Exhibit 10.1
November 16, 2006
Mr. Matthew D. Cabell
19 Glen Eagles Drive
Sugar Land, TX 77479
Dear Mr. Cabell:
We are pleased to offer you a position as President of Seneca Resources
Corporation (“Seneca”) on the terms and conditions set forth below. Your
employment commencement date will be December 11, 2006 (the “Commencement
Date”). In this capacity, you will report to the President of National Fuel Gas
Company (“National Fuel”).
Compensation
Salary. You will receive a base salary at the rate of $425,000 per annum. Your
salary will be paid in accordance with our standard payroll practices for senior
officers. Your base salary will be subject to periodic review, in accordance
with the policies generally applicable to senior officers of National Fuel.
Commencement Bonus. As an inducement for you to accept this offer on the terms
and conditions set forth herein, on or as soon as practicable (but not more than
20 business days) after the Commencement Date, you will receive a commencement
bonus in cash in the amount of $150,000.
Incentive Compensation. In addition to base salary, commencing with fiscal 2007,
you will be eligible to participate in an annual bonus plan that will provide
you with the opportunity to receive incentive compensation targeted at 65% of
your annual base salary, subject to the achievement of the applicable
performance measurements. You will have the opportunity to receive up to 130% of
your annual base salary upon achievement of the applicable performance
measurements at maximum levels. We anticipate that the performance standards
upon which your bonus will be determined will include: (1) finding and
development cost; (2) lease operating expenses and general administrative
expenses; (3) average return on capital; (4) production volume and (5) reserve
replacement. The performance measures for any given year will be established in
accordance with our generally applicable practices for establishing bonus
criteria for senior officers. Payment of any annual bonus will be made at the
same time as bonuses are paid to other senior officers (expected to be no later
December 31), and is generally contingent

 

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Mr. Matthew D. Cabell
November 16, 2006
Page 2
upon your continued employment through the end of the fiscal year, except to the
extent otherwise provided under our generally applicable policies and practices
in the event of certain terminations, such as death.
Long-Term Incentive Compensation. If the Compensation Committee determines to
establish a performance condition under the Company’s Performance Incentive
Program for the 2007-2009 performance period, management will recommend you to
participate in such program on the same terms and conditions as are generally
applicable to our other senior officers, with a target incentive opportunity for
such program equal to 65% of your annual base salary. Your right to receive any
payment with respect to any such award will be subject to the achievement of the
applicable performance measurements established under such program and to the
terms of that program.
Restricted Stock Grant. On or about the Commencement Date, you will be granted
an award of 15,000 shares of restricted stock. The form of award letter to be
issued for this grant is attached at Exhibit A. The remaining terms and
conditions of such award will be substantially the same as are applicable to
similar awards made to other senior officers of National Fuel and its
subsidiaries. This grant will be made pursuant to National Fuel’s 1997 Award and
Option Plan (the “1997 Plan”), and shall be subject to the terms and conditions
thereof.
Stock Option Grant. On or about the Commencement Date, you shall also be granted
an option to purchase 100,000 shares of the common stock of National Fuel, at an
exercise price per share equal to the fair market value thereof on the date of
grant, as determined in accordance with the terms of the 1997 Plan. The form of
award letter to be issued for this grant is attached at Exhibit B. The remaining
terms and conditions of such award will be substantially the same as are
applicable to similar awards made to other senior officers of National Fuel and
its subsidiaries. This option will also be granted pursuant to 1997 Plan, and
shall be subject to the terms and conditions thereof.
Benefits
Generally. You will be eligible to participate in our Retirement Savings Plan
and the applicable 401(k) plan, as well as Seneca’s life insurance and
disability insurance benefits programs on the same terms and conditions
(including, without limitation, employee contributions and subject to any
applicable services requirements), as are generally applicable to covered
employees in the United States.
Executive Medical Plan. Subject to your making the required employee
contributions thereto, you will also be eligible to participate in our executive
medical plan, on the terms and conditions generally applicable to participants
in such plan. The executive plan provides to select executives of National Fuel
and its affiliated companies enhanced medical benefits as compared to the plans
available generally to our employees.

 

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Mr. Matthew D. Cabell
November 16, 2006
Page 3
Top Hat Plan. Because your eligible compensation will exceed the amount that may
be taken into account under our qualified plans due to Internal Revenue Code
limitation, you will be eligible to participate in our “Top Hat” plan, which
provides supplemental benefits that replicate the benefits that would have
otherwise been provided under the applicable qualified plans but for the
application of such Internal Revenue Code provisions.
Perquisites. You will be provided membership in the Petroleum Club and Downtown
Athletic Club. You will also be afforded a company provided parking space.
Vacation. You will receive annual vacation benefits in accordance with our
generally applicable plans and policies for senior officers, except that you
shall have the right to four weeks of vacation commencing in calendar year 2007
and thereafter.
Change of Control Benefits. On or shortly following the Commencement Date, we
will make available to you a change of control agreement that is substantially
in the form attached at Exhibit C.
Conditions of Employment
This offer is also contingent upon compliance with our standard employment
practices with respect to newly hired employees. You must also complete and
return a W-4 prior to the Commencement Date.
Your employment is also conditioned upon your ongoing compliance with our
applicable policies (including, without limitation, our Code of Business Conduct
and Ethics), as the same may be amended from time to time.
Any and all payments of compensation and the provision of benefits in accordance
with this offer letter will be subject to all applicable federal, state and
local income, employment and other tax withholding requirements.
Confidentiality. In the course of your services, you have or will create,
develop, learn of or receive non-public information, ideas, processes, methods,
designs, devices, inventions, data, models and other information relating to the
Seneca and/or National Fuel and their respective subsidiaries and affiliates and
their products, services, businesses, operations, employees or customers, and
that we desire to protect and keep secret and confidential, including trade
secrets and information from third parties that we are obligated to keep
confidential (“Confidential Information”). Confidential Information shall not
include: (i) information that is or becomes generally known to the public
through no fault of your own, (ii) information received from a third party that
was disclosed without a breach of any confidentiality obligation; or
(iii) information approved for release by written authorization of National
Fuel. You recognize that all such Confidential Information is the sole and
exclusive property of Seneca and/or National

 

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Mr. Matthew D. Cabell
November 16, 2006
Page 4
Fuel, and that disclosure of Confidential Information would cause damage to
them. You agree that, except as required in the performance of your duties or if
compelled by a court or governmental agency, provided that you give us prior
written notice of any action to compel disclosure, you will not willfully
disseminate or otherwise disclose, directly or indirectly, any Confidential
Information obtained during your employment, and will take all necessary
precautions to prevent disclosure, to any unauthorized individual or entity, and
will not use the Confidential Information or permit its use for your own benefit
or that of any other person or entity other than Seneca, National Fuel and their
respective subsidiaries and affiliates. These obligations shall continue during
and after the termination of your employment.
Intellectual Property. As an employee, you will disclose immediately to National
Fuel all ideas, inventions and business plans that you make, conceive, discover
or develop alone or with others during the course of your employment, including
any inventions, modifications, discoveries, developments, improvements, computer
programs, processes, products or procedures (whether or not protectable upon
application by copyright, patent, trademark, trade secret or other proprietary
rights) (“Work Product”) that: (i) relate to the business of National Fuel or
any customer or supplier to National Fuel or any of the products or services
being developed, manufactured, sold or otherwise provided by National Fuel or
that may be used in relation therewith; (ii) result from tasks assigned to you;
or (iii) result from the use of the premises or personal property (whether
tangible or intangible) owned, leased or contracted for by National Fuel, its
subsidiaries or affiliates. You agree that any Work Product shall be the
property of National Fuel and, if subject to copyright, shall be considered a
“work made for hire” within the meaning of the Copyright Act of 1976, as amended
(the “Act”). If and to the extent that any such Work Product is found as a
matter of law not to be a “work made for hire” within the meaning of the Act,
you expressly assign to National Fuel all right, title and interest in and to
the Work Product, and all copies thereof, and the copyright, patent, trademark,
trade secret and all their proprietary rights in the Work Product, without
further consideration, free from any claim, lien for balance due or rights of
retention thereto on your part. You also agree that, during your employment and
at any time thereafter, at our request and cost, you will execute all such
documents and perform all such acts as we may reasonably require: (i) to apply
for, obtain and vest in the name of National Fuel alone (unless National Fuel
otherwise directs) letters patent, copyrights or other analogous protection in
any country throughout the world, and when so obtained or vested to renew and
restore the same; and (ii) to defend any opposition proceedings in respect of
such applications and any opposition proceedings or petitions or applications
for revocation of such letters patent, copyright or other analogous protection.
In the event that we are unable, after reasonable effort, to secure your
signature on any letters patents, copyright or other analogous protection
relating to Work Product, for any other reason whatsoever, you hereby
irrevocably designate and appoint National Fuel and its duly authorized officers
and agents as your agent and attorney-in-fact, to act for and on your behalf to
executive and file any such application or applications and to do all other
lawfully permitted acts to further the prosecution and issuance of letters
patent, copyright and other analogous protection with the same legal force and
effect as if personally executed by you.

 

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Mr. Matthew D. Cabell
November 16, 2006
Page 5
* * * *
We are excited about the prospect of your joining our executive management team
and all of us at National Fuel look forward to the opportunity to work with you.
Please sign below to signify your acceptance of our offer of employment and its
terms. Should you have any questions with regard to any of the items indicated
above, please call me.
Sincerely,
/s/ Philip C. Ackerman
Philip C. Ackerman
AGREED AND ACCEPTED:

             
  /s/ M. D. Cabell
 
        11/17/06
 
Date