SUPPLEMENTAL EMPLOYMENT AGREEMENT
Exhibit
10.4
WHEREAS,
Xxxxx Xxx Xxxxx (the “Executive”) and KCS Energy, Inc., (the “Company”) are
parties to an Employment Agreement dated December 1, 2001, (the “2001
Agreement”) setting forth certain terms and conditions of employment.
WHEREAS,
the Executive and the Company desire to modify the terms of the 2001 Agreement
in a manner that benefits both the Executive and the Company.
ACCORDINGLY,
The Executive and the Company agree to enter into a Supplemental Employment
Agreement (the “Amendment”) containing the following terms and
conditions:
1. Because
the Amendment affects the obligations of the parties under Section 3 of the
2001
Agreement, this Amendment constitutes a modification of Section 3 of the 2001
Agreement made in compliance with Section 14.3 of the 2001 Agreement.
Accordingly, the Executive and the Company agree that this Amendment serves
to
modify the provisions set forth in Section 3 of the 2001 Agreement.
2. Because
the Amendment affects the obligations of the parties under Section 4 of the
2001
Agreement, this Amendment constitutes a modification of Section 4 of the 2001
Agreement made in compliance with Section 14.3 of the 2001 Agreement.
Accordingly, the Executive and the Company agree that this Amendment serves
to
modify the provisions set forth in Section 4 of the 2001 Agreement.
3. Because
the Amendment affects the obligations of the parties under Section 8 of the
2001
Agreement, this Amendment constitutes a modification of Section 8 of the 2001
Agreement made in compliance with Section 14.3 of the 2001 Agreement.
Accordingly, the Executive and the Company agree that this Amendment serves
to
modify the provisions set forth in Section 8 of the 2001 Agreement.
4. Section
3
of the 2001 Agreement is hereby amended by deleting the words “President of KCS
Energy Services, a subsidiary of the Company” and replacing them with the words
“Senior Vice President, Marketing and Risk Management of the Company.”
5. Section
4
of the 2001 Agreement is amended by adding a new provision designated as Section
4.2, and by renumbering the provision in the 2001 Agreement previously
designated as 4.2, so that it is now Section 4.3. The Executive and the Company
agree that the new provision constituting Section 4.2 provides as
follows:
4.2
Any bonus payable to the Executive pursuant to Section shall be paid by the
later of (i) the date that is 2-1/2 months after the end of the calendar year
for which such bonus is determined and (ii) the date that is 2-1/2 months after
the end of the Company’s taxable year for which such
bonus
is
determined, or as soon after the later of such dates as administratively
feasible, but in any event before the end of the calendar year in which the
later of such dates occurs. The Company and the Executive agree that a Change
in
Control should not result in the forfeiture of any bonus payable in accordance
with Section 4.1. Accordingly, the Company agrees that any bonus payable to
Executive in accordance with Section 4.1 shall be paid as provided in this
Section 4.2 if a Change in Control occurs after the end of the applicable year,
but before the bonus is actually paid.
6. The
Executive and the Company hereby agree that Section 8.4 of the 2001 Agreement
is
amended by replacing the provisions found in Section 8.4 of the 2001 Agreement
and substituting the following terms:
8.4
If the Company terminates Executive’s employment other than for Cause,
death or permanent disability or Executive terminates his employment for Good
Reason, at any time within 2 years after a Change in Control, then the Company
shall pay to Executive: (i) an amount equal to two (2) times the greater of
(a)
Executive’s annual base salary in effect as of the Termination Date or (b)
Executive’s annual base salary in effect immediately preceding the Change in
Control; plus (ii) an amount equal to two (2) times the greater of (a) the
amount of any cash bonus payable to the Executive for the year in which the
Termination Date occurs (provided that if the Executive’s bonus for such year
has not been determined as of the Termination Date, then the amount of the
bonus
shall be determined as if the Executive earned 100% of the targeted bonus for
such year) or (b) the amount of the last annual cash bonus paid to the Executive
prior to the Change in Control; plus (iii) the amount of any earned but unpaid
salary as of the Termination Date; plus (iv) the amount of any cash bonus
payable to the Executive pursuant to Section 4.1
to the
extent not paid prior to the Termination Date; plus (v) an amount equal to
the
greater of (a) a pro rata amount of the Executive’s targeted bonus for the year
in which the Termination Date falls or (b) such bonus for such year as may
be
determined by the compensation committee or the board of directors of the
Company in their sole discretion; plus (vi) the amount of any accrued but unpaid
vacation pay through the Termination Date.
7. The
Executive and the Company hereby agree that Section 8.7 of the 2001 Agreement
is
amended by replacing the provisions found in Section 8.7 of the 2001 Agreement
and substituting the following terms:
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8.7
(a)
Any
payments due to the Executive pursuant to Section 8.1 shall be made in
accordance with the timing arrangements under which the Company normally
compensates its employees.
(b)
Any salary and vacation pay amounts due to the Executive pursuant to Section
8.2
shall be paid in accordance with the timing arrangements under which the Company
normally compensates its employees. Any bonus payments due to the Executive
pursuant to Section 8.2 shall be made by the later of (i) the date that is
2-1/2
months after the end of the calendar year in which the Termination Date falls
and (ii) the date that is 2-1/2 months after the end of the Company’s taxable
year in which the Termination Date falls, or as soon after the later of such
dates as administratively feasible, but in any event before the end of the
calendar year in which the later of such dates occurs.
(c)
In the event any payments
to Executive required to be made pursuant to Sections 8.3, 8.4., 8.6, or any
other provision of this Agreement are
determined, in
whole
or in part,
to
constitute “nonqualified deferred compensation” (“NQDC”) within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then
the portion (which may be all) of such
payments that constitutes NQDC will not be paid before the date which is six
(6)
months after the Executive’s “separation from service” (as such term is defined
in Section 409A of the Code).
The
determination of whether and what amount of any
payments
to Executive required to be made pursuant to Sections 8.3, 8.4, 8.6, or any
other provision of this Agreement constitute
NQDC shall
be
made by the board of directors of the Company in consultation with legal
counsel, and any such determination shall
be
final and binding on the Company and the Executive. The Company makes no
representation as to whether any such payment or any part thereof constitutes
or
may constitute NQDC. Neither the Company nor any of its directors, officers,
employees, agents, or professional advisers shall have any liability to the
Executive or any other person for any amounts incurred by the Executive or
such
other person by reason of the determination made by the board of directors
of
the Company pursuant to this Section 8.7(c) or any action taken or omitted
by
the board of directors of the Company, the Company or any of the Company’s
directors, officers, employees, agents, or professional advisers in the course
of or as a result of making such determination.
(d)
Subject to the provisions of Section 8.7(c), any and
all
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payments
to Executive required to be made under clause (b) of the last sentence of
Section 8.6 shall be made within five (5) days of Executive’s furnishing the
Company with evidence of the cost of such insurance, provided that the Executive
furnishes such evidence within six (6) months after the Termination Date, in
each case by wire transfer or Company check at Executive’s option.
(e)
All payments required to be made to Executive pursuant to this Agreement shall
be subject to the withholding of such taxes as may be required by law.
8. This
Amendment does not modify or otherwise affect any provision of the 2001
Agreement other
than as
expressly set forth in this Amendment, and, except as modified by this
Amendment, the 2001 Agreement remains in full force and effect.
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KCS
Energy, Inc.
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By:
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/s/ Xxxxx X. Christmas | |
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Xxxxx
Xxx Xxxxx
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| /s/ Xxxxx Xxx Xxxxx | ||
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