SEPARATION AGREEMENT
This Separation Agreement made this 11th day of May, 2001, by and between
Unit Corporation, a Delaware corporation (hereinafter called "Unit") and King ▇.
▇▇▇▇▇▇▇▇ (hereinafter called "▇▇▇▇▇▇▇▇").
WITNESSETH THAT
WHEREAS, ▇▇▇▇▇▇▇▇ is a founder of Unit and is presently Chairman of the
Board of Directors and Chief Executive Officer of Unit and has served Unit
continuously for more than thirty years since its formation as its principal
executive officer; and
WHEREAS, the leadership of ▇▇▇▇▇▇▇▇ was a major factor in the growth and
development of Unit; and
WHEREAS, ▇▇▇▇▇▇▇▇ desires to reduce his responsibilities and obligations to
Unit and Unit desires to provide for the orderly succession of certain of
▇▇▇▇▇▇▇▇'▇ responsibilities as well as recognize and compensate ▇▇▇▇▇▇▇▇ for his
many accomplishments and the benefits provided by him to Unit.
NOW, THEREFORE, it is hereby agreed as follows:
1. Retirement of ▇▇▇▇▇▇▇▇.
Effective as of June 30th 2001 (the "Separation Date"), ▇▇▇▇▇▇▇▇ shall
retire from the position of Chief Executive Officer of Unit. ▇▇▇▇▇▇▇▇ agrees
that his employment with Unit and Unit's direct and indirect subsidiaries or
affiliates will terminate as of the Separation Date.
2. Separation Compensation.
During the eight (8) year period beginning on July 1, 2001 (the "Separation
Period"), Unit shall pay to ▇▇▇▇▇▇▇▇ a total of Two Million Four Hundred
Thousand Dollars ($2,400,000) to be paid as follows:
(a) For the first two years, ▇▇▇▇▇▇▇▇ shall receive the benefits payable
to him under and in accordance with the terms of the Separation Benefit Plan for
Senior Management and an annual payment of Twenty Thousand Dollars ($20,000);
and
(b) The balance of the amount to be paid to ▇▇▇▇▇▇▇▇ shall be paid to him
at the rate of Three Hundred Thousand Dollars ($300,000) per year to be paid
monthly in the amount of $25,000.
In the event of ▇▇▇▇▇▇▇▇'▇ death during the Separation Period, the
remaining payments due under this Agreement shall be
paid to ▇▇▇▇▇▇▇▇'▇ designated beneficiaries (or, if there is no such
beneficiary, to ▇▇▇▇▇▇▇▇'▇ estate or legal representative).
3. Termination of Benefits.
Notwithstanding anything in this Agreement to the contrary, coverage under
all Unit benefit plans, practices, policies and programs (including, without
limitation, medical and health, vacation, 401(k), excess 401(k) and pension
plans, accidental death and dismemberment and accident insurance) will terminate
effective June 30, 2001. With respect to Unit's medical and health plan,
▇▇▇▇▇▇▇▇, his spouse, and dependents, if then eligible, may elect to continue
coverage at ▇▇▇▇▇▇▇▇'▇ expense in accordance with the group health continuation
requirements of
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COBRA. Any vested benefits and other amounts that ▇▇▇▇▇▇▇▇ is otherwise entitled
to receive under any such benefit plans, policies, practices, or programs of, or
any contract or agreement with, Unit or any of its subsidiaries on or after June
30, 2001 shall be payable in accordance with the terms of each such plan,
policy, practice, program, contract, or agreement, as the case may be, except as
explicitly modified by this Agreement.
4. Noncompetition Provision and Confidential Information.
(a) Non-Competition. ▇▇▇▇▇▇▇▇ agrees that during the Separation Period he
will not directly or indirectly engage in or participate as an officer,
employee, director, agent of or consultant for any business directly competitive
with that of Unit or any of its subsidiaries, nor shall ▇▇▇▇▇▇▇▇ make any
investments in any company or business competing with Unit or any of its
subsidiaries; provided, however, that nothing herein shall prevent ▇▇▇▇▇▇▇▇ from
investing (i) as less than a two (2%) percent shareholder in the securities of
any company listed on a national securities exchange or quoted on an automated
quotation system (ii) or in oil, gas and other mineral interests as a non-
operator which are not in competition with Unit's business interests and
activities, subject to obtaining the verbal or written approval of Unit, which
will not be unreasonably withheld.
(b) Confidential Information. ▇▇▇▇▇▇▇▇ agrees that he will not, during the
Separation Period or at any time thereafter, use for his own purposes, or
disclose to or for the benefit of any third party, any trade secret or other
confidential information of Unit or any of its subsidiaries (except as may be
required by law or in the performance of his duties hereunder consistent with
Unit's policies) and that he will comply with any confidentiality obligations of
Unit to a third party, whether under agreement or otherwise. Notwithstanding
the foregoing, confidential information shall be deemed not to include
information which (i) is or becomes generally available to the public other than
as a result of a disclosure by ▇▇▇▇▇▇▇▇ or any other person who directly or
indirectly receives such information from ▇▇▇▇▇▇▇▇ or at his direction or (ii)
is or becomes available to ▇▇▇▇▇▇▇▇ on a non-confidential basis from a source
which is entitled to disclose it to him.
(c) No Employee Solicitation. Except as otherwise agreed in writing
between ▇▇▇▇▇▇▇▇ and Unit, ▇▇▇▇▇▇▇▇ agrees that, during the Separation Period
and for one (1) year thereafter, he will not, directly or indirectly, engage,
employ, or solicit the employment of any person who is then or has been within
six (6) months prior thereto, an employee of Unit or any of its
subsidiaries.
(d) Litigation. ▇▇▇▇▇▇▇▇ agrees that, during the Separation Period, for
one (1) year thereafter and, if longer, during the pendancy of any litigation or
other proceeding, (i) he will not communicate with anyone (other than his own
attorneys and tax advisors and, except to the extent necessary in the
performance of his duties hereunder) with respect to the facts or subject
matter of any pending or potential litigation, or regulatory or administrative
proceeding involving any of Unit or any of its subsidiaries, other than any
litigation or other proceeding in which he is a party-in-opposition, without
giving prior notice to Unit or Unit's counsel, and (ii) in the event that any
other party attempts to obtain information or documents from ▇▇▇▇▇▇▇▇
with respect to matters possibly related to such litigation or other proceeding,
he will promptly so notify Unit's counsel.
(e) Non-Disparagement. ▇▇▇▇▇▇▇▇ and, to the extent set forth in the next
sentence, Unit agree that each party shall not, during the Separation Period and
for one (1) year thereafter
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criticize, ridicule or make any statement which disparages or is derogatory
of the other party in any communications with any customer or client. Unit's
obligations under the preceding sentence shall be limited to communications by
its senior corporate executives having the rank of Senior Vice President or
above.
(f) Injunctive Relief. ▇▇▇▇▇▇▇▇ acknowledges and agrees that any violation
of Section 4(a) - (e) hereof will result in irreparable damage to Unit, and,
accordingly, Unit may obtain injunctive and other equitable relief for any
breach or threatened breach of such paragraphs, in addition to any other
remedies available to Unit.
(g) Survival; Modification of Terms. ▇▇▇▇▇▇▇▇'▇ obligations under Section
4(a) -(f) hereof shall remain in full force and effect for the entire period
provided therein. ▇▇▇▇▇▇▇▇ and Unit agree that the restrictions and remedies
contained in Section 4(a) through (g) are reasonable and that it is his
intention and the intention of Unit that such restrictions and remedies shall
be enforceable to the fullest extent permissible by law. If it shall be found by
a court of competent jurisdiction that any such restriction or remedy is
unenforceable but would be enforceable if some part thereof were deleted or the
period or area of application reduced, then such restriction or remedy shall
apply with such modification as shall be necessary to make it enforceable.
5. Arbitration.
Unit and ▇▇▇▇▇▇▇▇ agree that any claim, dispute, or controversy arising
under or in connection with this Agreement shall be resolved solely and
exclusively by binding arbitration. The arbitration shall be held in the city
of Tulsa, Oklahoma (or at such other location as shall be mutually agreed by the
parties). The arbitration shall be conducted in accordance with the Expedited
Employment Arbitration Rules (the "Rules") of the American Arbitration
Association (the "AAA") in effect at the time of the arbitration, except that
the arbitrator shall be selected by alternatively striking from a list of five
arbitrators supplied by the AAA. All fees and expenses of the arbitration,
including a transcript if either requests, shall be borne equally by the
parties. If ▇▇▇▇▇▇▇▇ prevails as to any material issue presented to the
arbitrator, the entire cost of such proceedings (including, without limitation,
▇▇▇▇▇▇▇▇'▇ reasonable attorney's fees) shall be borne by Unit. If ▇▇▇▇▇▇▇▇
does not prevail as to any material issue, each party will pay for the fees and
expenses of its own attorneys, experts, witnesses, and preparation and
presentation of proofs and post-hearing briefs (unless the party prevails on a
claim for which attorneys' fees are recoverable under the Rules). Any action to
enforce or vacate the arbitrator's award shall be governed by the Federal
Arbitration Act, if applicable, and otherwise by applicable state law. If either
Unit or ▇▇▇▇▇▇▇▇ pursues any claim, dispute, or controversy against the other in
a proceeding other than the arbitration provide for herein, the responding
party shall be entitled to dismissal or injunctive relief regarding such action
and recovery of all costs, losses, and attorneys' fees related to such action.
6. Successors.
(a) This Agreement is personal to ▇▇▇▇▇▇▇▇ and, without the prior written
consent of Unit, shall not be assignable by ▇▇▇▇▇▇▇▇ otherwise than by will or
the laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by ▇▇▇▇▇▇▇▇'▇ legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon Unit and its successors and assigns.
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(c) Unit shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business and/or assets of Unit expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that Unit would have been
required to perform it if no such succession had taken place. As used in this
Agreement, "Unit" shall mean both Unit as defined above and any such successor
that assumes and agrees to perform this Agreement, by operation of law or
otherwise.
7. Miscellaneous.
(a) Oklahoma Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Oklahoma, without reference to
principles of conflict of laws.
(b) Headings. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
(c) Amendments. This Agreement may not be amended or modified except by a
written agreement executed by the parties hereto or their respective successors
and legal representatives.
(d) Notices. All notices and other communications under this Agreement
shall be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to ▇▇▇▇▇▇▇▇:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Unit:
Unit Corporation
1000 Kensington Tower
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
or to such other address as either party furnishes to the other in writing in
accordance with this Section 10(d). Notices and communications shall be
effective when actually received by the addressee.
(e) Void Provisions. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. If any provision of this Agreement shall be held
invalid or unenforceable in part, the remaining portion of such provision,
together with all other provisions of this Agreement, shall remain valid and
enforceable and continue in full force and effect to the fullest extent
consistent with law.
(f) Withholding of Taxes. Notwithstanding any other provision of this
Agreement, Unit may withhold from amounts payable under this Agreement all
federal, state, local, and foreign taxes that are required to be withheld by
applicable laws or regulations.
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(g) No Waiver. ▇▇▇▇▇▇▇▇'▇ or Unit's failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.
(h) Effect on Other Separation Plans. Except as otherwise provided herein,
▇▇▇▇▇▇▇▇ and Unit acknowledge that this Agreement supersedes and terminates any
other separation and employment agreements between ▇▇▇▇▇▇▇▇ and Unit or Unit's
subsidiaries and ▇▇▇▇▇▇▇▇ shall not be eligible to participate or receive any
benefits under such plans.
(i) Alienation. The rights and benefits of ▇▇▇▇▇▇▇▇ under this Agreement
may not be anticipated, assigned, alienated, or subject to attachment,
garnishment, levy, execution, or other legal or equitable process except as
required by law. Any attempt by ▇▇▇▇▇▇▇▇ to anticipate, alienate, assign, sell,
transfer, pledge, encumber, or charge the same shall be void. Payments hereunder
shall not be considered assets of ▇▇▇▇▇▇▇▇ in the event of insolvency or
bankruptcy.
(j) Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, and said counterparts shall
constitute but one and the same instrument.
(k) Approval. This Agreement is subject to approval by Unit's Board of
Directors and, until such approval is given, and evidenced by a written
resolution of the Board of Directors, shall be of no force and effect.
(l) Beneficiaries. ▇▇▇▇▇▇▇▇ may designate one or more persons or entities
as the primary and or contingent beneficiaries of any amounts to be received
under this Agreement. Such designation must be in the form of a signed writing
acceptable to the Board of Directors or the Board's designee. ▇▇▇▇▇▇▇▇ may make
or change such designation at any time.
(m) No Implied Contract. Nothing contained in this Agreement shall be
construed to impose any obligation on Unit to renew this Agreement or any
portion thereof. The parties intend to be bound only upon execution of a written
agreement and no negotiation, exchange of draft or partial performance shall be
deemed to imply an agreement. Neither the continuation of ▇▇▇▇▇▇▇▇'▇ engagement
nor any other conduct shall be deemed to imply a continuing agreement upon the
expiration of this Agreement.
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has hereunto set ▇▇▇▇▇▇▇▇'▇ hand and, pursuant
to the authorization of its Board of Directors, Unit has caused this Agreement
to be executed in its name on its behalf, all as of the day and year first above
written.
Unit Corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ King ▇. ▇▇▇▇▇▇▇▇
------------------------------- -------------------------------
Its: ▇▇▇▇ ▇. ▇▇▇▇▇▇, President King ▇. ▇▇▇▇▇▇▇▇
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