UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): April 9, 2007
(Exact
name of registrant as specified in its charter)
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Delaware
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1-9260
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73-1283193
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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7130
South Lewis, Suite 1000, Tulsa, Oklahoma
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74136
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (918) 493-7700
Not
Applicable
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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Written communications pursuant to Rule 425 under the Securities
Act (17
CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR
240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under
the
Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under
the
Exchange Act (17 CFR 240.13e-4(c))
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Section
1 - Registrant's Business and Operations
Item
1.01 Entry
into a Material Definitive Agreement.
Effective
April 1, 2005, Unit Corporation (the "Company") and Mr. John Nikkel,
Chairman of
the Board of the Company, entered into a consulting agreement ("Original
Consulting Agreement"), in conjunction with Mr Nikkel's retirement as
Chief
Executive Officer of the Company, which provided for the following:
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1.
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Mr. Nikkel would serve as a consultant to the Company, on an annual basis, for $70,000 per year; and |
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2.
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The
Company would provide office space and secretarial service
for Mr. Nikkel
for the time he serves as a consultant to the
Company.
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On
April
12, 2006, the Company and Mr. Nikkel entered into an agreement to renew
the
terms of the Original Consulting Agreement for a period of one year,
effective
April 1, 2006. On April 9, 2007, the Company and Mr. Nikkel entered into
another
consulting agreement under the substantially same terms and conditions
as the
Original Consulting Agreement for a period of one year, effective April
1, 2007
("New Consulting Agreement"). This New Consulting Agreement is filed
as Exhibit
10.1 to this Form 8-K and is incorporated by reference herein.
Information
regarding Mr. Nikkel's investments in the employee-limited partnerships
sponsored by the Company each year is described in the Company's most
recent
Proxy Statement filed in connection with the Company's Annual Meeting
of
Stockholders to be held on May 2, 2007. That information is incorporated
by
reference into this Form 8-K.
Mr.
Nikkel continues to serve on the Company's Board of Directors and as
its
Chairman.
Section
9 - Financial Statements and Exhibits
Item
9.01 Financial
Statements and Exhibits .
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(a)
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Financial
Statements of Businesses Acquired.
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Not
Applicable.
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(b)
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Pro
Forma Financial Information.
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Not
Applicable.
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(c)
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Shell Company Transactions. |
Not
Applicable.
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(d)
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Exhibits.
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The
following exhibits are furnished or filed herewith:
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10.1
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New
Consulting Agreement dated April 9, 2007, between John G. Nikkel
and the
Company.
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1
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.
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Unit
Corporation
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Date:
April 10, 2007
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By:/s/
Mark E. Schell
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Name:
Mark E. Schell
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Title:
Senior Vice President
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EXHIBIT
INDEX
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Exhibit
No.
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Description
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10.1
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New
Consulting Agreement dated April 9, 2007, between John G. Nikkel
and the
Company.
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3
Exhibit
10.1
CONSULTING
AGREEMENT
This
consulting agreement (this "Agreement")
is
dated April 9, 2007, and is between John G. Nikkel ("Nikkel")
and
Unit Corporation (the "Corporation").
Nikkel
and the Corporation are collectively referred to as the "Parties."
WHEREAS,
on December 17, 2004, the Parties entered into a consulting agreement (the
"Original
Agreement");
WHEREAS,
on April 1, 2006, the Original Agreement expired according to its
terms;
WHEREAS,
on April 12, 2006, the Parties renewed the Agreement for a one year term
effective April 1, 2006;
WHEREAS,
the Parties desire to again enter into a consulting agreement under the
substantially same terms and conditions as the Original Agreement;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
in this Agreement, the Parties agree as follows:
1. Except
as
otherwise provided herein, this Agreement incorporates and adopts the terms
and
conditions of the Original Agreement attached hereto as Exhibit A.
2. This
Agreement is for a term of 1 year commencing as of April 1, 2007 unless it
is
sooner terminated by mutual written agreement of the parties. In the event
of
Nikkel’s death during the term of this Agreement, the obligations of the parties
under this Agreement will terminate.
3. In
the
event there is a conflict between the terms of this Agreement and that of
the
Original Agreement, the terms of this Agreement will govern.
IN
WITNESS WHEREOF,
each of
the parties has signed this Agreement, in the case of the Corporation by
its
duly authorized officer, as of the day and year set forth above.
| Unit Corporation | ||
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/s/
John G. Nikkel
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/s/ Mark E. Schell | |
| John G. Nikkel | Mark E. Schell, Senior Vice President |
1
EXHIBIT
A
CONSULTING
AGREEMENT
This
consulting agreement is dated December 17, 2004, and is between John G. Nikkel
("Nikkel")
and
Unit Corporation, a Delaware corporation (the "Corporation").
Nikkel
has elected to retire as an employee and Chief Executive Officer of the
Corporation effective April 1, 2005 and will cease to be an officer of the
Corporation as of that date.
The
board
of directors of the Corporation wishes to secure the services of Nikkel as
a
consultant to the Corporation and Nikkel is willing to act in that capacity
following his retirement.
The
Corporation and Nikkel wish to enter into this agreement to describe their
obligations to each other and the scope of Nikkel's services to the Corporation
as an independent contractor and consultant to the Corporation after his
retirement.
The
parties therefore agree as follows:
1. Term
of Agreement.
This
agreement is for a term of 1 year starting on the date of Nikkel's retirement
unless it is sooner terminated by mutual written agreement of the parties.
In
the event of Nikkel's death during the term of this agreement, the obligations
of the parties under this agreement shall terminate.
The
parties, by mutual written agreement, may extend the term of this agreement
for
successive 1 year periods at any time before the termination of the then
existing term of this agreement.
2. Consulting
Fees.
In
consideration of Nikkel's obligations under this agreement, the Corporation
shall pay Nikkel an annual consulting fee of $70,000, with payments to be
made
monthly in accordance with the Corporation's usual procedures. This compensation
shall be paid beginning as of Nikkel's retirement date and ending on the
termination of this agreement.
During
the term of this agreement the Corporation shall make available to Nikkel
secretarial services and office space.
3. Consulting
Services.
3.1 Duration
and Scope.
During
the term of this agreement, Nikkel shall serve as a consultant to the
Corporation (including its subsidiaries, affiliates and joint venture partners).
Nikkel will provide the advice and counsel to the Corporation as reasonably
requested by the Chief Executive Officer of the Corporation. Unless otherwise
requested, Nikkel shall attend the weekly exploration meetings held by the
Corporation's subsidiary Unit Petroleum Company to assist in the decisions
normally made during those meetings.
3.2 Compliance
with Laws.
Nikkel
shall comply at his expense with all applicable provisions of workers'
compensation laws, unemployment compensation laws, federal social security
law,
the Fair Labor Standards Act, federal, state and local income tax laws, and
all
other applicable federal, state and local laws, regulations and codes applicable
to his status as an independent contractor.
3.3 Status.
As a
consultant to the Corporation, Nikkel shall act as an independent contractor.
Nikkel shall not have the status of an employee of the Corporation. Nikkel
shall
be solely responsible for and shall pay all such amounts of applicable federal
and state income and self employment taxes. Except as otherwise provided
in this
agreement, Nikkel shall not be eligible to participate in any employee benefit,
group insurance or compensation plans or programs maintained by the Corporation;
provided,
however,
that
any rights that Nikkel may have under these plans or programs because of
his
prior status as an employee and officer of the Corporation (or his status
as a
director of the Corporation) shall not be affected by this agreement. The
Corporation shall not provide Social Security, unemployment compensation,
disability insurance, workers ' compensation or similar coverage, or any
other
statutory employment benefit, to Nikkel.
2
3.4 Reimbursement
of Reasonable Expenses.
On
presentment to the Corporation of appropriate documentation of his expenses,
the
Corporation shall reimburse Nikkel under guidelines similar to those applicable
to the Corporation's officers for reasonable expenses incurred by Nikkel
during
the performance of his consulting services.
4. Protection
of the Corporation's Interests.
4.1 Protection
of Trade Secrets.
For the
term of this agreement, Nikkel shall not, without the prior written consent
of
the Corporation, disclose or use for any purpose (except in the course of
his
consulting services with the Corporation and in furtherance of the Corporation's
business) confidential information or proprietary data of the Corporation,
its
subsidiaries, affiliates and joint venture partners, except as required by
applicable law or legal process. Nikkel agrees to deliver to the Corporation
at
the termination of this agreement, or at such other time as the Corporation
may
request, all memoranda, notes, plans, records, reports and other documents
(and
copies thereof) relating to the business of the Corporation, its subsidiaries,
affiliates and joint venture partners, that Nikkel may then possess or have
under his control.
4.2 Limitation
on Services Provided to Others.
During
the term of this agreement, Nikkel shall not, directly or
indirectly:
(a) Engage
in
any business or activity in which the Corporation or any subsidiary, affiliate
or joint venture partner of the Corporation is engaged (provided, however,
that
the purchase, sale and leasing of oil and gas mineral interests or participating
in the drilling of oil and gas wells by Nikkel shall not be deemed to be
a
violation of this provision but nothing in this agreement will relieve Nikkel
of
any fiduciary duties he may owe to the Corporation); nor
(b) Be
employed by, render services of any kind to, advise or receive compensation
in
any form from, nor invest or participate in any manner or capacity in, any
entity or person that directly or indirectly engages in such business or
activity.
This
Subsection will not preclude investments in a corporation whose stock is
traded
on a public market and of which Nikkel owns less than a significant
interest.
4.3 Nonsolicitation.
During
the term of this agreement, Nikkel shall not, directly or
indirectly:
(a) Attempt
to cause any employee of the Corporation or any subsidiary, affiliate or
joint
venture partner to leave his or her employment; nor
(b) Knowingly
advise or provide information to any person in connection with an attempt
by
such person to cause any employee of the Corporation or any subsidiary,
affiliate or joint venture partner to leave his or her employment.
4.4 Modification
by Court.
If any
of the covenants contained in subsections 4.1, 4.2 and 4.3 above is determined
to be unenforceable because of the duration of the covenant or the area covered
by it, then the court or arbitrator making the determination shall have the
power to reduce the duration of the covenant or the area covered by it, and
the
covenants, in their reduced form, will be enforceable.
4.5 Different
Jurisdictions.
If any
of the covenants set forth in Subsections 4.1, 4.2 and 4.3 above is determined
to be wholly unenforceable by the courts or arbitrators of any domestic or
foreign jurisdiction, then the determination shall not bar or in any way
affect
the Corporation's right to relief in the courts or in arbitration proceedings
of
any other jurisdiction with respect to any breach of such covenants in such
other jurisdiction. Such covenants, as they relate to each jurisdiction,
shall
be severable into independent covenants and shall be governed by the laws
of the
jurisdiction where a breach occurs.
4.6 Purpose
of Covenants.
Nikkel
and the Corporation agree that the covenants in Subsections 4.1, 4.2 and
4.3
above are reasonable and necessary to protect the confidentiality of the
trade
secrets and other proprietary information concerning the business of the
Corporation and its subsidiaries, affiliates and joint venture partners that
was
acquired by Nikkel as an employee of the Corporation and during the course
of
his consulting services under this Agreement.
3
4.7 Repayment
of Gains.
Nikkel
and the Corporation agree that the principal purpose of entering into this
agreement was to motivate Nikkel to contribute to the Corporation's success
and
to increase the Corporation's value. Nikkel and the Corporation also agree
that
any breach of the covenants set forth in Subsections 4.1, 4.2 and 4.3 above
would be contrary to the purpose of this agreement. In the event that Nikkel
takes any action contrary to any of the covenants set forth in Subsections
4.1,
4.2 and 4.3 above, Nikkel shall on demand pay the Corporation an amount equal
to
the total amount of all cash compensation paid to Nikkel under this agreement,
whether that cash compensation was paid before or after the time when Nikkel
takes the contrary action.
5. Miscellaneous
Provisions.
5.1 Waiver.
No
provisions of this agreement can be modified, waived or discharged unless
the
modification, waiver or discharge is agreed to in writing and signed by Nikkel
and the Corporation. No waiver by either party of any breach of, or of
compliance with, any condition or provision of this agreement by the other
party
shall be considered a waiver of any other condition or provision or of the
same
condition or provision at another time.
5.2 Assignment
and Successors; The Corporation.
The
Corporation shall require any successor (whether direct or indirect and whether
by purchase, lease, merger, consolidation, liquidation or otherwise) to all
or
substantially all of the Corporation's business and/or assets, by an agreement
in substance and form satisfactory to Nikkel, to assume this agreement and
to
perform this agreement in the same manner and to the same extent as the
Corporation would be required to perform it in the absence of a succession.
For
all purposes under this agreement, the term "Corporation" shall include any
successor to the Corporation's business and/or assets that executes and delivers
the assumption agreement described in this Subsection 5.2 or that becomes
bound
by this agreement by operation of law. The rights and benefits of Nikkel
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 Nikkel to anticipate, alienate,
assign, sell, transfer, pledge, encumber, or charge the same shall be void.
5.3 Arbitration.
Any
dispute or controversy arising under or in connection with this agreement
shall
be settled exclusively by arbitration in Tulsa, Oklahoma, in accordance with
the
rules of the American Arbitration Association then in effect. Judgment may
be
entered on the arbitrator's award in any court having jurisdiction. Within
30
days following the conclusion of any arbitration proceeding (notwithstanding
any
appeal), the Corporation shall pay all reasonable attorneys' fees and related
expenses incurred by Nikkel in connection with any such arbitration;
provided,
however,
that
the Corporation's reimbursement obligation under this sentence shall be limited
to $15,000 in the event that the Corporation is the prevailing party in the
action and $30,000 if Nikkel is the prevailing party in the action. For purposes
of the preceding sentence, if there is disagreement concerning who is the
prevailing party, then the parties shall request that the arbitrator hearing
the
dispute determine the point and the parties agree to be bound by the
arbitrator's determination.
5.4 Taxes.
All
payments made under this agreement shall be subject to any required withholding
of applicable taxes.
5.5 Whole
Agreement.
No
agreements, representations or understandings (whether oral or written and
whether express or implied) which are not expressly set forth in this agreement
have been made or entered into by either party with respect to the subject
matter hereof.
5.6 Choice
of Law.
The
validity, interpretation, construction and performance of this agreement
shall
be governed by the laws of the State of Oklahoma.
5.7 Severability.
The
invalidity or unenforceability of any provision or provisions of this agreement
shall not affect the validity or enforceability of any other provision, which
shall remain in full force and effect.
5.8 Delivery
of Notice.
Notices
and all other communications contemplated by this agreement shall be in writing
and shall be deemed to have been duly given when personally delivered or
when
mailed by certified mail, return receipt requested and postage prepaid. In
the
case of the Nikkel, mailed notices shall be addressed to him at the home
address
which he most recently communicated to the Corporation in writing. In the
case
of the Corporation, mailed notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of its
Secretary.
4
IN
WITNESS WHEREOF, each
of
the parties has signed this agreement, in the case of the Corporation by
its
duly authorized officer, as of the day and year first above
written.
/s/
John G. Nikkel
John
G. Nikkel
Unit
Corporation
/s/
Larry D. Pinkston
By:
Larry
D. Pinkston
Its:
President
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