Exhibit 10.19(a)


 


CHANGE
OF CONTROL AGREEMENT


 


THIS
AGREEMENT (the “Agreement”) dated as of the 6th day of November,
2004 (the “Effective Date”) is made by and between EQUITABLE RESOURCES, INC., a
Pennsylvania corporation with its principal place of business at Pittsburgh,
Pennsylvania (the “Company”), and DIANE L. PRIER, an individual (the “Employee”);


 


WITNESSETH:


 


WHEREAS,
the Board of Directors of the Company (the “Board”) continues to believe that
it is in the best interest of the Company and its shareholders to assure that
the Company will have the continued dedication of the Employee, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined below)
of the Company; that it is imperative to diminish the inevitable distraction of
the Employee by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control and to encourage the Employee’s full
attention and dedication to the Company currently and in the event of any
threatened or pending Change of Control; and that it is appropriate to provide
the Employee with compensation and benefits arrangements upon a Change of
Control which ensure that the compensation and benefits expectations of the
Employee will be satisfied and which are competitive with those of other
corporations in the industry in which the Company’s principal business activity
is conducted; and


 


WHEREAS,
in order to better accomplish the foregoing objectives, the Company and the
Employee desire to terminate the Existing Agreement and to enter into this
Agreement in order to enhance and clarify in certain respects the compensation
and benefits payable to the Employee if the Employee’s employment terminates in
certain circumstances following a Change of Control of the Company;


 


NOW
THEREFORE, in consideration of the premises and mutual covenants contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:


 


1.             Term.
The term of this Agreement shall commence on the Effective Date hereof and,
subject to Sections 3(f), 5 and 8, shall terminate on the earlier of (i) the
date of the termination of Employee’s employment by the Company for any reason
prior to a Change of Control; or (ii) unless further extended as hereinafter
set forth, the date which is thirty-six (36) months after the Effective Date;
provided, that, commencing on the last day of the first full calendar month
after the Effective Date and on the last day of each succeeding calendar month,
the term of this Agreement shall be automatically extended without further
action by either party (but not beyond the date of the termination of Employee’s
employment prior to a Change of Control) for one (1) additional month unless
one party provides written notice to the other party that such party does not
wish to extend the term of this Agreement. In the event that such notice shall
have been delivered, the term of this Agreement shall no longer be subject to
automatic extension


 

















 


                and the term hereof shall expire on the date which
is thirty-six (36) calendar months after the last day of the month in which
such written notice is received.


 


2.             Change of Control. Except as provided in Section 12, Change of
Control shall mean any of the following events (each of such events being
herein referred to as a “Change of Control”):


 


(a)           The
sale or other disposition by the Company of all or substantially all of its
assets to a single purchaser or to a group of purchasers, other than to a
corporation with respect to which, following such sale or disposition, more
than eighty percent (80%) of, respectively, the then outstanding shares of
Company common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of the Board of
Directors is then owned beneficially, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively of the outstanding Company common stock and the combined
voting power of the then outstanding voting securities immediately prior to
such sale or disposition in substantially the same proportion as their
ownership of the outstanding Company common stock and voting power immediately
prior to such sale or disposition;


 


(b)           The
acquisition in one or more transactions by any person or group, directly or
indirectly, of beneficial ownership of twenty percent (20%) or more of the
outstanding shares of Company common stock or the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of the Board of Directors; provided, however, that the following
shall not constitute a Change of Control: 
(x) any acquisition by the Company or any of its subsidiaries, or any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any of its subsidiaries, (y) an acquisition by any person that is eligible,
pursuant to Rule 13d-1(b) under the Exchange Act (as such rule is in effect as
of November 1, 1995) to file a statement on Schedule 13G with respect to its
beneficial ownership of Company common stock and other voting securities,
whether or not such person shall have filed a statement on Schedule 13G, unless
such person shall have filed a statement on Schedule 13D with respect to
beneficial ownership of fifteen percent or more of the Company’s voting
securities, (z) an acquisition by any person or group of persons of not more
than forty percent (40%) of the outstanding shares of Company common stock or
the combined voting power of the then outstanding voting securities of the
Company if such acquisition resulted from the issuance of capital stock by the
Company and the issuance and the acquiring person or group was approved in
advance of such issuance by at least two-thirds of the Continuing Directors
then in office;


 


(c)           The
Company’s termination of its business and liquidation of its assets;


 


(d)           There
is consummated a merger, consolidation, reorganization, share exchange, or
similar transaction involving the Company (including a triangular merger), in
any case, unless immediately following such transaction:  (i) all or substantially all of


 


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                the persons who were the beneficial
owners of the outstanding common stock and outstanding voting securities of the
Company immediately prior to the transaction beneficially own, directly or
indirectly, more than 60% of the outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors of the corporation resulting from
such transaction (including a corporation or other person which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets through one or more subsidiaries (a “Parent Company”)) in substantially
the same proportion as their ownership of the common stock and other voting
securities of the Company immediately prior to the consummation of the
transaction, (ii) no person (other than (A) the Company, any employee benefit plan
sponsored or maintained by the Company or, if reference was made to equity
ownership of any Parent Company for purposes of determining whether clause (i)
above is satisfied in connection with the transaction, such Parent Company, or
(B) any person or group that satisfied the requirements of subsection (b)(y),
above, prior to such transaction) beneficially owns, directly or indirectly,
20% or more of the outstanding shares of common stock or the combined voting
power of the voting securities entitled to vote generally in the election of
directors of the corporation resulting from such transaction and (iii)
individuals who were members of the Company’s Board of Directors immediately
prior to the consummation of the transaction constitute at least a majority of
the members of the board of directors resulting from such transaction (or, if
reference was made to equity ownership of any Parent Company for purposes of
determining whether clause, (i) above is satisfied in connection with the
transaction, such Parent Company); or


 


(e)           The
following individuals (sometimes referred to herein as “Continuing Directors”)
cease for any reasons to constitute a majority of the number of directors then
serving:  individuals who, on the date
hereof, constitute the entire Board of Directors and any new director (other
than a director whose initial assumption of office is in connection with an
actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on the date hereof or
whose appointment, election or nomination for election was previously so
approved.


 


3.             Salary and Benefits Continuation.


 


(a)           “Salary
and Benefits Continuation” shall be defined to mean the following:


 


(i)            payment
of an amount of cash equal to two (2) times the Employee’s base salary at the
rate of base salary per annum in effect immediately prior to the Change of
Control or the termination of Employee’s employment, whichever is higher;


 


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(ii)           payment
of an amount of cash equal to two (2) times the greater of (A) the highest
annual incentive (bonus) payment earned (including all deferred amounts) by the
Employee under the Company’s Short-Term Incentive Plan (or any successor plan)
for any year in the five (5) years prior to the termination of Employee’s
employment or (B) the target incentive (bonus) award under the Company’s
Short-Term Incentive Plan (or any successor plan) for the year in which the
Change of Control or termination of Employee’s employment occurs, whichever is
higher;


 


(iii)          provision
to Employee and his/her eligible dependents of medical, long-term disability,
dental and life insurance coverage (to the extent such coverage was in effect
immediately prior to the Change of Control) for twenty-four (24) months (at the
end of which period the Company shall make such benefits available to the
Employee and his/her eligible dependents in accordance with the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”), whether or not the Company
is then required to comply with COBRA); and if the Employee would have become
entitled to benefits under the Company’s post-retirement health care or life
insurance plans (as in effect immediately prior to the Change of Control or the
date of the Employee’s termination of employment, whichever is most favorable
to the Employee) had the Employee’s employment terminated at any time during
the period of twenty-four (24) months after such date of termination, the
Company shall provide such post-retirement health care or life insurance
benefits to the Employee (subject to any employee contributions required under
the terms of such plans at the level in effect immediately prior to the Change
of Control or the date of termination, whichever is more favorable to the
Employee) commencing on the later of (i) the date that such coverage would have
first become available or (ii) the date that benefits described in this
subsection (iii) terminate;


 


(iv)          contribution
by the Company to Employee’s account under the Company’s defined contribution
retirement plan (currently, the Equitable Resources, Inc. Employee Savings
Plan) of an amount of cash equal to the amount that the Company would have
contributed to such plan (including both retirement contributions and Company
matching contributions in respect of Employee contributions to the plan) had
the Employee continued to be employed by the Company for an additional
twenty-four (24) months at a base salary equal to the Employee’s base
salary immediately prior to the Change of Control or the termination of
Employee’s employment, whichever is higher (and assuming for this purpose that
the Employee continued to make the maximum permissible contributions to such
plan during such period), such contribution being deemed to be made immediately
prior to the termination of Employee’s employment; provided, that to the extent
that the amount of such contribution exceeds the amount then allowed to be
contributed to the plan under the applicable rules relating to tax-qualified
retirement plans, then the excess shall be


 


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                paid to the Employee in cash (for the
avoidance of doubt, such cash payment includes the amount that the Company
would have otherwise contributed to the Company’s Deferred Compensation Plan
(or other non-qualified plan) in respect of both retirement and matching
contributions under the Company’s Employee Savings Plan (or any successor plan)
because of applicable rules relating to tax-qualified retirement plans);


 


(v)           reimbursement
to Employee of reasonable costs incurred by Employee for outplacement services
in the twelve (12) month period following termination of Employee’s employment;
and


 


(b)           All
amounts payable by the Company to the Employee in cash pursuant to Section 3(a)
shall be made in a lump sum unless the Employee otherwise elects and notifies
the Company in writing prior to the termination of Employee’s employment of
Employee’s desire to have all payments made in accordance with the Company’s
regular salary and benefit payment practices, provided that (i) the lump sum
payment or first payment shall be made within thirty (30) days after the
Employee’s termination, and (ii) the Employee may elect to defer such payments
pursuant to the Company’s then-existing deferred compensation plan(s). All
other amounts payable by the Company to the Employee pursuant to Section 3
shall be paid or provided in accordance with the Company’s standard payroll and
reimbursement procedures, as in effect immediately prior to the Change of
Control.


 


(c)           In
the event that medical, long-term disability, dental and life insurance
benefits cannot be provided under appropriate Company group insurance policies
pursuant to Section 3(a)(iii), an amount equal to the premium necessary for the
Employee to purchase directly the same level of coverage in effect immediately
prior to the Change of Control shall be added to the Company’s payments to
Employee pursuant to Section 3(a) (payable in the manner elected by the
Employee pursuant to Section 3(b)). If Employee is required to pay income or
other taxes on any medical, long-term disability, dental or life insurance
benefits provided or paid to the Employee pursuant to Section 3(a)(iii) or this
Section 3(c), then the Company shall pay to the Employee an amount of cash sufficient
to “gross-up” such benefits or payments so that Employee’s “net” benefits
received under Section 3(a)(iii) and this Section 3(c) are not diminished by
any such taxes that are imposed with respect to the same or the Company’s
gross-up hereunder with respect to such taxes.


 


(d)           If
there is a Change of Control as defined above, the Company will provide Salary
and Benefits Continuation if at any time during the first twenty-four (24)
months following the Change of Control, either (i) the Company terminates the
Employee’s employment other than for Cause as defined in Section 4 below or
(ii) the Employee terminates his/her employment for “Good Reason” as defined
below.


 


(e)           For
purposes of this Agreement, “Good Reason” is defined as:


 


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(i)            Removal
of the Employee from the position he/she held immediately prior to the Change
of Control (by reason other than death, disability or Cause);


 


(ii)           The
assignment to the Employee of any duties inconsistent with those performed by
the Employee immediately prior to the Change of Control or a substantial
alteration in the nature or status of the Employee’s responsibilities which
renders the Employee’s position to be of less dignity, responsibility or scope;


 


(iii)          A
reduction by the Company in the overall level of compensation of the Employee
for any year from the level in effect for the Employee in the prior year. For
purposes of this subsection (iii), the following shall not constitute a
reduction in the overall level of compensation of the Employee:  (A) across-the-board reductions in base
salary similarly affecting all executives of the Company and all executives of
any person in control of the Company, provided, however, that the Employee’s
annual base salary rate shall not be reduced by an amount equal to ten percent
or more of the Employee’s annual base salary rate in effect immediately prior
to the Change of Control; (B) changes in the mix of base salary payable to and
the short-term incentive opportunity available to the Employee; provided, that
in no event shall the Employee’s base salary for any year be reduced below 90%
of the annual base salary paid to such Employee in the prior year; (C) a
reduction in the compensation of the Employee resulting from the failure to
achieve corporate, business unit and/or individual performance goals
established for purposes of incentive compensation for any year or other
period; provided, that the aggregate short-term incentive opportunity, when
combined with the Employee’s annual base salary, provides, in the aggregate, an
opportunity for the Employee to realize at least the same overall level of base
salary and short term incentive compensation as was paid in the immediately
prior year or period at target performance levels; and provided, further, that
such target performance levels are reasonable at all times during the
measurement period, taking into account the fact that one of the purposes of
such compensation is to incentivize the Employee; (D) reductions in
compensation resulting from changes to any Company benefit plan; provided, that
such changes are generally applicable to all participants in such Company
benefit plan; and (E) any combination of the foregoing;


 


(iv)          The
failure to grant the Employee an annual salary increase reasonably necessary to
maintain such salary as reasonably comparable to salaries of senior executives
holding positions equivalent to the Employee’s in the industry in which the
Company’s then principal business activity is conducted;


 


(v)           The
Company requiring the Employee to be based anywhere other than the Company’s
principal executive offices in the city in which the Employee is principally
located immediately prior to the Change of


 


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Control, except for required travel on the Company’s
business to an extent substantially consistent with the Employee’s business
travel obligations prior to the Change of Control;


 


(vi)          Any
material reduction by the Company of the benefits enjoyed by the Employee under
any of the Company’s pension, retirement, profit sharing, savings, life
insurance, medical, health and accident, disability or other employee benefit
plans, programs or arrangements, the taking of any action by the Company which
would directly or indirectly materially reduce any of such benefits or deprive
the Employee of any material fringe benefits, or the failure by the Company to
provide the Employee with the number of paid vacation days to which he/she is
entitled on the basis of years of service with the Company in accordance with
the Company’s normal vacation policy, provided that this paragraph (vi) shall
not apply to any proportional across-the-board reduction or action similarly
affecting all executives of the Company and all executives of any person in
control of the Company; or


 


(vii)         The
failure of the Company to obtain a satisfactory agreement from any successor to
assume and agree to perform this Agreement, as contemplated in Section 15
hereof, or any other material breach by the Company of its obligations
contained in this Agreement.


 


(f)            The
Employee’s right to Salary and Benefits Continuation shall accrue upon the
occurrence of either of the events specified in (i) or (ii) of
Section 3(d) and shall continue as provided, notwithstanding the termination
or expiration of this Agreement pursuant to Section 1 hereof. The Employee’s
subsequent employment, death or disability following the Employee’s termination
of employment in connection with a Change of Control shall not affect the
Company’s obligation to continue making Salary and Benefits Continuation
payments. The Employee shall not be required to mitigate the amount of any
payment provided for in this Section 3 by seeking employment or otherwise. The
rights to Salary and Benefits Continuation shall be in addition to whatever
other benefits the Employee may be entitled to under any other agreement or
compensation plan, program or arrangement of the Company; provided, that the
Employee shall not be entitled to any separate or additional severance payments
pursuant to the Company’s severance plan as then in effect and generally
applicable to similarly situated employees. The Company shall be authorized to
withhold from any payment to the Employee, his/her estate or his/her
beneficiaries hereunder all such amounts, if any, that the Company may
reasonably determine it is required to withhold pursuant to any applicable law
or regulation.


 


4.             Termination of Employee for Cause.


 


(a)           Upon
or following a Change of Control, the Company may at any time terminate the
Employee’s employment for Cause. Termination of employment by the


 


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                Company for “Cause” shall mean
termination upon:  (i) the willful and
continued failure by the Employee to substantially perform his/her duties with
the Company (other than (A) any such failure resulting from Employee’s
disability or (B) any such actual or anticipated failure resulting from
Employee’s termination of his/her employment for Good Reason), after a written
demand for substantial performance is delivered to the Employee by the Board of
Directors which specifically identifies the manner in which the Board of
Directors believes that the Employee has not substantially performed his/her
duties, and which failure has not been cured within thirty days (30) after such
written demand; or (ii) the willful and continued engaging by the Employee in
conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise, or (iii) the breach by the Employee of any of the
covenants set forth in Section 8 hereof.


 


(b)           For
purposes of this Section 4, no act, or failure to act, on the Employee’s part
shall be considered “willful” unless done, or omitted to be done, by the
Employee in bad faith and without reasonable belief that such action or
omission was in the best interest of the Company. Notwithstanding the
foregoing, the Employee shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to him/her a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board of Directors at a meeting of the Board of
Directors called and held for that purpose (after reasonable notice to the
Employee and an opportunity for the Employee, together with his/her counsel, to
be heard before the Board of Directors) finding that in the good faith opinion
of the Board of Directors the Employee is guilty of the conduct set forth above
in clauses (a)(i), (ii) or (iii) of this Section 4 and specifying the
particulars thereof in detail.


 


5.             Prior Termination. Anything in this Agreement to the contrary
notwithstanding, if the Employee’s employment with the Company is terminated
prior to the date on which a Change of Control occurs either (i) by the Company
other than for Cause or (ii) by the Employee for Good Reason, and it is
reasonably demonstrated by Employee that such termination of employment (a) was
at the request of a third party who has taken steps reasonably calculated to
effect the Change of Control, or (b) otherwise arose in connection with or
anticipation of the Change of Control, then for all purposes of this Agreement
the termination shall be deemed to have occurred upon a Change of Control and
the Employee will be entitled to Salary and Benefits Continuation as provided
for in Section 3 hereof.


 


6.             Employment at Will. Subject to the provisions of any other agreement
between the Employee and the Company, the Employee shall remain an employee at
will and nothing herein shall confer upon the Employee any right to continued
employment and shall not affect the right of the Company to terminate the
Employee for any reason not prohibited by law; provided, however, that any such
removal shall be without prejudice to any rights the Employee may have to
Salary and Benefits Continuation hereunder.


 


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7.             Construction of Agreement.


 


(a)           Governing
Law. This Agreement shall be governed by and construed under the laws of
the Commonwealth of Pennsylvania without regard to its conflict of law
provisions.


 


(b)           Severability.
In the event that any one or more of the provisions of this Agreement shall be
held to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.


 


(c)           Headings.
The descriptive headings of the several paragraphs of this Agreement are
inserted for convenience of reference only and shall not constitute a part of
this Agreement.


 


8.             Covenant as to Confidential Information.


 


(a)           Confidentiality
of Information and Nondisclosure. The Employee acknowledges and agrees that
his/her employment by the Company necessarily involves his/her knowledge of and
access to confidential and proprietary information pertaining to the business
of the Company and its subsidiaries. Accordingly, the Employee agrees that at
all times during the term of this Agreement and for a period of two (2) years
after the termination of the Employee’s employment, he/she will not, directly
or indirectly, without the express written authority of the Company, unless
directed by applicable legal authority having jurisdiction over the Employee,
disclose to or use, or knowingly permit to be so disclosed or used, for the
benefit of himself/herself, any person, corporation or other entity other than
the Company and its subsidiaries, (i) any information concerning any financial
matters, customer relationships, competitive status, supplier matters, internal
organizational matters, current or future plans, or other business affairs of
or relating to the Company and its subsidiaries, (ii) any management,
operational, trade, technical or other secrets or any other proprietary
information or other data of the Company or its subsidiaries, or (iii) any
other information related to the Company or its subsidiaries which has not been
published and is not generally known outside of the Company. The Employee
acknowledges that all of the foregoing, constitutes confidential and
proprietary information, which is the exclusive property of the Company.


 


(b)           Company
Remedies. The Employee acknowledges and agrees that any breach of this
Section 8 by him/her will result in immediate irreparable harm to the Company,
and that the Company cannot be reasonably or adequately compensated by damages
in an action at law. In the event of an actual or threatened breach by the
Employee of the provisions of this Section 8, the Company shall be entitled, to
the extent permissible by law, immediately to cease to pay or provide the
Employee or his/her dependents any compensation or benefit being, or to be,
paid or provided to him pursuant to Section 3 of this Agreement, and also to
obtain immediate injunctive relief restraining the Employee from conduct in
breach or threatened breach of the covenants contained in this Section 8. Nothing
herein shall be construed as prohibiting the Company


 


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                from pursuing any other remedies
available to it for such breach or threatened breach, including the recovery of
damages from the Employee.


 


9.             Reimbursement of Fees. The Company agrees to pay, to the full extent
permitted by law, all legal fees and expenses which the Employee may reasonably
incur as a result of any contest by the Company, Internal Revenue Service or
others regarding the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance thereof (including
as a result of any contest by the Employee about the amount of any payment
pursuant to Section 3 of this Agreement) or in connection with any dispute
arising from this Agreement, regardless of whether Employee prevails in any
such contest or dispute. The Company shall pay such fees and expenses within
ten (10) days after the presentment of an invoice for the same by the Employee
and any amounts not paid within such period shall bear interest at the rate per
annum established by PNC Bank, National Association (or its successor) from
time to time as its “prime” or equivalent rate.


 


10.           Tax Gross-Up


 


(a)           Notwithstanding
anything in this Agreement to the contrary, if it shall be determined that any
payments, benefits and distributions due under this Agreement and those which
are otherwise payable or distributable to or for the benefit of the Employee
relating to the termination of the Employee’s employment in connection with a
change of control of the Company, including a Change of Control (whether paid
or payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise, including without limitation (i) payments, benefits and
distributions pursuant to Section 3 of this Agreement, and (ii) deemed amounts
under the Internal Revenue Code of 1986, as amended (the “Code”),
resulting from the acceleration of the vesting of any stock options or other
equity-based incentive award) (all such payments, benefits and distributions
being referred to herein as “Gross Payments”), would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Employee with respect to the excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then the Company shall pay to the
Employee an additional payment (a “Gross-Up Payment”) in an amount such
that after the payment by the Employee of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed on the Gross-Up Payment, the Employee retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed on the Gross Payments.


 


(b)           Subject
to the provisions of this Section 10, all determinations required to be made
under this Section 10, including, whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment, shall be made by a nationally
recognized accounting firm designated by the Company (the “Accounting Firm”)
which shall provide detailed supporting calculations both to the Company and
the Employee within fifteen (15) business days after there has been a Payment,
or


 


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                such earlier time as requested by the
Company. In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting the Change of Control,
the Company shall appoint another nationally recognized accounting firm to make
the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 10, shall be paid by the Company to the
Employee within five days of the receipt of the Accounting Firm’s determination.
Any determination by the Accounting Firm shall be binding upon the Company and
the Employee. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made (“Underpayment”),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 10(c) and the
Employee thereafter is required to make a payment of any income taxes or Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment shall be promptly paid by the Company to
or for the benefit of the Employee.


 


(c)           The
Employee shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company
of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after the Employee is
informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Employee shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such
shorter period ending on the date any payment of taxes with respect to such
claim is due). If the Company notifies the Employee in writing prior to the
expiration of such period that it desires to contest such claim, the Employee
shall:


 


(i)            give
the Company any information reasonably requested by the Company relating to
such claim;


 


(ii)           take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company;


 


(iii)          cooperate
with the Company in good faith in order effectively to contest such claim; and


 


(iv)          permit
the Company to participate in any proceedings relating to such claim;


 


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provided, however,
that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Employee harmless, on an after-tax basis, for any
income taxes or Excise Tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this Section 10,
the Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the Employee
to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Employee agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the
Employee to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Employee, on an interest-free basis, and shall
indemnify and hold the Employee harmless, on an after-tax basis, from any
income taxes or Excise Tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Employee with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. Furthermore, the Company’s control
of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Employee shall be entitled to settle
or contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.


 


(d)           If,
after the receipt by the Employee of an amount advanced by the Company pursuant
to Section 10, the Employee becomes entitled to receive any refund with
respect to such claim, the Employee shall (subject to the Company’s complying
with the requirements of Section 10) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Employee of an
amount advanced by the Company pursuant to Section 10, a determination is made
that the Employee shall not be entitled to any refund with respect to such
claim and the Company does not notify the Employee in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.


 


(e)           The
payments provided for in this Section 10 shall be made not later than the
tenth (10th) day following the termination of the Employee’s employment; provided,
however, that if the amounts of such payments cannot be finally
determined on or before such day, the Company shall pay to the Employee on such
day an estimate, as determined in good faith by the Employee, of the


 


12

















 


                minimum amount of such payments to
which the Employee is clearly entitled and shall pay the remainder of such
payments (together with interest at 120% of the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but
in no event later than the thirtieth (30th) day after the termination of the
Employee’s employment. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to the Employee, payable on the fifth (5th)
business day after demand by the Company (together with interest at 120% of the
rate provided in Section 1274(b)(2)(B) of the Code). In the event the Company
should fail to pay when due the amounts described in this Section 10, the
Employee shall also be entitled to receive from the Company an amount
representing interest on any unpaid or untimely paid amounts from the due date,
as determined under this Section 10, to the date of payment at a rate equal to
120% of the rate provided in Section 1274(b)(2)(B) of the Code.


 


11.           Resolution of Differences Over Breaches of
Agreement. Except as otherwise
provided herein, in the event of any controversy, dispute or claim arising out
of, or relating to this Agreement, or the breach thereof, or arising out of any
other matter relating to the Employee’s employment with the Company or the
termination of such employment, the parties may seek recourse only for
temporary or preliminary injunctive relief to the courts having jurisdiction thereof
and if any relief other than injunctive relief is sought, the Company and the
Employee agree that such underlying controversy, dispute or claim shall be
settled by arbitration conducted in Pittsburgh, Pennsylvania in accordance with
this Section 11 of this Agreement and the Commercial Arbitration Rules of the
American Arbitration Association (“AAA”). The matter shall be heard and
decided, and awards rendered by a panel of three (3) arbitrators (the “Arbitration
Panel”). The Company and the Employee shall each select one arbitrator from the
AAA National Panel of Commercial Arbitrators (the “Commercial Panel”) and AAA
shall select a third arbitrator from the Commercial Panel. The award rendered
by the Arbitration Panel shall be final and binding as between the parties
hereto and their heirs, executors, administrators, successors and assigns, and
judgment on the award may be entered by any court having jurisdiction thereof.


 


12.           Treatment of Certain Incentive Awards. All “Awards” held by the Employee under the
Company’s 1999 Long-Term Incentive Plan (the “1999 Plan”) shall, upon a Change
of Control, be treated in accordance with the terms of those Plans as in effect
on the date of this Agreement, without regard to the subsequent amendment of
those Plans. For purposes of this Section 12, the terms “Award” and “Change
of Control” shall have the meanings ascribed to them in the 1999 Plan, as the
case may be.


 


13.           Release. The Employee hereby acknowledges and agrees that prior to the Employee’s
or his/her dependents’ right to receive from the Company any compensation or
benefit to be paid or provided to him/her or his/her dependents pursuant to
Section 3 of this Agreement, the Employee may be required by the Company, in
its sole discretion, to execute a release in a form reasonably acceptable to
the Company, which releases any and all claims (other than amounts to be paid
to Employee as expressly provided for under this Agreement) the Employee has or
may have against the Company or its


 


13

















 


                subsidiaries, agents, officers, directors,
successors or assigns arising under any public policy, tort or common law or
any provision of state, federal or local law, including, but not limited to,
the Pennsylvania Human Relations Act, the Americans with Disabilities Act,
Title VII of the Civil Rights Act of 1964, the Civil Rights Protection Act,
Family and Medical Leave Act, the Fair Labor Standards Act, the Age
Discrimination in Employment Act of 1967, or the Employee Retirement Income
Security Act of 1974, all as amended.


 


14.           Waiver. The waiver by a party hereto of any breach by the other party hereto of
any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach by a party hereto.


 


15.           Assignment. This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Company. The Company shall be obligated to
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the Company’s
business or assets, by a written agreement in form and substance satisfactory
to the Employee, to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to
perform if no succession had taken place. This Agreement shall inure to the
extent provided hereunder to the benefit of and be enforceable by the Employee
or his/her legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. The Employee may not delegate any of
his/her duties, responsibilities, obligations or positions hereunder to any
person and any such purported delegation by him shall be void and of no force
and effect with respect to matters relating to his/her employment and
termination of employment. Without limiting the foregoing, the Employee’s
rights to receive payments and benefits hereunder shall not be assignable or
transferable, other than a transfer by Employee’s will or by the laws of
descent and distribution.


 


16.           Notices. Any notices required or permitted to be given under this Agreement shall
be sufficient if in writing, and if personally delivered or when sent by first
class certified or registered mail, postage prepaid, return receipt requested —
in the case of the Employee, to his/her residence address as set forth below,
and in the case of the Company, to the address of its principal place of
business as set forth below, in care of the Chairman of the Board — or to such
other person or at such other address with respect to each party as such party
shall notify the other in writing.


 


17.           Pronouns. Pronouns stated in either the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter.


 


18.           Entire Agreement. This Agreement contains the entire agreement of the parties concerning
the matters set forth herein and all promises, representations, understandings,
arrangements and prior agreements regarding the subject matter hereof
(including the Existing Agreement, which the parties agree shall terminate as
of the Effective Date hereof) are merged herein and superseded hereby. The
provisions of this Agreement may not be amended, modified, repealed, waived,
extended or discharged except by an agreement in writing signed by the party
against whom enforcement of any amendment, 


 


14

















 


                modification, repeal, waiver, extension or
discharge is sought. No person acting other than pursuant to a resolution of
the Board of Directors shall have authority on behalf of the Company to agree
to amend, modify, repeal, waive, extend or discharge any provision of this
Agreement or anything in reference thereto or to exercise any of the Company’s
rights to terminate or to fail to extend this Agreement.


 


15

















 


IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
officers thereunto duly authorized, and the Employee has hereunto set his/her
hand, all as of the day and year first above written.


 


	
  ATTEST:

  	
  EQUITABLE
  RESOURCES, INC.

  
	
   

  	
   

  
	
  /s/Tracy
  Caruso

  	
   

  	
  /s/
  Charlene Petrelli

  	
   

  
	
   

  	
  By:

  	
  Charlene
  Petrelli

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President, Human Resources

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  One
  Oxford Centre

  
	
   

  	
  Suite
  3300

  
	
   

  	
  Pittsburgh,
  PA 15219

  
	
   

  	
   

  
	
   

  	
   

  
	
  WITNESS:

  	
   

  
	
   

  	
   

  
	
  /s/Philip
  R. Prier

  	
   

  	
  /s/
  Diane L. Prier

  	
   

  
	
   

  	
  Name:
  Diane L. Prier

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  3151
  Discovery Bay Drive

  	
   

  
	
   

  	
   

  
	
   

  	
  Anchorage,
  AK 99515

  	
   

  
						



 


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