Exhibit 10.2
AGREEMENT
THIS AGREEMENT, made and entered into as of the 17/th/ day of July,
2001 by and between CABOT OIL & GAS CORPORATION, with its principal office at
1200 Enclave Parkway, Houston, Texas 77077 (together with its successors and
assigns permitted under this Agreement, the "Company"), and __________________
(the "Executive"),
W I T N E S S E T H:
WHEREAS, on November 3, 1995, the Compensation Committee of the Board
of Directors of the Company authorized and adopted a Change in Control Program
to provide for certain benefits to certain of the officers of the Company in the
event of certain terminations of employment, and determined that such program
would be in the best interests of the Company; and
WHEREAS, on July 17, 2001, upon the recommendation of its Compensation
Committee, the Board of Directors of the Company authorized and adopted certain
modifications to the Change in Control Program; and
WHEREAS, the Company and Executive both desire to amend that certain
Agreement between the Company and Executive dated as of the ____ day of
____________ to reflect the action by the Board of Directors with respect to the
Company's Change in Control Program, such amendment to be evidenced by entering
into this agreement (this "Agreement"), which supersedes and replaces such prior
agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive (individually a
"Party" and together the "Parties") agree as follows:
1. Definitions:
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(a) "Annual Compensation" shall mean the sum of (I) the Executive's
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Base Salary in effect immediately prior to the Change in Control or, if
greater, immediately prior to the Executive's termination and (II) the
greater of (1) 100% of the Executive's target Bonus with respect to the
fiscal year during which the Change in Control occurred or, if greater, the
fiscal year during which the Executive's termination occurred and (2) the
Executive's actual Bonus paid (including any amount deferred at the
election of the Executive) with respect to any of the three fiscal years
immediately preceding the Change in Control or, if termination of
employment occurs prior to a Change in Control, termination of employment.
(b) "Base Salary" shall mean the Executive's annualized base rate of
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pay with the Company.
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(c) "Beneficiary" shall mean the person or persons named by the
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Executive pursuant to Section 10 hereof or, in the event no such person is
named or survives the Executive, his estate.
(d) "Board" shall mean the Board of Directors of the Company.
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(e) "Bonus" shall mean the cash amount, excluding any amount relating
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to the vesting of options or granting of performance shares or vesting of
restricted stock or any other long-term incentive award, in excess of the
Executive's Base Salary, awarded to the Executive in any year.
(f) "Cause" shall mean:
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(I) dishonesty by Executive which results in significant loss
to the Company and significant personal enrichment to the Executive;
(II) a material failure of Executive to perform his obligations
under this Agreement (other than any such failure resulting from
incapacity due to physical or mental illness); or
(III) the willful and continued failure of the Executive to
perform substantially the Executive's duties with the Company or one
of its affiliates (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand
for substantial performance is delivered to the Executive by the Board
or the Chief Executive Officer of the Company which specifically
identifies the manner in which the Board or Chief Executive Officer
believes that the Executive has not substantially performed the
Executive's duties.
(g) "Change in Control" shall mean:
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(I) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 35% or more of either (1) the then
outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (2) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that for purposes of this
subsection (I), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from the Company, (ii)
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any acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or any entity controlled by the Company or (iv) any acquisition by any
entity pursuant to a transaction which complies with clauses (1), (2)
and (3) of subsection (III) of this definition; or
(II) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was approved by
a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
(III) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets
of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, (1) all or substantially all of
the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the entity resulting from such Business Combination
(including, without limitation, an entity that as a result of such
transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately
prior to such Business Combination, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be,
(2) no Person (excluding any entity resulting from such Business
Combination or any employee benefit plan (or related trust) of the
Company or such entity resulting from such Business Combination)
beneficially owns, directly or indirectly, 35% or more of,
respectively, the then outstanding shares of common equity of the
entity resulting from such Business Combination or the combined
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voting power of the then outstanding voting securities of such entity
except to the extent that such ownership existed prior to the Business
Combination and (3) at least a majority of the members of the board of
directors of the corporation, or the similar managing body of a non-
corporate entity, resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board, providing for such
Business Combination; or
(IV) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company, other than a liquidation or
dissolution in connection with a transaction to which subsection (III)
applies.
(h) "Confidential Information" shall mean information about the
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Company or any of its Subsidiaries or their respective businesses, products
and practices, disclosed to or known or obtained by Executive as a direct
or indirect consequence of or through the Executive's employment with the
Company, which information is not generally known in the business in which
the Company or such Subsidiaries are or may be engaged. However,
Confidential Information shall not include under any circumstances any
information with respect to the foregoing matters which is (I) available to
the public from a source other than the Executive, (II) released in writing
by the Company to the public or to persons who are not under a similar
obligation of confidentiality to the Company and who are not parties to
this Agreement, (III) obtained by the Executive from a third party not
under a similar obligation of confidentiality to the Company, (IV) required
to be disclosed by any court process or any government or agency or
department of any government, or (V) the subject of a written waiver
executed by the Company for the benefit of the Executive.
(i) "Constructive Termination Without Cause" shall mean a termination
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of the Executive's employment at his initiative as provided in Section 2
within 30 days following the occurrence, without the Executive's prior
written consent, of one or more of the following events:
(I) any loss of the Executive's titles or positions in effect
at the time of a Change in Control or any adverse change in the
position to which the Executive reports or the principal departmental
functions that report to the Executive at the time of a Change in
Control (reporting relationships) that in any case results in a
diminution of the Executive's responsibility or the Executive's access
to the Chief Executive Officer of the Company;
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(II) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including status,
offices, titles and reporting relationships), authority, duties or
responsibilities as in effect on the date of a Change in Control, or
any other action by the Company which results in a diminution in such
position, authority, duties or responsibilities, excluding action not
taken in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(III) any reduction in total aggregate compensation, including
the aggregate benefits of all fringe benefits, performance shares,
Bonus opportunity, long-term incentive opportunity or perquisites
applicable to the Executive immediately prior to a Change in Control,
or any reduction in Base Salary, Bonus opportunity or long-term
incentive opportunity from that immediately preceding a Change in
Control;
(IV) the relocation of the Executive's office location as
assigned to him by the Company to a location more than 35 miles from
his office location at the time of a Change in Control;
(V) any failure by the Company to comply with any of the
provisions of this Agreement, other than a failure not occurring in
bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Executive;
(VI) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this
Agreement for Cause; or
(VII) any failure by the Company to comply with and satisfy
Section 5 of this Agreement, provided that the successor contemplated
by Section 5 has received, at least 10 days prior to the giving of
notice of constructive termination by the Executive, written notice
from the Company or the Executive of the requirements of Section 5 of
the Agreement.
(j) "Initial Term" shall mean the period commencing on July 17, 2001
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and ending July 17, 2004.
(k) "Potential Change in Control Period" means the period beginning
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on the date a Potential Change in Control occurs and ending on the earlier
to occur of (i) the expiration of 12 months thereafter or (ii) the Board
determining in good faith that there is no longer a risk of a Change in
Control occurring.
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(l) "Potential Change in Control" shall be deemed to have occurred,
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if:
(I) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;
(II) any person (including the Company) publicly announces an
intention to take or to consider taking actions which if consummated
would constitute a Change in Control;
(III) any Person, who is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing 9.5%
or more of the combined voting power of the Company's then outstanding
securities, increases his beneficial ownership of such securities by
5% or more over the percentage so owned by such Person on the date
hereof; or
(IV) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a potential Change in Control has
occurred.
(m) "Subsidiary" shall mean any corporation in which the Company
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either (I) controls more than 50% of the voting power of all securities of
such corporation or (II) owns more than 50% of the total value of all
equity securities of such corporation.
(n) "Termination Benefits" shall mean:
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(I) an amount of cash equal to the product of (A) Annual
Compensation times (B) three; and
(II) payment with respect to any performance shares granted to
Executive, such payment to be prorated based on actual service
completed at the time of the Executive's termination without Cause or
Constructive Termination Without Cause, and valued according to the
percentage of goal attainment on the date of termination,
notwithstanding any contrary provisions of such grants or any plans
pursuant to which they are granted; and
(III) immediate vesting and exercisability of all of the
Executive's options to purchase securities of the Company, and
immediate vesting and lapse of restrictions on any restricted stock
grants, outstanding at the time of the Executive's termination without
Cause or Constructive Termination Without Cause, whether or not such
would be the result under the provisions of such options or stock
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grants or any plans pursuant to which they are granted, and each of
Executive's options shall remain outstanding until the earlier to
occur of exercise of the option or the expiration of the option at the
end of its full term, without regard to any provision for expiration
prior thereto by reason of termination of employment; and
(IV) at Executive's election, and subject to Executive's
payment of the applicable premiums set forth on Schedule A, continued
medical, dental and life insurance coverage (or reimbursement for the
premiums for such coverage or reimbursement for covered expenses, at
the Company's election) in each case for three years following the
date of the Executive's termination without Cause or Constructive
Termination Without Cause as though the Executive's employment were
continued in effect during such time and without regard to any benefit
reductions implemented after the date of such termination; provided
that Executive may elect to receive one or more of such coverages and
not the others; provided further that COBRA coverage shall commence
only as of the end of such three-year period; and
(V) immediate crediting of an additional three years of
service in the Company's non-qualified retirement plans in which the
Executive is participating at the time of the Change in Control, and
payments under a non-qualified plan equal to the sum of (i) the
additional benefits that would be attributable to a crediting of an
additional three years of service in the Company's qualified plans in
which the Executive is participating at the time of the Change in
Control and (ii) the Executive's benefits that are not vested under
any non-qualified or qualified Company employee pension benefit plans;
and
(VI) reimbursement as bills are submitted by Executive to the
Company for outplacement assistance in an amount not to exceed 15% of
Executive's Base Salary in effect on the date of a Change in Control,
or, if termination of employment occurs prior to a Change in Control,
termination of employment; and
(VII) the sum of (x) any unpaid salary earned by Executive for
periods prior to employment termination plus (y) the Executive's
target Bonus for the fiscal year of termination prorated for the
actual elapsed days of such fiscal year prior to such termination.
Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the
Company to or for the benefit of the
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Executive (whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise, but determined without regard
to any Gross-up Payment required under this paragraph) (a "Payment") would
be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), or any interest or penalties
are incurred by the Executive with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (a "Gross-up Payment") in an
amount such that after payment by the Executive of all income, excise and
other taxes (and any interest and penalties imposed with respect thereto),
the Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments.
(o) "Term" shall mean the term of this Agreement, as described in
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Section 17, consisting of the Initial Term and any extensions thereof.
2. Certain Executive Employment Obligations; Events Triggering
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Termination Benefits:
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(a) Executive agrees not to terminate his employment for reasons
other than death, disability or Constructive Termination without Cause (x)
during the 90-day period following a Change in Control or (y) during a
Potential Change in Control Period.
(b) In the event, within two years following a Change in Control
occurring during the Term, the Executive's employment is terminated by the
Company without Cause (other than by death or disability) or there is a
Constructive Termination Without Cause, then the Executive shall be
entitled to receive the Termination Benefits. The Termination Benefit
described in clauses (I), (II) and (VII) of the definition of Termination
Benefits shall be paid immediately upon such termination in a cash lump
sum. Except as otherwise provided in the definition of Constructive
Termination Without Cause, the failure of the Executive to effect a
Constructive Termination Without Cause as to any one event described in
such definition shall not affect his entitlement to effect a Constructive
Termination Without Cause as to any other such event.
(c) In the event the Executive's employment is terminated prior to a
Change in Control by the Company Without Cause (other than by death or
disability) or there is a Constructive Termination Without Cause and either
(i) the Executive reasonably demonstrates that such termination was at the
request of a third party or as a result of actions by the third party who
has taken steps reasonably calculated to effect a Change in Control or (ii)
the termination occurs during a Potential Change in Control Period, then
the Executive's employment shall be deemed to have terminated following a
Change in Control and the Executive shall be entitled to receive the
Termination Benefits as provided in Section 2(b). Prior to a Change in
Control, the determination of what events constitute grounds for a
Constructive Termination
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Without Cause and the amount of Termination Benefits payable on a
termination shall be made as if a Change in Control occurred immediately
prior to the event or termination, as applicable.
(d) If (i) the Executive's employment is terminated for Cause, (ii)
the Executive voluntarily terminates his employment and such does not
constitute a Constructive Termination Without Cause, or (iii) the
Executive's employment is terminated by death or disability, then the
Executive shall not be entitled to receive the Termination Benefits.
3. No Mitigation; No Offset: In the event of a termination of employment
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under Section 2 of this Agreement, the Executive shall be under no obligation to
seek other employment, and there shall be no offset against the Termination
Benefits due the Executive under this Agreement on account of any remuneration
attributable to any subsequent employment that he may obtain.
4. Effect of Agreement on Other Benefits and Rights of Executive: Nothing
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in this Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the Company
or any of its affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as the Executive may
have under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies at or
subsequent to any termination pursuant to Section 2 shall be payable in
accordance with such plan, policy, practice or program or contract or agreement
except as explicitly modified by this Agreement.
5. Assignability; Binding Nature: This Agreement shall be binding upon
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and inure to the benefit of the Parties and their respective successors, heirs
(in the case of the Executive) and assigns. No obligations of the Company under
this Agreement may be assigned or transferred by the Company except that such
obligations shall be assigned or transferred (as described below) pursuant to a
merger or consolidation in which the Company is not the continuing entity, or
the sale or liquidation of all or substantially all of the assets of the
Company, provided that the assignee or transferee is the surviving entity or
successor to all or substantially all of the assets of the Company and such
assignee or transferee assumes the liabilities, obligations and duties of the
Company, as contained in this Agreement, either contractually or as a matter of
law. The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
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6. Representation: The Company represents and warrants that it is fully
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authorized and empowered to enter into this Agreement and that the performance
of its obligations under this Agreement will not violate any agreement between
the Company and any other person or entity.
7. Entire Agreement: Except to the extent otherwise provided herein, this
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Agreement contains the entire understanding and agreement between the Parties
concerning the subject matter hereof and supersedes any prior agreement.
8. Amendment or Waiver: No provision in this Agreement may be amended
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unless such amendment is agreed to in writing and signed by both the Executive
and an authorized officer of the Company. No waiver by either Party of any
breach by the other Party of any condition or provision contained in this
Agreement to be performed by such other Party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by the Executive or an
authorized representative of the Company, as the case may be. The Company will
advise the Compensation Committee of the Board of any waivers under, or
amendments to, this Agreement.
9. Severability: In the event that any provision or portion of this
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Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.
10. Beneficiaries/References: The Executive shall be entitled to select
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(and change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
the Executive's death by giving the Company written notice thereof. In the event
of the Executive's death or a judicial determination of his incompetence,
reference in this Agreement to the Executive shall be deemed, where appropriate,
to refer to his beneficiary, estate or other legal representative.
11. Governing Law/Jurisdiction: This Agreement shall be governed by and
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construed and interpreted in accordance with the laws of Texas without reference
to principles of conflict of laws.
12. Disputes:
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(a) In the event of any dispute concerning this Agreement, either
Executive or the Company may compel the resolution of such dispute by
binding arbitration pursuant to the commercial arbitration rules of the
American Arbitration Association. The location of such arbitration shall be
the city in which the Executive's principal office with the Company is
located. Upon receipt of a written demand for arbitration, a hearing shall
be scheduled to be held within 60 days of receiving such demand. All costs,
fees and expenses, including attorney fees of both the Executive and the
Company, of any arbitration in connection with this Agreement which results
in any decision or settlement requiring the Company to make a payment or
provide any form of compensation to the Executive in excess of any amount
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agreed to be paid by the Company shall be borne by, and be the obligation
of, the Company. In the event the arbitration does not result in such a
decision or settlement, each party shall bear its own expenses and 50% of
the costs and expenses of the arbitration. The obligation of the Company
under this Section 12 shall survive the termination for any reason of this
Agreement (whether such termination is by the Company, by the Executive,
upon the expiration of this Agreement or otherwise).
(b) In the event that any person asserts that any of the payments or
benefits provided to or in respect of Executive pursuant to this Agreement
or otherwise, by or on behalf of the Company, are subject to excise taxes
under Section 4999 of the Code, the Company shall assume, and pay the costs
of, the dispute with such person but may settle such dispute in its
discretion.
(c) Pending the outcome or resolution of any arbitration, the Company
shall continue payment of all amounts due the Executive without regard to
any dispute but only if Executive agrees in writing that if and to the
extent that the Company prevails he will promptly repay to the Company (or,
regardless of the existence of such agreement, the Company may set off
against any amounts due to the Executive) appropriate amounts plus interest
at the applicable Federal Rate provided for in Section 7872(f)(2)(A) of the
Code from the date any amount was paid by the Company to the Executive.
13. Notices: Any notice given to either Party shall be in writing and
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shall be deemed to have been given when delivered personally or sent by
certified or registered mail, postage prepaid, return receipt requested, duly
addressed to the Party concerned at the address indicated below or to such
changed address as such Party may subsequently give such notice of:
If to the Company or the Board:
Cabot Oil & Gas Corporation
1200 Enclave Parkway
Houston, Texas 77077
Attention: Secretary
If to the Executive:
______________________
______________________
______________________
14. Confidential Information:
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(a) Non-Disclosure: During the Term or at any time thereafter,
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irrespective of the time, manner or cause of the expiration of the Term,
Executive will not directly or indirectly reveal, divulge, disclose or
communicate to any person
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or entity, other than authorized officers, directors and employees of the
Company, in any manner whatsoever, any Confidential Information without the
prior written consent of the Board.
(b) Return of Property: Upon the Executive's termination of
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employment, Executive will surrender to the Company all Confidential
Information, including without limitation, all lists, charts, schedules,
reports, financial statements, books and records of the Company or any
Subsidiary, and all copies thereof, and all other property belonging to the
Company or any Subsidiary, provided Executive shall be accorded reasonable
access to such Confidential Information subsequent to the Executive's
termination of employment for any proper purpose as determined in the
reasonable judgment of the Company.
15. Headings: The headings of the sections contained in this Agreement are
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for convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
16. Counterparts: This Agreement may be executed in two or more
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counterparts.
17. Term of Agreement: This Agreement shall remain in effect for the
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Initial Term, for any extensions of the Term as set forth herein and thereafter
to the extent necessary to maintain this Agreement in effect for a period of 24
months following any Change in Control during the Term. On July 17, 2003 and on
each succeeding anniversary of such date thereafter, the Term shall be
automatically extended by one year from the date upon which it would otherwise
expire, unless prior to such anniversary the Company shall have given written
notice to the Executive that the Term shall not be so extended. In addition, the
respective rights and obligations of the Parties hereunder shall survive any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
CABOT OIL & GAS CORPORATION
Date: ___________________ By________________________________________________
Ray R. Seegmiller
Chairman, President and CEO
EXECUTIVE
Date: ___________________ __________________________________________________
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Attached to and made a part
of that certain Agreement, dated
July 17, 2001, between
Cabot Oil & Gas Corporation
and
__________________
Schedule A
In the event the Executive so elects in accordance with Section
1(n)(IV) of the Agreement and subject to the Company's election rights provided
in the same Section, the premiums payable by the Executive for continued
medical, dental and life insurance coverage shall be such premiums as are in
effect at the Company immediately prior to the Change in Control.
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