Document:

Exhibit 10.7

 

EQUITRANS MIDSTREAM CORPORATION
 EXECUTIVE SHORT-TERM INCENTIVE PLAN

 

Section 1.                                           Incentive Plan Purposes.  The main purposes of the Equitrans Midstream Corporation (the “Company”) Executive Short-Term Incentive Plan (the “Plan”) are to maintain a competitive level of total cash compensation by providing the Company’s executive employees with an opportunity to earn incentives based upon the achievement of performance goals over a specified performance period (the “Performance Period”) and to align the interests of the Company’s executive employees with those of the Company’s shareholders and customers and with the strategic objectives of the Company.

 

Section 2.                                           Effective Date.  The effective date of this Plan is November 12, 2018.  The Plan will remain in effect until formally amended or terminated in writing by the Company’s Board of Directors (the “Board”) or the Management Development and Compensation Committee of the Board of Directors (the “Committee”) and as provided in Section 14 or the occurrence of a Change of Control as provided in Section 11.

 

Section 3.                                           Eligibility.

 

(a)                                 All executive officers of the Company shall be eligible to participate in the Plan.

 

(b)                                 The Committee may designate any other employee for participation in the Plan in its complete and sole discretion.  Eligible employees who are designated to participate in the Plan for any Performance Period will be notified in writing of their participation.

 

Section 4.                                           Administration of the Plan.  The Plan shall be administered by the Committee.  On an annual or periodic basis, the Committee shall designate the participants and determine the Performance Goals, as defined in Section 5 of the Plan, and the Incentive Targets, as defined in Section 6 of the Plan.  Prior to payment of any Incentive Awards, the Committee shall certify in writing that the Performance Goals and other material terms were satisfied, which writing may include meeting minutes of the Committee.  The Committee shall also review and approve any proposed amendments to the Plan throughout the Performance Period.

 

Section 5.                                           Performance Goals.

 

(a)                                 Each participant shall have specific performance goals (the “Performance Goals”) determined for his or her position for the subject Performance Period.  These Performance Goals will support the business of the Company, affiliate or business unit, as applicable, and be based upon the specific performance measures established by the Committee for the Performance Period.

 

(b)                                 A copy of each participant’s Performance Goals shall be determined in writing by the Committee not later than 90 days after the commencement of the Performance Period to which they relate; provided that in no event will Performance Goals be established after 25

 

 

percent of the Performance Period has elapsed or when the outcome of such Performance Goals is no longer substantially uncertain.

 

(c)                                  The Performance Goals determined by the Committee will be objectively determinable goals, which goals may (but shall not be required to be) based (without limitation) upon one or more of the following performance measures:

 

·                                          earnings per share or unit

·                                          revenue

·                                          expenses

·                                          return on equity

·                                          return on total capital

·                                          return on assets

·                                          earnings (such as net income, EBIT and similar measures)

·                                          cash flow (such as EBITDA, EBITDAX, after-tax cash flow and similar measures)

·                                          share or unit price

·                                          economic value added

·                                          debt reduction

·                                          gross margin

·                                          operating income

·                                          volumes metrics (such as volumes transported and similar measures)

·                                          land metrics (such as acres acquired, land permitted, land cleared and similar measures)

·                                          operating efficiency metrics (such as unit operating expense measures, general & administrative expense (“G&A”) per Mcf, G&A per customer and other G&A metrics, unit gathering and compression expenses and other midstream efficiency measures, lost and unaccounted for gas metrics, compressor or processing downtime, days from completed well to flowing gas and similar measures)

·                                          construction efficiency metrics (such as timely completion, cost within budget and similar measures)

·                                          gas storage metrics (such as lease acquisition and divestitures)

·                                          customer service measures (such as wait time, on-time service, calls answered and similar measures)

·                                          closing of a transaction

·                                          safety and environmental performance

·                                          total shareholder or unitholder return

 

(d)                                 The Performance Goals may be based either on the performance of the Company, a subsidiary or subsidiaries or other affiliates, any branch, department, business unit, or other portion thereof under such measure for the Performance Period and/or upon a comparison of such performance with the performance of a peer group of corporations, prior Company performance or other comparative measure selected by the Committee before, at, or after the time of making an Incentive Award.  Performance Goals may be specified in absolute terms, on an adjusted basis, in percentages, or in terms of growth or reduction from period to period or

 

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growth or reduction rates over time, as well as measured relative to the performance of a group of comparator companies, or a published or special index, or a stock market index, or otherwise, in any such case that the Committee deems appropriate.  Performance Goals need not be based upon an increase or positive result under a business criterion and could include, for example, the maintenance of the status quo, the reduction of expenses or the limitation of economic losses (measured, in each case, by reference to a specific business criterion).  Performance measures may but need not be determinable in conformance with generally accepted accounting principles.

 

(e)                                  When the Performance Goals are determined by the Committee, the Committee shall specify the manner in which the level of achievement of the Performance Goals shall be calculated and the weighting assigned to the Performance Goals.  In addition, if the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company or the manner in which the Company or any of its affiliates conducts its business has occurred, or other events or circumstances have rendered performance goals to be unsuitable or otherwise appropriate for adjustment, the Committee may modify such performance goals, in whole or in part, as the Committee deems appropriate.

 

Section 6.                                           Section Incentive Targets and Awards.

 

(a)                                 Incentive compensation targets (“Incentive Targets”) shall be determined by the Committee in writing not later than 90 days after the commencement of each Performance Period (and provided that not more than 25 percent of the Performance Period has elapsed).  The Incentive Targets shall be based upon the level of achievement of the Performance Goals.  Incentive Targets may be expressed as a range of outcomes, such as “threshold,” “target” and “maximum,” based on the level of achievement of the Performance Goals.

 

(b)                                 Incentive awards (“Incentive Awards”) may be earned by participants during a Performance Period; provided, however, that payment of any Incentive Award under the Plan to a participant (i) shall be contingent upon the attainment of the Performance Goals established by the Committee for the Performance Period and (ii) may not exceed the participant’s maximum Incentive Target established for the actual level of achievement attained.

 

(c)                                  The Committee shall have no discretion to increase any Incentive Award that would otherwise be payable based upon attainment of the Performance Goals, but the Committee may in its discretion reduce or eliminate such Incentive Award; provided, however, that the exercise of such negative discretion shall not be permitted to result in any increase in the amount of any Incentive Award payable to any other participant.

 

(d)                                 The maximum aggregate Incentive Award payable to any participant for any calendar year is $5,000,000.

 

(e)                                  Except as provided in Section 7 of the Plan, Incentive Awards shall be paid in cash no later than 21/2 months after the end of a Performance Period in which the right to payment is no longer subject to a substantial risk of forfeiture; provided, further, that the

 

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Committee has determined and certified in writing the extent to which the Performance Goals have been attained and the Incentive Awards have been earned.

 

Section 7.                                           Form of Payment.  The Committee may, in its discretion, determine to satisfy, in whole or in part, an obligation for any Incentive Award by issuing, in substitution for a cash payment, shares of Company common stock having a fair market value (measured as of the date of the Committee’s determination of the payment amount) equal to the cash payment, under and pursuant to the terms of the Company’s 2018 Long-Term Incentive Plan, or any successor or substitute plan.

 

Section 8.                                           Impact on Benefit Plans.  Payments under the Plan shall not be considered as earnings for purposes of the Company’s qualified retirement plans or any such retirement or benefit plan unless specifically provided for and defined under such plans or as otherwise determined by the Committee.

 

Section 9.                                           Tax Consequences.

 

(a)                                 It is intended that nothing in this Plan shall cause the participants in the Plan to be taxed currently under the Constructive Receipt or Economic Benefit Doctrines and as expressed in Sections 451 and 83 of the Code.  The terms, requirements and limitations of this Plan shall be interpreted and applied in a manner consistent with such intent.

 

(b)                                 It is intended that the Incentive Awards payable under the Plan shall either be exempt from the application of, or comply with, the requirements of Section 409A of the Code.  The Plan shall be construed in a manner that effects such intent.  Nevertheless, the tax treatment of the benefits provided under the Plan or any Incentive Award is not warranted or guaranteed.  None of the Company, its affiliates and their respective directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any participant or other taxpayer as a result of the Plan or any Incentive Award.

 

(c)                                  Notwithstanding anything in the Plan to the contrary, to the extent that any Incentive Award would constitute nonexempt “deferred compensation” for purposes of Section 409A of the Code and would be payable or distributable under the Plan by reason of the occurrence of a Change of Control, or the participant’s disability or separation from service, such amount or benefit will not be payable or distributable to the participant by reason of such circumstance unless the circumstances giving rise to such Change of Control, disability or separation from service meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition).  This provision does not prohibit the vesting of any Incentive Award upon a change of control, disability or separation from service, however defined.  If this provision prevents the payment or distribution of any Incentive Award, such Incentive Award shall be made on the payment date that would have applied absent such designated event or circumstance.

 

(d)                                 Notwithstanding anything in the Plan to the contrary, to the extent that any Incentive Award would constitute nonexempt “deferred compensation” for purposes of Section

 

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409A of the Code and would otherwise be payable under this Plan by reason of a participant’s separation from service during a period in which the participant is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4) (vi) (payment of employment taxes):  (i) the amount of such non-exempt deferred compensation that would otherwise be payable during the six-month period immediately following the participant’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the participant’s separation from service (or, if the participant dies during such period, within 30 days after the participant’s death) (in either case, the “Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.  For purposes of this Plan, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder, provided, however, that, as permitted in such final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board or any committee of the Board, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Plan.

 

Section 10.                                    Change of Status.  In making decisions regarding employees’ participation in the Plan, the Committee may consider any factors that they may consider relevant.  The following guidelines are provided as general guidelines regarding employee status changes:

 

(a)                                 New Hire,  Transfer,  Promotion.  A newly hired executive officer whose hire date is during the first 90 day period of a Performance Period (and when not more than 25 percent of the Performance Period has elapsed) will participate in the Plan and be eligible for an Incentive Award as determined by the Committee, unless otherwise specified in the employment offer.  An employee who is promoted or transferred during the first 90 day period of a Performance Period (and when not more than 25 percent of the Performance Period has elapsed) to a position qualifying for participation may be recommended for a pro rata Incentive Award under the Plan based on the level of participation in his or her previous annual or other incentive program(s) and the percentage of the Performance Period the employee is in the participating position under this Plan.  This includes employees who leave positions that qualify for incentive payments in other Company business segments.  These potential payments shall be considered when determining the employee’s Incentive Target and Incentive Award under this Plan; provided, however, that no amounts of deferred compensation under other plans and arrangements may be substituted for or in respect of amounts payable under the Plan.

 

(b)                                 Demotion.  No Incentive Award shall be paid to an employee who has been demoted during a Performance Period because of performance.  If the demotion is due to an organizational change, a pro rata Incentive Award may be made, provided the employee otherwise qualifies for payment of an Incentive Award.

 

(c)                                  Termination.  No Incentive Award shall be paid to any employee whose services are terminated during a Performance Period for cause including:  (i) the conviction of a felony, a crime of moral turpitude or fraud or having committed fraud, misappropriation or embezzlement in connection with the performance of his duties; (ii) willful and repeated failures to substantially

 

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perform his assigned duties or (iii) a violation of any express significant policies of the Company.  If the termination is due to reasons such as reorganization, and not due to the fault of the employee, the employee may be considered for a pro rata Incentive Award, provided the employee otherwise qualifies for payment of an Incentive Award.  Notwithstanding the foregoing, a participant who at the time of his termination was an executive officer shall not be deemed to have been terminated for cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of a majority of the members of the Board at a duly-held meeting of the Board finding that, in the good faith opinion of the Board, the participant is guilty of the conduct set forth above.

 

(d)                                 Resignation.  No Incentive Award shall be paid to an employee who resigns for any reason before Incentive Awards are paid; provided, however, if the employee has voluntarily terminated his or her employment with the Company’s consent, all or any portion of the Incentive Award may be made in the discretion of the Company, provided the employee otherwise qualifies for payment of an Incentive Award.

 

(e)                                  Death and Disability.  An employee whose status as an active employee is changed during a Performance Period for any reason other than the reasons cited above, including termination for death or disability, may be considered for a pro rata or full payment of an Incentive Award, provided the employee otherwise qualifies for payment of an Incentive Award.  In the event that an Incentive Award is paid on behalf of an employee who has terminated employment by reason of death, any such payments or other amounts due shall be paid to the employee’s estate.

 

Nothing in the Plan or in any Incentive Target or Incentive Award shall confer any right on any employee to continue in the employ of the Company, its affiliates or any business unit.  In the event any payments are made under the guidelines provided in this Section 10, the timing of such payments shall be in accordance with the provisions of Section 6(e) or, if applicable, Sections 9(c)-(d).

 

Section 11.                                    Change of Control.  In the event of a Change of Control of the Company, as then defined under the Company’s 2018 Long-Term Incentive Plan, or its successor, whichever is in effect at that time, the Performance Period shall end on the date of the Change of Control, the Performance Goals shall be deemed to have been achieved for the pro-rata portion of the Performance Period that elapsed through the date of the Change of Control, at target levels or, if actual performance is greater, at actual levels.  In such event, any Incentive Awards earned shall be paid to participants on a pro-rata (or, in the discretion of the Committee, full) basis in accordance with the provisions of Section 6(e) or, if applicable, Sections 9(c)-(d), but subject to the Committee’s overall discretion as provided in Section 6(c).

 

Section 12.                                    Compensation Recoupment Policy.  Any Incentive Awards paid to participants hereunder shall be subject to the terms and conditions of any compensation recoupment policy adopted from time to time by the Board or any committee of the Board, to the extent such policy is applicable to incentive compensation under this Plan.  In addition, the Committee may specify in an Incentive Award agreement that the participant’s rights, payments and benefits with respect to an Incentive Award shall be subject to reduction, cancellation,

 

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forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Incentive Award.

 

Section 13.                                    Dispute Resolution.  The following is the exclusive procedure to be followed by all participants in resolving disputes arising from payments made under this Plan.  All disputes relative to a given Performance Period must be presented to the Company’s Chief Human Resources Officer (who will forward the dispute to the Committee) within thirty (30) days following the payment date of the Incentive Award for that Performance Period, or the participant’s right to dispute a payment will be irrevocably waived.  The employee with the concern must include a written statement setting forth in reasonable detail, the basis for the dispute, including, but not limited to, specific reference to the pertinent Plan and/or Incentive Award agreement provisions on which the dispute is based.  A decision will be rendered by the Committee within one hundred twenty (120) days of the Committee’s receipt of the dispute.  The Chairperson of the Committee will be responsible for preparing a written version of the decision.  The decision by the Committee regarding the matter is final and binding on all Plan participants.

 

Section 14.                                    Amendment or Termination of this Plan.  The Company’s Board of Directors and the Committee shall each have the right to amend or terminate the Plan at any time.  No employee or participant shall have any vested right, interest or entitlement to any Incentive Award hereunder prior to its payment.  The Company shall notify affected employees in writing of any amendment or Plan termination.

 

7Exhibit 10.8

 

Equitrans Midstream Corporation

 

2018 PAYROLL DEDUCTION

 

AND

 

CONTRIBUTION PROGRAM

 

 

EQUITRANS MIDSTREAM CORPORATION
 2018 PAYROLL DEDUCTION AND CONTRIBUTION PROGRAM

 

TABLE OF CONTENTS

 

	
ARTICLE I
    	
 
    	
1
    
	
 
    	
 
    	
 
    
	
1.1
    	
Statement of Purpose
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II   DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
2.1
    	
Bonus
    	
1
    
	
2.2
    	
Code
    	
1
    
	
2.3
    	
Committee (BAC) and Committee   (BIC)
    	
1
    
	
2.4
    	
Company
    	
1
    
	
2.5
    	
Company Benefit
    	
1
    
	
2.6
    	
Eligible Employee
    	
1
    
	
2.7
    	
Employer
    	
2
    
	
2.8
    	
Management Development and   Compensation Committee
    	
2
    
	
2.9
    	
Participant
    	
2
    
	
2.10
    	
Personal Retirement Annuity
    	
2
    
	
2.11
    	
Program
    	
2
    
	
2.12
    	
Program Year
    	
2
    
	
2.13
    	
Selected Affiliate
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE III   ELIGIBILITY AND PARTICIPATION
    	
3
    
	
 
    	
 
    	
 
    
	
3.1
    	
Eligibility
    	
3
    
	
3.2
    	
Participation; Removal from   Participation
    	
3
    
	
3.3
    	
Ineligible Participant
    	
3
    
	
 
    	
 
    	
 
    
	
ARTICLE IV   COMPANY BENEFITS
    	
4
    
	
 
    	
 
    	
 
    
	
4.1
    	
Company Benefit
    	
4
    
	
4.2
    	
Company Benefit Amounts
    	
4
    
	
 
    	
 
    	
 
    
	
ARTICLE V   PERSONAL RETIREMENT ANNUITIES  
    	
5
    
	
 
    	
 
    	
 
    
	
5.1
    	
General
    	
5
    
	
5.2
    	
Terms of Personal Retirement   Annuity
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE VI   ADMINISTRATION
    	
5
    
	
 
    	
 
    	
 
    
	
6.1
    	
Committees
    	
5
    
	
6.2
    	
Agents
    	
6
    
	
6.3
    	
Binding Effect of Decisions
    	
6
    

 

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6.4
    	
Indemnification of Committees
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE VII   AMENDMENT AND TERMINATION OF PROGRAM
    	
6
    
	
 
    	
 
    	
 
    
	
7.1
    	
Amendment
    	
6
    
	
7.2
    	
Termination
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII   MISCELLANEOUS
    	
7
    
	
 
    	
 
    	
 
    
	
8.1
    	
Funding
    	
7
    
	
8.2
    	
Nonassignability
    	
7
    
	
8.3
    	
No Acceleration of Benefits; No   Deferred Compensation; Taxation; Tax Withholding
    	
7
    
	
8.4
    	
Captions
    	
7
    
	
8.5
    	
Governing Law
    	
8
    
	
8.6
    	
Successors
    	
8
    
	
8.7
    	
No Right to Continued Service
    	
8
    
	
8.8
    	
Benefit Claims
    	
8
    
	
 
    	
 
    	
 
    
	
EXHIBIT A   SECTION 3.1 - DESCRIPTION OF ELIGIBLE EMPLOYEES
    	
10
    
	
 
    	
 
    	
 
    
	
EXHIBIT B   PERSONAL RETIREMENT ANNUITY
    	
11
    

 

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ARTICLE I

 

1.1                               Statement of Purpose

 

This is the Equitrans Midstream Corporation 2018 Payroll Deduction and Contribution Program (as amended from time to time, the “Program”).  The purpose of the Program is to provide a select group of management and highly compensated employees of the Employer with the ability to deposit in a Personal Retirement Annuity, as per Article V, an amount of Company Benefit on an after-tax basis.  It is intended that the Program will assist in attracting and retaining qualified individuals to serve as officers and managers of the Employer.

 

ARTICLE II

 

DEFINITIONS

 

When used in this Program and initially capitalized, the following words and phrases shall have the meanings indicated:

 

2.1                               Bonus.

 

“Bonus” means the total amount awarded and paid, prior to any reduction for applicable tax withholdings, under the Equitrans Midstream Corporation Executive Short-Term Incentive Plan (as implemented each year) or the Equitrans Midstream Corporation Short-Term Incentive Plan (as implemented each year).

 

2.2                               Code.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

2.3                               Committee (BAC) and Committee (BIC).

 

“Committee (BAC)” and “Committee (BIC)” have the meanings set forth in Section 6.1.  Together the Committee (BAC) and the Committee (BIC) shall be referred to as the “Committees.”

 

2.4                               Company.

 

“Company” means Equitrans Midstream Corporation and any successor thereto.

 

2.5                               Company Benefit.

 

“Company Benefit” means the benefit contributed to the Personal Retirement Annuity on behalf of the Participant pursuant to Sections 4.1 and 4.2.

 

2.6                               Eligible Employee.

 

“Eligible Employee” means a highly compensated or management employee of the Employer who is designated by the Company, by name or group or description, in accordance with Section 3.1, as eligible to participate in the Program; provided that to the extent such

 

 

employee is an executive officer such participation must be approved by the Management Development and Compensation Committee.

 

2.7                               Employer.

 

“Employer” means, with respect to a Participant, the Company or the Selected Affiliate which pays such Participant’s  base earnings.

 

2.8                               Management Development and Compensation Committee.

 

“Management Development and Compensation Committee” means the Management Development and Compensation Committee of the Company’s Board of Directors.

 

2.9                               Participant.

 

“Participant” means any Eligible Employee listed on Exhibit A and designated under Section 3.2.

 

2.10                        Personal Retirement Annuity.

 

“Personal Retirement Annuity” means the annuity described in Section 5.1.

 

2.11                        Program.

 

“Program” means this Equitrans Midstream Corporation 2018 Payroll Deduction and Contribution Program, as amended from time to time. Program Year.

 

2.12                        Program Year

 

“Program Year” means each twelve-month period commencing January 1 and ending December 31, except that the first Program Year shall commence on November 12, 2018 and end on December 31, 2018.

 

2.13                        Selected Affiliate.

 

“Selected Affiliate” means (1) any company in an unbroken chain of companies beginning with the Company if each of the companies other than the last company in the chain owns or controls, directly or indirectly, stock possessing not less than 50 percent of the total combined voting power of all classes of stock in one of the other companies, or (2) any partnership or joint venture in which one or more of such companies is a partner or venturer, each of which shall be selected by the Company.

 

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ARTICLE III

 

ELIGIBILITY AND PARTICIPATION

 

3.1                               Eligibility.

 

Eligibility to participate in the Program is limited to Eligible Employees.  From time to time, and subject to Section 3.3, the Company shall prepare, and attach to the Program as Exhibit A, a complete list of the Eligible Employees, by individual name or by reference to an identifiable group of persons or by descriptions of individuals which would qualify as individuals who are eligible to participate, and all of whom shall be a select group of management or highly compensated employees.

 

3.2                               Participation; Removal from Participation.

 

Participation in the Program shall be limited to Eligible Employees.  An Eligible Employee shall commence participation in the Program upon designation as an Eligible Employee by the Chief Executive Officer of the Company or his designee, provided that, to the extent such Eligible Employee is an executive officer, such designation also must be approved by the Management Development and Compensation Committee.  Following designation, an Eligible Employee shall continue participation in the Program from year to year without further action by the Company, subject to this Section and Section 3.3.

 

Notwithstanding the foregoing, an Eligible Employee may be removed from participation at any time:  (a) in the case of an executive officer, by the Management Development and Compensation Committee and (b) in all other cases, by the Chief Executive Officer of the Company or his designee.  In the event of such removal:

 

(i)            there shall be no reduction of any Program benefits attributable to participation for years prior to the year of removal;

 

(ii)           for the year of removal, there shall be no reduction of any Program benefits (including Employer contributions under Article IV) that have been made already to the Personal Retirement Annuity prior to such removal; and

 

(iii)          for the year of removal, the removed Eligible Employee shall not have any right to a pro-rated or proportionate share of Program benefits for such year (including Employer contributions under Article IV) that have not been made to the Personal Retirement Annuity prior to such removal.

 

Eligible Employees who are removed under this Section 3.2 shall be notified in writing by the Company, not later than 90 days after their removal.

 

3.3                               Ineligible Participant.

 

Notwithstanding any other provisions of this Program to the contrary, if the Committee (BAC) determines that any Participant may not qualify as a member of a select group of “management or highly compensated employee” within the meaning of the Employee

 

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Retirement Income Security Act of 1974, as amended (“ERISA”), or regulations thereunder, the Committee (BAC) may determine, in its sole discretion, that such Participant shall cease to be eligible to participate in this Program.  Upon such determination by the Committee (BAC), the Committee (BAC) shall give written notice to the individual who has ceased to be eligible to participate in this Program (and, in the case of an executive officer, a copy of such notice shall also be given to the Management Development and Compensation Committee).  In any such notice, the Committee (BAC) shall explain that all benefits under the Program have been forfeited (or otherwise handled in a manner that the Committee (BAC) determines is consistent with applicable law) due to loss of eligibility under applicable law.

 

ARTICLE IV

 

COMPANY BENEFITS

 

4.1                               Company Benefit.

 

The Employer shall provide a Company Benefit under this Program with respect to each Participant who is eligible to be allocated matching contributions and/or performance contributions (also known as “retirement contributions”) under the Equitrans Midstream Corporation Employee Savings Plan (as amended from time to time, the “Equitrans Midstream 401(k) Plan”).  Prior to reduction for taxes as set forth in Section 4.2, the Company Benefit under this Program on behalf of a Participant for a Program Year shall be equal to the sum of (a) the matching contributions which would be credited to the Participant under the Equitrans Midstream 401(k) Plan based upon the Participant’s hypothetical pre-tax personal contribution amount that would be made under the Equitrans Midstream 401(k) Plan, absent the limitations of Sections 402(g), 401(a)(17), and 415 of the Code, (b) the performance contributions which would be credited to the Participant under the Equitrans Midstream 401(k) Plan, absent the limitations of Sections 401(a)(17) and 415 of the Code, and (c) an amount equal to 11% of the Participant’s Bonus payment, prior to reduction for any applicable tax withholding.  The express provisions herein on the time and form of payment applicable to Company Benefits shall control over the terms and conditions provided in the Equitrans Midstream 401(k) Plan.  For the avoidance of doubt, Eligible Employees are not required to make personal contributions to their Equitrans Midstream 401(k) Plan account or otherwise in order to receive the Company Benefit described in items (b) and (c) above, but personal contributions to the Equitrans Midstream 401(k) Plan are required to receive the Company Benefit described in item (a) above.

 

4.2                               Company Benefit Amounts.

 

The Company Benefit under the Program for each Participant shall be contributed by the Employer to the Participant’s Personal Retirement Annuity on an after-tax basis.  The gross amount (pre-tax) of the Company Benefit is determined under Section 4.1.  Prior to contribution to the Participant’s Personal Retirement Annuity, the Company shall withhold, and reduce the Company Benefit by, the applicable income and other taxes that the Company determines to be appropriate.  All references herein to “contribution of the Company Benefit” (or similar terminology) shall mean such amount remaining after applicable tax withholding.  In no event shall any Company Benefit be contributed to the Participant’s Personal Retirement Annuity later than 21⁄2 months following the Program Year to which the Company Benefit relates.  An Eligible

 

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Employee must be a full-time, regular employee of the Employer on the date that the Employer makes the contribution to the Participant’s Personal Retirement Annuity.  If a Participant ceases to be employed by the Employer as a full-time, regular employee prior to the date that the Employer makes the contribution to the Participant’s Personal Retirement Annuity, or has terminated his or her participation in the Program prior to such date, the Company Benefit for such annual period shall be forfeited without any further action required by the Employer.

 

ARTICLE V

 

PERSONAL RETIREMENT ANNUITIES

 

5.1                               General.

 

The Personal Retirement Annuity to which Company Benefits will be contributed is listed on Exhibit B hereto and may be changed, on a prospective basis, from time to time.  Any such changes shall be authorized and approved by the Committee (BIC) or the Management Development and Compensation Committee.

 

5.2                               Terms of Personal Retirement Annuity.

 

The terms of the Personal Retirement Annuity, which is owned by the Participant, shall be as provided solely by the third-party sponsor of such annuity, including the investment returns and elections, payment and withdrawal provisions and statements of account.  The election of investments within a Personal Retirement Annuity shall be the sole responsibility of each Participant.  The Company, the other Employers, their employees and members of the Committees are not authorized to make any recommendation to any Participant with respect to such election.  Each Participant assumes all risk connected with any adjustment to the value of his or her Personal Retirement Annuity.  None of the Committees, the Management Development and Compensation Committee, the Company and the other Employers in any way guarantees against loss or depreciation.

 

ARTICLE VI

 

ADMINISTRATION

 

6.1                               Committees.

 

The administrative committee for the Program (the “Committee (BAC)”) shall be the Benefits Administration Committee of the Company.  The Committee (BAC) shall have (i) complete discretion to supervise the administration and operation of the Program, (ii) complete discretion to adopt rules and procedures governing the Program from time to time, and (iii) sole authority to give interpretive rulings with respect to the Program.

 

The investment committee for the Program (the “Committee (BIC)”) shall be the Benefits Investment Committee of the Company.  The Committee (BIC) shall have (i) complete discretion to determine and select the personal retirement annuity program under Section 5.1; (ii) complete discretion to monitor, remove and replace all or part of any personal retirement annuity program;

 

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and (iii) complete discretion to adopt rules, guidelines or other procedures for the management and investment of Program assets.

 

6.2                               Agents.

 

The Committees may appoint an individual, who may be an employee of the Company, to be the Committees’ agent with respect to the day-to-day administration of the Program.  In addition, the Committees may, from time to time, employ other agents and delegate to them such administrative duties as they see fit, and may from time to time consult with counsel who may be counsel to the Company.

 

6.3                               Binding Effect of Decisions.

 

Any decision or action of the Committees with respect to any question arising out of or in connection with the administration, investment, interpretation and application of the Program shall be final and binding upon all persons having any interest in the Program.

 

6.4                               Indemnification of Committees.

 

The Company shall indemnify and hold harmless the members of the Committees and their duly appointed agents under Section 6.2 against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to the Program, except in the case of gross negligence or willful misconduct by any such member or agent of the Committees.

 

ARTICLE VII

 

AMENDMENT AND TERMINATION OF PROGRAM

 

7.1                               Amendment.

 

The Company, on behalf of itself and of each Selected Affiliate, may at any time amend, suspend or reinstate any or all of the provisions of the Program, except that no such amendment, suspension or reinstatement may adversely affect any Participant’s Personal Retirement Annuity as it existed as of the day before the effective date of such amendment, suspension or reinstatement, without such Participant’s prior written consent, and provided that any amendment, suspension or reinstatement affecting the benefits to any executive officer of the Company shall require the approval of the Management Development and Compensation Committee.  Written notice of any amendment, suspension or reinstatement with respect to the Program shall be given to each Participant by the Committee (BAC).

 

7.2                               Termination.

 

The Company, on behalf of itself and of each Selected Affiliate, in its sole discretion, may terminate this Program at any time and for any reason whatsoever.  A termination of the Program shall not adversely affect any Participant’s Personal Retirement Annuity as it existed on the day before such termination, without the Participant’s prior written consent.

 

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ARTICLE VIII

 

MISCELLANEOUS

 

8.1                               Funding.

 

Participants and their heirs, successors and assigns, shall have no secured interest or claim in any property or assets of the Company or any other Employer.  The Employer’s obligation under the Program to contribute Company Benefits to a Participant’s Personal Retirement Annuity shall be merely that of an unfunded and unsecured promise.  To the extent that any Participant or other person acquires a right to receive Company Benefits under the Program, such right shall be no greater than the right, and each Participant shall at all times have the status, of a general unsecured creditor of the Company or any other Employer.

 

8.2                               Nonassignability.

 

No right or interest under the Program of a Participant (or any person claiming through or under him or her) shall be assignable or transferable in any manner or be subject to alienation, anticipation, sale, pledge, encumbrance or other legal process or in any manner be liable for or subject to the debts or liabilities of any such Participant.  If any Participant shall attempt to or shall transfer, assign, alienate, anticipate, sell, pledge or otherwise encumber his or her benefits hereunder or any part thereof, or if by reason of his or her bankruptcy or other event happening at any time such benefits would devolve upon anyone else or would not be enjoyed by him or her, then the Committee (BAC), in its discretion, may terminate his or her interest in any such benefit to the extent the Committee (BAC) considers necessary or advisable to prevent or limit the effects of such occurrence.  Termination shall be effected by filing a written “termination declaration” with the Company’s Corporate Director, Compensation and Benefits and making reasonable efforts to deliver a copy to the Participant whose interest is adversely affected.

 

8.3                               No Acceleration of Benefits; No Deferred Compensation; Taxation; Tax Withholding.

 

This Program is not intended to provide for the deferral of compensation and there shall be no acceleration of the time or schedule of any payments or contributions under the Program.  The Employer shall be and is authorized to withhold from Company Benefits under this Program, or from such other compensation or benefits paid or payable to the Participant, those federal, state or local income taxes or similar charges that the Committee (BAC), in its sole discretion, determines are required to be withheld under applicable law.  The Employer does not represent or guarantee that any particular federal, state or local income, payroll, personal property or other tax consequence will result from participation in this Program.  Participants are directed to consult with professional tax advisors to determine the tax consequences of their participation.

 

8.4                               Captions.

 

The captions contained herein are for convenience only and shall not control or affect the meaning or construction hereof.

 

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8.5                               Governing Law.

 

The provisions of the Program shall be construed and interpreted according to the laws of the Commonwealth of Pennsylvania without regard to its conflicts of laws provisions.  If any insubstantial provision of this Program is declared unlawful for any reason, including by state or federal legislative act, regulation or judicial ruling, such provision shall become inoperative but will not affect the validity of any other provision.

 

8.6                               Successors.

 

The provisions of the Program shall bind and inure to the benefit of the Company, the other Employers, and their respective successors and assigns.  The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise, acquire all or substantially all of the business and assets of the Company or any other Employer and successors of any such Company or other business entity.

 

8.7                               No Right to Continued Service.

 

Nothing contained herein shall be construed to confer upon any Eligible Employee the right to continue to serve as an Eligible Employee of an Employer or in any other capacity.

 

8.8                               Benefit Claims.

 

(a)                                 Initial Claims.  To make a claim for a benefit, a Participant (or the Participant’s authorized representative) may file a written request setting forth the claim for such benefit with:  (i) in the case of an executive officer, the Management Development and Compensation Committee; and (ii) in all other cases, the Committee (BAC).  (On a case-by-case basis, the Management Development and Compensation Committee may delegate its claim review functions to the Committee (BAC).  All references in this Section 8.8 to Committee (BAC) shall include the Management Development and Compensation Committee, where the Management Development and Compensation Committee undertakes the review of a claim and does not delegate such review to the Committee (BAC).)

 

(b)                                 Denied Claims.  If the Committee (BAC) receives a claim in writing, the Committee (BAC) will advise the Participant of its decision on the claim in writing in a reasonable period of time after receipt of the claim (not to exceed 120 days).  The notice shall set forth the following information:

 

(1)                                 The specific basis for its decision,

 

(2)                                 Specific reference to pertinent Program provisions on which the decision is based,

 

(3)                                 A description of any additional material or information necessary for the Participant to perfect a claim and an explanation of why such material or information is necessary,

 

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(4)                                 An explanation of the Program’s claim review procedure, and

 

(5)                                 If applicable, a statement of the Participant’s right to bring an action under Section 502 of ERISA upon the denial of the appeal of a previously denied claim.

 

(c)                                  Appealing a Claim.  The Participant (or the Participant’s authorized representative) may make a written request within 60 days of the denial to the Committee (BAC) to have a designated appeals authority (which shall be different than the Committee (BAC)) review the denial.  The Participant may review the pertinent documents and submit issues and comments in writing for consideration by the appeals authority.  If the Participant does not request a review of the initial determination within such 60-day period, he or she will be barred from challenging the determination by reason of failure to exhaust administrative remedies.

 

Within 60 days after the Committee (BAC)’s receipt of the Participant’s request for appeal review, the Participant will receive notice of the appeals authority’s decision.  If the claim is further denied, the notice will contain the specific reasons for the decision of the appeals authority; specific references to the pertinent provisions of this Program upon which the decision is based; and, if applicable, a statement of the Participant’s right to bring an action under Section 502 of ERISA.  If special circumstances require that the 60-day time period be extended, the appeals authority will notify the Participant within the initial 60-day time period and will render the decision as soon as possible, but no later than 120 days, after receipt of the request for review.

 

(d)                                 Limitation of Time to Commence Legal Action.  Notwithstanding any otherwise applicable legally-prescribed statute of limitations period, no legal action may be commenced or maintained to recover benefits under this Program more than twelve (12) months after the final review decision by the appeals authority has been rendered (or deemed rendered).

 

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EXHIBIT A

 

Section 3.1 - Description of Eligible Employees

 

·                  The executive officers of the Company designated as Eligible Employees by the Chief Executive Officer or his designee and approved by the Management Development and Compensation Committee, which record of designated Eligible Employees is maintained in the Company’s Human Resources Department.

 

·                  Such employees of the Company or any Selected Affiliate other than executive officers of the Company designated as Eligible Employees by the Chief Executive Officer or his designee, which record of designated Eligible Employees is maintained in the Company’s Human Resources Department.

 

Effective Date:  November 12, 2018

 

Initials:

 

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EXHIBIT B

 

Personal Retirement Annuity

 

Fidelity Personal Retirement Annuity

 

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