Exhibit 10.16(c)


 


	
  To:

  	
  Steven Schlotterbeck

  
	
   

  	
  Managing Director, E&P Planning and
  Development

  
	
   

  	
   

  
	
  From:

  	
  Philip Conti

  
	
   

  	
  Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
  Date:

  	
  May 17, 2006

  
	
   

  	
   

  
	
  Subject:

  	
  Horizontal Drilling Incentive Opportunities

  



 


The following provides you with an outline of the incentive
opportunities available to you.


 


Regular Short Term Incentive


 


1.              Your incentive
opportunities are provided for under the Equitable Resources, Inc.
Short-term Incentive Plan (the “STIP”). 
A copy of the 2006 plan is attached for your review.


 


2.              Your incentive
targets for 2006, 2007 and 2008 will be 40% of your base salary.  Based on your current base salary of $175,000,
your bonus target for this year is $70,000. 
This target will be adjusted as your salary changes.  Payment will be made, if at all, in
accordance with the terms of the applicable STIP.


 


3.              Value drivers will
be established and approved by me each year. 
A copy of the 2006 value drivers, which we have already discussed, is
attached.  These drivers may, with my
approval, be changed during the year.  If
any revisions are approved, an updated list of value drivers will be provided
to you for your records.


 


4.              Your performance on
your value drivers will be assessed as exceptional, successful, marginal or
unsatisfactory.  The President, Chief
Executive Officer and Chairman may, but shall not be obligated to, in his sole
and absolute discretion, award you an incentive payment of up to 250% of your
target for exceptional performance, subject to the determination of the
Headquarters pool by the Compensation Committee.


 

















 


Additional Bonus


 


1.              At the conclusion of
2008, a full review of the Horizontal Drilling Program will be conducted to
determine if an additional bonus is appropriate.  The following will be considered in making
that determination:


 


a.              The horizontal well
pilot program must have been completed in 2006 with a minimum of 5 wells spud
by year -end.  Additionally, capital
expenditure dollars must be approved by the Board of Directors to drill a minimum
of an additional 10 wells in 2007;  and


b.             A minimum of 20
additional wells must be spud in 2007 with capital expenditure dollars approved
by the Board of Directors to drill a minimum of an additional 25 wells in 2008;
and


c.              A minimum of 25
additional wells must be spud in 2008 with capital expenditures approved by the
Board of Directors to drill a minimum of an additional 50 wells in 2009.


 


2.              The bonus target for
full execution of the details provided above will be $1,000,000. The Chairman,
President and Chief Executive Officer may, in his sole and absolute discretion,
award a bonus payment adjusted to account for less than full execution as
defined above.  You must be an active
employee on February 2, 2009 to be considered for this additional bonus
payment. Except as otherwise required by this memorandum, your additional bonus
will be payable in accordance with the applicable STIP, including the
resolution of any disputes relative to the payment of this additional bonus.


 


3.              Notwithstanding the
foregoing, you are an employee at will, and we have no obligation to continue
your employment for the term of the above incentives.  In the event of termination of employment for
any reason prior to February 2, 2009, subject to the following sentence,
you shall have no right to the above incentives to the extent that they are
unpaid as of date of termination.  If
termination is involuntary and without fault on your part, including death or
disability as defined above (as defined in Sec. 409A(a)(2)(c) of the Internal
Revenue Code), you will be eligible to receive a partial additional payment if
you have achieved the stated objectives that were due as of the date of such
termination, death or disability as follows:


 


	
  Termination Date

  	
   

  	
  Percent Payable

  	
   

  
	
  Prior to December 31, 2006

  	
   

  	
  0

  	
  %

  
	
  January 1, 2007 to December 31,
  2007

  	
   

  	
  25

  	
  %

  
	
  January 1, 2008 to December 31,
  2008

  	
   

  	
  50

  	
  %

  



 


4.              In the event that
all or a portion of the Devonian shale development rights in the Kentucky or
Brenton districts are sold, farmed out or otherwise restricted (including EPC’s
becoming a non-operator with no such development rights), the final cumulative
well target of 100 approved wells will be reduced by one well for 


 

















 


every 20,000
gross acres sold, farmed-out or otherwise restricted as to Devonian shall
horizontal development.  The objectives
will be reduced in reverse order—i.e., 2007 objectives will not be affected
until the well target has been reduced by 50 wells.  If all of the Kentucky and Brenton development
rights are sold, farmed-out or otherwise restricted and you have achieved the
stated objectives due as of the date of such sale, farm-out or restriction,
then a partial additional bonus will be paid to you within 30 days of such
transaction as follows:


 


	
  Transaction Date

  	
   

  	
  Percent Payable

  	
   

  
	
  Prior to December 31, 2006

  	
   

  	
  0

  	
  %

  
	
  January 1, 2007 to December 31,
  2007

  	
   

  	
  50

  	
  %

  
	
  January 1, 2008 to December 31,
  2008

  	
   

  	
  100

  	
  %

  



 


I am looking forward to working with you to fully explore the viability
of the horizontal drilling at Equitable Resources.  Please sign below indicating that you have
been provided the material listed above and do not have questions regarding the
incentive opportunities described in this memo. 
If you would like to discuss the incentive opportunities provided in
this memo in more detail, please call Dave Smith at (412) 553-5740.


 


	
  Accepted on

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Steven Schlotterbeck

  	
   

  



 
















 





 


	
  To:

  	
  Steven T. Schlotterbeck

  
	
   

  	
  President, Equitable Production

  
	
   

  	
   

  
	
  From:

  	
  Charlene Petrelli

  
	
   

  	
  Vice President and Chief Human Resources
  Officer

  
	
   

  	
   

  
	
  Date:

  	
  August 18, 2008

  
	
   

  	
   

  
	
  Subject:

  	
  Amendment to Horizontal Drilling Incentive
  Opportunities

  



 


The following amends (this “Amendment”) that certain letter dated May 17,
2006 (the “Letter”) regarding Horizontal Drilling Incentive Opportunities for
the purposes of complying with Section 409A of the Internal Revenue Code
of 1986, as amended, and changing the medium of payment of any additional bonus
as set forth herein.


 


Regular Short Term Incentive


 


1.              If and to the extent
earned, any short term incentive amounts will be paid under and pursuant to the
terms of, and at the time and in the form provided in the Equitable Resources, Inc.
Executive Short-Term Incentive Plan.


 


Additional Bonus


 


1.              Except as otherwise
required herein, any additional bonus will be payable at the time and in the
form provided in the Executive Short-Term Incentive Plan.


 


2.              Equitable Resources, Inc.
(“Equitable”) has determined to amend the medium of payment with respect to the
additional bonus target of $1,000,000 (the “Target Amount”) set forth in the
Letter.  Equitable has determined to
satisfy any obligation it may incur for such amount in shares of Equitable
Common Stock, without par value (“Shares”), as provided in and pursuant to the
Equitable 1999 Long-Term Incentive Plan (the “Plan”).  No cash shall be payable with respect to the
additional bonus.


 


3.              (a)  Subject to
the terms of the Letter as amended by this Amendment, the number of Shares that
may be earned as an equivalent to the Target Amount is 29,000 Shares, subject
to adjustment as provided in the Plan. 
In the event that a bonus payment is awarded for less than full
execution of the performance criteria as set forth in the Letter, the number of
Shares earned shall be an adjusted portion of the number of shares equivalent
to the Target Amount, as determined by the Chairman and Chief Executive Officer,
subject to the approval of the Compensation Committee.


 

















 


(b)           As consideration for
the promises made in this Agreement, (i) concurrently
herewith you shall execute and deliver to the Company a new Confidentially,
Non-Solicitation and Non-Competition Agreement in the form of Exhibit A
hereto and a Change of Control Agreement in the form of Exhibit B hereto and
(ii) effective the date above, your stock ownership guidelines are
increased from two times base salary to four times base salary.


 


4.              In the event that
you or your estate receive a partial payment pursuant to paragraph 3 of
the “Additional Bonus” section of the Letter based upon your termination of
employment prior to February 2, 2009 (the end of the “Performance Period”),
such payment will be made in Shares in a lump sum on the 30th day following your separation from service,
death or disability, as the case may be; provided, that, in the event such
amount is payable upon your separation from service and you are a “specified
employee” under Section 409A of the Internal Revenue Code at the time of
your separation from service, no such amount may be paid to you until the first
day following the six-month anniversary of your separation from service.  The term “termination,” when used in the
context of a condition to, or timing of, payment hereunder shall be interpreted
to mean a “separation from service” as that term is used in Section 409A
of the Internal Revenue Code.


 


5.              The last sentence of
paragraph 4 of the “Additional Bonus” section of the Letter is amended and
restated to read as set forth in italics:


 


If all of the Kentucky and Brenton development rights are sold, farmed-out or
otherwise restricted and you have achieved the stated objectives due as of the
date of such sale, farm-out or restriction, then the Performance Period will
automatically end and a partial additional bonus will be paid to you, subject
to your continued employment on the payment date, as follows:


 


	
  Transaction Date

  	
   

  	
  Percent Payable

  	
   

  
	
  Prior to December 31, 2006

  	
   

  	
  0

  	
  %

  
	
  January 1, 2007 to December 31,
  2007

  	
   

  	
  50

  	
  %

  
	
  January 1, 2008 to December 31,
  2008

  	
   

  	
  100

  	
  %

  



 


In the event that you receive a payment pursuant to paragraph 4 of the
Letter, such payment will be made in Shares in a lump sum within 30 days
following the end of the Performance Period.


 


6.              You acknowledge and
agree that Equitable may amend the incentive opportunities set forth in the
Letter directly or indirectly through amendment of any underlying plans from
time to time without your consent to the extent deemed necessary or
appropriate, in its sole discretion, to effect compliance with Section 409A
of the Internal Revenue Code, including regulations and interpretations thereunder, 


 

















 


which
amendments may result in a reduction of benefits provided hereunder and/or
other unfavorable changes to you.


 


7.              Except as provided
herein, the Letter is, in all other respects, unchanged and is and shall
continue to be in full force and effect, and is hereby in all respects ratified
and confirmed.


 


Please sign below indicating that you acknowledge and accept the foregoing
amendment.


 


 


	
  EQUITABLE RESOURCES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ Charlene Petrelli

  	
   

  
	
  Charlene Petrelli

  	
   

  
	
  Vice President and Chief Human Resources
  Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted on:

  	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Steven Schlotterbeck

  	
   

  
	
  Steven Schlotterbeck