UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
On October 1, 2021 (the “Closing Date”), Double C Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and a wholly owned subsidiary of Cabot Oil & Gas Corporation, a Delaware corporation (“Cabot”), completed its merger (the “Merger”) with and into Cimarex Energy Co., a Delaware corporation (“Cimarex”), as a result of which Cimarex became a subsidiary of Cabot. The Merger was effected pursuant to the Agreement and Plan of Merger, dated as of May 23, 2021, by and among Cabot, Merger Sub and Cimarex (as amended on June 29, 2021, the “Merger Agreement”). On the Closing Date, Cabot changed its name to “Coterra Energy Inc.” (the “Company” or “Coterra”).
Pursuant to the Merger, each share of Cimarex common stock, par value $0.01 per share (“Cimarex Common Stock”), issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than each share of Cimarex Common Stock held immediately prior to the Effective Time by Cabot or Merger Sub, or by Cimarex as treasury shares, in each case, not held on behalf of third parties), was automatically converted into the right to receive 4.0146 shares of common stock, par value $0.10 per share, of the Company (“Company Common Stock”). No fractional shares of Company Common Stock will be issued in the Merger, and holders of shares of Cimarex Common Stock will, instead, receive cash in lieu of fractional shares of Company Common Stock, if any, as provided in the Merger Agreement.
In connection with the Merger, the Company issued approximately 414 million shares of Company Common Stock, which represents approximately 50.5% of the outstanding Company Common Stock after giving effect to such issuance. In addition, the Company reserved for issuance approximately 3.2 million additional shares of Company Common Stock in connection with (1) the exercise or conversion of certain of Cimarex’s outstanding equity awards, which became exercisable for or convertible into Company Common Stock pursuant to the Merger Agreement, and (2) the conversion of Cimarex’s outstanding 8 1∕8% Series A Cumulative Perpetual Convertible Preferred Stock, par value $0.01 per share, which became convertible into Company Common Stock as a result of the Merger.
As of the Closing Date, Coterra is headquartered in Houston, Texas. The Company is changing its New York Stock Exchange (“NYSE”) trading symbol “COG” to “CTRA” and expects to begin trading under the “CTRA” trading symbol effective as of the open of trading on the NYSE on October 4, 2021.
The foregoing description of the Merger Agreement and the transactions contemplated thereby is not complete and is subject to and qualified in its entirety by reference to the Merger Agreement, which was filed as Annex A to Cabot’s definitive joint proxy statement/prospectus filed with the Securities and Exchange Commission (the “SEC”) on August 23, 2021 (the “Joint Proxy Statement/Prospectus”), and the terms of which are incorporated into this Item 2.01 by reference.
| Item 3.03 | Material Modification to Rights of Security Holders. |
The disclosure set forth in Item 2.01 and Item 5.03 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Pursuant to the Merger Agreement, the Board of Directors of Coterra (the “Board”) immediately following the Effective Time is composed of (A) five persons who were members of the Board of Directors of Cabot (the “Cabot Board”) prior to the Effective Time and (B) five persons who were members of the Board of Directors of Cimarex (the “Cimarex Board”) prior to the Effective Time.
Director Resignations
In accordance with the director selection process provided for in the Merger Agreement, on September 28, 2021, Messrs. Rhys J. Best, Peter B. Delaney and W. Matt Ralls submitted their resignations from the Cabot Board, effective as of the closing of the Merger and, as of the Effective Time, ceased to be directors of the Company. Such resignations were not the result, in whole or in part, of any disagreement with the Company or the Company’s management.
Director Appointments
Upon the Effective Time, in accordance with the director selection process provided for in the Merger Agreement, the Board appointed Mr. Thomas E. Jorden, Ms. Frances M. Vallejo, Ms. Lisa A. Stewart, Mr. Hans Helmerich and Mr. Paul N. Eckley to the Board. Each of the new directors was a member of the Cimarex Board immediately prior to the Effective Time. In addition, on the Closing Date, in accordance with the provisions governing post-closing corporate governance set forth in the Company’s Amended and Restated Bylaws, Mr. Dan O. Dinges was appointed as Executive Chairman of the Board and Ms. Stewart was appointed as Lead Independent Director. Mr. Dinges will serve as Executive Chairman of the Board until the earlier of (1) December 31, 2022 or (2) any date on which Mr. Dinges ceases to serve as a member of the Board for any reason. Each other person will serve as a director of the Company until such person’s successor shall be appointed or such person’s earlier death, resignation or removal in accordance with the Company’s organizational documents.
Each of Messrs. Boswell, Watts, Eckley, Helmerich, and Mses. Ables, Brock, Stewart and Vallejo may receive compensation for his or her services on the Board as determined by the Board following the Effective Time.
Additional information relating to the former Cimarex directors who were added to the Board is set forth below (ages are as of October 1, 2021):
Thomas E. Jorden, 63, was named Chief Executive Officer and President of Cimarex in September 2011 and Chairman of the Cimarex Board in August 2012 and served in those positions until the Effective Time. Mr. Jorden previously served as Executive Vice President of Exploration since the formation of Cimarex in September 2002 and held that same position at Key Production Company, Inc. (“Key”), Cimarex’s predecessor. He joined Key in November 1993 as Chief Geophysicist and later as Vice President of Exploration (October 1999 to September 2002). Prior to joining Key, Mr. Jorden was with Union Pacific Resources and Superior Oil Company. He is a graduate of the Colorado School of Mines where he earned B.S. and M.S. degrees in Geophysics. Mr. Jorden serves as Chairman of the Board of Trustees for the Colorado School of Mines.
Frances M. Vallejo, 56, served on the Cimarex Board from May 2017 until the Effective Time. She is a former executive officer of ConocoPhillips where she began her career in 1987. She served as Vice President Corporate Planning and Development from April 2015 until December 2016 and as Vice President and Treasurer from October 2008 until March 2015. Prior to October 2008, she served as General Manager Corporate Planning and Budgets, Vice President Upstream Planning & Portfolio Management, Assistant Treasurer, Manager Strategic Transactions, and in other geophysical, commercial, and finance roles. Ms. Vallejo served as a member of the Board of Trustees of Colorado School of Mines from 2010 until 2016 and is a member of Colorado School of Mines Foundation Board of Governors since 2017. Ms. Vallejo currently serves on the Board of Directors of Crestwood Equity GP LLC.
Lisa A. Stewart, 64, served on the Cimarex Board from October 2015 until the Effective Time. Ms. Stewart serves as Executive Chairman of Sheridan Production Partners, a privately-owned oil and gas operating company she founded in 2006. Before her appointment to the Cimarex Board, Ms. Stewart served as President and Chief Executive Officer of Sheridan from December 2016 to April 2020. Ms. Stewart served as Chairman and Chief Investment Officer of Sheridan from its founding in 2006. Prior to 2006, Ms. Stewart served as Executive Vice President of El Paso Corporation and President of El Paso E&P from 2004 to 2006. From 1984 to 2004, Ms. Stewart was with Apache Corporation where she most recently served as Executive Vice President with responsibility for reservoir engineering, business development, land, environmental, health and safety, and corporate purchasing. Ms. Stewart served as a director at Talisman Energy Inc. from 2009 until its acquisition in May 2015, including as the Chair of the Reserves Committee and a member of the Human Resources Committee. Ms. Stewart currently serves on the Board of Directors of Jadestone Energy and Western Midstream Partners, LP.
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Hans Helmerich, 63, served on the Cimarex Board from 2002 until the Effective Time. Mr. Helmerich has been the Chairman of the Board of Helmerich & Payne since 2012 and has served as President and Chief Executive Officer of Helmerich & Payne from 1989 to 2014. Mr. Helmerich also serves as a director of Atwood Oceanics, Inc.
Paul N. Eckley, 66, served on the Cimarex Board from May 2019 until the Effective Time. Mr. Eckley retired from State Farm® Corporate Headquarters, where he most recently served as Senior Vice President – Investments, a position he held since 1998. He joined State Farm in 1977 as an investment analyst, was promoted to Investment Officer in 1990, and became Vice President – Common Stocks in 1995. Mr. Eckley was a director of the Emerging Markets Growth Fund owned by the Capital Group from 2005 until November 2016 and served as Chairman of the Board for the fund from January 2014 through November 2016. Mr. Eckley earned a B.S. degree in economics and history from Northwestern University and an MBA from the University of Chicago.
Committee Appointments
On the Closing Date, in accordance with the provisions governing post-closing corporate governance set forth in the Company’s Amended and Restated Bylaws, the Executive Committee of the Board was formed and constituted and the Audit Committee, the Compensation Committee, the Governance and Social Responsibility Committee and the Environment, Health and Safety Committee of the Board were reconstituted as described below:
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Executive Committee
Dan O. Dinges (Chair) Thomas E. Jorden Lisa A. Stewart Robert S. Boswell | |
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Audit Committee
Dorothy M. Ables (Chair) Robert S. Boswell Lisa A. Stewart Frances M. Vallejo |
Compensation Committee
Paul N. Eckley (Chair) Amanda M. Brock Marcus A. Watts Hans Helmerich
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Governance and Social Responsibility Committee
Marcus A. Watts (Joint Chair) Frances M. Vallejo (Joint Chair) Dorothy M. Ables Paul N. Eckley
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Environment, Health and Safety Committee
Lisa A. Stewart (Chair) Amanda M. Brock Robert S. Boswell Hans Helmerich
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Officer Departures and Appointments
As of the Effective Time, Mr. Dinges was appointed as Executive Chairman of the Board and ceased to serve as President and Chief Executive Officer of the Company.
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In addition, on the Closing Date, in accordance with the officer selection process set forth in the Merger Agreement, the Board appointed the following executive officers of the Company:
| · | Thomas E. Jorden, former Chief Executive Officer and President of Cimarex, as Chief Executive Officer and President |
| · | Scott C. Schroeder, continuing as Executive Vice President and Chief Financial Officer |
| · | Stephen P. Bell, former Executive Vice President of Business Development of Cimarex, as Executive Vice President — Business Development |
| · | Francis B. Barron, former Senior Vice President—General Counsel of Cimarex, as Senior Vice President and General Counsel |
| · | Christopher H. Clason, former Senior Vice President and Chief Human Resources Officer of Cimarex, as Senior Vice President and Chief Human Resources Officer |
| · | Phil L. Stalnaker, former Senior Vice President, Operations of Cabot, as Senior Vice President — Marcellus Business Unit |
| · | Steven W. Lindeman, former Senior Vice President, EHS and Engineering of Cabot, as Senior Vice President — Production and Operations |
| · | Michael D. DeShazer, former Vice President—Permian Business Unit of Cimarex, as Vice President of Business Units |
| · | Todd M. Roemer, continuing as Vice President and Chief Accounting Officer |
Additional information relating to the new executive officers (other than Mr. Jorden, whose information is set forth above) is set forth below (ages are as of October 1, 2021):
Stephen P. Bell, 66, served as Executive Vice President, Business Development of Cimarex from September 13, 2012 until the Effective Time. Mr. Bell also served as Senior Vice President of Business Development and Land of Cimarex from September 2002 until the Effective Time. Mr. Bell was previously with Key Production Company, Inc. from February 1994 until its merger with Cimarex. In September 1999, he was appointed Senior Vice President, Business Development and Land. From February 1994 to September 1999, he served as Vice President, Land.
Francis B. Barron, 59, served as Senior Vice President⸺General Counsel of Cimarex from July 2013 until the Effective Time. From February 2004 until July 2013, Mr. Barron served in various capacities at Bill Barrett Corporation, a publicly traded, Denver-based oil and gas exploration and development company, including as Executive Vice President, General Counsel, and Secretary. He also served as Chief Financial Officer from November 2006 until March 2007. Prior to February 2004, Mr. Barron was a partner at the Denver, Colorado office of the law firm of Patton Boggs LLP as well as a partner at Bearman Talesnick & Clowdus Professional Corporation. Mr. Barron’s practice included corporate, securities, and business law for publicly traded oil and gas companies.
Christopher H. Clason, 55 served as Senior Vice President and Chief Human Resources Officer of Cimarex from February 2020 until the Effective Time. Mr. Clason joined Cimarex as Vice President and Chief Human Resources Officer in April 2019. From February 2016 until April 2019, Mr. Clason was Director of MBA Career Management and Employer Relations at the Marriott School of Business at Brigham Young University. Prior to his work in higher education, he was Senior Vice President and Chief Human Resources Officer at ProBuild LLC, a Devonshire Investors company. From 2001 until 2014, Mr. Clason held various global HR executive leadership roles at Honeywell International, including Vice President Human Resources and Communications at Honeywell Aerospace. His background includes extensive international experience at Citigroup and early career work at Chevron.
Michael D. DeShazer, 36, served as Vice President of the Permian Business Unit of Cimarex from September 2019 until the Effective Time. He previously served as Asset Evaluation Team Manager of Cimarex from June 2018 to August 2019, Technology Group Manager from August 2016 to June 2018, and in various engineering and reservoir manager positions since joining Cimarex in 2007. Mr. DeShazer is a licensed Professional Engineer and holds a Bachelor’s in Chemical Engineering and a Master’s of Energy Business from the University of Tulsa.
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Mr. Helmerich is the non-executive Chairman of the Board, and until March 5, 2014 was the CEO, of Helmerich & Payne, Inc. (“H&P”), a company with which Cimarex engages in the ordinary course of business transactions. As non-executive Chairman, Mr. Helmerich currently is not an employee of H&P. During H&P’s fiscal year ended September 30, 2020, Cimarex paid H&P $36 million for drilling rigs services in arms’ length transactions and as part of its ordinary course of business and in the same manner as Cimarex obtains services from other companies that provide similar services. The aggregate amount of the payments represented 2.0% of H&P’s revenue during that period. Cimarex’s Nominating and Corporate Governance Committee had previously reviewed these transactions and concluded: (1) the transactions are proper and not material when compared to Cimarex’s total drilling and completions costs and H&P’s total revenues; (2) the transactions occurred in the ordinary course of business and at arms’ length; (3) the Cimarex Board did not review or approve drilling service contracts or arrangements; (4) Mr. Helmerich ceased being an employee of H&P in 2014; and (5) Mr. Helmerich's relationship with H&P did not interfere with his independent judgment as a director of Cimarex. In addition, the Company contracted for drilling services from H&P in 2019 and through March, 2020. In those years, the Company paid H&P $9.2 million and $2.6 million, respectively. The Company has not received services from H&P in 2021 and does not expect to receive any services from H&P for the remainder of 2021. The preceding amounts represent less than 2% of H&P’s consolidated gross revenues for 2019 and less than 2% of H&P’s consolidated gross revenues for 2020.
Other than as described above, there are no family relationships among any of the Company’s directors and executive officers and no other transactions requiring disclosure under Item 404(a) of Regulation S-K. Other than the Merger Agreement, and in the case of Messrs. Dinges and Jorden, the employment letter agreements previously disclosed and entered into on May 23, 2021, there are no arrangements between the Company’s directors and any other person pursuant to which such individuals were selected as directors.
Entry into Deferred Compensation Arrangements
As previously disclosed in the Joint Proxy Statement/Prospectus, each of Messrs. Scott C. Schroeder, Jeffrey W. Hutton, Phillip L. Stalnaker and Steven W. Lindeman was party to a change-in-control agreement with Cabot, which provided that, upon a termination by Cabot without Cause or by the executive officer due to a “Constructive Termination Without Cause” in connection with a change in control, the executive officer would have been entitled to receive: (1) a payment equal to three times the sum of (a) the executive officer’s base salary and the (b) greater of (i) the executive officer’s target bonus for the year of the change in control or the year of termination (whichever is greater) and (ii) the executive officer’s actual bonus paid with respect to any of the three fiscal years immediately preceding the change in control or, if termination of employment occurs prior to the change in control, termination of employment; (2) immediate vesting of the executive officer’s outstanding equity awards (provided that performance-based awards remain subject to the terms of the applicable award agreements for purposes of calculating the amount and timing of benefits thereunder); (3) continued medical, dental and life insurance coverage (or reimbursement for the premiums for such coverage or reimbursement for covered expenses, at Cabot’s election) in each case for three years following the date of termination; (4) reimbursement of expenses for outplacement assistance; and (5) the executive officer’s target bonus for the year of termination, prorated for the actual days elapsed during the fiscal year prior to such termination.
On September 30, 2021, in connection with and in furtherance of integration planning related to the Merger, each of Messrs. Schroeder, Hutton, Stalnaker and Lindeman entered into a letter agreement with Cabot (collectively, the “Letter Agreements”) whereby, in exchange for the cancellation of his rights under his change-in-control agreement (other than provisions that relate to Internal Revenue Code Sections 280G and 4999, if applicable, and dispute resolution, which continue to apply with respect to the new arrangements described herein) and the non-competition and non-solicitation covenants contained therein, effective as of the Effective Time, each of Messrs. Schroeder, Hutton and Lindeman received a contribution by Cabot to his deferred compensation account under Cabot’s deferred compensation plan and Mr. Stalnaker entered into a deferred compensation agreement with Cabot (the “Deferred Compensation Agreement”). The amount of the deferred compensation contributions to Messrs. Schroeder’s, Hutton’s and Lindeman’s deferred compensation accounts are $5,243,700, $3,131,700 and $3,131,700, respectively, and the amount subject to Mr. Stalnaker’s Deferred Compensation Agreement is $3,131,700. All of such contributions and amounts are fully vested.
The foregoing description of the Letter Agreements and Deferred Compensation Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Letter Agreements, a form of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and the terms of which are incorporated into this Item 5.02 by reference, and the Deferred Compensation Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and the terms of which are incorporated into this Item 5.02 by reference.
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Entry into Indemnification Agreements
The officers and directors of the Company are entering into customary indemnification agreements with the Company in connection with their appointments as officers and directors of the Company. The foregoing description of the indemnification agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Form of Indemnification Agreement, which is filed as Exhibit 10.4 to this Current Report on Form 8-K and the terms of which are incorporated into this Item 5.02 by reference.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On September 29, 2021, at a Special Meeting of Stockholders of Cabot, Cabot stockholders approved an amendment to Cabot’s Restated Certificate of Incorporation, as amended (the “Prior Cabot Charter”), to increase the number of authorized shares of Company Common Stock from 960,000,000 shares to 1,800,000,000 shares (the “Authorized Shares Amendment”). The Company filed the Authorized Shares Amendment on October 1, 2021, with the Secretary of State of the State of Delaware. The Authorized Share Amendment became effective upon filing. The foregoing description of the Authorized Shares Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Authorized Shares Amendment, which is filed as Exhibit 3.1 to this Current Report on Form 8-K and the terms of which are incorporated into this Item 5.03 by reference.
On October 1, 2021, immediately following the filing of the Authorized Shares Amendment, the Company filed an amendment to the Prior Cabot Charter with the Secretary of State of the State of Delaware in order to change the Company’s name to “Coterra Energy Inc.” (the “Name Change Amendment”). The filing of the Name Change Amendment was authorized and adopted by the Cabot Board in accordance with Section 242(b)(1) of the General Corporation Law of the State of Delaware (the “DGCL”). The Name Change Amendment became effective upon filing. The foregoing description of the Name Change Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Name Change Amendment, which is filed as Exhibit 3.2 to this Current Report on Form 8-K and the terms of which are incorporated into this Item 5.03 by reference.
On October 1, 2021, immediately following the filing of the Name Change Amendment, the Company filed a Restated Certificate of Incorporation (the “Restated Certificate”) that combined into one document the Prior Cabot Charter as amended by the Authorized Share Amendment and the Name Change Amendment. The filing of the Restated Certificate was authorized and adopted by the Cabot Board in accordance with Section 245 of the DGCL. The Restated Certificate became effective upon filing. The foregoing description of the Restated Certificate does not purport to be complete and is qualified in its entirety by reference to the full text of the Restated Certificate, which is filed as Exhibit 3.3 to this Current Report on Form 8-K and the terms of which are incorporated into this Item 5.03 by reference.
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Effective upon the effectiveness of the Name Change Amendment, the Amended and Restated Bylaws of the Company were amended and restated (as so amended and restated, the “Bylaws”) to (1) update the Company’s name to “Coterra Energy Inc.,” (2) add certain corporate governance provisions as described in the section of the Joint Proxy Statement/Prospectus entitled “The Merger⸺Board of Directors and Management of Cabot Following the Completion of the Merger,” (3) conform the standard required for a quorum to be present at a meeting of stockholders to the standard set forth in Section 216(1) of the DGCL, and (4) make certain other updates and conforming changes. The foregoing description of the Bylaws does not purport to be complete and is qualified in its entirety by reference to the full text of the Bylaws, which is filed as Exhibit 3.4 to this Current Report on Form 8-K and the terms of which are incorporated into this Item 5.03 by reference.
| Item 7.01 | Regulation FD Disclosure. |
On October 1, 2021, the Company issued a press release announcing the completion of the previously announced Merger and announcing the name and trading symbol of the combined business. A copy of that press release is attached hereto as Exhibit 99.1 and is incorporated into this Item 7.01 by reference.
Cautionary Statement Regarding Forward-Looking Information
This communication contains certain forward-looking statements within the meaning of federal securities laws. All statements, other than statements of historical fact, included in this communication are forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the expected timing of the changing of the Company’s trading symbol. No assurances can be given that the forward-looking statements contained in this communication will occur as expected and actual results may differ materially from those included in this communication. Forward-looking statements are based on current expectations or assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those included in this communication. These risks and uncertainties include, without limitation, the risk that necessary stock exchange approval to effect the change of the Company’s trading symbol may not be satisfied on a timely basis or at all. Additional important risks, uncertainties and other factors are described in the definitive joint proxy statement/prospectus filed by the Company on August 23, 2021 in connection with the transaction, Cabot’s Annual Report on Form 10-K for the year ended December 31, 2020 and Cabot’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2021 and June 30, 2021, Current Reports on Form 8-K and other filings the Company makes with the SEC and in Cimarex’s Annual Report on Form 10-K for the year ended December 31, 2020 and Cimarex’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2021 and June 30, 2021, Current Reports on Form 8-K and other filings Cimarex makes with the SEC. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Except to the extent required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
| Item 9.01 | Financial Statements and Exhibits. |
(a) Financial Statements of Business Acquired.
The audited consolidated balance sheets of Cimarex as of December 31, 2020 and 2019, the related audited consolidated statements of operations and comprehensive income (loss), stockholders equity, and cash flows for each of the years ended December 31, 2020, 2019 and 2018, and the notes related thereto, are incorporated by reference into this Item 9.01(a) from Cimarex’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 23, 2021.
The unaudited condensed consolidated balance sheets of Cimarex as of June 30, 2021 and December 30, 2020, the related unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2021 and 2020, the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2021 and 2020, and the unaudited condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2021 and 2020, and the notes related thereto, are incorporated by reference into this Item 9.01(a) from Cimarex’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021 filed with the SEC on August 6, 2021.
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(b) Pro Forma Financial Information.
The unaudited pro forma combined statements of operations for the year ended December 31, 2020 and for the six months ended June 30, 2021, are presented as if the Merger had been completed on January 1, 2020. The unaudited pro forma combined balance sheet is presented as if the Merger had been completed on June 30, 2021. The pro forma financial statements, and the related notes thereto, required to be filed under this Item 9.01(b) were previously filed in the Joint Proxy Statement/Prospectus under the caption “Unaudited Pro Forma Combined Financial Information,” which is incorporated by reference into this Item 9.01(b).
(d) Exhibits.
| * | Incorporated by reference to the filing indicated. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| COTERRA ENERGY INC. | ||
| By: | /s/ Scott C. Schroeder | |
| Scott C. Schroeder | ||
| Executive Vice President and Chief Financial Officer | ||
| Date: October 1, 2021 | ||
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Exhibit 3.1
CERTIFICATE OF AMENDMENT
of
RESTATED CERTIFICATE OF INCORPORATION
Cabot Oil & Gas Corporation (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby adopts this Certificate of Amendment (this “Certificate of Amendment”), which amends its Restated Certificate of Incorporation, as heretofore amended (the “Certificate of Incorporation”), as described below, and does hereby further certify that:
FIRST: The Board of Directors of the Corporation has duly adopted a resolution proposing and declaring advisable the amendment to the Certificate of Incorporation described herein (the “Amendment”), and the holders of a majority of the outstanding Common Stock, par value $.10 per share, of the Corporation entitled to vote at the special meeting of the stockholders called and held upon notice in accordance with Section 222 of the DGCL for the purpose of voting on the Amendment have voted in favor of the Amendment.
SECOND: The first sentence of Article IV of the Certificate of Incorporation is amended and restated to read in its entirety as follows:
The aggregate number of shares of all classes of stock which the Company shall have authority to issue is 1,805,000,000, divided into 5,000,000 shares of Preferred Stock, par value $.10 per share (“Preferred Stock”), and 1,800,000,000 shares of Common Stock, par value $.10 per share (the “Common Stock”).
IN WITNESS WHEREOF, this Certificate of Amendment has been executed by an authorized officer of the Corporation as of this 1st day of October, 2021.
| CABOT OIL & GAS CORPORATION | |||
| By: | /s/ Deidre L. Shearer | ||
| Name: | Deidre L. Shearer | ||
| Title: | Vice President, Administration and Corporate Secretary | ||
Exhibit 3.2
CERTIFICATE OF AMENDMENT
of
RESTATED CERTIFICATE OF INCORPORATION
Cabot Oil & Gas Corporation (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby adopts this Certificate of Amendment (this “Certificate of Amendment”), which amends its Restated Certificate of Incorporation, as heretofore amended (the “Certificate of Incorporation”), as described below, and does hereby further certify that:
FIRST: The Board of Directors of the Corporation has duly adopted a resolution proposing and declaring advisable the amendment to the Certificate of Incorporation described herein (the “Amendment”), and the Amendment was adopted in accordance with Section 242 of the DGCL.
SECOND: Article I of the Certificate of Incorporation is amended and restated to read in its entirety as follows:
ARTICLE I
The name of the corporation is Coterra Energy Inc. (the “Corporation”).
IN WITNESS WHEREOF, this Certificate of Amendment has been executed by an authorized officer of the Corporation as of this 1st day of October, 2021.
| CABOT OIL & GAS CORPORATION | |||
| By: | /s/ Deidre L. Shearer | ||
| Name: | Deidre L. Shearer | ||
| Title: | Vice President, Administration and Corporate Secretary | ||
Exhibit 3.3
RESTATED CERTIFICATE OF INCORPORATION
of
COTERRA ENERGY INC.
Coterra Energy Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation” or the “Company”), does hereby certify that:
1. The name of the Corporation is Coterra Energy Inc.
2. The name under which the Corporation was originally incorporated was Cabot Oil & Gas Corporation and the date of filing of the Corporation’s original Certificate of Incorporation with the Secretary of State of the State of Delaware was December 14, 1989.
3. The Board of Directors of the Corporation has duly adopted this Restated Certificate of Incorporation without a vote of the stockholders in accordance with Section 245 of the General Corporation Law of the State of Delaware. This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Corporation’s Certificate of Incorporation as heretofore amended and supplemented, and there is no discrepancy between the provisions of the Certificate of Incorporation as heretofore amended and supplemented and the provisions of this Restated Certificate of Incorporation.
4. The text of the Corporation’s Certificate of Incorporation as heretofore amended and supplemented is hereby restated to read as herein set forth in full.
ARTICLE I
The name of the corporation is Coterra Energy Inc. (the “Corporation”).
ARTICLE II
The address of the registered office of the Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.
ARTICLE III
The nature of the business to be conducted and the purposes to be promoted by the Corporation are to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “GCL”).
ARTICLE IV
The aggregate number of shares of all classes of stock which the Company shall have authority to issue is 1,805,000,000, divided into 5,000,000 shares of Preferred Stock, par value $.10 per share (“Preferred Stock”), and 1,800,000,000 shares of Common Stock, par value $.10 per share (the “Common Stock”).
The following is a statement of the designations and the powers, preferences and rights, and the qualifications, limitations or restrictions thereof, of the classes of stock of the Corporation:
SECTION I. PREFERRED STOCK
Shares of Preferred Stock may be issued from time to time in one or more series as from time to time may be determined by the Board of Directors. Each series shall be distinctly designated. The Board of Directors of the Corporation is hereby expressly granted authority to fix, by resolution or resolutions adopted prior to the issuance of any shares of each particular series of Preferred Stock, the designation, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, if any, of such series, including, but without limiting the generality of the foregoing, the following:
(1) the designation of, and the number of shares of Preferred Stock which shall constitute, the series, which number may be increased (except as otherwise fixed by the Board of Directors) or decreased (but not below the number of shares thereof then outstanding) from time to time by action of the Board of Directors;
(2) the rate and times at which (or the method of determination thereof), and the terms and conditions upon which, dividends, if any, on shares of the series shall be paid, the nature of any preferences or the relative rights of priority of such dividends to the dividends payable on any other class or classes of stock of the Corporation or on any series of Preferred Stock of the Corporation, and a statement whether such dividends shall be cumulative;
(3) whether shares of the series shall be convertible into or exchangeable for shares of capital stock or other securities or property of the Corporation or of any other corporation or entity, and, if so, the terms and conditions of such conversion or exchange, including any provisions for the adjustment of the conversion or exchange rate in such events as the Board of Directors shall determine;
(4) whether shares of the series shall be redeemable, and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount and type of consideration payable in case of redemption, which amount may vary under different conditions and at different redemption dates;
(5) the rights, if any, of the holders of shares of the series upon voluntary or involuntary liquidation, merger, consolidation, distribution or sale of assets, dissolution or winding up of the Corporation;
(6) whether shares of the series shall have a sinking fund or purchase account for the redemption or purchase of shares of the series, and if so, the terms, conditions and amount of such sinking fund or purchase account;
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(7) whether shares of the series shall have voting rights in addition to the voting rights provided by law, which may, without limiting the generality of the foregoing, include (а) the right to more or less than one vote per share on any or all matters voted upon by the Corporation’s stockholders and (b) the right to vote, as а series by itself or together with other series of Preferred Stock or together with all series of Preferred Stock as а class or with the Common Stock as а class, upon such matters, under such circumstances and upon such conditions as the Board of Directors may fix, including, without limitation, the right, voting as а series by itself or together with other series of Preferred Stock or together with all series of Preferred Stock as а class, to elect one or more directors of the Corporation in the event there shall have been а default in the payment of dividends on any one or more series of Preferred Stock or under such other circumstances and upon such conditions as the Board of Directors may determine; and
(8) any other powers, preferences and relative, participating, optional or other rights, and qualifications, limitations or restrictions of shares of that series.
The relative powers, preferences and rights of each series of Preferred Stock in relation to the powers, preferences and rights of each other series of Preferred Stock shall, in each case, be as fixed from time to time by the Board of Directors in the resolution or resolutions adopted pursuant to authority granted in this Section I, and the consent, by class or series vote or otherwise, of the holders of Preferred Stock of such of the series of the Preferred Stock as are from time to time outstanding shall not be required for the issuance by the Board of Directors of any other series of Preferred Stock whether the powers, preferences and rights of such other series shall be fixed by the Board of Directors as senior to, or on a parity with, the powers, preferences and rights of such outstanding series, or any of them; provided, however, that the Board of Directors may provide in such resolution or resolutions adopted with respect to any series of Preferred Stock that the consent of the holders of а majority (or such greater proportion as shall be therein fixed) of the outstanding shares of such series voting thereon shall be required for the issuance of any or all other series of Preferred Stock.
SECTION II. COMMON STOCK
(1) Dividends. After the requirements with respect to preferential dividends on Preferred Stock, if any, shall have been met and after the Company shall have complied with all the requirements, if any, with respect to the setting aside of sums as sinking funds or redemption or purchase accounts and subject further to any other conditions which may be fixed in accordance with the provisions of this Certificate of Incorporation, then, but not otherwise, the holders of Common Stock shall be entitled to receive such dividends, if any, as may be declared from time to time by the Board of Directors on the Common Stock, which dividends shall be paid out of assets legally available for payment of dividends and shall be distributed among the holders of shares pro rata in accordance with the number of shares of such stock held by each such holder.
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(2) Liquidation. After distribution in full of the preferential amount, if any, to be distributed to the holders of Preferred Stock in the event of voluntary or involuntary liquidation, distribution or sale of assets, dissolution or winding-up of the Company, the holders of the Common Stock shall be entitled to receive all the remaining assets of the Company, tangible and intangible, of whatever kind available for distribution to stockholders, which assets shall be distributed pro rata in accordance with the number of shares of such stock held by each such holder.
(3) Voting. Except as may otherwise be required by law, this Certificate of Incorporation or the provisions of the resolution or resolutions as may be adopted by the Board of Directors pursuant to Section I of this Article IV, each holder of Common Stock shall have one vote in respect of each share of Common Stock held by such holder on each matter voted upon by the stockholders. Cumulative voting of shares of Common Stock is prohibited.
ARTICLE V
The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:
(1) The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
(2) The directors shall have concurrent power with the stockholders to make, alter, amend, change, add to or repeal the By-Laws of the Corporation.
(3) The number of directors of the Corporation shall be as from time to time fixed by, or in the manner provided in, the By-Laws of the Corporation. Election of directors need not be by written ballot unless the By-Laws so provide.
(4) In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the statutes of Delaware, this Certificate of Incorporation and any By-Laws adopted by the stockholders; provided, however, that no By-Laws thereafter adopted by the stockholders shall invalidate any prior act of the directors which would have been valid if such By-Laws had not been adopted.
ARTICLE VI
Reserved.
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ARTICLE VII
А director of the Corporation shall not be personally liable to the Corporation or its stockholder or stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholder or stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or а knowing violation of law, (iii) under Section 174 of the GCL, as the same exists or hereafter may be amended or replaced, or (iv) for any transaction from which the director derived an improper personal benefit. If the GCL is amended after the date of filing of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the GCL as so amended. Any repeal or modification of this Article IХ by the stockholder or stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of а director of the Corporation existing at the time of such repeal or modification.
ARTICLE VIII
The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
[Signature page follows]
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IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been executed by an authorized officer of the Corporation as of this 1st day of October, 2021.
| COTERRA ENERGY INC. | ||
| By: | /s/ Scott C. Schroeder | |
| Scott C. Schroeder | ||
| Executive Vice President and Chief | ||
| Financial Officer | ||
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Exhibit 3.4
AMENDED AND RESTATED
BYLAWS
OF
COTERRA ENERGY INC.
Adopted August 5, 1994
Amended February 20, 1997
Amended May 3, 2001
Amended September 6, 2001
Amended May 2, 2007
Amended January 14, 2010
Amended February 17, 2012
Amended March 11, 2015
Amended July 27, 2016
Amended May 23, 2021
Amended June 17, 2021
Last Amended October 1, 2021
INDEX OF AMENDED AND RESTATED BYLAWS
COTERRA ENERGY INC.
| Section | Page |
| Section 1 Certificate of Incorporation | 1 |
| Section 2 Annual Meeting of Stockholders | 1 |
| Section 3 Special Meetings of Stockholders | 1 |
| Section 4 Place of Stockholders’ Meetings | 2 |
| Section 5 Notice of Stockholders’ Meetings, Business and Nominations | 2 |
| Section 6 Adjournments and Postponements of Stockholders’ Meetings | 12 |
| Section 7 Quorum and Action of Stockholders | 13 |
| Section 8 Proxies and Voting | 13 |
| Section 9 Conduct of Stockholders’ Meetings | 14 |
| Section 10 Action by Written Consent | 15 |
| Section 11 Board of Directors | 16 |
| Section 12 Powers of the Board of Directors | 16 |
| Section 13 Executive Committee | 17 |
| Section 14 Committees | 17 |
| Section 15 Meetings of the Board of Directors | 18 |
| Section 16 Quorum and Action of Directors | 18 |
| Section 17 Restrictions on Stock Transfer | 19 |
| Section 18 Compensation of Directors | 19 |
| Section 19 Officers and Agents | 19 |
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| Section 20 Chairman of the Board of Directors; Chief Executive Officer | 19 |
| Section 21 President | 20 |
| Section 22 Executive Vice Presidents, Senior Vice Presidents and Vice Presidents | 20 |
| Section 23 Chief Financial Officer | 20 |
| Section 24 Secretary and Assistant Secretaries | 20 |
| Section 25 Treasurer and Assistant Treasurers | 21 |
| Section 26 General Counsel and Assistant General Counsels | 21 |
| Section 27 Controller | 22 |
| Section 28 Resignations and Removals | 23 |
| Section 29 Vacancies | 23 |
| Section 30 Waiver of Notice | 24 |
| Section 31 Certificates of Stock | 24 |
| Section 32 Transfer of Shares of Stock | 24 |
| Section 33 Transfer Books: Record Date | 25 |
| Section 34 Loss of Certificates | 25 |
| Section 35 Seal | 25 |
| Section 36 Execution of Papers | 25 |
| Section 37 Fiscal Year | 26 |
| Section 38 Dividends | 26 |
| Section 39 Respecting Certain Contracts | 26 |
| Section 40 Indemnification of Directors, Officers and Employees | 26 |
| Section 41 Amendments | 27 |
| Section 42 Exclusive Forum for Adjudication of Disputes | 27 |
| Section 43 Certain Corporate Governance Matters | 28 |
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AMENDED AND RESTATED
BYLAWS
OF
COTERRA ENERGY INC.
(THE “CORPORATION”)
Section 1 Certificate of Incorporation. The name, location of the principal office or place of business in Delaware, and the objects or purposes of the Corporation shall be as set forth in its Certificate of Incorporation. These Bylaws, the powers of the Corporation and of its directors and stockholders, and all matters concerning the management of the business and conduct of the affairs of the Corporation shall be subject to such provisions in regard thereto, if any, as are set forth in the Certificate of Incorporation; and the Certificate of Incorporation is hereby made a part of these Bylaws. In these Bylaws, references to the Certificate of Incorporation mean the provisions of the Certificate of Incorporation (as that term is defined in the General Corporation Law of the State of Delaware (the “DGCL”)) of the Corporation as from time to time in effect, and references to these Bylaws or to any requirement or provision of applicable law mean these Bylaws or such requirement or provision of applicable law as from time to time in effect.
Section 2 Annual Meeting of Stockholders.
The annual meeting of stockholders shall be held at such date and time as the Board of Directors may designate. Purposes for which the annual meeting is to be held, in addition to those prescribed by applicable law, by the Certificate of Incorporation and by these Bylaws, may be specified by the chairman (the “Chairman”) of the board of directors of the Corporation (the “Board of Directors”), the chief executive officer of the Corporation (the “Chief Executive Officer”), the president of the Corporation (the “President”) or by the Board of Directors.
If the election of directors shall not be held on the day provided for by these Bylaws, the directors shall cause the election to be held as soon thereafter as convenient, and to that end, if the election of directors shall not be held at the annual meeting, a special meeting of the stockholders may be held in place of such omitted meeting or election, and any business transacted or election held at such special meeting shall have the same effect as if transacted or held at the annual meeting, and in such cases all references in these Bylaws, except in this Section 2 and in Section 4 to the annual meeting of the stockholders, or to the annual election of directors, shall be deemed to refer to or include such special meeting. Any such special meeting shall be called, and the purposes thereof shall be specified in the call, as provided in Section 3.
Section 3 Special Meetings of Stockholders. A special meeting of the stockholders may be called at any time only by the Chairman, by the Chief Executive Officer, by the President or by the Board of Directors. Such call shall state the time, place and purposes of the meeting.
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Section 4 Place of Stockholders’ Meetings. The annual election of directors, whether at the original or any adjourned session of the annual meeting of the stockholders or of a special meeting held in place thereof, shall be held at such place as the Board of Directors shall fix for each such meeting. Sessions of such meetings for any other purposes, and the original or any adjourned session of any other special meeting of the stockholders, shall be held at such place within or without the State of Delaware as shall be stated in the call or in the vote of adjournment, as the case may be. The Board of Directors may, in its sole discretion, determine that an annual meeting or special meeting shall not be held at any place, but may instead be held solely by means of remote communication in accordance with Section 211(a)(2) of the DGCL.
Section 5 Notice of Stockholders’ Meetings, Business and Nominations.
A. Notice of Meetings.
Except as may be otherwise required by applicable law, by the Certificate of Incorporation or by other provisions of these Bylaws, a written notice of each meeting of stockholders, stating the place, if any, day and hour thereof, the means of remote communication, if any, by which stockholders and holders of proxies for stockholders may participate in that meeting and be deemed present in person and vote at that meeting, and the purposes for which the meeting is called, shall be given, at least 10 days but no more than 60 days before the date of the meeting, to each stockholder entitled to vote thereat by leaving such notice with him or her or at his or her residence or usual place of business, by mailing it, postage prepaid, addressed to such stockholder at his or her address as it appears upon the books of the Corporation or by delivering it to such stockholder by a form of electronic transmission consented to by such stockholder, to the fullest extent permitted by applicable law. Such notice shall be given by the secretary of the Corporation (the “Secretary”) or an assistant secretary of the Corporation (an “Assistant Secretary”) or in case of their death, absence, incapacity or refusal, by some other officer or by a person designated by the Board of Directors.
B. Annual Meetings of Stockholders.
(1) Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders only (a) pursuant to the Corporation’s notice of meeting, (b) by or at the direction of the Board of Directors, (c) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Section 5 and on the record date for determination of stockholders entitled to vote at such meeting, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 5 or (d) by an Eligible Stockholder (defined below) who meets the requirements of and complies with all of the procedures set forth in Section 5(E). Clauses (c) and (d) of the immediately preceding sentence shall be the exclusive means for a stockholder to submit business or proposals (other than matters properly brought under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and included in the notice relating to the meeting given by or at the direction of the Board of Directors) before, or to make any nomination of a person or persons for election as a director of the Corporation at, an annual meeting of stockholders of the Corporation. Any business proposed to be brought before an annual meeting by a stockholder of the Corporation must be a proper matter for stockholder action and be properly introduced at such meeting.
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(2) For director nominations to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of Section 5(B)(1), in addition to any other applicable requirements, the stockholder must have given timely advance notice thereof in writing to the Secretary.
Any stockholder’s advance notice to the Secretary pursuant to Section 5(B)(2), (C) or (E) shall set forth (i) as to each person whom such stockholder proposes to nominate for election or reelection as a director of the Corporation, (a) the name, age, business address and residence address of such person, (b) the principal occupation or employment of such person, (c) any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors of the Corporation in a contested election, or would otherwise be required, in each case pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including, without limitation, the written consent of such person to having such person’s name placed in nomination at the meeting and to serve as a director of the Corporation if elected), and (d) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if such stockholder and such beneficial owner, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; and (ii) as to such stockholder giving the notice, the beneficial owner, if any, on whose behalf the nomination is made and each proposed nominee, (a) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, if any, and the name and address of any other stockholders known by such stockholder to be supporting such nomination, (b)(1) the class or series and number of shares of capital stock of the Corporation which are, directly or indirectly, owned beneficially and of record by such stockholder, such beneficial owner and such nominee, (2) any Derivative Instrument directly or indirectly owned beneficially by such stockholder, such beneficial owner and such nominee and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of capital stock of the Corporation, (3) any proxy, contract, arrangement, understanding or relationship the effect or intent of which is to increase or decrease the voting power of such stockholder, beneficial owner or nominee with respect to any shares of any security of the Corporation, (4) any pledge by such stockholder, beneficial owner or nominee of any security of the Corporation or any short interest of such stockholder, beneficial owner or nominee in any security of the Corporation, (5) any rights to dividends on the shares of capital stock of the Corporation owned beneficially by such stockholder, beneficial owner and nominee that are separated or separable from the underlying shares of capital stock of the Corporation, (6) any proportionate interest in shares of capital stock of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder, beneficial owner or nominee is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (7) any performance-related fees (other than an asset-based fee) that such stockholder, beneficial owner or nominee is entitled to based on any increase or decrease in the value of shares of capital stock of the Corporation or Derivative Instruments, if any, as of the date of such notice, including, without limitation, for purposes of clauses (b)(1) through (b)(7) above, any of the foregoing held by members of such stockholder’s, beneficial owner’s or nominee’s immediate family sharing the same household (which information shall be supplemented by such stockholder, beneficial owner, if any, and nominee not later than 10 days after the record date for the meeting to disclose such ownership as of the record date), (c) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice, (d) a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, and (e) any other information relating to such stockholder, beneficial owner, if any, and nominee that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for election of directors of the Corporation in a contested election, or would otherwise be required, in each case pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Any such stockholder’s notice to the Secretary shall also include or be accompanied by, with respect to each nominee for election or reelection to the Board of Directors, a completed and signed questionnaire, representation and agreement required by the third paragraph of this Section 5(B)(2). The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee.
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To be eligible to be a nominee for election or reelection as a director of the Corporation, a person must deliver (in accordance with the time periods prescribed for delivery of notice under this Section 5, or, in the case of a Stockholder Nominee (defined below), the time periods prescribed for delivery of a Notice of Proxy Access Nomination (defined below) under Section 5(E)) to the Secretary at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be in the form provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (a) is not and will not become a party to (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (2) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (b) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein, and (c) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.
(3) For business, other than director nominations (which are governed by Section 5(B)(2) and Section 5(E)), to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of Section 5(B)(1), in addition to any other applicable requirements, the stockholder must have given timely notice thereof in writing to the Secretary.
Any stockholder’s advance notice to the Secretary pursuant to this Section 5(B)(3) shall set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a description of the proposal desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, together with the text of the proposal or business (including the text of any resolutions proposed for consideration), (ii) as to such stockholder proposing such business and the beneficial owner, if any, on whose behalf the proposal is made, (a) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, if any, and the name and address of any other stockholders known by such stockholder to be supporting such business or proposal, (b)(1) the class or series and number of shares of capital stock of the Corporation which are, directly or indirectly, owned beneficially and of record by such stockholder and such beneficial owner, (2) any Derivative Instrument directly or indirectly owned beneficially by such stockholder and by such beneficial owner and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of capital stock of the Corporation, (3) any proxy, contract, arrangement, understanding or relationship the effect or intent of which is to increase or decrease the voting power of such stockholder or beneficial owner with respect to any shares of any security of the Corporation, (4) any pledge by such stockholder or beneficial owner of any security of the Corporation or any short interest of such stockholder or beneficial owner in any security of the Corporation, (5) any rights to dividends on the shares of capital stock of the Corporation owned beneficially by such stockholder and by such beneficial owner that are separated or separable from the underlying shares of capital stock of the Corporation, (6) any proportionate interest in shares of capital stock of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder or beneficial owner is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (7) any performance-related fees (other than an asset-based fee) that such stockholder or beneficial owner is entitled to based on any increase or decrease in the value of shares of capital stock of the Corporation or Derivative Instruments, if any, as of the date of such notice, including, without limitation, for purposes of clauses (b)(1) through (b)(7) above, any of the foregoing held by members of such stockholder’s or beneficial owner’s immediate family sharing the same household (which information shall be supplemented by such stockholder and beneficial owner, if any, not later than 10 days after the record date for the meeting to disclose such ownership as of the record date), and (c) any other information relating to such stockholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for the proposal, or would otherwise be required, in each case pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; (iii) any material interest of such stockholder and beneficial owner, if any, in such business or proposal, (iv) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting and (v) a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person or persons (including their names) in connection with such business or proposal by such stockholder.
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(4) To be timely, a stockholder’s notice pursuant to the first paragraph of Section 5(B)(2) (other than a Notice of Proxy Access Nomination, which must be delivered or mailed to and received at the principal executive offices of the Corporation within the time periods provided in Section 5(E)) or the first paragraph of Section 5(B)(3) shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or, if less than 100 days’ prior notice or public announcement of the scheduled meeting date is given or made, the 10th day following the earlier of the day on which the notice of such meeting was mailed to stockholders of the Corporation or the day on which such public announcement was made. In no event shall the public announcement of an adjournment, postponement or deferral of an annual meeting commence a new time period for the giving of timely notice as described above. Notwithstanding anything in the first sentence of this paragraph to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased and there is no prior notice or public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice to nominate a director required by this Section 5 (other than a Notice of Proxy Access Nomination, which must be delivered or mailed to and received at the principal executive offices of the Corporation within the time periods provided in Section 5(E)) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the earlier of the day on which the notice of such meeting was mailed to stockholders of the Corporation or the day on which such public announcement was made.
(5) A stockholder providing (a) notice of any director nomination proposed to be made at a meeting (including any Notice of Proxy Access Nomination) or (b) notice of business proposed to be brought before a meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 5 shall be true and correct as of the record date for the meeting and as of the date that is 10 business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received at, the principal executive offices of the Corporation not later than five business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than eight business days prior to the date for the meeting, if practicable (or, if not practicable, on the first practicable date prior to the date for the meeting) or any adjournment or postponement thereof (in the case of the update and supplement required to be made as of 10 business days prior to the meeting or any adjournment or postponement thereof). In addition, a stockholder providing a notice described in clause (a) or (b) of the immediately preceding sentence shall update and supplement such notice, and deliver such update and supplement to the principal executive offices of the Corporation, promptly following the occurrence of any event that materially changes the information provided or required to be provided in such notice pursuant to this Section 5.
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C. Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting given by or at the direction of the Board of Directors. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (a) by or at the direction of the Board of Directors or (b) if but only if the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 5 and on the record date for determination of stockholders entitled to vote at such meeting, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 5, including Section 5(B)(2) hereof. Clause (b) of the immediately preceding sentence shall be the exclusive means for a stockholder to make any nomination of a person or persons for election as a director of the Corporation at a special meeting of stockholders of the Corporation. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by Section 5(B)(2) shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the 90th day prior to such special meeting; provided, however, that if less than 100 days’ prior notice or public announcement of the scheduled meeting date and of the nominees proposed by the Board of Directors to be elected at such meeting is given or made, notice by such stockholder, to be timely, must be so delivered not later than the close of business on the 10th day following the earlier of the day on which the notice of such meeting was mailed to stockholders of the Corporation or the day on which such public announcement was made. In no event shall the public announcement of an adjournment, postponement or deferral of a special meeting commence a new time period for the giving of timely notice as described above. Nominations pursuant to Section 5(E) may not be made in connection with any special meeting of the stockholders.
D. General.
(1) Subject to such rights of holders of shares of one or more outstanding series of preferred stock of the Corporation to elect one or more directors of the Corporation under circumstances as shall be provided by or pursuant to the Certificate of Incorporation, only such persons who are nominated in accordance with the procedures set forth in this Section 5 shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 5. Except as otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, the chairman of the meeting shall have the power and duty to determine whether a nomination or proposed nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 5 and, if any proposed nomination or business is not in compliance with this Section 5, to so declare, and such defective proposal or nomination shall be disregarded.
(2) For purposes of this Section 5, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed or furnished by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act or posted on the Corporation’s website at www.coterra.com.
(3) For purposes of this Section 5, a “Derivative Instrument” shall include any option, warrant, convertible security, stock appreciation right or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of capital stock of the Corporation or with a value derived in whole or in part from the price, value or volatility of any class or series of shares of capital stock of the Corporation or any derivative or synthetic arrangement having characteristics of a long position in any class or series of shares of capital stock of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise.
(4) For purposes of this Section 5, a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security.
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(5) Notwithstanding the other provisions of this Section 5, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 5. Nothing in this Section 5 shall be deemed to affect any rights (a) of the holders of any series of preferred stock if and to the extent provided for under applicable law, the Certificate of Incorporation or these Bylaws or (b) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.
E. Proxy Access for Director Nominations
(1) Whenever the Board of Directors solicits proxies with respect to the election of directors at an annual meeting of the stockholders, subject to the provisions of this Section 5(E), the Corporation shall include in its proxy statement for such annual meeting, in addition to any persons nominated for election by the Board of Directors or any committee thereof, the name, together with the Required Information, of any person or persons, as applicable, nominated for election (the “Stockholder Nominee(s)”) to the Board of Directors by a stockholder or group of not more than 20 stockholders that satisfies the requirements of Section 5(E)(5) (the “Eligible Stockholder”), and who expressly elects at the time of providing the notice required by this Section 5(E) (the “Notice of Proxy Access Nomination”) to have its nominee or nominees, as applicable, included in the Corporation’s proxy materials pursuant to this Section 5(E). For purposes of this Section 5(E), the “Required Information” that the Corporation will include in its proxy statement is the information provided to the Secretary concerning the Stockholder Nominee(s) and the Eligible Stockholder that is required to be disclosed in the Corporation’s proxy statement by Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder, and, if the Eligible Stockholder so elects, a written statement, not to exceed 500 words, in support of the candidacy of the Stockholder Nominee(s) (the “Statement”). Notwithstanding anything to the contrary contained in this Section 5(E), the Corporation may omit from its proxy materials any information or Statement (or portion thereof) that it, in good faith, believes would violate any applicable law or regulation.
(2) To be timely for purposes of this Section 5(E), the Notice of Proxy Access Nomination shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 120th day nor earlier than the close of business on the 150th day prior to the first anniversary of the date (as specified in the Corporation’s proxy materials for its immediately preceding annual meeting of stockholders) on which the Corporation first mailed its proxy materials for its immediately preceding annual meeting of stockholders. In no event will an adjournment or postponement of an annual meeting of stockholders or the announcement thereof commence a new time period for the giving of a Notice of Proxy Access Nomination as provided above.
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(3) The maximum number of Stockholder Nominees nominated by all Eligible Stockholders that will be included in the Corporation’s proxy materials with respect to an annual meeting of stockholders shall not exceed 20% of the number of directors in office as of the last day on which a Notice of Proxy Access Nomination may be delivered pursuant to and in accordance with this Section 5(E) (the “Final Proxy Access Nomination Date”), or if such amount is not a whole number, the largest whole number below 20%. In the event that one or more vacancies for any reason occurs on the board after the Final Proxy Access Nomination Date but before the date of the annual meeting and the Board of Directors resolves to reduce the size of the board in connection therewith, the maximum number of Stockholder Nominees included in the Corporation’s proxy materials shall be calculated based on the number of directors in office as so reduced. Any individual nominated by an Eligible Stockholder for inclusion in the Corporation’s proxy materials pursuant to this Section 5(E) whom the Board of Directors decides to nominate as a nominee for director shall be counted as one of the Stockholder Nominees for purposes of determining when the maximum number of Stockholder Nominees provided for in this Section 5(E) has been reached. Any Eligible Stockholder submitting more than one Stockholder Nominee for inclusion in the Corporation’s proxy materials pursuant to this Section 5(E) shall rank such Stockholder Nominees based on the order that the Eligible Stockholder desires such Stockholder Nominees to be selected for inclusion in the Corporation’s proxy statement in the event that the total number of Stockholder Nominees submitted by Eligible Stockholders pursuant to this Section 5(E) exceeds the maximum number of nominees provided for in this Section 5(E). In the event that the number of Stockholder Nominees submitted by Eligible Stockholders pursuant to this Section 5(E) exceeds the maximum number of nominees provided for in this Section 5(E), the highest ranking Stockholder Nominee who meets the requirements of this Section 5(E) from each Eligible Stockholder will be selected for inclusion in the Corporation’s proxy materials until the maximum number is reached, going in order of the number (largest to smallest) of shares of common stock of the Corporation each Eligible Stockholder disclosed as owned in its respective Notice of Proxy Access Nomination submitted to the Corporation. If the maximum number is not reached after the highest ranking Stockholder Nominee who meets the requirements of this Section 5(E) from each Eligible Stockholder has been selected, this process will continue as many times as necessary, following the same order each time, until the maximum number is reached. Notwithstanding anything to the contrary contained in this Section 5(E), if the Corporation receives notice pursuant to Section 5(B) that any stockholder intends to nominate for election at such meeting one or more persons, no Stockholder Nominees will be included in the Corporation’s proxy materials with respect to such meeting pursuant to this Section 5(E).
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(4) For purposes of this Section 5(E), an Eligible Stockholder shall be deemed to “own” only those outstanding shares of common stock of the Corporation as to which the stockholder possesses both (i) the full voting and investment rights pertaining to the shares and (ii) the full economic interest in (including the opportunity for profit from and risk of loss on) such shares; provided, that the number of shares calculated in accordance with clauses (i) and (ii) shall not include any shares (x) sold by such stockholder or any of its affiliates in any transaction that has not been settled or closed, including any short sale, (y) borrowed by such stockholder or any of its affiliates for any purposes or purchased by such stockholder or any of its affiliates pursuant to an agreement to resell or (z) subject to any option, warrant, forward contract, swap, contract of sale, other derivative or similar agreement entered into by such stockholder or any of its affiliates, whether any such instrument or agreement is to be settled with shares or with cash based on the notional amount or value of shares of outstanding common stock of the Corporation, in any such case which instrument or agreement has, or is intended to have, the purpose or effect of (1) reducing in any manner, to any extent or at any time in the future, such stockholder’s or its affiliates’ full right to vote or direct the voting of any such shares, and/or (2) hedging, offsetting or altering to any degree any gain or loss realized or realizable from maintaining the full economic ownership of such shares by such stockholder or affiliate. For purposes of this Section 5(E), a stockholder shall “own” shares held in the name of a nominee or other intermediary so long as the stockholder retains the right to instruct how the shares are voted with respect to the election of directors and possesses the full economic interest in the shares. A stockholder’s ownership of shares shall be deemed to continue during any period in which (i) the stockholder has loaned such shares, provided that the stockholder has the power to recall such loaned shares on no more than five business days’ notice, or (ii) the stockholder has delegated any voting power by means of a proxy, power of attorney or other instrument or arrangement which is revocable at any time by the stockholder. The terms “owned,” “owning” and other variations of the word “own” shall have correlative meanings. Whether outstanding shares of the common stock of the Corporation are “owned” for these purposes shall be determined by the Board of Directors or any committee thereof. For purposes of this Section 5(E), the term “affiliate” or “affiliates” shall have the meaning ascribed thereto under the general rules and regulations under the Exchange Act.
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(5) In order to make a nomination pursuant to this Section 5(E), an Eligible Stockholder must have owned the Required Ownership Percentage of the Corporation’s outstanding common stock (the “Required Shares”) continuously for the Minimum Holding Period as of both the date the Notice of Proxy Access Nomination is delivered to or mailed to and received by the Secretary in accordance with this Section 5(E) and the record date for determining the stockholders entitled to vote at the annual meeting and must continue to own the Required Shares through the meeting date. For purposes of this Section 5(E), the “Required Ownership Percentage” is 3% or more, and the “Minimum Holding Period” is 3 years. Within the time period specified in this Section 5(E) for delivering the Notice of Proxy Access Nomination, an Eligible Stockholder must provide the following information in writing to the Secretary: (i) one or more written statements from the record holder of the shares (and from each intermediary through which the shares are or have been held during the Minimum Holding Period) verifying that, as of a date within seven calendar days prior to the date the Notice of Proxy Access Nomination is delivered to or mailed to and received by the Secretary, the Eligible Stockholder owns, and has owned continuously for the Minimum Holding Period, the Required Shares, and the Eligible Stockholder’s agreement to provide, within five business days after the record date for the annual meeting, written statements from the record holder and intermediaries verifying the Eligible Stockholder’s continuous ownership of the Required Shares through the record date; (ii) a copy of the Schedule 14N that has been filed with the Securities and Exchange Commission as required by Rule 14a-18 under the Exchange Act; (iii) the information, representations and agreements that are the same as those that would be required to be set forth in a stockholder’s notice of nomination with respect to each Stockholder Nominee pursuant to Section 5(B); (iv) the consent of each Stockholder Nominee to being named in the proxy statement as a nominee and to serving as a director if elected; (v) a representation that the Eligible Stockholder (a) acquired the Required Shares in the ordinary course of business and not with the intent to change or influence control at the corporation, and does not currently have such intent, (b) currently intends to maintain qualifying ownership of the Required Shares through the date of the annual meeting, (c) has not engaged and will not engage in, and has not and will not be a “participant” in another person’s, “solicitation” within the meaning of Rule 14a-1(l) under the Exchange Act in support of the election of any individual as a director at the annual meeting other than its Stockholder Nominee(s) or a nominee of the Board of Directors, (d) agrees to comply with all applicable laws and regulations applicable to the use, if any, of soliciting material, and (e) has provided and will provide facts, statements and other information in all communications with the Corporation and its stockholders that are or will be true and correct in all material respects and do not and will not omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; (vi) an undertaking that the Eligible Stockholder agrees to (a) assume all liability stemming from any legal or regulatory violation arising out of the Eligible Stockholder’s communications with the stockholders of the Corporation or out of the information that the Eligible Stockholder provided to the Corporation and (b) indemnify and hold harmless the Corporation and each of its directors, officers and employees individually against any liability, loss or damages in connection with any threatened or pending action, suit or proceeding, whether legal, administrative or investigative, against the corporation or any of its directors, officers or employees arising out of the Eligible Stockholder’s communications with the stockholders of the Corporation or out of the information that the Eligible Stockholder provided to the Corporation; and (vii) in the case of a nomination by a group of stockholders that together comprises an Eligible Stockholder, each group member’s agreement designating one group member as the exclusive group member authorized to interact with the Company for purposes of this Section 5(E) on behalf of all such members with respect to the nomination and matters related thereto, including withdrawal of the nomination.
(6) Within the time period specified in this Section 5(E) for delivering the Notice of Proxy Access Nomination, each Stockholder Nominee must deliver to the Secretary the representations, agreements and other information required by Section 5(B).
(7) In the event that any information or communications provided by the Eligible Stockholder or any Stockholder Nominees to the Corporation or its stockholders ceases to be true and correct in all material respects or omits a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading, each Eligible Stockholder or Stockholder Nominee, as the case may be, shall promptly notify the Secretary of any defect in such previously provided information and of the information that is required to correct any such defect.
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(8) The Corporation shall not be required to include, pursuant to this Section 5(E), a Stockholder Nominee in its proxy materials for any meeting of stockholders (i) for which the Secretary receives a notice that a stockholder has nominated such Stockholder Nominee for election to the Board of Directors pursuant to the advance notice requirements for stockholder nominees for director set forth in Section 5(B), (ii) if the Eligible Stockholder that has nominated such Stockholder Nominee has engaged in or is currently engaged in, or has been or is a “participant” in another person’s, “solicitation” within the meaning of Rule 14a-1(l) under the Exchange Act in support of the election of any individual as a director at the annual meeting other than its Stockholder Nominee(s) or a nominee of the Board of Directors, (iii) if the Stockholder Nominee is or becomes a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director, if elected, that has not been disclosed to the Corporation by the Stockholder Nominee pursuant to Section 5(E)(6), (iv) who is not independent under the listing standards of each principal U.S. exchange upon which the common stock of the Corporation is listed, any applicable rules of the Securities and Exchange Commission and any publicly disclosed standards used by the Board of Directors in determining and disclosing independence of the Corporation’s directors, in each case as determined by the Board of Directors, (v) whose election as a member of the Board of Directors would cause the Corporation to be in violation of these Bylaws, the Certificate of Incorporation, the rules and listing standards of the principal U.S. exchanges upon which the common stock of the Corporation is traded, or any applicable state or federal law, rule or regulation, (vi) who is or has been, within the past fiscal year, an officer or director of a competitor, as defined in Section 8 of the Clayton Antitrust Act of 1914, as amended, (vii) who is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses) or has been convicted in such a criminal proceeding within the past 10 years, (viii) who is subject to any order of the type specified in Rule 506(d) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), (ix) if such Stockholder Nominee or the applicable Eligible Stockholder shall have provided information to the Corporation in respect to such nomination that was untrue in any material respect or omitted to state a material fact necessary in order to make the statement made, in light of the circumstances under which they were made, not misleading, as determined by the Board of Directors or any committee thereof, or (x) if the Eligible Stockholder or applicable Stockholder Nominee fails to comply with its obligations pursuant to this Section 5(E).
(9) Notwithstanding anything to the contrary set forth herein, the Board of Directors or the presiding officer of the annual meeting of stockholders shall declare a nomination by an Eligible Stockholder to be invalid, and such nomination shall be disregarded notwithstanding that proxies in respect of such vote may have been received by the Corporation, if (i) the Stockholder Nominee(s) and/or the applicable Eligible Stockholder shall have breached its or their obligations under this Section 5(E), as determined by the Board of Directors or such presiding officer or (ii) the Eligible Stockholder (or a qualified representative thereof) does not appear at the meeting of stockholders to present any nomination pursuant to this Section 5(E).
(10) Any Stockholder Nominee who is included in the Corporation’s proxy materials for a particular annual meeting of stockholders but either (i) withdraws from or becomes ineligible or unavailable for election at the annual meeting, or (ii) does not receive at least 25% of the votes cast in favor of such Stockholder Nominee’s election, will be ineligible to be a Stockholder Nominee pursuant to this Section 5(E) for the next two annual meetings. For the avoidance of doubt, this Section 5(E) shall not prevent any stockholder from nominating any person to the Board of Directors pursuant to and in accordance with Section 5(B).
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(11) Whenever the Eligible Stockholder consists of a group of more than one stockholder, each provision in this Section 5(E) that requires the Eligible Stockholder to provide any written statements, representations, undertakings, agreements or other instruments or to meet any other conditions shall be deemed to require that each stockholder that is a member of such group to provide such written statements, representations, undertakings, agreements or other instruments and to meet such other conditions. In addition, a group of any two or more funds that are under common management and investment control shall be treated as one stockholder for purposes of forming a group to qualify as an Eligible Stockholder. No person may be a member of more than one group of stockholders constituting an Eligible Stockholder with respect to any annual meeting.
(12) This Section 5(E) shall be the exclusive method for stockholders to include nominees for director in the Corporation’s proxy materials.
Section 6 Adjournments and Postponements of Stockholders’ Meetings.
Any meeting of stockholders, annual or special, may be adjourned by the chairman of the meeting from time to time, and for any reason, to reconvene at the same or some other place, if any, and, except as required by applicable law, notice need not be given of any such reconvened meeting if the hour, place, if any, thereof and the means of remote communication, if any, by which stockholders and holders of proxies for stockholders may be deemed present in person and vote at that reconvened meeting are announced at the meeting at which the adjournment or recess is taken. At the reconvened meeting the Corporation may transact any business it might have transacted at the original meeting. If the adjournment is for more than 30 days, or if after the adjournment the Board of Directors fixes a new record date for the meeting to be reconvened, the Corporation will give, in accordance with Section 5(A), notice of the reconvened meeting to each stockholder of record and entitled to vote at the reconvened meeting.
The Board of Directors may, at any time prior to the holding of a meeting of stockholders, annual or special, and for any reason, cancel, postpone or reschedule such meeting by public announcement made prior to the time previously scheduled for such meeting of stockholders. The meeting may be postponed or rescheduled to such time and place, if any, as is specified in the notice of postponement or rescheduling of such meeting, which notice shall be given in accordance with Section 5(A), as applicable, at least 10 days before the date to which the meeting is postponed or rescheduled.
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Section 7 Quorum and Action of Stockholders.
At any meeting of the stockholders, the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business, except in any case where a larger quorum is required by applicable law, by the Certificate of Incorporation or by these Bylaws. Stock owned by the Corporation, if any, shall not be deemed outstanding for the purpose of determining if a quorum is present. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum. In any case, any meeting may be adjourned from time to time by a majority of the votes properly cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting not less than 10 nor more than 60 days before the date of the meeting.
Each director shall be elected by the affirmative vote of the holders of the majority of the votes cast at a meeting for the election of directors at which a quorum is present; provided, however, that the directors shall be elected by a plurality of the voting power of the capital stock of the Corporation present at any meeting for which the number of candidates for election as directors exceeds the number of directors to be elected, with the determination thereof being made by the Secretary as of the tenth day preceding the date the Corporation first mails or delivers its notice of meeting for such meeting to stockholders. For purposes of this paragraph, a majority of votes cast shall mean that the number of shares voted “for” a director’s election exceeds the number of shares voted “against” such director’s election. Votes cast shall exclude abstentions with respect to that director’s election.
The Board of Directors shall have the power to establish procedures with respect to the resignation of continuing directors who are not reelected as provided above.
When a quorum is present at any meeting, any question brought before the meeting, other than in an election of directors as provided for above, shall be decided by the affirmative vote of the holders of a majority of the voting power of the capital stock of the Corporation which is present in person or represented by proxy at the meeting and entitled to vote on such question, except in any case where a larger vote is required by applicable law, by the Certificate of Incorporation or by these Bylaws.
Section 8 Proxies and Voting.
Except as otherwise may be provided in the Certificate of Incorporation and subject to the provisions of Section 33, each stockholder at every meeting of the stockholders shall be entitled to one vote in person or by proxy for each share of the capital stock held by such stockholder, but no proxy shall be voted after six months from its date, unless the proxy provides for a longer period; and except where the transfer books of the Corporation shall have been closed or a date shall have been fixed as a record date for the determination of the stockholders entitled to vote, as provided in Section 33, no share of capital stock shall be voted at any election for directors which has been transferred on the books of the Corporation within the twenty days preceding such election of directors. Shares of the capital stock of the Corporation belonging to the Corporation shall not be voted upon directly or indirectly.
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Persons holding capital stock in a fiduciary capacity shall be entitled to vote the shares so held, or to give any consent permitted by applicable law, and persons whose capital stock is pledged shall be entitled to vote, or to give any consent permitted by applicable law, unless in the transfer by the pledgor on the books of the Corporation he or she shall have expressly empowered the pledgee to vote thereon, in which case only the pledgee or his or her proxy may represent said capital stock and vote thereon or give any such consent.
The Secretary shall prepare or cause to be prepared, at least 10 days before every election of directors, a complete list of the stockholders entitled to vote at said election, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder during ordinary business hours, at the place where such election meeting is to be held, or such other place as may be specified in the notice of the meeting, within the city, town or village where the election meeting is to be held, for said 10 days, and shall be produced and kept at the time and place of the election meeting for the duration of the election meeting, and be subject to the inspection of any stockholder who may be present. The original or duplicate stock ledger shall conclusively list and identify the stockholders entitled to examine such list or to vote in person or by proxy at such election.
Section 9 Conduct of Stockholders’ Meetings.
At every meeting of stockholders, the Chairman, or, if a chairman has not been appointed or is absent, the Chief Executive Officer, or if no Chief Executive Officer is then serving or is absent, the President, or, if no President is then serving or is absent, any vice president of the Corporation (a “Vice President”), or, if no Vice President is then serving or all are absent, a chairman of the meeting chosen by a majority of the voting power of the capital stock of the Corporation which is present at the meeting and entitled to vote, shall act as chairman of the meeting. The Chairman may appoint the Chief Executive Officer as chairman of the meeting. The Secretary, or, in his or her absence, an Assistant Secretary or other officer or other person directed to do so by the chairman of the meeting, shall act as secretary of the meeting.
To the extent not in conflict with the provisions of applicable law relating thereto, the Certificate of Incorporation or these Bylaws, the Board of Directors may adopt by resolution such rules and regulations for the conduct of meetings of stockholders as it deems appropriate, including such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and holders of proxies for stockholders not physically present at a meeting. Except to the extent inconsistent with those rules and regulations, if any, the chairman of any meeting of stockholders will have the right and authority to adjourn the meeting and prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of that chairman, are appropriate for the proper conduct of that meeting. Those rules, regulations or procedures, by whomever so adopted, may include the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record, their duly authorized and constituted proxies or such other persons or entities as the chairman of the meeting may determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; (v) limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting and matters which are to be voted on by ballot; and (vi) restrictions on the use of audio or video recording devices at the meeting. Except to the extent the Board of Directors or the chairman of any meeting otherwise prescribes, no rules or parliamentary procedure will govern any meeting of stockholders.
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Section 10 Action by Written Consent.
A. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within 10 days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within 10 days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its principal place of business or to any officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action.
B. Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the record date established in accordance with Section 10(A), a written consent or consents signed by a sufficient number of holders to take such action are delivered to the corporation in the manner prescribed in Section 10(A).
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C. In the event of the delivery, in the manner provided by this Section 10, to the Corporation of the requisite written consent or consents to take corporate action and/or any related revocation or revocations, the Corporation shall engage nationally recognized independent inspectors of elections for the purpose of promptly performing a ministerial review of the validity of the consents and revocations. For the purpose of permitting a prompt ministerial review by the independent inspectors, no action by written consent without a meeting shall be effective until the earlier of (i) five business days following delivery to the corporation of consents signed by the holders of the requisite minimum number of votes that would be necessary to take such action, which delivery shall be accompanied by a certification by the stockholder of record (or his or her designee) who delivered, in accordance with Section 5(A), the written notice to the Secretary requesting the Board of Directors to fix a record date or (ii) such date as the independent inspectors certify to the Corporation that the consents delivered to the corporation in accordance with this Section 10 represent at least the minimum number of votes that would be necessary to take the corporate action. Nothing contained in this paragraph shall in any way be construed to suggest or imply that the Board of Directors or any stockholder shall not be entitled to contest the validity of any consent or revocation thereof, whether during or after such five business day period, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto).
Section 11 Board of Directors.
The number of directors which constitute the whole Board of Directors shall be neither less than three nor more than 15. Within the limits above specified, the number of directors shall be determined by resolution of the Board of Directors. The directors shall be elected at the annual meeting of the stockholders, except as provided elsewhere in these Bylaws, and each director elected shall hold office until a successor is elected and qualified, or until he or she sooner dies, resigns or is removed or replaced. Directors need not be stockholders. Newly-created directorships resulting from any increase in the authorized number of directors voted by the Board of Directors between annual meetings may be filled, at the discretion of the board, by an election at a meeting of stockholders held for that purpose, or by an election at a meeting of the Board of Directors, by vote of a majority of the directors then in office though less than a quorum, and each director so chosen shall hold office until the next annual meeting of the stockholders. No decrease in the number of directors shall have the effect of shortening the term of any incumbent director.
At each annual meeting of stockholders, all directors shall be elected to hold office for a term expiring at the next succeeding annual meeting of stockholders and until their successors have been elected and shall qualify.
Section 12 Powers of the Board of Directors. The Board of Directors shall have and may exercise all the powers of the Corporation, except such as are conferred exclusively upon the stockholders by applicable law, by the Certificate of Incorporation or by these Bylaws.
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Section 13 Executive Committee.
The Board of Directors, by a resolution adopted by a majority of the whole board, may from its own number elect an executive committee of the Board of Directors, to consist of not less than two members, and may from time to time designate or alter, within the limits permitted by this Section 13, the duties and powers of such committee, or change its membership. The Chairman and the Chief Executive Officer shall each be an ex officio member of the executive committee.
Such executive committee shall be vested with power to take any action which the board itself could take, except as hereinafter provided, with respect to the conduct and management of the business of the Corporation, including declaring dividends, designating and altering the duties, powers and compensation of the officers and agents of the Corporation, electing or appointing the officers and agents other than the Chairman, Chief Executive Officer, President, treasurer of the Corporation (the “Treasurer”) and Secretary, filling vacancies other than those vacancies occurring within the Board of Directors and executive committee, and authorizing or ratifying all purchases, sales, contracts, offers, conveyances, transfers, negotiable instruments, powers of attorney, bonds, and other transactions and instruments of every kind, as well as authorizing the seal of the Corporation to be affixed to all papers which may require it.
If an executive committee is elected, each member of such executive committee shall hold office until the first meeting of the Board of Directors following the next annual meeting of the stockholders and until his or her successor is elected and qualified, or until he or she sooner dies, resigns, is removed, is replaced by change of membership or becomes disqualified by ceasing to be a director.
One-half of the members of the executive committee then in office, but in no case less than two members, shall constitute a quorum for the transaction of business, but any meeting may be adjourned from time to time by affirmative vote of a majority of the votes cast upon the question, whether or not a quorum is present, and upon such majority consent to adjourn, the meeting may be adjourned without further notice. All minutes of proceedings of the executive committee shall be kept by the Secretary or an Assistant Secretary and shall be available to the Board of Directors upon its verbal or written request. The executive committee may make rules not inconsistent herewith for the holding and conducting of its meetings, but unless otherwise provided in such rules, its meetings shall be held and conducted in the same manner, as nearly as may be, as is provided in these Bylaws for meetings of the Board of Directors. The Board of Directors shall have power and authority to rescind any vote or resolution of the executive committee, but no such rescission shall have retroactive effect.
Section 14 Committees. The Board of Directors may at any time and from time to time, by resolution adopted by a majority of the whole Board of Directors, appoint, designate, change the membership of or terminate the existence of one or more committees, each committee to consist of two or more of the directors of the Corporation. Each such committee shall have such name as may be determined from time to time by resolution adopted by the Board of Directors and shall have and may exercise such powers of the Board of Directors in the management of the business and affairs of the Corporation, including the power to authorize the seal of the Corporation to be affixed to all papers which may require it, as may be determined from time to time by resolution adopted by a majority of the whole board. One-half of the members of each such committee then in office, but in no case less than two members, shall constitute a quorum for the transaction of business, but any meeting may be adjourned from time to time by affirmative vote of a majority of the votes cast upon the question, whether or not a quorum is present, and upon such majority consent to adjourn, the meeting may be adjourned without further notice. All minutes of proceedings of committees shall be kept by the Secretary or an Assistant Secretary and shall be available to the Board of Directors upon its verbal or written request.
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Section 15 Meetings of the Board of Directors.
Regular meetings of the Board of Directors may be held without call or formal notice at such places either within or without the State of Delaware and at such times as the board may from time to time determine. A regular meeting of the Board of Directors may be held without call or formal notice immediately after and at the same place as the annual meeting of the stockholders.
Special meetings of the Board of Directors may be held at any time and at any place either within or without the State of Delaware when called by the Chairman, the Chief Executive Officer, the President, the chief financial officer of the Corporation (the “Chief Financial Officer”) or two or more directors, reasonable notice thereof being given to each director by the Secretary or an Assistant Secretary, or in the case of the death, absence, incapacity or refusal of the Secretary or an Assistant Secretary, by the officer or directors calling the meeting, or without call or formal notice if each director then in office is either present at the special meeting or waives notice before or after such meeting. A waiver of notice in writing, signed by a director entitled to such notice shall be deemed to satisfy such notice requirement whether such written waiver of notice were signed before or after the time of the meeting. In any case it shall be deemed sufficient notice to a director to send notice addressed to him or her at his or her usual or last known business or residence address by postage paid mail at least forty-eight hours before the meeting, or by telegram, telex or facsimile transmission at least twenty-four hours before the meeting, or to give notice to him or her in person at least twenty-four hours before the meeting either by telephone, or by handing him or her a written notice.
Section 16 Quorum and Action of Directors. At any meeting of the Board of Directors, except in any case where a larger quorum or the vote of a larger number of directors is required by applicable law, by the Certificate of Incorporation or by these Bylaws, a quorum for any election or for the consideration of any question shall consist of one-half of the directors then in office, but in no case less than two directors, but any meeting may be adjourned from time to time by a majority of the votes cast upon the question, whether or not a quorum is present, and upon such majority consent to adjournment, the meeting may be adjourned without further notice. When a quorum is present at any meeting, the votes of a majority of the directors present and voting shall be requisite and sufficient to elect any officer, and a majority of the directors present and voting shall decide any questions brought before such meeting, except in any case where a larger vote is required by applicable law, by the Certificate of Incorporation or by these Bylaws.
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Section 17 Restrictions on Stock Transfer. The Board of Directors by resolution or resolutions may from time to time, in connection with any employee stock option or purchase plan, fix limitations and restrictions on the transfer of any or all of the authorized but unissued shares or treasury shares of the Corporation made available for such stock option or purchase plan, such restrictions to take effect upon the issue, sale or transfer of such shares. If such shares are represented by a certificate or certificates, no such limitation or restriction shall be valid unless notice thereof is given on the certificate or certificates representing such shares.
Section 18 Compensation of Directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be paid like compensation for attending committee meetings.
Section 19 Officers and Agents.
The officers of the Corporation shall be chosen by the Board of Directors and shall consist of a Chairman, a Chief Executive Officer, a President, one or more Vice Presidents, a Secretary, a Treasurer and such other officers as the board shall deem necessary or appropriate. The Board of Directors, in its discretion, may choose a Chief Financial Officer, one or more executive vice presidents of the Corporation (each, an “Executive Vice President”), senior vice presidents of the Corporation (each, a “Senior Vice President”), Assistant Secretaries and assistant treasurers of the Corporation (each, an “Assistant Treasurer”). Two or more offices may be held by the same person, except that when one person holds the offices of both President and Secretary such person shall not hold any other office.
The Board of Directors at its first meeting after each annual meeting of stockholders shall choose the corporate officers, of whom only the Chairman, the Chief Executive Officer and the President must be board members. At any time as it shall deem necessary, the Board of Directors may choose any other officers and agents, who shall hold their offices for such terms, and shall exercise such powers, and perform such duties, as the board shall determine from time to time.
Any vacancies occurring in any office of the Corporation shall be filled by the Board of Directors.
Section 20 Chairman of the Board of Directors; Chief Executive Officer.
The Chairman, who may be the Chief Executive Officer, shall perform all duties commonly incident to his or her office and shall perform such other duties as the Board of Directors shall from time to time designate. The Chairman shall preside at all meetings of the stockholders and of the Board of Directors at which he or she is present, except as otherwise voted by the Board of Directors.
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The Chief Executive Officer, in addition to his or her other duties, shall have general and active management authority of corporate business and shall ensure that all orders and resolutions of the Board of Directors are carried into effect.
Section 21 President.
The President, who may be the Chief Executive Officer or the chief operating officer of the Corporation (the “Chief Operating Officer”), shall have such duties and powers as shall be designated from time to time by the Chairman or the Board of Directors. The President shall have all the powers and shall discharge all the duties, other than those as a director, of the Chairman or the Chief Executive Officer during his or her absence or his or her inability or incapacity to act. The President shall preside at all meetings of the stockholders and the Board of Directors, except when the Chairman or the Chief Executive Officer is present at such meetings.
The Chief Operating Officer shall have general responsibility for the daily operations of the Corporation and shall have such duties and powers as shall be designated from time to time by the Chairman, the Chief Executive Officer or the Board of Directors.
Section 22 Executive Vice Presidents, Senior Vice Presidents and Vice Presidents. Any Executive Vice President, any Senior Vice President or, if they are not available, any available Vice President, shall have all the powers and shall discharge all the duties of the President during his or her absence or his or her inability or incapacity to act, and each such Vice President shall further have such powers and discharge such duties as are imposed upon them by these Bylaws or may be from time to time conferred or imposed upon them by the Chairman, the Chief Executive Officer, the President, the Chief Operating Officer or the Board of Directors. Any Executive Vice President or senior Vice President may be the Chief Operating Officer.
Section 23 Chief Financial Officer. The Chief Financial Officer, if such officer is appointed, or if not, the Treasurer, shall be responsible for developing, recommending and implementing financial policies of the Corporation and shall have general responsibility for protecting the Corporation’s financial position. He or she shall keep and maintain or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses capital, retained earnings and shares. He or she shall represent the Corporation in its transactions with banks and other financial institutions.
Section 24 Secretary and Assistant Secretaries.
The Secretary or an Assistant Secretary shall attend all meetings of the stockholders and all meetings of the Board of Directors and its committees, and shall record all the proceedings of the meetings of the stockholders and of the Board of Directors and its committees in a book or books to be kept for that purpose. He or she shall give, or cause to be given, notice of all meetings of the stockholders and meetings of the Board of Directors and shall perform such other duties as may be prescribed by the Chairman, the Chief Executive Officer, the President or by the Board of Directors, under whose supervision the Secretary shall work. The Secretary shall keep in safe custody the seal of the Corporation and when authorized by the Chairman, the Chief Executive Officer, the President, the Board of Directors, or these Bylaws, affix the same to any instrument requiring it and, when so affixed, the Secretary or an Assistant Secretary shall attest the seal by signing his or her name to the sealed document. The Secretary shall be responsible for the stock ledger (which may, however, be kept by any transfer agent or agents of the Corporation under the direction of the Secretary).
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The Assistant Secretary, or if there are more than one, the Assistant Secretaries, in the order determined by the Secretary, shall in the absence or disability of the Secretary perform the duties and exercise the powers of the Secretary, and shall perform such other duties and have such other powers as the Chairman, the Chief Executive Officer, the President, the Board of Directors and the Secretary may from time to time prescribe.
Section 25 Treasurer and Assistant Treasurers.
The Treasurer shall have custody of the corporate funds and securities and shall keep, or cause to be kept, full and accurate account of receipts and disbursements in books belonging to the Corporation, and shall deposit or cause to be deposited all monies and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall invest surplus funds in such investments as he or she shall deem appropriate in consultation with the Chief Financial Officer and pursuant to this authority may buy and sell securities on behalf of the Corporation from time to time. He or she shall disburse or cause to be disbursed the funds of the Corporation as may be ordered by the Board of Directors, the Chairman, the Chief Executive Officer or such other officer as the Chairman or the Chief Executive Officer may from time to time designate, taking proper vouchers for such disbursements. The Treasurer shall work under the supervision of the Chief Financial Officer, if the Board of Directors has appointed such an officer.
If required by the Board of Directors, the Treasurer shall give the Corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of his or her office and for the restoration to the Corporation in case of his or her death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his or her possession or under his or her control belonging to the Corporation. The Assistant Treasurer, if any, shall in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Chairman, the Chief Executive Officer, the President, the Board of Directors and the Treasurer may from time to time prescribe and shall be responsible to and shall report to the Treasurer.
Section 26 General Counsel and Assistant General Counsels.
The general counsel of the Corporation (the “General Counsel”), if the Board of Directors appoints such an officer, shall be the chief counseling officer of the Corporation in all legal matters, and, subject to the control by the Board of Directors, he or she shall have charge of all matters of legal import to the Corporation. His or her relationship to the Corporation shall in all respects be that of an attorney to a client. The General Counsel shall have charge of all litigation of the Corporation and keep himself or herself advised of the progress of all legal proceedings and claims by and against the Corporation, or in which the Corporation is interested by reason of its ownership and control of other Corporations. The General Counsel shall maintain records of all lawsuits and actions of every nature in which the Corporation may be a party, or in which it is interested, with sufficient data to show the nature of the case and the proceedings therein, and such records and the papers relating thereto shall be open at all times to the inspection of the directors and the executive officers of the Corporation.
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The General Counsel shall give to the Board of Directors and to any officer of the Corporation, whenever requested to do so, his or her opinion upon any question affecting the interests of the Corporation and when requested by the Chairman, the Chief Executive Officer, the President, a Vice President, or by the Board of Directors or the executive committee, give his or her opinion upon any subject that may be referred to him or her.
The General Counsel may, in his or her discretion, on behalf of the Corporation, retain such independent attorneys, or law firms, in any and all parts of the world, as he or she may deem necessary to assist him or her in the performance of his or her duties and to protect and further the interests of the Corporation.
The General Counsel shall have power and authority to execute in the name of the Corporation any and all bonds or stipulations for costs or other purposes connected with legal proceedings in any of the courts of justice, for the protection or enforcement of the rights and interests of this Corporation; and, by instrument in writing, he or she may delegate to any such authority appropriate power and authority to execute such bonds or stipulations.
The assistant general counsel of the Corporation (each, an “Assistant General Counsel”), or, if there are more than one, the Assistant General Counsels, shall, in the order determined by the General Counsel, in the absence or disability of the General Counsel, perform his or her duties and exercise his or her powers and shall perform such other duties and have such other powers as the Chairman, the Chief Executive Officer, the President, the Board of Directors and the General Counsel may from time to time prescribe.
Section 27 Controller.
The controller of the Corporation (the “Controller”), if the Board of Directors elects such an officer, shall be the chief accounting officer of the Corporation, shall keep its books of account and accounting records, and shall be in charge of the Corporation’s accounting policies and procedures. The Controller shall work under the supervision of the Chief Financial Officer. The Controller shall, with the approval of the Board of Directors, arrange for annual audits by independent public accountants.
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If required by the Board of Directors, the Controller shall give the Corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of his or her office and for the restoration to the Corporation in case of his or her death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his or her possession or under his or her control belonging to the Corporation.
The assistant controller of the Corporation, if any, shall in the absence or disability of the Controller perform the duties and exercise the powers of the Controller, and shall perform such other duties and have such other powers as the Chairman, the Chief Executive Officer, the President, the Board of Directors and the Controller may from time to time prescribe, and shall be responsible to and shall report to the Controller.
Section 28 Resignations and Removals.
Any director or officer may resign at any time by delivering his or her resignation in writing to the Chairman, the Chief Executive Officer, the President or the Secretary, or to a meeting of the Board of Directors. Such resignation shall take effect at the time stated in the resignation, or if no time be so stated therein, immediately upon its delivery, and without the necessity of its being accepted unless the resignation shall so state.
The stockholders may remove any director from office, by vote of a majority in interest of the capital stock issued and outstanding and entitled to vote for such removal, at any meeting called for that purpose. The Board of Directors may at any time, by vote of a majority of the directors then in office, remove from office the Chairman, the Chief Executive Officer, the President, any Executive Vice President, any Vice President, the Chief Financial Officer, the Treasurer, the Secretary, the General Counsel or the Controller at a special meeting called for that purpose. Any other officer, agent or employee may be removed from office, agency or employment by (i) vote of the Board of Directors at any meeting thereof, or (ii) in the case of any officer, agent or employee not elected to his or her position by the Board of Directors, by any committee or officer upon whom such power may be conferred by the Board of Directors.
No director or officer resigning, and (except where a right to receive compensation for a definite future period shall be expressly provided in a written agreement with the Corporation duly approved by the Board of Directors) no director or officer being removed shall have any right to any compensation as such director or officer for any period following his or her resignation or removal, or any right to damages on account of such removal, whether his or her compensation be by the month or by the year or otherwise.
Section 29 Vacancies. If the office of any director becomes vacant, by reason of death, resignation or removal, a successor may be elected by the Board of Directors by vote of a majority of the remaining directors then in office whether or not the remaining directors constitute a quorum. If the office of any officer becomes vacant, by reason of death, resignation, removal or disqualification, a successor may be elected or appointed by the Board of Directors by vote of a majority of the directors present and voting. Each such successor shall hold office for the unexpired terms, and until his or her successor shall be elected or appointed and qualified, or until he or she sooner dies, resigns, is removed or replaced or becomes disqualified. The Board of Directors shall have and may exercise all its powers notwithstanding the existence of one or more vacancies in its number as fixed by the Board of Directors, subject to any requirements of applicable law or of these Bylaws as to the number of directors required for a quorum or for any vote, resolution or other action.
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Section 30 Waiver of Notice. Whenever any notice is required to be given by applicable law or under the provisions of the Certificate of Incorporation or of these Bylaws, a written waiver of notice, signed by the person or persons entitled to such notice shall be deemed to satisfy such notice requirement, whether such waiver was signed and delivered before or after the meeting or other event for which notice is waived.
Section 31 Certificates of Stock. Shares of capital stock of the Corporation may be certificated or uncertificated, as permitted by applicable law. Every holder of capital stock in the Corporation shall be entitled, upon written request, to have a certificate, signed in the name of the Corporation, by the Chairman, the President or a Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, certifying the number of shares owned by him or her in the Corporation; provided, however, that where any such certificate is countersigned by a transfer agent, other than the Corporation or its employee, or by a registrar, other than the Corporation or its employee, any other signature on such certificate may be a facsimile, engraved, stamped or printed. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the Corporation, and any such issue and delivery shall be regarded as an adoption by the Corporation of such certificate or certificates. Any certificates of capital stock that may be used shall be in such form as shall, in conformity to applicable law, be prescribed from time to time by the Board of Directors or an officer of the Corporation.
Section 32 Transfer of Shares of Stock. Subject to applicable restrictions upon transfer, if any, (1) title to a certificate of capital stock and to the shares represented thereby shall be transferred only by delivery of the certificate properly endorsed, or by delivery of the certificate accompanied by a written assignment of the same, or a written power of attorney to sell, assign or transfer the same or the shares represented thereby, properly executed by the holder thereof, and (2) title to uncertificated shares of capital stock shall be transferred only upon instructions properly executed by the holder thereof. The person registered on the books of the Corporation as the owner of shares shall have the exclusive right to receive dividends thereon and, except as provided in Section 8 with respect to capital stock which has been pledged, to vote thereon as such owner or to give any consent permitted by applicable law, and shall be held liable for such calls and assessments, if any, as may lawfully be made thereon, and except only as may be required by applicable law, may in all respects be treated by the Corporation as the exclusive owner thereof. It shall be the duty of each stockholder to notify the Corporation of his or her post office or mailing address and to furnish to the Corporation such other information as the Corporation may by applicable law be required to obtain.
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Section 33 Transfer Books: Record Date. The Board of Directors shall have power to close the stock transfer books of the Corporation for a period not exceeding 60 days preceding the date of any meeting of stockholders or the date for payment of any dividend or the date for the allotment of rights or the date when any change or conversion or exchange of capital stock shall go into effect or for a period of not exceeding 60 days in connection with obtaining the consent of stockholders for any purpose; provided, however, that in lieu of closing the stock transfer books as aforesaid, the Board of Directors may fix in advance a date, not exceeding 60 days preceding the date of any meeting of stockholders, or any other of the above-mentioned events, or a date in connection with obtaining such consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect to any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any capital stock on the books of the Corporation after any such record date fixed as aforesaid.
Section 34 Loss of Certificates. In the case of the alleged loss or destruction or the mutilation of a certificate of stock, a duplicate certificate may be issued in place thereof upon such terms in conformity with applicable law as the Board of Directors may prescribe; provided, however, that if such shares are no longer certificated, a new certificate shall be issued only upon a written request as contemplated by Section 31.
Section 35 Seal. The corporate seal of the Corporation shall, subject to alteration by the Board of Directors, consist of a flat-faced circular die with the word “Delaware”, together with the name of the Corporation and the year of its organization, cut or engraved thereon. The corporate seal of the Corporation may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 36 Execution of Papers. Unless the Board of Directors generally or in particular cases authorizes the execution thereof in some other manner, all deeds, leases, transfers, sales of securities, contracts, proxies, bonds, notes, checks, drafts and other obligations, agreements and undertakings made, accepted or endorsed by the Corporation, shall be signed by the Chairman, the Chief Executive Officer, the President or by one of the Vice Presidents, and, if such papers require a seal, the seal of the Corporation shall be affixed thereto and attested by the Secretary or an Assistant Secretary.
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Section 37 Fiscal Year. Except as from time to time otherwise provided by the Board of Directors, the fiscal year of the Corporation shall commence on the first day of January of each year.
Section 38 Dividends. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to applicable law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation. Before payment of any dividend, there may be set aside, out of any funds of the Corporation available for dividends, such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the directors shall think conducive to the interests of the Corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.
Section 39 Respecting Certain Contracts. The directors of the Corporation are likely to be connected with other corporations, partnerships, associations or firms with which from time to time this Corporation may have business dealings. No contract or other transaction between the Corporation and any other corporation, partnership, association or firm and no act of the Corporation shall be affected by the fact that directors of this Corporation are pecuniarily or otherwise interested in, or are directors, members or officers of such other corporation, partnership, association or firm. Any director individually, or any firm of which such director may be a member, may be a party to or may be pecuniarily or otherwise interested in any contract or transaction of the Corporation, provided that the fact that he or she or such firm is so interested shall be disclosed or shall have been known to the Board of Directors or a majority thereof that approves such contract or transaction. Every contract, act or transaction which at any annual meeting of the stockholders, or at any meeting of the stockholders called for that purpose, among others, of considering such contract, act or transaction, shall be authorized, approved or ratified by vote of the holders of a majority of the shares in the capital stock of the Corporation present in person or represented by proxy at such meeting (provided that a quorum of stockholders be there present or represented by proxy) shall be as valid and binding upon the Corporation and upon all its stockholders as though such a contract, act or transaction had been expressly authorized, approved and ratified by every stockholder of the Corporation.
Section 40 Indemnification of Directors, Officers and Employees. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (and whether or not by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another company, partnership, joint venture, trust or other enterprise or is or was serving as a fiduciary of any employee benefit plan, fund or program sponsored by the Corporation or such other company, partnership, joint venture, trust or other enterprise, against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding, to the extent and under the circumstances permitted by the DGCL as amended from time to time. Such indemnification (unless ordered by a court) shall be made as authorized in a specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth in the DGCL. Such determination shall be made (1) by the Board of Directors by vote of a majority of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such quorum is not obtainable, or even if obtainable a quorum of disinterested directors so directs by independent legal counsel in a written opinion, or (3) by the stockholders. The foregoing right of indemnification shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
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Section 41 Amendments. These Bylaws may be altered, amended or repealed by (i) the affirmative vote of the holders of a majority of the voting power of the issued and outstanding capital stock of the Corporation or (ii) the affirmative vote of the majority of the directors then holding office at any annual, regular or special stockholders or directors meeting, called for that purpose, the notice of which shall specify the subject matter of the proposed alteration, amendment or repeal and the articles to be affected thereby. Any bylaw, whether made, altered, amended or repealed by the stockholders or directors, may be repealed, amended, further amended or reinstated, as the case may be, by either the stockholders or the directors as aforesaid.
Section 42 Exclusive Forum for Adjudication of Disputes.
Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, including a claim alleging the aiding and abetting of such a breach of fiduciary duty, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or these Bylaws or the Certificate of Incorporation of the Corporation (as either may be amended from time to time), or (iv) any action asserting a claim governed by the internal affairs doctrine or asserting an “internal corporate claim” (as that term is defined in Section 115 of the DGCL) (any action, proceeding or claim described in clauses (i) through (iv) being referred to as a “Covered Action”) shall, to the fullest extent permitted by applicable law, be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the U.S. Federal District Court for the District of Delaware).
If any Covered Action is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall, to the fullest extent permitted by applicable law, be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce this Section 42 (an “Enforcement Action”) and (ii) having service of process made upon such stockholder in any such Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.
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Unless the Corporation consents in writing to the selection of an alternative forum, the Federal District Courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Section 42.
Section 43 Certain Corporate Governance Matters.
A. Executive Chairman; President and CEO.
Effective as of the Effective Time (for all purposes of this Section 43, as defined in the Agreement and Plan of Merger, dated as of May 23, 2021, by and among the Corporation, Double C Merger Sub, Inc. and Cimarex Energy Co. (“Cimarex”), as amended as of June 29, 2021 and as the same may be further amended from time to time (the “Merger Agreement”)), (a) Mr. Dan O. Dinges shall serve as the Executive Chairman of the Board of Directors and (b) Mr. Thomas E. Jorden shall serve as the President and Chief Executive Officer of the Corporation and as a member of the Board of Directors. The term of Mr. Dinges as Executive Chairman of the Board of Directors shall expire effective as of the earlier of (i) December 31, 2022 or (ii) any date as of which Mr. Dinges ceases to serve as a member of the Board of Directors for any reason (such date, the “Chairman Succession Date”); provided, however, that, Mr. Dinges’s service as a member of the Board of Directors need not cease upon the cessation of his term as Executive Chairman of the Board of Directors pursuant to clause (i) of this sentence. The role of Mr. Jorden as President and Chief Executive Officer and of Mr. Dinges as Executive Chairman of the Board of Directors shall be consistent with the employment letter agreements entered into with each of them, respectively, by the Corporation on May 23, 2021 in connection with the Merger Agreement. The Board of Directors shall select a member of the Board of Directors to serve as Chairman of the Board of Directors from and after the Chairman Succession Date.
The following actions shall require the affirmative vote of at least 75% of all the members of the Board of Directors (other than the person being considered for removal pursuant to the following provisions): (i) prior to the Chairman Succession Date, the removal of Mr. Dinges from, or the failure to appoint, re-elect or re-nominate Mr. Dinges to, as applicable, his position as the Executive Chairman of the Board of Directors; and (ii) prior to the Expiration Date (as defined below), the removal of Mr. Jorden from, or the failure to appoint, re-elect or re-nominate Mr. Jorden to, as applicable, his positions as the President and Chief Executive Officer of the Corporation and as a member of the Board of Directors (or as Chairman of the Board of Directors, if Mr. Jorden is elected Chairman of the Board of Directors prior to the Expiration Date).
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B. Board Size and Composition.
Effective as of the Effective Time, the Board of Directors shall be comprised of five Continuing Corporation Directors, including Mr. Dinges, and five Continuing Cimarex Directors, including Mr. Jorden. From and after the Effective Time until the Expiration Date: (i) the number of directors that comprises the full Board of Directors shall be ten, (ii) no vacancy on the Board created by the cessation of service of a director shall be filled by the Board of Directors and the Board of Directors shall not nominate any individual to fill such vacancy, unless (x) such individual would be an independent director of the Corporation, as applicable (unless such predecessor director was not an independent director), (y) in the case of a vacancy created by the cessation of service of a Continuing Corporation Director, not less than a majority of the Continuing Corporation Directors have approved the appointment or nomination (as applicable) of the individual appointed or nominated (as applicable) to fill such vacancy, and (z) in the case of a vacancy created by the cessation of service of a Continuing Cimarex Director, not less than a majority of the Continuing Cimarex Directors have approved the appointment or nomination (as applicable) of the individual appointed or nominated (as applicable) to fill such vacancy; provided that any such appointment or nomination pursuant to clause (y) or (z) shall be made in accordance with applicable Law and the rules of the New York Stock Exchange (or other national securities exchange on which the Corporation’s securities are listed); (iii) at its first meeting following the Effective Time, the Board of Directors shall determine what committees of the Board of Directors shall exist following that time (which shall include, without limitation, all committees required by applicable stock exchange and federal securities laws, rules and regulations); provided that from and after the Effective Time, each committee of the Board of Directors shall consist of an equal number of Continuing Corporation Directors and Continuing Cimarex Directors; (iv) each of the Compensation Committee and the Environment, Health and Safety Committee shall be chaired by a Continuing Cimarex Director; (v) each of the Audit Committee and, subject to the next sentence, the Governance and Social Responsibility Committee shall be chaired by a Continuing Corporation Director; and (vi) the executive committee of the Board of Directors (to the extent it exists) shall have four members, consisting of two Continuing Corporation Directors and two Continuing Cimarex Directors and including Mr. Jorden (for so long as he serves as Chief Executive Officer and a member of the Board of Directors) and Mr. Dinges (for so long as he serves as Executive Chairman or Chairman of the Board of Directors). In the event the Governance and Social Responsibility Committee does not include as members each of the independent members of the Board of Directors, the Governance and Social Responsibility Committee shall have two joint chairs, one a Continuing Corporation Director and one a Continuing Cimarex Director. For purposes of this Section 43, the terms “Continuing Corporation Directors” and “Continuing Cimarex Directors” shall mean, respectively, the directors of the Corporation or Cimarex, as applicable, who were selected to be directors of the Corporation as of the Effective Time, pursuant to Section 2.7(a) of the Merger Agreement, and any directors of the Corporation who were subsequently appointed or nominated and elected to fill a vacancy created by the cessation of service of any such director (or any successor thereto) pursuant to this Section 43, Section B.
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C. Lead Independent Director.
From the Effective Time through the Expiration Date, the Board of Directors shall have a lead independent director who shall be (i) a Continuing Cimarex Director at any time when the Chairman of the Board of Directors is a Continuing Corporation Director and (ii) a Continuing Corporation Director at any time when the Chairman of the Board of Directors is a Continuing Cimarex Director.
D. Headquarters; Name.
Effective as of and from the Effective Time, (i) the headquarters and main office of the Corporation will be located in Houston, Texas and (ii) the Corporation will be given a name selected by mutual agreement of the Corporation and Cimarex prior to the Effective Time.
E. Other Management Positions.
The Senior Vice President, EHS and Engineering of the Corporation as of the date of the Merger Agreement shall serve as Senior Vice President — Production and Operations of the Corporation for a term commencing as of the Effective Time and extending until the first anniversary of the Effective Time. The Chief Executive Officer shall be entitled to designate a successor to fill the vacancy in the role of Senior Vice President — Production and Operations resulting from the expiration or termination of such term.
F. Amendments; Interpretation.
Effective as of the Effective Time until the completion of the Corporation’s 2024 annual meeting of stockholders (the “Expiration Date”), the provisions of this Section 43 may be modified, amended or repealed, and any bylaw provision or other resolution (including any proposed corresponding modification, amendment or repeal of any provision of the Corporation’s other constituent documents) inconsistent with this Section 43 may be adopted, only by (and any such modification, amendment, repeal or inconsistent bylaw provision or other resolution may be proposed or recommended by the Board of Directors for adoption by the stockholders of the Corporation only by) the affirmative vote of at least 75% of the full Board of Directors. In the event of any inconsistency between any provision of this Section 43 and any other provision of these Bylaws or the Corporation’s other constituent documents, the provisions of this Section 43 shall control to the fullest extent permitted by law.
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Exhibit 10.1
September 29, 2021
[Executive]
[Address]
[Address]
Re: Change in Control Agreement
Dear [Name]:
Reference is made to the Agreement and Plan of Merger, dated as of May 23, 2021, among Cabot Oil & Gas Corporation (“Cabot”), Double C Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Cabot (“Merger Sub”), and Cimarex Energy Co., a Delaware corporation (“Cimarex”), as subsequently amended on June 29, 2021 (the “Merger Agreement”), pursuant to which Merger Sub will be merged with and into Cimarex (the “Merger”) in accordance with the terms of the Merger Agreement.
This letter agreement (this “Letter Agreement”) is intended to memorialize our agreement regarding the treatment of certain rights under the Change in Control Agreement, dated as of [DATE] (as amended [DATE]) between you and Cabot (the “Change in Control Agreement”). Except as otherwise indicated herein, capitalized terms that are used but not defined in this Letter Agreement, but that are defined in the Change in Control Agreement, shall have the meanings ascribed to them in the Change in Control Agreement.
This Letter Agreement shall automatically terminate and be of no force or effect if your employment with Cabot is terminated for any reason before the Closing (as defined in the Merger Agreement) or the Merger Agreement is terminated for any reason without the occurrence of the Closing.
1. Termination of Change in Control Agreement. By signing below, you and Cabot agree that, subject to and in consideration for the compensation described in Section 2 of this Letter Agreement, the Change in Control Agreement shall terminate and be of no further force or effect (other than provisions of such agreement [relating to Sections 280G and 4999 of the Code (and any associated definitional provisions) and] relating to disputes, which shall survive and continue in full force and effect and be incorporated by reference into this Letter Agreement and apply to this Letter Agreement and the [Deferred Compensation Contribution/Deferred Compensation Agreement] as if set forth herein) effective as of the Effective Time (as defined in the Merger Agreement).
2. Deferred Compensation. As of the Closing Date (as defined in the Merger Agreement), Cabot will [cause to be credited to the Cabot Oil & Gas Corporation Deferred Compensation Plan (the “Deferred Compensation Plan”) a Company Discretionary Contribution Amount (as defined in the Deferred Compensation Plan) equal to $[_____________] (the “Deferred Compensation Contribution”). The Deferred Compensation Contribution shall be credited to your Company Contribution Account and shall be deemed to be invested in the Investment Fund Subaccounts (each as defined in the Deferred Compensation Plan) designated by you pursuant to the Deferred Compensation Plan. The Deferred Compensation Contribution will be paid to you from Cabot as provided in the payment provisions of the Deferred Compensation Plan.][enter into a deferred compensation agreement with you substantially in the form set forth in Exhibit A (the “Deferred Compensation Agreement”) in an amount equal to $[_____________].
3. Restrictive Covenants. In consideration of the benefits provided by this Letter Agreement, you agree to comply with the restrictive covenants set forth in Exhibit [A/B] hereto.
4. Section 409A. This Letter Agreement is intended to be exempt from or comply with Section 409A of the Code and ambiguous provisions, if any, shall be construed in a manner that is compliant with or exempt from the application of Section 409A.
5. [Section 280G. In the event that any payment or benefit received or to be received by you from the Company (or an affiliate or successor) pursuant to this Letter Agreement or otherwise (“Payments”) would be subject (in whole or part) to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Excise Tax”), then the Payments shall be either (a) provided in full pursuant to the terms of this Letter Agreement or any other applicable agreement, or (b) reduced to an amount equal to the greatest portion of the Payments that, if paid, would result in no portion of any Payment being subject to the Excise Tax (the “Reduced Amount”), whichever results in the receipt by you, on a net after-tax basis (including, without limitation, any Excise Tax), of the greatest amount, notwithstanding that all or some portion of such Payments may be subject to the Excise Tax. Any reduction shall be made by agreement of the Company and you first from Payments that are exempt from Section 409A of the Code, and only thereafter from Payments that are subject to Section 409A of the Code. To the extent the reduction is made from Payments that are subject to Section 409A of the Code, the reduction shall first apply to any in-kind benefits (or reimbursements) beginning with the benefits (or reimbursements) to be paid latest in time; second, to Payments in the form of shares of common stock of the Company, beginning with shares to be delivered latest in time; third, with respect to cash Payments, beginning with the cash Payments to be made latest in time.]
6. Governing Law. The validity, interpretation, construction and performance of this Letter Agreement shall in all respects be governed by the laws of the State of Texas, without reference to any principles of conflicts of law thereof that would result in the application of the laws of any other jurisdiction.
7. Entire Agreement; Amendments. This Letter Agreement, together with the Change in Control Agreement and [the Deferred Compensation Contribution/the Deferred Compensation Agreement], represents the complete understanding between you and Cabot regarding the subject matter of this Letter Agreement. No amendment to this Letter Agreement shall be binding upon either party unless in writing and signed by or on behalf of such party. The obligations of the parties hereto are severable and divisible. In the event any provision hereunder is determined to be illegal or unenforceable, the remainder of this Letter Agreement shall continue in full force and effect.
2
8. Employment at Will; Tax Withholding. This Letter Agreement does not provide a guarantee of employment for any specific duration or a guarantee of any fixed terms or conditions of employment. Your employment with Cabot will continue to be “at will”, which means that either you or Cabot may terminate your employment relationship at any time, with or without cause or notice, subject only to payment of the compensation and benefits contemplated by this Letter Agreement or any other agreement between you and Cabot or any severance or benefit plan maintained by Cabot pursuant to which you are a participant or a beneficiary. Employment with Cabot for purposes of this Letter Agreement shall include employment with any subsidiary or affiliate of Cabot. Cabot reserves the right to withhold or cause to be withheld applicable local, state, federal and foreign taxes from any amounts paid pursuant to this Letter Agreement in the reasonable discretion of Cabot.
[Signature Page Follows]
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| Sincerely, | ||
| CABOT OIL & GAS CORPORATION | ||
| By: | ||
| Name: | ||
| Title: | ||
| Acknowledged and Agreed: | ||
| [Name] | ||
[Signature Page for Letter Agreement]
[Exhibit A
Deferred Compensation Agreement]
A-1
Exhibit [A/B]
Restrictive Covenants
In return for the consideration provided for in the Letter Agreement as well as the goodwill and Confidential Information you receive from, develop, or have access to due to your employment with Cabot, you acknowledge and agree that you are subject to the following restrictive covenants, both during and after the term of your employment by Cabot. Therefore, you agree as follows:
1. Non-Compete. You shall not, either during the term of your employment by Cabot or for a period of 18 months thereafter, engage in any Competitive Business (as defined below) within any county or parish or adjacent to any county or parish in which Cabot or an affiliate owns an interest (whether by ownership, leasehold or otherwise) in any oil or natural gas properties or other properties utilized by Cabot in the operation of its business; provided, however, that the ownership of less than five percent of the outstanding capital stock of a corporation whose shares are traded on a national securities exchange or on the over-the-counter market shall not be deemed engaging in a Competitive Business. “Competitive Business” shall mean the acquisition, development or production of crude oil and/or natural gas, or any other business activities that are the same as or similar to Cabot's or any of its affiliate's business operations as its business exists, and in the geographic areas in which Cabot is operating, on the date of termination of your employment.
2. No Solicitation. You shall not, directly or indirectly, either during the term of your employment by Cabot or for a period of 18 months thereafter, (a) solicit, directly or indirectly, the services of any person who was an employee of Cabot, its subsidiaries, divisions or affiliates, or otherwise induce such employee to terminate or reduce such employment or (b) solicit the business of any person who was a customer of Cabot, its subsidiaries, divisions or affiliates, in each case at any time during the last year of the term of your employment by Cabot.
3. Non-Disclosure: You shall not, during the term of your employment by Cabot or any time thereafter, irrespective of the time, manner or cause of the termination of your employment, directly or indirectly use or reveal, divulge, disclose or communicate to any person or entity, other than in the course of performing your job duties to authorized officers, directors and employees of Cabot, in any manner whatsoever, any Confidential Information subsequent to the time of your termination of employment for any purpose, without the prior written consent of Cabot. “Confidential Information” shall mean information about Cabot or any of its subsidiaries or affiliates or their respective businesses, products and practices, disclosed to or known or obtained by you as a direct or indirect consequence of or through your employment with Cabot, which information is not generally known in the business in which Cabot or such subsidiaries or affiliates are or may be engaged. However, Confidential Information shall not include under any circumstances any information with respect to the foregoing matters which is (a) available to the public from a source other than you, (b) released in writing by Cabot to the public or to persons who are not under a similar obligation of confidentiality to Cabot and who are not parties to this Letter Agreement, (c) obtained by you from a third party not under a similar obligation of confidentiality to Cabot, (d) required to be disclosed by any court process or any government agency or department of any government, or (e) the subject of a written waiver executed by Cabot for the benefit of you.
B-1
4. Return of Property: Upon your termination of employment, you will surrender to Cabot all Confidential Information, including without limitation, all lists, charts, schedules, reports, financial statements, books and records of Cabot or any of Cabot’s subsidiaries or affiliates, and all copies thereof, and all other property belonging to Cabot or any of Cabot’s subsidiaries or affiliates, provided, however, that you shall be accorded reasonable access to such Confidential Information subsequent to your termination of employment for any proper purpose as determined in the reasonable judgment of Cabot. In addition, you agree to search for and delete all Cabot business information (other than the payroll information that you may need to file tax returns or keep for financial records), including all Confidential Information, that may exist on your personal electronic devices such as a smartphone, laptop, tablet, personal computer, flash drive, or any other electronic storage device and, if requested by Cabot, certify that you have searched for, returned, and deleted all Cabot information from your personal electronic storage devices.
5. Protected Rights and Immunity. Notwithstanding the foregoing, nothing in this Letter Agreement or the restrictive covenants above limits your ability to file a charge or complaint with a government agency. In addition, the non-disclosure provision above does not affect your ability to communicate with any government agency or otherwise participate in any investigation or proceeding that may be conducted by any government agency, including providing documents or other information, without notice to Cabot. Further, you acknowledge that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that — (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
6. Remedies. You acknowledge and agrees that Cabot’s remedy at law for a breach or a threatened breach of the provisions of the foregoing covenants could be inadequate or difficult to quantify, and in recognition of this fact, in the event of a breach or threatened breach by you of any of the provisions of the foregoing covenants, it is agreed that Cabot will be entitled to seek equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available, without posting bond or other security. You acknowledge that the granting of a temporary injunction, a temporary restraining order or other permanent injunction merely prohibiting you from engaging in any business activities would not be an adequate remedy upon breach or threatened breach of the foregoing covenants, and consequently agree upon any such breach or threatened breach to the granting of injunctive relief prohibiting you from engaging in any activities prohibited by the foregoing covenants. No remedy herein conferred is intended to be exclusive of any other remedy, and each and every such remedy will be cumulative and will be in addition to any other remedy given hereunder now or hereinafter existing at law or in equity or by statute or otherwise. In addition, in the event of any breach or suspected breach of the provisions of the foregoing covenants, Cabot shall have the right to suspend immediately any payments or benefits that may otherwise be due to you pursuant to this Letter Agreement.
B-2
Exhibit 10.2
CABOT OIL & GAS CORPORATION
DEFERRED COMPENSATION AGREEMENT
This Deferred Compensation Agreement (“Agreement”) is made between Cabot Oil & Gas Corporation, a Delaware corporation (the “Company”), and Phillip L. Stalnaker (“Executive”), effective as of October 1, 2021 (the “Effective Date”) in connection with the Company and Executive entering into a letter agreement (the “letter agreement”) regarding the treatment of certain rights under Executive’s Change in Control Agreement (as defined in such letter agreement).
This Agreement shall automatically terminate and be of no force or effect if Executive’s employment with the Company is terminated for any reason before the Closing (as defined in the Agreement and Plan of Merger, dated as of May 23, 2021, among the Company, Double C Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), and Cimarex Energy Co., a Delaware corporation (“Cimarex”), as subsequently amended on June 29, 2021 (the “Merger Agreement”), pursuant to which Merger Sub will be merged with and into Cimarex (the “Merger”) in accordance with the terms of the Merger Agreement) or the Merger Agreement is terminated for any reason without the occurrence of the Closing.
ARTICLE I
DEFINITIONS
| 1.1 | Definitions. |
Whenever the following words and phrases are used in this Agreement, with the first letter capitalized, they shall have the meanings specified below.
(a) “Account” shall mean the bookkeeping account maintained by the Committee for Executive that, pursuant to Section 3.1, is credited with amounts equal to (i) $3,131,700 and (ii) earnings and losses.
(b) “Beneficiary” or “Beneficiaries” shall mean the person or persons, including a trustee, personal representative or other fiduciary, last designated in writing by Executive in accordance with procedures established by the Committee to receive the benefits specified hereunder in the event of Executive’s death. No beneficiary designation shall become effective until it is filed with the Committee. Any designation shall be revocable at any time through a written instrument filed by Executive with the Committee with or without the consent of the previous Beneficiary. If there is no such designation or if there is no surviving designated Beneficiary, then the Beneficiary shall be Executive’s surviving spouse, if any, or, if there is no surviving spouse, Executive’s estate. Payment by the Company to the Beneficiary identified pursuant to the terms of this Section 1.1(b) if no such designation exists, of all benefits owed hereunder shall terminate any and all liability of the Company.
(c) “Board of Directors” or “Board” shall mean the Board of Directors of the Company.
(d) “Code” shall mean the Internal Revenue Code of 1986, as amended.
(e) “Committee” shall mean the Committee appointed by the Board to administer the Agreement in accordance with Article VI.
(f) “Company” shall mean Cabot Oil & Gas Corporation and any successor corporations.
(g) “Deferred Compensation Plan” shall mean Cabot Oil & Gas Corporation Deferred Compensation Plan now in effect, or as amended from time to time.
(h) “Distributable Amount” shall mean the balance in Executive’s Account.
(i) “401 (k) Plan” shall mean the retirement plan maintained by the Company on the Effective Date that is intended to qualify under Sections 401(a) and 401(k) of the Code and any successor or replacement plan.
(j) “Fund” or “Funds” shall mean one or more of the investment funds selected by the Committee pursuant to Section 2.1(b).
(k) “Interest” shall mean, for each Fund, an amount equal to the net rate of gain or loss on the assets of such Fund, as calculated on a daily basis.
(l) “Investment Fund Subaccount” means one of the separate subaccounts into which Executive’s Account is divided pursuant to Executive’s election under Section 2.1(a).
(m) “Payment Date” shall mean
(i) except as provided in Section 1.1(m)(ii), the 15th business day following the earlier of (A) the date of Executive’s Separation from Service or (B) Executive’s death; and
(ii) if Executive is a Specified Employee on the Payment Date otherwise applicable in Section 1.1(m)(i), the 15th business day following the earlier of (A) the expiration of six months following the date of Executive’s Separation from Service or (B) the date of Executive’s death.
(n) “Section 409A” shall mean Section 409A of the Code and all related regulations and notices in effect thereunder.
(o) “Separation from Service” shall mean separation from service as defined in Treasury Regulation 1.409A-1(h), other than because of Executive’s death.
(p) “Specified Employee” shall mean an individual who, on the date of Separation from Service with the Company, is treated as a Specified Employee by the Company in accordance with the requirements of Section 409A.
(q) “Trust” shall mean a trust that may be established pursuant to Section 3.2.
(r) “Unforeseeable Emergency” shall mean a severe financial hardship to Executive resulting from:
(i) a sudden and unexpected illness or accident of Executive or of his spouse, beneficiary or dependent (as defined in Section 152 of the Code without regard to Section 152(b)(1), Section 152(b)(2) and Section 152(d)(1)(B));
(ii) loss of Executive’s property due to casualty and not otherwise covered by insurance; or
(iii) such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond Executive’s control.
Except as otherwise provided herein, “Unforeseeable Emergency” shall not include the purchase of a home or the payment of college tuition.
The Committee shall have the sole authority and discretion to determine whether Executive has experienced an Unforeseeable Emergency and may require Executive to submit such documentary evidence as the Committee, in its sole discretion, deems necessary to establish the existence or non-existence of an Unforeseeable Emergency and/or the amount of such distribution. The Committee shall have the sole discretion and authority to establish the time period within which Executive must provide any such documentary evidence.
(s) “Year” shall mean the period of twelve consecutive months beginning on each January 1 and ending on December 31.
ARTICLE II
INVESTMENT ELECTIONS
| 2.1 | Investment Elections. |
(a) In connection with entering into this Agreement, Executive shall designate the types of Funds Executive’s Account will be deemed to be invested in for purposes of determining the amount of Interest to be credited to the Account. In making the designation pursuant to this Section 2.1, Executive may specify that all or any multiple of his Account in whole percentage increments (equal to or greater than 1%) be deemed to be invested in one or more of the types of Funds provided under the Agreement as communicated from time to time by the Committee. Executive may change the designation made under this Section 2.1 effective as of the next following business day, by following the procedures set forth by the Committee; provided, however, that the portion of Executive’s Account that is subject to such change shall be at least $250. If Executive fails to designate a type of fund under this Section 2.1, his Account shall be invested in the fund or funds designated by Executive under the Deferred Compensation Plan and if no such election has been made thereunder, his account shall be invested in the fund designated by the Committee.
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(b) Although Executive may designate the type of investments, the Committee shall not be bound by such designation. The Committee, from time to time, in its sole discretion, may designate commercially available investments of each of the types communicated by the Committee to Executive pursuant to Section 2.1(a) above to be the Funds. The interest rate of each such commercially available Fund shall be used to determine the amount of earnings or losses to be credited to Executive’s Account under Article III.
ARTICLE III
ACCOUNT AND TRUST FUNDING
| 3.1 | Account. |
The Committee shall establish and maintain an Account for Executive under the Agreement. Executive’s Account shall be further divided into separate Investment Fund Subaccounts, each of which corresponds to a Fund elected by Executive pursuant to Section 2.1(a). Executive’s Account shall be credited as follows:
(a) On or within fifteen business days of the Effective Date, the Committee shall credit the Investment Fund Subaccounts of Executive’s Account with an amount equal to $3,131,700 in accordance with Executive’s designation under Section 2.1(a); that is, the portion of the credit that Executive has elected to be deemed to be invested in a certain type of Fund shall be credited to the Investment Fund Subaccount corresponding to that Fund; and
(b) As of each payroll date during each Year, each Investment Fund Subaccount of Executive’s Account shall be credited with Interest in an amount equal to that determined by multiplying the balance credited to such Investment Fund Subaccount immediately following the preceding payroll date by the Interest Rate for the corresponding Fund selected by the Company pursuant to Section 2.1(b).
| 3.2 | Trust Funding. |
The Company may create a Trust with respect to which Fidelity Management Trust Company, or another third party, may serve as Trustee. The Company may contribute to the Trust an amount equal to the amount credited to Executive’s Account pursuant to Section 3.1. The Company may also contribute such additional amounts as it shall deem necessary or appropriate.
Although the principal of the Trust and any earnings thereon shall, if established, be held separate and apart from other funds of Company and, except as provided below, shall be used exclusively for the uses and purposes of Executive and Beneficiaries as set forth therein, neither Executive nor his Beneficiaries shall have any preferred claim on, or any beneficial ownership in, any assets of the Trust prior to the time such assets are paid to Executive or his Beneficiaries as benefits and all rights created under this Agreement shall be unsecured contractual rights of Executive and his Beneficiaries against the Company. Any assets held in the Trust will be subject to the claims of Company’s general creditors under federal and state law in the event of insolvency as may be defined in the Trust.
Except as provided above, assets of the Agreement and, if established, the Trust shall never inure to the benefit of the Company and the same shall be held for the exclusive purpose of providing benefits to Executive and his Beneficiaries and deferring reasonable expenses of administering the Agreement and, if established, the Trust.
ARTICLE IV
VESTING
| 4.1 | Vesting. |
Executive’s Account shall be 100% vested at all times.
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ARTICLE V
DISTRIBUTIONS
| 5.1 | Distribution of Account. |
The Distributable Amount shall be paid to Executive in a lump sum on the Payment Date.
| 5.2 | Inability to Locate Executive. |
In the event that the Committee is unable to locate Executive or Beneficiary within two years following the required Payment Date, the amount allocated to Executive’s Account shall be forfeited and, to the extent that such amounts have been funded through contributions to the Trust Fund, shall be credited and restored to the Company.
ARTICLE VI
ADMINISTRATION
| 6.1 | Committee. |
A Committee shall be appointed by, and serve at the pleasure of, the Board of Directors. The number of members comprising the Committee shall be determined by the Board which may from time to time vary the number of members. A member of the Committee may resign by delivering a written notice of resignation to the Board. The Board may remove any member by delivering a certified copy of its resolution of removal to such member. Vacancies in the membership of the Committee shall be filled promptly by the Board.
| 6.2 | Committee Action. |
The Committee shall act at meetings by affirmative vote of a majority of the members of the Committee. Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a written consent to the action is signed by all members of the Committee and such written consent is filed with the minutes of the proceedings of the Committee. The Chairman or any other member or members of the Committee designated by the Chairman may execute any certificate or other written direction on behalf of the Committee.
| 6.3 | Powers and Duties of the Committee. |
(a) The Committee, on behalf of Executive and his Beneficiaries, shall enforce the Agreement in accordance with its terms, shall be charged with the general administration of the Agreement, and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following:
(i) To select the Funds in accordance with Section 2.1(b) hereof;
(ii) To construe and interpret the terms and provisions of this Agreement;
(iii) To compute and certify to the amount of benefits payable to Executive and his Beneficiaries;
(iv) To maintain all records that may be necessary for the administration of the Agreement;
(v) To provide for the disclosure of all information and the filing or provision of all reports and statements to Executive, Beneficiaries or governmental agencies as shall be required by law;
(vi) To make and publish such rules for the regulation of the Agreement and procedures for the administration of the Agreement as are not inconsistent with the terms hereof;
(vii) To appoint an administrator or any other agent, and to delegate to them such powers and duties in connection with the administration of the Agreement as the Committee may from time to time prescribe; and
(viii) To take all actions necessary for the administration of the Agreement.
| 6.4 | Construction and Interpretation. |
The Committee shall have full discretion to construe and interpret the terms and provisions of this Agreement, which interpretations or construction shall be final and binding on all parties, including, but not limited to, the Company and Executive or Beneficiary.
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| 6.5 | Information. |
To enable the Committee to perform its functions, the Company shall supply full and timely information to the Committee on all matters relating to Executive’s Separation from Service or death, and such other pertinent facts as the Committee may require.
| 6.6 | Compensation, Expenses and Indemnity. |
(a) The members of the Committee shall serve without compensation for their services hereunder.
(b) The Committee is authorized, at the expense of the Company, to employ such legal counsel as it may deem advisable to assist in the performance of its duties hereunder. Expenses and fees in connection with the administration shall be paid by the Company.
(c) To the extent permitted by applicable state law, the Company shall indemnify and hold harmless the Committee and each member thereof, the Board of Directors and any delegate of the Committee who is an employee of the Company against any and all expenses, liabilities and claims, including legal fees to defend against such liabilities and claims arising out of their discharge in good faith of responsibilities under or incident to the Agreement, other than expenses and liabilities arising out of willful misconduct. This indemnity shall not preclude such further indemnities as may be available under insurance purchased by the Company or provided by the Company under any bylaw, agreement or otherwise, as such indemnities are permitted under state law.
| 6.7 | Quarterly Statements. |
Under procedures established by the Committee, Executive shall receive a statement with respect to his Account on a quarterly basis as of each March 31, June 30, September 30 and December 31.
| 6.8 | Claims and Review Procedures. |
(a) Claims Procedure. If Executive believes he is entitled to any rights or benefits under the Agreement, he may file a claim in writing with the Chief Executive Officer of the Company (“CEO”). If any such claim is wholly or partially denied, the CEO will notify such person of his decision in writing. Such notification will contain (i) specific reasons for the denial, (ii) specific reference to pertinent Agreement provisions, (iii) a description of any additional material or information necessary for Executive to perfect such claim and an explanation of why such material or information is necessary, and (iv) information as to the steps to be taken if Executive wishes to submit a request for review, the time limits applicable to such procedures, and a statement of Executive’s rights following an adverse benefit determination on review, including a statement of his right to file a lawsuit under the Employee Retirement Income Security Act of 1974 (“ERISA”) if the claim is denied on appeal. Such notification will be given within 90 days after the claim is received by the CEO (or within 180 days, if special circumstances require an extension of time for processing the claim, and if written notice of such extension and circumstances is given to Executive within the initial 90-day period).
(b) Claim Review Procedure. Within 60 days after the date on which Executive receives a notice of denial, Executive or his duly authorized representative (“Applicant”) may (i) file a written request with the CEO for a review of his denied claim; (ii) review pertinent documents; and (iii) submit issues and comments in writing. The Applicant may submit written comments, documents, records and other information relating to the claim for benefits under this Agreement. The Applicant may request a formal hearing before the CEO, which the CEO may grant in his discretion. The CEO shall notify the Applicant of his decision with regard to Applicant’s claim not later than 60 days of the receipt of Applicant’s request; provided, however, that CEO may determine that an extension of up to 60 days from the termination date of the initial 60-day review period is required and shall advise the Applicant in writing of the special circumstances requiring any such extension and the date by which the expects to render a decision. Such special circumstances that require an extension of time for rendering a decision include, but are not limited to, the need to hold a hearing. The decision on review shall be in written or electronic notice of the final determination. If the claim is denied in whole or part, such notice, which shall be in a manner calculated to be understood by the person receiving such notice, shall include (A) the specific reasons for the decision, (B) the specific references to the pertinent Agreement provisions on which the decision is based, (C) that the Applicant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim for benefits, and (D) a statement of the Applicant’s right to file a lawsuit under ERISA.
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Benefits under this Agreement will only be paid if the CEO decides, in his discretion, that an Applicant is entitled to them. The decision of the CEO on review of the claim denial shall be binding on all parties when Executive has exhausted the claims procedure under this Section 6.8. Moreover, no action at law or in equity shall be brought to recover benefits under this Agreement prior to the date the Applicant has exhausted the administrative remedies under this Section 6.8.
ARTICLE VII
MISCELLANEOUS
| 7.1 | Unsecured General Creditor. |
Executive and his Beneficiaries, heirs, successors, and assigns shall have no legal or equitable rights, claims, or interest in any specific property or assets of the Company. No assets of the Company shall be held in any way as collateral security for the fulfilling of the obligations of the Company under this Agreement. Any and all of the Company’s assets shall be, and remain, the general unpledged, unrestricted assets of the Company. The Company’s obligation under the Agreement shall be merely unfunded and unsecured promise of the Company to pay money in the future, and the rights of Executive and Beneficiaries shall be no greater than those of unsecured general creditors. It is the intention of the Company that this Agreement be unfunded for purposes of the Code and for purposes of Title 1 of ERISA.
| 7.2 | Restriction Against Assignment. |
The Company shall pay all amounts payable hereunder only to the person or persons designated by the Agreement and not to any other person or corporation. No part of Executive’s Account shall be liable for the debts, contracts, or engagements of any successors in interest, nor shall Executive’s Account be subject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person have any right to alienate, anticipate, sell, transfer, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever. If Executive, any Beneficiary or successor in interest is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, commute, assign, pledge, encumber or charge any distribution or payment from the Agreement, voluntarily or involuntarily, the Committee, in its discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of Executive, such Beneficiary or successor in interest in such manner as the Committee shall direct.
| 7.3 | Withholding. |
There shall be deducted from each payment made under the Agreement to Executive (or Beneficiary) all taxes which are required to be withheld by the Company in respect to such payment or this Agreement. The Company shall have the right to reduce any payment (or compensation) by the amount of cash sufficient to provide the amount of said taxes.
| 7.4 | Amendment, Modification, Suspension or Termination. |
The Committee may amend, modify, suspend or terminate the Agreement in whole or in part, except that no amendment, modification, suspension or termination shall have any retroactive effect to reduce any amounts allocated to Executive’s Account. In the event that this Agreement is terminated, the amounts allocated to Executive’s Account shall be distributed to Executive or, in the event of his death, his Beneficiary in a lump sum on the fifteenth business day following the date of termination.
| 7.5 | Governing Law. |
This Agreement shall be construed, governed and administered in accordance with the laws of the State of Delaware.
| 7.6 | Receipt or Release. |
Any payment to Executive or Executive’s Beneficiary in accordance with the provisions of the Agreement shall, to the extent thereof, be in full satisfaction of all claims under the Agreement against the Committee and the Company. The Committee may require Executive or Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect; provided, however, that the terms and conditions applicable to such release shall not cause this Agreement or the payment of any amounts under this Agreement to fail to comply with Section 409A.
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| 7.7 | Payments on Behalf of Persons Under Incapacity. |
In the event that any amount becomes payable under the Agreement to a person who, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give a valid receipt therefore, the Committee may direct that such payment be made to any person found by the Committee, in its sole judgment, to have assumed the care of such person. Any payment made pursuant to such determination shall constitute a full release and discharge of the Committee and the Company.
| 7.8 | Limitation of Rights and Employment Relationship. |
Neither the establishment of the Agreement or Trust nor any modification thereof, nor the creating of any fund or account, nor the payment of any benefits shall be construed as giving to Executive or other person any legal or equitable right against the Company or the trustee of the Trust except as provided in the Agreement and, if established, Trust; and in no event shall the terms of employment of Executive be modified or in any way be affected by the provisions of the Agreement and, if established, Trust.
| 7.9 | Headings. |
Headings and subheadings in this Agreement are inserted for convenience of reference only and are not to be considered in the construction of the provisions hereof.
| 7.10 | Section 409A. |
The following provisions shall apply to this Agreement, notwithstanding any provision to the contrary:
(a) This Agreement is intended to comply with or be exempt from Section 409A of the Code and ambiguous provisions, if any, shall be construed in a manner that is compliant with or exempt from the application of Section 409A.
(b) This Agreement shall not be amended or terminated in a manner that would cause the Agreement or any amounts payable under the Agreement to fail to comply with the requirements of Section 409A, to the extent applicable, and, further, the provisions of any purported amendment that may reasonably be expected to result in such non-compliance shall be of no force or effect with respect to the Agreement.
(c) The Agreement shall neither cause nor permit any payment, benefit or consideration to be substituted for a benefit that is payable under this Agreement if such action would result in the failure of any amount that is subject to Section 409A to comply with the applicable requirements of Section 409A.
(d) Notwithstanding any provision of this Agreement to the contrary, if Executive is a Specified Employee as of the date of Executive’s Separation from Service, then any amounts or benefits which are payable under this Agreement upon Executive’s Separation from Service which are subject to the provisions of Section 409A and are not otherwise excluded under Section 409A and would otherwise be payable during the first six-month period following such Separation from Service shall be paid on the first business day next following the earlier of (i) the date that is six months and one day following the date of Executive’s Separation from Service or (ii) the date of Executive’s death.
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IN WITNESS WHEREOF, the Company has caused this document to be executed by its duly authorized officer on this 30th day of September, 2021.
COMPANY
| By: | /s/ Scott C. Schroeder | ||
| Name: | Scott C. Schroeder | ||
| Title: | Executive Vice President and Chief Financial Officer | ||
EXECUTIVE
| /s/ Phillip L. Stalnaker | |
| Phillip L. Stalnaker |
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Exhibit 10.3
COTERRA ENERGY INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement is made and entered into this ___ day of ________, 202_ (“Agreement”), by and between COTERRA ENERGY INC., a Delaware corporation (“Company”), and ________ (“Indemnitee”).
WHEREAS, highly competent persons are becoming more reluctant to continue to serve publicly held corporations as directors or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify such persons as permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; and
WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified;
NOW THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve, or to continue to serve, at the request of the Company as a director, officer or employee. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). The Company shall have no obligation under this Agreement to continue Indemnitee in any such position.
Section 2. Indemnification - General. The Company shall indemnify, and advance Expenses (as defined in Section 17 hereof) to, Indemnitee as provided in this Agreement and to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as applicable law may hereafter from time to time permit. The rights of Indemnitee provided under the preceding sentence shall include, but shall not be limited to, the rights set forth in the other Sections of this Agreement.
Section 3. Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 3 if, by reason of his Corporate Status (as defined in Section 17 hereof), he is, or is threatened to be made, a party to any threatened, pending, or completed Proceeding (as defined in Section 17 hereof), other than a Proceeding by or in the right of the Company. Pursuant to this Section 3, Indemnitee shall be indemnified against Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful. If Indemnitee is entitled to indemnification pursuant to this Section 3 as to some claims, issues or matters in such Proceeding but not others, then the Company reserves the right to reasonably prorate in good faith its indemnification obligations arising under this Agreement.
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Section 4. Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be made, a party to any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified against Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. Notwithstanding the foregoing, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company if applicable law prohibits such indemnification; provided, however, that if applicable law so permits, indemnification against Expenses shall nevertheless be made by the Company in such event if and only to the extent that the Court of Chancery of the State of Delaware, or the court in which such Proceeding shall have been brought or is pending, shall determine.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, with Expenses with respect to such Proceeding being reasonably prorated by the Company in good faith. For purposes of this Agreement and without limitation, if any claim, issue or matter in such a Proceeding is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to Indemnitee, (ii) an adjudication that Indemnitee was liable to the Company, (iii) a plea of guilty or nolo contendere by Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and (v) with respect to any criminal proceeding, an adjudication that Indemnitee had reasonable cause to believe Indemnitee’s conduct was unlawful, Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect thereto.
Section 6. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise participates in any Proceeding at a time when he is not named as a defendant or respondent in the Proceeding, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
Section 7. Advancement of Expenses. The Company shall advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of the Corporate Status within 20 days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses.
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Section 8. Procedure for Determination of Entitlement to Indemnification.
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 8(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a Change of Control (as hereinafter defined) shall have occurred, by Independent Counsel (as hereinafter defined) (unless Indemnitee shall request that such determination be made by the Board of Directors or the stockholders, in which case by the person or persons or in the manner provided for in clauses (ii) of this Section 8(b)) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors by a majority vote of the Disinterested Directors (as hereinafter defined), even though less than a quorum or (B) if there are no Disinterested Directors or if the Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if so directed by the Disinterested Directors, or if there are no Disinterested Directors, the Board of Directors, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within 10 days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification), and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(c) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 8(b) hereof, the Independent Counsel shall be selected as provided in this Section 8(c). If a Change of Control shall not have occurred, the Independent Counsel shall be selected by the Board of Directors, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. If a Change of Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within seven days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection. Such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 17 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. If such written objection is timely made, the Independent Counsel so selected may not serve as Independent Counsel unless and until a court has determined that such objection is without merit. If, within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 8(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom an objection is so resolved or the person so appointed shall act as Independent Counsel under Section 8(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 8(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 8(c), regardless of the manner in which such Independent Counsel was selected or appointed. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 10(a)(iii) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).
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Section 9. Presumptions and Effect of Certain Proceedings.
(a) If a Change of Control shall have occurred, in making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 8(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.
(b) If the person, persons or entity empowered or selected under Section 8 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within 60 days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional 30 days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 9(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 8(b) of this Agreement and if (A) within 15 days after receipt by the Company of the request for such determination the Board of Directors, or Disinterested Directors, as appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within 90 days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within 60 days after such receipt for the purpose of making such determination, such meeting is held for such purpose within 90 days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 8(b) of this Agreement.
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(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
Section 10. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section 8 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 7 of this Agreement, (iii) the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 8(b) of this Agreement and such determination shall not have been made and delivered in a written opinion within 90 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 6 of this Agreement within 10 days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within 10 days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 8 or 9 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the then-prevailing Commercial Arbitration Rules of the American Arbitration Association. The parties agree that all matters subject to the arbitration, including the arbitration itself, shall remain confidential. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 10(a); provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by an Indemnitee to enforce his rights under Section 5 of the Agreement.
(b) If a Change of Control shall have occurred, (i) in the event that a determination shall have been made pursuant to Section 8 of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 10 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination; and (ii) in any judicial proceeding or arbitration commenced pursuant to this Section 10 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made or deemed to have been made pursuant to Section 8 or 9 of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
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(d) The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 10 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.
(e) In the event that Indemnitee, pursuant to this Section 10, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all expenses (of the types described in the definition of Expenses in Section 17 of this Agreement) actually and reasonably incurred by him in such judicial adjudication or arbitration, but only if he prevails therein. If it shall be determined in said judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advancement of expenses sought, the expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated in good faith by counsel for Indemnitee.
Section 11. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall be in addition to, and shall not be deemed exclusive of, any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation or the By-Laws of the Company, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.
(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers or employees of the Company or of any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such similarly situated director, officer or employee under such policy or policies.
(c) In the event of any payment by the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any Bylaw, insurance policy, contract, agreement or otherwise.
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Section 12. Certain Settlement Provisions. The Company shall have no obligation to indemnify Indemnitee under this Agreement for amounts paid in settlement of a Proceeding without the Company’s prior written consent. The Company shall not settle any Proceeding in any manner that would impose any fine, Expense, limitation or other obligation on Indemnitee without Indemnitee’s consent. Neither the Company nor Indemnitee shall unreasonably withhold their consent to any proposed settlement.
Section 13. Duration of Agreement. This Agreement shall continue for so long as the Indemnitee may have any liability or potential liability by virtue of serving as a director, officer or employee of the Company or of any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the request of the Company, including without limitation, the final termination of all pending Proceedings in respect of which Indemnitee is granted rights of indemnification or advancement of expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 10 of this Agreement relating thereto. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors, legal representatives and administrators.
Section 14. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
Section 15. Exception to Right of Indemnification or Advancement of Expenses. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement with respect to (i) any Proceeding, or any claim therein, brought or made by him against the Company except for any claim or proceeding or in respect of this Agreement and/or the Indemnitee’s rights hereunder; or (ii) the payment by Indemnitee to the Company of profits pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or Proceedings in connection therewith.
Section 16. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (.pdf) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.
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Section 17. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
Section 18. Definitions.
(a) “Change of 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
(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
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(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.
(b) “Corporate Status” describes the status of a person who is or was a director, officer or employee of the Company or of any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Company.
(c) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(d) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating or being or preparing to be a witness in a Proceeding.
(e) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than as Independent Counsel under this Agreement or similar agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
(f) “Proceeding” includes any action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding whether civil, criminal, administrative or investigative.
Section 19. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a wavier of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder.
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Section 21. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and received for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:
(a) If to Indemnitee, to his address on file with the Company from time to time.
(b) If to the Company to:
Three Memorial City Plaza
840 Gessner Road, Suite 1400
Houston, Texas 77024
or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.
Section 22. Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware.
Section 23. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.
Section 24. Mutual Acknowledgments. Both the Company and Indemnitee acknowledge that in certain instances, applicable law (including applicable federal law that may preempt or override applicable state law) or public policy may prohibit the Company from indemnifying the directors and officers of the Company under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the U.S. Securities and Exchange Commission has taken the position that indemnification of directors, officers and controlling persons of the Company for liabilities arising under federal securities laws is against public policy and, therefore, unenforceable. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee. In addition, the Company and Indemnitee acknowledge that federal law prohibits indemnifications for certain violations of the Employee Retirement Income Security Act of 1974, as amended.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.
| ATTEST: | COTERRA ENERGY INC. | |||
| By | By: | |||
| Deidre L. Shearer | Thomas E. Jorden | |||
| Corporate Secretary | Chief Executive Officer and President | |||
| INDEMNITEE | ||
| By: | ||
| Address: | ||
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Exhibit 99.1
Cabot Oil & Gas and Cimarex Energy Complete Combination, Forming Coterra Energy
Newly Created Energy Company Benefits from Strong Financial Foundation and Premier, Diverse Assets
HOUSTON, October 1, 2021 – Coterra Energy Inc. (“Coterra” or the “Company”) (NYSE: COG) today announced the successful completion of the combination of Cabot Oil & Gas Corporation (“Cabot”) and Cimarex Energy Co. (“Cimarex”), creating a premier, diversified energy company with a strong free cash flow profile, well positioned to deliver superior and sustainable returns to shareholders through commodity cycles. Coterra’s common stock will trade on the New York Stock Exchange under the ticker symbol "CTRA" at the open of trading on October 4, 2021 and under the symbol “COG” until then.
The Coterra name reflects two companies coming together, combining teams and assets to create a stronger platform to deliver sustainably higher returns.
Dan O. Dinges, Executive Chairman of Coterra, said, “We are proud to complete our transaction and launch Coterra, which will build upon the impressive legacies and many strengths of both Cabot and Cimarex. Driven by a commitment to operating accountably, sustainably and safely, Coterra will be well positioned to increase returns to shareholders and deliver long-term value for all our stakeholders.”
Thomas E. Jorden, Chief Executive Officer, President and Director of Coterra, said, “Today marks the beginning of our journey as one Coterra team. We couldn’t be more excited to bring together our teams and form a new E&P company that is positioned to succeed in the next phase of the shale revolution and beyond. With tremendous flexibility between premier oil and natural gas assets and a focus on operating efficiently, driving substantial cash flows and generating capital returns through commodity cycles, Coterra is poised to deliver enhanced value to our shareholders.”
With the transaction now closed, Coterra is positioned to drive enhanced shareholder value by:
| · | Facilitating significant capital returns, with an increased base dividend, a variable dividend reflecting the Company’s commitment to return 50% of quarterly free cash flow (“FCF”) to shareholders and a special cash dividend of $0.50 per share post-closing. |
| · | Delivering substantial and sustained cash generation across cycles and supporting a more resilient free cash flow profile with the flexibility to leverage commodity specific cycles in allocating capital. |
| · | Leveraging a top tier asset base across over 700,000 net acres, with high-return Marcellus, Permian and Anadarko Basins inventory and a combined production base of approximately 605 MBoepd as of the second quarter of 2021. |
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| · | Ensuring a strong financial profile through enhanced scale and a stronger balance sheet characterized by increased liquidity and reduced volatility, including an improved credit rating, a favorable net debt-to-EBITDAX ratio and $100 million in targeted G&A synergies. |
| · | Strengthening its commitment to ESG through industry leading practices and policies, a commitment to further improvement across critical sustainability metrics and the alignment of executive compensation with shareholder value creation and environmental sustainability. |
Coterra Senior Leadership Team
As previously announced, joining Mr. Jorden as a member of Coterra’s senior leadership team is Scott C. Schroeder, previously Cabot’s Executive Vice President and Chief Financial Officer, who will serve as EVP and CFO of the combined business. Additional members of Coterra’s senior leadership team announced today include:
| · | Stephen P. Bell, Executive Vice President – Business Development |
| · | Francis B. Barron, Senior Vice President and General Counsel |
| · | Christopher H. Clason, Senior Vice President and Chief Human Resources Officer |
| · | Steven W. Lindeman, Senior Vice President – Production & Operations |
| · | Phil L. Stalnaker, Senior Vice President – Marcellus Business Unit |
| · | Michael D. DeShazer, Vice President of Business Units |
| · | Kevin W. Smith, Vice President and Chief Technology Officer |
Coterra Board of Directors
Coterra’s 10-member Board of Directors has equal representation from Cabot and Cimarex and was selected to ensure that the Company has the diverse skills, experience and perspectives along with the necessary independence and diversity to provide strong corporate governance and expert oversight of management. They include:
| · | Dan O. Dinges, Executive Chairman (former Cabot Board member) |
| · | Thomas E. Jorden, CEO & President (former Cimarex Board member) |
| · | Lisa A. Stewart, Lead Independent Director (former Cimarex Board member) |
| · | Dorothy M. Ables, Independent Director (former Cabot Board member) |
| · | Robert S. Boswell, Independent Director (former Cabot Board member) |
| · | Amanda M. Brock, Independent Director (former Cabot Board member) |
| · | Paul N. Eckley, Independent Director (former Cimarex Board member) |
| · | Hans Helmerich, Independent Director (former Cimarex Board member) |
| · | Frances M. Vallejo, Independent Director (former Cimarex Board member) |
| · | Marcus A. Watts, Independent Director (former Cabot Board member) |
For more information on Coterra’s Board of Directors and senior leadership team, please visit our website at www.coterra.com.
Share Exchange
As previously announced, in accordance with the terms of the merger agreement, each eligible share of Cimarex common stock issued and outstanding immediately prior to the effective time of the transaction will be exchanged for 4.0146 shares of Cabot common stock.
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Additional information regarding the exchange of Cimarex common stock for merger consideration was mailed to registered holders of Cimarex common stock.
With the completion of the transaction, as of today, Cimarex common stock will no longer be listed for trading.
Coterra Energy
Coterra is a premier, diversified energy company based in Houston, Texas. We strive to be a leading producer, delivering returns with a commitment to sustainability leadership. Learn more about us at www.coterra.com.
Cautionary Statement Regarding Forward-Looking Information
This press release contains certain forward-looking statements within the meaning of federal securities laws. Words such as anticipates, believes, expects, intends, plans, outlook, will, should, may and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect Coterra’s current views about future events. Such forward-looking statements include, but are not limited to, statements about the benefits of the merger involving Cabot and Cimarex, including future financial and operating results, free cash flow profile and returns to shareholders; Coterra’s plans, objectives, expectations and intentions; future dividends; and other statements that are not historical facts, including estimates of future oil and natural gas production, projected synergies, business strategy and other plans and objectives for future operations. No assurances can be given that the forward-looking statements contained in this press release will occur as projected and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include, without limitation, the risk that the businesses will not integrate successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; the effect of future regulatory or legislative actions, including the risk of new restrictions with respect to well spacing, hydraulic fracturing, natural gas flaring or other oil and natural gas development activities; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; the diversion of management time on integration-related issues; the volatility in commodity prices for crude oil and natural gas; the continuing effects of the COVID-19 pandemic and the impact thereof on the combined business, financial condition and results of operations; actions by, or disputes among or between, the Organization of Petroleum Exporting Countries and other producer countries; the presence or recoverability of estimated reserves; the ability to replace reserves; environmental risks; drilling and operating risks; exploration and development risks; competition; the ability of management to execute its plans to meet its goals; and other risks inherent in Cabot’s and Cimarex’s businesses. In addition, the declaration and payment of any future dividends, whether regular base quarterly dividends, variable dividends or special dividends, will depend on Coterra’s financial results, cash requirements, future prospects and other factors deemed relevant by Coterra’s board of directors. While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. For additional information about other factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to: (1) Cabot’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other filings with the SEC, and (2) Cimarex’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other filings with the SEC, which are available on Coterra’s website at www.coterra.com.
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Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Except to the extent required by applicable law, Coterra does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
CONTACTS
Investors
Dan Guffey 303.285.4901
Matt Kerin 281.589.4642
Media
Aaron Palash / Haley Salas
Joele Frank, Wilkinson Brimmer Katcher
212.355.4449
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