NONCOMPETE AND RESTRICTIVE COVENANT AGREEMENT

 

THIS AGREEMENT (the “Agreement”) is made by and between National Fuel Gas
Company, a New Jersey corporation having offices at 6363 Main Street,
Williamsville, New York 14221 (“National Fuel”) and Mr. Dennis J. Seeley, 141
Gypsy Lane, East Aurora, New York, 14052 (“Mr. Seeley”) as of February 1, 2006.

 

 

WHEREAS, National Fuel and Mr. Seeley (each a “party,” collectively, the
“parties”) mutually agree that each party shall receive certain consideration,
on the terms set out in this Agreement;

 

WHEREAS, Mr. Seeley has been employed by National Fuel Gas Company and/or its
various subsidiaries from 1965 through January 31, 2006, and among other things,
has worked on and provided advice and expertise on matters relating to (i)
timber and sawmill operations, and (ii) exploration, production, gathering,
transportation, distribution, purchasing, brokering, marketing and trading of,
and construction and maintenance of facilities for, natural gas, electricity and
other energy products or services;

 

WHEREAS, during the course of Mr. Seeley’s employment with National Fuel, Mr.
Seeley had access to and became acquainted with National Fuel’s trade secrets
and confidential and proprietary information and materials, including but not
limited to investment plans and strategies;

 

WHEREAS, during the course of Mr. Seeley’s employment with National Fuel, Mr.
Seeley was aware that the confidentiality of National Fuel’s trade secrets and
confidential and proprietary information was required to be maintained by
National Fuel’s employees;

 

WHEREAS, during the course of Mr. Seeley’s employment with National Fuel, Mr.
Seeley was aware that National Fuel’s oil and gas exploration and development
activities, and other business strategies were subject to restricted use and
disclosure;

 

WHEREAS, during the course of Mr. Seeley’s employment with National Fuel,
National Fuel took steps to protect its trade secrets and confidential and
proprietary information;

 

WHEREAS, Mr. Seeley recognizes that National Fuel’s business and goodwill are
dependent upon National Fuel’s trade secrets and confidential and proprietary
information;

 

WHEREAS, National Fuel will sustain great loss and damage if Mr. Seeley
discloses, utilizes or causes to be disclosed or utilized National Fuel’s trade
secrets and/or confidential and proprietary information to third parties or for
Mr. Seeley’s own benefit;

 

 

 

 

NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:

 

 

1.

As used within this Agreement, the terms “Company,” “we,” “our” or “us“
collectively refer to National Fuel Gas Company and its subsidiary and
affiliated companies, other related entities, and successors or assigns. As used
within this Agreement, the terms “Mr. Seeley,” “employee,” “you” or “your”
refers to Dennis J. Seeley.

 

 

2.

You have voluntarily decided to apply for retirement, effective February 1,
2006.

 

 

3.

The Company agrees to pay you by check mailed to your then-current home address
or via direct deposit to an account so designated, in writing, by you, a lump
sum of Four Hundred Forty Thousand Dollars ($440,000), less any and all
applicable taxes and withholding. Said lump sum payment shall be made on or
about February 15, 2006. In the event of your death prior to February 15, 2006,
this payment will be payable to your Estate when due. For the avoidance of
doubt, no portion of this payment is intended to constitute any bonus for any
fiscal year and none has been nor shall be included in the calculation of any
pension benefits.

 

 

4.

In consideration for the promises set forth in paragraph 3 of this Agreement,
you hereby knowingly and voluntarily release and unconditionally waive any and
all demands, claims and causes of action, of whatever kind or nature, which you
ever had, now have or which you, your successors, assigns, heirs, executors or
administrators can, shall or may have for any reason as of the date you execute
this Agreement against the Company or any of the Company's predecessors,
successors, assigns, executors, administrators, directors, officers, employees
and agents (collectively "Releasees") regarding your employment and its
termination, including, but not limited to:

 

 

(a)

all demands, claims and causes of action for wages, bonuses, severance pay,
perquisites, or back wages;

 

 

(b)

all manner of action and actions, cause and causes of actions, suits, claims and
demands whatsoever, in law or in equity, based on your 2005 Target Incentive
Opportunity under the Performance Incentive Program

 

 

(c)

all demands, claims and causes of action under state or federal civil rights and
anti-discrimination laws, regulations or orders, including Executive Order
11246, Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act of 1967, the Americans with Disabilities Act of 1990 and the New
York Human Rights Law;

 

 

(d)

all demands, claims and causes of action that your employment or its termination
violated any alleged contractual relationship with the Company or was in any way
unreasonable, wrongful, or in violation of any Company policy; and

 

 

(e)

all demands, claims and causes of action for mental, physical or emotional
distress or harm, or defamation relating in any way to your employment or its
termination.

 

 

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5.

In conjunction with the provisions of paragraph 4 herein, the Company and you
specifically acknowledge and agree that:

 

 

(a)

you do not waive any claim which may arise after the execution of this
Agreement;

 

 

(b)

you do not waive any claim with respect to performance by the Company of its
obligations under this Agreement;

 

 

(c)

you do not waive any right of indemnification by or contribution from the
Company which arises under the provisions of paragraph 11 of this Agreement,
under the Company’s by-laws or under the corporate laws of New York,
Pennsylvania or New Jersey regarding the relationship between a corporation and
its officers;

 

 

(d)

but for this Agreement, you would not be entitled to the benefits set forth in
paragraph 3 of this Agreement;

 

 

(e)

the Company has advised you to review the Agreement, and specifically the
release contained in paragraph 4 herein, with your attorney prior to signing
this Agreement;

 

 

(f)

you were given this Agreement on January 30, 2006, and you understand you may
review this Agreement for up to twenty-one (21) days before being required to
execute this Agreement. You and the Company agree that the time period for you
to consider this Agreement before signing it will not be restarted if any
changes, material or non-material, are made to the Agreement after the date you
first received it. You and the Company also agree that no benefits provided
under this Agreement shall be payable unless and until the time periods
referenced herein and in subparagraph (g) hereof expire and this Agreement
becomes effective;

 

 

(g)

you may terminate this Agreement at any time within seven (7) days after your
execution of this Agreement. This Agreement shall not become effective until the
time to terminate it has expired.

 

 

6.

As a part of the consideration for the compensation provided in this Agreement
and for the other covenants made by National Fuel in this Agreement, you agree
to the following confidentiality provisions:

 

 

(a)

You agree that the contents of this Agreement are confidential and will not be
disclosed to any third party, other than your attorney, your wife, tax advisor,
financial advisor(s), the Internal Revenue Service, the New York State Tax
Department or the tax authority of any state or locality in which you are, or
may be, subject to income tax, unless you are compelled to do so by a court
having jurisdiction over such matter (in which case you will notify the Company
as soon as possible of the activity and cooperate with the Company in seeking
relief from such compulsion) or as may be necessary in connection with the
enforcement of this Agreement. Notwithstanding the previous sentence, you may
disclose the

 

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provisions of this paragraph 6 and paragraphs 7 and 9 hereof to any prospective
employer or any other person or entity for whom you propose to provide services;

 

 

(b)

Notwithstanding anything to the contrary contained in this Agreement, or any
other express or implied agreement, arrangement or understanding, the parties
and their respective affiliates, employees, representatives and other agents may
disclose to any and all persons the tax structure and any of the tax aspects of
the transaction(s) contemplated by this Agreement, which are necessary to
describe or support any United States federal income tax benefits that may
result therefrom or any materials necessary to comply with United States federal
or state securities laws. For the purposes of this provision, “tax structure” is
limited to facts relevant to the U.S. federal income tax treatment of the
transaction(s) and does not include information relating to the identity of the
parties, their affiliates, agents or advisors;

 

 

 

(c)

You hereby represent that you have returned to the Company any and all corporate
documents, records or copies of the same, information or property in your
possession of which you are aware, except those relating to either your own
employment, such as payroll stubs and benefits statements, or your shareholdings
in the Company. You agree to return to the Company any and all such documents,
records, copies, information and property which are or become subject to your
control in the future. The Company acknowledges receipt from you of corporate
documents and information you left behind on the Company’s premises. Your
performance of the obligations set forth in this paragraph 6(c) is a condition
precedent to your receipt of any benefits under paragraph 3 of this Agreement;
however, upon a change of control of the Company (within the meaning of Section
409A of the U.S. Internal Revenue Code as in effect on the date of this
Agreement), your performance of this condition shall no longer be such a
condition precedent, and any subsequent breach by you of this paragraph 6(c)
would render you subject only to the same remedies the Company would have for
any other material breach of this Agreement;

 

 

(d)

You shall hold in a fiduciary capacity for the benefit of National Fuel any and
all of the Company’s trade secrets and confidential and proprietary information
in your possession. You shall not, without the prior written consent of National
Fuel, unless compelled pursuant to an order of a court or other body having
jurisdiction over such matter (in which case you will notify the Company as soon
as possible of the activity and cooperate with the Company in seeking relief
from such compulsion), at any time, utilize or communicate or divulge to anyone
other than the Company and those designated by it, any of the Company’s trade
secrets and confidential and proprietary information;

 

 

(e)

The prohibition against your use of the Company’s trade secrets and confidential
and proprietary information, other than for the benefit of National Fuel,
includes but is not limited to the exploitation of any products or services that
embody or are derived from the Company’s trade secrets or confidential and
proprietary information;

 

 

4

 

 

 

 

(f)

You agree to comply with (i) any and all applicable laws and regulations
regarding your actions and omissions while in possession of any material
nonpublic information about the Company which you may have at any time; and (ii)
any and all confidentiality agreements that the Company entered into with third
parties, of which you were made aware during your employment by the Company,
under which the Company promised that its Representatives (including you) would
keep confidential certain information described in those confidentiality
agreements;

 

 

(g)

You represent, warrant and agree that you have no proprietary or ownership
rights or title to any of the Company’s trade secrets or confidential and
proprietary information and no legal right to use, disclose, disseminate, or
publish any of the Company's trade secrets or confidential and proprietary
information in any locality. You acknowledge that if you were to work for or
advise any entity in connection with a potential acquisition of or merger with
the Company, you would in the course of that work inevitably use or disclose
some of the Company’s trade secrets or confidential and proprietary information;

 

 

(h)

The Company's "trade secrets" and "confidential and proprietary information"
include, but are not limited to, any and all memoranda, software, data bases,
computer programs, interface systems, pricing and client information, records
and “writings” as hereinafter defined pertaining to the Company’s methods or
practices of doing business and marketing its services and products, whether or
not developed or prepared by you during the term of your employment with the
Company. As used in the preceding sentence, the term “writings” shall mean and
include all works, expressed in words, numbers or other verbal or numerical
symbols, regardless of the physical manner in which they are embodied,
including, but not limited, to books, articles, manuscripts, memoranda, computer
programs, computer software systems, maps, charts, diagrams, technical drawings,
manuals, video and audio tape recordings, and photographs. Notwithstanding the
foregoing, the Company's trade secrets and confidential and proprietary
information shall mean only such information or material not generally known to
the public (other than by act of you or your representatives in breach of this
Agreement).

 

 

7.

In order to protect and safeguard the Company's trade secrets and confidential
information, you agree that, during the period beginning February 1, 2006 and
ending January 31, 2009:

 

 

(a)

you will not, directly or indirectly and without the prior written consent of
National Fuel, engage in or be interested in (as owner, partner, shareholder,
employee, director, agent, consultant or otherwise), any business which is a
“competitor” of the Company, as hereafter defined, except as otherwise permitted
under paragraph 7(c) below;

 

 

(b)

for purposes of this Agreement, a “competitor” of the Company is any
corporation, sole proprietorship, partnership, joint venture, syndicate, trust
or any other form of organization or parent, subsidiary or division of any of
the

 

5

 

 

foregoing, which, during such period or the immediately preceding fiscal year of
such entity, was engaged in (i) timber and sawmill operations, or (ii) the
exploration, production, gathering, transportation, distribution, purchase,
brokering, marketing, or trading of, and construction and maintenance of
facilities for, natural gas, electricity or other energy products or services
which are competitive to the Company’s products or services, or in any energy
related project that is competitive to the Company's products, services or
projects, provided that such entity was engaged in such competitive business
within 50 miles of the geographic area in which the Company is engaged in
business;

 

 

(c)

the terms of this paragraph 7 shall not apply to:

 

 

(i)

your present or future investments in the securities of companies listed on a
national securities exchange or traded on the over-the-counter market to the
extent such investments do not exceed 2% of the total outstanding shares of such
company,

 

 

(ii)

your engagement in or interest in any business with the prior written consent of
National Fuel.

 

 

(d)

The parties acknowledge and agree that the foregoing restrictions contain
reasonable limitations as to the time, geographical area, and scope of activity
to be restrained and these restrictions do not impose any greater restraint than
is necessary to protect the goodwill and other legitimate business interests of
the Company.

 

 

8.

In consideration for your promises set forth in this Agreement, the Company
agrees that:

 

 

(a)

any inquiries by prospective employers or third parties will be handled as per
Company policy; that is, the dates of your employment and job title will be the
only information released by the Company;

 

 

(b)

the contents of this Agreement are confidential; the Company shall not disclose
the contents of this Agreement to anyone other than the directors, officers,
employees and agents of the Company or its affiliates who need to know except as
required, in the opinion of counsel, to comply with applicable law, regulation
or order;

 

 

(c)

the Company hereby knowingly and voluntarily releases and unconditionally waives
any and all demands, claims and causes of action against you, of whatever kind
or nature, which the Company ever had, now has or which it or its successors
can, shall or may have for any reason as of the date you execute this Agreement,
except for claims for fraud or other intentional misconduct discovered by the
Company’s officers after the execution of this Agreement; the Company does not
release or waive any claim which may arise after the execution of this
Agreement; and

 

 

6

 

 

 

 

(d)

the Company shall not publicly or privately disparage you, either personally or
professionally; the parties agree that nothing in this paragraph shall be
construed to prevent any officer of the Company or any subsidiary or affiliate
from discussing your performance internally in the ordinary course of business.

 

 

9.

In further consideration for the promises set forth in this Agreement, you agree
that:

 

 

(a)

you will not publicly or privately disparage the Company, or any of its
subsidiaries, affiliates, directors, officers or employees including any aspect
of their respective business, products, employees, management or Board of
Directors, in any manner, including but not limited to in any way which could
materially adversely affect the business of the Company or such subsidiaries or
affiliates; and

 

 

(b)

you will not, directly or indirectly, take any action with the intended purpose
of interfering with, damaging or disrupting the assets or business operations or
affairs of the Company or its subsidiaries or affiliates; without limiting the
foregoing in any way, it shall be conclusively presumed that you have breached
this subparagraph 9(b) if, without the prior written consent of National Fuel or
other than at National Fuel’s written request, you

 

 

(i)

voluntarily participate in any of the following, collectively referred to as a
“Proceeding”: any rate case, claim, litigation, arbitration, mediation or
administrative proceeding affecting the revenue, expenses, assets or liabilities
of the Company other than any claim, litigation, arbitration, mediation or
administrative proceeding that does not relate to a rate matter;

 

 

(ii)

voluntarily render any assistance in the preparation or development of any
position in a Proceeding; or

 

 

(iii)

submit any shareholder proposal, motion or resolution to the Company to be
discussed or voted upon by the Company’s shareholders. You hereby grant the
Secretary of National Fuel an irrevocable power of attorney to withdraw for all
purposes any such shareholder proposal.

 

 

(c)

you will not, directly or indirectly and without the prior written consent of
National Fuel , work for, consult with, advise or represent (as employee, agent,
consultant or otherwise), any business which is a “customer” of the Company, as
hereafter defined, with respect to any matter or activity which would tend to
reduce the quantity or price of services or commodities provided by the Company
to that business;

 

 

(d)

for purposes of this Agreement, a “customer” of the Company is any corporation,
sole proprietorship, partnership, joint venture, syndicate, trust or any other
form of organization or parent, subsidiary or division of any of the foregoing,
which, during such period or the immediately preceding fiscal year of such
entity, purchased commodities, goods or services from the Company; and

 

7

 

 

 

 

(e)

you will not induce or otherwise entice, directly or indirectly, any employee or
officer of the Company to leave the Company, nor shall you attempt to hire any
of the Company's employees or officers.

 

 

10.

You waive any and all rights to employment at the Company, agree not to
knowingly apply for, solicit, seek or otherwise attempt to obtain employment
with the Company, and further agree that the Company is not or will not be at
any time under any obligation to employ you. You further agree that if you
should apply for employment at the Company, the Company will have no obligation
to process your employment application or to hire you and that the failure to
process your employment application or to hire you shall not constitute a
violation of any federal, state or local law, regulation or order. Nothing in
this Agreement shall preclude you, however, from soliciting, seeking or
otherwise attempting to obtain consulting work with the Company as an
independent contractor, or from actually performing consulting services for the
Company if retained by the Company, it being understood that the Company is not
and will not be under any obligation to engage you as a consultant.

 

 

11.

National Fuel shall indemnify you to the fullest extent permitted and in the
manner provided by the laws of the State of New Jersey including, without
limitation, the indemnification permitted by N.J.S. 14A:3-5(8), against all
liabilities (including amounts paid or incurred in satisfaction of settlements,
judgments, fines and penalties) and expenses (including, without limitation,
attorneys’ fees and disbursements) imposed upon or incurred by you in connection
with any pending, threatened or completed civil, criminal, administrative or
arbitrative action, suit or proceeding in which you may become involved by
reason of your being or having been a director or officer of the Company, or of
serving or having served at the request of the Company as a director, officer,
trustee, employee or agent of, or in any other capacity with, another foreign or
domestic corporation, or any partnership, joint venture, sole proprietorship,
employee benefit plan, trust or other enterprise, whether or not for profit.
During the pendency of any such proceeding, the Company shall, to the fullest
extent permitted by law, promptly advance expenses (including, without
limitation, attorneys’ fees and disbursements) that are incurred, from time to
time, in connection therewith by you, subject to the receipt by the Company of
an undertaking of you as required by law. Unless otherwise required by
applicable law at that time, this undertaking shall be in the form of a writing
signed by you promising to immediately repay the advanced amounts if it shall
ultimately be determined that you are not entitled to indemnification under this
section or under applicable law at that time. The indemnification provided by
this paragraph 11 shall extend to your estate or personal representative.

 

 

12.

The parties agree that the legal invalidity of any provision of this Agreement
shall not make this Agreement void or unenforceable, and that in such case this
Agreement shall be construed so as to preserve as much as possible of the
parties’ respective interests which motivated them to execute this Agreement. It
is also agreed that this Agreement shall be construed and enforced in accordance
with the laws of the State of New York. The parties acknowledge that they have
mutually negotiated all provisions of this Agreement with the assistance of
counsel. The provisions of this Agreement shall be interpreted and construed in
accordance with their fair meanings, and not strictly for or

 

8

 

 

against either party, regardless of which party may have drafted this Agreement
or any specific provisions.

 

 

13.

This Agreement constitutes the final, complete and exclusive agreement between
the Company and you regarding your employment and its termination. You do not
rely upon any oral promises in signing this Agreement, and the only promises you
rely on are those set forth in writing herein. This Agreement may be modified or
amended only by a written instrument signed by the Company and you.

 

 

14.

This Agreement is personal to Mr. Seeley and without the prior written consent
of National Fuel shall not be assignable by him other than by will or the laws
of descent and distribution. This Agreement shall inure to the benefit of and be
enforceable by Mr. Seeley’s legal representatives.

 

 

15.

This Agreement shall inure to the benefit of and be binding upon National Fuel
and its successors.

 

IN WITNESS WHEREOF, each party has executed this Agreement as of the date
indicated below.

 

DENNIS J. SEELEY

 

 

/s/ D. J. Seeley                                                   

Date:

1/31/06                                        

 

NATIONAL FUEL GAS COMPANY

 

 

By: /s/ P. C. Ackerman                                  

Date:

1/31/06                                        

 

P. C. Ackerman

 

 

President

 

 

 

 

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