EXHIBIT 10.11

LETTERHEAD OF

ATLAS AMERICA, INC.

January 15, 2009

Mr. Eugene N. Dubay

558 West Lincoln Street

Birmingham, MI 48009

 

  Re: Summary of Employment Terms

Dear Gene:

This letter (the “Agreement”) will summarize the arrangements that we have
agreed to regarding your prospective employment by Atlas America, Inc. (“ATLS”).
Specifically, you will be joining us and will be employed as a Senior
Vice-President of ATLS, and will also serve as (i) President and Chief Executive
Officer of Atlas Pipeline Partners GP, LLC, the general partner of Atlas
Pipeline Partners, L.P. (“APL”); (ii) President and Chief Executive Officer of
Atlas Pipeline Mid-Continent, LLC ( “Atlas Mid-Continent”) (by itself, “Atlas
Mid-Continent”, and together with ATLS, APL and Atlas Pipeline Holdings, L.P.
(“AHD”), the “Company”); and (iii) in such other capacit(ies) to be determined
with respect to the Company’s pipeline operations. The general terms and
conditions of your employment are as follows:

1. Titles, Positions and Location. You will serve as a Senior Vice-President of
ATLS, and your principal day-to-day responsibilities will be as President and
Chief Executive Officer of the APL, as President and Chief Executive Officer of
Atlas Mid-Continent (the “Position”). You will initially be principally based at
Atlas Mid-Continent’s offices in Tulsa, Oklahoma. Your permanent principal
location, effective as of June 30, 2009, will be determined in writing by you
and ATLS. You will visit locations of the Company as is appropriate and
necessary to carry out your duties and responsibilities with respect to the
Position.

2. Services. You will serve the Company and its affiliates diligently,
competently, and to the best of your ability during the Employment Term (defined
below). You will devote substantially all of your working time and attention to
the business of the Company and its affiliates, and you will not undertake any
other duties which conflict with your responsibilities to the Company and its
affiliates. The Company shall provide you with sufficient support, capital and
personnel to assist you in performing and discharging your duties. You shall
report to the Chief Executive Officer of ATLS (currently Edward E. Cohen) and,
as applicable, to the boards of directors of APL and AHD (the “Boards”). You
will render such services as may reasonably be required of you to accomplish the
business purposes of the Company.

--------------------------------------------------------------------------------

3. Employment Term. The term of your employment shall commence as of January 15,
2009 (the “Employment Effective Date”) and shall continue for a period of two
(2) years thereafter. After the initial two (2)-year term, your employment shall
automatically renew for one (1) year renewal terms at the end of each term or
renewal term, unless ATLS gives notice, not less than sixty (60) days prior to
the end of the term or renewal term then in effect, of its intention not to
renew. The period commencing on the Employment Effective Date and ending on the
date on which the term of your employment under this Agreement shall terminate
is hereinafter referred to as the “Employment Term.”

4. Compensation. Your compensation shall be as follows:

(a) Base Salary. You shall receive an annual base salary (“Annual Base Salary”)
of Four Hundred Thousand Dollars ($400,000). The Annual Base Salary shall be
payable in accordance with ATLS’s regular payroll practices for its senior
executives, as in effect from time to time.

(b) Bonus. You will be eligible to be considered for bonus compensation. Such
bonus compensation will based upon reasonable criteria, including performance
criteria, as the Board of Directors of ATLS shall reasonably determine. For the
period ending December 31, 2009, your bonus shall be at least Three Hundred
Thousand Dollars ($300,000). Notwithstanding anything to the contrary in the
incentive compensation plan, program or arrangement pursuant to which a bonus is
payable, any annual bonus that you shall become entitled to receive hereunder
shall be deemed earned as of December 31, and shall be paid on or before
March 15 of the calendar year following the calendar year for which such annual
bonus is earned.

(i) Initial Equity Grant. On or shortly after the Employment Effective Date, you
will be granted restricted shares, phantom units and/or options to acquire
shares of APL, AHD and/or ATLS under their respective equity compensation plans,
as set forth on Schedule A hereto.

(ii) Equity-Based Compensation. You shall be eligible to receive additional
incentive equity-based compensation in the form of stock options, grants of
restricted stock and/or other forms of equity-based compensation in APL and/or
AHD as shall be determined by the Boards. Such incentive equity-based
compensation shall be subject to such restrictions and vesting as is provided
under the equity compensation plans of APL, AHD and/or ATLS, as applicable.

(c) Benefits. You shall be entitled to receive the following employment related
benefits:

(i) Participation in Benefit Plans. (1) you shall be entitled to participate in
all applicable incentive, savings, and retirement plans, practices, policies,
and programs of ATLS to the extent they are generally available to other senior
officers, directors or executives of ATLS, and (2) you and/or your family, as
the case may be, shall be eligible for participation in, and shall receive all
benefits under, all applicable welfare benefit plans, practices, policies, and
programs provided by ATLS, including, without limitation, medical, prescription,
dental, disability, sickness benefits, employee life insurance, accidental
death, and travel insurance plans and programs, to the same extent as other
senior officers, directors or executives of ATLS.

 

2

--------------------------------------------------------------------------------

(ii) Expenses. ATLS shall pay, or reimburse you for, all reasonable and
necessary expenses incurred in carrying out your duties under this Agreement in
accordance with Company policy, including all such costs incurred in connection
with your being principally based in Tulsa, Oklahoma through June 30, 2009. In
addition to the aforementioned expenses related to Tulsa, in 2009, ATLS shall
also pay directly up to $40,000 of your costs and expenses in relocating your
residence to the permanent principal location. Also in addition to the forgoing,
upon forty five (45) days written notice from you (which notice must be given
not later than July 31, 2009) ATLS will purchase your current personal residence
from you for an amount equal to your original purchase cost of $1,000,000, and
will assume all attributes, responsibilities, costs and benefits of ownership of
such residence. You agree that, if prior to June 30, 2011, your employment
hereunder shall be terminated by you without Good Reason, or by ATLS for Cause
(as such terms are later defined herein), then you shall repay to ATLS, within
ninety (90) days of such termination of employment, an amount equal to the
(i) the amount paid by ATLS to you for such residence, less (ii) the fair market
value of such residence on the date ATLS acquires it from you, such fair market
value to be determined by an MAI appraiser to be retained by ATLS during the
forty-five (45) day notice period.

5. Confidential Information; No Solicitation; Non-Competition

(a) All confidential information or trade secrets which you may obtain relating
to the business of the Company and its affiliates shall not be published,
disclosed, or made accessible by you to any other person, firm, or corporation
except in connection with the business, and for the benefit, of the Company and
its affiliates. You shall not, until two years after your employment with the
Company has terminated, for yourself or on behalf of any other person, firm,
partnership, corporation, or other entity, directly or indirectly solicit or
hire, or attempt to solicit or hire, any employee of the Company or its
affiliates away from the Company or its affiliates.

(b) In the event that your employment is terminated by ATLS for Cause, or is
terminated by you for any reason other than for Good Reason (each as defined in
Section 6 hereof), then you shall not, until eighteen (18) months after the
termination of your employment, for whatever reason, for yourself or on behalf
of any other person, firm, partnership, corporation, or other entity, directly
or indirectly engage in any natural gas pipeline and/or processing business in
the continental United States. For purposes of this clause 5(c), “to engage”
shall include your acting as an owner (of more than 5%), employee, director or
officer of an entity so engaged.

(c) You acknowledge that the restrictions contained in this Section 5 are, in
view of the nature of the business of the Company, reasonable and necessary to
protect the legitimate interests of the Company, and that any violation of any
provision of this Section will result in irreparable injury to the Company. You
also acknowledge that in the event of any such violation, the Company shall be
entitled to preliminary and permanent injunctive relief, without

 

3

--------------------------------------------------------------------------------

the necessity of proving actual damages or posting a bond, and to an equitable
accounting of all earnings, profits and other benefits arising from any such
violation, which rights shall be cumulative and in addition to any other rights
or remedies to which the Company may be entitled. You agree that in the event of
any such violation, an action may be commenced for any such preliminary and
permanent injunctive relief and other equitable relief in any federal or state
court of competent jurisdiction sitting in Pennsylvania or in any other court of
competent jurisdiction. You hereby waive, to the fullest extent permitted by
law, any objection that you may now or hereafter have to such jurisdiction or to
the laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that such suit, action or proceeding has been brought in an
inconvenient forum. You agree that effective service of process may be made upon
you by mail under the notice provisions contained in Section 9 hereof.

6. Termination. Notwithstanding anything herein to the contrary, your employment
shall terminate as a result of any of the following events:

(a) Your death;

(b) Termination by ATLS for Cause. “Cause” shall encompass any of the following:
i) you have committed any demonstrable and material act of fraud; (ii) illegal
or gross misconduct by you that is willful and results in damage to the business
or reputation of the Company; (iii) you are charged with a felony; (iv) the
continued failure of you to substantially to perform your duties under this
Agreement (other than as a result of physical or mental illness or injury),
after ATLS delivers you a written demand for substantial performance that
specifically identifies, with reasonable opportunity to cure, the manner in
which ATLS believes that you have not substantially performed your duties; or
(v) you have failed to follow reasonable written directions of ATLS which are
consistent with your duties hereunder and not in violation of applicable law.
ATLS’s termination of your employment for Cause shall be effected by ATLS
providing you written notice (“Notice of Termination for Cause”) of its
intention to terminate your employment for Cause, setting forth in reasonable
detail the specific conduct constituting Cause and the specific provision(s) of
this Agreement on which it relies. You shall have ten (10) business days after
receipt of such written notice to cure such failure;

(c) Termination by ATLS without Cause upon forty-five (45) days prior written
notice to you;

(d) Termination by ATLS upon your Disability. “Disability” shall mean that you
become disabled by reason of physical or mental disability for more than one
hundred eighty (180) days in the aggregate or a period of ninety
(90) consecutive days during any 365-day period and the Board determines, in
good faith, that you, by reason of such physical or mental disability, are
rendered unable to perform your duties and services hereunder. A termination of
your employment by ATLS for Disability shall be communicated to you by written
notice, and shall be effective on the thirtieth (30th) day after your receipt of
such notice (the “Disability Effective Date”), unless you return to full-time
performance of your duties before the Disability Effective Date;

 

4

--------------------------------------------------------------------------------

(e) Termination by you for “Good Reason” upon thirty (30) days’ prior written
notice to ATLS. “Good Reason” shall mean: (i) any substantial breach of this
Agreement by ATLS that either is not taken in good faith or is not remedied by
ATLS promptly after receipt of notice thereof from you; provided, however, that
Termination by you for Good Reason shall be effective only if such failure has
not been cured within ninety (90) days after the Notice of Termination for Good
Reason (as later defined in this paragraph) has been given to ATLS by you; or
(ii) a Change of Control (defined below), and provided further, that for the
avoidance of doubt, any change without your written agreement in permanent
principal location from the location determined pursuant to Paragraph 1 will
constitute a substantial breach of this Agreement. A termination of your
employment for Good Reason shall be effectuated by you providing ATLS with
thirty (30) days prior written notice (“Notice of Termination for Good Reason”)
of the termination within two (2) months of the event constituting Good Reason,
setting forth in reasonable detail the specific conduct of ATLS that constitutes
Good Reason and the specific provision(s) of this Agreement on which you rely.
As used herein, “Change of Control” shall mean the occurrence of any of the
following: (a) The acquisition of the beneficial ownership, as defined under the
Securities Exchange Act of 1934, as amended (the “1934 Act”), of fifty percent
(50%) or more of ATLS’s voting securities or all or substantially all of the
assets of ATLS by a single person or entity or group of affiliated persons or
entities other than by a Related Entity (as defined below); or (b) ATLS
consummates a merger, consolidation, combination, share exchange, division or
other reorganization or transaction of ATLS (a “Corporate Transaction”) with an
unaffiliated entity, other than a Related Entity (as defined below), in which
either (A) the directors of ATLS as applicable immediately prior to the
Corporate Transaction constitute less than a majority of the board of directors
of the surviving, new or combined entity, unless one-half of the board of
directors of the surviving, new or combined entity were directors of ATLS
immediately prior to such Corporate Transaction and ATLS’s chief executive
officer immediately prior to such Corporate Transaction continues as the chief
executive officer of the surviving, new or combined entity, or (B) the voting
securities of ATLS immediately before the Corporate Transaction represent less
than sixty (60) percent of the combined voting power immediately after the
Corporate Transaction of the outstanding securities of (I) ATLS, (II) the
surviving entity or (III) in the case of a division, each entity resulting from
the division; or (c) during any period of twenty-four (24) consecutive calendar
months, individuals who at the beginning of such period constitute the Board
cease for any reason to constitute at least a majority thereof, unless the
election or nomination for the election by ATLS’s stockholders of each new
director was approved by a vote of at least two-thirds (2/3) of the directors
then still in office who were directors at the beginning of the period; or
(d) the shareholders of ATLS approve a plan of complete liquidation, or
winding-up of ATLS or an agreement of sale or disposition (in one transaction or
a series of transactions) of all or substantially all of ATLS’s assets or all or
substantially all of the assets of its primary subsidiaries to an unaffiliated
entity, other than to a Related Entity (as defined below). For purposes of the
definition of “Change of Control” as set forth herein, the term “Related Entity”
shall mean an entity that is an “affiliate” of the Company or you or any member
of your immediate family including your spouse or children, as determined in
accordance with Rule 12b-2 of the General Rules and Regulations under the 1934
Act, as amended;

(f) Your termination without Good Reason upon sixty (60) day’s prior written
notice to ATLS; and

 

5

--------------------------------------------------------------------------------

(g) Termination by ATLS at the end of the Employment Term by reason of
non-renewal. In the event that ATLS provides you with notice of non-renewal
pursuant to Section 3, your termination shall constitute a termination without
Cause.

(h) The “Date of Termination” means the date of your death, the Disability
Effective Date, the date on which the termination of your employment by ATLS for
Cause, by ATLS without Cause, by you for Good Reason is effective, or the date
on which you give ATLS notice of a termination of employment without Good
Reason, as the case may be.

7. Consideration Payable to You upon Termination.

(a) Death. If your employment is terminated by reason of your death during the
Employment Term, ATLS shall pay to your designated beneficiaries (or, if there
is no such beneficiary, to your estate or legal representative), in a single
lump sum cash payment within sixty (60) days after the Date of Termination, the
sum of the following amounts:

(i) portion of your Annual Base Salary through the Date of Termination that has
been earned and not yet paid;

(ii) an amount representing the incentive compensation for the period that
includes the Date of Termination, computed by assuming that the amount of all
such incentive compensation would be equal to the amount of cash incentive
compensation that you earned for the prior fiscal year, multiplied by a
fraction, the numerator of which is the number of days worked in the current
fiscal year through the Date of Termination, and the denominator of which is the
total number of work days in the relevant current fiscal year; and

(iii) any accrued but unpaid incentive compensation for a prior incentive period
and any accrued but unpaid vacation pay.

All other benefits, payments or compensation provided to you hereunder shall
terminate and your rights in any unvested stock option or unit of APL, AHD or
ATLS shall be governed solely by the terms of the applicable plan.

(b) By ATLS for Cause; By You Other than for Good Reason. If your employment is
terminated by ATLS for Cause or if you terminate your employment other than for
Good Reason, ATLS shall pay to you your accrued but unpaid Annual Base Salary
through the Date of Termination. All other benefits, payments or compensation to
be provided to you hereunder shall be governed solely by the terms of the
applicable plan.

(c) By ATLS Other than For Cause or Death; By You for Good Reason. If ATLS
terminates your employment, other than for Cause or Death, if you terminate
employment for Good Reason, and you execute and do not revoke a customary
release in a form provided by ATLS, ATLS shall pay to you:

(i) Pro-rated cash incentive compensation for the year that includes the Date of
Termination, based on actual performance for the year. The pro-rata amount will
be calculated as the annual amount based on performance, multiplied by a
fraction, the numerator of which is the number of days worked in the current
fiscal year through the Date of Termination, and the denominator of which is the
total number of work days in the relevant current fiscal year. The pro-rated
amount shall be payable in a lump sum payment on the date on which you otherwise
would have been paid the incentive compensation had you remained employed by
ATLS;

 

6

--------------------------------------------------------------------------------

(ii) Monthly severance pay for the remainder of the Employment Term in an amount
equal to one-twelfth (1/12) of (x) your Annual Base Salary and (y) your Annual
Incentive Compensation (defined below). The severance pay shall be payable in
monthly installments in accordance with ATLS’s regular payroll practices,
commencing within sixty (60) days after the Date of Termination, subject to the
six (6)-month delay described in Section 16(a), if applicable. “Annual Incentive
Compensation” shall mean the annual amount of cash incentive compensation paid
to you for the fiscal year prior to your year of termination;

(iii) For the remainder of the Employment Term, you may elect continued health
coverage under the Company’s health plan in which you participated at the Date
of Termination, as in effect from time to time, provided that you shall be
responsible for paying the full monthly cost of such coverage. The monthly cost
shall be the premium determined for purposes of continued coverage under section
4980B(f)(4) of the Code (“COBRA Premium”) in effect from time to time.

(iv) Each month in which you pay the COBRA Premium, ATLS shall reimburse you for
the COBRA Premium in an amount equal to the COBRA Premium cost of continued
health coverage under the Company’s health plan, less the monthly premium charge
that is paid by the Company’s employees for such coverage.

(v) Any restrictions on any APL, AHD and/or ATLS stock options or units
outstanding on the Date of Termination shall terminate as of the Date of
Termination and all such options or units shall be fully vested and exercisable
and shall remain in effect and exercisable through the end of their respective
terms, without regard to the termination of your employment.

The payments and benefits provided pursuant to this Section 7(c) are intended as
liquidated damages for a termination of your employment by ATLS other than for
Cause or for the actions of ATLS leading to a termination of your employment by
you for Good Reason, and shall be the sole and exclusive remedy therefore. If
you are terminated by reason of Disability, you shall assign to Company any
benefits received on account of Company provided disability insurance for the
period on which this severance payment is based (i.e., through the end of the
term of this Agreement). You shall not be required to mitigate the amount of any
payment provided for in this Section 7(c) by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for herein be
reduced by any compensation or any retirement benefit heretofore or hereafter
earned by you as the result of employment by any other person, firm or
corporation. If you become entitled to receive payments provided for in
Section 7(c) of this Agreement, you hereby waive your right to receive payments
under any severance plan or similar program of the Company.

 

7

--------------------------------------------------------------------------------

8. Survivorship. The respective rights and obligations of the parties under this
Agreement shall survive any termination of your employment to the extent
necessary to the intended preservation of such rights and obligations.

9. Notices. All notices and other communications required or permitted under
this Agreement or necessary or convenient in connection herewith shall be in
writing and shall be deemed to have been given when hand delivered or delivered
by nationally recognized overnight delivery service, as follows (provided that
notice of change of address shall be deemed given only when received):

If to the Company, to:

Atlas America, Inc.

1845 Walnut Street, 10th Fl.

Philadelphia, PA 19103

Attn: Chief Legal Officer

If to you, to:

Mr. Eugene N. Dubay

558 West Lincoln Street

Birmingham, MI 48009

or to such other names or addresses as the Company or you, as the case may be,
shall designate by notice to each other person entitled to receive notices in
the manner specified in this Section.

10. Contents of Agreement; Amendment and Assignment.

(a) This Agreement sets forth the entire understanding between the parties with
respect to the subject matter hereof and cannot be changed, modified, extended
or terminated except upon written amendment approved by the Board of ATLS and
executed on its behalf by a duly authorized officer and by you.

(b) All of the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective heirs, executors,
administrators, legal representatives, successors and assigns of the parties
hereto, except that your duties and responsibilities under this Agreement are of
a personal nature and shall not be assignable or delegatable in whole or in part
by you.

11. Severability. If any provision of this Agreement or application thereof to
anyone or under any circumstances is adjudicated to be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect any
other provision or application of this Agreement which can be given effect
without the invalid or unenforceable provision or application and shall not
invalidate or render unenforceable such provision or application in any other
jurisdiction. If any provision is held void, invalid or unenforceable with
respect to particular circumstances, it shall nevertheless remain in full force
and effect in all other circumstances.

 

8

--------------------------------------------------------------------------------

12. Remedies Cumulative; No Waiver. No remedy conferred upon a party by this
Agreement is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to any other remedy
given under this Agreement or now or hereafter existing at law or in equity. No
delay or omission by a party in exercising any right, remedy or power under this
Agreement or existing at law or in equity shall be construed as a waiver
thereof, and any such right, remedy or power may be exercised by such party from
time to time and as often as may be deemed expedient or necessary by such party
in its sole discretion.

13. Withholding. All payments under this Agreement shall be made subject to
applicable tax withholding, and the Company shall withhold from any payments
under this Agreement all federal, state and local taxes as the Company is
required to withhold pursuant to any law or governmental rule or regulation.
Except as specifically provided otherwise in this Agreement, you shall bear all
expense of, and be solely responsible for, all federal, state and local taxes
due with respect to any payment received under this Agreement.

14. Governing Law. This Agreement shall be governed by and interpreted under the
laws of the State of Delaware without giving effect to any conflict of laws
provisions.

15. Section 409A.

(a) Notwithstanding anything in this Agreement to the contrary, if you are a
“specified employee” of a publicly traded corporation under section 409A of the
Code and if payment of any amount under this Agreement is required to be delayed
for a period of six (6) months after separation from service pursuant to section
409A of the Code, payment of such amount shall be delayed as required by section
409A of the Code, and the accumulated postponed amount shall be paid in a lump
sum payment within ten (10) days after the end of the six-month period. If you
die during the postponement period prior to the payment of postponed amount, the
amounts withheld on account of section 409A of the Code shall be paid to the
personal representative of your estate within sixty (60) days after the date of
your death. A “specified employee” shall mean an employee who, during the twelve
(12) month period ending on the identification date, is a “specified employee”
under section 409A of the Code, as determined by the Board of ATLS. The
determination of “specified employees,” including the number and identity of
persons considered “specified employees” and the identification date, shall be
made by the Board in accordance with the provisions of sections 416(i) and 409A
of the Code and the regulations issued thereunder.

(b) This Agreement is intended to comply with the requirements of section 409A
of the Code or an exemption, and shall in all respects be administered in
accordance with section 409A or an exemption. Notwithstanding anything in the
Agreement to the contrary, distributions may only be made under the Agreement
upon an event and in a manner permitted by section 409A of the Code or an
applicable exemption. All payments to be made upon a termination of employment
under this Agreement may only be made upon a “separation from service” under
section 409A. For purposes of section 409A of the Code, the right to a series of
payments under this Agreement shall be treated as a right to a series of
separate payments. In no event may you, directly or indirectly, designate the
calendar year of a payment. All reimbursements and in-kind benefits provided
under this Agreement shall be made or provided

 

9

--------------------------------------------------------------------------------

in accordance with the requirements of section 409A of the Code, including,
where applicable, the requirement that (i) any reimbursement shall be for
expenses incurred during your lifetime (or during a shorter period of time
specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during a calendar year may not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other calendar year, (iii) the reimbursement of an eligible
expense will be made on or before the last day of the calendar year following
the year in which the expense is incurred, and (iv) the right to reimbursement
or in-kind benefits is not subject to liquidation or exchange for another
benefit.

 

10

--------------------------------------------------------------------------------

By execution hereof, you are confirming that you are free to enter into
employment with ATLS pursuant to the terms identified herein. Please acknowledge
your acceptance of and agreement to the terms of this Agreement by signing a
copy of this Agreement where indicated and returning it to me.

 

Sincerely,

 

ATLAS AMERICA, INC.

By:      

 

ACCEPTED AND AGREED:

 

   Eugene N. Dubay

 

11

--------------------------------------------------------------------------------

SCHEDULE A TO LETTER AGREEMENT

WITH EUGENE N. DUBAY

EQUITY COMPENSATION

 

  •  

100,000 options of Atlas America, Inc. which vest 25% per year on the
anniversary of the Employment Effective Date.

 

  •  

100,000 options of Atlas Pipeline Partners, L.P. which vest 25% per year on the
anniversary of the Employment Effective Date.

 

  •  

100,000 options of Atlas Pipeline Holdings, L.P. which vest 25% on the third
anniversary of the Employment Effective Date and 75% on the fourth anniversary
of the Employment Effective Date.