the Company and Indemnitee hereby irrevocably and unconditionally:
(1) agree that any action or proceeding arising out of or in connection with this
Agreement will be brought only in the Court of Chancery and not in any other state or
federal court in the United States of America or any court in any other country;
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(2) consent to submit to the exclusive jurisdiction of the Court of Chancery for
purposes of any action or proceeding arising out of or in connection with this Agreement;
(3) waive any objection to the laying of venue of any such action or proceeding in the
Court of Chancery; and
(4) waive, and agree not to plead or to make, any claim that any such action or
proceeding brought in the Court of Chancery has been brought in an improper or otherwise
inconvenient forum.
Section 20.
Entire Agreement.
Except as Section 8(a) otherwise provides, this Agreement
constitutes the entire agreement and understanding between the Company and Indemnitee, and
supersedes all prior oral, written or implied agreements and understandings of the Company and
Indemnitee with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day
and year first above written.
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OCEANEERING INTERNATIONAL, INC.
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By:
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M. Kevin McEvoy
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President and Chief Executive Officer
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INDEMNITEE:
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Exhibit 10.5
May 6, 2011
__________
__________
Oceaneering International, Inc.
11911 FM 529
Houston, Texas 77041
Re: Change of Control Agreement
Dear __________:
Oceaneering International, Inc. (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 shareholders. The Company recognizes that, as is the case with many
publicly held corporations, the possibility of a “Change of Control” (as defined herein) 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 shareholders. 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
service 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 of Control of the Company. In particular the Board believes it important,
should the Company or its shareholders receive a proposal for or notice of transfer of control of
the Company, or consider one itself, that you be able to assess and advise the Company whether such
transfer would be or is in the best interests of the Company and its shareholders, and to take such
other action regarding such 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 letter agreement (this
“Agreement”), prepared pursuant to authority granted by the Board, sets forth the compensation and
severance benefits which the Company agrees will be provided to you should your employment with the
Company be terminated in connection with a Change of Control under the circumstances described
below, as well as certain other benefits which will be made available to you.
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, this Agreement shall prevail.
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1.
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Termination of Employment in Connection with a Change of Control.
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(a)
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During the Effective Period, if there is a termination of your employment with
the Company either by the Company without Cause or by you for Good Reason either (x)
prior to the Effective Date, unless it is reasonably demonstrated by the Company that
such termination of your employment (a) was not at the request of a third party who has
taken steps reasonably calculated to effect the Change of Control and (b) otherwise did
not arise in connection with or anticipation of the Change of Control or (y) on or
after the Effective Date, and if such Effective Period commences during the life of
this Agreement, you shall be entitled to the following benefits:
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(i)
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all benefits conferred upon you by the Severance Package, and
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(ii)
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in addition, all benefits payable under the provisions either
of the Plans and Other Plans in which you are a participant immediately prior
to the Effective Date, or of those plans in existence at the time of your
Termination Date or pursuant to any other agreement between you and the
Company, whichever are more favorable to you, in accordance with the terms and
conditions of such Plans or Other Plans, such benefits to be paid under such
Plans or Other Plans and not under this Agreement to the extent they are more
favorable to you.
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(b)
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You shall also be entitled to any such benefits if your termination results
from your death or Disability if your death or Disability occurs:
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(i)
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during the Effective Period but after the Effective Date, and
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(ii)
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with respect to the benefits conferred by the Severance Package
only, after either it has been decided that you will be terminated without
Cause during the Effective Period, or you have given notice of termination for
Good Reason during the Effective Period;
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(c)
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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 Person after any Termination Date.
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2.
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Procedures for Termination of Employment.
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If your employment be terminated or intended to be terminated:
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(a)
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For Cause, 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 of the Board not
less than 30 days following the date of such notice at which the Board shall consider
your termination and at which you and your counsel shall have the opportunity to be
heard, following which the Board shall either by resolution
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withdraw the notice, or if it so finds in its good faith opinion, issue its report
within 10 days thereafter that Cause exists and specifying the particulars of its
findings, in which latter event a “final notice” shall occur. After receipt of a
“final notice” of intended termination for Cause, you may contest such “final
notice” in any court described in Section 4(b)(i) and all provisions of this
Agreement, shall be continued until a Termination Date is determined pursuant to
such contest. Within 10 days following the commencement of any such contest, the
Company must escrow all amounts which would have been due pursuant to Section 1(a)
if the “final notice” were not valid, at a bank of your choice. Should the result
of the contest from which no further appeal is possible be that the:
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(i)
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“final notice” is valid, then the Termination Date shall be the
date no further appeal is possible;
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(ii)
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“final notice” is not valid, then the Termination Date shall be
the date no further appeal is possible.
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(b)
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For Good Reason, you shall transmit to the Company written notice setting forth
the Good Reason for which you are proposed to terminate your employment in sufficient
detail to permit a reasonable assessment of the bona fides thereof. The Board shall
issue a resolution to you not more than 10 days following the date of such notice as to
either:
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(i)
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Their Acceptance
— In the event the Board accepts your
notice of Good Reason, then the Termination Date is established and you are
entitled to receive the amounts pursuant to Section 1(a); or
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(ii)
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Their Rejection
— In the event the Board rejects your
notice of Good Reason, then (A) the Company must escrow within 10 days
following the rejection the amounts which would have been due pursuant to
Section 1(a) if your termination for Good Reason had been accepted, at a bank
of your choice, (B) you must proceed to dispute resolution pursuant to Section
4, and (C) all provisions of this Agreement shall be continued until a
termination is determined pursuant to such dispute resolution from which no
further appeal is possible. The Termination Date shall be the date on which no
further appeal is possible.
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Notwithstanding anything in this Agreement to the contrary, if any amounts due to
you under this Agreement and any other plan or program of the Company constitute a
“parachute payment” as such term is defined in Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended (the “Code”), and the amount of the parachute
payment, reduced by all federal, state and local taxes applicable thereto, including
the excise tax imposed pursuant to Section 4999 of the Code, is less than the amount
you would receive if you were paid three times your “base amount,” as defined in
Section 280G(b)(3) of the Code, less $1.00, reduced by all
3
federal, state and local taxes applicable thereto, then the aggregate of the amounts
constituting the parachute payment shall be reduced to an amount that will equal
three times your base amount less $1.00. This reduction in parachute payments will
be taken only from (a) first, the cash payable under subsection (a) of the
definition of Severance Package hereunder and (b) if further reduction is necessary,
from performance awards (in chronological order beginning with the oldest) but only
to the extent the value of such award for parachute payment purposes is equal to the
economic value of such award. All determinations required to be made under this
Section 3 shall be made by the independent public accounting firm selected by the
Company, subject to your consent which will not be unreasonably withheld,
conditioned or delayed, and the fees and expenses of the accounting firm will be
paid by the Company. The accounting firm shall provide detailed supporting
calculations both to the Company and you. Absent manifest error, any determination
by the accounting firm shall be binding upon the Company and you.
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(a)
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This Agreement shall be governed in all respects, including as to validity,
interpretation and effect, by the internal laws of the State of Texas without regard to
choice of law principles.
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(b)
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It is irrevocably agreed that if any dispute arises with respect to any action,
suit or other legal proceeding pertaining to this Agreement or to the interpretation of
or enforcement of any of your rights under this Agreement:
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(i)
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the Company and you agree that exclusive jurisdiction for any
such suit, action or legal proceeding shall be in the state district courts of
Texas sitting in Harris County, Texas;
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(ii)
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the Company and you are each at the time present in Texas for
the purpose of conferring personal jurisdiction;
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(iii)
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the Company and you each consent to the jurisdiction of each
such court in any such suit, action or legal proceeding and will comply with
all requirements necessary to give such court jurisdiction;
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(iv)
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the Company and you each waive any objection it may have to the
laying of venue of any such suit, action or legal proceeding in any of such
court;
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(v)
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the Company and you each waive any objection or right to
removal that may otherwise arise in any such suit, action or legal proceeding;
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(vi)
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any such suit, action or legal proceeding may be brought in
such court, 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;
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4
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(vii)
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service of process in any such suit, action or legal
proceeding 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 provided in Section 7 hereof; and
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(viii)
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prior to any trial on the merits, the Company and you will submit to court
supervised, non-binding mediation.
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(c)
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Notwithstanding any contrary provision of Texas law, the Company shall have the
burden of proof with respect to any of the following:
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(i)
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that Cause existed at the time any notice was given to you
under Section 2;
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(ii)
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that Good Reason did not exist at the time notice was given to
the Company under Section 2;
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(iii)
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that the Company is not in default in performance of its
obligations under this Agreement;
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(iv)
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that the termination of your employment was not at the request
of a third party who has taken steps reasonably calculated to effect the Change
of Control and otherwise did not arise in connection with or anticipation of
the Change of Control; and
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(v)
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that a Change of Control has not occurred.
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5.
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Successors; Binding Agreement.
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(a)
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In the event any Successor does not assume this Agreement by operation of law,
the Company will seek to have any Successor, by agreement in form and substance
reasonably 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 (unless assumption
occurs as a matter of law) 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 entitled to the benefits provided for herein.
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(b)
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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.
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5
The Company shall reimburse you for all legal and other costs (including but not
limited to, administrative, accounting, tax, human resource and expert witness fees
and expenses) incurred by you as a result of your seeking to obtain, assert or
enforce any right or benefit conferred upon you by this Agreement.
You shall submit all invoices for such costs to the Company no later than 30 days
prior to the end of the taxable year following the taxable year in which they were
incurred. The Company shall reimburse you for such costs within 14 days of receipt
of such invoices.
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:
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If to the Company:
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Oceaneering International, Inc.
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11911 FM 529
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Houston, Texas 77041
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Attention: Chief Executive Officer
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If to you:
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________________
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________________
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________________
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Either party may change, by the giving of notice in accordance with this Section 7,
the address to which notices are thereafter to be sent.
You will receive, to the fullest extent possible and to such greater extent as
applicable law hereafter may permit, indemnity from the Company on terms at least as
favorable as that provided under (i) any Indemnity Agreement of the Company to which
you are a party or an intended beneficiary, or (ii) the Company’s Bylaws as in
effect on the Effective Date or, if earlier, your Termination Date.
6
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.
All obligations undertaken and benefits conferred pursuant to this Agreement, shall
survive any termination of your employment and continue until performed in full.
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(a)
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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
Company. 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 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.
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(b)
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Failure to pay within 10 days of a payment due date or notice thereon (whether
payment is disputed or not) will result in a default under this Agreement. Past due
amounts will accrue interest and compound at the lesser of 2% per month or the highest
interest rate allowed by applicable law.
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This Agreement has been executed in duplicate originals, with one to be held by each
of the parties hereto.
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(a)
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Notwithstanding anything in this Agreement to the contrary, if any provision of
this Agreement would result in the imposition of an additional tax under Section 409A
of the Code, that provision of this Agreement will be reformed to avoid imposition of
the applicable tax and no action taken to comply with Section 409A of the Code shall be
deemed to adversely affect your rights to the benefits provided by this Agreement.
This Agreement is intended to comply with Section 409A of the Code, and ambiguous
provisions hereof, if any, shall be construed and interpreted in a manner that is
compliant with the application of Section 409A of the Code. The Agreement shall
neither cause nor permit any payment, benefit or consideration to be substituted for a
benefit that is payable under this Agreement if such action would result in the failure
of any amount that is subject to Section 409A of the Code to comply with the applicable
requirements of
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7
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Section 409A of the Code. You shall have no right to specify the calendar year
during which any payment hereunder shall be made.
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(b)
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Notwithstanding any provision in this Agreement to the contrary, this Agreement
shall not be amended or terminated in such manner that would cause this Agreement or
any amounts or benefits payable hereunder to fail to comply with the requirements of
Section 409A of the Code, to the extent applicable, and any such amendment or
termination that may reasonably be expected to result in such non-compliance shall be
of no force or effect.
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(c)
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If you are a “Specified Employee” (as defined under Section 409A of the Code)
as of the date of your “Separation from Service” (as defined under Section 409A of the
Code) as determined by the Company, the payment of any amount under this Agreement on
account of your Separation from Service that is deferred compensation subject to the
provisions of Section 409A of the Code and not otherwise excluded from Section 409A of
the Code, shall not be paid until the earlier of your death or the later of the first
business day that is six months after the date after your Separation from Service or
the date the payment is otherwise payable under this Agreement (the “Delay Period”).
Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to
this Section (whether they would have otherwise been payable in a single sum or in
installments in the absence of such delay) shall be paid or reimbursed to you in a lump
sum, without interest, and any remaining payments due under this Agreement shall be
paid or provided in accordance with the normal payment dates specified for them herein.
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(d)
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All reimbursements or provision of in-kind benefits pursuant to this Agreement
shall be made in accordance with Treasury Regulation §1.409A-3(i)(1)(iv) such that the
reimbursement or provision will be deemed payable at a specified time or on a fixed
schedule relative to a permissible payment event. Specifically, the amounts reimbursed
or in-kind benefits provided under this Agreement during one taxable year may not
affect the amounts reimbursed or provided in any other taxable year, the reimbursement
of an eligible expense shall be made on or before the last day of the taxable year
following the taxable year in which the expense was incurred, and the right to
reimbursement or provision of an in-kind benefit is not subject to liquidation or
exchange for another benefit. Notwithstanding any provision to the contrary in this
Agreement, you agree that you shall submit reimbursable expenses to the Company no
later than 30 days prior to the end of the taxable year following the taxable year in
which they were incurred.
|
8
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(e)
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An entitlement to a series of payments under this Agreement will be treated as
an entitlement to a series of separate payments.
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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.
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Sincerely,
OCEANEERING INTERNATIONAL, INC.
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BY
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M. Kevin McEvoy
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President and Chief Executive Officer
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Agreed to as of the ____
day of ________ 2011:
________________________
9
ANNEX I
TO CHANGE OF CONTROL AGREEMENT DATED MAY 6, 2011
BETWEEN
OCEANEERING INTERNATIONAL, INC.
AND
Definition of Certain Terms
“AGREEMENT” means this Change of Control Agreement between you and the Company dated as of May 6,
2011.
“BASE SALARY” means your annual salary as determined by the Company.
“BOARD” means the Board of Directors of the Company.
“BYLAWS” means the bylaws of the Company, except as otherwise specified, as in effect at the day
hereof and as the same shall be amended or otherwise modified to, but not on or after, any Change
of Control.
“CAUSE” means 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 related to your
employment with the Company.
“CHANGE OF CONTROL” means the earliest date at which:
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(i)
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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
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(ii)
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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
shareholders, 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
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(iii)
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the Company is merged or consolidated with another corporation
or entity, and as a result of such merger or consolidation, less than 60% 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
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I-1
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(iv)
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the consummation of (a) a tender offer or (b) exchange offer by
a Person other than the Company for the ownership of 20% or more of the Voting
Securities of the Company then outstanding; or
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(v)
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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 more than 20% 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.
“COMPANY” means Oceaneering International, Inc., a Delaware corporation.
“DISABILITY” means your continuing full-time absence from your duties with the Company for 90 days
or longer as a result of physical or mental incapacity, which absence is anticipated to extend for
90 additional days or longer. Your need for absence and its anticipated duration shall be
determined solely by a medical physician of your choice to be approved by the Company, which
approval shall not be unreasonably withheld.
“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, (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, (iv) the agreement by the Company to enter into a transaction which, if consummated,
would result in a Change of Control, or (v) consideration by the Board of a transaction which, if
consummated, would result in a Change of Control.
If, however, an Effective Date occurs but the proposed transaction to which it relates ceases to be
actively considered or it is not consummated within 12 months of such Effective Date, the Effective
Period will be deemed not to have commenced for purposes of this Agreement. If an Effective Date
occurs with respect to a proposed transaction which ceases to be actively considered but for which
active consideration is revived, the Effective Date with respect to the Change of Control that
ultimately occurs shall be that date when consideration was revived and carried through to
consummation.
“EFFECTIVE PERIOD” means the period beginning on the Effective Period Commencement Date and ending
on the Effective Period Conclusion Date.
“EFFECTIVE PERIOD COMMENCEMENT DATE” means the date falling one year prior to the Effective Date.
I-2
“EFFECTIVE PERIOD CONCLUSION DATE” means the date falling two years after the occurrence of a
merger or consolidation set forth under clause (iii) of the definition of Change of Control, but in
no event later than three years after the first event that constituted a Change of Control.
“EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“FISCAL YEAR BONUS PLAN” means for each year, the Company’s fiscal year bonus plan, or any other
plan adopted by the Board which provides for the payment of additional compensation or equity
consideration on an annual basis to senior executive officers contingent upon the Company’s
performance, including stock performance and results of operations for that specific year, in
either case as such plan shall be amended or modified prior to, but not on or after, any
Termination Date.
“GOOD REASON” means any of the following:
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(i)
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except as a result of your death or due to Disability, a change
in your status, title(s) or position(s) with the Company, including 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) immediately prior to the Effective Date; 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
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(ii)
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a reduction by the Company in your annual Base Salary, SERP (or
equivalent), annual bonus opportunity or aggregate long-term incentive
compensation in effect immediately prior to the Effective Date and as may
subsequently be increased thereafter; or
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(iii)
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the failure by the Company to continue in effect any Plan in
which you were participating immediately prior to the Effective Date 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 immediately
prior to the Effective Date or which would materially reduce your benefits
under any of such Plans or deprive you of any material benefit enjoyed by you
immediately prior to the Effective Date, except as proposed by you to the
Company; or
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(iv)
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the relocation of the principal place of your employment to a
location 25 miles further from your principal residence without your express
written consent; or
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I-3
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(v)
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the failure by the Company upon a Change of Control to obtain
the assumption of this Agreement by any Successor (other than by operation of
law); or
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(vi)
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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 immediately prior to a Change
of Control which do not otherwise violate your obligations hereunder; or
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(vii)
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any default by the Company in the performance of its
obligations under this Agreement, whether before or after a Change of Control.
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“INDEMNITY AGREEMENT” means that certain agreement between you and the Company dated as of
___________, 20___, and any successor thereto.
“LONG-TERM INCENTIVE BONUS PLAN” means the Company’s long-term incentive plans (including
agreements issued thereunder, e.g., Restricted Stock Agreements and Stock Option Agreements) or any
other plan or agreement approved by the Board, other than the Fiscal Year Bonus Plan, which
provides for the payment of additional compensation or equity consideration to senior executive
officers contingent on the Company’s performance, including stock performance and results of
operations for a specific time period, and in either case, as such plan may be amended or modified
prior to, but not on or after, any Termination Date.
“MARKET VALUE” when used with respect to a Share, means (i) if Shares are listed or quoted on a
national securities exchange, the closing price per Share reported or quoted on the consolidated
transaction reporting system for the principal national securities exchange on which Shares are
listed or quoted on that date, or, if there shall have been no such sale so reported or quoted on
that date, on the last preceding date on which such a sale was so reported or quoted, (ii) if
Shares are not so listed or quoted, the closing price on that date, or, if there are no quotations
available for such date, on the last preceding date on which such quotations shall be available, as
reported by the Nasdaq Stock Market, Inc., or, if not reported by the Nasdaq Stock Market, Inc., by
the National Quotation Bureau Incorporated, or (iii) if Shares are not publicly traded, the most
recent value determined by an independent appraiser appointed by the Company for such purpose.
“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 employees of the Company that are similarly situated to you (other than the
Plans or as otherwise provided to you in this Agreement).
“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.
“PLANS” means the Fiscal Year Bonus Plan, the Long-Term Incentive Bonus Plan and the SERP.
I-4
“RESTRICTED STOCK AGREEMENTS” means any grant by the Company to you of Shares which are, at the
relevant time, subject to possible forfeiture.
“SERP” means the Company’s Supplemental Executive Retirement Plan, as the same shall be amended or
modified to, but not on or after, any Effective Date.
“SEVERANCE PACKAGE” means your right to receive, and the Company’s obligation to pay and/or perform
on, the following:
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(a)
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On or within five days following an applicable Termination Date, the Company
shall pay to you a lump sum, cash amount equal to the sum of:
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(i)
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two times the highest annual rate of your Base Salary in effect
during the then current year or any of the three years preceding the
Termination Date; and
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(ii)
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two times the target award you would have been eligible to
receive under the then current Fiscal Year Bonus Plan in respect of the then
current year, regardless of any limitations otherwise applicable to the then
current fiscal year (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);
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(b)
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All the outstanding contingent compensation issued or awarded to you under the
Plans shall become vested, exercisable, distributable and unrestricted (any contrary
provision in the Plans or Other Plans notwithstanding). You shall have the right
immediately to:
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(i)
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for one year thereafter (or if earlier, until the expiration of
the option term), exercise all or any portion of all your options covered by
any Plan or Other Plans and to have the underlying Shares issued to you;
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(ii)
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for one year thereafter, in lieu of such exercise as provided
in Subsection (b)(i) above, as elected by you, to receive a cash amount within
five days following an applicable Termination Date equal to the spread between
the exercise price and the higher Market Value of the shares, multiplied by the
number of shares of outstanding stock options;
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(iii)
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performance units, restricted stock units, and any shares of
restricted stock issued under the Plans and Other Plans, shall be vested with
all conditions to have been deemed to have been satisfied at the maximum level
(provided that such awards had not theretofore been forfeited);
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(iv)
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obtain the full benefit of any other contingent compensation
rights to which you may be entitled under the Plans or Other Plans, in each
case as though all applicable performance targets had been met or achieved at
maximum levels for all performance periods (including those extending beyond
the Effective Date) and any Plan contingencies had been satisfied
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I-5
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in full at the date of the Change of Control and the maximum possible
benefits thereunder had been earned at the date of the Change of Control;
and
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(c)
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The Company shall maintain in full force and effect for your continued benefit
for a two-year period after the Termination Date all Other Plans in which you were
entitled to participate immediately prior to the Termination Date (at no greater cost
or expense to you than was the case immediately prior to the Change of Control),
including without limitation, plans providing medical, dental, life and disability
insurance coverage, provided that your continued participation is possible under the
general terms and provisions of such plans and programs. In the event that your
participation in any such plan or program is not possible, the Company shall arrange to
provide you, at the Company’s cost and expense, with benefits substantially similar to
those which you are entitled to receive under such plans and programs. This Agreement’s
provision of continued participation in the Company’s medical and dental plans is
intended to satisfy the Company’s obligation to provide such continuation coverage as
required by Section 4980B of the Code.
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Anything else in this Agreement to the contrary notwithstanding, if:
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(i)
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your employment is terminated in connection with a merger,
consolidation or a tender offer or an exchange offer;
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(ii)
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you are entitled to the benefits provided for under Section 1
hereof; and
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(iii)
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your Termination Date precedes or occurs on the date of the
closing thereof, then unless otherwise agreed to by both parties in writing,
all amounts to which you are or shall become entitled to under this Agreement,
which are calculable as of the closing date, shall be accelerated to, and
become immediately due and payable contemporaneously with such closing.
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“SHARES” means shares of Common Stock, $.25 par value, of the Company at the date of this
Agreement, as the same may be subsequently amended, modified or changed.
“STOCK OPTION AGREEMENTS” means any agreements providing for the grant by the Company to you of
options to purchase Shares.
“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, spin-off or similar transaction, or
indirectly by purchase of the Company’s Voting Securities or acquisition of all or substantially
all of the assets of the Company.
“TERMINATION DATE” means the date, which is the final date of your service pursuant to Section 2 of
this Agreement.
I-6
“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.
I-7