Summary
ONEOK Inc. (OKE) filed an 8-K on July 22, 2011, primarily detailing changes to its executive severance policies and announcing a quarterly dividend. The company established a new "Officer Change in Control Severance Plan" (Change in Control Plan) to standardize severance benefits for its executive officers in the event of a change in control. This new plan replaces existing individual termination agreements over a transition period, aiming to provide a more consistent framework of severance payments, including salary and bonus multiples, and COBRA premium reimbursement, while removing excise tax gross-up provisions found in some older agreements. In addition to the executive compensation update, ONEOK announced its second-quarter 2011 cash dividend of $0.56 per share. This dividend is payable to shareholders of record on August 1, 2011, with the payment date set for August 12, 2011. For investors, these announcements provide clarity on executive retention and compensation strategies during potential corporate transitions, as well as information regarding the company's commitment to returning capital to shareholders through dividends.
Key Highlights
- 1ONEOK established a new "Officer Change in Control Severance Plan" effective July 20, 2011.
- 2The new plan standardizes severance benefits for executive officers in case of termination without cause or resignation for good reason following a change in control.
- 3Severance under the new plan can range from one to three times the sum of annual salary plus target annual bonus.
- 4The Change in Control Plan includes reimbursement of COBRA premiums for 18 months post-termination.
- 5Unlike previous agreements, the new plan will not provide excise tax gross-up payments to officers.
- 6Existing individual termination agreements will be phased out by January 1, 2012.
- 7ONEOK announced a second-quarter 2011 cash dividend of $0.56 per share, payable August 12, 2011.