8-KLeadership ChangesRegulation FDOther Events+1

ONEOK INC /NEW/ 8-K Report, Executive Changes (Jul 22, 2011)

Filed July 22, 2011For Securities:OKE

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.

Frequently Asked Questions

The primary purpose of the new plan is to standardize and modernize the severance benefits provided to ONEOK's executive officers in the event of a change in control of the company. It aims to replace existing, varied individual termination agreements with a more uniform policy.

The new plan will offer a consistent structure for severance, generally including a multiplier of salary and target bonus, and COBRA premium reimbursement. A key difference is the removal of excise tax gross-up payments, which were present in some of the older agreements. Additionally, the new plan defines "cause" and "good reason" more explicitly within its framework.

The new Change in Control Plan is effective as of July 20, 2011, for officers without existing termination agreements. For officers who currently have termination agreements, these will be terminated effective December 31, 2011, with the new Change in Control Plan covering them starting January 1, 2012.

ONEOK announced a second-quarter 2011 cash dividend of $0.56 per share. This dividend is payable on August 12, 2011, to shareholders of record as of the close of business on August 1, 2011.