Exhibit 10.2
CABOT OIL & GAS
CORPORATION
SUPPLEMENTAL EMPLOYEE INCENTIVE
PLAN II
(Effective as of July 1,
2008)
1. Plan. Effective as
of July 1, 2008 (the “Effective Date”), Cabot
Oil & Gas Corporation (the “Company”) hereby
establishes the Cabot Oil & Gas Corporation Supplemental
Employee Incentive Plan II (the “Plan”) to reward
certain non-officer employees of the Company by providing the
opportunity to earn cash incentive compensation upon the
Company’s attainment of certain pre-determined performance
goals with regard to value creation.
2. Objectives. The
Company anticipates that, by tying incentive compensation to value
creation, the Plan will motivate Eligible Employees to align their
interests with the Company’s long-term business plan and
shareholder interests. The Plan’s further objective is to
facilitate the Company’s ability to attract and retain
talented employees by differentiating the Company as an employer of
choice in a competitive talent market. By providing some
compensation protection to Eligible Employees, the Plan also
mitigates possible concerns about the stability of employment
relationships in a consolidating industry. Any benefit payable
under this Plan is and shall be characterized for all purposes as a
retention bonus payment.
3. Definitions. The
terms set forth below shall have the following meanings:
“Board”
means the Board of Directors of the
Company.
“Calendar
Quarter” means each
of the following periods of each year: (a) January 1 through
March 31; (b) April 1 through June 30;
(c) July 1 through September 30; and
(d) October 1 through December 31.
“ Change in Control
” means:
(I) The acquisition by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of 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) 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
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(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
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.
Notwithstanding the foregoing, none
of the events described in subsections (I) through (IV) above
shall constitute a Change in Control unless such event also meets
the requirements of Section 409A(a)(2)(A)(v) of the Code and
the related regulations and guidance.
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“ Closing Price ”
means, for any given trading day, the closing price of a share of
Common Stock, as reported by Bloomberg Finance L.P. or a data
source selected by the Committee.
“ Code ” means
the Internal Revenue Code of 1986, as amended from time to
time.
“ Committee ”
means the Compensation Committee of the Board.
“ Common Stock ”
means the Common Stock, par value $.10 per share, of the
Company.
“Competitor” means any person or entity that is engaged in
the exploration and production of oil, gas or other hydrocarbons,
the transportation thereof, any other midstream activities or the
provision of oilfield services.
“Deferred
Distribution” means
the portion of an Interim Distribution or Final Distribution to be
deferred in accordance with Section 9.
“Deferred Payment
Date” means the
date on which a Deferred Distribution shall be made, as determined
in accordance with Section 9.
“ Disability ”
means the condition of an Eligible Employee who has been determined
to be disabled in accordance with the terms of the Cabot Group
Health and Welfare Plan; provided, however, that the terms of such
plan define disability in a manner consistent with Treasury
Regulation § 1.409A-3(i)(4).
“Early Achievement
Period” means the
period from the Effective Date through December 31,
2010.
“ Eligible Employee
” means any full-time employee who (a) is not an officer
of the Company on the relevant Trigger Date and (b) has
completed at least one year of continuous service with the Company
that includes such Trigger Date.
“ Eligible
Retiree” shall have the meaning set forth in
Section 7 or Section 8 of this Plan, as
applicable.
“ Exchange Act ”
means the Securities Exchange Act of 1934, as amended from time to
time.
“ Final Deadline
” means June 30, 2012.
“ Final Distribution
” means a distribution under Section 8.
“ Final Payment Date
” means the fifteenth business day following the Final
Trigger Date.
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“ Final Price Goal
” means $105 per share of Common Stock (appropriately
adjusted by the Committee to reflect any stock splits, stock
dividends or extraordinary cash distributions to
stockholders).
“ Final Trigger Date
” means the first date that meets the specifications of the
next sentence. If, for any 20 trading days (which need not be
consecutive) that fall within a period of 60 consecutive trading
days ending on or before the Final Deadline, the Closing Price of
the Common Stock on each of such 20 trading days equals or exceeds
the Price Goal, then the Final Trigger Date shall be the last of
such 20 trading days.
“ Interim Deadline
” means June 30, 2010.
“ Interim Distribution
” means a distribution under Section 7.
“ Interim Payment Date
” means the fifteenth business day following the Interim
Trigger Date.
“ Interim Price Goal
” means $85 per share of Common Stock (appropriately adjusted
by the Committee to reflect any stock splits, stock dividends or
extraordinary cash distributions to stockholders).
“ Interim Trigger Date
” means the first date that meets the specifications of the
next sentence. If, for any 20 trading days (which need not be
consecutive) that fall within a period of 60 consecutive trading
days ending on or before the Interim Deadline, the Closing Price of
the Common Stock on each of such 20 trading days equals or exceeds
the Interim Price Goal, then the Interim Trigger Date shall be the
last of such 20 trading days.
“ Other Employee
” means any full-time employee who (a) is not an officer
of the Company on the relevant Trigger Date and (b) has not
completed one year of continuous service with the Company that
includes such Trigger Date.
“ Payment Date ”
means the Interim Payment Date or the Final Payment Date, as
applicable.
“ Price Goal”
means either the Interim Price Goal or the Final Price Goal, as
applicable.
“ Retired ”
describes a person who has retired from employment with the Company
(a) at or after age 55 with at least 10 years of service or
(b) at or after age 65 with at least 5 years of
service.
“ Trigger Date ”
means either the Interim Trigger Date or the Final Trigger Date, as
applicable.
4. Administration. The
Plan shall be administered by the Compensation Committee of the
Board of Directors (the “Committee”).
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The Committee shall have full and
exclusive power and authority to administer the Plan and to take
all actions that are specifically contemplated hereby or are
necessary or appropriate in connection with the administration
hereof. The Committee shall also have full and exclusive power to
interpret the Plan and to adopt such rules, regulations and
guidelines for carrying out the Plan as it may deem necessary or
proper. Subject to the limitations of Section 12, the
Committee may, in its discretion, (a) eliminate or make less
restrictive any restrictions applicable to any person or class of
persons, (b) waive any restriction or other provision of the
Plan, (c) extend the Final Deadline or the Interim Deadline,
(d) amend or modify the Plan in any manner that is either
(i) not materially adverse to any Eligible Employee, Eligible
Retiree or Other Employee or (ii) consented to by such
Eligible Employee, Eligible Retiree or Other Employee. The
Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan in the manner and to the
extent the Committee deems necessary or desirable to further the
Plan purposes. Any decision of the Committee in the interpretation
and administration of the Plan shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on
all parties concerned. No member of the Committee shall be liable
for anything done or omitted to be done by him, by any member of
the Committee or by any officer of the Company in connection with
the performance of any duties under the Plan, except for his own
willful misconduct or as expressly provided by statute.
5. Delegation of
Authority. The Committee may delegate to the Chief
Executive Officer and to other senior officers of the Company its
duties under this Plan, subject to the conditions or limitations
established by the Committee.
6.
Eligibility.
(a) The Co
