Exhibit 10.1

 

 

 

PENN VIRGINIA RESOURCE GP, LLC

ANNUAL INCENTIVE PLAN

Effective as of May 12, 2011

 

 

 

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PENN VIRGINIA RESOURCE GP, LLC

ANNUAL INCENTIVE PLAN

1. Definitions. As used in this Plan, the following terms shall have the
meanings herein specified:

1.1 Affiliate - means, with respect to any entity, any other entity that
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with, the entity in question. For
purposes of this definition, “control” means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
an entity, whether through ownership of voting securities, by contract or
otherwise.

1.2 Board of Directors - means the Board of Directors of the Company.

1.3 Cause - means: (i) the willful and continued failure by Participant to
substantially perform Participant’s duties with the Company or any Affiliate
(other than any such failure resulting from a Disability), (ii) Participant is
convicted of a felony, (iii) Participant willfully engages in gross misconduct
materially and demonstrably injurious to the Company or any Affiliate or
(iv) Participant commits one or more significant acts of dishonesty as regards
the Company or any Affiliate. For purposes of clause (i) above, no act, or
failure to act, on Participant’s part shall be deemed “willful” unless done, or
omitted to be done, by Participant not in good faith and without reasonable
belief that Participant’s act, or failure to act, was in the best interest of
the Company. In the case of clause (i) above, the determination of whether Cause
exists shall only be made within thirty (30) days following the delivery of a
written demand for substantial performance to the Participant by the Board of
Directors, or any employee of the Company or an Affiliate with supervisory
authority over the Participant, that specifically identifies the manner in which
the Board of Directors or such supervising employee believes that the
Participant has not substantially performed the Participant’s duties.

1.4 Change of Control - means, and shall be deemed to have occurred upon the
occurrence of one or more of the following events:

(a) Any sale, lease, exchange or other transfer (in one or a series of related
transactions) of all or substantially all of the assets of the Company or the
Partnership;

(b) Any Person or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of (A) equity securities of the
Company representing more than 50% of the combined voting power of the Company
or (B) equity securities of the Partnership representing more than 75% of the
combined voting power of the Partnership; or

(c) The equity security holders of the Partnership approve the consummation of a
merger or consolidation of the Partnership with any other entity, other than a
merger or consolidation which would result in the voting securities of the
Partnership immediately outstanding prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least 75% of the combined voting power of the voting
securities of the Partnership outstanding immediately after such merger or
consolidation.

 

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1.5 CIC Incentive Award - means the incentive award payable in cash following a
Change of Control, as described herein at Section 8.4.

1.6 CIC Participant - means a Participant:

(a) whose employment was terminated by the Company (other than for Cause) on or
following the Change of Control, but before payment of the CIC Incentive Award;
or

(b) whose employment was terminated by the Company (other than for Cause) before
the Change of Control; or

(c) who terminated employment for one of the following reasons:

(1) a reduction in the Participant’s authority, duties, titles, status or
responsibilities from those in effect immediately prior to the Change of Control
or the assignment to the Participant of duties or responsibilities inconsistent
in any respect from those of the Participant in effect immediately prior to the
Change of Control, but excluding any action or omission by the Company that is
immaterial, isolated, insubstantial and inadvertent and which was not taken in
bad faith by the Company and is remedied by the Company promptly after receipt
of notice thereof given by the Participant; or

(2) a reduction by the Company in either the Participant’s annual base salary or
guideline (target) bonus that results in an annual base salary or guideline
(target) bonus of which is less than 95% of what was in effect immediately prior
to the Change of Control; or

(3) the failure of the Company to continue in effect any material incentive
compensation plan or arrangement (unless replacement plans providing Participant
with substantially similar benefits are adopted) or the Company takes any action
that would adversely affect Participant’s participation in any such plan or
arrangement or reduce Participant’s incentive compensation opportunities under
such plan or arrangement, as the case may be; or

(4) the Company requires the Participant to be based anywhere other than the
Participant’s then present work location or a location within fifty (50) miles
from the then present location; or

(5) with respect to any Participant who is a member of the Company’s Board of
Directors immediately prior to the Change of Control, any failure of the members
of the Company to elect or re-elect, or of the Company to appoint or re-appoint,
the Participant as a member of such Board of Directors;

(d) who was, immediately before the Change of Control, eligible for a prorated
award under the provisions of Section 8.3; or

(e) who was employed by the Company on the date of the Change of Control and who
does not incur a termination for Cause before payment of the CIC Incentive
Award, in the event that, prior to the end of the calendar year in which the
Change of Control occurred, either:

(1) the Plan is terminated; or

(2) the performance measures and/or performance targets for the applicable Plan
Year are changed or modified, resulting in a decrease in the amount of any CIC
Incentive Award otherwise payable.

 

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provided, however, that (i) in the case of a Participant whose employment
terminates under subsection 1.6 (b) the Change of Control actually occurs within
(1) one year following the employment termination and, (ii) in the case of a
termination under subsection 1.6 (c) (1)-(4), the Participant shall give the
Company notice within 90 days following an act or omission to act by the Company
hereunder that would constitute a reason for Participant resignation under
subsection 1.6 (c)(1)-(4), and the Company shall have 30 days from the date of
such notice to cure the circumstances or events giving rise to Participant’s
right to resign under subsection 1.6 (c)(1)-(4), if capable of being cured, so
as to eliminate the existence of good reason (pursuant to subsection 1.6
(c)(1)-(4)), for Participant’s resignation, and, in the event the Company does
not cure such circumstances or events, then unless the Participant terminates
his or her employment upon the expiration of the foregoing 30-day cure period,
Participant’s continued employment after the expiration of such 30-day cure
period shall constitute Participant’s consent to, and a waiver of Participant’s
rights with respect to, such act or failure to act. Participant’s right to
terminate Participant’s employment for good reason (pursuant to subsection 1.6
(c)(1)-(4)). Participant’s determination that an act or failure to act
constitutes good reason shall be presumed to be valid unless such determination
is deemed by an arbitrator to be unreasonable and not to have been made in good
faith by Participant;

and provided further, if Participant terminates his or her employment with the
Company prior to, but within six months of, the date on which a Change of
Control occurs, and it is reasonably demonstrated by a Participant that such
termination of employment by Participant under the circumstances would have
constituted good reason to terminate under subsection 1.6 (c) (1)-(4) if the
circumstances arose on or after a Change of Control, then such termination shall
be deemed a qualified termination under subsection 1.6 (c) (1)-(4)

1.7 CIC Short Period - means the portion of the Plan Year from January 1 to the
date of the occurrence of a Change of Control.

1.8 Company - means Penn Virginia Resource GP, LLC, a Delaware limited liability
company. The term “Company” shall include any successor to Penn Virginia
Resource GP, LLC, any subsidiary or Affiliate thereof that has adopted the Plan,
or any entity succeeding to the business of Penn Virginia Resource GP, LLC or
any subsidiary or Affiliate, by merger, consolidation, liquidation, or purchase
of assets or equity, or similar transaction.

1.9 Committee - means the Compensation and Benefits Committee of the Company’s
Board of Directors.

1.10 Disability - shall have the meaning given such term in
Section 409A(a)(2)(C) of the Internal Revenue Code of 1986, as amended and the
regulations promulgated thereunder.

1.11 Incentive Award - means the award granted to a Participant.

1.12 Participant - means a person participating or eligible to participate in
the Plan, as determined under Section 5.

1.13 Partnership - means Penn Virginia Resource Partners, L.P., a Delaware
limited partnership, and its subsidiaries.

1.14 Person - means an individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or other entity.

 

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1.15 Plan - means the Company’s Annual Incentive Plan as set forth herein, and
as the same may be amended from time to time.

1.16 Plan Year - means the performance (calendar) year.

1.17 Pro-Rated Incentive Award - For purposes of Section 8.3(a) and (b) means an
amount equal to the Incentive Award otherwise payable to a Participant for the
Plan Year in which the Participant’s initiation of employment with the Company
(new hires) or termination of employment with the Company (other than for Cause)
is effective, multiplied by a fraction, the numerator of which is the number of
full and partial months in the applicable Plan Year beginning on the date such
Participant’s employment with the Company began or through the date of
termination of such Participant’s employment, as applicable, and the denominator
of which is twelve (12). For purposes of Section 8.3(c) means an Incentive Award
equal to the sum of (i) the amount equal to the Incentive Award payable to the
Participant for the Plan year based on the Participant’s previous position,
multiplied by a fraction, the numerator of which is the number of full and
partial months of the applicable Plan year in which the Participant was in the
previous position and the denominator of which is twelve (12), and (ii) the
amount equal to the Incentive Award payable to the Participant for the Plan year
based on the Participant’s new position, multiplied by a fraction, the numerator
of which is the number of full and partial months of the applicable Plan year in
which the Participant has been in the new position and the denominator of which
is twelve (12).

1.18 Retirement - means the voluntary termination by a Participant of the
Participant’s employment with the Company after such Participant has become
Retirement Eligible.

1.19 Retirement Eligible - means a Participant has attained age 62 or such
younger age as determined by the Committee.

1.20 Years of Service - means any calendar year in which an employee of the
Company is paid or entitled to be paid for 1,000 hours of service.

2. Purpose. The purpose of this Plan is to motivate management and the employees
of the Company and its Affiliates who perform services for the Partnership to
collectively produce outstanding results, encourage superior performance,
increase productivity, and aid in attracting and retaining key employees.

3. Plan guidelines. Any potential awards granted pursuant to the Plan are
subject to the determination by the Committee that the performance goals for the
applicable periods have been achieved. The Plan is an additional compensation
program designed to encourage Participants to exceed specified objective
performance targets for the designated period. The Committee will review the
Partnership’s performance results for the designated performance period, and
thereafter will determine whether or not to approve awards under the Plan.

4. Performance Targets.

4.1 Designation of Performance Targets. The Company’s Chief Executive Officer
shall recommend, subject to approval by the Committee, the performance measures
and performance targets to be used for each Plan Year in determining the
Incentive Awards to be paid under the Plan. Performance targets may be based on
Partnership, business unit and/or individual achievements, or any combination of
these, or on such other factors as the Company’s Chief Executive Officer,
subject to the approval of the Committee, may determine. Different performance
targets may be established for different participants for any Plan Year.
Satisfactory results, as determined by the Committee in its sole discretion,
must be achieved in order for an Incentive Award to be made pursuant to the
Plan.

4.2 Equitable Adjustment to Performance Measure Results. At its discretion, the
Committee may adjust actual performance measure results for extraordinary events
or accounting adjustments

 

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resulting from significant asset, stock, partnership, or other similar purchases
or dispositions or other events not contemplated or otherwise considered by the
Committee when the performance measures and targets were set.

5. Participants. The Committee, in consultation with the Company’s Chief
Executive Officer, will designate members of management and employees of the
Company and its Affiliates as eligible to participate in the Plan. Employees so
designated shall be referred to as “Participants.”

6. Participation Levels. A Participant’s designated level of participation in
the Plan, or target Incentive Award, will be determined under criteria
established or approved by the Committee for that Plan Year or designated
performance period. Levels of participation in the Plan may vary according to a
Participant’s position and the relative impact such Participant can have on the
Company’s and/or Affiliates’ operations. Care will be used in communicating to
any participant his performance targets and potential performance amount for a
Plan Year. The amount of target Incentive Award a participant may receive for
any Plan Year, if any, will depend upon the performance level achieved (unless
waived) for that Plan Year, as determined by the Committee. No Participant shall
have any claim to be granted any award under the Plan, and there is no
obligation for uniformity of treatment of Participants. The terms and conditions
of awards need not be the same respecting each Participant.

7. Award Payout. Incentive Awards typically will be determined after the end of
the Plan Year or designated performance period. Awards will be paid in cash
annually, unless otherwise determined by the Committee. The Committee will have
the discretion, by Participant or all Participants, to adjust some or all of the
amount of any Incentive Award that otherwise would be payable by reason of the
satisfaction of the applicable performance targets. In making any such
determination, the Committee is authorized to take into account any such factor
or factors it determines are appropriate, including but not limited to Company,
business unit and individual performance. Notwithstanding the foregoing, payment
of Incentive Awards will be made within two and one-half (2-1/2) months
following the end of the Plan Year.

8. Termination of Employment.

8.1 Voluntary Termination. Except as specifically provided in any other
agreement with an employee of the Company, or except in the event of a Change of
Control, if a Participant terminates his or her employment with the Company for
any reason (other than Retirement, death, Disability, or approved leave of
absence) prior to December 31 of any Plan Year, such Participant will not
receive payment of the Incentive Award for such Plan Year, and will forfeit any
right, title or interest in such Incentive Award, unless and to the extent
waived by the Committee in its sole discretion; provided, however, that a
Participant who is Retirement Eligible, and who terminates voluntarily his or
her employment with the Company prior to December 31 of any Plan Year, will be
paid a Pro-Rated Incentive Award, as provided in Section 8.3, hereof.

8.2 Termination for Cause. A Participant will not receive payment of any
Incentive Award for a particular Plan Year if the Participant’s employment with
the Company is terminated for Cause prior to the payment of such Incentive
Award.

8.3 Proration of Incentive Award.

(a) A Pro-Rated Incentive Award, reflecting participation for a portion of the
Plan Year, will be paid to any Participant whose employment status changed
during the year as a result of:

(1) death;

(2) Disability

(3) Retirement;

 

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(4) voluntary termination, or resignation, of employment by a Participant who,
at the time of such voluntary termination or resignation, is Retirement
Eligible;

(5) approved leave of absence; or

(6) termination at the Company’s request (other than for Cause).

(b) Newly-hired employees and part-time employees who are Participants also will
receive a Pro-Rated Incentive Award.

(c) If the Participant has a change in level of employment after the beginning
of the Plan Year, the Participant will receive a Pro-Rated Incentive Award, with
pro-ration based on the length of time and guideline percentage in the previous
and new position, as more particularly described in Section 1.17.

(d) Unless otherwise required by applicable law, any Pro-Rated Incentive Award
payable hereunder will be paid on the date when awards are otherwise payable as
provided in the Plan.

8.4 Change of Control. Upon the occurrence of a Change of Control, the terms of
this Section 8.4 shall immediately become operative, without further action or
consent by any person or entity, and once operative shall supersede and control
over any other provisions of this Plan:

(a) Acceleration. The CIC Incentive Award shall be payable in cash to all CIC
Participants within thirty (30) days following the occurrence of a Change of
Control (or as soon as it is practicable to determine the level of attainment of
applicable performance targets under subsection 8.4(a)(1)), but in no event
later than two and one-half (2 1/2) months following the end of the Plan Year in
which the Change of Control occurred). Such award shall be calculated according
to the terms of the Plan, except as follows:

(1) the level of attainment of applicable performance targets shall be
determined based upon the performance of the Partnership for completed months
from January 1 through the date of the Change of Control.

(2) The amount of the CIC Incentive Award shall be equal to the respective award
adjusted to reflect the level of attainment of applicable performance targets,
multiplied by the number of full and partial months in the CIC Short Period
divided by twelve (12).

(3) Notwithstanding anything herein to the contrary, no action taken by the
Committee or the Board of Directors after a Change of Control, or before, but in
connection with, a Change of Control, may: (i) terminate or reduce the CIC
Incentive Award or prospective CIC Incentive Award payable to any Participant in
connection with such Change of Control without the express written consent of
such Participant; or (ii) adversely affect a Participant’s rights under
subsection 8.4(b) in connection with such Change of Control.

(b) Attorney’s Fees. The Company shall pay all reasonable legal fees and related
expenses incurred by or with respect to a Participant during his lifetime or
within ten (10) years after his death in seeking to obtain or enforce payment of
the CIC Incentive Award to which such Participant may be entitled under the Plan
after a Change of Control; provided, however, that the Participant (or a
Participant’s representative) shall be required to repay any such amounts to the
Company to the extent a court of competent jurisdiction issues a final and
non-appealable order setting forth the determination that the position taken by
the Participant (or a Participant’s representative) was frivolous or advanced in
bad faith. Reimbursement shall be made on or before the close of the calendar
year following the calendar year in which the expense was incurred. The amount
of expenses eligible for reimbursement under this provision in one calendar year
may not affect the amount of expenses eligible for reimbursement under this
provision in any other calendar year.

 

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9. Amendment and Termination. The Committee, at its sole discretion, may amend
the Plan or terminate the Plan at any time (except as otherwise set forth in
Section 8.4).

10. Administration. The Committee may delegate the responsibility for the
administration and operation of the Plan to the Chief Executive Officer (or
designee) of the Company or any participating Affiliate. The Committee (or the
person(s) to which administrative authority has been delegated) shall have the
authority to interpret and construe any and all provisions of the Plan,
including all performance targets and whether and to what extent achieved. Any
determination made by the Committee (or the person(s) to which administrative
authority has been delegated) shall be final and conclusive and binding on all
persons.

11. Indemnification. Neither the Company, any participating Affiliate, nor the
Board of Directors, or any member or any committee thereof, of the Company or
any participating Affiliate, nor any employee of the Company or any
participating Affiliate shall be liable for any act, omission, interpretation,
construction or determination made in connection with the Plan in good faith;
and the members of the Company’s Board of Directors, the Committee and/or the
employees of the Company or any participating Affiliate shall be entitled to
indemnification and reimbursement by the Company to the maximum extent permitted
by law in respect of any claim, loss, damage or expense (including counsel’s
fees) arising from their acts, omission and conduct in their official capacity
with respect to the Plan.

12. General provisions.

12.1 Non-Guarantee of Employment. Nothing contained in this Plan shall be
construed as a contract of employment between the Company and/or a participating
Affiliate and a Participant, and nothing in this Plan shall confer upon any
Participant any right to continued employment with the Company or a
participating Affiliate, or to interfere with the right of the Company or a
participating Affiliate to terminate a Participant’s employment, with or without
cause.

12.2 Minimum Benefits. All benefits provided hereunder to Participant shall be
considered minimum benefits; if the Participant determines that the benefits
provided under any other agreement between the Participant and the Company are
more valuable to the Participant than the comparable benefits offered under this
Plan, Participant may elect to receive the more valuable benefits. No terms of
this Plan shall serve to modify, amend or terminate any benefits offered under
such other agreement.

12.3 Interests Not Transferable. No benefits under the Plan shall be subject in
any manner to alienation, sale, transfer, assignment, pledge, attachment or
other legal process, or encumbrance of any kind, and any attempt to do so shall
be void.

12.4 Facility Payment. Any amounts payable hereunder to any person under legal
disability or who, in the judgment of the Committee or its designee, is unable
to properly manage his or her financial affairs, may be paid to the legal
representative of such person, or may be applied for the benefit of such person
in any manner which the Committee or its designee may select, and each
participating Affiliate shall be relieved of any further liability for payment
of such amounts.

12.5 Controlling Law. To the extent not superseded by federal law, the law of
the State of Delaware shall be controlling in all matters relating to the Plan.

12.6 No Rights to Award. No person shall have any claim to be granted any award
under the Plan, and there is no obligation for uniformity of treatment of
participants. The terms and conditions of awards need not be the same with
respect to each recipient.

12.7 Severability. If any Plan provision or any award is or becomes or is deemed
to be invalid, illegal, or unenforceable in any jurisdiction or as to any person
or award, or would disqualify the Plan or any award under the law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to the applicable laws, or if it cannot be construed or deemed
amended without, in the determination of the Committee, materially altering the
intent of the Plan or the award, such provision shall be stricken as to such
jurisdiction, person or award and the remainder of the Plan and any such award
shall remain in full force and effect.

 

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12.8 No Trust or Fund Created. Neither the Plan nor any award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any participating Affiliate and a
Participant or any other person. To the extent that any person acquires a right
to receive payments from the Company or any participating Affiliate pursuant to
an award, such right shall be no greater than the right of any general unsecured
creditor of the Company or any participating Affiliate.

12.9 Headings. Headings are given to the sections of the Plan solely as a
convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of the Plan or
any provision of it.

12.10 Tax Withholding. The Company and/or any participating Affiliate may deduct
from any payment otherwise due under this Plan to a Participant (or beneficiary)
amounts required by law to be withheld for purposes of federal, state or local
taxes.

 

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