Effective Date: February 22, 2006 Mr. Frederick Dwyer Re: Amendment No. 2 to Change in Control Agreement Dear Frederick:
Exhibit
10.6
Effective
Date: February 22, 2006
Xx.
Xxxxxxxxx Xxxxx
Re:
Amendment No. 2 to Change in Control Agreement
Dear
Xxxxxxxxx:
When
countersigned by you, this letter will serve as an amendment (referred to here
as “Amendment
No. 2”)
to
your existing change in control agreement with KCS Energy, Inc. (the
“Company”)
dated
May 1, 2003, as amended by Amendment No.1 (the “Original
Agreement”).
1.
Cash
Payment.
Section
2.1.1 of the Original Agreement is amended by deleting that provision in its
entirety and substituting the following terms:
Cash
Payment.
The Company shall pay to Executive: (i) an amount equal to one (1) times the
greater of (a) the Executive’s annual base salary in effect as of the
Termination Date or (b) the Executive’s annual base salary in effect immediately
preceding the Change in Control; plus (ii) an amount equal to one (1) times
the
greater of (a) the amount of any cash bonus payable to the Executive for the
year in which the Termination Date falls (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 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 3 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.
2.
Bonus
Payment.
New
Section 3 is added to the Original Agreement to provide as follows:
Bonus
Payment.
(a) In
the
event of a Change in Control, if prior to the Change in Control a bonus for
the
Executive has been determined by the compensation committee or the board of
directors of the Company for the year immediately preceding the year in which
a
Change in Control occurs, then the Executive shall receive a bonus payment
for
such year in the amount so determined.
(b)
In the event of a Change in Control, if prior to the Change in Control the
Executive has not been awarded a bonus for the year immediately preceding the
year in which the Change in Control falls by the compensation committee or
the
board of directors of the Company, then the Executive shall receive a bonus
payment for such preceding year in an amount equal to the greater of (i) 100%
of
Executive’s targeted bonus payment for such year or (ii) the bonus
for
-2-
such
preceding year determined after the Change in Control by the compensation
committee or the board of directors of the Company under the bonus plan in
effect immediately prior to the Change in Control.
(c)
Subject to the provisions of Section 4(b), any bonus payable to Executive
pursuant to Section 3(a) shall be paid by the later of (i) the date that is
2-1/2 months after the end of the calendar year immediately preceding the
calendar year in which the Change in Control occurred and (ii) the date that
is
2-1/2 months after the end of the Company’s taxable year immediately preceding
the Company’s taxable year in which the Change in Control occurred, 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 Change in Control
occurred.
(d)
Subject to the provisions of Section 4(b), any bonus payable to the
Executive pursuant to Section 3(b) shall be paid by the later of (i) the date
that is 2-1/2 months after the end of the calendar year in which the Change
in
Control occurred and (ii) the date that is 2-1/2 months after the end of the
Company’s taxable year in which the Change in Control occurred, or as soon after
the later of such dates as administratively feasible, but in any event before
the end of the calendar year immediately following the calendar year in which
the Change in Control occurred.
3.
Payment
Terms.
Section
3 of the Original Agreement is renumbered as Section 4 and is amended by
deleting that Section in its entirety and substituting the following new Section
4:
Payment
Terms.
(a)
Except as provided by the remaining provisions of this Section 4, all payments
to the Executive required to be made pursuant to Section 2.1.1 shall be made
by
the Company within five (5) days after the Termination Date, and all payments
to
the Executive required to be made under clause (b) of the last sentence of
Section 2.1.3 shall be made within five (5) days of the 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 the Executive’s option.
All payments required to be made to the Executive pursuant to this Agreement
shall be subject to the withholding of such taxes as may be required by
law.
(b)
In the event that any payment made pursuant to this Agreement is
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”), and
Executive is a specified employee as defined in Section
409A(a)(2)(B)(i) of the Code, then the portion (which may be all) of such
payment 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 such payment constitutes NQDC and
whether Executive is a specified employee within the meaning of Section
409A(a)(2)(B)(i) of the Code 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
Executive or any other person for any amounts incurred by the Executive or
such
other
-3-
person
by
reason of the determination made by the board of directors of the Company
pursuant to this Section 4(b) 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.
4.
Original
Agreement Ratified.
In all
other respects, the Original Agreement remains in effect, and is ratified by
you
and by the Company.
*
* *
Please
sign below and return a signed copy to the Company to confirm your agreement
with this Amendment No. 2.
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Very
truly yours,
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KCS
Energy, Inc.
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By:
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/s/ Xxxxx Christmas | |
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Xxxxx
Christmas
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Chairman
and Chief Executive Officer
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Accepted
and agreed to:
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| /s/ Xxxxxxxxx Xxxxx | ||
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Xxxxxxxxx
Xxxxx
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