Document:

CUSIP NO:
	KMG CHEMICALS, INC.
 INCORPORATED UNDER THE LAWS OF THE STATE OF TEXAS

 

COMMON STOCK
	

 	
 	

 	
 	

 	
 	

 	
 	

SEE REVERSE FOR

CERTAIN DEFINITIONS
	
NUMBER	
 	

 	
 	

 	
 	

 	
 	

SHARES
	

 	
 	
This

certifies

that	
 	

 	
 	

 	
 	

 
	

 	
 	

is the owner of	
 	

 	
 	

 	
 	

 
	

 	
 	

FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, $0.01 PAR VALUE, OF

KMG CHEMICALS, INC.
	

 	
 	
(hereinafter called the "Corporation"), transferable on the books of the Corporation by the holder hereof in person or by duly authorized attorney, upon surrender of the Certificate properly endorsed. This certificate
and the shares represented hereby are issued and shall be held subject to all the provisions of the Certificate of Incorporation, as amended, and the Bylaws of the Corporation, as amended (copies of which are on file at the office of the Transfer
Agent), to all of which the holder of this Certificate by acceptance hereof assents. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar. Witness the facsimile seal of the Corporation and the
facsimile signatures of its duly authorized officers.
	

 	
 	

DATE:	
 	

 	
 	

 	
 	

 
	

 	
 	

/s/ David L. Hatcher	
 	

 	
 	

 
	

 	
 	

PRESIDENT	
 	
[SEAL]	
 	
Countersigned:	
 	

 
	 	 	 	 	 	 	 	 	SECURITIES TRANSFER CORPORATION

P.O. Box 701625

Dallas, TX 75370
	 	 	 	 	 	 	By:	 	 
	 	 	/s/ Fred C. Leonard	 	 	 	 	 	

	 	 	SECRETARY	 	 	 	 	 	TRANSFER AGENT • AUTHORIZED SIGNATURE

KMG CHEMICALS, INC.  

TRANSFER FEE $15.00 PER NEW CERTIFICATE ISSUED  

 A FULL STATEMENT OF THE RELATIVE RIGHTS, INTERESTS, PREFERENCES AND RESTRICTIONS OF EACH CLASS OF STOCK WILL BE FURNISHED BY THE CORPORATION TO ANY SHAREHOLDER UPON WRITTEN REQUEST, WITHOUT CHARGE.  

        The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to
applicable laws or regulations: 

	TEN COM	—	 	as tenants in common	 	 	 	UNIF GIFT MIN ACT	—	 	
	 	Custodian	 	

	TEN ENT	—	 	as tenants by the entireties	 	 	 	 	 	 	(Cust)	 	 	 	(Minor)
	JT TEN	—	 	as joint tenants with right of survivorship and not as tenants in common	 	 	 	 	 	 	under Uniform Gifts to Minors Act

    
 (State)

Additional abbreviations may also be used though not in the above list. 

        For
value received,
                                         
                                          
                                      hereby sell(s),
assign(s) and transfer(s) unto
 

	Please insert Social Security or other identifying number of assignee
    
	 	 	 	 
	

    
 Please print or typewrite name and address including postal zip code of assignee
	    

	

    

	

    
	
 	

Shares
	of the Common Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint
	

    

	Attorney to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises.

	

Dated	
 	

    
	
 	

 	
 	

    
	
 	

 	
 	

 
	

 	
 	

 	
 	

 	
 	

 	
 	

Signature:
	

 	
 	

 	
 	

 	
 	

 	
 	
X	
 	

    

	 	 	 	 	 	 	 	 	X	 	    

	

 	
 	

 	
 	

 	
 	

X NOTICE:	
 	

The signature to this assignment must correspond with the name as written upon the face of the Certificate, in every particular, without alteration or enlargement, or any change whatever.
	

Signature Guaranteed:	
 	

 	
 	

 	
 	

 	
 	

 

	

    
THE SIGNATURE(S) SHOULD BE MEDALLION STAMP GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION PURSUANT TO S.E.C. RULE 17AD-15.
	
 	

 
	    	 	 
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Exhibit 10.13  

 
 

INCOME CONTINUANCE PLAN    

        Key
Production Company, Inc. (the "Company") desires to provide income continuance benefits to the following groups of its employees if the Company is taken over by another
company, for the reasons indicated: 

        (a)   Those
40 years of age and older, a protected class under federal and state age discrimination laws, because it has been determined that they typically have more
difficulty finding new employment than younger persons; 

        (b)   Those
who have been continuously employed by the Company for 10 years or more, because they have demonstrated their personal commitment to the success of the
Company; 

        (c)   Those
whose special skills, experience or potential justify their inclusion in order to acquire or retain their services; and 

        (d)   Those
who are officers of the Company. 

        The
Company has adopted this Income Continuance Plan (the "Plan") effective June 1, 1994, to protect the income and other employee benefits of the Company's Employees (as defined
below in paragraph 1) and in order to induce the Employees to remain in the employ of the Company for the ultimate benefit of the Company and its shareholders. 

        The
Plan is intended to create a binding legal relationship between the Company and each Employee, and a copy of the Plan together with applicable conditions will be given to each
Employee. 

1.    DEFINITIONS.    Capitalized terms used herein shall have the following meanings: 

        (a)   "Base
Compensation" shall mean the total of all compensation, including wages, salary, and any other incentive compensation, bonuses, commissions and
non-salary and non-wage cash compensation, which was paid as consideration for the Employee's service during the twelve month period immediately preceding the Termination Date,
or which would have been so paid at the Employee's usual rate of compensation if the Employee had worked a full twelve months. 

        (b)   "Benefit
Period" shall mean a period commencing on the Termination Date of the Employee and ending 24 months thereafter except as otherwise provided in
paragraph 4(a) or paragraph 7 of this Plan. 

        (c)   "Change
of Control" shall mean the occurrence, after June 1, 1994 of any of the following: 

        (1)   the
acquisition by any person or group of beneficial ownership of securities (including securities convertible into or exchangeable for or options or other rights to
acquire securities) of the Company, representing in the aggregate 25% or more of the combined voting power of all securities of the Company entitled to vote in the election of directors, without the
prior approval of the acquisition resulting in such person or group acquiring such percentage by at least two-thirds of the directors of the Company who are not affiliates or associates of
such person or group; 

        (2)   during
any period of up to 24 consecutive months, commencing after June 1, 1994, individuals who at the beginning of such 24-month period were
directors of the Company ceasing for any reason to constitute two-thirds of the total number of directors of the Company unless the individuals serving as new or replacement directors were
nominated by at least a majority of the directors of the Company in office immediately prior to such period; 

        (3)   the
adoption of any plan or proposal to liquidate or dissolve the Company; or 

        (4)   any
merger or consolidation of the Company unless thereafter (i) directors of the Company immediately prior thereto continue to constitute at least
two-thirds of the directors 

 

of
the surviving entity or transferee or (ii) the Company's securities continue to represent or are converted into securities that represent more than 80% of the combined voting power of the
surviving entity or transferee. 

        As
applicable, all terms used in this definition of "Change of Control" shall be given their meanings as used in Section 13(d) of the Securities Exchange Act of 1934 as in effect
on the date of this Plan or Rule 13d-3 or Rule 12b-2 issued thereunder as in effect on June 1, 1994. 

        (d)   "Company"
shall mean Key Production Company, Inc., a Delaware corporation, whose headquarters is in Denver, Colorado, and its wholly-owned subsidiaries and
affiliates. 

        (e)   "Effective
Date" shall mean the date on which a Change of Control takes place. 

        (f)    "Employee"
shall mean each regular exempt or non-exempt employee of the Company on the Effective Date or the Termination Date who: 

        (1)   is
40 years of age or older; or 

        (2)   has
been continuously employed by the Company for 10 years or more; or 

        (3)   has
been designated by the Board of Directors of the Company as having special skills, experience or potential which warrant extension of the benefits of the Plan to
them; or 

        (4)   is
an officer of the Company. 

        (g)   "Plan"
shall mean the Income Continuance Plan of the Company. 

        (h)   "Termination
Date" shall mean: 

        (1)   if
termination is by the Company or its successor, the date on which an authorized written or oral statement is conveyed to the Employee indicating that the Employee's
employment is terminated; or 

        (2)   if
termination is by the Employee, the date on which the Employee delivers a written notice to the Company or its successor advising of termination of employment. 

2.    EFFECTIVE DATE OF PLAN.    The income protection benefits described in this Plan shall be effective only if the employment of
an Employee is terminated on or after the Effective Date. 

3.    TERMINATION OF EMPLOYMENT.    The employment of an Employee shall be deemed to have been terminated within the meaning of this
Plan if one of the following events occur: 

        (a)   The
Company or its successor terminates the employment relationship on or after the Effective Date unless the termination results from an act of the Employee that is
materially detrimental to the best interests of the Company or its successor and the act constitutes common law fraud, a felony or a gross malfeasance of duty; or 

        (b)   The
Employee on his or her own volition terminates the employment relationship on or after the Effective Date due to changed circumstances occurring on or after the
Effective Date, which are adverse to the best interest of the Employee, including without limitation: 

        (1)   a
significant change in the title, duties, authority or compensation of the Employee; or 

        (2)   the
assignment of the Employee to a regular work place which is more than 50 miles distant from the Employee's regular work place on the Effective Date. 

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4.    INCOME PROTECTION BENEFITS.    During the Benefit Period, the Company or its successor shall pay and provide to the Employee
the following income continuation and fringe benefits: 

        (a)   A
monthly payment on or about the fifteenth day of each month (or, in the case of the initial payment, as soon thereafter as is reasonably practicable), which shall
equal 1/12 of the Base Compensation
of the Employee; provided, that such payments may be accelerated in accordance with the terms of any arrangement adopted by the Company to fund the Company's obligations hereunder; and provided
further, that 

        (1)   For
an Employee other than an officer of the Company whose continuous service with the Company on the Termination Date is less than 48 months, the Benefit Period
shall be reduced to one-half the number of months of the Employee's continuous service; and 

        (2)   The
Benefit Period for an Employee can be extended to the full Benefit Period term of 24 months, if the Board of Directors of the Company by majority vote
concludes it is reasonably required in order to induce an individual to accept employment with the Company, or in order to retain an existing Employee of the Company. 

        (b)   Continued
comparable health and life insurance benefits as of the Effective Date at no increase in cost to the Employee; and 

        (c)   All
expenses, including attorneys' fees, which may be incurred by the Employee in enforcing the Employee's rights against the Company or its successor under this Plan,
whether or not the Employee is successful. 

        The
foregoing payments and benefits shall be paid and provided to the Employee by the Company or its successor whether or not they are deductible by the Company or its successor for
federal or state income tax purposes. In case of death of an Employee during the Benefit Period, all payments and benefits hereunder which have not yet been paid shall be paid to the beneficiary
designated by the Employee in a written beneficiary designation delivered to the Company prior to the death of the Employee. If the Employee has failed to designate a beneficiary, such payments and
benefits shall be paid to the Employee's surviving spouse, or if there is not surviving spouse, to the Employee's estate. 

5.    TERMS OF PLAN; TERMINATION.    This Plan is terminable at any time by the majority vote of the Board of Directors of the
Company or its successor upon six month's prior written notice delivered to all Employees, provided that the Company or its successor shall be prohibited from delivering notice of termination of the
Plan during the two year period immediately subsequent to the Effective Date. Upon termination of the Plan, benefits shall continue to be paid to any Employee whose Termination Date occurred prior to
the date of the termination of the Plan. 

6.    AMENDMENT.    This Plan can be amended at any time by the Company by a majority vote of the Board of Directors of the Company
and execution of a written amendment to the Plan by an officer duly authorized by the Board of Directors on the following conditions: 

        (a)   No
amendment shall be adopted by the Company or its successor subsequent to the Effective Date. 

        (b)   Immediately
after adopting any amendment, the Company shall provide to the Employees a written statement of this Plan, as amended, and no amendments shall be effective
as to any Employee, until the Employee has received the statement. An Employee will be deemed to have received the written statement of the Plan if it is delivered in person or after 48 hours
of dispatch by mail or other suitable means of delivery to the last known address of the Employee. 

7.    OTHER PLANS AND CONTRACTS.    It is the intention of the Company that the benefits provided for in this Plan are in addition
to, and not in lieu of any other rights, privileges or benefits to which any Employee may now or hereafter be entitled under any contract, arrangement, plan or other 

3

 

policy
applicable to any Employee with the Company or any other employer; provided, however, that if an Employee is entitled to receive a payment or payments based upon annual salary pursuant to the
terms of an employment agreement between the Company and such Employee, that amount shall operate to postpone commencement of income continuation payments pursuant to paragraph 4(a). For
example, if an Employee is entitled to six months compensation pursuant to the terms of an employment agreement, payments made hereunder for such Employee shall commence seven months from the
Termination Date and continue for the remaining term of the Benefit Period and if an Employee is entitled to payments pursuant to an employment agreement which have a duration greater than the Benefit
Period such Employee shall not be entitled to any income continuation payments hereunder. 

8.    APPLICABLE LAW.    This Plan shall be interpreted to have been made in the State of Colorado and the laws of the State of
Colorado shall control to the extent not preempted by federal law. 

        IN
WITNESS WHEREOF, the Company has adopted this Plan effective June 1, 1994. 

	 	 	KEY PRODUCTION COMPANY, INC.
	

 	
 	

By:	

/s/  F. H. MERELLI      
 F. H. Merelli, President

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