Document:

EX-10.1

 

Exhibit 10.1

November 16, 2006

Mr. Matthew D. Cabell

19 Glen Eagles Drive

Sugar Land, TX 77479

Dear Mr. Cabell:

We are pleased to offer you a position as President of Seneca Resources Corporation (“Seneca”) on
the terms and conditions set forth below. Your employment commencement date will be December 11,
2006 (the “Commencement Date”). In this capacity, you will report to the President of National
Fuel Gas Company (“National Fuel”).

Compensation

 Salary. You will receive a base salary at the rate of $425,000 per annum. Your
salary will be paid in accordance with our standard payroll practices for senior officers. Your
base salary will be subject to periodic review, in accordance with the policies generally
applicable to senior officers of National Fuel.

Commencement Bonus. As an inducement for you to accept this offer on the terms and
conditions set forth herein, on or as soon as practicable (but not more than 20 business days)
after the Commencement Date, you will receive a commencement bonus in cash in the amount of
$150,000.

Incentive Compensation. In addition to base salary, commencing with fiscal 2007, you will
be eligible to participate in an annual bonus plan that will provide you with the opportunity to
receive incentive compensation targeted at 65% of your annual base salary, subject to the
achievement of the applicable performance measurements. You will have the opportunity to receive
up to 130% of your annual base salary upon achievement of the applicable performance measurements
at maximum levels. We anticipate that the performance standards upon which your bonus will be
determined will include: (1) finding and development cost; (2) lease operating expenses and general
administrative expenses; (3) average return on capital; (4) production volume and (5) reserve
replacement. The performance measures for any given year will be established in accordance with
our generally applicable practices for establishing bonus criteria for senior officers. Payment of
any annual bonus will be made at the same time as bonuses are paid to other senior officers
(expected to be no later December 31), and is generally contingent

 

 

Mr. Matthew D. Cabell

November 16, 2006

Page 2

upon your continued employment through the end of the fiscal year, except to the extent otherwise
provided under our generally applicable policies and practices in the event of certain
terminations, such as death.

Long-Term Incentive Compensation.  If the Compensation Committee determines to establish a
performance condition under the Company’s Performance Incentive Program for the 2007-2009
performance period, management will recommend you to participate in such program on the same terms
and conditions as are generally applicable to our other senior officers, with a target incentive
opportunity for such program equal to 65% of your annual base salary. Your right to receive any
payment with respect to any such award will be subject to the achievement of the applicable
performance measurements established under such program and to the terms of that program.

Restricted Stock Grant. On or about the Commencement Date, you will be granted an award of
15,000 shares of restricted stock. The form of award letter to be issued for this grant is
attached at Exhibit A. The remaining terms and conditions of such award will be substantially the
same as are applicable to similar awards made to other senior officers of National Fuel and its
subsidiaries. This grant will be made pursuant to National Fuel’s 1997 Award and Option Plan (the
“1997 Plan”), and shall be subject to the terms and conditions thereof.

Stock Option Grant. On or about the Commencement Date, you shall also be granted an option
to purchase 100,000 shares of the common stock of National Fuel, at an exercise price per share
equal to the fair market value thereof on the date of grant, as determined in accordance with the
terms of the 1997 Plan. The form of award letter to be issued for this grant is attached at
Exhibit B. The remaining terms and conditions of such award will be substantially the same as are
applicable to similar awards made to other senior officers of National Fuel and its subsidiaries.
This option will also be granted pursuant to 1997 Plan, and shall be subject to the terms and
conditions thereof.

Benefits

Generally. You will be eligible to participate in our Retirement Savings Plan and the
applicable 401(k) plan, as well as Seneca’s life insurance and disability insurance benefits
programs on the same terms and conditions (including, without limitation, employee contributions
and subject to any applicable services requirements), as are generally applicable to covered
employees in the United States.

Executive Medical Plan. Subject to your making the required employee contributions
thereto, you will also be eligible to participate in our executive medical plan, on the terms and
conditions generally applicable to participants in such plan. The executive plan provides to
select executives of National Fuel and its affiliated companies enhanced medical benefits as
compared to the plans available generally to our employees.

 

 

Mr. Matthew D. Cabell

November 16, 2006

Page 3

Top Hat Plan. Because your eligible compensation will exceed the amount that may be taken
into account under our qualified plans due to Internal Revenue Code limitation, you will be
eligible to participate in our “Top Hat” plan, which provides supplemental benefits that replicate
the benefits that would have otherwise been provided under the applicable qualified plans but for
the application of such Internal Revenue Code provisions.

Perquisites. You will be provided membership in the Petroleum Club and Downtown Athletic
Club. You will also be afforded a company provided parking space.

Vacation. You will receive annual vacation benefits in accordance with our generally
applicable plans and policies for senior officers, except that you shall have the right to four
weeks of vacation commencing in calendar year 2007 and thereafter.

Change of Control Benefits. On or shortly following the Commencement Date, we will make
available to you a change of control agreement that is substantially in the form attached at
Exhibit C.

Conditions of Employment 

This offer is also contingent upon compliance with our standard employment practices with respect
to newly hired employees. You must also complete and return a W-4 prior to the Commencement Date.

Your employment is also conditioned upon your ongoing compliance with our applicable policies
(including, without limitation, our Code of Business Conduct and Ethics), as the same may be
amended from time to time.

Any and all payments of compensation and the provision of benefits in accordance with this offer
letter will be subject to all applicable federal, state and local income, employment and other tax
withholding requirements.

Confidentiality. In the course of your services, you have or will create, develop, learn
of or receive non-public information, ideas, processes, methods, designs, devices, inventions,
data, models and other information relating to the Seneca and/or National Fuel and their respective
subsidiaries and affiliates and their products, services, businesses, operations, employees or
customers, and that we desire to protect and keep secret and confidential, including trade secrets
and information from third parties that we are obligated to keep confidential (“Confidential
Information”). Confidential Information shall not include: (i) information that is or becomes
generally known to the public through no fault of your own, (ii) information received from a third
party that was disclosed without a breach of any confidentiality obligation; or (iii) information
approved for release by written authorization of National Fuel. You recognize that all such
Confidential Information is the sole and exclusive property of Seneca and/or National

 

 

Mr. Matthew D. Cabell

November 16, 2006

Page 4

Fuel, and that disclosure of Confidential Information would cause damage to them. You agree that,
except as required in the performance of your duties or if compelled by a court or governmental
agency, provided that you give us prior written notice of any action to compel disclosure, you will
not willfully disseminate or otherwise disclose, directly or indirectly, any Confidential
Information obtained during your employment, and will take all necessary precautions to prevent
disclosure, to any unauthorized individual or entity, and will not use the Confidential Information
or permit its use for your own benefit or that of any other person or entity other than Seneca,
National Fuel and their respective subsidiaries and affiliates. These obligations shall continue
during and after the termination of your employment.

Intellectual Property. As an employee, you will disclose immediately to National Fuel all
ideas, inventions and business plans that you make, conceive, discover or develop alone or with
others during the course of your employment, including any inventions, modifications, discoveries,
developments, improvements, computer programs, processes, products or procedures (whether or not
protectable upon application by copyright, patent, trademark, trade secret or other proprietary
rights) (“Work Product”) that: (i) relate to the business of National Fuel or any customer or
supplier to National Fuel or any of the products or services being developed, manufactured, sold or
otherwise provided by National Fuel or that may be used in relation therewith; (ii) result from
tasks assigned to you; or (iii) result from the use of the premises or personal property (whether
tangible or intangible) owned, leased or contracted for by National Fuel, its subsidiaries or
affiliates. You agree that any Work Product shall be the property of National Fuel and, if subject
to copyright, shall be considered a “work made for hire” within the meaning of the Copyright Act of
1976, as amended (the “Act”). If and to the extent that any such Work Product is found as
a matter of law not to be a “work made for hire” within the meaning of the Act, you expressly
assign to National Fuel all right, title and interest in and to the Work Product, and all copies
thereof, and the copyright, patent, trademark, trade secret and all their proprietary rights in the
Work Product, without further consideration, free from any claim, lien for balance due or rights of
retention thereto on your part. You also agree that, during your employment and at any time
thereafter, at our request and cost, you will execute all such documents and perform all such acts
as we may reasonably require: (i) to apply for, obtain and vest in the name of National Fuel alone
(unless National Fuel otherwise directs) letters patent, copyrights or other analogous protection
in any country throughout the world, and when so obtained or vested to renew and restore the same;
and (ii) to defend any opposition proceedings in respect of such applications and any opposition
proceedings or petitions or applications for revocation of such letters patent, copyright or other
analogous protection. In the event that we are unable, after reasonable effort, to secure your
signature on any letters patents, copyright or other analogous protection relating to Work Product,
for any other reason whatsoever, you hereby irrevocably designate and appoint National Fuel and its
duly authorized officers and agents as your agent and attorney-in-fact, to act for and on your
behalf to executive and file any such application or applications and to do all other lawfully
permitted acts to further the prosecution and issuance of letters patent, copyright and other
analogous protection with the same legal force and effect as if personally executed by you.

 

 

Mr. Matthew D. Cabell

November 16, 2006

Page 5

* * * *

We are excited about the prospect of your joining our executive management team and all of us at
National Fuel look forward to the opportunity to work with you.

Please sign below to signify your acceptance of our offer of employment and its terms. Should you
have any questions with regard to any of the items indicated above, please call me.

Sincerely,

/s/ Philip C. Ackerman

Philip C. Ackerman

AGREED AND ACCEPTED:

	 	 	 	 	 	 	 
	  /s/ M. D. Cabell
 

	 	 
	 	  11/17/06
 

DateEX-10.2

 

Exhibit 10.2

[Date]

 

[Name]

[Address]

[Address]

 

Dear [Name]:

     The Compensation Committee (“Committee”) of the Board of Directors of National Fuel Gas
Company (“NFG”) awarded to you (the “Grantee”), on [date], [number] shares of NFG Common
Stock (“Common Stock”) subject to the restrictions set out herein (“Restricted Stock”). This
award is made subject to the terms of the National Fuel Gas Company 1997 Award and Option
Plan, as amended (the “Plan”), and the administrative rules concerning the Plan that have
been adopted by the Committee (“Rules”), both of which are fully incorporated herein by
reference, and to the terms and conditions of this letter agreement.

     The Restricted Stock will be issued in the Grantee’s name but the Restricted Stock
certificate(s) will be held by NFG for the account of the Grantee, together with stock powers
that the Grantee shall execute in favor of NFG, until such time as restrictions shall lapse.
Grantee hereby agrees to execute said stock powers in favor of NFG (and any other documents
that NFG may reasonably require in connection with this Restricted Stock) as a condition to
receiving the Restricted Stock.

     RESTRICTIONS

     The Restricted Stock shall be subject to vesting restrictions as follows:

     Until [three years after date of grant], the Restricted Stock is subject to forfeiture,
except to the extent vesting restrictions lapse as provided herein. The Grantee will forfeit
to NFG his Restricted Stock if his employment with NFG and its subsidiaries shall terminate
for any reason prior to the expiration of vesting restrictions on such stock, unless such
termination is on account of death or termination by NFG without just cause. For purposes of
this letter agreement, “just cause” means (i) failure to comply with Company policies on
hedging, financial reporting, accurate accounting, disclosure of information about the
Company, or regulatory compliance; (ii) fraud, misconduct, or dishonesty related to your
employment; (iii) illegal conduct amounting to a misdemeanor or felony; or (iv) the willful
and continued failure to substantially perform your duties with the Company after written
warnings specifically identifying the lack of substantial performance are delivered to you by
the Company. In the event of either your termination by NFG without just cause or your death
before [three years after date of grant], all restrictions shall lapse on the date

 

 

[Name]

[Date}

Page 2

of death or termination without just cause. Until and to the extent such Restricted Stock
has vested, it may not be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of, except by will or the laws of descent and distribution.

     The restrictions on vesting of the Restricted Stock awarded herein shall lapse on [three
years after date of grant]. Notwithstanding the above provisions, the Committee, in its sole
discretion, may at any time or from time to time relax or remove any vesting or other
restrictions on the Restricted Stock in accordance with the terms of the Plan.

     ADJUSTMENT

     In the event that, as a result of a stock dividend, stock split, recapitalization,
combination of shares or other adjustment in the capital stock of NFG or otherwise, or as a
result of a merger, consolidation or other reorganization, the Common Stock shall be
increased, reduced or otherwise changed, and by virtue of any such change the Grantee shall,
in his capacity as owner of Restricted Stock, be entitled to new or additional or different
shares of stock or securities (other than rights or warrants to purchase securities)
(“Adjustment Shares”), the certificates representing the Adjustment Shares, together with a
stock power executed by the Grantee in favor of NFG, shall also be delivered to and held by
NFG. Any Adjustment Shares shall be Restricted Stock for all purposes of this Agreement,
subject to the same restrictions as were applicable to the Restricted Stock to which they
relate.

     RIGHTS AND WARRANTS

     If the Grantee shall receive rights or warrants in respect of any Restricted Stock or
any Adjustment Shares, such rights or warrants may be held, exercised, sold or otherwise
disposed of by the Grantee, and any shares or other securities acquired by the Grantee as a
result of the exercise of such rights or warrants likewise may be held, sold or otherwise
disposed of by the Grantee free and clear of any restrictions.

     MISCELLANEOUS

     Except for the restrictions contained in this letter agreement and the Plan, the Grantee
shall have all rights of a shareholder, including the right to vote and receive cash
dividends as and when paid.

     The Grantee, by accepting this award, represents to NFG that he is acquiring the shares
of Restricted Stock for investment and not with a view to distribution, and the Grantee will
not sell or otherwise dispose of such shares unless such shares are registered under
applicable federal and state securities laws or the Grantee furnishes NFG an opinion of
counsel, satisfactory to NFG, to the effect that such sale or disposition is exempt from the
Registration requirements of such laws.

 

 

[Name]

[Date}

Page 3

     Certificates representing shares of Restricted Stock may bear a legend reflecting the
provisions of this agreement.

     This letter agreement shall be binding upon an inure to the benefit of NFG and the
Grantee and their respective successors and legal representatives.

     Nothing in the Plan or this letter agreement gives Grantee any right to continue in the
employment of NFG or its subsidiaries.

     This letter agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and may not be modified, amended, renewed or terminated, nor may
any term or condition or breach of any term or condition be waived, except by a writing
signed by the person or persons sought to be bound by such modification, amendment, renewal,
termination or waiver. Any waiver of any term or condition or breach thereof shall not be a
waiver of any other term or condition or of the same term or condition for the future or of
any subsequent breach.

     This letter agreement shall be governed, construed and enforced in accordance with the
Plan and with the laws of the State of New York.

     In the event of the invalidity of any part or provision of this letter agreement, such
invalidity shall not affect the enforceability of any other part or provision hereof.

     If the foregoing is acceptable to you, kindly acknowledge your acceptance by signing
both copies of this letter and returning one to Anna Marie Cellino.

	 	 	 	 	 
	 	 	Very truly yours,

	 	 	NATIONAL FUEL GAS COMPANY

	 

	 	By:
	 	 

 

P. C. Ackerman

Chairman and Chief Executive Officer

	ACCEPTED AND AGREED TO

this ________ day of ______________________________, ___.

	 	 	 	 
	 

Grantee

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