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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

 

Date of Report (date of earliest event reported): December 27, 2022

 

COTERRA ENERGY INC.

(Exact name of registrant as specified in its charter)

 

Delaware 1-10447 04-3072771
(State or other jurisdiction of
incorporation)
(Commission File Number) (I.R.S. Employer Identification No.)

 

Three Memorial City Plaza

840 Gessner Road, Suite 1400

Houston, Texas

77024
(Address of principal executive offices) (Zip Code)

 

Registrant's telephone number, including area code: (281) 589-4600 

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
   
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.10 per share   CTRA   New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Change-in-control agreement for Executive Chairman and former CEO modified to eliminate tax gross-up provision

 

Coterra Energy Inc. (the “Company” or “Coterra”) and Dan O. Dinges are party to a change-in-control agreement, as previously amended, and an employment letter agreement, each previously disclosed in the Company’s definitive joint proxy statement/prospectus filed with the Securities and Exchange Commission on August 23, 2021. In response to the recommendation by a proxy advisory firm to vote against our 2022 say-on-pay proposal and the shareholder vote on executive compensation at the 2022 annual meeting of shareholders, and shareholder outreach, on December 27, 2022, the Company and Mr. Dinges entered into an amendment to his change-in-control agreement and employment letter agreement with the Company to eliminate the excise tax gross-up provision of the agreement. As consideration, the amendment provides that the change-in-control severance payment due to Mr. Dinges as a result of the termination of his employment as Executive Chairman on December 31, 2022 would accrue interest for the period from termination on December 31, 2022 until paid on or about July 24, 2023 based on the 6-month Treasury Bill rate posted to the Daily Treasury Par Yield Curve Rates section of the U.S. Department of the Treasury’s website on December 31, 2022.

 

The foregoing description of the amendment and the actions contemplated thereby is not complete and is subject to and qualified in its entirety by reference to the full text of the amendment, a copy 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.

 

Item 9.01   Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit Number Description
10.1 Amendment to Change In Control Agreement and Employment Letter Agreement dated December 27, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

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/ Adam Vela
    Adam Vela
    Vice President—General Counsel

 

Date: December 29, 2022

 

 

 

Exhibit 10.1

 

AMENDMENT TO
CHANGE IN CONTROL AGREEMENT
AND
EMPLOYMENT LETTER AGREEMENT

 

December 27, 2022

 

WHEREAS, Coterra Energy Inc., formerly Cabot Oil & Gas Corporation, a Delaware corporation (the “Company”) and Dan O. Dinges (“Executive”) entered into a Change in Control Agreement dated as of December 10, 2008 and effective as of December 31, 2008 (as amended pursuant to the Cabot Confirmation that Certain Benefits no Longer Apply, dated as of December 9, 2010 and effective as of October 26, 2010, and as further amended on May 23, 2021, the “Change in Control Agreement”) and a letter agreement regarding the terms of Executive’s employment dated as of May 23, 2021 (the “Employment Letter Agreement”); and

 

WHEREAS, the Company and Executive desire to amend each of the Change in Control Agreement and the Employment Letter Agreement as set forth in this Amendment to Change in Control Agreement and Employment Letter (this “Amendment”);

 

NOW, THEREFORE, for good and valuable consideration, the Company and Executive mutually agree that the Change in Control Agreement and the Employment Letter Agreement are amended, effective immediately upon execution of this Amendment, as follows:

 

1.             Incorporation by Reference. All provisions of each of the Change in Control Agreement and Employment Letter Agreement shall remain in full force and effect except to the extent that such provisions are expressly modified by the provisions of this Amendment. Words and phrases used in this Amendment shall have the meaning set forth in the Change in Control Agreement or Employment Letter Agreement, as applicable, unless the context clearly indicates that a different meaning is intended.

 

2.             Interest Payment Addition to Change in Control Agreement. Section 2(b) of the Change in Control Agreement is hereby amended to add the following sentence immediately prior to the final sentence of such subsection:

 

“To the extent the payment of the Termination Benefits provided in clause (I) of the definition of Termination Benefits is delayed as set forth in the immediately preceding sentence, such amount payable thereunder shall accrue interest for the period beginning on the date of the termination of the Executive’s employment and ending on the date such amount is paid, with the amount of accrued interest payable based on the six-month Treasury Bill rate posted to the Daily Treasury Par Yield Curve Rates section of the U.S. Department of the Treasury’s website on the date of the termination of the Executive’s employment.”

 

1

 

 

3.             Modification of Tax Protections in Change in Control Agreement. Section 3 of the Change in Control Agreement is hereby deleted in its entirety and replaced with the following:

 

Section 280G. Notwithstanding any provision of this Agreement to the contrary, in the event that any payment or benefit received or to be received by the Executive from the Company (or an affiliate or successor) pursuant to this Agreement or otherwise (“Payments”) would be subject (in whole or part) to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Payments shall be either (a) provided in full pursuant to the terms of this 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 the Executive, 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 the Executive first from Payments that are exempt from Section 409A, and only thereafter from Payments that are subject to Section 409A. To the extent the reduction is made from Payments that are subject to Section 409A, 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.”

 

4.             “Change in Control Agreement” reference in Employment Letter Agreement. For the avoidance of doubt, the “Change in Control Agreement” as defined in Section 3 of the Employment Letter Agreement shall be deemed to refer to the Change in Control Agreement as defined herein (that is, with such terms as amended by the May 23, 2021 amendment) and as further amended by this Amendment.

 

[Signature page follows]

 

2

 

 

IN WITNESS WHEREOF, the Company, acting by and through its duly authorized officer, and Executive have caused this Amendment to be executed.

 

  COTERRA ENERGY INC.
   
  By: /s/ Christopher H. Clason
  Name: Christopher H. Clason
  Title: SVP & CHRO
  Date: December 27, 2022
     
  EXECUTIVE
   
    /s/ Dan O. Dinges
    Dan O. Dinges
  Date: December 23, 2022

 

Signature Page to Amendment to Change In Control Agreement and
Employment Letter Agreement