Exhibit 10.3

 

Sabine Oil & Gas Corporation

1415 Louisiana Street,  Suite 1600

Houston, TX 77002

 

 

March 12, 2015

 

CONFIDENTIAL

 

Re:Performance Award

Dear ________________:

This letter (your “Participation Agreement”) confirms that you are eligible to
receive (i) a cash bonus for the first calendar quarter of 2015 (the “Bonus”),
and (ii) a performance award (the “Performance Award”), in each case pursuant to
the 2014 Long-Term Incentive Plan (the “Plan”) in consideration of and
appreciation for your continued services and contribution to Sabine Oil & Gas
Corporation (the “Company”), subject to the terms and conditions outlined in
this Participation Agreement and the Plan.  Capitalized terms used in this
Participation Agreement and not herein defined shall have the meaning set forth
in the Plan.

2015 First Quarter Bonus

This Participation Agreement provides you with the opportunity to earn a Bonus
equal to [$xx,xxx], which shall be payable no later than 30 days following the
end of the first calendar quarter of 2015 so long as you continue to be employed
by the Company or its affiliates through the date of payment of the Bonus.  If
your employment with the Company or its affiliates terminates for any reason
prior to the payment of the Bonus, you shall forfeit your right to receive any
portion of the Bonus.

Performance Award

General Description of Performance Award.  The “Term” of the Performance Award
will begin on April 1, 2015 and continue through June 30, 2016, or such earlier
date as the Board (as such term is defined in the Plan) shall determine, in its
sole discretion.  This Participation Agreement provides you with the opportunity
to earn a quarterly cash bonus with respect to each calendar quarter commencing
during the Term (a “Performance Period”), provided that you continue to be
employed by the Company or its affiliates through the applicable Payment Date
(as defined below).  This Performance Award opportunity is inclusive of your
2015 annual bonus and long term incentive opportunities.

Quarterly Performance Bonus Amounts and Dates.  Your target quarterly
Performance Award opportunity will be $[__] (the “Target Quarterly Bonus”).  You
may earn more or less than this Target Quarterly Bonus for each calendar quarter
during the Term depending on the Company’s actual performance as compared to
pre-established threshold, target, and maximum EBITDA goals set by the Committee
(as such term is defined in the Plan)] for each calendar quarter, as described
in more detail below (each quarterly bonus actually earned and paid, the “Actual
Quarterly Performance Bonus”).

 

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Actual Company Performance

  

  

Percentage of Target Quarterly
Bonus Earned

Below Threshold

 

 

0%

Threshold

 

 

75%

Target

 

 

100%

Maximum

 

 

125%

 

The Committee shall establish the threshold, target, and maximum EBITDA
performance levels for each Performance Period prior to the beginning of such
Performance Period.  Once established, management will communicate the
performance levels for each Performance Period.  The Committee shall certify the
actual Company performance achieved for each Performance Period following the
end of the Performance Period and prior to the payment of the Actual Quarterly
Performance Bonus.  The administration of the Performance Awards shall comply in
all respects with Section 8(b) of the Plan. 

No payments of your Performance Award will be made to you for any calendar
quarter in which the Company does not achieve at least the threshold level of
EBITDA performance established by the Committee.  In the event that Company
EBITDA performance falls between the threshold, target, and maximum levels, the
value of your Actual Quarterly Performance Bonus will be calculated using
straight line interpolation.  The maximum quarterly Performance Award that you
are eligible to receive will be $[___].  You will be paid the Actual Quarterly
Performance Bonus if, and only if, (i) you are employed by the Company or its
affiliates through the applicable Payment Date and (ii) the Company achieves at
least the threshold EBITDA performance goal for the applicable Performance
Period.  Each Actual Quarterly Performance Bonus earned pursuant to the terms of
this Participation Agreement, less withholding for applicable taxes, will be
paid to you no later than 30 days following the end of the applicable calendar
quarter (the date such payment is made, the “Payment Date”).

For an example of how the Actual Quarterly Bonus will be calculated, please see
Exhibit A.

Terminations of Employment.  In the event that your employment with the Company
is terminated for any reason whatsoever before the Payment Date, you will
forfeit your right to receive any portion of your Performance Award that has not
been paid as of the date of your termination of employment, including the Actual
Quarterly Performance Bonus for a calendar quarter that is complete as of the
date of your termination of employment but has not yet been paid. 

Administration.  The Plan, this Participation Agreement, and the Performance
Award shall be administered and interpreted by the Committee, in its full and
absolute discretion.  All calculations, determinations and interpretations made
by the Board with respect to the Plan, this Participation Agreement and your
Performance Award will be final and binding on you and the Company.

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Please execute and return a copy of this Participation Agreement to Yamoria
Miller, Vice President, Human Resources, at 1415 Louisiana Street, Suite 1600,
Houston, Texas 77002 or ymiller@sabineoil.com by March 31, 2015 to indicate your
acceptance of the terms and conditions herein. The Company will not make payment
to you pursuant to the Performance Award unless the Company has timely received
a signed copy of this Participation Agreement.

We are pleased to be able to offer this Performance Award to you and truly
appreciate your dedication and commitment to the Company and its affiliates.  If
you have further questions about this plan please contact your Yamoria Miller in
Human Resources.  We are excited about the future and look forward to our
success together.

 

 

 

 

 

 

Very Truly Yours,

 

 

 

Sabine Oil & Gas Corporation

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

ACCEPTED BY:

 

 

 

 

 

[Name]

 

 

 

 

 

 

 

Date

 

 

 

 

 

 

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Exhibit A

EXHIBIT  A

 

Below is an example of the calculation of the Performance Award described in the
Participation Agreement.  This example is intended for illustrative purposes
only. 

The example below assumes that the Target Quarterly Performance Bonus is $100.

Performance Goals

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

Performance
Period (Q1)
($)

  

  

Performance
Period (Q2)
($)

  

  

Performance
Period (Q3)
($)

  

  

Performance
Period (Q4)
($)

 

Threshold EBITDA Performance Goal

 

 

84.6 

 

 

84.6 

 

 

90.3 

 

 

84.6 

 

Target EBITDA Performance Goal

 

 

89 

 

 

89 

 

 

95 

 

 

89 

 

Maximum EBITDA Performance Goal

 

 

93.5 

 

 

93.5 

 

 

99.8 

 

 

93.5 

 

 

Actual Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

Performance
Period (Q1)
($)

  

  

Performance
Period (Q2)
($)

  

  

Performance
Period (Q3)
($)

  

  

Performance
Period (Q4)
($)

 

 

 

 

84 

 

 

86 

 

 

105 

 

 

89 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual Quarterly Performance Bonus

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of Target Quarterly Performance Bonus Earned

 

 

0%

 

 

83%

 

 

125%

 

 

100%

 

Actual Quarterly Performance Bonus Payable

 

 

0 

 

 

83 

 

 

125 

 

 

100 

 

 

 

 

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