Document:

Exhibit 10.(b)

 

CONSENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby consent to the use in this Registration
Statement on Form N-4 (File No. 333-146508) of our report dated April 13,
2009, relating to the statutory financial statements of Protective Life and
Annuity Insurance Company, which appears in such Registration Statement.  We also consent to the use in this
Registration Statement on Form N-4 (File No. 333-146508) of our report
dated April 24, 2009, relating to the financial statements of Variable
Annuity Account A of Protective Life, which appears in such Registration
Statement.  We also consent to the
reference to us under the heading “Experts” in such Registration Statement.

 

 

PricewaterhouseCoopers
LLP

Birmingham, Alabama

April 30, 2009Exhibit 10.4

 

EQT
CORPORATION

2007 SUPPLY LONG-TERM INCENTIVE PROGRAM

(as amended and restated March 5, 2009)

 

EQT CORPORATION (formerly known as Equitable Resources, Inc., the “Company”)
hereby establishes this EQT CORPORATION 2007 SUPPLY LONG-TERM INCENTIVE PROGRAM
(the “Program”) as of this 1st day of July, 2007, as amended and restated March 5,
2009, in accordance with the terms provided herein.

 

WHEREAS, the Company maintains certain long-term incentive award plans
including the 1999 Equitable Resources, Inc. Long-Term Incentive Plan (the
“1999 Plan”) for the benefit of its employees and executives, of which the
Program is a subset;

 

WHEREAS, in order to align the interests of employees with the
interests of the shareholders, customers and the strategic objectives of the
Company, the Company desires to provide long-term incentive award opportunities
through the Program in the form of awards qualifying as “Performance Awards”
under the 1999 Plan;

 

NOW, THEREFORE, the Company
hereby adopts the Program on the following terms and conditions:

 

Section 1.  Incentive
Program Purpose. 
The purpose of the Program is to provide long-term incentive award
opportunities to key employees in the Company’s Supply segment (the “Supply
Segment” business unit, now the Production and Midstream business units) and
align their interests with those of the Company’s shareholders and customers
and with the strategic objectives of the Company.  Awards granted hereunder may be earned by
achieving pre-determined absolute performance levels and by satisfying certain
applicable employment requirements, and are forfeited if defined performance
levels or applicable employment requirements are not achieved.  By placing a portion of the employee’s
compensation at risk, the Company has an opportunity to reward exceptional
performance or reduce the compensation opportunity when performance does not
meet expectations.  The Program shall be
construed consistent with the provision of the 1999 Plan with respect to awards
to Covered Employees, as such term is defined in the 1999 Plan, and the
deductibility of such awards under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the “Code”).

 

Section 2.  Effective Date.  The effective date of this Program is July 1,
2007.  The Program will remain in effect
until the earlier of December 31, 2010 or the closing date of a Change of
Control of the Company, determined in accordance with Section 5, unless
otherwise amended or terminated as provided in Section 18 (“Termination
Date”).

 

Section 3.  Eligibility. 
The Chief Executive Officer of the Company (the “CEO”) shall, in his or
her sole discretion, recommend the employees of the Company who shall be
eligible to participate in the Program. 
The CEO’s selections will become participants in the Program (the “Participants”)
only upon approval by the Compensation Committee of the Board of Directors (the
“Committee”), comprised in accordance with the requirements of the 1999
Plan.  In the event that an employee is
hired or promoted by the 

 

 

Company during any
Performance Period, as defined below, the employee may become eligible to
participate in the Program, subject to Committee approval, in the next
succeeding Performance Period.

 

Section 4.  Performance Incentive Share Unit Awards.  Each Participant shall be allocated a number
of performance incentive share units (the “Target Share Units”) relative to one
or more of the Performance Periods, as may be specified in the award and
subject to the conditions provided herein, the value of which is determined by
reference to the Company’s stock. 
Allocations of Target Share Units shall be proposed by the CEO and
approved by the Committee.  The Target
Share Units may be increased by as much as three times the number awarded or
reduced to zero, based solely on the achievement of the Performance Condition
as described in Section 5.  The
Committee shall have no discretion to increase the Target Share Units.

 

The Target Share Units shall be held in escrow by the
Company subject to satisfaction of the terms and conditions described
below.  A Participant shall have no right
to exchange the Target Share Units for cash, stock or any other benefit and
shall be a mere unsecured creditor of the Company with respect to such share
units and any future rights to benefits.

 

Section 5.  Performance Condition.  Subject to Section 6, the total number
of Target Share Units that may be issued (“Awarded Share Units”) to a
Participant will be based on Supply Segment Revenues, Improvement in RDCD and
Improvement in DGCE, each as calculated below (the “Performance Condition”).  For the avoidance of doubt, the Compensation
Committee of the Board of Directors may decrease, but not increase, the Revenue
Payout Factor or the Efficiency Payout Factors (each as defined below) in its
sole discretion.  In evaluating any such
decrease, the Compensation Committee shall consider whether the Improvement in RDCD
and the Improvement in DGCE (each as defined below), if any, resulted from the
efforts of the participants or from other unrelated influences and such other
matters as the Compensation Committee shall consider to be appropriate.

 

(a)                                  Performance Periods.  Except as described below, the Performance
Condition shall be measured over three Performance Periods as follows:

 

	
  Performance Period

  	
   

  	
  Dates

  
	
   

  	
   

  	
   

  
	
  #1

  	
   

  	
  July 1,
  2007 – December 31, 2008

  
	
  #2

  	
   

  	
  January 1,
  2009 – December 31, 2009

  
	
  #3

  	
   

  	
  January 1,
  2010 – December 31, 2010

  

 

(i)                        Supply Segment
Revenues.  For purposes of this Program, Supply Segment
Revenues shall be measured as the Sales Price multiplied by Total Sales Volume
for each Performance Period.  Sales Price
shall equal $4.82
for each Performance Period.

 

(ii)                     Total Sales Volume.  For purposes of this Program, Total Sales
Volume for each Performance Period equals the sum of the production total sales
volumes (mmcfe) reported in the applicable Form 10-Q for each 

 

2

 

quarter
and, in the case of the fourth quarter of any year, the volumes calculated for
the fourth quarter by reducing the annual production total sales volume
reported in the Form 10-K by the quarterly production total sales volumes
reported in the Forms 10-Q for the first three quarters of such year. For the
avoidance of doubt, (a) Total Sales Volume is determined solely by the volumes
reported, regardless of any subsequently identified prior period adjustment, (b) Total
Sales Volume represents the Company’s interest in gas and oil sales during the
applicable period and (c) gathered volumes are not included.  For each individual and the collective
Performance Periods, Total Sales Volume shall be measured on a basis consistent
with current practice on the date of adoption of the Program.

 

(iii)                Improvement in Return on Drilling Capital
Dollars (“Improvement in RDCD”). 
The Improvement in RDCD shall be measured by the Capital Efficiency
during the period January 1, 2009 through December 31, 2010 (the “Two-Year
Period”).   “Capital Efficiency” shall
equal the Gross Drilling Capital Dollars divided by EUR.  “Gross Drilling Capital Dollars” shall equal
the sum of the gross value set forth on closed Authorizations for Expenditures
(“AFEs”) at December 31, 2010 for New Completed Wells plus the estimated
gross value for open AFEs at December 31, 2010 for New Completed
Wells.  The estimated gross value for
open AFEs shall be prepared by the EQT Production segment and approved by the
Vice President and Corporate Controller. “New Completed Wells” shall mean the
wells spud in the Two-Year Period that have produced for not less than 30 days
through December 31, 2010, that are operated by the Company and that are
neither exploratory wells nor third-party wells.  “EUR” shall mean the gross estimated ultimate
reserves developed in mcfe for the New Completed Wells as set forth in a report
prepared by the EQT Production segment and approved by the Vice President and
Corporate Controller.   Such report shall
be audited on a well by well basis by Ryder Scott and all differences shall be
resolved in favour of Ryder Scott’s estimate. 
Ryder Scott shall issue a written report summarizing the results of its
audit.    For the avoidance of doubt, all
elements of the Improvement in RDCD shall be determined solely as described
above, without giving effect to any subsequently identified prior adjustment.

 

(iv)                 Improvement in Direct Gathering &
Compression (“DG&C”) Expense (“Improvement in DGCE”).  The Improvement in DGCE shall be measured by
the DG&C Efficiency Amount.  The “DG&C
Efficiency Amount” shall be equal to the DG&C Expense divided by the
Throughput.  The “DG&C Expense” shall
be determined by (a) multiplying EQT Midstream’s gathering and compression
per unit expense for each year in the Two-Year Period (each as reported in the
Company’s Form 10-K for the year ended December 31, 2010 or, if such
metrics are not then set forth in the Form 10-K, calculated on a basis
consistent with the Company’s Form 10-K for the year ended December 31,
2008 (as applicable, the “Information Source”)) by (X) 

 

3

 

the
gathered volumes for the corresponding period (each as reported in the
Information Source) and (Y) 1,000, (b) adding the two resulting
values and (c) subtracting the property taxes for each year included in
such amount. The “Throughput” shall equal EQT Midstream’s gathered volumes for
the Two-Year Period as reported in the Information Source multiplied by 1,000.  For the avoidance of doubt, all elements of Improvement in
DGCE shall be determined solely as described above, without giving effect to
any subsequently identified prior period adjustment.

 

(v)                     Allocation of Target
Share Units among Performance Periods. 
Unless otherwise specifically allocated for a particular Performance
Period or Periods, the Target Share Units for each Participant will be divided
into 20%, 30% and 50% increments for the first, second and third Performance
Periods, respectively.

 

(vi)                  Application of Supply
Segment Revenue Performance Condition to Individual Performance Periods.  Except as provided in Section 5(b), the
Target Share Units for each Performance Period will be multiplied by the
Revenue Payout Factor identified on Attachment A (the “Revenue Payout Factor”)
that corresponds to the Supply Segment Revenues, as calculated in accordance
with this Program, for the relevant Performance Period.  Except as modified by subsections (vii) through
(ix) of this Section 5(a), the result of the calculation is the
number of Awarded Share Units for the Performance Period which may be issued to
a Participant contingent upon satisfaction of the Initial and Continuing
Employment Conditions set forth in Sections 6(a) and (b).

 

(vii)              Potential
Three-Year Cumulative Performance Award.  Participants who have participated in the
Program and remained employed with the Company during each of the three
Performance Periods are eligible to receive a three-year cumulative performance
award, calculated in accordance with this Section 5(a)(vii), subject to
satisfaction of the Initial and Continuing Employment Conditions set forth in
Sections 6(a) and (b).  Upon
completion of the third Performance Period, the cumulative Supply Segment
Revenues for the three Performance Periods shall be calculated and the Revenue
Payout Factor identified on Attachment A for such cumulative Supply
Segment Revenues shall be determined.  If
the total number of share units resulting from uniformly applying the
cumulative Revenue Payout Factor to the total number of Target Share Units is
greater than or equal to the total number of share units resulting from
applying each individual Performance Period’s Revenue Payout Factor identified
in accordance with subsection (vi) to the Target Share Units allocated to
such Performance Periods, then the Target Share Units for such eligible
Participants shall be adjusted to the 

 

4

 

higher amount by using the cumulative Revenue Payout
Factor, as illustrated in the following example:

 

Example: 
Participant A was granted 100 Target Share Units and remained employed
throughout Performance Periods #1, #2 and #3. 
Supply Segment Revenue and Revenue Payout Factors are as follows:

 

	
  Performance

  Period

  	
   

  	
  Supply

  Segment

  Revenue

  (000,000)

  	
   

  	
  Revenue

  Payout

  Factor

  	
   

  	
  Target

  Share Units

  	
   

  	
  Share Units

  Earned from

  Individual Period

  Payout Factors

  	
   

  	
  Share Units Earned

  from Cumulative

  Revenue Payout

  Factor

  	
   

  
	
  #1

  	
   

  	
  $

  	
  571.2

  	
   

  	
  0.8

  	
   

  	
  20

  	
   

  	
  16

  	
   

  	
  40.12

  	
   

  
	
  #2

  	
   

  	
  $

  	
  413.6

  	
   

  	
  1.0

  	
   

  	
  30

  	
   

  	
  30

  	
   

  	
  60.18

  	
   

  
	
  #3

  	
   

  	
  $

  	
  572.1

  	
   

  	
  3.0

  	
   

  	
  50

  	
   

  	
  150

  	
   

  	
  100.3

  	
   

  
	
  Cumulative

  	
   

  	
  $

  	
  1,556.9

  	
   

  	
  2.006

  	
   

  	
  100

  	
   

  	
  196

  	
   

  	
  200.6
  (Awarded Share Units)

  	
   

  

 

In the event that any Performance Period terminates
due to a Change of Control, as provided in Section 5(b), no cumulative
performance awards shall be payable pursuant to this Section 5(a)(vii).

 

(viii)         Potential
Two-Year Cumulative Performance Award.  Participants who have participated in the
Program and remained employed during each of the second and third, but not the
first, Performance Periods are eligible to receive a two-year cumulative
performance award, calculated in accordance with this Section 5(a)(viii),
subject to satisfaction of the Initial and Continuing Employment Conditions set
forth in Sections 6(a) and (b). 
Upon completion of the third Performance Period, the cumulative Supply
Segment Revenues for the second and third Performance Periods shall be
calculated and the Revenue Payout Factor identified on Attachment A for such
two-year cumulative Supply Segment Revenues shall be determined.  If the total number of share units resulting
from uniformly applying the cumulative Revenue Payout Factor to the total
number of Target Share Units is greater than or equal to the total number of
share units resulting from applying each individual Performance Period’s
Revenue Payout Factor identified for the second and third Performance Periods
in accordance with subsection (vi) to the Target Share Units allocated to
such Performance Periods, then the Target Share Units for the second and third
Performance Periods for such eligible Participants shall be adjusted to the
higher amount by using the cumulative Revenue Payout Factor consistent with the
example in subsection (vii) above. 
In the event that any Performance Period terminates due to a Change of
Control, as provided in Section 5(b), no cumulative performance awards
shall be payable pursuant to this Section 5(a)(viii).

 

5

 

(ix)                 Potential Improvement
in RDCD and Improvement in DGCE Award.  
Participants who have participated in the Program and remain employed
with the Company during each of the second and third Performance Periods are eligible to
receive an efficiency performance award, calculated in accordance with this Section 5(a)(ix),
subject to satisfaction of the Initial and Continuing Employment Conditions set
forth in Sections 6(a) and (b). 
Upon completion of the third Performance Period, the “Efficiency Payout
Factor” shall be determined by identifying and adding together the payout factors
identified on Attachment B that correspond to the Capital Efficiency and the
DG&C Efficiency Amount, each as calculated in accordance with this Program;
provided that if the sum of the Efficiency Payout Factor plus the Revenue
Payout Factor for any Performance Period or, if controlling, the cumulative
Revenue Payout Factor, exceeds 3.0X, then the Efficiency Payout Factor shall be
reduced for such period or periods to an amount so that such sum equals
3.0X.  Except as provided in Section 5(b),
the Target Share Units for the second and third Performance Periods will each
be multiplied by the Efficiency Payout Factor and then added together.  The result of the calculation shall be added
to the Awarded Share Units determined pursuant to subsections (vi) (as
modified, if at all, by subsections (vii) and (viii)).  The application of this subsection (ix) is
illustrated as follows:

 

Example:  The Supply Segment Revenue in the example in
subsection (vii) applies, and therefore the cumulative Revenue Payout
Factor of 2.006X controls and results in 200.6 share units.  Assume that the Efficiency Payout Factor is
..4X.

 

	
  Period

  	
   

  	
  Shares

  	
   

  	
  Efficiency Payout Factor

  	
   

  	
  Additional Units

  	
   

  
	
  2

  	
   

  	
  30

  	
   

  	
  .4

  	
   

  	
  12

  	
   

  
	
  3

  	
   

  	
  50

  	
   

  	
  .4

  	
   

  	
  20

  	
   

  
	
  Units added for Efficiency Payout Factor

  	
   

  	
  32

  	
   

  
	
  Awarded Share Units:  232.6

  	
   

  	
   

  	
   

  

 

(b)                                 Change of Control.  Notwithstanding Section 9 of the 1999
Plan, the performance criteria and other restrictions and conditions on any outstanding
award shall not automatically lapse or be deemed to be achieved, fulfilled or
waived in the event of a Change of Control, as then defined in the 1999
Plan.  The Committee may, in the event of
a Change of Control, cause the then-current Performance Period to terminate on
the date of the Change of Control.  If
the Performance Period terminates, the Supply Segment Revenues, the DG&C
Efficiency Amount and the Capital Efficiency shall be calculated for the number
of reported calendar quarters in the Performance Period.  The Supply Segment Revenue amounts identified
on Exhibit A for the then-current Performance Period shall be divided by
four (or six in the case of the first Performance Period) and multiplied by the
number of reported calendar quarters in such Performance Period, and compared
to actual Supply Segment Revenues, 

 

6

 

calculated in accordance with this Program to determine the
corresponding Revenue Payout Factor.  The
Efficiency Payout Factor shall be determined from Exhibit B based upon the
DG&C Efficiency Amount and the Capital Efficiency calculated in accordance
with this Program.  The Target Share
Units for the then-current Performance Period will be multiplied by the
corresponding Payout Factors (not to exceed 3.0X).  The result of this calculation will then be
multiplied by a fraction, the numerator of which is the number of completed
days within the then-current Performance Period and the denominator of which is
the number of days in the Performance Period, to calculate the Awarded Share
Units for such Performance Period that will be paid to a Participant,
contingent upon satisfaction of the Initial and Continuing Employment
Conditions set forth in Sections 6(a) and (b).

 

Section 6.  Employment Conditions.  Payments under the Program are expressly
contingent upon satisfaction of the condition set forth in subsection 6(a) (the
“Initial Employment Condition”) and subsection 6(b) (the “Continuing
Employment Condition”).  The Initial
Employment Condition and the Continuing Employment Condition are collectively
referred to herein as the “Employment Conditions”.  Awarded Share Units calculated in accordance
with Section 5 shall vest upon satisfaction of the Employment Conditions.

 

(a)                                  Initial Employment
Condition:  Termination during or prior
to commencement of a Performance Period. 
Target Share Units applicable to a particular Performance Period shall
be forfeited if the Participant’s employment is terminated for any reason
during, or if the Participant is not otherwise employed by the Company
throughout, the Performance Period.

 

(b)                                 Continuing Employment
Condition:  Termination following a
Performance Period.

 

(i)                       Awarded Share Units
applicable to the first Performance Period shall be forfeited if the
Participant’s employment is terminated for any reason after the end of the
first Performance Period and prior to the earlier of (x) the second
anniversary of the end of the first Performance Period or (y) the early
termination of the then-current Performance Period by reason of a Change of
Control or otherwise, except for (i) an involuntary termination of
Participant’s employment by the Company for reasons other than misconduct,
failure to perform or other cause, (ii) the Participant’s death or (iii) the
Participant’s disability, as defined in Section 409A(a)(2)(C) of the
Code.

 

(ii)                    Awarded Share Units applicable to the
second Performance Period shall be forfeited if the Participant’s employment is
terminated for any reason after the end of the second Performance Period and
prior to the earlier of (x) the first anniversary of the end of the second
Performance Period or (y) the early termination of the

 

7

 

then-current
Performance Period by reason of a Change of Control or otherwise, except for (i) an
involuntary termination of Participant’s employment by the Company for reasons
other than misconduct, failure to perform or other cause, (ii) the
Participant’s death or (iii) the Participant’s disability, as defined in Section 409A(a)(2)(C) of
the Code.

 

(iii)                Awarded Share Units applicable to the
third Performance Period and the cumulative Performance Periods, as set forth
in Section 5(a)(vii) and (viii), shall be forfeited if the
Participant’s employment is terminated for any reason prior to the end of the
third Performance Period.

 

Notwithstanding
the foregoing, Awarded Share Units shall be forfeited if the Participant’s
employment is terminated by reason of voluntary resignation prior to the date
of payment.  For purposes of this
Program, the effective date of a Participant’s termination shall be the date on
which the Participant ceased to perform services as an employee of the Company,
without regard to accrued vacation, severance or other benefits or the
characterization thereof on the payroll records of the Company.

 

Section 7.  Dividends. 
Following the end of the Performance Period and until payment therefor
or forfeiture thereof, each Awarded Share Unit for such Performance Period, as
calculated in accordance with Section 5, will be cumulatively credited
with dividends that are paid on the Company’s common stock in the form of
additional share units.  These additional
share units shall be deemed to have been purchased on the last business day of
the month in which the record date for the dividend occurs using the closing
stock price for the Company as reported in The
Wall Street Journal and shall be subject to all the same conditions
and restrictions as provided in this Program applicable to the underlying
Awarded Share Units.

 

Section 8.  Payment.  Subject to Sections 5 and 6, Awarded Share
Units shall be payable within two and one-half months following the end of the
year in which the Awarded Share Units have vested and are no longer subject to
a substantial risk of forfeiture; provided, however,
in the event that any such amounts are conditioned upon a separation from
service and not compensation the Participant could receive without separating
from service, then no such payments may be made to a Participant who is a “specified
employee” under Section 409A of the Code until the first day following the
six-month anniversary of the Participant’s separation from service.

 

Such Awarded Share Units will be distributed in cash, the amount of
which shall be calculated based upon each Awarded Share Unit being equal in
value to a corresponding share of Company stock as determined under the 1999
Plan as of the date on which the final Performance Period ends, or in any case
if such day is not a business day, the next succeeding business day.

 

Payments under the Program are expressly contingent upon achievement of
the Performance Condition and may not exceed the value calculated in accordance
with the 

 

8

 

terms hereof.  The maximum amount payable to any one
Participant under the Program in any one calendar year shall be the amount set
forth and as calculated in the 1999 Plan, as approved by shareholders of the
Company.

 

Section 9.  Responsibilities of the Committee. 
The Committee has responsibility for all aspects of the Program’s
administration, including:

 

·                  Determining and certifying in writing the
extent to which the Performance Condition and other conditions have been
achieved prior to any payments under the Program,

 

·                  Ensuring that the Program is administered
in accordance with its provisions,

 

·                  Approving Program Participants,

 

·                  Interpreting and administering the
Program and any instrument or agreement relating to, or award made under, the
Program,

 

·                  Authorizing Target Share Unit awards to
Participants,

 

·                  Ruling on any disagreement between
Program Participants, the Company, and any other interested parties to the
Program,

 

·                  Adopting, amending, suspending, waiving
and rescinding such rules and regulations as deemed necessary or advisable
to administer the Program,

 

·                  Making decisions and determinations as
required under the Program or as deemed necessary or advisable for
administration of the Program,

 

·                  Prescribing the form of any award
agreement, which need not be identical for each Participant, and

 

·                  Maintaining final authority to modify or
terminate the Program at any time.

 

The
interpretation and construction by the Committee of any provisions of the
Program or of any Target Share Units or Awarded Share Units shall be
final.  All conditions of the Target
Share Units must be approved by the Committee. 
As early as practicable prior to or during the Performance Period, the
Committee shall approve the number of Target Share Units to be awarded to each
Participant.  The associated terms and
conditions of the Program will be communicated to Participants as close as
possible to the date an award is made. 
The Participant will sign and return a participant agreement to the
Chief Human Resources Officer or his or her designee.

 

Section 10.  Tax Consequences to Participants. 
It is intended that: (i) until the Performance Condition and
applicable Employment Conditions are satisfied and payment is made, a
Participant’s right to an award under this Program shall be considered to be
subject to a substantial risk of forfeiture in accordance with those terms as
defined or referenced in Sections 83(a), 409A and 3121(v)(2) of the Code; (ii) the
Awarded Share 

 

9

 

Units shall be subject to employment taxes only
upon the satisfaction of the Performance Condition and applicable Employment
Conditions; and (iii) until the Awarded Share Units are actually paid to
the Participant, the Participants shall have merely an unfunded, unsecured
promise to be paid the benefit, and such unfunded promise shall not consist of
a transfer of “property” within the meaning of Code Section 83.  It is further intended that, because a
Participant cannot actually or constructively receive the Target or Awarded
Share Units prior to payment, the Participant will not be in actual or
constructive receipt of the Target or Awarded Share Units within the meaning of
Code Section 451 until they are actually paid.

 

Section 11.  Nonassignment.  A
Participant shall not be permitted to assign, alienate or otherwise transfer
his or her Target or Awarded Share Units and any attempt to do so shall be
void.

 

Section 12.  Impact on
Benefit Plans. 
Payments under the Program 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.  Nothing herein shall prevent the
Company from maintaining additional compensation plans and arrangements,
provided however that no payments shall be made under such plans and
arrangements if the effect thereof would be the payment of compensation
otherwise payable under this Program regardless of whether the Performance
Condition was attained.

 

Section 13.  Successors;
Changes in Stock. 
The obligation of the Company under the Program shall be binding upon the
successors and assigns of the Company. 
If a dividend or other distribution shall be declared upon the Company’s
common stock payable in shares of Company common stock, the Target and Awarded
Share Units shall be adjusted by adding thereto the number of shares of Company
common stock which would have been distributable thereon if such Target and
Awarded Share Units had been actual Company shares and outstanding on the date
fixed for determining the shareholders entitled to receive such stock dividend or
distribution.  In the event of any
spin-off, split-off or split-up, or dividend in partial liquidation, dividend
in property other than cash, or extraordinary distribution to shareholders of
the Company’s common stock, the Target and Awarded Share Units shall be
appropriately adjusted to prevent dilution or enlargement of the rights of
Participants which would otherwise result from any such transaction, provided
such adjustment shall be consistent with Code Section 162(m).

 

In the case of a Change of Control, any obligation under the Program
shall be handled in accordance with the terms of Section 5(b) hereof.  In any case in which the Company’s common
stock is changed into or becomes exchangeable for a different number or kind of
shares of stock or other securities of the Company or another corporation, or
cash or other property, whether through reorganization, reclassification,
recapitalization, stock split-up, combination of shares, merger or
consolidation, then there shall be substituted for each performance incentive
share units constituting an award, units representing the number and kind of
shares of stock or other securities (or cash or other property) into which each
outstanding share of the Company’s common stock shall be so changed or for
which each such share shall be exchangeable (and substituting the 

 

10

 

Federal one-year Treasury Bill
interest rate for dividends in the case of units represented by cash or
property).  In the case of any such
adjustment, the Target and Awarded Share Units shall remain subject to the
terms of the Program.

 

Section 14.  Dispute Resolution. 
The Participant may make a claim to the Committee with regard to a
payment of benefits provided herein.  If
the Committee receives a claim in writing, the Committee must 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:

 

(a)                                  The specific basis for its decision,

 

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

 

(c)                                  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, and

 

(d)                                 An explanation of the Program’s claim
review procedure.

 

Section 15.  Applicable Law.  This
Program shall be governed by and construed under the laws of the Commonwealth
of Pennsylvania without regard to its conflict of law provisions.

 

Section 16.  Severability.  In the
event that any one or more of the provisions of this Program shall be held to
be invalid, illegal or unenforceable, the validity, legality or enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

 

Section 17.  Headings.  The
descriptive headings of the Sections of this Program are inserted for
convenience of reference only and shall not constitute a part of this Program.

 

Section 18.  Amendment or Termination of this Program.  This Program may be amended, suspended or
terminated by the Company at any time upon approval by the Committee without
liability therefor, including without limitation any potential liability for
potential cumulative performance awards described in Section 5(a)(vii) and
(viii) hereof; provided, however, the Committee may not amend, suspend or
terminate the Program with respect to the then-current Performance Period
except within the first 90 days of such Performance Period and no amendment,
suspension or termination shall adversely affect a Participant’s rights to his
or her award for prior Performance Periods, subject to satisfaction of the
applicable Employment Conditions set forth in Section 6.  Notwithstanding the foregoing, the Company
may amend this Program from time to time without any Participant’s consent to
the extent deemed necessary or appropriate, in its sole discretion, to effect
compliance with Section 409A of the Code, including regulations and
interpretations thereunder, which amendments may result in a reduction of
benefits provided hereunder and/or other unfavorable changes to
Participants.  Upon 

 

11

 

termination of the
Program, all Target Share Units shall automatically be forfeited and terminate
without further action required of the Company. 
Amendment, suspension or termination must be approved by the Committee.

 

*            *            *

 

12

 

Attachment A

 

2007 Supply Long Term Incentive Revenue Payout Factor
Matrix

 

REVENUE  PAYOUT
FACTOR 

 

	
   

  	
   

  	
  1

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  Cumulative Total for

  all Performance

  Periods

  	
   

  
	
   

  	
   

  	
  Bcfe

  	
   

  	
  Revenue

  (000,000)

  	
   

  	
  Bcfe

  	
   

  	
  Revenue

  (000,000)

  	
   

  	
  Bcfe

  	
   

  	
  Revenue

  (000,000)

  	
   

  	
  Bcfe

  	
   

  	
  Revenue

  (000,000)

  	
   

  
	
  3.0

  	
   

  	
  124.7

  	
   

  	
  $

  	
  601.1

  	
   

  	
  100.6

  	
   

  	
  $

  	
  484.9

  	
   

  	
  118.7

  	
   

  	
  $

  	
  572.1

  	
   

  	
  344.0

  	
   

  	
  $

  	
  1,658.1

  	
   

  
	
  2.0

  	
   

  	
  121.4

  	
   

  	
  $

  	
  585.1

  	
   

  	
  93.3

  	
   

  	
  $

  	
  449.7

  	
   

  	
  108.2

  	
   

  	
  $

  	
  521.5

  	
   

  	
  322.9

  	
   

  	
  $

  	
  1,556.3

  	
   

  
	
  1.0

  	
   

  	
  119.5

  	
   

  	
  $

  	
  576.0

  	
   

  	
  85.8

  	
   

  	
  $

  	
  413.6

  	
   

  	
  91.2

  	
   

  	
  $

  	
  439.6

  	
   

  	
  296.5

  	
   

  	
  $

  	
  1,429.2

  	
   

  
	
  0.9

  	
   

  	
  119.0

  	
   

  	
  $

  	
  573.6

  	
   

  	
  85.3

  	
   

  	
  $

  	
  411.1

  	
   

  	
  90.7

  	
   

  	
  $

  	
  437.2

  	
   

  	
  295.0

  	
   

  	
  $

  	
  1,421.9

  	
   

  
	
  0.8

  	
   

  	
  118.5

  	
   

  	
  $

  	
  571.2

  	
   

  	
  84.8

  	
   

  	
  $

  	
  408.7

  	
   

  	
  90.2

  	
   

  	
  $

  	
  434.8

  	
   

  	
  293.5

  	
   

  	
  $

  	
  1,414.7

  	
   

  
	
  0.0

  	
   

  	
  <118.5

  	
   

  	
  $

  	
  <571.2

  	
   

  	
  <84.8

  	
   

  	
  $

  	
  <408.7

  	
   

  	
  <90.2

  	
   

  	
  $

  	
  <434.8

  	
   

  	
  <293.5

  	
   

  	
  $

  	
  <1,414.7

  	
   

  
																										

 

* The Performance Factor between defined
targets is interpolated.

**
Two-year cumulative total to be based on sum of 2d and 3d performance periods.

 

 

Attachment B

 

2007 Supply Long Term Incentive Efficiency Payout
Factor Matrix

 

PAYOUT FACTOR

 

	
  Capital
  Efficiency

  	
   

  	
  Cost per

  mcfe

  	
   

  	
  1.90

  	
   

  	
  1.862

  	
   

  	
  1.824

  	
   

  	
  1.786

  	
   

  	
  1.748

  	
   

  	
  1.710

  
	
   

  	
   

  	
  Efficiency

  Payout

  Factor

  	
   

  	
  0

  	
   

  	
  .10

  	
   

  	
  .20

  	
   

  	
  .30

  	
   

  	
  .40

  	
   

  	
  .50

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DG&C
  Efficiency

  	
   

  	
  Cost per

  Dth

  	
   

  	
  .436

  	
   

  	
  .427

  	
   

  	
  .419

  	
   

  	
  .410

  	
   

  	
  .401

  	
   

  	
  .392

  
	
  Amount

  	
   

  	
  Efficiency

  Payout

  Factor

  	
   

  	
  0

  	
   

  	
  .10

  	
   

  	
  .20

  	
   

  	
  .30

  	
   

  	
  .40

  	
   

  	
  .50

  

 

* The Performance Factor between defined
targets is interpolated.

 

14

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