Exhibit 10.19
CABOT OIL & GAS CORPORATION
DEFERRED COMPENSATION PLAN
WHEREAS, Cabot Oil & Gas Corporation (the "Company") desires to establish
Cabot Oil & Gas Corporation Deferred Compensation Plan to provide supplemental
retirement income benefits for a select group of management and highly
compensated employees of the Company and certain of its subsidiary or related
companies through deferrals of salary, bonus, Company contributions of matching
amounts which cannot be made to the Company 401 (k) plan due to Internal Revenue
Code limitations, and Company discretionary contributions effective as of June
1, 1998; and
WHEREAS, the Company wants to allow such employees, upon their retirement
from the Company, to defer receipt of the benefits hereunder in order to provide
a regular stream of income during retirement;
NOW, THEREFORE, effective as of June 1, 1998, the Plan is hereby adopted to
read as follows:
ARTICLE I
TITLE AND DEFINITIONS
I.1 Title.
This Plan shall be known as Cabot Oil & Gas Corporation Deferred
Compensation Plan.
I.2 Definitions.
Whenever the following words and phrases are used in this Plan, with the
first letter capitalized, they shall have the meanings specified below.
(a) "Account" or "Accounts" shall mean a Participant's Deferral Account
and Company Contribution Account.
(b) "Base Salary" shall mean a Participant's annual base salary, excluding
bonus, incentive and all other remuneration for services rendered to
Company and prior to reduction for any salary contributions to a plan
established pursuant to Section 125 of the Code or qualified pursuant
to Section 401(k) of the Code.
(c) "Beneficiary" or "Beneficiaries" shall mean the person or persons,
including a trustee, personal representative or other fiduciary, last
designated in writing by a Participant in accordance with procedures
established by the Committee to receive the benefits specified
hereunder in the event of the Participant's death. No beneficiary
designation shall become effective until it is filed with the
Committee. Any designation shall be revocable at any time through a
written instrument filed by the Participant with the Committee with or
without the consent of the previous Beneficiary. However, no
designation of a Beneficiary other than the Participant's spouse shall
be valid unless consented to in writing by such spouse. If there is no
such designation or if there is no surviving designated Beneficiary,
then the Participant's surviving spouse shall be the Beneficiary. If
there is no surviving spouse to receive any benefits payable in
accordance with the preceding sentence, the duly appointed and current
personal representative of the Participant's estate (which shall
include either Participant's probate estate or living trust) shall be
the Beneficiary. In any case where there is no such personal
representative of the Participant's estate duly appointed and acting
in that capacity within 90 days after the Participant's death (or such
extended period as the Committee determines is reasonably necessary to
allow such personal representative to be appointed, but not to exceed
180 days after the Participant's death), then Beneficiary shall mean
the person or persons who can verify by affidavit or court order to
75
the satisfaction of the Committee that they are legally entitled to
receive the benefits specified hereunder. In the event any amount is
payable under the Plan to a minor, payment shall not be made to the
minor, but instead be paid (a) to that person's living parent(s) to
act as custodian, (b) if that person's parents are then divorced, and
one parent is the sole custodial parent, to such custodial parent, or
(c) if no parent of that person is then living, to a custodian
selected by the Committee to hold the funds for the minor under the
Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction
in which the minor resides. If no parent is living and the Committee
decides not to select another custodian to hold the funds for the
minor, then payment shall be made to the duly appointed and currently
acting guardian of the estate for the minor or, if no guardian of the
estate for the minor is duly appointed and currently acting within 60
days after the date the amount becomes payable, payment shall be
deposited with the court having jurisdiction over the estate of the
minor. Payment by Company pursuant to any unrevoked Beneficiary
designation, or to the Participant's estate if no such designation
exists, of all benefits owed hereunder shall terminate any and all
liability of Company.
(d) "Board of Directors" or "Board" shall mean the Board of Directors of
Cabot Oil & Gas Corporation.
(e) "Bonuses" shall mean the annual bonuses earned as of the last day of
the Plan Year, provided a Participant is in the employ of Company on
the last day of the Plan Year.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(g) "Committee" shall mean the Committee appointed by the Board to
administer the Plan in accordance with Article VII.
(h) "Company" shall mean Cabot Oil & Gas Corporation and any successor
corporations. Company shall include each corporation which is a member
of a controlled group of corporations (within the meaning of Section
414(b) of the Code) of which Cabot Oil & Gas Corporation is a
component member, if the Board provides that such corporation shall
participate in the Plan.
(i) "Company Contribution Account" shall mean the bookkeeping account
maintained by the Company for each Participant that is credited with
an amount equal to the applicable of the following: the Company
Discretionary Contribution Amount, Matching Contributions, the Company
SERP Contribution Amount, and earnings and losses pursuant to Section
4.2.
(j) "Company Discretionary Contribution Amount" shall mean, if contributed
by the Company for each Participant for a Plan Year, an additional
discretionary amount allocated to a Participant under this Plan as
determined by the Company. Such amount may differ from Participant to
Participant both in amount, including no contribution, and as a
percentage of Compensation.
(k) "Company SERP Contribution Amount" shall mean the amount of the
benefit provided the Participant under the terms of the supplemental
employee retirement plan ("SERP") agreement between the Company and
the Participant with relation to the Company's Pension Plan, provided
that the Participant elects to defer such amount on a form provided by
the Committee prior to the date of Participant's Retirement and the
Company agrees to contribute such amount to the Company Contribution
Account maintained for the Participant.
(l) "Compensation" shall mean Base Salary and Bonuses that the Participant
is entitled to receive for services rendered to the Company.
(m) "Deferral Account" shall mean the bookkeeping account maintained by
the Committee for each Participant that is credited with amounts equal
to (1) the portion of the Participant's Compensation that he or she
elects to defer and (2) earnings and losses pursuant to Section 4.1.
76
(n) "Disability" shall mean the Participant's inability to perform each
and every duty of his or her occupation or position of employment due
to illness or injury as determined in the sole and absolute discretion
of the Committee.
(o) "Distributable Amount" shall mean the vested balance in the
Participant's Deferral Account and Company Contribution Account.
(p) "Early Distribution" shall mean an election by a Participant in
accordance with Section 6.2 to receive a withdrawal of amounts from
his or her Deferral Account and Company Contribution Account prior to
the time in which such Participant would otherwise be entitled to such
amounts.
(q) "Effective Date" shall mean June 1, 1998.
(r) "Eligible Employee" shall mean members of the Company's executive
management group.
(s) "401 (k) Plan" shall mean the retirement plan maintained by the
Company on the Effective Date that is intended to qualify under
Sections 401 (a) and 401 (k) of the Code and any successor or
replacement plan.
(t) "Fund" or "Funds" shall mean one or more of the investment funds
selected by the Committee pursuant to Section 3.2(b).
(u) "Future Date Withdrawal" shall mean the distribution date elected by
the Participant for an in-service withdrawal of all amounts of
Compensation, vested Matching Contributions and vested Company
Discretionary Contribution Amounts deferred in a given Plan Year, and
earnings and losses attributable thereto, as set forth on the election
form for such Plan Year.
(v) "Hardship Distribution" shall mean a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident
of the Participant or of his or her Dependent (as defined in Section
152(a) of the Code), loss of a Participant's property due to casualty
or other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the control of the Participant. The
circumstances that would constitute an unforeseeable emergency will
depend upon the facts of each case, but in any case a Hardship
Distribution may not be made to the extent that such hardship is or
may be relieved (1) through reimbursement or compensation by insurance
or otherwise, (2) liquidation of the Participant's assets, to the
extent the liquidation of such assets would not itself cause severe
financial hardship, or (3) by cessation of deferrals under this Plan.
(w) "Initial Election Period" for an Eligible Employee shall mean the
30-day period prior to June 30, 1998, or the 30-day period following
the time an employee shall be designated by the Company as an Eligible
Employee.
(x) "Interest" shall mean, for each Fund, an amount equal to the net rate
of gain or loss on the assets of such Fund during each month.
(y) "Investment Fund Subaccount" means one of the separate subaccounts
into which a Participant's Deferral Account is divided pursuant to a
Participant's election under Section 3.2(a).
(z) "Matching Contribution" means, for a given Plan Year, 4% of
Compensation minus the actual amount of matching contributions made to
the Company's 401(k) plan by the Company provided, however, that in no
event shall the Matching Contribution exceed the excess of the dollar
limit imposed by Code Section 402(g) over the actual amount of
matching contribution made to the 401 (k) Plan by the Company.
(aa) "Participant" shall mean any Eligible Employee who becomes a
Participant in this Plan in accordance with Section 2.1.
77
(bb) "Payment Date" shall mean the time as soon as practicable after (1)
the first day of the month following the end of the calendar quarter
in which the Participant's employment terminates for any reason or (2)
the Future Date Withdrawal, if later.
(cc) "Plan" shall mean Cabot Oil & Gas Corporation Deferred Compensation
Plan set forth herein, now in effect, or as amended from time to time.
(dd) "Plan Year" shall mean the initial period beginning on June 1, 1998,
and ending on December 31, 1998, and thereafter the 12 consecutive
month period beginning on each January 1 and ending on December 31.
(ee) "Retirement" shall mean the termination of employment by the
Participant at or after the attainment of age 55 with 10 years of
active service with the Company or at or after attainment of age 65
with five years of active service with the Company.
(ff) "Trust" shall mean Cabot Oil & Gas Corporation Deferred Compensation
Plan Trust.
ARTICLE II
PARTICIPATION
An Eligible Employee shall become a Participant in the Plan by filing
election forms prescribed by the Committee. An Eligible Employee may elect to
defer a portion of his or her Compensation in accordance with Section 3.1 of the
Plan or of his or her Company SERP Contribution in accordance with Section
1.2(k). An Eligible Employee who completes the requirements of this paragraph
shall commence participation in this Plan as of the first day of the month
following receipt by the Company of the completed forms.
ARTICLE III
DEFERRAL ELECTIONS
III.1 Elections to Defer Compensation.
(a) Initial Election Period. Subject to the provisions of Article II, each
Eligible Employee may elect to defer Base Salary and Bonus by filing
with the Committee an election that conforms to the requirements of
this Section 3.1, on a form provided by the Committee, no later than
the last day of his or her Initial Election Period.
(b) General Rule. The amount of Compensation which Employee may elect to
defer is such Compensation earned on or after the Eligible Employee
elects to defer in accordance with Sections 1.2(w) and 3.1(a) and
shall be a flat dollar amount or percentage which shall not exceed
100% of the Eligible Employee's Base Salary and 100% of the Eligible
Employee's Bonus, provided that the total amount deferred by a
Participant shall be limited in any calendar year, if necessary, to
satisfy Social Security tax (including Medicare), income tax and
employee benefit plan withholding requirements as determined in the
sole and absolute discretion of the Committee. The minimum
contribution which may be made in any Plan Year by an Eligible
Employee shall not be less than $5,000, provided such minimum
contribution can be satisfied from either Base Salary and/or Bonuses.
Notwithstanding the previous sentence, the minimum contribution for
the first Plan Year shall be $2,500.
(c) Duration of Compensation Deferral Election. With respect to an
employee who is an Eligible Employee as of the Effective Date, such
Eligible Employee's initial election to defer Base Salary and Bonuses
must be filed on or before June 30, 1998, and is to be effective with
respect to Base Salary and Bonuses received after such deferral
election is processed. A Participant may increase, decrease or
terminate a deferral election with respect to Base Salary or Bonus for
any subsequent Plan Year by filing a new election before December 15,
which election shall be effective on the first day of the next
following Plan Year, provided such election shall apply to Bonuses
payable on the last day of the next following Plan Year. Any
subsequent election with respect to Base Salary and Bonus must be
78
filed prior to December 15 to be effective for the first pay period
beginning in the next following Plan Year. In the case of an employee
who becomes an Eligible Employee after the Effective Date, such
Eligible Employee shall have 30 days from the date he or she has
become an Eligible Employee to make an Initial Election with respect
to Base Salary and Bonus. Such election shall be for the remainder of
the Plan Year, in the event the Plan Year has commenced.
(d) Elections other than Elections during the Initial Election Period.
Subject to the limitations of Section 3.1 (b) above, any Eligible
Employee who has terminated a prior Compensation deferral election may
elect to again defer Compensation, by filing an election, on a form
provided by the Committee, to defer Compensation as described in
Sections 3.1 (b) and 3.1 (c) above. An election Compensation must be
filed in a timely manner in accordance with Section 3.1(c).
III.2 Investment Elections.
(a) At the time of making the deferral elections described in Section 3.1,
the Participant shall designate, on a form provided by the Committee,
the types of Funds the Participant's Account will be deemed to be
invested in for purposes of determining the amount of Interest to be
credited to that account. In making the designation pursuant to this
Section 3.2, the Participant may specify that all or any multiple of
his or her Account be deemed to be invested in one or more of the
types of Funds provided under the Plan as communicated from time to
time by the Committee. Effective as of the end of any calendar month,
a Participant may change the designation made under this Section 3.2
by filing an election, on a form provided by the Committee, at least
five days prior to the end of such month. If a Participant fails to
elect a type of fund under this Section 3.2, he or she shall be deemed
to have elected the Money Market type of Fund.
(b) Although the Participant may designate the type of investments, the
Committee shall not be bound by such designation. The Committee, from
time to time, in its sole discretion, may designate commercially
available investments of each of the types communicated by the
Committee to the Participant pursuant to Section 3.2(a) above to be
the Funds. The interest rate of each such commercially available Fund
shall be used to determine the amount of earnings or losses to be
credited to Participant's Account under Article IV.
ARTICLE IV
DEFERRAL ACCOUNTS AND TRUST FUNDING
IV.1 Deferral Accounts.
The Committee shall establish and maintain a Deferral Account for each
Participant under the Plan. Each Participant's Deferral Account shall be further
divided into separate Investment Fund Subaccounts, each of which corresponds to
a Fund elected by the Participant pursuant to Section 3.2(a). A Participant's
Deferral Account shall be credited as follows:
(a) On an annual basis during each Plan Year, the Committee shall credit
the Investment Fund Subaccounts of the Participant's Deferral Account
with an amount equal to Compensation deferred by the Participant
during each pay period ending in that month in accordance with the
Participant's election under Section 3.2(a); that is, the portion of
the Participant's deferred Compensation that the Participant has
elected to be deemed to be invested in a certain type of Fund shall be
credited to the Investment Fund Subaccount corresponding to that Fund;
and
(b) As of the last day of each month, each Investment Fund Subaccount of a
Participant's Deferral Account shall be credited with Interest in an
amount equal to that determined by multiplying the balance credited to
such Investment Fund Subaccount as of the last day of the preceding
month plus contributions during the current month commencing on the
date such contributions are credited to Investment Fund Subaccount by
the Interest Rate for the corresponding Fund selected by the Company
pursuant to Section 3.2(b); and
79
(c) In the event that a Participant elects for a given Plan Year's
deferral of Compensation to have a Future Date Withdrawal, all amounts
attributed to the deferral of Compensation for such Plan Year shall be
accounted for in a manner which allows separate accounting for the
deferral of Compensation and investment gains and loses associated
with such Plan Year's deferral of Compensation.
IV.2 Company Discretionary Contribution Account.
The Committee shall establish and maintain a Company Contribution Account
for each Participant under the Plan. Each Participant's Company Contribution
Account shall be further divided into separate Investment Fund Subaccounts
corresponding to the Fund elected by the Participant pursuant to Section 3.2(a).
A Participant's Company Contribution Account shall be credited as follows:
(a) On an annual basis during each Plan Year, the Committee shall credit
the Investment Fund Subaccounts of the Participant's Company
Contribution Account with an amount equal to the Company Discretionary
Contribution Amount, if any, and Matching Contribution Amount, if any,
applicable to that Participant that is the proportion of the Company
Discretionary Contribution Amount, if any, and matching Contribution
Amount, if any, which the Participant elected to be deemed to be
invested in a certain type of Fund; and
(b) As soon as practicable following the Retirement date of a Participant,
the Committee shall credit the Investment Fund Subaccounts of the
Participant's Company Contribution Account with an amount equal to the
Company SERP Contribution Amount, if any, applicable to that
Participant that is the proportion of the Company SERP Contribution
Amount which the Participant elected to be deemed to be invested in a
certain type of Fund; and
(c) As of the last day of each month, each Investment Fund Subaccount of a
Participant's Company Contribution Account shall be credited with
Interest in an amount equal to that determined by multiplying the
balance credited to such Investment Fund Subaccount as of the last day
of the preceding month plus contributions during the current month
commencing on the date such contributions are credited to the
Investment Fund Subaccount by the interest rate for the Corresponding
Fund selected by the Company pursuant to Section 3.2(b).
IV.3 Trust Funding.
The Company has created a Trust with BANKERS TRUST COMPANY, a New York
Banking Corporation serving as initial trustee. The Company shall cause the
Trust to be funded each year. The Company shall contribute to the Trust an
amount equal to the amount deferred by each Participant for the Plan Year. The
Company may also contribute such additional amounts as it shall deem necessary
or appropriate.
Although the principal of the Trust and any earnings thereon shall be held
separate and apart from other funds of Company and, except as provided below,
shall be used exclusively for the uses and purposes of Plan Participants and
Beneficiaries as set forth therein, neither the Participants nor their
Beneficiaries shall have any preferred claim on, or any beneficial ownership in,
any assets of the Trust prior to the time such assets are paid to the
Participants or Beneficiaries as benefits and all rights created under this Plan
shall be unsecured contractual rights of Plan Participants and Beneficiaries
against the Company. Any assets held in the Trust will be subject to the claims
of Company's general creditors under federal and state law in the event of
insolvency defined in the Trust.
Except as provided above, assets of the Plan and Trust shall never inure to
the benefit of the Company and the same shall be held for the exclusive purpose
of providing benefits to Participants and their Beneficiaries and deferring
reasonable expenses of administering the Plan and Trust.
80
ARTICLE V
VESTING
A Participant's Deferral Account and the Company SERP Contribution
allocated to a Participant's Company Contribution Account shall be 100% vested
at all times. The Matching Contributions allocated to a Participant's Company
Contribution Account shall be vested in accordance with the vesting schedule
contained in the 401(k) Plan. The Company shall determine the vesting schedule
for Company Discretionary Contribution Amounts at the time each such
contribution is made by the Company.
ARTICLE VI
DISTRIBUTIONS
VI.1 Distribution of Deferred Compensation and Discretionary Company
Contributions.
(a) Distribution Without Future Date Withdrawal.
(1) In the case of a Participant who terminates employment with the
Company due to Disability or Retirement and has an Account
balance of more than $25,000, the Distributable Amount shall be
paid to the Participant (and, after his or her death, to his or
her Beneficiary) in substantially equal quarterly installments
over 15 years commencing on the Participant's Payment Date. An
optional form of benefit may be elected by the Participant, on
the form provided by Company, during his or her Initial Election
Period from among the following: (i) A lump sum distribution
beginning on the Participant's Payment Date, (ii) Substantially
equal quarterly installments over five years beginning on the
Participant's Payment Date, (iii)Substantially equal quarterly
installments over ten years beginning on the Participant's
Payment Date, (iv) Substantially equal quarterly installments
over 20 years beginning on the Participant's Payment Date.
A Participant may modify the form of benefit that he or she has
previously elected, pursuant to this Section 6.1(a)(1), provided
such modification occurs at least one year before the Participant
terminates employment with Company.
(2) In the case of a Participant who terminates employment with the
Company other than due to Disability or Retirement, the
Distributable Amount shall be paid to the Participant in a lump
sum on the Participant's Payment Date.
(3) In the case of a Participant who terminates employment with the
Company for any reason and has an Account balance of $25,000 or
less, the Distributable Amount shall be paid to the Participant
(and, in the event of his or her death, to his or her
Beneficiary) in a lump sum distribution on the Participant's
Payment Date.
The Participant's Account shall continue to be credited with
earnings pursuant to Section 4.1 of the Plan until all amounts
credited to Account under the Plan have been distributed.
(b) Distribution With Future Date Withdrawal. In the case of a Participant
who has elected a Future Date Withdrawal for a distribution while
still in the employ of the Company, such Participant shall receive his
or her Distributable Amount, but only with respect to those deferrals
of Compensation, vested Matching Contributions and vested Company
Discretionary Contributions and earnings on such deferrals of
Compensation, Matching Contributions and Company Discretionary
Contribution Amounts as shall have been elected by the Participant to
be subject to the Future Date Withdrawal in accordance with Section
81
1.2(u) of the Plan. A Participant's Future Date Withdrawal with
respect to amounts of Compensation, Matching Contributions and Company
Discretionary Contribution Amounts deferred in a given Plan Year can
be no earlier than two years from the last day of the Plan Year for
which the deferrals of Compensation, Matching Contributions and
Company Discretionary Contribution Amounts are made. A Participant may
extend the Future Date Withdrawal for any Plan Year, provided such
extension occurs at least one year before the Future Date Withdrawal
and is for a period of not less than two years from the Future Date
Withdrawal. The Participant shall have the right to twice modify any
Future Date Withdrawal. In the event a Participant terminates
employment with the Company prior to a Future Date Withdrawal, other
than by reason of death, the portion of the Participant's Account
associated with Future Date Withdrawals which have not occurred prior
to such termination shall be distributed in a lump sum.
(c) Death Benefit. In the case of a Participant who dies while employed by
the Company, the Participant's Beneficiary shall receive his or her
vested Account Balance in a lump sum.
(d) Death After Benefit Commencement. In the event a Participant dies
after the Participant has terminated from the employ of the Company
and still has a balance in his or her Account, the balance shall
continue to be paid to such Participant's Beneficiary as provided in
Section 6.1(a) above.
VI.2 Early Distributions.
A Participant shall be permitted to elect an Early Distribution from his or
her Account prior to the Payment Date, subject to the following restrictions:
(a) The election to take an Early Distribution shall be made by filing a
form provided by and filed with the Committee prior to the end of any
calendar month.
(b) The amount of the Early Distribution shall be an amount not to exceed
90% of his or her vested Account balance.
(c) The amount described in subsection (b) above shall be paid in a single
cash lump sum as soon as practicable after the end of the calendar
month in which the Early Distribution election is made.
(d) If a Participant receives an Early Distribution of 90% of his vested
Account, the remaining balance of his or her Account shall be
permanently forfeited and the Company shall have no obligation to the
Participant or his or her Beneficiary with respect to such forfeited
amount.
(e) If a Participant receives an Early Distribution of less than 90% of
his or her vested Account balance, the Participant will forfeit an
amount equal to 10% of the Early Distribution and will be ineligible
to participate in the Plan for the remainder of the Plan Year and the
following Plan Year.
VI.3 Hardship Distribution
The committee may, pursuant to rules or policies from time to time adopted
by it and applied in a consistent mannerr, accelerate the date of distribution
to all or any portion of a Participant's Account balance because of a Financial
Hardship. A distribution pursuant to this Section 6.3 of less than the
Participant's entire interest in the Plan shall be made pro rata from his or her
Investment Fund Subaccounts according to the balances in such subaccounts.
Subject to the foregoing payment of any amount with respect to which a
Participant has filed a request under this Section 6.3 shall be made as soon as
practible after approval of such request by the Committee. Distributions made
pursuant to this Section 6.3 shall be without penalty.
VI.4 Inability to Locate Participant.
In the event that the Committee is unable to locate a Participant or
Beneficiary within two years following the required Payment Date, the amount
allocated to the Participant's Deferral Account shall be forfeited. If, after
such forfeiture, the Participant or Beneficiary later claims such benefit, such
benefit shall be reinstated without interest or earnings.
82
ARTICLE VII
ADMINISTRATION
VII.1 Committee.
A committee shall be appointed by, and serve at the pleasure of, the Board
of Directors. The number of members comprising the Committee shall be determined
by the Board which may from time to time vary the number of members. A member of
the Committee may resign by delivering a written notice of resignation to the
Board. The Board may remove any member by delivering a certified copy of its
resolution of removal to such member. Vacancies in the membership of the
Committee shall be filled promptly by the Board.
VII.2 Committee Action.
The Committee shall act at meetings by affirmative vote of a majority of
the members of the Committee. Any action permitted to be taken at a meeting may
be taken without a meeting if, prior to such action, a written consent to the
action is signed by all members of the Committee and such written consent is
filed with the minutes of the proceedings of the Committee. A member of the
Committee shall not vote or act upon any matter which relates solely to himself
or herself as a Participant. The Chairman or any other member or members of the
Committee designated by the Chairman may execute any certificate or other
written direction on behalf of the Committee.
VII.3 Powers and Duties of the Committee.
(a) The Committee, on behalf of the Participants and their Beneficiaries,
shall enforce the Plan in accordance with its terms, shall be charged
with the general administration of the Plan, and shall have all powers
necessary to accomplish its purposes, including, but not by way of
limitation, the following: (1) To select the Funds in accordance with
Section 3.2(b) hereof; (2) To construe and interpret the terms and
provisions of this Plan; (3) To compute and certify to the amount and
kind of benefits payable to Participants and their Beneficiaries; (4)
To maintain all records that may be necessary for the administration
of the Plan; (5) To provide for the disclosure of all information and
the filing or provision of all reports and statements to Participants,
Beneficiaries or governmental agencies as shall be required by law;
(6) To make and publish such rules for the regulation of the Plan and
procedures for the administration of the Plan as are not inconsistent
with the terms hereof; (7) To appoint a plan administrator or any
other agent, and to delegate to them such powers and duties in
connection with the administration of the Plan as the Committee may
from time to time prescribe; and (8) To take all actions necessary for
the administration of the Plan, including determining whether to hold
or discontinue the Policies.
VII.4 Construction and Interpretation.
The Committee shall have full discretion to construe and interpret the
terms and provisions of this Plan, which interpretations or construction shall
be final and binding on all parties, including, but not limited to, the Company
and any Participant or Beneficiary. The Committee shall administer such terms
and provisions in a uniform and nondiscriminatory manner and in full accordance
with any and all laws applicable to the Plan.
VII.5 Information.
To enable the Committee to perform its functions, the Company shall supply
full and timely information to the Committee on all matters relating to the
Compensation of all Participants, their death or other events which cause
termination of their participation in this Plan, and such other pertinent facts
as the Committee may require.
VII.6 Compensation, Expenses and Indemnity.
(a) The members of the Committee shall serve without compensation for
their services hereunder.
(b) The Committee is authorized, at the expense of the Company, to employ
such legal counsel as it may deem advisable to assist in the
performance of its duties hereunder. Expenses and fees in connection
with the administration shall be paid by the Company.
83
(c) To the extent permitted by applicable state law, the Company shall
indemnify and hold harmless the Committee and each member thereof, the
Board of Directors and any delegate of the Committee who is an
employee of the Company against any and all expenses, liabilities and
claims, including legal fees to defend against such liabilities and
claims arising out of their discharge in good faith of
responsibilities under or incident to the Plan, other than expenses
and liabilities arising out of willful misconduct. This indemnity
shall not preclude such further indemnities as may be available under
insurance purchased by the Company or provided by the Company under
any bylaw, agreement or otherwise, as such indemnities are permitted
under state law.
VII.7 Quarterly Statements.
Under procedures established by the Committee, a Participant shall receive
a statement with respect to such Participant's Accounts on a quarterly basis as
of each March 31, June 30, September 30 and December 31.
VII.8 Disputes.
(a) Claim. A person who believes that he or she is being denied a benefit
to which he or she is entitled under this Plan (hereinafter referred
to as "Claimant") must file a written request for such benefit with
the Company, setting forth his or her claim. The request must be
addressed to the President of the Company at its then principal place
of business.
(b) Claim Decision. Upon receipt of a claim, the Company shall advise the
Claimant that a reply will be forthcoming within 90 days and shall, in
fact, deliver such reply within such period. The Company may, however,
extend the reply period for an additional 90 days for special
circumstances.
If the claim is denied in whole or in part, the Company shall inform
the Claimant in writing, using language calculated to be understood by
the Claimant, setting forth: (1) the specified reason or reasons for
such denial; (2) the specific reference to pertinent provisions of
this Plan on which such denial is based; (3) a description of any
additional material or information necessary for the Claimant to
perfect his or her claim and an explanation of why such material or
such information is necessary; (4) appropriate information as to the
steps to be taken if the Claimant wishes to submit the claim for
review; and (5) the time limits for requesting a review under
subsection (c).
(c) Request For Review. Within 60 days after the receipt by the Claimant
of the written opinion described above, the Claimant may request in
writing that the Committee review the determination of the Company.
Such request must be addressed to the Secretary of the Company, at its
then principal place of business. The Claimant or his or her duly
authorized representative may, but need not, review the pertinent
documents and submit issues and comments in writing for consideration
by the Committee. If the Claimant does not request a review within
such 60 day period, he or she shall be barred and estopped from
challenging the Company's determination.
(d) Review of Decision. Within 60 days after the Committee's receipt of a
request for review, after considering all materials presented by the
Claimant, the Committee will inform the Claimant in writing, in a
manner calculated to be understood by the Claimant, the decision
setting forth the specific reasons for the decision containing
specific references to the pertinent provisions of this Plan on which
the decision is based. If special circumstances require that the 60
day time period be extended, the Committee will so notify the Claimant
and will render the decision as soon as possible, but no later than
120 days after receipt of the request for review.
84
ARTICLE VIII
MISCELLANEOUS
VIII.1 Unsecured General Creditor.
Participants and their Beneficiaries, heirs, successors, and assigns shall
have no legal or equitable rights, claims, or interest in any specific property
or assets of the Company. No assets of the Company shall be held in any way as
collateral security for the fulfilling of the obligations of the Company under
this Plan. Any and all of the Company's assets shall be, and remain, the general
unpledged, unrestricted assets of the Company. The Company's obligation under
the Plan shall be merely an unfunded and unsecured promise of the Company to pay
money in the future, and the rights of the Participants and Beneficiaries shall
be no greater than those of unsecured general creditors. It is the intention of
the Company that this Plan be unfunded for purposes of the Code and for purposes
of Title 1 of ERISA.
VIII.2 Restriction Against Assignment.
The Company shall pay all amounts payable hereunder only to the person or
persons designated by the Plan and not to any other person or corporation. No
part of a Participant's Accounts shall be liable for the debts, contracts, or
engagements of any Participant, his or her Beneficiary, or successors in
interest, nor shall a Participant's Accounts be subject to execution by levy,
attachment, or garnishment or by any other legal or equitable proceeding, nor
shall any such person have any right to alienate, anticipate, sell, transfer,
commute, pledge, encumber, or assign any benefits or payments hereunder in any
manner whatsoever. If any Participant, Beneficiary or successor in interest is
adjudicated bankrupt or purports to anticipate, alienate, sell, transfer,
commute, assign, pledge, encumber or charge any distribution or payment from the
Plan, voluntarily or involuntarily, the Committee, in its discretion, may cancel
such distribution or payment (or any part thereof) to or for the benefit of such
Participant, Beneficiary or successor in interest in such manner as the
Committee shall direct.
VIII.3 Withholding.
There shall be deducted from each payment made under the Plan or any other
Compensation payable to the Participant (or Beneficiary) all taxes which are
required to be withheld by the Company in respect to such payment or this Plan.
The Company shall have the right to reduce any payment (or compensation) by the
amount of cash sufficient to provide the amount of said taxes.
VIII.4 Amendment, Modification, Suspension or Termination.
The Committee may amend, modify, suspend or terminate the Plan in whole or
in part, except that no amendment, modification, suspension or termination shall
have any retroactive effect to reduce any amounts allocated to a Participant's
Accounts. In the event that this Plan is terminated, the amounts allocated to a
Participant's Accounts shall be distributed to the Participant or, in the event
of his or her death, his or her Beneficiary in a lump sum within 30 days
following the date of termination.
VIII.5 Governing Law.
This Plan shall be construed, governed and administered in accordance with
the laws of the State of Delaware.
VIII.6 Receipt or Release.
Any payment to a Participant or the Participant's Beneficiary in accordance
with the provisions of the Plan shall, to the extent thereof, be in full
satisfaction of all claims under the Plan against the Committee and the Company.
The Committee may require such Participant or Beneficiary, as a condition
precedent to such payment, to execute a receipt and release to such effect.
VIII.7 Payments on Behalf of Persons Under Incapacity.
In the event that any amount becomes payable under the Plan to a person
who, in the sole judgment of the Committee, is considered by reason of physical
or mental condition to be unable to give a valid receipt therefore, the
Committee may direct that such payment be made to any person found by the
Committee, in its sole judgment, to have assumed the care of such person. Any
payment made pursuant to such determination shall constitute a full release and
discharge of the Committee and the Company.
85
VIII.8 Limitation of Rights and Employment Relationship.
Neither the establishment of the Plan and Trust nor any modification
thereof, nor the creating of any fund or account, nor the payment of any
benefits shall be construed as giving to any Participant or other person any
legal or equitable right against the Company or the trustee of the Trust except
as provided in the Plan and Trust; and in no event shall the terms of employment
of any Employee or Participant be modified or in any way be affected by the
provisions of the Plan and Trust.
VIII.9 Headings.
Headings and subheadings in this Plan are inserted for convenience of
reference only and are not to be considered in the construction of the
provisions hereof.
IN WITNESS WHEREOF, the Company has caused this document to be executed by
its duly authorized officer on this _____ day of __________, 1999.
By _______________________________________
86
CABOT OIL & GAS CORPORATION
DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
Page
ARTICLE I TITLE AND DEFINITIONS......................................... 1
1.1 Title......................................................... 1
1.2 Definitions................................................... 1
ARTICLE II PARTICIPATION................................................. 5
ARTICLE III DEFERRAL ELECTIONS............................................ 5
3.1 Elections to Defer Compensation............................... 5
3.2 Investment Elections.......................................... 6
ARTICLE IV DEFERRAL ACCOUNTS AND TRUST FUNDING........................... 7
4.1 Deferral Accounts............................................. 7
4.2 Company Discretionary Contribution Account.................... 8
4.3 Trust Funding................................................. 8
ARTICLE V VESTING....................................................... 9
ARTICLE VI DISTRIBUTIONS................................................. 9
6.1 Distribution of Deferred Compensation and
Discretionary Company Contributions........................ 9
6.2 Early Distributions........................................... 11
6.3 Inability to Locate Participant............................... 11
ARTICLE VII ADMINISTRATION................................................ 12
7.1 Committee..................................................... 12
7.2 Committee Action.............................................. 12
7.3 Powers and Duties of the Committee............................ 12
7.4 Construction and Interpretation............................... 13
7.5 Information................................................... 13
7.6 Compensation, Expenses and Indemnity.......................... 13
7.7 Quarterly Statements.......................................... 14
7.8 Disputes...................................................... 14
ARTICLE VIII MISCELLANEOUS................................................. 15
8.1 Unsecured General Creditor.................................... 15
8.2 Restriction Against Assignment................................ 15
8.3 Withholding................................................... 16
8.4 Amendment, Modification, Suspension or Termination............ 16
8.5 Governing Law................................................. 16
8.6 Receipt or Release............................................ 16
8.7 Payments on Behalf of Persons Under Incapacity................ 16
8.8 Limitation of Rights and Employment Relationship.............. 16
8.9 Headings...................................................... 17
87