|
May
22, 2006
|
|
(Date
of Report - Date of earliest event
reported)
|
|
KERR-McGEE
CORPORATION
|
|
(Exact
name of registrant as specified in its
charter)
|
|
Delaware
|
1-16619
|
73-1612389
|
||
|
(State
of Incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
|
123
Robert S. Kerr Avenue
|
||
|
Oklahoma
City, Oklahoma
|
73102
|
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
(405) 270-1313
|
|
(Registrant's
telephone number)
|
|
Item
1.01
|
Entry
into a Material Definitive Agreement
|
|
On
May 22, 2006, Kerr-McGee Corporation (the “Company”) entered into amended
Continuity Agreements (each, an “Amended Continuity Agreement”) with its
named executive officers (the “executive officers”) . The amended
Continuity Agreements supersede existing continuity agreements with
these
same executives. The amendments (a) address recently issued guidance
on
the deferred compensation rules under Internal Revenue Code (“IRC”)
Section 409A (as further described below), (b) require each executive
officer to sign a general release of claims against the Company as
a
condition to the Company providing any payments under the Amended
Continuity Agreements and (c) permit any lump sum payments owed to
an
executive officer under the Amended Continuity Agreements to be paid
(1)
subject to such executive officer’s obligation to promptly return the
funds if the general release is revoked or (2) by depositing the
funds
with an escrow agent and conditioning release of the funds to the
executive officer on non-revocation of the general release.
The
American Jobs Creation Act of 2004 became effective January 1, 2005,
and
among other things, it amended the IRC to add new Section 409A (“Section
409A”). Section 409A imposes an additional income tax and interest and
penalties on many forms of “deferred compensation” unless they comply with
the requirements of Section 409A. To ensure that they comply with
Section
409A, each Amended Continuity Agreement provides that, if the executive
officer is a “key employee” (as defined in Section 409A), payment of
deferred benefits under the Amended Continuity Agreement that are
subject
to Section 409A will not be made before the date that is six months
after
the employment separation date.
As
with the continuity agreements previously entered into with the executive
officers, the Amended Continuity Agreements are designed to retain
the
executive officers and provide for continuity of management in the
event
of an actual or threatened change in control of the Company (as “change in
control” is defined in each Amended Continuity Agreement). Like the
previous continuity agreements, the Amended Continuity Agreements
provide
that, in the event of a change in control of the Company, each executive
officer would have specific rights and receive specified benefits
if the
executive officer is terminated without cause by the Company or any
subsidiary or the executive officer voluntarily terminates his or
her
employment for “good reason” (as defined in the Amended Continuity
Agreement) within two years after the change in control. In these
circumstances, executive officers will each receive a severance payment
equal to a lump sum cash payment equal to three times the executive's
annual base salary, bonuses and perquisites (with such perquisites
calculated at 7% of the executive's annual base salary); any accrued
but
unpaid compensation (including the pro-rata amount of any bonus);
100%
vesting of all stock options, stock appreciation rights and restricted
stock held by the executive officer; continuation of health and welfare
benefits for 3 years; outplacement services; and an amount representing
additional savings plan contributions for a three-year period plus
the
present value of lost pension benefits under the Company's qualified
and
nonqualified defined benefit programs generally after giving effect
to
five additional years of credit for age and service in the benefit
calculation.
In
each Amended Continuity Agreement, a
change in control means (a) a change in any two-year period in a
majority of the members of the Board of Directors of the Company,
(b) any person becoming the beneficial owner, directly or indirectly,
of 25% or more of the Company's outstanding Common Stock, (c) with
certain exceptions, the consummation of a merger or consolidation
of the
Company with any other corporation, a sale of 50% or more of the
Company's
assets, liquidation or dissolution of the Company or combination
of the
foregoing transactions other than such a transaction immediately
following
which the stockholders of the Company and any trustee or fiduciary
of any
Company employee benefit plan immediately prior to the transaction
own at
least 60% of the voting power of the surviving corporation(s), or
(d) if a majority of the members of the Board in office immediately
prior to a proposed transaction determine by written resolution that
such
proposed transaction, if taken, will be deemed a change in control
and
such proposed transaction is effected
Amended
Continuity Agreements for each of the executive officers are attached
hereto as Exhibits 10.1 through 10.5. This summary description of
the
Amended Continuity Agreements does not purport to be complete and
is
qualified in its entirety by reference to such
Exhibits.
|
|
Item
9.01
|
Financial
Statements and Exhibits
|
|
(c)
Exhibits
10.1
Amended Continuity Agreement, dated May 22, 2006, between the Company
and
Luke R. Corbett.
10.2 Amended
Continuity Agreement, dated May 22, 2006, between the Company and
Kenneth W. Crouch.
10.3
Amended Continuity Agreement, dated May 22, 2006, between the Company
and
David A. Hager.
10.4
Amended Continuity Agreement, dated May 22, 2006, between the Company
and
Gregory F. Pilcher.
10.5
Amended Continuity Agreement, dated May 22, 2006, between the Company
and
Robert M. Wohleber.
|
|
SIGNATURES
|
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
|
KERR-MCGEE
CORPORATION
|
||
|
By:
|
(John
M. Rauh)
|
|
|
John
M. Rauh
|
||
|
Vice
President and Controller
|
||
|
Dated:
May 22, 2006
|