Document:

Exhibit 10.2

 

EQUITABLE
RESOURCES, INC.

2003 SHORT-TERM INCENTIVE PLAN

 

EQUITABLE RESOURCES, INC. (the “Company”) hereby
establishes this EQUITABLE RESOURCES, INC 2003 SHORT-TERM INCENTIVE PLAN (the
“Plan”) as of this 1st day of January, 2003, in accordance with the terms
provided herein.

 

WHEREAS, the Company has maintained the 2002
Short-Term Incentive Plan for the benefit of its employees; and

 

WHEREAS, the Company desires to amend the 2002
Short-Term Incentive Plan and restate the structure of its incentive programs
through the Plan which describes the goals of the Company and the methodology
for awarding incentive amounts under the programs described within the Plan;
and

 

NOW, THEREFORE, the Company hereby adopts the terms of
the Plan as follows:

 

Section 1.  Incentive Program Purposes.  The Company’s main purposes in providing the
incentive programs described within the Plan (collectively, the “Incentive
Programs”) are to maintain a competitive level of total cash compensation and
to align the interests of the Company’s employees with those of the Company’s
shareholders, customers, and with the strategic objectives of the Company.  By placing a portion of employee
compensation at risk, the Company can reward performance based on the overall
performance of the Company, the business segment and the individual
contribution of each employee.

 

Section 2.  Effective Date.  The effective date of this Plan is
January 1, 2003.  The Plan will
remain in effect from year to year (each calendar year shall be referred to
herein as a “Plan Year”) until formally amended or terminated in accordance
with Section 17.

 

Section 3.  Eligibility.  Specific eligibility requirements for each
Incentive Program shall be proposed by the President of each business segment
or corporate officer, as applicable, and approved by the Company’s Vice
President-Human Resources.  Based upon
such eligibility requirements, the Company’s Vice President-Human Resources or
the Company’s Director of Compensation and Benefits, as applicable, may designate
any eligible employee for participation in the Plan in his or her complete and
sole discretion.  Eligible employees who
are designated to participate in an Incentive Program will be notified in
writing of their participation and given a Plan document for their reference.

 

Section 4.  Administration of the Plan.  The Equitable Resources Headquarters
Short-Term Incentive Program (the “Headquarters Incentive Program”), and any
other Incentive Program that covers the officers of the Company, shall be
administered by the Compensation Committee of the Board of Directors (the
“Committee”).  The Company’s Director of
Compensation and Benefits shall administer all other Incentive Programs under
the general direction of the Company’s Vice President-Human Resources; provided,
however, that the Committee shall at all times retain the discretion with
respect to all Incentive Programs to reduce, eliminate, substitute or determine
the source of any payment or award hereunder without regard to any particular
factors specified in the Plan.  On an
annual basis, the Committee must review and approve (a) the Plan, (b) the
Headquarters Incentive Program, and other Incentive Programs covering officers
of the Company, (c) the Incentive Targets, as defined in Section 8 of the
Plan, for officers of the Company, (d) the methodology for determining the
incentive pools, including the Financial Measures and the Value Drivers, as
defined in Section 7 of the Plan, and (e) the projected payout under the
Plan and under each Incentive Program. 
The Committee must also review and approve all incentive payments under
the Headquarters Incentive Program and 

 

 

other Incentive Programs covering officers of the
Company, as well as any proposed amendments to the Plan throughout the Plan
Year.

 

Section 5.  Incentive Programs.  The following Incentive Programs shall be
administered under the Plan:

 

•                  Equitable Resources Headquarters
Short-Term Incentive Program;

•                  Equitable Utilities Short-Term
Incentive Program;

•                  Equitable Production Short-Term Incentive
Program; and

•                  NORESCO Short-Term Incentive Program.

 

Section 6.  Definitions.  The following provides the definition of
certain Financial Measures, defined in Section 7 of the Plan, as may be
used in the Incentive Programs:

 

(a)                                  Net
Income After Tax.  Net Income After
Tax, if used in the Headquarters Incentive Program, is calculated as follows:

 

Total Revenue of the Company minus
Total Expenses of the Company for the Plan Year.

 

For purposes of
the foregoing calculation, Total Revenue shall mean revenue from continuing
operations.  Income from unusual items,
as determined by the Company’s Chief Financial Officer, will be excluded.  Expenses shall include interest, taxes,
corporate overhead and the accrual charge for the Incentive Program
funding.  Expenses from unusual items,
as determined by the Company’s Chief Financial Officer, will be excluded.  The Company’s Chief Financial Officer is
responsible for determining this Financial Measure under the general direction
of the Committee.

 

Net Income After
Tax, if used in all other Incentive Programs, is calculated as follows:

 

Total Revenue of the applicable
business segment minus Total Expenses of the applicable business segment for
the Plan Year.

 

For purposes of
the foregoing calculation, the same methodology described above is used, except
that the following process shall apply for calculating the expenses associated
with business segment interest and taxes:

 

Pro forma
financials below the business segment “Earnings before Interest and Taxes” line
will be used.  For purposes of
calculating interest and taxes, the business segment’s capital structure, tax
rate, and interest rate will be fixed at the capital structure, tax rate and
interest rate reflected in the respective business segment’s final business
plan for such Plan Year.  Interest will
be determined by multiplying 1) the predetermined interest rate, by
2) the predetermined percentage debt in the capital structure and
3) the 12-month average actual total capital employed during the
year.  Taxes will be determined by
multiplying the predetermined effective tax rate by the business segment’s
pre-tax income and then deducting a predetermined amount of investment tax
credit amortization.  This calculation
will be completed by the President of the respective business segment and
submitted to the Company’s Chief Financial Officer for review and
approval.  The Company’s Chief Financial
Officer will determine, for purposes of

 

 

 

the Plan, the
final business segment Net Income After Tax under the general direction of the
Committee.

 

(b)                                 Return
on Total Capital.  The Company’s
Return on Total Capital is calculated as follows:

 

Net Income After Tax + (Interest x (1
– Effective Tax Rate))

(Short and Long Term Debt + Preferred Stock + Book Equity)

 

For purposes of
the foregoing calculation, all factors in the denominator shall be calculated
by determining each specific factor at the end of each of the four quarters of
the Plan Year and at the end of December of the previous year.  The average of those five numbers shall be
the value used for each factor.  The
Company’s Chief Financial Officer is responsible for determining this Financial
Measure under the general direction of the Committee.

 

(c)                                  Earnings
per Share Growth Rate.  The
Company’s Earnings per Share Growth Rate is calculated as follows:

 

The positive difference between the Company’s actual
earnings per share for the Plan Year and the year immediately preceding the
Plan Year, divided by the Company’s earnings per share for the year immediately
preceding the Plan Year.

 

For purposes of
the foregoing calculation, actual earnings per share shall be as reported in
the Company’s published financial statements for the subject year on a
fully-diluted basis; provided, however, that any changes in tax laws, the
effects of acquisitions and extraordinary items as defined by generally
accepted accounting principles, including divestitures and Financial Accounting
Standards Board accounting changes, may be excluded in the discretion of the
Company’s Chief Financial Officer under the general direction of the Committee.

 

(d)                                 Total
Shareholder Return.  The Company’s
Total Shareholder Return (“TSR”) is calculated as follows:

 

(B + C)
– A

A

 

For purposes of
the foregoing calculation:

 

A is the average
closing price of the Company’s common stock for the first ten trading days of
the Plan Year.

 

B is the average
closing price of the Company’s common stock for the last ten trading days of
the Plan Year.

 

C is the dividends
paid on the Company’s common stock in the plan year.

 

The Company’s
Chief Financial Officer is responsible for determining this Financial Measure
under the general direction of the Committee.

 

 

 

(e)                                  Peer
Group.  The Committee will establish
a Peer Group for purposes of peer comparative performance measures used in the
Plan.  This Peer Group is listed in
Attachment A.  Any changes to the Peer
Group must be approved by the Committee.

 

Section 7.  Determination of Incentive Pools.

 

(a)                                  All
Incentive Programs provide for incentive payments that are funded based on
incentive pools.  An incentive pool is
created for each Incentive Program.  The
base amount of each incentive pool shall be determined by the extent to which
one or more specific and defined financial measures (the “Financial Measures”)
are achieved for the Plan Year.  One or
more additional, defined operational measures (“Value Drivers”) may affect the
determination of the incentive pools, in the discretion of the Company’s Chief
Executive Officer (the “CEO”).  The
Value Drivers for each of the incentive pools are attached hereto as
Attachment B.

 

(b)                                 The
following chart provides the specific Financial Measures for each of the
Incentive Programs.

 

	
  Incentive Program

  	
   

  	
  Financial Measures

  	
   

  
	
  Equitable Resources Headquarters

  	
   

  	
  •     Return
  on Total Capital

  (Peer Comparison)

  •     Earnings
  per Share Growth Rate

  (Peer Comparison)

  •     Earnings
  per Share Growth Rate

  (EQT Year to Year Comparison)

  	
   

  
	
  Equitable Utilities

  	
   

  	
  Net Income After Tax

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equitable Production

  	
   

  	
  Net Income After Tax

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NORESCO

  	
   

  	
  Net Income After Tax

  	
   

  

 

(c)                                  Each
incentive pool is determined based on the Financial Measures listed above, any
minimum threshold amounts established therefor, and, if applicable, the Value
Drivers, in accordance with the weightings assigned to each as listed on
Attachment C.  Attachment D to this
Plan specifies the base amount for each incentive pool, expressed as a multiple
of the total of all Incentive Targets, as defined in Section 8 of the
Plan, of those participants in each particular Incentive Program.  The CEO may, in his sole and absolute
discretion, adjust the determination of the base amount of any business segment
incentive pool (i) by any amount up to fifty (50%) percent based on the Value
Drivers applicable to the particular business segment incentive pool and (ii) by
an amount up to twenty-five percent (25%) based on the impact of weather, the
prices of gas, oil and liquids, and/or any acquisitions or divestitures.  The Committee may, in its sole and absolute
discretion, adjust the determination of the base amount of the Headquarters
Incentive Program by an amount of up to twenty-five percent (25%) based on the
impact of weather, the prices of gas, oil and liquids, acquisitions or
divestitures and any peer group or performance factors determined by the  Committee.  Such adjustments by the CEO or the Committee
may be either positive or negative.

 

 

 

Section 8.  Incentive Targets.  Each participant under the Plan shall be
given an incentive target (an “Incentive Target”) that shall be determined
based on market competitive levels. 
Incentive Targets for all corporate officers shall be determined within
90 days of the commencement of each Plan Year and approved by the
Committee.  All other Incentive Targets
shall be determined within 90 days of the commencement of each Plan Year by the
Company’s Director of Compensation and Benefits, in consultation with the
appropriate business segment President or corporate officer, as applicable, and
approved by the Company’s Vice President-Human Resources.  Actual incentive awards payable (“Incentive
Awards”), subject to adjustments as provided in the Plan, shall be based on the
overall determination of the incentive pools and on individual performance.

 

Section 9.  Performance Goals.

 

(a)                                  Each
participant shall have specific performance goals (the “Performance Goals”)
determined for his or her position for the subject Plan Year.  These Performance Goals must support the
approved business plan of the Company, affiliate or business unit, as applicable,
and should identify how the participant will support any specific Value Drivers
established.

 

(b)                                 A
copy of each participant’s Performance Goals and objectives shall be determined
in writing, and kept on file with the appropriate business segment Human
Resources Department, by February 28 of the Plan Year to which they
relate.

 

(c)                                  Following
the determination of the incentive pools as described in Section 7, an
evaluation of each participant’s actual performance relative to his or her
individual Performance Goals for the Plan Year shall be completed.  Performance can be rated as Exceptional,
Successful or Lower 10%.  The definition
of each rating is as follows:

 

	
  Performance
  Level

  	
   

  	
  Performance Definition

  
	
   

  	
   

  	
   

  
	
  Exceptional

  	
   

  	
  Performance consistently exceeds established
  expectations.  Performance at this
  level creates new standards of performance.

  
	
   

  	
   

  	
   

  
	
  Successful

  	
   

  	
  Performance meets and often exceeds established
  performance expectations.

  
	
   

  	
   

  	
   

  
	
  Lower 10%

  	
   

  	
  When compared to other employees in the business
  unit/function, performance is in the lower  10% of the business unit/function.  For purposes of this rating, performance is relative to other
  similarly-situated employee’s performance.

  

 

Based on the evaluation of the employee’s performance
relative to his or her Performance Goals, individual performance adjustments
can be made by the business segment President or appropriate corporate officer,
as applicable, ranging from elimination of the Incentive Target to 150% of the
Incentive Target.  The CEO must approve
all individual performance adjustments under the Plan and may make individual
performance adjustments in excess of 150%.

 

 

 

Section 10.  Distributing the Incentive Pool.  Incentive Awards may be earned based on the
determination of the incentive pools and individual performance as follows:

 

(1)                                  The
incentive pool is determined as described in Section 7.  If the established Financial Measures for
the incentive pool are not achieved, the process to calculate Incentive Awards
for the related Incentive Program is terminated.

 

(2)                                  The
performance of each employee is reviewed by the business segment President or
appropriate corporate officer, as applicable, and the individual performance
adjustment described in Section 9, if any, is applied as appropriate to
the employee’s original Incentive Target.

 

(3)                                  The
Incentive Targets for each employee within an incentive pool, after giving
effect to the individual performance adjustments described in Section 9,
are totaled.  Each employee’s adjusted
Incentive Target is then calculated as a percent of the total adjusted
Incentive Targets for all employees within the incentive pool.

 

(4)                                  The
percent assigned to each employee in step 3 is multiplied by the total
incentive pool generated, resulting in the amount of the employee’s actual
Incentive Award payable, subject to reduction, elimination or substitution by
the Committee as provided in Section 4.

 

(5)                                  Additional
or substituted distributions, if any, may be paid in cash or other forms from
the Plan or other source as determined by the Committee, in its discretion.

 

Except as provided in Sections 10(5), 11 and 14
of the Plan, the amount of the Incentive Awards payable from the Plan, as
calculated in Section 10(4), above, shall be paid in cash to participants
as promptly as practicable following the end of a Plan Year and after
determination of the incentive pools and the achievement of the Performance
Goals.  An Incentive Award shall not be
earned and a participant shall have no vested interest or entitlement to any
Incentive Award hereunder prior to its actual payment.

 

Section 11.  Incentive Pool Calculation and
Distribution for Selected Employees.

 

(a)                                  Employees
who directly report to the CEO or those who are Chief Operating Officers of the
Company’s business segments will have eighty percent (80%) of their Incentive
Award tied to the performance of the Headquarters Incentive Program incentive
pool and twenty percent (20%) of their Incentive Award tied to the performance
of their specific business segment incentive pool.  Employees who directly report to Chief Operating Officers of the
Company’s business segments will have twenty percent (20%) of their Incentive
Award tied to the performance of the Headquarters Incentive Program incentive
pool and eighty percent (80%) of their Incentive Award tied to the performance
of the appropriate business segment incentive pool.

 

(b)                                 In
accordance with the Company’s Stock Ownership guidelines adopted on
January 30, 2003, the CEO may elect to pay all or some of an individual’s
Incentive Award in stock if the individual has not satisfied the guideline.

 

Section 12.  Impact on Benefit Plans.  Payments under the Plan shall not be
considered as earnings for purposes of the Company’s qualified retirement plans
or any such retirement or benefit plan unless specifically provided for and
defined under such plans.

 

 

 

Section 13.  Tax Consequences.  It is intended that nothing in the Plan
shall change the tax consequences of the Plans under Federal or State law and
specifically shall not cause the participants in the Incentive Programs to be
taxed currently under the Constructive Receipt or Economic Benefit Doctrines
and as expressed in Sections 451 and 83 of the Internal Revenue Code of 1986,
as amended.

 

Section 14.  Change of Status.  In making decisions regarding employees’
participation in the Plan, the Company’s Vice President-Human Resources or
Director of Compensation and Benefits, as applicable, may consider any factors
that he or she may consider relevant in their sole discretion .  The Company shall have no obligation to exercise
its discretion to make an award to any employee affected by the described
status changes.  The following
guidelines are provided as general information regarding employee status
changes upon the occurrence of the events described below, provided that the
recommendation to include an employee in the Plan must originate from the
business segment President or appropriate corporate officer, as applicable:

 

(a)                                  New
Hire, Transfer, Promotion.  A newly
hired employee will participate in the Plan Year following the year in which
they are hired, unless otherwise specified in their employment offer.  An employee who is promoted or transferred
during the Plan Year to a position qualifying for participation may
be recommended for a pro rata Incentive Award based on the level of
participation in his or her previous program and the percentage of the Plan
Year the employee is in the participating position.  This includes employees who leave positions that qualify for
incentive payments in other Company business segments.

 

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

 

 (c)                               Termination.  No Incentive Award shall be paid to any
employee whose services are terminated prior to payment of an Incentive Award
for reasons of misconduct, failure to perform, or other cause.  If the termination is due to reasons such as
reorganization, and not due to the fault of the employee, the employee may
be considered for a pro rata Incentive Award, provided the employee
otherwise qualifies for payment of an Incentive Award.

 

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

 

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

 

Nothing in the Plan, in any Program or in any
Incentive Target or Incentive Award shall confer any right on any employee to
continue in the employ of the Company.

 

 

 

Section 15.  Change of Control.  In the event of a Change of Control of the
Company, as then defined under the Company’s 1999 Long-Term Incentive Plan,
Incentive Awards shall be paid, on a pro-rata basis for the portion of the Plan
Year elapsed through the date of the Change of Control, to all Plan
participants as if the target Financial Measures and Value Drivers were
achieved and without adjustment to any individual Incentive Targets, but subject
to the Committee’s overall discretion as provided in Section 4.  The pro-rata Incentive Awards payable
pursuant to the foregoing sentence shall be paid immediately prior to
consummation of such Change of Control or at such other time and subject to such
other conditions as the Committee shall in its sole discretion determine,
contingent upon consummation of such Change of Control.

 

Section 16.  Dispute Resolution.  The following is the exclusive procedure to
be followed by all participants in resolving disputes arising from
participation in and payments made under the Plan.  All disputes relative to a given Plan Year must be presented to
the Director of Compensation and Benefits within thirty (30) days following the
payment date of the Incentive Award for that Plan Year, or the participant’s
right to dispute a payment will be irrevocably waived.  Once the Director of Compensation and
Benefits has been notified of a dispute, he or she will assemble a Compensation
Review Committee (the “CRC”) to review the issue.  The CRC will consist of the following: the Director of
Compensation and Benefits, the manager of the employee with the dispute, the
human resources director or vice president of the business segment, and a peer
chosen by the employee with the dispute. 
The employee with the concern will be given an opportunity to present
his or her issues to the CRC.  A
decision will be rendered by the CRC within thirty (30) business days of the
meeting.  The Director of Compensation
and Benefits will be responsible for preparing a written version of the
decision.  This decision may be appealed
to the Vice President-Human Resources of the Company.  Appealed decisions will be reviewed by the Vice President-Human
Resources with information requested from the appropriate parties as he or she
may determine in his or her sole discretion. 
The decision made by the Vice President-Human Resources regarding the
matter is final and binding on all Plan participants.

 

Section 17. 
Amendment or Termination of this Plan.  The Company shall have the right to amend or
terminate the Plan at any time by written action approved by the Committee,
provided that any amendment or termination shall not affect any amounts
deferred into the Company’s Deferred Compensation Plan and that no employee or
participant shall have any vested right to payment of any Incentive Award
hereunder prior to its payment.  The
Company shall notify affected employees in writing of any amendment or Plan
termination.Exhibit 10(j)(ii)(b)

 

ALBANY
INTERNATIONAL RECEIVABLES CORPORATION

 

Albany International
Corp.

Geschmay Corp.

Albany International
Research Co.

Albany International
Techniweave, Inc.

Albany International
Canada Inc.

M & I Door Systems
Ltd.

 

Re:                               Second
Amendment to Exhibit A to Purchase and Sale Agreement dated As of September 28,
2001 (the “Agreement”), as previously amended Effective March 1, 2002

 

Ladies and Gentlemen:

 

The undersigned, Albany International Receivables
Corporation, as Buyer under the Agreement, hereby proposes to further amend
Exhibit A of the Agreement, pursuant to the terms of such Exhibit A as well as
Section 8.1 of the Agreement, as follows:

 

The
Historical Loss Factor, which was initially described as 0.6% of the Face
Amount of receivables sold to Buyer, and later amended to 0.1% of such amount,
is hereby amended to 0.4%.

 

These changes in pricing terms shall be effective as
of July 1, 2003.  Capitalized terms used
but not defined above shall have the meanings ascribed to them in the Agreement.

 

Please indicate your acceptance of the foregoing by
executing in the space provided below your name.

 

	
   

  	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ALBANY INTERNATIONAL

  RECEIVABLES CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David Michaels

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  David C. Michaels

  	
   

  
	
   

  	
   

  	
   

  	
  President &
  Treasurer

  	
   

  
						

 

 

	
  ACCEPTED BY:

  	
   

  
	
   

  	
   

  
	
  ALBANY INTERNATIONAL
  CORP.

  
	
   

  	
   

  
	
  By:

  	
  /s/

  	
  Charles J. Silva

  	
   

  
	
  Name:

  	
  Charles J. Silva, Jr.

  
	
  Title:

  	
  Vice President and
  General Counsel

  
	
   

  
	
   

  
	
  GESCHMAY CORP.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/

  	
  Charles J. Silva

  	
   

  
	
  Name:

  	
  Charles J. Silva, Jr.

  
	
  Title:

  	
  Vice President and
  Secretary

  
	
   

  
	
   

  
	
  ALBANY INTERNATIONAL
  RESEARCH CO.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/

  	
  Charles J. Silva

  	
   

  
	
  Name:

  	
  Charles J. Silva, Jr.

  
	
  Title:

  	
  Vice President

  
	
   

  
	
   

  	
   

  
	
  ALBANY INTERNATIONAL
  TECHNIWEAVE, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/

  	
  Charles J. Silva

  	
   

  
	
  Name:

  	
  Charles J. Silva, Jr.

  
	
  Title:

  	
  Secretary

  
	
   

  
	
   

  
	
  ALBANY INTERNATIONAL
  CANADA INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/

  	
  Edward Walther

  	
   

  
	
  Name:

  	
  Edward Walther

  
	
  Title:

  	
  President

  
								

 

2

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