Document:

FY13 Q4 Exhibit 10.15 Harty ee

Exhibit 10.15

EMPLOYMENT AGREEMENT

AGREEMENT entered into as of June 24, 2013, by and between MEREDITH CORPORATION, an Iowa corporation (the “Company” or “Meredith”), and THOMAS H. HARTY (“Harty”), to become effective July 1, 2013 (“Effective Date”). 
WITNESSETH: 
WHEREAS, Harty has been employed by the Company as President, National Media Group; and 
WHEREAS, the Company wishes to continue to employ Harty pursuant to the terms and conditions hereof, and in order to induce Harty to enter into this agreement (the “Agreement”) and to secure the benefits to accrue from his performance hereunder is willing to undertake the obligations assigned to it herein; and 
WHEREAS, Harty is willing to continue his employment with the Company under the terms hereof and to enter into the Agreement; 
NOW THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows: 
1. Position. 
Meredith will continue to employ Harty in New York, New York as President, National Media Group. While employed hereunder, Harty shall continue to have at least the same level of responsibility and authority associated with being President of Meredith's National Media Group as he has on date this Agreement is executed. 
2. Term. 
The term of employment under this Agreement will continue through June 30, 2016, unless otherwise terminated in accordance with this Agreement. 
3. Negotiation/Renewal at End of Term. 
In the event either party wishes to negotiate new terms of this Agreement to become effective at the end of the Term, written notice shall be provided to the other party no fewer than sixty (60) and no more than ninety days immediately preceding the end of the Term. If no notice to renegotiate is given, this Agreement shall automatically renew at the end of the Term for subsequent one (1) year terms unless either party terminates the Agreement under section 7 below. If the parties are unable to mutually agree to new terms within sixty (60) days after such notice to renegotiate is provided or choose not to agree to new terms, Harty will be released from those Covenants set forth in Sections 8.1.a and 8.1.b of this Agreement, unless Meredith chooses to enforce said Covenants, in which case, Meredith shall be obliged to treat Harty's departure as a Termination Without Cause under Section 7.2 herein. 
4. Base Salary. 
Harty's minimum base salary under this Agreement will be Seven Hundred Thousand Dollars ($700,000) (“Base Salary”). Harty will be eligible for merit increase in July 2014, at the discretion of the Compensation Committee of the Company's Board of Directors ("Compensation Committee"). Base Salary shall include all such increased amounts, and if increased, Base Salary shall not thereafter be decreased. 

5. Incentive Plans.
5.1 While employed under this Agreement, Harty will be eligible to participate in Meredith's Annual Management Incentive Plan (or any successor or replacement annual incentive plan of Meredith) for such periods as it continues in effect, subject to the terms of the Plan and to the discretion vested in the Compensation Committee of the Board of Directors by the Plan, provided, however, that the percentage of Base Salary payable as a target bonus under the Plan shall not be less than seventy-five percent (75%) (actual Company financial results may eventuate in an actual bonus paid to Harty equal to, less than, or more than seventy-five percent (75%) of Base Salary. 
5.2 While employed under this Agreement, Harty will participate in a three-year (FY 13-15) Cash Long-Term Incentive Program (“Program”) with a $250,000 target, conditioned upon the achievement of certain specified financial objectives (described in Exhibit A attached hereto). This payment will be made after the first regular August meeting of Meredith's Board of Directors immediately following the conclusion of the three-year Program, subject to the terms of the Program and to the discretion vested in the Compensation Committee of the Board of Directors and it is conditioned upon Harty being employed at Meredith at the time of payment. 
5.3 Harty is also currently participating in a three-year (FY12-14) cash Long-Term Incentive Program with a $250,000 target, conditioned upon the achievement of certain specified financial objectives (described in Exhibit B attached hereto). Under the Program, payment will made at the end of FY2014, subject to the terms of the Program and is conditioned upon Harty being employed with Meredith at the time of payment. 
5.4 While employed under this Agreement, Harty will be eligible to participate in Meredith's non-qualified stock incentive plan in accordance with the terms of the plan and subject to the discretion and approval of the Compensation Committee of the Board of Directors. 
6. Perquisites. 
During his employment under this Agreement, Harty shall receive or be eligible to participate in, to the extent permitted by law, the various perquisites and plans generally available to officers of Meredith, in accordance with the provisions thereof as in effect from time to time, including, without limitation, professional fee reimbursement for tax preparation and financial planning, supplemental life insurance, executive long term disability insurance, Meredith Replacement Benefit Plan, Meredith Supplemental Benefit Plan, the Amended and Restated Severance Agreement Between Meredith Corporation and Executive Officers, and a minimum of four (4) weeks of vacation per year. Harty will similarly be provided with an automobile allowance of $11,050/year under Meredith's executive automobile allowance policy and reimbursement for the regular dues in a country club pursuant to Meredith's policy, subject to applicable withholding and deductions. Furthermore, Harty will be entitled to reimbursement, in accordance with Meredith Policy, for reasonable expenses incurred in connection with the performance of his duties with Meredith. In addition, the terms and conditions of the Amended and Restated Severance Agreement between Meredith Corporation and Executive Officers dated as of November 2, 2010, between Harty and the Company (the Severance Agreement) are incorporated herein and will continue through the Term and extended terms of this Agreement. 
7. Termination of Employment. 
7.1 Termination for Cause. This Agreement and Harty's employment hereunder may be terminated by Meredith at any time for “Cause”, in which case Harty will receive only his Base Salary through the date of such termination. Upon such termination, Harty shall be entitled to no further benefits under this Agreement, except that any rights and benefits Harty may have under the employee benefit plans and programs of the Company, in which Harty is a participant, shall be determined in accordance with the terms and provisions of such plans and programs. Harty understands and agrees that in the event of the termination of employment and termination of this Agreement pursuant to this Section 7.1, all awards of restricted stock, stock options and any other benefits under the Incentive Plans shall be handled in accordance with the terms of the relevant plan and agreements entered into between Harty and the Company with respect to such awards. “Cause” is defined as (i) the willful and continued failure of Harty to attempt to perform substantially his duties with the Company (other than any such failure resulting from Disability), after a demand for substantial performance is delivered to Harty, which specifically identifies the manner in which 

Harty has not attempted to substantially perform his duties and for those matters which are subject to cure, a ten (10) day notice to cure is provided or (ii) the engaging by Harty in willful misconduct which is materially injurious to the Company, monetarily or otherwise. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by Harty in good faith and in the best interests of the Company. Under no circumstances will Harty be entitled to more than three (3) ten (10) day notice to cure periods during Harty's employment with Meredith. 
7.2 Termination Without Cause. This Agreement and Harty's employment hereunder may be terminated by Meredith at any time without Cause. In the event Harty's employment is terminated without Cause by Meredith, then in return for a signed full release of all employment-related claims, Harty will receive his base salary through the date on which notice is given and Harty will then receive separation payments equivalent to his regular biweekly Base Salary, minus applicable withholding and deductions, for a period of eighteen (18) months following the date of notice to him and Harty will receive a lump sum payment equal to his Annual Management Incentive Plan target bonus, minus applicable withholding and deductions, pro-rated for the year in which such termination occurs through the date on which notice of termination is given. If Harty does not execute the above mentioned release, Harty will receive only his Base Salary through the date on which notice of termination is given. It is understood that if as a result of Harty's termination without Cause hereunder Harty could qualify for a severance payment (a Change in Control Severance Payment) and, or payment under the Meredith Corporation Severance Pay Plan, Harty may elect to receive the consideration provided for under either this Agreement or one of the above referenced plans. Harty is not entitled to receive the consideration provided for under this Agreement and either of the above referenced Plans under any circumstances. 
Upon such termination, Harty shall be entitled to no further benefits under this Agreement, except that any rights and benefits Harty may have under the employee benefit plans and programs of the Company, in which Harty is a participant, shall be determined in accordance with the terms and provisions of such plans and programs, and except Harty shall be presumed to have met eligibility requirements specified in Section 2.4 of the Meredith Replacement Benefit Plan and the Meredith Supplemental Benefit Plan or any successor thereto and he shall be entitled to the amounts that would have accrued under such plans through the date of his termination without Cause. All awards of restricted stock and stock options shall automatically vest, and stock options shall be exercisable for the full unexpired term of the option. 
The parties intend this Agreement to be in compliance with Section 409A of the Internal Revenue Code and its accompanying regulations and it should be interpreted accordingly. Therefore, if Harty's Base Salary at the time of termination without Cause exceeds the separation pay safe harbor rule under section 409A of the Internal Revenue Code, then the excess over the safe harbor will be paid within 60 days of the date of Harty's termination without Cause. 
7.3 Employee Voluntary. In the event Harty terminates his employment of his own volition, prior to or at the end of the Term of this Agreement, such termination shall constitute a voluntary termination and in such event Meredith's only obligation to Harty shall be to make Base Salary payments provided for in this Agreement through the date of such voluntary termination. Any rights and benefits Harty may have under the employee benefit plans and programs of the Company, in which he is a participant, shall be determined in accordance with the terms and provisions of such plans and programs. All awards of restricted stock, stock options and any other benefits under the Incentive Plans shall be handled in accordance with the terms of the relevant plan and agreements entered into between Harty and the Company with respect to such awards. 
7.4 Employee Death or Disability. In the event Harty's employment ends due to his death or disability, all awards of restricted stock, stock options and any other benefits under the Incentive Plans shall be handled in accordance with terms of the relevant plan and agreements entered into between Harty and the Company with respect such awards. 
7.5 Change in Title, Duties or Location. If at any time prior to the end of the Term of this Agreement (a) a change is made to Harty's title as President, National Media Group, (b) there is a material change in Harty having at least the same level of responsibility and authority associated with being President of Meredith's National Media Group as he has on date this Agreement is executed, (c) a change is made in Harty's reporting relationship such that he reports 

to any person with any title other than Chief Executive Officer of Meredith; or (d) an involuntary change is made to the location of Harty's principal office more than twenty-five (25) miles from its current location, Harty shall have the right to terminate his employment with the Company by giving written notice within ninety (90) days after the date of Harty receiving written notice of such action, and such termination shall be deemed to be Termination Without Cause by the Company and such termination shall be treated in accordance with the terms of Section 7.2 
7.6 Officers and Directors Insurance. The Company agrees to maintain Harty's coverage under such directors' and officers' liability insurance policies as shall from time to time be in effect for active officers and employees for not less than six years following Harty's termination of employment. 
8. Covenants of Harty. 
8.1 Harty agrees that during his employment with Meredith and, provided applicable termination payments have been paid pursuant to Section 7, for a period of eighteen (18) months after his employment ends (whether his employment is ended voluntarily or involuntarily by Harty or Meredith), Harty will not, directly or indirectly, whether as a sole proprietor, partner, venture, stockholder, director, officer, employee, consultant, or in any other capacity as a principal or agent or through any person, subsidiary, affiliate, or employee acting as nominee or agent, engage in any of the following activities: 
		
	a) 
	Render services to, conduct or engage in any activities for the benefit of, or be interested in or associated with, any of the entities listed on Exhibit C or with any person or other entity that is a competitor of Meredith (“Competitor”). 

		
	b) 
	Take any action to finance or guarantee or knowingly to provide other material assistance to any Competitor. 

		
	c) 
	Influence or attempt to influence any person or entity that is a contracting party with Meredith to terminate any written or oral agreement with Meredith; 

		
	d) 
	Hire or attempt to hire any person who is employed by Meredith or attempt to influence any such person to terminate employment with Meredith. 

8.2 Harty will not use, divulge, sell or deliver to or for himself or any other person, firm or corporation other than Meredith any confidential information of Meredith in any form or memoranda, reports, computer software and data banks, customer lists, employee lists, contracts, strategic plans and any and all other documents containing trade secrets concerning Meredith and its business operations (“Confidential Information”). Confidential Information does not include information available from or which can be ascertained through public means (e.g., phone books, published materials or industry publications). Harty will destroy or surrender to Meredith all Confidential Information and all other property belonging to Meredith at the conclusion of his employment. 
8.3 Harty agrees to cooperate with Meredith in the truthful and honest prosecution and/or defense of any claim in which Meredith may have an interest (with the right of reimbursement for reasonable expenses actually incurred) which may include, without limitation, being available to participate in any proceeding involving Meredith, permitting interviews with representatives of Meredith, appearing for depositions and trial testimony, and producing and/or providing any documents or names of other persons with relevant information in Harty's possession or control arising out of his employment in a reasonable time, place and manner. 
9. Arbitration. 
9.1 The parties shall use their best efforts and good will to settle all disputes by amicable negotiations. The Company and Harty agree that, with the express exception of any dispute or controversy arising under Section 3(g) of the Severance Agreement, any controversy or claim arising out of or in any way relating to Harty's employment with the Company, including, without limitation, any and all disputes concerning this Agreement and the termination of this Agreement that are not amicably resolved by negotiation, shall be settled by arbitration in New York, New York, or such other place agreed to by the parties, as follows: 

		
	a)
	An arbitration may be commenced by any party to this Agreement by the service of a written Request for Arbitration upon the other affected party. Such Request for Arbitration shall summarize the controversy or claim to be arbitrated. No Request for Arbitration shall be valid if it relates to a claim, dispute, disagreement or controversy that would have been time barred under the applicable statute of limitations had such claim, dispute, disagreement or controversy been submitted to the courts of New York. 

		
	b) 
	The arbitration will be conducted before an impartial arbitrator appointed as follows. Within sixty (60) days of the Request for Arbitration the parties shall mutually agree to an arbitrator. If the parties fail to mutually agree to an arbitrator within sixty (60) days, then within seventy-five (75) days following Request for Arbitration, each party shall produce to the other a list of three (3) potential arbitrators. Within ninety (90) days of the Request for Arbitration the parties will meet in person or by conference call to select an arbitrator from the combined list. Each party will first strike two (2) names from the other party's list. The arbitrator will then be selected by lot from the two potential arbitrators whose names have not been stricken. The parties will evenly split the costs of the arbitrator. Legal fees and costs may be awarded by the arbitrator in accordance with applicable law. 

		
	c) 
	Judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 

		
	d) 
	It is intended that controversies or claims submitted to arbitration under this Section 9 shall remain confidential, and to that end it is agreed by the parties that neither the facts disclosed in the arbitration, the issues arbitrated, nor the views or opinions of any persons concerning them, shall be disclosed by third persons at any time, except to the extent necessary to enforce an award or judgment or as required by law or in response to legal process or in connection with such arbitration. In addition, Harty and the Company shall be entitled to disclose the facts disclosed in arbitration, the issues arbitrated, and the views or opinions of any persons concerning them to legal and tax advisors so long as such advisors agree to be bound by the terms of this Agreement. 

10. Governing Law. 
This Agreement shall be deemed a contract made under, and for all purposes shall be 
construed in accordance with, the laws of the State of New York without reference to the principles of conflict of laws. 
11. Entire Agreement. 
This Agreement, and those plans and agreements referenced herein contain all the understandings and representations between Harty and Meredith pertaining to Harty's employment with Meredith and supersede all agreements the parties have previously entered into, including, but not limited to the employment letters Harty signed on June 25, 2009 and November 2, 2010. This Agreement may be modified only in writing signed by Harty and an authorized representative of Meredith. 
12. Deferred Payments. 
If any provision in this Agreement is deemed to potentially preclude a tax deduction for compensation in a taxable year because it does not meet the definition of performance-based compensation pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended, then such compensation shall be reduced accordingly. The reduction shall be in sufficient amount to conform to the appropriate provisions of Internal Revenue Code and the Treasury regulations thereunder. It is Meredith's intention to ensure that all of its incentive plans are performance-based in conformance with Section 162(m) of the Internal Revenue Code of 1986, as amended. To the extent that any amounts shall be withheld under this paragraph, such amounts shall be deposited in a deferral account for Harty's benefit and be paid as soon as practicable to Harty in accordance with applicable tax regulations. 
13. Headings. 

Headings of the sections of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the title of any section. 
14. Knowledge and Representation. 
Harty acknowledges that the terms of this Agreement have been fully explained to him, that Harty understands the nature and extent of the rights and obligations provided under this Agreement, and that Harty has been represented by legal counsel in the negotiation and preparation of this Agreement. 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above. 
	
			
	MEREDITH CORPORATION
	 
	THOMAS H HARTY

	By:  Scott Rundall
	 
	 

	  /s/ Scott Rundall
	 
	  /s/ Thomas H Harty

	 
	 
	 

	Dated:  June 28, 2013
	 
	Dated:  June 27, 2013

Exhibit A 

FY2013 - FY2015 CASH LTIP
PERFORMANCE METRIC

OFFICER: Tom Harty 
TARGET: $250,000 
PLAN PERIOD: July 1, 2012 through June 30, 2015 
PERFORMANCE GOAL: The payout earned upon the attainment of the Performance Goal shall be determined by the Compensation Committee of the Board of Directors and will be based on the Company's cumulative Cash Flow for the Plan Period in accordance with the following chart: 
PAYOUT AND PERFORMANCE RANGES 
	
					
	Metric/Payout
	50%
	100%
	150%
	200%

	Cash Flow 
($ in millions)
	$450
	$500
	$530
	$550

	Payout
	$125,000
	$250,000
	$375,000
	$500,000

Target based on three-year financial plan presented at the January Board of Directors' Retreat adjusted for 2013 budget which includes recent acquisitions. 
TERMS AND CONDITIONS: The percent earned will be prorated for performance between levels. A participant must be continuously employed throughout the three-year Plan Period to be eligible for a payout. In the event of death, disability or retirement of the participant prior to the end of the three-year Plan Period, cumulative results will be calculated and any payout will be prorated as of the date of event and paid to the participant or beneficiary, in the event of death, as soon as practical and in compliance with IRC Section 409A. 

Exhibit B 

FY2012 - FY2014 CASH LTIP
PERFORMANCE METRIC

PLAN PERIOD: July 1, 2011 through June 30, 2014 
PERFORMANCE GOAL: The payout earned upon the attainment of the performance goal shall be determined by the Compensation Committee of the Board of Directors and will be based on the Company's cumulative Cash Flow for the performance period, in accordance with the following chart: 
PERFORMANCE RANGE 
	
				
	Measure
	Minimum
	Target
	Maximum

	Cash Flow 
($ in millions)
	$475
	$530
	$585

	Payout
	50%
	100%
	150%

Target based on three-year cash flow in accordance with Boston Consulting Group materials from the August 2011 Board meeting. 
TERMS AND CONDITIONS: The percent earned will be prorated for performance between levels. A participant must be continuously employed throughout the three-year performance period to be eligible for a payout. In the event of death, disability or retirement of the participant prior to the end of the three-year Plan Period, cumulative results will be calculated and any payout will be prorated as of the date of event and paid to the participant or beneficiary, in the event of death, as soon as practical and in compliance with IRC Section 409A. 

Exhibit C 

American Media 
AOL 
Condé Nast/ Advance 
Disney 
Google 
Hachette Filipacchi Media 
Hearst 
iVillage 
Martha Stewart Omnimedia 
Primedia 
Readers' Digest 
Rodale 
The Bonnier Group 
The Scripps Network 
Time Warner 
YahooExhibit 10.1

Exhibit 10.1

Delta Natural Gas Company, Inc.
Notice of Performance Shares Award

To:      John B. Brown     

At its meeting on August 16, 2013, the Corporate Governance and Compensation Committee (the “Committee”) of Delta Natural Gas Company, Inc. (the “Company”), authorized and directed the Company, on the Date of Award set forth below, to issue and make an award to you of Performance Shares entitling you to receive shares of the Company's common stock under the terms and conditions of the Incentive Compensation Plan (the “Plan”) of the Company and this Notice of Performance Shares Award.  A copy of the Plan was filed with the Securities and Exchange Commission on March 4, 2010 as an exhibit to Form S-8 and is available on the Company's website (deltagas.com).  A hard copy is also available upon request.  Contact John B. Brown, Chief Financial Officer, Treasurer and Secretary.  Capitalized terms that are not defined have the meanings given them in the Plan.

Date of Award:     August 31, 2013
Award:  Subject to the Performance Period, Performance Criteria and other restrictions set forth herein, you may receive between 2,000 to 6,000 Performance Shares which will entitle you to receive one share of the Company's common stock (“Share”) for each Performance Share.
Performance Period:  The period from July 1, 2013 - June 30, 2014.
Restriction Period(s):   
     Restriction Period 1 (covers 1/3 of Performance Shares paid):  July 1, 2014 - August 31, 2014
     Restriction Period 2 (covers 1/3 of Performance Shares paid):  July 1, 2014 - August 31, 2015
     Restriction Period 3 (covers 1/3 of Performance Shares paid):  July 1, 2014 - August 31, 2016
Performance Criteria:  The performance objective of this award is based upon on the Company's 2014 audited earnings per share as reported in the Company's Annual Report on Form 10-K, before any cash bonuses or stock awards, for the year ending June 30, 2014 (“2014 Audited EPS”).
Minimum Performance Objective:   $  .95 per share  
Targeted Performance Objective:    $1.00 per share
Maximum Performance Objective:   $1.05 per share

Minimum Performance Objective Not Met.  If the Minimum Performance Objective is not met, i.e., if the Company does not achieve a 2014 Audited EPS of at least $.95, the number of Performance Shares will not be determined and none will vest and you will not be entitled to any Performance Shares hereunder.

Minimum Performance Objective Met or Exceeded.  If the Minimum Performance Objective and all other conditions, including the Conditions to Payment set out below, are met or exceeded, then you shall receive the following number of Performance Shares based upon the actual 2014 Audited EPS:

	
			
	$.95 - $.99
2014 Audited EPS
	$1.00 - $1.04
2014 Audited EPS
	$1.05 and over
2014 Audited EPS

	2,000 shares
	4,000 shares
	6,000 shares

Restrictions and Vesting:  Except as provided in Paragraph 2 under Conditions to Payment, all Performance Shares paid hereunder shall be in the form of Restricted Stock, which shall vest in 1/3 increments as described below under Conditions on Restrictions.  

Conditions to Payment:

1.    Payment of Shares.  Except as provided in Paragraph 2, your Performance Shares will be paid in Shares of Restricted Stock, subject to the restrictions and vesting set forth below, as soon as administratively feasible after the end of the Performance Period, but no earlier than the filing date of the Company's annual report on Form 10-K and no later than September 13 of the same year.  Payment will be made in the form of whole shares of Restricted Stock in a lump sum payment.  You will only receive such number of Shares as are established under the Performance Criteria.

2.    Death, Disability or Retirement before end of Performance Period and Payment.  For purposes of this Paragraph 2 only, the Performance Shares awarded as provided in subsections 2(a), (b), (c) or (d) shall be in the form of shares of the Company's common stock and will not be subject to the Conditions on Restrictions in this Notice of Performance Shares Award.

(a)     In the event of your Disability or Retirement before the Performance Period has ended, the number of Performance Shares to which you shall be entitled to, if any, shall equal (i) the number of Performance Shares, if any, you would otherwise be entitled to had you been an active Employee at the end of the Performance Period (i.e., as adjusted or forfeited based on the actual Performance Criteria) multiplied by (ii) the portion of the Performance Period during which you were an active Employee multiplied by (iii) one-third, and such Performance Shares shall be distributed as soon as administratively feasible after the end of the Performance Period, but no later than September 13 of the same year; or

(b)     In the event of your death while an Employee before the Performance Period has ended, the Company will be assumed to have achieved a Targeted Performance Objective for the Performance Period in which death occurs, and the number of Shares your beneficiary shall be entitled to, if any, shall equal the number of Shares you would otherwise be entitled to had you been an active Employee at the end of the Performance Period without any further adjustment, and such Performance Shares shall be distributed within a reasonable period following death; or  

(c)     In the event of your Disability or Retirement after the end of the Performance Period, but before the date the Performance Shares are distributed, the number of Performance Shares you shall be entitled to, if any, shall be (i) based on the actual Performance Criteria for the entire Performance Period multiplied by (ii) one-third; or
 
(d)    In the event of your death after the end of the Performance Period, but before the date the Performance Shares are distributed, the number of Performance Shares you shall be entitled to, if any, shall be based on the actual Performance Criteria for the entire Performance Period without any further adjustment.  

3.    Other Termination. 

(a)      You shall have no right to receive payment in respect of Performance Shares if you resign or are otherwise terminated from the Company before the end of the Performance Period for reasons other than your death, Disability, or Retirement or following a Change in Control.

(b)      You shall have no right to receive payment in respect of Performance Shares if you resign or are otherwise terminated from the Company after the end of the Performance Period but before any Performance Shares have vested if you resign or are otherwise terminated from the Company for reasons other than your death, Disability, or Retirement or following a Change in Control.

4.    Short-Term Disability; Other Authorized Leaves of Absence. If you are absent from employment during a Performance Period and you are entitled to (a) reemployment rights following military service under the Uniformed Services Employment and Reemployment Rights Act (USERRA) (or any other similar applicable federal or state law) or (b) sickness allowance and/or short-term disability benefits under the Company's employee benefit plans, then your absence shall not affect your award of Performance Shares, if any. In the event you are absent from employment during a Performance Period due to an authorized leave of absence not described in the immediately preceding sentence, the amount or number of Performance Shares to which you shall be entitled to, if any, shall equal (i) the amount or number of Performance Shares, if any, to which you would otherwise be entitled had you been an active Employee during the entire Performance Period (i.e., as adjusted or forfeited based on the Performance Criteria) multiplied by (ii) the portion of the Performance Period during which you were an active Employee (i.e., excluding the period of the authorized leave of absence) and such Performance Shares shall be distributed and vest following the end of the Performance Period as set forth in Section 1 above.

5.    Adjustment of Award Due to Demotion or Promotion. The Committee, in its discretion, may reduce the number of Performance Shares (if the Performance Criteria are met) in the event you are demoted during a Performance Period, or grant additional Performance Shares (if the Performance Criteria are met) in the event you are promoted during a Performance Period.

6.    Restriction on Payment of Awards. No distributions in respect of Performance Shares shall be made, and such distribution shall be forfeited, if at the time a distribution would otherwise have been made:

(a)    The regular quarterly dividend on any outstanding common or preferred shares of the Company has been omitted and not subsequently paid prior to or on September 15, 2014; or

(b)     The consolidated net income of the Company for the fiscal year ending June 30, 2014 is less than the sum of (i) the aggregate amount to be distributed plus (ii) dividends on all outstanding preferred and common shares of the Company applicable to such twelve-month period (either paid, declared or accrued at the most recently paid rate).

Conditions on Restrictions:

7.    Restricted Stock.  Except as provided in Paragraph 2 under Conditions to Payment, Performance Shares paid hereunder shall be in the form of Restricted Stock which will vest and the restrictions thereon will lapse in 1/3 increments each year beginning on August 31, 2014, and annually each August 31 thereafter until fully vested as long as the Recipient is an Employee throughout each such Restriction Period.  If the Performance Criteria is not met, you will not receive any Restricted Stock.

8.    Restrictions.  Except as otherwise provided in this Agreement, the Shares of Restricted Stock granted hereunder may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the 

termination of the applicable Restriction Period. Except as otherwise provided herein and subject to the Plan, if you resign, are otherwise terminated from the Company, prior to the end of the Restriction Period, you will forfeit all interests in the applicable Restricted Stock. All rights with respect to the Restricted Stock granted to you shall be exercisable during your lifetime only by you or your guardian or legal representative.

9.    Removal of Restrictions.  Restricted Stock paid hereunder shall become freely transferable by you after the last day of the applicable Restriction Period.

10.    Voting Rights. During the Restriction Period, you may exercise full voting rights with respect to the Restricted Stock subject thereto.

11.    Dividends and Other Distributions. During the Restriction Period, you shall be entitled to receive all dividends and other distributions paid with respect to the applicable Restricted Stock. If any such dividends or distributions are paid in Shares, the Shares shall be subject to the same restrictions on transferability and forfeitability as the Restricted Stock with respect to which they were distributed.

12.    Death, Disability or Retirement after Payment but before end of Restriction Period. Except as otherwise provided in this Notice, in the event of your death, Disability, or Retirement while an Employee, the following shall apply:

(a) In the event of your Disability or Retirement before the Restriction Period has ended, the restrictions on the Shares shall be removed upon expiration of the Restriction Period, and the number of Shares you shall be entitled to, if any, shall equal (i) the number of Shares, if any, you would otherwise be entitled to had you been an active Employee at the end of the Restriction Period multiplied by (ii) the portion of the Restriction Period you were an active Employee; or

(b) In the event of your death before the Restriction Period has ended, the restrictions on the Shares shall be removed upon your date of death, and the number of Shares the Participant shall be entitled to, if any, shall equal the number of Shares contingently granted to you, without any further adjustment.

Change of Control:

13.    Change in Control.  Upon a Change in Control Performance Shares previously granted shall be immediately vested and not subject to forfeiture due to any subsequent termination from employment.  Upon a change in Control, Restrictions on Restricted Stock shall be eliminated as of such event.  If the Change in Control occurs before the end of the Performance Period, the amount of the Performance Shares shall be determined assuming the Company has achieved the Targeted Performance Objective and, the amount shall then be multiplied by the portion of the Performance Period for which you were an active Employee hereunder. If the Change in Control occurs after the end of the Performance Period but before the Performance Shares are paid, the amount payable shall be determined based on the actual performance objective achieved. In either case payment of the Performance Shares shall be made as soon as practicable following the Change in Control but no later than the close of the seventy five (75) day period following the earlier of the end of the Performance Period or the Change in Control.

Recovery of Stock:

14.    If you are or become subject to the terms of the Company's Compensation Recovery Policy (the “Policy”), as such Policy may be amended from time to time, including amendments adopted in order to conform to the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any resulting rules issued by the SEC or national securities exchanges thereunder, then the Performance Shares and Restricted Stock granted hereunder shall also be subject to such Policy. Accordingly, 

if the Committee determines that recovery of compensation under such Policy is due, then the Committee will determine the percentage of your total Performance Shares and Restricted Stock that is recoverable (the “Recoverable Percentage”) and the following shall occur:

		
	•
	the Performance Shares and Restricted Stock equal to the Recoverable Percentage granted hereunder shall automatically terminate and be forfeited effective on the date of such determination; and

		
	•
	all shares of Common Stock equal to the Recoverable Percentage that you acquired pursuant to this Agreement (or other securities into which such shares have been converted or exchanged) shall be returned to the Company or, if no longer held by you, then you shall pay to the Company, without interest, all cash, securities or other assets received by you from the sale or transfer of such stock or securities.  If you received nominal or no consideration on transfer of the Common Stock (e.g. a gift) then in connection with such recovery, you shall pay to the Company the market value of the Common Stock at the time of the transfer.

Definitions:

15.    Definitions.  The following terms used in this Notice of Performance Shares Award will have the meanings indicated:

(a)    “Change in Control” shall have the same meaning as such term or similar term is defined by your individual agreement with the Company which relates to your compensation and benefits upon the occurrence of a change in ownership of the Participating Company or similar event.

In the event there is no such agreement, “Change in Control” shall mean:

(i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (20%) or more of either (A) the then outstanding shares of Common Stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute an acquisition of control: any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege), any acquisition by the Company, any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or any acquisition by any corporation pursuant to a reorganization, merger, share exchange or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (A), (B) and (C) of subsection (iii) of this section are satisfied; or

(ii) Individuals who, as of the Effective Date, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(iii) Consummation of a reorganization, merger, share exchange or consolidation, in each case, unless, following such reorganization, merger, share exchange or consolidation, (A) more than fifty percent (50%) of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, share exchange or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, 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 Outstanding Company Voting Securities immediately prior to such reorganization, merger, share exchange or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger, share exchange or consolidation, of the Outstanding Company Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding the Company, any employee benefit plan or related trust of the Company, or such corporation resulting from such reorganization, merger, share exchange or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger, share exchange or consolidation, directly or indirectly, twenty percent (20%) or more of the Outstanding Company Common Stock or Outstanding Voting Securities, as the case may be) beneficially owns, directly or indirectly, twenty percent (20%) or more of, respectively, the then outstanding  shares of common stock of the corporation resulting from such reorganization, merger, share exchange or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger, share exchange or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger, share exchange or consolidation; or

(iv) Approval by the shareholders of the Company and consummation of (A) a complete liquidation or dissolution of the Company or (B) the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, with respect to which following such sale or other disposition (1) more than fifty percent (50%) of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, 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 Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding the Company and any employee benefit plan or related trust of the Company, or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, twenty percent (20%) or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, twenty percent (20%) or more of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (3) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company; or

(v) The closing, as defined in the documents relating to, or as evidenced by a certificate of any state or federal governmental authority in connection with, a transaction approval of which by the shareholders of the Company would constitute a “Change in Control” under subsection (iii) or (iv) of this Section.

Notwithstanding (a) above, if your employment is terminated before a Change in Control as defined in this Section and you reasonably demonstrate that such termination (i) was at the request of a third party who has indicated an intention or taken steps reasonably calculated to effect a “Change in Control” and who effectuates a “Change in Control” or (ii) otherwise occurred in connection with, or in anticipation of, a “Change in Control” which actually occurs, then for all purposes of this Notice of Performance Shares Award, the date of a “Change in Control” with respect to you shall mean the date immediately prior to the date of such termination of  your employment.

(b)    “Disability” shall mean (a) your  mental or physical disability that is defined as “Disability” under the terms of the long-term disability plan sponsored by the Company and in which you are covered, as amended from time to time in accordance with the provisions of such plan; or (b) a determination by the Committee, in its sole discretion, of total disability (based on medical evidence) that precludes you from engaging in a full-time position at the Company for wage or profit for at least twelve months and appears to be permanent. All decisions by the Committee relating to your Disability (including a decision that you are not disabled), shall be final and binding on all parties.

(c)    “Retirement” shall mean the termination of your employment consistent with the provisions for early or normal retirement under the defined benefit pension plan sponsored by the Company.  Notwithstanding the foregoing, “Retirement” before you are eligible for normal retirement under such plan shall require prior approval by the Committee. 

16.    Conflicts.  If there is a conflict between the terms of this Notice of Performance Shares Award and the Plan, the Plan shall control.

DELTA NATURAL GAS COMPANY, INC.

By:  /s/ Glenn R. Jennings

Its:  Chairman of the Board, President and 
Chief Executive Officer

/s/ John B. Brown
______________________________________
   [Signature of Participant]

005522.135297/4133863.4

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