Document:

Exhibit 10.1

 

RETENTION BONUS
AGREEMENT

 

This RETENTION BONUS AGREEMENT (the
“Agreement”) is made and entered into effective as of June 2, 2010, by and
between Hawkins, Inc. (the “Company”) and John R. Hawkins (“Executive”).

WHEREAS, Executive currently serves as Chief Executive
Officer of the Company; 

 

WHEREAS, the Company recently appointed a new
President of the Company as part of succession planning efforts of the Board of
Directors of the Company (the “Board”);

 

WHEREAS, the Company desires to have Executive play a
significant role in the succession planning process over the next several years
and desires to provide an incentive to Executive to continue employment with the
Company for a period of time;

 

WHEREAS, the Company is willing to provide a retention
bonus to Executive under the terms and subject to the considerations set forth
herein.

 

NOW THEREFORE,
in consideration of the foregoing and the covenants set forth below, and other
good and valuable consideration, the receipt and adequacy of which is
specifically acknowledged, the Company and Executive hereby agree as follows:

 

1.                  
Retention Bonus.  The
Company will pay Executive a retention bonus in the amount of $680,000 (the
“Retention Bonus”), subject to the following conditions:

 

a.      
Executive remains actively
employed with the Company from the date of this Agreement through June 2, 2013
(the “Vesting Date”);

 

b.      
Executive’s Termination Date
occurs thereafter for any reason other than termination by the Company for
Cause; and

 

c.       
Executive signs and does not rescind
a release of claims in a form prescribed by the Company.  Such release will be
provided to Executive on or before the Termination Date.

 

Any Retention Bonus that
becomes due under this Agreement shall be paid to Executive in substantially equal
installments commencing on the first regular payroll date of the Company
following the Termination Date and continuing in accordance with the Company’s
regular payroll schedule for a period of three (3) years.  

 

2.             Certain
Definitions.   As used in this
Agreement, the following terms shall have the meanings set forth below:

 

a.      
 “Cause” shall mean any of the
following:

 

 

	
(i)

	
Executive’s willful and material failure or refusal during his employment to carry out any reasonable directive of the Board;

	
 

	
 

	
(ii)

	
Any willful and material failure by Executive during his employment to comply with any material policy, rule or code of conduct generally applicable to employees of the Company or to management employees of the Company, which failure is materially and demonstratively injurious to the financial condition or business reputation of the Company;

	
 

	
 

	
(iii)  

	
Executive’s embezzlement or misappropriation of funds of the Company or any other willful act or omission by Executive which is materially injurious to the financial condition or business reputation of the Company; or

	
 

	
 

	
(iv)

	
Executive’s conviction or confession of an act or acts constituting a felony under the laws of the United States or any state thereof related to the business of the Company or which is materially injurious to the financial condition or business reputation of the Company.

 

Provided, however, that the circumstances set forth in
parts (i) or (ii) above shall constitute Cause under this Agreement only if the
Company provides Executive written notice of the act(s) or omission(s) that the
Company believes constitutes Cause, provides Executive the opportunity to cure
the consequences of such act(s) or omission(s) within 30 days following such
notice, and Executive does not so cure.

 

b.      
“Termination Date” shall mean the
date of Executive’s “separation from service” with the Company within the
meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as
amended, and the regulations and guidances thereunder.

 

3.             Early Payment upon Death. 
In the event Executive’s death prior to the Vesting Date, the Retention Bonus
shall become fully vested and payable to Executive’s estate, provided the
release condition set forth in Section 1(c) has been satisfied by the estate. 
The Retention Bonus will be paid in substantially equal installments commencing
on the first regular payroll date of the Company following the date of
Executive’s death and continuing in accordance with the Company’s regular
payroll schedule for a period of three (3) years.  

 

4.             Notice.  Any notice or
communication contemplated by or required to be given under this Agreement
shall be in writing and shall be deemed to have been duly given when personally
delivered or when mailed by U.S. registered or certified mail, return receipt
requested and postage prepaid.  In the case of notice to the Executive, mailed
notices shall be addressed to the Executive at the home address which he most
recently communicated to the Company in writing.  In the case of notice to the
Company, mailed notices shall be addressed to its corporate headquarters, and
all notices shall be directed to the attention of its General Counsel.  Notices
sent by mail are deemed to have been given upon the date of mailing in
accordance with this Section 4.

 

 

2

 

 

5.             No Promise of Employment.  Nothing in this Agreement shall constitute a promise
of continued employment of Executive by the Company.  Executive’s employment is
at-will, meaning that either Executive or the Company may terminate the
employment relationship at any time for any or no reason.

 

6.             Tax
Withholding.  The Company may
withhold from any amounts payable under this Agreement such federal, state and
local income and employment taxes as the Company shall determine are required
to be withheld pursuant to any applicable law or regulation.  The Company makes
no assurances to Executive as to the tax treatment of any payments hereunder
and, except with respect to tax amounts withheld by the Company, Executive will
be responsible for payment and remittance of all taxes due with respect to
compensation received or imputed under this Agreement.

 

7.             Section
409A.  This Agreement and the
payments hereunder are intended to be exempt from or to satisfy the
requirements of Section 409A(a)(2), (3) and (4) of the Internal Revenue Code of
1986, as amended, including current and future guidance and regulations
interpreting such provisions (the “Code”), including the exceptions for
short-term deferrals, separation pay arrangements, reimbursements, and in-kind
distributions, and shall be interpreted and administered accordingly. Each
payment under this Agreement is intended to be treated as one of a series of
separate payments for purposes of Code Section 409A and Treasury Regulation
§1.409A-2(b)(2)(iii) (or any similar or successor provisions). To the extent
that payments under this Agreement are subject to Code Section 409A and are on
account of a Separation from Service and the Executive is a “Specified
Employee” (as defined in Section 409A) as of the date of termination,
distributions to the Executive may not be made before the date that is six (6)
months after the date of Separation from Service or, if earlier, the date of
the Executive’s death. Payments to which the Executive would otherwise be
entitled during the first six (6) months following the date of termination will
be accumulated and paid on the first day of the seventh month following the Termination
Date (or the Executive’s death, if earlier).  To the extent that payments under
this Agreement are payments under a “reimbursement plan” subject to Code
Section 409A, the right to reimbursement may not be exchanged for cash or any
other benefit, the amount of expenses eligible for reimbursement in one
calendar year shall not affect the expenses eligible for reimbursement in any
other calendar year, and the reimbursement of any eligible expense shall be
made pursuant to the Company’s normal policies and procedures for expense
reimbursement, which shall be in any event no later than the last day of the
calendar year following the calendar year in which the expense was incurred.

 

8.             Governing
Law.  All matters relating to the
interpretation, construction, application, validity, and enforcement of this
Agreement will be governed by the laws of the State of Minnesota without giving
effect to any choice or conflict of law provision or rule, whether of the State
of Minnesota or any other jurisdiction, that would cause the application of
laws of any jurisdiction other than the State of Minnesota.

 

9.             Jurisdiction
and Venue.  Executive and the
Company consent to jurisdiction of the courts of the State of Minnesota and/or
the United States District Court, District of Minnesota, for the purpose of
resolving all issues of law, equity, or fact arising out of or in connection
with this Agreement.  Any action involving claims of a breach of this Agreement
must be brought exclusively in such courts.  Each party consents to personal
jurisdiction over such party in the state and/or federal courts of Minnesota
and hereby waives any defense of lack of personal jurisdiction.

 

 

3

 

 

10.          WAIVER OF JURY TRIAL.  TO THE EXTENT PERMITTED BY LAW, EXECUTIVE AND THE COMPANY WAIVE ANY AND ALL RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

11.          Entire Agreement.  This Agreement contains the entire agreement and understanding between the parties with respect to the subject matter herein.  This Agreement may not be modified or amended or any terms or provisions waived or discharged except in a written addendum signed by Executive and the Company.   This Agreement supersedes and replaces any prior agreement between the Company and Executive relating to the subject matter hereof.

 

12.          Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

 

13.          Successors and Assigns.  This Agreement is binding on and inures to the benefit of Executive and Executive’s heirs, legal representatives and permitted assigns, and on the Company and its successors and permitted assigns.  No rights or obligations of Executive or the Company hereunder may be assigned, pledged, disposed of or transferred by such party to any other person or entity without the prior written consent of the other party, except that the Company may, without the consent of Executive, assign or delegate all or any portion of its rights and obligations under this Agreement to any corporation or other business entity (i) with which the Company may merge or consolidate, (ii) to which the Company may sell or transfer all or substantially all of its assets or capital stock, or (iii) of which 50% or more of the capital stock or the voting control is owned, directly or indirectly, by the Company or which is under common ownership or control with the Company.  Upon any such assignment or delegation by the Company, the Company shall be discharged from all further liability hereunder and such assignee or delegate shall thereafter be deemed to be the “Company” for purposes of such rights or obligations of this Agreement.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date stated above.

 

	
 

	
 

	
HAWKINS, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
/s/ John R. Hawkins

	
 

	
/s/ Patrick H. Hawkins

	
John R. Hawkins

	
 

	
By: 

	
Patrick H. Hawkins

	
 

	
 

	
 

	
Its: 

	
President

 

 

 

 

 

 

4bc8kexh1023-060410.htm

THE BEARD COMPANY

Harvey Parkway

301 N.W. 63rd Street, Suite 400

Oklahoma City, OK 73116

(405) 842-2333    Fax: (405) 842-9901

May 28, 2010

Royal Energy, LLC

11330 County Road 3560

Ada, Oklahoma 74820

	
  

	
Re:

	
Purchase of Working Interests in Dilworth Field

Mr. Robert R. Cantrell:

This letter agreement (the “Agreement”) shall memorialize the agreement between Royal Energy, LLC, an Oklahoma limited liability company (“Seller”) and The Beard Company, an Oklahoma corporation (“Buyer”) concerning the purchase by Buyer of all of Seller’s right, title and interest in, to and under, the oil and gas leases and any other working interests and associated rights or entitlements covering the lands located in Kay County, Oklahoma, described in Exhibit “A” attached hereto (the “Dilworth Field”) and made a part hereof (the “Assets”), which includes an undivided 7.5357142860% working interest in the Dilworth Field; provided, however, the Assets shall not include the membership interest of Seller or Robert R. Cantrell in RIG Enterprises, LLC, an Oklahoma limited liability company (“RIG”), or True Energy Exploration, LLC, an Oklahoma limited liability company (“True Energy”), or any overriding royalty interest, working interest, or other economic interest in the Dilworth Field owned by RIG or True Energy.

 

1.  Purchase Price.  The purchase price for the Assets shall be $900,000 (the “Purchase Price”).  Buyer shall pay $150,000 of the Purchase Price on June 4, 2010 (the “Closing Date”)1 as an earnest money deposit (the “Deposit”).  Buyer shall pay the remaining $750,000 of the Purchase Price on or before October 4, 2010 (the “Outside Closing Date”); provided, that the Purchase Price shall be reduced to $875,000 if Buyer pays $725,000 on or before August 4, 2010.

 

_______________

  

1 Buyer has prepaid $25,000 of the Deposit as evidence of good faith in negotiating this Agreement.

  

  

  

2.  Assignment; Reassignment.  On the Closing Date, Seller shall execute an assignment of the Assets to Buyer, in a form mutually agreeable to both parties, conveying record title to the Assets to Buyer.   In the event that Buyer fails to pay the remainder of the Purchase Price by the Outside Closing Date, Buyer shall execute an assignment of the Assets back to Seller in a form mutually agreeable to both parties, conveying record title to the Assets to Seller.2

 

3.  Buyer Board Approval.  The obligations of the parties to consummate this transaction are subject to the Buyer obtaining the approval of its Board of Directors to this Agreement and the purchase of the Assets on or prior to the Closing Date.

 

4.  Right to Deposit.  If this Agreement fails to close due to Buyer’s failure to obtain Board approval of this Agreement and the Purchase of the Assets as contemplated by Paragraph 2 above, Buyer shall not be required to pay the Deposit as specified in Paragraph 1 above and Seller shall have no right to the Deposit.  If Buyer fails to close this Agreement for any other reason by the Outside Closing Date, Seller shall be entitled to retain the Deposit as liquidated damages for Buyer’s failure to close.  Seller acknowledges and agrees that its right to retain the Deposit as set forth in this Paragraph 4 and its right to reassignment of the Assets as set forth in Paragraph 2 shall be Seller’s sole remedy in the event of a breach of this Agreement by Seller.

 

5.  Effective Date.  The Effective Date of this transaction shall be May 1, 2010.  Seller will be responsible for all expenses and shall receive all revenues relating to the Assets incurred and earned prior to the Effective Date and Buyer will be responsible for all expenses and shall receive all revenues relating to the Assets incurred and earned after the Effective Date; provided, however, Seller shall not be required to pay more than $5,000 for expenses relating to the Assets that were incurred prior to the Effective Date, but were not reflected on the April 30, 2010 joint interest billing for the Dilworth Field.    For purposes of illustration and without limitation of the foregoing, Seller shall be entitled any revenue related to the Assets that is paid on or after the Effective Date, but is attributable to oil and gas production prior to the Effective Date.  The parties shall each pay unto the other any amounts received by such party but owed to another so as to reflect the proper allocation of costs and revenues of operations for periods before and after the Effective Date.

 

6.  Representations and Warranties of Seller.  Seller hereby represents to Buyer that (a) there are no claims or litigation pending which could in any manner impair the right of Seller to sell the Assets or otherwise adversely affect the Assets or the value thereof, (b) there are no liens, mortgages or encumbrances on or burdening the Assets other than those set forth in (i) that certain Acquisition and Joint Development Agreement dated June 30, 2009, as amended December 31, 2009 related to the Dilworth Field, and (ii) that certain Joint Operating Agreement dated June 30, 2009 related to the Dilworth Field, and (c) all limited liability company authorizations and approvals necessary for Seller to consummate this sale transaction and perform Seller’s obligations hereunder have been obtained.

 

_______________

  

2 In the event the working interest is reassigned to Royal Energy, LLC, said interest will be free of any debt or encumbrances.

  

  

  

7.  Further Assurances.  At and after the Effective Date, Buyer and Seller shall take all further actions necessary in order to give effect to this Agreement.

 

8.  Entire Agreement.    This Agreement, together with Exhibits “A,” constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all previous agreements, proposals, offers, and correspondence between the parties.

 

9.  Applicable Law.  This Agreement shall be interpreted in accordance with the laws of the State of Oklahoma.

 

10.  Counterpart Execution.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which shall collectively constitute but one Agreement.

 

 

Executed on the dates set forth in each party’s respective acknowledgment, but effective for all purposes as of May 1, 2010.

 

	  	
The Beard Company

	  	  
	  	
By:  /s/ Herb Mee, Jr.

	  	
Name:  Herb Mee, Jr.

	  	
Title:  President

	  	  
	
Agreed to and accepted this 28th day of May, 2010

	  	  
	
Royal Energy, LLC

	  
	  	  
	
By:  /s/ Robert R. Cantrell

	  
	
Name:  Robert R. Cantrell

	  
	
Title:  Manager

	  

  

  

  

EXHIBIT A

All right, title, and interest of Royal Energy, LLC (excluding any royalty interests) in any oil and gas leaseholds, minerals, brine leases, well bores, equipment, contracts, easements, agreements, and general tangibles and intangibles related to the following land in Kay County, Oklahoma or used or obtained in connection therewith:

	
Section

	
LEGAL DESCRIPTION

	
17

	
NW/4 of Section 17-28N-1E

	
17

	
SW/4 of Section 17-28N-1E

	
17

	
S/2 NE/4 SE/4 & NE/4 NE/4 SE/4 & NW/4 NE/4

SE/4 & N/2 SW/4 SE/4 of Section 17-28N-1E

	
17

	
SE/4 SE/4 & SE/4 SW/4 SE/4 & SW/4 SW/4

SE/4 & N/2 SW/4 SE/4 of Section 17-28N-1E

	
17

	
S/2 NE/4 Section 17

	
18

	
NE/4 of Section 18-28N-1E

	
18

	
NW/4 Section 18

 

	
18

	
SE/4 Section 18

	
18

	
SE/4 Section 18

	
20

	
W/2 NW/4 NE/4 of Section 20-28N-1E

	
20

	
NW4/ of Section 20-28N-1E

	
20

	
NE/4 SE/4 NE/4 of Section 20

	
20

	
S/2 SE/4 NE/4 Se/4 of Section 20

And all rights, title, and interest of Royal Energy, LLC in and to the surface estate including any structures thereon of the following lands in Kay County, Oklahoma:

	
Section

	
LEGAL DESCRIPTION

	
17

	
NW/4 of Section 17-28N-1E

	
20

	
NW/4 of Section 20-28N-1E

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00174-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00174-of-00352.parquet"}]]