Document:

Exhibit 10.19

 

INDEMNIFICATION
AGREEMENT

 

This Agreement is made
effective as of the          day of                     ,
by and between Equitable Resources, Inc., a Pennsylvania corporation (the “Company”)
and                                         
(the “Indemnitee”), a director and/or officer of the Company.

 

WHEREAS,
it is essential that the Company retain and attract as directors and officers
the most capable persons available; and

 

WHEREAS,
Indemnitee is a director and/or officer of the Company and in that capacity is
performing a valuable service for the Company; and

 

WHEREAS,
Company Bylaws (the “Bylaws”) contain a provision which provides for
indemnification of and advancement of expenses to the directors and officers of
the Company for liabilities and expenses they incur in their capacities as
such, and the Bylaws and the applicable indemnification statutes of the
Commonwealth of Pennsylvania provide that they are not exclusive; and

 

WHEREAS,
in recognition of Indemnitee’s need for protection against personal liability
in order to enhance Indemnitee’s continued service to the Company in an
effective manner, the potential difficulty in obtaining satisfactory Directors
and Officers Liability Insurance (“D & O Insurance”) coverage,
and Indemnitee’s reliance on the Bylaws, and in part to provide Indemnitee with
specific contractual assurance that the protection promised by the Bylaws will
be available to Indemnitee (regardless of, among other things, any amendment to
or revocation of the Bylaws or any change in the composition of the Company’s
Board of Directors or acquisition transaction relating to the Company), the
Company desires to provide in this Agreement for the indemnification of and the
advancing of expenses to Indemnitee to the fullest extent permitted by law and
as set forth in this Agreement, and, to the extent insurance is maintained, for
the continued coverage of Indemnitee under the Company’s D & O
Insurance policies.

 

NOW,
THEREFORE, in consideration of the premises and of Indemnitee
continuing to serve the Company directly or, at its request, another
enterprise, and intending to be legally bound hereby, the parties hereto agree
as follows:

 

1.            Indemnity
of Indemnitee.

 

(a)           The Company shall indemnify and hold
harmless the Indemnitee against any and all reasonable expenses, including fees
and expenses of counsel, and any and all liability and loss, including
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement, incurred or paid by Indemnitee in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter “a proceeding”) and
whether or not by or in the right of the Company or otherwise, to which the
Indemnitee is, was or at any time becomes a party, or is threatened to be made
a party or is involved (as a witness or otherwise) by reason of the fact that
Indemnitee is or was a director or officer of the Company or is or was serving
at the request of the Company as director, officer, employee, trustee or
representative of another corporation or of a partnership, joint 

 

 

venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity or in
any other capacity while serving as a director, officer, employee, trustee or
representative, unless the act or failure to act giving rise to the claim for
indemnification is determined by a court to have constituted willful misconduct
or recklessness; provided, however, that the Company shall indemnify the
Indemnitee in connection with a proceeding (or part thereof) initiated by the
Indemnitee (other than a proceeding to enforce the Indemnitee’s rights to
indemnification under this Agreement or otherwise) prior to a Change of
Control, as defined in Section 2(e), only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Company.

 

(b)           Subject to the foregoing limitation
concerning certain proceedings initiated by the Indemnitee prior to a Change of
Control, the Company shall pay the expenses (including fees and expenses of
counsel) incurred by Indemnitee in connection with any proceeding in advance of
the final disposition thereof promptly after receipt by the Company of a
request therefor stating in reasonable detail the expenses incurred or to be
incurred.

 

(c)           If a claim under paragraph (a) or
(b) of this section is not paid in full by the Company within forty-five
(45) days after a written claim has been received by the Company, the
Indemnitee may, at any time thereafter, bring suit against the Company to
recover the unpaid amount of the claim. 
The burden of proving that indemnification or advances are not
appropriate shall be on the Company.  The
Indemnitee shall also be entitled to be paid the expenses of prosecuting such
claim to the extent he or she is successful in whole or in part on the merits
or otherwise in establishing his or her right to indemnification or to the
advancement of expenses.  The Company
shall pay such fees and expenses in advance of the final disposition of such
action on the terms and conditions set forth in Section 1(b).

 

2.            Maintenance
of Insurance and Funding.

 

(a)           The Company represents that a summary
of the terms of the policies of D&O Insurance in effect as of the date of
this Agreement is attached hereto as Exhibit A (the “Insurance Policies”).

 

Subject only to the
provisions of Section 2(b) hereof, the Company agrees that, so long
as Indemnitee shall continue to serve as an officer or director of the Company
(or shall continue at the request of the Company to serve as a director,
officer, employee, trustee or representative of another corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan) and thereafter so long as Indemnitee shall
be subject to any possible claim or threatened, pending or completed action,
suit or proceeding, whether civil, criminal or investigative, by reason of the
fact that Indemnitee was a director or officer of the Company (or served in any
of said other capacities), the Company shall purchase and maintain in effect
for the benefit of Indemnitee one or more valid, binding and enforceable policy
or policies of D & O Insurance providing coverage at least comparable
to that provided pursuant to the Insurance Policies.

 

(b)           The Company shall not be required to
maintain said policy or policies of D & O Insurance in effect if, in
the reasonable, good faith business judgment of the then Board of 

 

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Directors of the Company (i) the
premium cost for such insurance is substantially disproportionate to the amount
of coverage, (ii) the coverage provided by such insurance is so limited by
exclusions that there is insufficient benefit from such insurance or (iii) said
insurance is not otherwise reasonably available; provided, however, that in the
event the then Board of Directors makes such a judgment, the Company shall
purchase and maintain in force a policy or policies of D & O Insurance
in the amount and with such coverage as the then Board of Directors determines
to be reasonably available. 
Notwithstanding the general provisions of this Section 2(b),
following a Change of Control, any decision not to maintain any policy or
policies of D & O Insurance or to reduce the amount or coverage under
any such policy or policies shall be effective only if there are Disinterested
Directors (as defined in Section 2(e) hereof) and shall require the
concurrence of a majority of the Disinterested Directors.

 

(c)           If and to the extent the Company,
acting under Section 2(b), does not purchase and maintain in effect the
policy or policies of D & O Insurance described in Section 2(a),
the Company shall indemnify and hold harmless the Indemnitee to the full extent
of the coverage which would otherwise have been provided by such policies.  The rights of the Indemnitee hereunder shall
be in addition to all other rights of Indemnitee under the remaining provisions
of this Agreement.

 

(d)           In the event of a Potential Change of
Control or if and to the extent the Company is not required to maintain in
effect the policy or policies of D & O Insurance described in Section 2(a) pursuant
to the provisions of Section 2(b), the Company shall, upon written request
by Indemnitee, create a “Trust” for the benefit of Indemnitee and from time to
time, upon written request by Indemnitee, shall fund such Trust in an amount
sufficient to pay any and all expenses, including attorneys’ fees, and any and
all liability and loss, including judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement actually and reasonably
incurred by him or on his behalf for which the Indemnitee is entitled to indemnification
or with respect to which indemnification is claimed, reasonably anticipated or
proposed to be paid in accordance with the terms of this Agreement or
otherwise; provided that in no event shall more than $100,000 be required to be
deposited in any Trust created hereunder in excess of the amounts deposited in
respect of reasonably anticipated expenses, including attorneys’ fees.  The amounts to be deposited in the Trust
pursuant to the foregoing funding obligation shall be determined by a majority
of the Disinterested Directors whose determination shall be final and
conclusive.

 

The terms of the Trust
shall provide that upon a Change of Control (i) the Trust shall not be
revoked or the principal thereof invaded, without the written consent of the
Indemnitee, (ii) the Trust shall advance, within two business days of a
request by the Indemnitee, any and all expenses, including attorneys’ fees, to
the Indemnitee (and the Indemnitee hereby agrees to reimburse the Trust under
the circumstances under which the Indemnitee would be required to reimburse the
Company under Section 5 of this Agreement), (iii) the Trust shall
continue to be funded by the Company in accordance with the funding obligation
set forth above, (iv) the Trustee shall promptly pay to the Indemnitee all
amounts for which the Indemnitee shall be entitled to indemnification pursuant
to this Agreement or otherwise, and (v) all unexpended funds in such Trust
shall revert to the Company upon a final determination by a majority of the
Disinterested Directors or a court of competent jurisdiction, as the case may
be, that the 

 

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Indemnitee has been fully
indemnified under the terms of this Agreement. 
The Trustee shall be a bank or trust company or other individual or
entity chosen by the Indemnitee and reasonably acceptable and approved of by
the Company.

 

(e)           For the purposes of this Agreement:

 

(i)                                     a
“Change of Control” shall mean any of the following events (each of such
events being herein referred to as a “Change of Control”):

 

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

 

B.                                     The
acquisition in one or more transactions by any person or group, directly or
indirectly, of beneficial ownership of twenty percent (20%) or more of the
outstanding shares of Company common stock or the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of the Board of Directors; provided, however, that any acquisition
by (x) the Company or any of its subsidiaries, or any employee benefit
plan (or related trust) sponsored or maintained by the Company or any of its
subsidiaries or (y) any person that is eligible, pursuant to Rule 13d-1(b) under
the Exchange Act (as such rule is in effect as of November 1, 1995)
to file a statement on Schedule 13G with respect to its beneficial ownership of
Company common stock and other voting securities, whether or not such person
shall have filed a statement on Schedule 13G, unless such person shall have
filed a statement on Schedule 13D with respect to beneficial ownership of
fifteen percent or more of the Company’s voting securities, shall not
constitute a Change of Control;

 

C.                                     The
Company’s termination of its business and liquidation of its assets;

 

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

 

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

 

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(ii)                                  a
“Disinterested Director” means any member of the Board of Directors of
the Company who is unaffiliated with, and not a representative of, an
Interested Shareholder and who was a member of the Board of Directors prior to
the time that the Interested Shareholder became an Interested Shareholder or
became a member subsequently to fill a vacancy created by an increase in the
size of the Board of Directors and did receive the favorable vote of two-thirds
(2/3) of the Disinterested Directors in connection with being nominated for
election by the shareholders to fill such vacancy or in being elected by the
Board of Directors to fill such vacancy, and any successor of a Disinterested
Director who is unaffiliated with, and not a representative of, the Interested
Shareholder and is recommended or elected to succeed a Disinterested Director
by a majority of the Disinterested Directors then on the Board of Directors.

 

(iii)                               “Interested
Shareholder” means any person (other than the Company or any subsidiary of
the Company and other than any profit sharing, employee stock ownership, or
other employee benefit plan of the Company or any subsidiary of the Company or
any trustee of or fiduciary with respect to any such plan when acting in such
capacity) who or which:

 

A.                                   is
at such time the beneficial owner, directly or indirectly, of more then ten
percent (10%) of the voting power of the outstanding common stock of the
Company;

 

B.                                     was
at any time within the two-year period immediately prior to such time the
beneficial owner, directly or indirectly, of more than ten percent (10%) of the
voting power of the then outstanding common stock of the Company;

 

C.                                     is
at such time an assignee of or has otherwise succeeded to the beneficial
ownership of any shares of common stock of the Company which were at any time
within the two-year period immediately prior to such time beneficially owned by
any Interested Shareholder, if such assignment or succession has occurred in
the course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933, as amended.

 

(iv)                              a “person”
means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or government (or any
subdivision, department, commission or agency thereof), and includes without
limitation any “person”, as such term is used in Sections 13(d) of 14(d) of
the Securities Exchange Act of 1934, as amended.

 

(v)                                 a
“Potential Change of Control” shall occur if:

 

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A.                                   the
Company enters into an agreement or arrangement the consummation of which would
result in the occurrence  of a Change of
Control;

 

B.                                     any
Person (including the Company) publicly announces an intention to take or to
consider taking actions which if consummated would constitute a Change in
Control; or

 

C.                                     the
Board of Directors of the Company adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change of Control has occurred.

 

3.            Continuation
of Indemnity.

 

The Company’s obligations
hereunder shall be applicable to any and all claims made after the date hereof
regardless of when the facts upon which such claims are based occurred,
including times prior to the date hereof. 
All agreements and obligations of the Company contained in this
Agreement shall continue during the period the Indemnitee is a director or
officer of the Company (or is or was serving at the request of the Company as a
director, officer, employee, trustee or representative of another corporation,
partnership, joint venture, trust or other enterprise, including any employee
benefit plan) and shall continue thereafter so long as the Indemnitee shall be
subject to any possible claim or threatened, pending or completed action, suit
or proceeding, whether civil, criminal or investigative, by reason of the fact
that the Indemnitee was a director or officer of the Company or serving in any
other capacity referred to herein.

 

4.            Contribution.

 

If the full indemnification
provided in Section 1 hereof may not be paid to an Indemnitee because such
indemnification is prohibited by law, then in respect of any actual or
threatened proceeding in which the Company is jointly liable with Indemnitee
(or would be if joined in such proceeding) the Company shall contribute to the
amount of expenses incurred by the Indemnitee for which indemnification is not
available in such proportion as is appropriate to reflect (i) the relative
benefits received by the Company on the one hand and the Indemnitee on the
other hand from the transaction from which such proceeding arose and (ii) the
relative fault of the Company and the Indemnitee, as well as any other relevant
equitable considerations.  The relative
fault of the Company (which shall be deemed to include its other directors,
officers and employees) on the one hand and of the Indemnitee on the other hand
shall be determined by reference to, among other things, the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
the circumstances resulting in such expenses. 
The Company agrees that it would not be just and equitable if
contribution pursuant to this section were determined by any method of
allocation which does not take account of the foregoing equitable
considerations.

 

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5.            Notification
and Defense of Claim.

 

As soon as practicable
after receipt by the Indemnitee of actual knowledge of any action, suit or
proceeding, the Indemnitee shall notify the Company thereof if a claim in
respect thereof may be or is being made by the Indemnitee against the Company
under this Agreement; provided, that the failure of the Indemnitee to give such
notice shall not relieve the Company of its obligations hereunder except to the
extent the Company is actually prejudiced by such failure.  With respect to any action, suit or
proceeding as to which the Indemnitee has so notified the Company:

 

(a)           The Company will be entitled to
participate therein at its own expense; and

 

(b)           Except as otherwise provided below,
the Company may assume the defense thereof, with counsel reasonably
satisfactory to the Indemnitee. After the Company notifies the Indemnitee of
its election to so assume the defense, the Company will not be liable to the
Indemnitee under this Agreement for any legal or other expenses subsequently
incurred by the Indemnitee in connection with the defense, other than
reasonable costs of investigation, including an investigation in connection
with determining whether there exists a conflict of interest of the type
described in (ii) of this paragraph, or as otherwise provided in this
paragraph. The Indemnitee shall have the right to employ his or her counsel in
such action, suit or proceeding but the fees and expenses of such counsel
incurred after the Company notifies the Indemnitee of its assumption of the
defense shall be at the expense of the Indemnitee unless (i) the Company
authorizes the Indemnitee’s employment of counsel, provided, that following a
Change of Control, the Indemnitee shall be entitled to employ his or her own
counsel at the Company’s expense after giving not less than 30 days’ notice to
the Company unless a majority of the Disinterested Directors determine that the
Indemnitee’s interests are adequately represented by the counsel employed by
the Company; (ii) the Indemnitee shall have reasonably concluded that
there may be a conflict of interest between the Company and the Indemnitee in
the conduct of the defense or (iii) the Company shall not have employed
counsel to assume the defense of such action, in each of which cases the fees
and expenses of counsel shall be at the expense of the Company. The Company
shall not be entitled to assume the defense of any action, suit or proceeding
brought by or on behalf of the Company or as to which the Indemnitee shall have
made the conclusion described in (ii) of this paragraph.

 

(c)           The Company shall not be obligated to
indemnify the Indemnitee under this Agreement for any amounts paid in
settlement of any action or claim effected without its written consent. The
Company shall not settle any action or claim in any manner which would impose
any penalty or limitation on the Indemnitee without the Indemnitee’s written
consent. Neither the Company nor the Indemnitee shall unreasonably withhold
their consent to any proposed settlement.

 

6.            Undertaking
to Repay Expenses.

 

In the event it shall
ultimately be determined that the Indemnitee is not entitled to be indemnified
for the expenses paid by the Company pursuant to Section 1(b) hereof
or otherwise or was not entitled to be fully indemnified, the Indemnitee shall
repay to the Company such amount of the expenses or the appropriate portion
thereof, so paid or advanced.  Indemnitee
shall reimburse the Company for any amounts paid by the Company as
indemnification of expenses  

 

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to the extent Indemnitee
receives payment for the same expenses from any insurance carrier or from
another party.

 

7.            Notice.

 

Any notice to the Company
shall be directed to Equitable Resources, Inc., 225 North Shore Drive,
Pittsburgh, Pennsylvania 15212-5861, Attention: 
Corporate Secretary (or such other address as the Company shall
designate in writing to the Indemnitee).

 

8.            Enforcement.

 

In the event the
Indemnitee is required to bring any action to enforce rights or to collect
monies due under this Agreement, the Company shall pay to the Indemnitee the
fees and expenses incurred by the Indemnitee in bringing and pursuing such
action if the Indemnitee is successful, in whole or in part, on the merits or
otherwise, in such action.  The Company
shall pay such fees and expenses in advance of the final disposition of such
action on the terms and conditions set forth in Section 1(b).

 

9.            Severability.

 

If any provision or provisions
of this Agreement shall be held to be invalid, illegal or unenforceable for any
reason whatsoever:

 

(a)           the validity, legality and
enforceability of the remaining provisions of this Agreement (including without
limitation, each portion of any Section of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby; and

 

(b)           to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of
any Section of this Agreement containing any such provision held to be
invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.

 

10.          Indemnification
Under this Agreement Not Exclusive.

 

(a)           The indemnification provided by this
Agreement shall not be deemed exclusive of any other rights to which the
Indemnitee may be entitled under the Articles of Incorporation of the
Corporation or its Bylaws, any other agreement, any vote of stockholders or
directors, or otherwise, both as to action in the Indemnitee’s official
capacity and as to action in another capacity while holding such office.  The protection and rights provided by this
Agreement and all of such other protections and rights are intended to be
cumulative.

 

(b)           It is the intention of the parties in
entering into this Agreement that the insurers under any D & O
Insurance policy shall be obligated ultimately to pay any claims by Indemnitee
which are covered by such policy or to give such insurers any rights against
the Company under 

 

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or with respect to this
Agreement, including, without limitation, any right to be subrogated to any of
Indemnitee’s right hereunder, unless otherwise expressly agreed to by the
Company in writing and the obligation of such insurers to the Company or
Indemnitee shall not be deemed reduced or impaired in any respect by virtue of
the provisions of this Agreement.

 

11.          Miscellaneous.

 

(a)           This Agreement shall be interpreted
and enforced in accordance with the laws of the Commonwealth of Pennsylvania.

 

(b)           This Agreement shall be binding upon
the Indemnitee and upon the Company, its successors and assigns, and shall
inure to the benefit of the Indemnitee and his or her heirs, executors,
personal representatives and assigns, and to the benefit of the Company, its successors
and assigns.  If the Company shall merge
or consolidate with another corporation or shall sell, lease, transfer or
otherwise dispose of all or substantially all of its assets to one or more
persons or groups (in one transaction or series of transactions), (i) the
Company shall cause the successor in the merger or consolidation or the
transferee of the assets that is receiving the greatest portion of the assets
or earning power transferred pursuant to the transfer of the assets, by
agreement in form and substance satisfactory to the Indemnitee, to expressly
assume all of the Company’s obligations under and agree to perform this
Agreement[; provided, however, that the Company may assign this Agreement to
its new holding company in connection with a corporate reorganization
transaction without obtaining Indemnitee’s approval of the form of written
agreement effecting such assignment,](1) and
(ii) the term “Company” whenever used in this Agreement shall mean and
include any such successor or transferee.

 

(c)           No amendment, modification,
termination or cancellation of this Agreement shall be effective unless in
writing signed by both of the parties hereto.

 

(1)     Bracketed language is included in
Indemnification Agreements entered into on or after July 11, 2007.

 

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IN
WITNESS WHEREOF, the parties have executed this Agreement on
and as of the day and year first above written.

 

	
   

  	
  EQUITABLE RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  

 

11Exhibit 10.20

 

DIRECTORS’ COMPENSATION

 

The
Corporate Governance Committee of the Board of Directors discharges the Board’s
responsibilities relating to compensation of directors.  Compensation
of directors is reviewed by the Corporate Governance Committee annually at its April meeting
and is approved by the Board.  No
compensation is paid to employee directors for their service as directors.

 

The
Corporate Governance Committee has engaged Towers,
Perrin, Forster & Crosby, Inc. (“Towers Perrin”), an external
human resources consulting firm, to conduct an annual review of the
total compensation for outside directors. 
Specifically, retainer fees, meeting
fees, stock-based long-term incentives and insurance were evaluated using, as
the competitive benchmark, levels of total compensation paid to directors of 30
energy companies (consisting of Vectren Corp. and the 29 companies constituting
the Long Term Peer Group (as defined under the caption “Peer Groups Define
Competitive Levels of Performance” under “Executive Compensation”)), and 20
general industry companies of comparable revenue and equity capitalization size
(consisting of Toll Brothers Inc., 
Sovereign Bancorp Inc., Teleflex Inc., Harsco Inc., Airgas Inc., Analog
Devices Inc., Pep Boys-Manny Moe & Jack (The), Bausch & Lomb
Inc., FMC Corp., Cabot Corp., Hercules Inc., Ann Taylor Stores Corp., Iron
Mountain Inc.,  Dow Jones and Co. Inc.,
Ametek Inc., Carpenter Technology Corp., Erie Indemnity Company, Covance Inc.,
Tektronix Inc., and Reynolds and Reynolds Co.). 
Set forth below is a description of the 2007 compensation of the company’s
non-employee directors.

 

Cash Compensation

 

·                  An
annual cash retainer of $30,000 is paid on a quarterly basis.

·                  The
cash meeting fee is $1,500 for each Board and committee meeting attended in
person.  If a director participates in a
meeting by telephone, the meeting fee is $750. 
An additional $500 is paid to each committee chair ($1,500 for the Audit
Committee Chair) for each meeting of his or her committee that the chair attends.

 

Equity-Based Compensation

 

·                  In
2003, the company began granting to each director stock units that vested upon
award and that are payable on a deferred basis under the directors’ deferred
compensation plans.  In 2007, a grant of
1,730 deferred stock units was awarded to each non-employee director.  The deferred stock units are awarded by the
Board annually at the April Board meeting upon the recommendation of the
Corporate Governance Committee.  Each
deferred stock unit is equal in value to one share of company common stock, but
does not have voting rights.  Dividends
are credited quarterly in the form of additional stock units.  The value of the stock units will be paid in
cash on the earlier of the director’s death or termination of service as a
director.

·                  The
non-employee directors are subject to stock ownership guidelines which require
them to hold shares (or share equivalents, including deferred stock units) with
a value equal to at least two times the annual cash retainer.  Under the guidelines, directors have up to
two years to acquire a sufficient number of shares (or share equivalents,
including deferred stock units) to meet this requirement.  

 

 

All of
the company’s non-employee directors meet this share ownership requirement.

 

Deferred Compensation

 

·                  The
company has a deferred compensation plan for non-employee directors.  In addition to the automatic deferral of
stock units awarded, non-employee directors may elect to defer up to 100% of
their annual retainer and fees into the 2005 Directors’ Deferred Compensation
Plan and receive an investment return on the deferred funds as if the funds
were invested in company stock or permitted mutual funds.  Prior to the deferral, plan participants must
irrevocably elect to receive the deferred funds either in a lump sum or in
equal installments.  Distributions
commence following termination of service as a director.  The directors’ deferred compensation accounts
are unsecured obligations of the company. 
The company has taken steps to provide that the 2005 Directors’ Deferred
Compensation Plan is operated in compliance with Section 409A of the Code
and intends to meet documentary requirements by the relevant compliance
deadline. Ms. Jeremiah, Mr. Miles and Mr. Whalen deferred fees
under the plan in 2007, and they and other directors have participated in prior
years.  The pre-existing Directors’
Deferred Compensation Plan continues to operate for the sole purpose of
administering amounts vested under the plan on or prior to December 31,
2004.

 

Other

 

·                  To
further the company’s support for charitable giving, all directors are eligible
to participate in the Matching Gifts Program of the Equitable Resources
Foundation, Inc. (the “Equitable Foundation”) on the same terms as company
employees.  Under this program, the
Equitable Foundation will match gifts of at least $100 made by the director to
eligible charities, up to an aggregate total of $10,000 in any calendar year.

·                  Non-employee
directors who joined the Board prior to May 25, 1999 may designate a civic,
charitable or educational organization as beneficiary of a $500,000 gift funded
by a life insurance policy purchased by Equitable Resources.  The directors do not receive any financial
benefit from this program because the charitable deductions accrue solely to
the company.

·                  The
company reimburses directors for their travel and related expenses in
connection with attending Board meetings and Board-related activities.  The company also provides non-employee
directors with $20,000 of life insurance and $250,000 of travel accident
insurance while traveling on business for the company.

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