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EXHIBIT 10.9
STAY AGREEMENT
This Stay Agreement (the "Agreement") dated as of November __, 2000 between Coho
Energy, Inc., a Texas corporation (the "Company") and _____________________ (the
"Key Employee").
WITNESSETH
WHEREAS the Company has adopted a plan (the "Stay Plan") designed to
ensure the retention of key personnel and to motivate them to manage the
Company's business effectively;
WHEREAS the Company has designated the Key Employee as a participant in
the Stay Plan; provided that such designation may be revoked under certain
circumstances as provided herein;
NOW THEREFORE, the parties hereto hereby agree to follows:
1. Stay Bonus,
(a) Subject to all of the terms and conditions of this Agreement, the
Company shall pay, or cause to be paid, to the Key Employee a lump sum in the
amount of one year salary (the "Stay Bonus"), if the Key Employee continues to
be employed by the Company or its Subsidiaries for a period (the "Stay Period")
of not less than 180 days after consummation of a Change of Control, or, if
there is a Specified Termination Event, as hereinafter defined, prior to the
expiration of the Stay Period. The Stay Bonus shall be payable on the earlier of
10 days after the expiration of the Stay Period or if there is a Specified
Termination Event prior to the expiration of the Stay Period, 10 days after the
later of the Specified Termination Event or the Consummation Date.
(b) All payments hereunder, to the extent required by law, will be made
by the Company net of withholding, social security, Medicare and other similar
taxes and levies.
(c) In the event that the Key Employee is entitled to receive any
payment pursuant to this Agreement and the Key Employee dies after such payment
is due hereunder but before such payment is made, such payment shall be made to
the Key Employee's beneficiary designated hereunder; provided that nothing
contained in this paragraph is intended to increase any compensation or benefits
provided to the Key Employee under this Agreement. At any time after the
execution of this Agreement, the Key Employee may prepare, execute, and file
with the Secretary of the Company a designation of beneficiary. The Key Employee
shall thereafter be free to change beneficiary by filing a new designation of
beneficiary with the Secretary of the Company. In the event the Key Employee
fails to designate a beneficiary, following the death of the Key Employee all
payments of the amounts specified by this Agreement which would have been paid
to the Key Employee's designated beneficiary pursuant to this Agreement shall
instead be paid to the Key Employee's spouse, if any, if she survives the Key
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Employee or, if there is no spouse or she does not survive the Key Employee, to
the Key Employee's estate.
(d) This Agreement shall not constitute a guarantee of continuing
employment.
(e) Any termination of the Key Employee's employment by the Company or
by the Key Employee (other than termination by reason of death) shall be
communicated by written notice to the other party, which notice shall indicate
the reason for such termination and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis therefor.
(f) As used herein, the following terms shall have the following
respective meanings:
"CAUSE" shall mean (i) the engaging by the Key Employee in
willful misconduct that is injurious to the Company or its
Subsidiaries (ii) the embezzlement or misappropriation of
funds or property of the Company or its Subsidiaries by the
Key Employee or the conviction of the Key Employee of a felony
or the entrance of a plea of guilty or nolo contendere by the
Key Employee to a felony, or (iii) the willful failure or
refusal by the Key Employee to substantially perform his
duties or responsibilities that continues after being brought
to the attention of the Key Employee (other than any such
failure resulting from the Key Employee's incapacity due to
Disability). For purposes of this paragraph, no act, or
failure to act, on the Key Employee's part shall be considered
"willful" unless done, or omitted to be done, by him not in
good faith and without reasonable belief that his action or
omission was in the best interest of the Company.
Determination of Cause shall be made by the Compensation
Committee in their sole discretion. Any such determination
shall be final and binding on the Key Employee.
"CHANGE OF CONTROL" means (a) the sale, lease or other
transfer of all or substantially all of the assets of the
Company to any person or group (as such term is used in
Section 13 (d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")); (b) the adoption by the
stockholders of the Company of a plan relating to the
liquidation or dissolution of the Company; (c) the merger or
consolidation of the Company with or into another entity or
the merger of another entity into the Company or any
subsidiary thereof with the effect that immediately after such
transaction the stockholders of the Company immediately prior
to such transaction (or their affiliates) hold less than fifty
percent (50%) of the total voting power of all securities
generally entitled to vote in the election of directors,
managers or trustees of the entity surviving such merger or
consolidation; or (d) the acquisition by any person, entity or
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group, within the meaning of Section 13(d) or 14(d) of the
Exchange Act (other than PPM America, Inc., Appaloosa
Management LP, Oaktree Capital Management LLC, their
respective affiliates or managed funds, or any group
consisting of any of them), of more than fifty percent (50%)
of the voting power of all securities of the Company generally
entitled to vote in the election of directors of the Company.
"CONSUMMATION DATE" shall mean the date on which a Change of
Control becomes effective.
"DISABILITY" shall mean the good faith determination of the
Compensation Committee that the Key Employee has become
physically or mentally disabled or incapacitated to the extent
that he is unable to perform his duties hereunder, and that
such disability or incapacity has continued for a period of
ninety (90) consecutive days; provided, that in reaching its
determination, the Compensation Committee shall consider
medical evaluations by a physician selected by the Key
Employee and a physician selected by the Company (if the Key
Employee fails or refuses to submit to a medical examination,
within thirty (30) days after the Company so requests, by a
physician selected by the Company, then the conditions set
forth in this definition shall be deemed to have been
satisfied upon the expiration of such thirty (30) day period).
"GOOD REASON" shall mean, so long as the Key Employee has not
been guilty of the conduct described in clause (i), (ii) or
(iii) of the definition of "Cause" herein, (i) a reduction in
the Key Employee's base salary in effect immediately prior to
the Effective Date, (ii) a material change in the terms of any
incentive compensation or bonus plan in which the Key Employee
participated immediately prior to the Effective Date if the
effect thereof is to reduce the potential compensation to the
Key Employee thereunder, unless in the case of clauses (i) or
(ii) above, the Key Employee agrees in writing such reduction
of base salary or change in incentive compensation or bonus
plan, or (iii) the relocation by the Company of the Key
Employee's office to a location outside a 20 mile radius of
Dallas, Texas.
"SPECIFIED TERMINATION EVENT" shall mean the termination of
the Key Employee's employment (i) by the Company other than by
reason of the Key Employee's death or Disability or for Cause,
or (ii) by the Key Employee for Good Reason.
2. Term.
(a) Effective Date. This Agreement shall become effective on the date
(the "Effective Date") of execution of this Agreement by the Company and the Key
Employee.
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(b) Termination Date. The term of this Stay Agreement is until December
31, 2002 (the "Termination Date").
3. Representations.
(a) The Company represents and warrants that this Agreement has been
authorized by all necessary corporate action of the Company.
(b) The Key Employee represents and warrants that he is not a party to
any agreement or instrument that would prevent him from entering into or
performing his duties in any way under this Agreement.
4. Compensation Committee. The Compensation Committee of the Board of
Directors of Coho Energy, Inc. ("Compensation Committee") shall be responsible
for the administration and interpretation of this Agreement. Any provisions of
this Agreement to the contrary notwithstanding, the Compensation Committee (i)
may shorten the Stay Period with respect to the Key Employee or (ii) may revoke
the Key Employee's designation as a participant in the Stay Bonus, without
payment or penalty, at any time prior to the end of the Stay Period if, the
Compensation Committee determine, in their sole discretion, that, the Key
Employee has failed to continue to perform his duties in a diligent and proper
manner throughout the Stay Period, or has taken any action which is inconsistent
with his duty of loyalty and duty of care to the Company. Before reaching its
determination under clause (ii) of the preceding sentence, the Compensation
Committee shall give the Key Employee five (5) days prior notice and, if
requested by the Key Employee, the opportunity to appear before the Compensation
Committee within five (5) days after such notice is given. Any action to be
taken by the Compensation Committee shall be taken by majority vote or action.
The initial Compensation Committee shall be Xxx Xxxxxxxxx, Xxxxxxx Xxxxxxx and
Xxxxxxx XxXxxxxx. Upon death or resignation of any member of the Compensation
Committee, the remaining Compensation Committee then in office shall have the
power to fill such vacancy.
5. Entire Agreement. This Agreement contains all the understandings
between the parties hereto pertaining to the matters referred to herein, and
supersedes all undertakings and agreements, whether oral or in writing,
previously entered into by them with respect thereto. The Key Employee
represents that, in executing this Agreement, he does not rely and has not
relied upon any representation or statement not set forth therein made by the
Company with regard to the subject matter, bases or effect of this Agreement or
otherwise.
6. Amendment or Modification, Waiver. No provision of this Agreement
may be amended or waived unless such amendment or waiver is agreed to in
writing, signed by the Key Employee and by a duly authorized representative of
the Compensation Committee. No waiver by any party hereto of any breach by
another party hereto of any condition or provision of 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 time, any prior time or any
subsequent time.
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7. Notices. Any notice to be given hereunder shall be in writing and
shall be deemed given when delivered personally, sent by courier or telecopy or
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other
address as such party may subsequently give notice of hereunder in writing:
To Key Employee at:
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To the Company at:
Coho Energy, Inc.
00000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: President
Any notice delivered personally or by courier under this Section 6
shall be deemed given on the date delivered and any notice sent by telecopy or
registered or certified mail, postage prepaid, return receipt requested, shall
be deemed given on the date telecopied or mailed.
8. Arbitration/Awards. Any claim or dispute arising out of this
Agreement shall be submitted to binding arbitration in Dallas, Texas, pursuant
to the commercial arbitration rules of the American Arbitration Association
("AAA"), with each party selecting one arbitrator from a list of qualified
arbitrators submitted by the AAA, and those two arbitrators selecting a single
qualified arbitrator who will arbitrate the matter. The arbitrators selected
will be attorneys with at least five years of business law experience. The
decision of the selected arbitrators shall be final and binding on both the Key
Employee and the Company, without appeal, and any such decision may be entered
and enforced as a final judgement or order through any Federal or state court
within or outside of the United States. The Company agrees that in any such
proceeding the Key Employee shall be entitled to recover pre-judgment interest
on any amount awarded, together with reasonable attorney's fees and expenses but
in no event shall the Key Employee be entitled to recovery of punitive or
exemplary damages.
9. Failure to Enforce and Waiver. The failure to insist upon strict
compliance with any of the terms, convenants or conditions of this Agreement
shall not be deemed by waiver of such terms, covenants or conditions, and the
waiver or relinquishment of any right or power under this Agreement at any one
or more times shall not be deemed a waiver or relinquishment or such right or
power at any other time or times.
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10. Severability. If any provision of this Agreement or the application
of any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable, shall not be affected thereby, and each provision
hereof shall be validated and shall be enforced to the fullest extent permitted
by law.
11. Survival. 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.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to its conflicts
of laws principles.
13. Headings. All descriptive headings of sections and paragraphs in
this Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.
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COHO ENERGY, INC.
By:
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Xxxxxxx X. XxXxxxxx
President and Chief Executive Officer
