Document:

Exhibit

10.16

 

CHANGE OF CONTROL AGREEMENT

 

THIS AGREEMENT (the “Agreement”) dated as of the 1st

day of September, 2002 (the “Effective Date”) is made by and between EQUITABLE

RESOURCES, INC., a Pennsylvania corporation with its principal place of

business at Pittsburgh, Pennsylvania (the “Company”), and GREGORY R. SPENCER,

an individual (the “Employee”);

 

WITNESSETH:

 

WHEREAS, the Company and the Employee are parties to a

Change of Control Agreement dated as of December 1, 1999, which provides for

the payment of certain benefits to the Employee if the Employee’s employment

terminates in certain circumstances following a change of control of the

Company (the “Existing Agreement”); and

 

WHEREAS, the Board of Directors of the Company (the

“Board”) continues to believe that it is in the best interest of the Company

and its shareholders to assure that the Company will have the continued

dedication of the Employee, notwithstanding the possibility, threat or

occurrence of a Change of Control (as defined below) of the Company; that it is

imperative to diminish the inevitable distraction of the Employee by virtue of

the personal uncertainties and risks created by a pending or threatened Change

of Control and to encourage the Employee’s full attention and dedication to the

Company currently and in the event of any threatened or pending Change of

Control; and that it is appropriate to provide the Employee with compensation

and benefits arrangements upon a Change of Control which ensure that the

compensation and benefits expectations of the Employee will be satisfied and

which are competitive with those of other corporations in the industry in which

the Company’s principal business activity is conducted; and

 

WHEREAS, in consideration of the compensation and

benefits payable to the Employee under this Agreement, the Company desires to

restrict the Employee from competing with the Company and from soliciting

customers and employees of the Company for one year following the termination

of the Employee’s employment within two years following a Change of Control,

and the Employee is willing to agree to such a restriction in consideration of

the compensation and benefits payable under this Agreement; and

 

WHEREAS, in order to accomplish the foregoing

objectives, the Company and the Employee desire to terminate the Existing

Agreement and to enter into this Agreement which, among other things, (i)

provides for the payment of compensation and benefits payable to the Employee

if the Employee’s employment terminates in certain circumstances following a

Change of Control of the Company, and (ii) restricts the Employee’s right to

compete with Company and to solicit customers and employees of the Company for

one year following such termination of employment;

 

NOW THEREFORE, in consideration of the premises and

mutual covenants contained herein, and intending to be legally bound hereby,

the parties hereto agree as follows:

 

1.                                       Term.  The term of this Agreement shall commence on

the Effective Date hereof and, subject to Sections 3(f), 5 and 8, shall

terminate on the earlier of (i) the date of the termination of Employee’s

employment by the Company for any reason prior to a Change

 

 

of Control; or (ii) unless further extended as

hereinafter set forth, the date which is thirty-six (36) months after the

Effective Date; provided, that, commencing on the last day of the first full

calendar month after the Effective Date and on the last day of each succeeding

calendar month, the term of this Agreement shall be automatically extended

without further action by either party (but not beyond the date of the

termination of Employee’s employment prior to a Change of Control) for one (1)

additional month unless one party provides written notice to the other party

that such party does not wish to extend the term of this Agreement.  In the event that such notice shall have

been delivered, the term of this Agreement shall no longer be subject to

automatic extension and the term hereof shall expire on the date which is thirty-six

(36) calendar months after the last day of the month in which such written

notice is received.

 

2.                                       Change

of Control.  Except as provided in

Sections 3(e)(viii) and Section 12, 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 the following

shall not constitute a Change of Control: 

(x) any acquisition by 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, (y) an acquisition by 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, (z) an

acquisition by any person or group of persons of not more than forty percent

(40%) of the outstanding shares of Company common stock or the combined voting

power of the then outstanding voting securities of the Company if such

acquisition resulted from the issuance of capital stock by the

 

2

 

Company and the issuance and the acquiring person or

group was approved in advance of such issuance by at least two-thirds of the

Continuing Directors then in office;

 

(c)                                  The

Company’s termination of its business and liquidation of its assets;

 

(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 (A) 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, or (B) any person or group that satisfied the

requirements of subsection (b)(y), above, prior to such transaction)

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 (sometimes referred to herein as “Continuing Directors”)

cease for any reasons 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.

 

3

 

3.                                       Salary

and Benefits Continuation.

 

(a)                                  “Salary

and Benefits Continuation” shall be defined to mean the following:

 

(i)                                     payment

of an amount of cash equal to three (3) times the Employee’s base salary at the

rate of base salary per annum in effect immediately prior to the Change of

Control or the termination of Employee’s employment, whichever is higher;

 

(ii)                                  payment

of an amount of cash equal to three (3) times the greater of (A) the highest

annual incentive (bonus) payment earned (including all deferred amounts) by the

Employee under the Company’s Short-Term Incentive Plan (or any successor plan)

for any year in the five (5) years prior to the termination of Employee’s

employment or (B) the target incentive (bonus) award under the Company’s

Short-Term Incentive Plan (or any successor plan) for the year in which the

Change of Control or termination of Employee’s employment occurs, whichever is

higher;

 

(iii)                               provision to Employee

and his/her eligible dependents of medical, long-term disability, dental and

life insurance coverage (to the extent such coverage was in effect immediately

prior to the Change of Control) for thirty-six (36) months (at the end of which

period the Company shall make such benefits available to the Employee and

his/her eligible dependents in accordance with the Consolidated Omnibus Budget

Reconciliation Act of 1985 (“COBRA”), whether or not the Company is then required

to comply with COBRA); and if the Employee would have become entitled to

benefits under the Company’s post-retirement health care or life insurance

plans (as in effect immediately prior to the Change of Control or the date of

the Employee’s termination of employment, whichever is most favorable to the

Employee) had the Employee’s employment terminated at any time during the

period of thirty-six (36) months after such date of termination, the Company

shall provide such post-retirement health care or life insurance benefits to

the Employee (subject to any employee contributions required under the terms of

such plans at the level in effect immediately prior to the Change of Control or

the date of termination, whichever is more favorable to the Employee)

commencing on the later of (i) the date that such coverage would have first

become available or (ii) the date that benefits described in this subsection

(iii) terminate;

 

(iv)                              contribution

by the Company to Employee’s account under the Company’s defined contribution

retirement plan (currently, the Equitable Resources, Inc. Employee Savings

Plan) of an amount of cash equal to the amount that the Company would have

contributed to such plan (including both retirement contributions and Company

matching contributions in respect of Employee contributions to the plan) had

the Employee continued to be employed by the Company for an additional

thirty-six (36) months at a base salary equal to the Employee’s base

salary immediately prior to the

 

4

 

Change of Control or the termination of Employee’s

employment, whichever is higher (and assuming for this purpose that the

Employee continued to make the maximum permissible contributions to such plan

during such period), such contribution being deemed to be made immediately

prior to the termination of Employee’s employment; provided, that to the extent

that the amount of such contribution exceeds the amount then allowed to be

contributed to the plan under the applicable rules relating to tax-qualified

retirement plans, then the excess shall be paid to the Employee in cash (for

the avoidance of doubt, such cash payment includes the amount that the Company

would have otherwise contributed to the Company’s Deferred Compensation Plan

(or other non-qualified plan) in respect of both retirement and matching

contributions under the Company’s Employee Savings Plan (or any successor plan)

because of applicable rules relating to tax-qualified retirement plans);

 

(v)                                 reimbursement

to Employee of reasonable costs incurred by Employee for outplacement services

in the twenty-four (24) month period following termination of Employee’s

employment; and

 

(vi)                              establishment

and funding by the Company of an irrevocable grantor trust holding an amount of

assets sufficient to pay all such remaining premiums owed by the Company (which

trust shall be required to pay such premiums), under any insurance policy

insuring the life of the Employee under any “split dollar” insurance

arrangement in effect between the Employee and the Company, for which trust the

trustee appointed by the Employee under such “split dollar” insurance

arrangement shall serve as sole trustee.

 

(vii)                           Notwithstanding anything in

this Agreement to the contrary, if the aggregate gross amount payable to the

Employee under Sections 3(a)(i), (ii), (iv) and (v) (collectively, the “Payments”)

is less than an amount equal to $2,931,000, plus interest on this amount from

the Effective Date through the date of payment at the rate of 5.5% per annum,

compounded semi-annually (in the aggregate, the “Floor Amount”), the

Company shall pay to the Employee an additional cash payment (the “Additional

Payment”) within thirty (30) days after the termination of the Employee’s

employment in an amount such that the sum of the Payments plus the Additional

Payment is equal to the Floor Amount.

 

(b)                                 All

amounts payable by the Company to the Employee in cash pursuant to Section 3(a)

shall be made in a lump sum unless the Employee otherwise elects and notifies

the Company in writing prior to the termination of Employee’s employment of

Employee’s desire to have all payments made in accordance with the Company’s

regular salary and benefit payment practices, provided that (i) the lump sum

payment or first payment shall be made within thirty (30) days after the

Employee’s termination, and (ii) the Employee may elect to defer such payments

pursuant to the Company’s then-existing deferred compensation plan(s).  All other

 

5

 

amounts payable by the Company to the Employee

pursuant to Section 3 shall be paid or provided in accordance with the

Company’s standard payroll and reimbursement procedures, as in effect

immediately prior to the Change of Control.

 

(c)                                  In

the event that medical, long-term disability, dental and life insurance

benefits cannot be provided under appropriate Company group insurance policies

pursuant to Section 3(a)(iii), an amount equal to the premium necessary for the

Employee to purchase directly the same level of coverage in effect immediately

prior to the Change of Control shall be added to the Company’s payments to

Employee pursuant to Section 3(a) (payable in the manner elected by the

Employee pursuant to Section 3(b)), but such amount shall not be considered a

Payment for purposes of Section 3(a)(vii). 

If Employee is required to pay income or other taxes on any medical,

long-term disability, dental or life insurance benefits provided or paid to the

Employee pursuant to Section 3(a)(iii) or this Section 3(c), then the Company

shall pay to the Employee an amount of cash sufficient to “gross-up” such

benefits or payments so that Employee’s “net” benefits received under Section

3(a)(iii) and this Section 3(c) are not diminished by any such taxes that are

imposed with respect to the same or the Company’s gross-up hereunder with

respect to such taxes.

 

(d)                                 If

there is a Change of Control as defined above, the Company will provide Salary

and Benefits Continuation if at any time during the first twenty-four (24) months

following the Change of Control, either (i) the Company terminates the

Employee’s employment other than for Cause as defined in Section 4 below or

(ii) the Employee terminates his/her employment for “Good Reason” as defined

below.

 

(e)                                  For

purposes of this Agreement, “Good Reason” is defined as:

 

(i)                                     Removal

of the Employee from the position he/she held immediately prior to the Change

of Control (by reason other than death, disability or Cause);

 

(ii)                                  The

assignment to the Employee of any duties inconsistent with those performed by

the Employee immediately prior to the Change of Control or a substantial

alteration in the nature or status of the Employee’s responsibilities which

renders the Employee’s position to be of less dignity, responsibility or scope;

 

(iii)                               A reduction by the

Company in the overall level of compensation of the Employee for any year from

the level in effect for the Employee in the prior year.  For purposes of this subsection (iii), the

following shall not constitute a reduction in the overall level of compensation

of the Employee:  (A) across-the-board

reductions in base salary similarly affecting all executives of the Company and

all executives of any person in control of the Company, provided, however, that

the Employee’s annual base salary rate shall not be reduced by an amount equal

to ten percent or

 

6

 

more of the Employee’s annual base salary rate in

effect immediately prior to the Change of Control; (B) changes in the mix of

base salary payable to and the short-term incentive opportunity available to

the Employee; provided, that in no event shall the Employee’s base salary for

any year be reduced below 90% of the annual base salary paid to such Employee

in the prior year; (C) a reduction in the compensation of the Employee

resulting from the failure to achieve corporate, business unit and/or

individual performance goals established for purposes of incentive compensation

for any year or other period; provided, that the aggregate short-term incentive

opportunity, when combined with the Employee’s annual base salary, provides, in

the aggregate, an opportunity for the Employee to realize at least the same

overall level of base salary and short term incentive compensation as was paid in

the immediately prior year or period at target performance levels; and

provided, further, that such target performance levels are reasonable at all

times during the measurement period, taking into account the fact that one of

the purposes of such compensation is to incentivize the Employee; (D)

reductions in compensation resulting from changes to any Company benefit plan;

provided, that such changes are generally applicable to all participants in

such Company benefit plan; and (E) any combination of the foregoing;

 

(iv)                              The

failure to grant the Employee an annual salary increase reasonably necessary to

maintain such salary as reasonably comparable to salaries of senior executives

holding positions equivalent to the Employee’s in the industry in which the Company’s

then principal business activity is conducted;

 

(v)                                 The

Company requiring the Employee to be based anywhere other than the Company’s

principal executive offices in the city in which the Employee is principally

located immediately prior to the Change of Control, except for required travel

on the Company’s business to an extent substantially consistent with the

Employee’s business travel obligations prior to the Change of Control;

 

(vi)                              Any

material reduction by the Company of the benefits enjoyed by the Employee under

any of the Company’s pension, retirement, profit sharing, savings, life

insurance, medical, health and accident, disability or other employee benefit

plans, programs or arrangements, the taking of any action by the Company which

would directly or indirectly materially reduce any of such benefits or deprive

the Employee of any material fringe benefits, or the failure by the Company to

provide the Employee with the number of paid vacation days to which he/she is

entitled on the basis of years of service with the Company in accordance with

the Company’s normal vacation policy, provided that this paragraph (vi) shall

not apply to any proportional across-the-board reduction or action similarly

affecting all executives of the Company and all executives of any person in

control of the Company;

 

7

 

(vii)                           The failure of the Company

to obtain a satisfactory agreement from any successor to assume and agree to

perform this Agreement, as contemplated in Section 15 hereof, or any other

material breach by the Company of its obligations contained in this Agreement;

or

 

(viii)                        Notwithstanding anything herein

to the contrary, a termination of employment by the Employee for any reason

during the 30-day period commencing on the one (1) year anniversary of a Change

of Control shall constitute Good Reason for purposes of this Agreement,

provided, however, that for purposes of this subsection (viii), a merger,

consolidation, reorganization, share exchange, or similar transaction involving

the Company (including a triangular merger), as referred to in Section 2(d)

hereof, shall not constitute a Change of Control if: (i) Continuing

Directors constitute at least two-third (2/3) of the board of directors of the

Company and, if applicable, the Parent Company after the consummation of such

transaction and (ii) 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 50% 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 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.

 

(f)                                    The

Employee’s right to Salary and Benefits Continuation shall accrue upon the

occurrence of either of the events specified in (i) or (ii) of

Section 3(d) and shall continue as provided, notwithstanding the

termination or expiration of this Agreement pursuant to Section 1 hereof.  The Employee’s subsequent employment, death

or disability following the Employee’s termination of employment in connection

with a Change of Control shall not affect the Company’s obligation to continue

making Salary and Benefits Continuation payments.  The Employee shall not be required to mitigate the amount of any

payment provided for in this Section 3 by seeking employment or otherwise.  The rights to Salary and Benefits

Continuation shall be in addition to whatever other benefits the Employee may

be entitled to under any other agreement or compensation plan, program or

arrangement of the Company; provided, that the Employee shall not be entitled

to any separate or additional severance payments pursuant to the Company’s

severance plan as then in effect and generally applicable to similarly situated

employees.  The Company shall be

authorized to withhold from any payment to the Employee, his/her estate or

his/her beneficiaries hereunder all such amounts, if any, that the Company may reasonably

determine it is required to withhold pursuant to any applicable law or

regulation.

 

8

 

4.                                       Termination

of Employee for Cause.

 

(a)                                  Upon

or following a Change of Control, the Company may at any time terminate the

Employee’s employment for Cause. 

Termination of employment by the Company for “Cause” shall mean

termination upon:  (i) the willful and

continued failure by the Employee to substantially perform his/her duties with

the Company (other than (A) any such failure resulting from Employee’s

disability or (B) any such actual or anticipated failure resulting from

Employee’s termination of his/her employment for Good Reason), after a written

demand for substantial performance is delivered to the Employee by the Board of

Directors which specifically identifies the manner in which the Board of

Directors believes that the Employee has not substantially performed his/her

duties, and which failure has not been cured within thirty days (30) after such

written demand; or (ii) the willful and continued engaging by the Employee in

conduct which is demonstrably and materially injurious to the Company,

monetarily or otherwise, or (iii) the breach by the Employee of any of the

covenants set forth in Section 8 hereof.

 

(b)                                 For

purposes of this Section 4, no act, or failure to act, on the Employee’s part

shall be considered “willful” unless done, or omitted to be done, by the

Employee in bad faith and without reasonable belief that such action or

omission was in the best interest of the Company.  Notwithstanding the foregoing, the Employee shall not be deemed

to have been terminated for Cause unless and until there shall have been

delivered to him/her a copy of a resolution duly adopted by the affirmative

vote of not less than three-quarters of the entire membership of the Board of

Directors at a meeting of the Board of Directors called and held for that

purpose (after reasonable notice to the Employee and an opportunity for the

Employee, together with his/her counsel, to be heard before the Board of

Directors) finding that in the good faith opinion of the Board of Directors the

Employee is guilty of the conduct set forth above in clauses (a)(i), (ii) or

(iii) of this Section 4 and specifying the particulars thereof in detail.

 

5.                                       Prior

Termination.  Anything in this

Agreement to the contrary notwithstanding, if the Employee’s employment with

the Company is terminated prior to the date on which a Change of Control occurs

either (i) by the Company other than for Cause or (ii) by the Employee for Good

Reason, and it is reasonably demonstrated by Employee that such termination of

employment (a) was at the request of a third party who has taken steps

reasonably calculated to effect the Change of Control, or (b) otherwise arose

in connection with or anticipation of the Change of Control, then for all

purposes of this Agreement the termination shall be deemed to have occurred

upon a Change of Control and the Employee will be entitled to Salary and

Benefits Continuation as provided for in Section 3 hereof.

 

6.                                       Employment

at Will. Subject to the provisions of any other agreement between the

Employee and the Company, the Employee shall remain an employee at will and

nothing herein shall confer upon the Employee any right to continued employment

and shall not

 

9

 

affect the right of the Company to terminate the

Employee for any reason not prohibited by law; provided, however, that any such

removal shall be without prejudice to any rights the Employee may have to

Salary and Benefits Continuation hereunder.

 

7.                                       Construction

of Agreement.

 

(a)                                  Governing

Law.  This Agreement shall be

governed by and construed under the laws of the Commonwealth of Pennsylvania

without regard to its conflict of law provisions.

 

(b)                                 Severability.  In the event that any one or more of the

provisions of this Agreement 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.

 

(c)                                  Headings.  The descriptive headings of the several

paragraphs of this Agreement are inserted for convenience of reference only and

shall not constitute a part of this Agreement.

 

8.                                       Covenant

as to Confidential Information, Non-Competition and Non-Solicitation.

 

(a)                                  Confidentiality

of Information and Nondisclosure. 

The Employee acknowledges and agrees that his/her employment by the

Company necessarily involves his/her knowledge of and access to confidential

and proprietary information pertaining to the business of the Company and its

subsidiaries.  Accordingly, the Employee

agrees that at all times during the term of this Agreement and for a period of

two (2) years after the termination of the Employee’s employment, he/she will

not, directly or indirectly, without the express written authority of the

Company, unless directed by applicable legal authority having jurisdiction over

the Employee, disclose to or use, or knowingly permit to be so disclosed or

used, for the benefit of himself/herself, any person, corporation or other

entity other than the Company and its subsidiaries, (i) any information

concerning any financial matters, 

customer  relationships,

competitive status, supplier matters, internal organizational matters, current

or future plans, or other business affairs of or relating to the Company and

its subsidiaries, (ii) any management, operational, trade, technical or other

secrets or any other proprietary information or other data of the Company or

its subsidiaries, or (iii) any other information related to the Company or its

subsidiaries which has not been published and is not generally known outside of

the Company.  The Employee acknowledges

that all of the foregoing, constitutes confidential and proprietary information,

which is the exclusive property of the Company.

 

(b)                                 Non-Competition

and Non-Solicitation.  At all times

while the Employee is an employee of the Company and, if the Employee is

entitled to Salary and Benefits Continuation under Section 3 hereof, then for a

period of one (1) year after the termination of Employee’s employment, the

Employee will not (i) engage, directly or indirectly, whether as principal or

as agent, officer, director, employee,

 

10

 

consultant, owner, partner, shareholder or otherwise,

alone or in association with any other person, corporation or other entity, in

any business which derives a material portion of its revenues (i.e., greater

than 5% of its consolidated revenues in its last completed fiscal year) from

the sale of any products or services in competition with products or services

from the sale of which the Company and its subsidiaries derive a material

portion of their revenues (i.e., greater than 5% of their consolidated revenues

in the last completed fiscal year) in any geographic market where the Company

and its subsidiaries are materially engaged in business (i.e., they derived

greater than 5% of their consolidated revenue from the sale of products or

services in such geographic market in their last completed fiscal year);  (ii) solicit, directly or indirectly, either

for himself or any other person, any business related to the business of any

customer, supplier, licensee or other person having a business relationship with

the Company, or induce or attempt to induce any such person to cease doing

business with the Company; (iii) interfere, or attempt to interfere, with any

contemplated business project which representatives of the Company and its

subsidiaries have discussed with any potential participant in such project; or

(iv) solicit or induce or attempt to induce any employee of the Company or its

subsidiaries to leave the employ of the Company or its subsidiaries or to

violate the terms of his or her contract with the Company or its

subsidiaries.  Notwithstanding the

provisions of Section 8(b), the Employee may purchase or otherwise acquire up

to (but not more than) 1% of any class of securities of any enterprise (but

without otherwise participating in the activities of such enterprise) if such

securities are listed on any national or regional securities exchange or have

been registered under Section 12 of the Securities Exchange Act of 1934.  The Employee agrees that the covenants in

this Section 8(b) are reasonable with respect to duration, geographical area

and scope.

 

(c)                                  Company

Remedies.  The Employee acknowledges

and agrees that any breach of this Section 8 by him/her will result in

immediate irreparable harm to the Company, and that the Company cannot be

reasonably or adequately compensated by damages in an action at law.  In the event of an actual or threatened

breach by the Employee of the provisions of this Section 8, the Company shall

be entitled, to the extent permissible by law, immediately to cease to pay or

provide the Employee or his/her dependents any compensation or benefit being,

or to be, paid or provided to him pursuant to Section 3 of this Agreement, and

also to obtain immediate injunctive relief restraining the Employee from

conduct in breach or threatened breach of the covenants contained in this

Section 8.  Nothing herein shall be

construed as prohibiting the Company from pursuing any other remedies available

to it for such breach or threatened breach, including the recovery of damages

from the Employee.

 

9.                                       Reimbursement

of Fees.  The Company agrees to pay,

to the full extent permitted by law, all legal fees and expenses which the

Employee may reasonably incur as a result of any contest by the Company,

Internal Revenue Service or others regarding the validity or enforceability of,

or liability under, any provision of this Agreement or any guarantee of

performance thereof (including as a result of any contest by the Employee about

the amount of any payment pursuant to Section 3 of this Agreement) or in

connection with

 

11

 

any dispute arising from this Agreement, regardless of

whether Employee prevails in any such contest or dispute.  The Company shall pay such fees and expenses

within ten (10) days after the presentment of an invoice for the same by the

Employee and any amounts not paid within such period shall bear interest at the

rate per annum established by PNC Bank, National Association (or its successor)

from time to time as its “prime” or equivalent rate.

 

10.                                 Tax

Gross-Up

 

(a)                                  Notwithstanding

anything in this Agreement to the contrary, if it shall be determined that any

payments, benefits and distributions due under this Agreement and those which

are otherwise payable or distributable to or for the benefit of the Employee

relating to the termination of the Employee’s employment in connection with a

change of control of the Company, including a Change of Control (whether paid

or payable or distributed or distributable pursuant to the terms of this Agreement

or otherwise, including without limitation (i) payments, benefits and

distributions pursuant to Section 3 of this Agreement, including the Additional

Payment, and (ii) deemed amounts under the Internal Revenue Code of 1986, as

amended (the “Code”), resulting from the acceleration of the vesting of

any stock options or other equity-based incentive award) (all such payments,

benefits and distributions being referred to herein as “Gross Payments”),

would be subject to the excise tax imposed by Section 4999 of the Code or any

interest or penalties are incurred by the Employee with respect to the excise

tax (such excise tax, together with any such interest and penalties, are

hereinafter collectively referred to as the “Excise Tax”), then the

Company shall pay to the Employee an additional payment (a “Gross-Up Payment”)

in an amount such that after the payment by the Employee of all taxes

(including any interest or penalties imposed with respect to such taxes),

including, without limitation, any income taxes (and any interest and penalties

imposed with respect thereto) and Excise Tax imposed on the Gross-Up Payment,

the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax

imposed on the Gross Payments.

 

(b)                                 Subject

to the provisions of this Section 10, all determinations required to be made

under this Section 10, including, whether and when a Gross-Up Payment is

required and the amount of such Gross-Up Payment, shall be made by a nationally

recognized accounting firm designated by the Company (the “Accounting Firm”)

which shall provide detailed supporting calculations both to the Company and

the Employee within fifteen (15) business days after there has been a Payment,

or such earlier time as requested by the Company.  In the event that the Accounting Firm is serving as accountant or

auditor for the individual, entity or group effecting the Change of Control,

the Company shall appoint another nationally recognized accounting firm to make

the determinations required hereunder (which accounting firm shall then be

referred to as the Accounting Firm hereunder). 

All fees and expenses of the Accounting Firm shall be borne solely by

the Company.  Any Gross–Up

Payment, as determined pursuant to this Section 10, shall be paid by the

Company to the Employee within five days of the receipt of the Accounting

Firm’s determination.  Any determination

by the Accounting Firm

 

12

 

shall be binding upon the Company and the

Employee.  As a result of the uncertainty

in the application of Section 4999 of the Code at the time of the initial

determination by the Accounting Firm hereunder, it is possible that Gross-Up

Payments which will not have been made by the Company should have been made (“Underpayment”),

consistent with the calculations required to be made hereunder.  In the event that the Company exhausts its

remedies pursuant to Section 10(c) and the Employee thereafter is required to

make a payment of any income taxes or Excise Tax, the Accounting Firm shall

determine the amount of the Underpayment that has occurred and any such

Underpayment shall be promptly paid by the Company to or for the benefit of the

Employee.

 

(c)                                  The

Employee shall notify the Company in writing of any claim by the Internal

Revenue Service that, if successful, would require the payment by the Company

of the Gross-Up Payment.  Such

notification shall be given as soon as practicable but no later than ten (10)

business days after the Employee is informed in writing of such claim and shall

apprise the Company of the nature of such claim and the date on which such

claim is requested to be paid.  The

Employee shall not pay such claim prior to the expiration of the 30-day period

following the date on which it gives such notice to the Company (or such

shorter period ending on the date any payment of taxes with respect to such

claim is due).  If the Company notifies

the Employee in writing prior to the expiration of such period that it desires

to contest such claim, the Employee shall:

 

(i)            give the Company any information

reasonably requested by the Company relating to such claim;

 

(ii)           take such action in connection with

contesting such claim as the Company shall reasonably request in writing from

time to time, including, without limitation, accepting legal representation

with respect to such claim by an attorney reasonably selected by the Company;

 

(iii)          cooperate with the Company in good

faith in order effectively to contest such claim; and

 

(iv)          permit the Company to participate in

any proceedings relating to such claim;

 

provided, however, that the Company shall bear and pay

directly all costs and expenses (including additional interest and penalties)

incurred in connection with such contest and shall indemnify and hold the

Employee harmless, on an after-tax basis, for any income taxes or Excise Tax

(including interest and penalties with respect thereto) imposed as a result of

such representation and payment of costs and expenses.  Without limitation on the foregoing

provisions of this Section 10, the Company shall control all proceedings taken

in connection with such contest and, at its sole option, may pursue or forego

any and all administrative appeals, proceedings, hearings and conferences with

the taxing authority in respect of such claim and may, at its sole option,

either direct the Employee to pay the tax

 

13

 

claimed and sue for a refund or contest the claim in

any permissible manner, and the Employee agrees to prosecute such contest to a determination

before any administrative tribunal, in a court of initial jurisdiction and in

one or more appellate courts, as the Company shall determine; provided, however,

that if the Company directs the Employee to pay such claim and sue for a

refund, the Company shall advance the amount of such payment to the Employee,

on an interest-free basis, and shall indemnify and hold the Employee harmless,

on an after-tax basis, from any income taxes or Excise Tax (including interest

or penalties with respect thereto) imposed with respect to such advance or with

respect to any imputed income with respect to such advance; and further

provided that any extension of the statute of limitations relating to payment

of taxes for the taxable year of the Employee with respect to which such

contested amount is claimed to be due is limited solely to such contested

amount.  Furthermore, the Company’s

control of the contest shall be limited to issues with respect to which a

Gross-Up Payment would be payable hereunder and the Employee shall be entitled

to settle or contest, as the case may be, any other issue raised by the

Internal Revenue Service or any other taxing authority.

 

(d)                                 If,

after the receipt by the Employee of an amount advanced by the Company pursuant

to Section 10, the Employee becomes entitled to receive any refund with

respect to such claim, the Employee shall (subject to the Company’s complying

with the requirements of Section 10) promptly pay to the Company the

amount of such refund (together with any interest paid or credited thereon

after taxes applicable thereto).  If,

after the receipt by the Employee of an amount advanced by the Company pursuant

to Section 10, a determination is made that the Employee shall not be entitled

to any refund with respect to such claim and the Company does not notify the

Employee in writing of its intent to contest such denial of refund prior to the

expiration of 30 days after such determination, then such advance shall be

forgiven and shall not be required to be repaid and the amount of such advance

shall offset, to the extent thereof, the amount of Gross-Up Payment required to

be paid.

 

(e)                                  The

payments provided for in this Section 10 shall be made not later than the

tenth (10th) day following the termination of the Employee’s employment; provided,

however, that if the amounts of such payments cannot be finally

determined on or before such day, the Company shall pay to the Employee on such

day an estimate, as determined in good faith by the Employee, of the minimum

amount of such payments to which the Employee is clearly entitled and shall pay

the remainder of such payments (together with interest at 120% of the rate

provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof

can be determined but in no event later than the thirtieth (30th) day after the

termination of the Employee’s employment. 

In the event that the amount of the estimated payments exceeds the

amount subsequently determined to have been due, such excess shall constitute a

loan by the Company to the Employee, payable on the fifth (5th) business day

after demand by the Company (together with interest at 120% of the rate

provided in Section 1274(b)(2)(B) of the Code).  In the event the Company should fail to pay when due the amounts

described in this

 

14

 

Section 10, the Employee shall also be entitled to

receive from the Company an amount representing interest on any unpaid or

untimely paid amounts from the due date, as determined under this Section 10, to

the date of payment at a rate equal to 120% of the rate provided in Section

1274(b)(2)(B) of the Code.

 

11.                                 Resolution

of Differences Over Breaches of Agreement. 

Except as otherwise provided herein, in the event of any controversy,

dispute or claim arising out of, or relating to this Agreement, or the breach

thereof, or arising out of any other matter relating to the Employee’s

employment with the Company or the termination of such employment, the parties

may seek recourse only for temporary or preliminary injunctive relief to the

courts having jurisdiction thereof and if any relief other than injunctive

relief is sought, the Company and the Employee agree that such underlying

controversy, dispute or claim shall be settled by arbitration conducted in Pittsburgh,

Pennsylvania in accordance with this Section 11 of this Agreement and the

Commercial Arbitration Rules of the American Arbitration Association

(“AAA”).  The matter shall be heard and

decided, and awards rendered by a panel of three (3) arbitrators (the

“Arbitration Panel”).  The Company and

the Employee shall each select one arbitrator from the AAA National Panel of

Commercial  Arbitrators  (the “Commercial Panel”) and AAA shall

select a third arbitrator from the Commercial Panel.  The award rendered by the Arbitration Panel shall be final and

binding as between the parties hereto and their heirs, executors,

administrators, successors and assigns, and judgment on the award may be

entered by any court having jurisdiction thereof.

 

12.                                 Treatment

of Certain Incentive Awards.  All

“Awards” held by the Employee under the Company’s 1994 Long-Term Incentive Plan

(the “1994 Plan”) or the Company’s 1999 Long-Term Incentive Plan (the “1999

Plan”) shall, upon a Change of Control, be treated in accordance with the terms

of those Plans as in effect on the date of this Agreement, without regard to

the subsequent amendment of those Plans. 

For purposes of this Section 12, the terms “Award” and “Change of

Control” shall have the meanings ascribed to them in the 1999 Plan and the 1994

Plan, as the case may be.

 

13.                                 Release.  The Employee hereby acknowledges and agrees

that prior to the Employee’s or his/her dependents’ right to receive from the

Company any compensation or benefit to be paid or provided to him/her or his/her

dependents pursuant to Section 3 of this Agreement, the Employee may be

required by the Company, in its sole discretion, to execute a release in a form

reasonably acceptable to the Company, which releases any and all claims (other

than amounts to be paid to Employee as expressly provided for under this

Agreement) the Employee has or may have against the Company or its

subsidiaries, agents, officers, directors, successors or assigns arising under

any public policy, tort or common law or any provision of state, federal or

local law, including, but not limited to, the Pennsylvania Human Relations Act,

the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964,

the Civil Rights Protection Act, Family and Medical Leave Act, the Fair Labor

Standards Act, the Age Discrimination in Employment Act of 1967, or the

Employee Retirement Income Security Act of 1974, all as amended.

 

15

 

14.                                 Waiver.  The waiver by a party hereto of any breach

by the other party hereto of any provision of this Agreement shall not operate

or be construed as a waiver of any subsequent breach by a party hereto.

 

15.                                 Assignment.  This Agreement, including the

non-competition and non-solicitation covenant in Section 8(b) hereof, shall be

binding upon and inure to the benefit of the successors and assigns of the

Company.  The Company shall be obligated

to require any successor (whether direct or indirect, by purchase, merger,

consolidation or otherwise) to all or substantially all of the Company’s

business or assets, by a written agreement in form and substance satisfactory

to the Employee, to expressly assume and agree to perform this Agreement in the

same manner and to the same extent that the Company would be required to perform

if no succession had taken place.  This

Agreement shall inure to the extent provided hereunder to the benefit of and be

enforceable by the Employee or his/her legal representatives, executors,

administrators, successors, heirs, distributees, devisees and legatees.  The Employee may not delegate any of his/her

duties, responsibilities, obligations or positions hereunder to any person and

any such purported delegation by him shall be void and of no force and effect

with respect to matters relating to his/her employment and termination of

employment.  Without limiting the

foregoing, the Employee’s rights to receive payments and benefits hereunder

shall not be assignable or transferable, other than a transfer by Employee’s

will or by the laws of descent and distribution.

 

16.                                 Notices.  Any notices required or permitted to be

given under this Agreement shall be sufficient if in writing, and if personally

delivered or when sent by first class certified or registered mail, postage

prepaid, return receipt requested — in the case of the Employee, to his/her

residence address as set forth below, and in the case of the Company, to the

address of its principal place of business as set forth below, in care of the

Chairman of the Board — or to such other person or at such other address with

respect to each party as such party shall notify the other in writing.

 

17.                                 Pronouns.  Pronouns stated in either the masculine,

feminine or neuter gender shall include the masculine, feminine and neuter.

 

18.                                 Entire

Agreement.  This Agreement contains

the entire agreement of the parties 

concerning the matters set forth herein and all promises,

representations, understandings, arrangements and prior agreements regarding

the subject matter hereof (including the Existing Agreement, which the parties

agree shall terminate as of the Effective Date hereof) are merged herein and

superseded hereby.  The provisions of

this Agreement may not be amended, modified, repealed, waived, extended or

discharged except by an agreement in writing signed by the party against whom

enforcement of any amendment, modification, repeal, waiver, extension or

discharge is sought.  No person acting

other than pursuant to a resolution of the Board of Directors shall have authority

on behalf of the Company to agree to amend, modify, repeal, waive, extend or

discharge any provision of this Agreement or anything in reference thereto or

to exercise any of the Company’s rights to terminate or to fail to extend this

Agreement.

 

16

 

IN WITNESS WHEREOF, the Company has caused this

Agreement to be executed by its officers thereunto duly authorized, and the

Employee has hereunto set his/her hand, all as of the day and year first above

written.

 

	

  ATTEST:

  	

   

  	

  EQUITABLE RESOURCES, INC.

  
	

   

  	

   

  	

   

  
	

  /s/ Johanna G. O’Loughlin

  	

   

  	

  /s/ Murry S. Gerber

  
	

   

  	

   

  	

  By:

  	

  Murry S. Gerber

  
	

   

  	

   

  	

  Title:

  	

  Chairman, President and

  Chief Executive Officer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Address:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  One Oxford Centre

  
	

   

  	

   

  	

  Suite 3300

  
	

   

  	

   

  	

  Pittsburgh, PA 

  15219

  
	

   

  	

   

  	

   

  
	

  WITNESS:

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  /s/ Johanna G. O’Loughlin

  	

   

  	

  /s/ Gregory R. Spencer

  
	

   

  	

   

  	

  Name: 

  Gregory R. Spencer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Address:

  
	

   

  	

   

  	

  1020 Devonshire

  Rd.

  
	

   

  	

   

  	

  Pittsburgh, PA

  15213

  
					

 

17Exhibit

10.18

 

CHANGE OF CONTROL AGREEMENT

 

THIS AGREEMENT (the “Agreement”) dated as of the 1st

day of September, 2002 (the “Effective Date”) is made by and between EQUITABLE

RESOURCES, INC., a Pennsylvania corporation with its principal place of

business at Pittsburgh, Pennsylvania (the “Company”), and JOHANNA G.

O’LOUGHLIN, an individual (the “Employee”);

 

WITNESSETH:

 

WHEREAS, the Company and the Employee are parties to a

Change of Control Agreement dated as of December 1, 1999, which provides for

the payment of certain benefits to the Employee if the Employee’s employment

terminates in certain circumstances following a change of control of the

Company (the “Existing Agreement”); and

 

WHEREAS, the Board of Directors of the Company (the

“Board”) continues to believe that it is in the best interest of the Company

and its shareholders to assure that the Company will have the continued

dedication of the Employee, notwithstanding the possibility, threat or

occurrence of a Change of Control (as defined below) of the Company; that it is

imperative to diminish the inevitable distraction of the Employee by virtue of

the personal uncertainties and risks created by a pending or threatened Change

of Control and to encourage the Employee’s full attention and dedication to the

Company currently and in the event of any threatened or pending Change of

Control; and that it is appropriate to provide the Employee with compensation

and benefits arrangements upon a Change of Control which ensure that the

compensation and benefits expectations of the Employee will be satisfied and

which are competitive with those of other corporations in the industry in which

the Company’s principal business activity is conducted; and

 

WHEREAS, in consideration of the compensation and

benefits payable to the Employee under this Agreement, the Company desires to

restrict the Employee from competing with the Company and from soliciting

customers and employees of the Company for one year following the termination

of the Employee’s employment within two years following a Change of Control,

and the Employee is willing to agree to such a restriction in consideration of

the compensation and benefits payable under this Agreement; and

 

WHEREAS, in order to accomplish the foregoing

objectives, the Company and the Employee desire to terminate the Existing

Agreement and to enter into this Agreement which, among other things, (i)

provides for the payment of compensation and benefits payable to the Employee

if the Employee’s employment terminates in certain circumstances following a

Change of Control of the Company, and (ii) restricts the Employee’s right to

compete with Company and to solicit customers and employees of the Company for

one year following such termination of employment;

 

NOW THEREFORE, in consideration of the premises and

mutual covenants contained herein, and intending to be legally bound hereby,

the parties hereto agree as follows:

 

1.                                       Term.  The term of this Agreement shall commence on

the Effective Date hereof and, subject to Sections 3(f), 5 and 8, shall

terminate on the earlier of (i) the date of the termination of Employee’s

employment by the Company for any reason prior to a Change

 

 

of Control; or (ii) unless further extended as

hereinafter set forth, the date which is thirty-six (36) months after the

Effective Date; provided, that, commencing on the last day of the first full

calendar month after the Effective Date and on the last day of each succeeding

calendar month, the term of this Agreement shall be automatically extended

without further action by either party (but not beyond the date of the

termination of Employee’s employment prior to a Change of Control) for one (1)

additional month unless one party provides written notice to the other party

that such party does not wish to extend the term of this Agreement.  In the event that such notice shall have

been delivered, the term of this Agreement shall no longer be subject to

automatic extension and the term hereof shall expire on the date which is

thirty-six (36) calendar months after the last day of the month in which such

written notice is received.

 

2.                                       Change

of Control.  Except as provided in

Sections 3(e)(viii) and Section 12, 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 the following

shall not constitute a Change of Control: 

(x) any acquisition by 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, (y) an acquisition by 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, (z) an acquisition by any person or group of persons of not more

than forty percent (40%) of the outstanding shares of Company common stock or

the combined voting power of the then outstanding voting securities of the

Company if such acquisition resulted from the issuance of capital stock by the

 

2

 

Company and the issuance and the acquiring person or

group was approved in advance of such issuance by at least two-thirds of the

Continuing Directors then in office;

 

(c)                                  The

Company’s termination of its business and liquidation of its assets;

 

(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 (A) 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, or (B) any person or group that satisfied the

requirements of subsection (b)(y), above, prior to such transaction)

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 (sometimes referred to herein as “Continuing Directors”)

cease for any reasons 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.

 

3

 

3.                                       Salary

and Benefits Continuation.

 

(a)                                  “Salary

and Benefits Continuation” shall be defined to mean the following:

 

(i)                                     payment

of an amount of cash equal to three (3) times the Employee’s base salary at the

rate of base salary per annum in effect immediately prior to the Change of

Control or the termination of Employee’s employment, whichever is higher;

 

(ii)                                  payment

of an amount of cash equal to three (3) times the greater of (A) the highest

annual incentive (bonus) payment earned (including all deferred amounts) by the

Employee under the Company’s Short-Term Incentive Plan (or any successor plan)

for any year in the five (5) years prior to the termination of Employee’s

employment or (B) the target incentive (bonus) award under the Company’s

Short-Term Incentive Plan (or any successor plan) for the year in which the

Change of Control or termination of Employee’s employment occurs, whichever is

higher;

 

(iii)                               provision to Employee

and his/her eligible dependents of medical, long-term disability, dental and

life insurance coverage (to the extent such coverage was in effect immediately

prior to the Change of Control) for thirty-six (36) months (at the end of which

period the Company shall make such benefits available to the Employee and

his/her eligible dependents in accordance with the Consolidated Omnibus Budget

Reconciliation Act of 1985 (“COBRA”), whether or not the Company is then

required to comply with COBRA); and if the Employee would have become entitled

to benefits under the Company’s post-retirement health care or life insurance

plans (as in effect immediately prior to the Change of Control or the date of

the Employee’s termination of employment, whichever is most favorable to the

Employee) had the Employee’s employment terminated at any time during the

period of thirty-six (36) months after such date of termination, the Company

shall provide such post-retirement health care or life insurance benefits to

the Employee (subject to any employee contributions required under the terms of

such plans at the level in effect immediately prior to the Change of Control or

the date of termination, whichever is more favorable to the Employee)

commencing on the later of (i) the date that such coverage would have first

become available or (ii) the date that benefits described in this subsection

(iii) terminate;

 

(iv)                              contribution

by the Company to Employee’s account under the Company’s defined contribution

retirement plan (currently, the Equitable Resources, Inc. Employee Savings

Plan) of an amount of cash equal to the amount that the Company would have

contributed to such plan (including both retirement contributions and Company

matching contributions in respect of Employee contributions to the plan) had

the Employee continued to be employed by the Company for an additional

thirty-six (36) months at a base salary equal to the Employee’s base

salary immediately prior to the

 

4

 

Change of Control or the termination of Employee’s

employment, whichever is higher (and assuming for this purpose that the

Employee continued to make the maximum permissible contributions to such plan

during such period), such contribution being deemed to be made immediately

prior to the termination of Employee’s employment; provided, that to the extent

that the amount of such contribution exceeds the amount then allowed to be

contributed to the plan under the applicable rules relating to tax-qualified

retirement plans, then the excess shall be paid to the Employee in cash (for

the avoidance of doubt, such cash payment includes the amount that the Company

would have otherwise contributed to the Company’s Deferred Compensation Plan

(or other non-qualified plan) in respect of both retirement and matching

contributions under the Company’s Employee Savings Plan (or any successor plan)

because of applicable rules relating to tax-qualified retirement plans);

 

(v)                                 reimbursement

to Employee of reasonable costs incurred by Employee for outplacement services

in the twenty-four (24) month period following termination of Employee’s

employment; and

 

(vi)                              establishment

and funding by the Company of an irrevocable grantor trust holding an amount of

assets sufficient to pay all such remaining premiums owed by the Company (which

trust shall be required to pay such premiums), under any insurance policy

insuring the life of the Employee under any “split dollar” insurance

arrangement in effect between the Employee and the Company, for which trust the

trustee appointed by the Employee under such “split dollar” insurance

arrangement shall serve as sole trustee.

 

(vii)                           Notwithstanding anything in

this Agreement to the contrary, if the aggregate gross amount payable to the

Employee under Sections 3(a)(i), (ii), (iv) and (v) (collectively, the “Payments”)

is less than an amount equal to $2,931,000, plus interest on this amount from

the Effective Date through the date of payment at the rate of 5.5% per annum,

compounded semi-annually (in the aggregate, the “Floor Amount”), the

Company shall pay to the Employee an additional cash payment (the “Additional

Payment”) within thirty (30) days after the termination of the Employee’s

employment in an amount such that the sum of the Payments plus the Additional

Payment is equal to the Floor Amount.

 

(b)                                 All

amounts payable by the Company to the Employee in cash pursuant to Section 3(a)

shall be made in a lump sum unless the Employee otherwise elects and notifies

the Company in writing prior to the termination of Employee’s employment of

Employee’s desire to have all payments made in accordance with the Company’s

regular salary and benefit payment practices, provided that (i) the lump sum

payment or first payment shall be made within thirty (30) days after the

Employee’s termination, and (ii) the Employee may elect to defer such payments

pursuant to the Company’s then-existing deferred compensation plan(s).  All other

 

5

 

amounts payable by the Company to the Employee

pursuant to Section 3 shall be paid or provided in accordance with the

Company’s standard payroll and reimbursement procedures, as in effect

immediately prior to the Change of Control.

 

(c)                                  In

the event that medical, long-term disability, dental and life insurance

benefits cannot be provided under appropriate Company group insurance policies

pursuant to Section 3(a)(iii), an amount equal to the premium necessary for the

Employee to purchase directly the same level of coverage in effect immediately

prior to the Change of Control shall be added to the Company’s payments to

Employee pursuant to Section 3(a) (payable in the manner elected by the

Employee pursuant to Section 3(b)), but such amount shall not be considered a

Payment for purposes of Section 3(a)(vii). 

If Employee is required to pay income or other taxes on any medical,

long-term disability, dental or life insurance benefits provided or paid to the

Employee pursuant to Section 3(a)(iii) or this Section 3(c), then the Company

shall pay to the Employee an amount of cash sufficient to “gross-up” such

benefits or payments so that Employee’s “net” benefits received under Section

3(a)(iii) and this Section 3(c) are not diminished by any such taxes that are imposed

with respect to the same or the Company’s gross-up hereunder with respect to

such taxes.

 

(d)                                 If

there is a Change of Control as defined above, the Company will provide Salary

and Benefits Continuation if at any time during the first twenty-four (24)

months following the Change of Control, either (i) the Company terminates the

Employee’s employment other than for Cause as defined in Section 4 below or

(ii) the Employee terminates his/her employment for “Good Reason” as defined

below.

 

(e)                                  For

purposes of this Agreement, “Good Reason” is defined as:

 

(i)                                     Removal

of the Employee from the position he/she held immediately prior to the Change

of Control (by reason other than death, disability or Cause);

 

(ii)                                  The

assignment to the Employee of any duties inconsistent with those performed by

the Employee immediately prior to the Change of Control or a substantial

alteration in the nature or status of the Employee’s responsibilities which

renders the Employee’s position to be of less dignity, responsibility or scope;

 

(iii)                               A reduction by the

Company in the overall level of compensation of the Employee for any year from

the level in effect for the Employee in the prior year.  For purposes of this subsection (iii), the

following shall not constitute a reduction in the overall level of compensation

of the Employee:  (A) across-the-board

reductions in base salary similarly affecting all executives of the Company and

all executives of any person in control of the Company, provided, however, that

the Employee’s annual base salary rate shall not be reduced by an amount equal

to ten percent or

 

6

 

more of the Employee’s annual base salary rate in

effect immediately prior to the Change of Control; (B) changes in the mix of base

salary payable to and the short-term incentive opportunity available to the

Employee; provided, that in no event shall the Employee’s base salary for any

year be reduced below 90% of the annual base salary paid to such Employee in

the prior year; (C) a reduction in the compensation of the Employee resulting

from the failure to achieve corporate, business unit and/or individual

performance goals established for purposes of incentive compensation for any

year or other period; provided, that the aggregate short-term incentive

opportunity, when combined with the Employee’s annual base salary, provides, in

the aggregate, an opportunity for the Employee to realize at least the same

overall level of base salary and short term incentive compensation as was paid

in the immediately prior year or period at target performance levels; and

provided, further, that such target performance levels are reasonable at all

times during the measurement period, taking into account the fact that one of

the purposes of such compensation is to incentivize the Employee; (D)

reductions in compensation resulting from changes to any Company benefit plan;

provided, that such changes are generally applicable to all participants in

such Company benefit plan; and (E) any combination of the foregoing;

 

(iv)                              The

failure to grant the Employee an annual salary increase reasonably necessary to

maintain such salary as reasonably comparable to salaries of senior executives

holding positions equivalent to the Employee’s in the industry in which the

Company’s then principal business activity is conducted;

 

(v)                                 The

Company requiring the Employee to be based anywhere other than the Company’s

principal executive offices in the city in which the Employee is principally

located immediately prior to the Change of Control, except for required travel

on the Company’s business to an extent substantially consistent with the

Employee’s business travel obligations prior to the Change of Control;

 

(vi)                              Any

material reduction by the Company of the benefits enjoyed by the Employee under

any of the Company’s pension, retirement, profit sharing, savings, life

insurance, medical, health and accident, disability or other employee benefit

plans, programs or arrangements, the taking of any action by the Company which

would directly or indirectly materially reduce any of such benefits or deprive

the Employee of any material fringe benefits, or the failure by the Company to

provide the Employee with the number of paid vacation days to which he/she is

entitled on the basis of years of service with the Company in accordance with

the Company’s normal vacation policy, provided that this paragraph (vi) shall

not apply to any proportional across-the-board reduction or action similarly

affecting all executives of the Company and all executives of any person in

control of the Company;

 

7

 

(vii)                           The failure of the Company

to obtain a satisfactory agreement from any successor to assume and agree to

perform this Agreement, as contemplated in Section 15 hereof, or any other

material breach by the Company of its obligations contained in this Agreement;

or

 

(viii)                        Notwithstanding anything herein

to the contrary, a termination of employment by the Employee for any reason

during the 30-day period commencing on the one (1) year anniversary of a Change

of Control shall constitute Good Reason for purposes of this Agreement,

provided, however, that for purposes of this subsection (viii), a merger,

consolidation, reorganization, share exchange, or similar transaction involving

the Company (including a triangular merger), as referred to in Section 2(d)

hereof, shall not constitute a Change of Control if: (i) Continuing

Directors constitute at least two-third (2/3) of the board of directors of the

Company and, if applicable, the Parent Company after the consummation of such

transaction and (ii) 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 50% 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 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.

 

(f)                                    The

Employee’s right to Salary and Benefits Continuation shall accrue upon the

occurrence of either of the events specified in (i) or (ii) of

Section 3(d) and shall continue as provided, notwithstanding the

termination or expiration of this Agreement pursuant to Section 1 hereof.  The Employee’s subsequent employment, death

or disability following the Employee’s termination of employment in connection

with a Change of Control shall not affect the Company’s obligation to continue

making Salary and Benefits Continuation payments.  The Employee shall not be required to mitigate the amount of any

payment provided for in this Section 3 by seeking employment or otherwise.  The rights to Salary and Benefits

Continuation shall be in addition to whatever other benefits the Employee may

be entitled to under any other agreement or compensation plan, program or

arrangement of the Company; provided, that the Employee shall not be entitled

to any separate or additional severance payments pursuant to the Company’s

severance plan as then in effect and generally applicable to similarly situated

employees.  The Company shall be

authorized to withhold from any payment to the Employee, his/her estate or

his/her beneficiaries hereunder all such amounts, if any, that the Company may

reasonably determine it is required to withhold pursuant to any applicable law

or regulation.

 

8

 

4.                                       Termination

of Employee for Cause.

 

(a)                                  Upon

or following a Change of Control, the Company may at any time terminate the

Employee’s employment for Cause. 

Termination of employment by the Company for “Cause” shall mean

termination upon:  (i) the willful and

continued failure by the Employee to substantially perform his/her duties with

the Company (other than (A) any such failure resulting from Employee’s

disability or (B) any such actual or anticipated failure resulting from

Employee’s termination of his/her employment for Good Reason), after a written

demand for substantial performance is delivered to the Employee by the Board of

Directors which specifically identifies the manner in which the Board of

Directors believes that the Employee has not substantially performed his/her

duties, and which failure has not been cured within thirty days (30) after such

written demand; or (ii) the willful and continued engaging by the Employee in

conduct which is demonstrably and materially injurious to the Company,

monetarily or otherwise, or (iii) the breach by the Employee of any of the

covenants set forth in Section 8 hereof.

 

(b)                                 For

purposes of this Section 4, no act, or failure to act, on the Employee’s part

shall be considered “willful” unless done, or omitted to be done, by the

Employee in bad faith and without reasonable belief that such action or

omission was in the best interest of the Company.  Notwithstanding the foregoing, the Employee shall not be deemed

to have been terminated for Cause unless and until there shall have been

delivered to him/her a copy of a resolution duly adopted by the affirmative

vote of not less than three-quarters of the entire membership of the Board of

Directors at a meeting of the Board of Directors called and held for that

purpose (after reasonable notice to the Employee and an opportunity for the

Employee, together with his/her counsel, to be heard before the Board of

Directors) finding that in the good faith opinion of the Board of Directors the

Employee is guilty of the conduct set forth above in clauses (a)(i), (ii) or

(iii) of this Section 4 and specifying the particulars thereof in detail.

 

5.                                       Prior

Termination.  Anything in this

Agreement to the contrary notwithstanding, if the Employee’s employment with

the Company is terminated prior to the date on which a Change of Control occurs

either (i) by the Company other than for Cause or (ii) by the Employee for Good

Reason, and it is reasonably demonstrated by Employee that such termination of

employment (a) was at the request of a third party who has taken steps

reasonably calculated to effect the Change of Control, or (b) otherwise arose

in connection with or anticipation of the Change of Control, then for all

purposes of this Agreement the termination shall be deemed to have occurred

upon a Change of Control and the Employee will be entitled to Salary and

Benefits Continuation as provided for in Section 3 hereof.

 

6.                                       Employment

at Will.  Subject to the provisions

of any other agreement between the Employee and the Company, the Employee shall

remain an employee at will and nothing herein shall confer upon the Employee

any right to continued employment and shall not

 

9

affect the right of the Company to terminate the

Employee for any reason not prohibited by law; provided, however, that any such

removal shall be without prejudice to any rights the Employee may have to

Salary and Benefits Continuation hereunder.

 

7.                                       Construction

of Agreement.

 

(a)                                  Governing

Law.  This Agreement shall be

governed by and construed under the laws of the Commonwealth of Pennsylvania

without regard to its conflict of law provisions.

 

(b)                                 Severability.  In the event that any one or more of the

provisions of this Agreement 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.

 

(c)                                  Headings.  The descriptive headings of the several

paragraphs of this Agreement are inserted for convenience of reference only and

shall not constitute a part of this Agreement.

 

8.                                       Covenant

as to Confidential Information, Non-Competition and Non-Solicitation.

 

(a)                                  Confidentiality

of Information and Nondisclosure. 

The Employee acknowledges and agrees that his/her employment by the

Company necessarily involves his/her knowledge of and access to confidential

and proprietary information pertaining to the business of the Company and its

subsidiaries.  Accordingly, the Employee

agrees that at all times during the term of this Agreement and for a period of

two (2) years after the termination of the Employee’s employment, he/she will

not, directly or indirectly, without the express written authority of the

Company, unless directed by applicable legal authority having jurisdiction over

the Employee, disclose to or use, or knowingly permit to be so disclosed or

used, for the benefit of himself/herself, any person, corporation or other

entity other than the Company and its subsidiaries, (i) any information

concerning any financial matters, 

customer  relationships,

competitive status, supplier matters, internal organizational matters, current

or future plans, or other business affairs of or relating to the Company and

its subsidiaries, (ii) any management, operational, trade, technical or other

secrets or any other proprietary information or other data of the Company or

its subsidiaries, or (iii) any other information related to the Company or its

subsidiaries which has not been published and is not generally known outside of

the Company.  The Employee acknowledges

that all of the foregoing, constitutes confidential and proprietary information,

which is the exclusive property of the Company.

 

(b)                                 Non-Competition

and Non-Solicitation.  At all times

while the Employee is an employee of the Company and, if the Employee is

entitled to Salary and Benefits Continuation under Section 3 hereof, then for a

period of one (1) year after the termination of Employee’s employment, the

Employee will not (i) engage, directly or indirectly, whether as principal or

as agent, officer, director, employee,

 

10

consultant, owner, partner, shareholder or otherwise,

alone or in association with any other person, corporation or other entity, in

any business which derives a material portion of its revenues (i.e., greater

than 5% of its consolidated revenues in its last completed fiscal year) from

the sale of any products or services in competition with products or services

from the sale of which the Company and its subsidiaries derive a material

portion of their revenues (i.e., greater than 5% of their consolidated revenues

in the last completed fiscal year) in any geographic market where the Company

and its subsidiaries are materially engaged in business (i.e., they derived

greater than 5% of their consolidated revenue from the sale of products or

services in such geographic market in their last completed fiscal year);  (ii) solicit, directly or indirectly, either

for himself or any other person, any business related to the business of any

customer, supplier, licensee or other person having a business relationship with

the Company, or induce or attempt to induce any such person to cease doing

business with the Company; (iii) interfere, or attempt to interfere, with any

contemplated business project which representatives of the Company and its

subsidiaries have discussed with any potential participant in such project; or

(iv) solicit or induce or attempt to induce any employee of the Company or its

subsidiaries to leave the employ of the Company or its subsidiaries or to

violate the terms of his or her contract with the Company or its

subsidiaries.  Notwithstanding the

provisions of Section 8(b), the Employee may purchase or otherwise acquire up

to (but not more than) 1% of any class of securities of any enterprise (but

without otherwise participating in the activities of such enterprise) if such

securities are listed on any national or regional securities exchange or have

been registered under Section 12 of the Securities Exchange Act of 1934.  The Employee agrees that the covenants in

this Section 8(b) are reasonable with respect to duration, geographical area

and scope.

 

(c)                                  Company

Remedies.  The Employee acknowledges

and agrees that any breach of this Section 8 by him/her will result in

immediate irreparable harm to the Company, and that the Company cannot be

reasonably or adequately compensated by damages in an action at law.  In the event of an actual or threatened

breach by the Employee of the provisions of this Section 8, the Company shall

be entitled, to the extent permissible by law, immediately to cease to pay or

provide the Employee or his/her dependents any compensation or benefit being,

or to be, paid or provided to him pursuant to Section 3 of this Agreement, and

also to obtain immediate injunctive relief restraining the Employee from

conduct in breach or threatened breach of the covenants contained in this

Section 8.  Nothing herein shall be

construed as prohibiting the Company from pursuing any other remedies available

to it for such breach or threatened breach, including the recovery of damages

from the Employee.

 

9.                                       Reimbursement

of Fees.  The Company agrees to pay,

to the full extent permitted by law, all legal fees and expenses which the

Employee may reasonably incur as a result of any contest by the Company,

Internal Revenue Service or others regarding the validity or enforceability of,

or liability under, any provision of this Agreement or any guarantee of

performance thereof (including as a result of any contest by the Employee about

the amount of any payment pursuant to Section 3 of this Agreement) or in

connection with

 

11

 

any dispute arising from this Agreement, regardless of

whether Employee prevails in any such contest or dispute.  The Company shall pay such fees and expenses

within ten (10) days after the presentment of an invoice for the same by the

Employee and any amounts not paid within such period shall bear interest at the

rate per annum established by PNC Bank, National Association (or its successor)

from time to time as its “prime” or equivalent rate.

 

10.                                 Tax

Gross-Up

 

(a)                                  Notwithstanding

anything in this Agreement to the contrary, if it shall be determined that any

payments, benefits and distributions due under this Agreement and those which

are otherwise payable or distributable to or for the benefit of the Employee

relating to the termination of the Employee’s employment in connection with a

change of control of the Company, including a Change of Control (whether paid

or payable or distributed or distributable pursuant to the terms of this

Agreement or otherwise, including without limitation (i) payments, benefits and

distributions pursuant to Section 3 of this Agreement, including the Additional

Payment, and (ii) deemed amounts under the Internal Revenue Code of 1986, as

amended (the “Code”), resulting from the acceleration of the vesting of

any stock options or other equity-based incentive award) (all such payments,

benefits and distributions being referred to herein as “Gross Payments”),

would be subject to the excise tax imposed by Section 4999 of the Code or any

interest or penalties are incurred by the Employee with respect to the excise

tax (such excise tax, together with any such interest and penalties, are

hereinafter collectively referred to as the “Excise Tax”), then the

Company shall pay to the Employee an additional payment (a “Gross-Up Payment”)

in an amount such that after the payment by the Employee of all taxes

(including any interest or penalties imposed with respect to such taxes),

including, without limitation, any income taxes (and any interest and penalties

imposed with respect thereto) and Excise Tax imposed on the Gross-Up Payment,

the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax

imposed on the Gross Payments.

 

(b)                                 Subject

to the provisions of this Section 10, all determinations required to be made

under this Section 10, including, whether and when a Gross-Up Payment is

required and the amount of such Gross-Up Payment, shall be made by a nationally

recognized accounting firm designated by the Company (the “Accounting Firm”)

which shall provide detailed supporting calculations both to the Company and

the Employee within fifteen (15) business days after there has been a Payment,

or such earlier time as requested by the Company.  In the event that the Accounting Firm is serving as accountant or

auditor for the individual, entity or group effecting the Change of Control,

the Company shall appoint another nationally recognized accounting firm to make

the determinations required hereunder (which accounting firm shall then be

referred to as the Accounting Firm hereunder). 

All fees and expenses of the Accounting Firm shall be borne solely by

the Company.  Any Gross-Up Payment, as

determined pursuant to this Section 10, shall be paid by the Company to the

Employee within five days of the receipt of the Accounting Firm’s

determination.  Any determination by the

Accounting Firm

 

12

 

shall be binding upon the Company and the

Employee.  As a result of the uncertainty

in the application of Section 4999 of the Code at the time of the initial

determination by the Accounting Firm hereunder, it is possible that Gross-Up

Payments which will not have been made by the Company should have been made (“Underpayment”),

consistent with the calculations required to be made hereunder.  In the event that the Company exhausts its

remedies pursuant to Section 10(c) and the Employee thereafter is required to

make a payment of any income taxes or Excise Tax, the Accounting Firm shall

determine the amount of the Underpayment that has occurred and any such

Underpayment shall be promptly paid by the Company to or for the benefit of the

Employee.

 

(c)                                  The

Employee shall notify the Company in writing of any claim by the Internal

Revenue Service that, if successful, would require the payment by the Company

of the Gross-Up Payment.  Such

notification shall be given as soon as practicable but no later than ten (10)

business days after the Employee is informed in writing of such claim and shall

apprise the Company of the nature of such claim and the date on which such

claim is requested to be paid.  The

Employee shall not pay such claim prior to the expiration of the 30-day period

following the date on which it gives such notice to the Company (or such

shorter period ending on the date any payment of taxes with respect to such

claim is due).  If the Company notifies

the Employee in writing prior to the expiration of such period that it desires

to contest such claim, the Employee shall:

 

(i)            give the Company any information

reasonably requested by the Company relating to such claim;

 

(ii)           take such action in connection with

contesting such claim as the Company shall reasonably request in writing from

time to time, including, without limitation, accepting legal representation

with respect to such claim by an attorney reasonably selected by the Company;

 

(iii)          cooperate with the Company in good

faith in order effectively to contest such claim; and

 

(iv)          permit the Company to participate in

any proceedings relating to such claim;

 

provided, however, that the Company shall bear and pay

directly all costs and expenses (including additional interest and penalties)

incurred in connection with such contest and shall indemnify and hold the

Employee harmless, on an after-tax basis, for any income taxes or Excise Tax

(including interest and penalties with respect thereto) imposed as a result of

such representation and payment of costs and expenses.  Without limitation on the foregoing

provisions of this Section 10, the Company shall control all proceedings taken

in connection with such contest and, at its sole option, may pursue or forego

any and all administrative appeals, proceedings, hearings and conferences with

the taxing authority in respect of such claim and may, at its sole option,

either direct the Employee to pay the tax

 

13

 

claimed and sue for a refund or contest the claim in

any permissible manner, and the Employee agrees to prosecute such contest to a

determination before any administrative tribunal, in a court of initial

jurisdiction and in one or more appellate courts, as the Company shall

determine; provided, however, that if the Company directs the

Employee to pay such claim and sue for a refund, the Company shall advance the

amount of such payment to the Employee, on an interest-free basis, and shall

indemnify and hold the Employee harmless, on an after-tax basis, from any

income taxes or Excise Tax (including interest or penalties with respect thereto)

imposed with respect to such advance or with respect to any imputed income with

respect to such advance; and further provided that any extension of the statute

of limitations relating to payment of taxes for the taxable year of the

Employee with respect to which such contested amount is claimed to be due is

limited solely to such contested amount. 

Furthermore, the Company’s control of the contest shall be limited to

issues with respect to which a Gross-Up Payment would be payable hereunder and

the Employee shall be entitled to settle or contest, as the case may be, any

other issue raised by the Internal Revenue Service or any other taxing

authority.

 

(d)                                 If,

after the receipt by the Employee of an amount advanced by the Company pursuant

to Section 10, the Employee becomes entitled to receive any refund with

respect to such claim, the Employee shall (subject to the Company’s complying

with the requirements of Section 10) promptly pay to the Company the

amount of such refund (together with any interest paid or credited thereon

after taxes applicable thereto).  If,

after the receipt by the Employee of an amount advanced by the Company pursuant

to Section 10, a determination is made that the Employee shall not be entitled

to any refund with respect to such claim and the Company does not notify the

Employee in writing of its intent to contest such denial of refund prior to the

expiration of 30 days after such determination, then such advance shall be

forgiven and shall not be required to be repaid and the amount of such advance

shall offset, to the extent thereof, the amount of Gross-Up Payment required to

be paid.

 

(e)                                  The

payments provided for in this Section 10 shall be made not later than the

tenth (10th) day following the termination of the Employee’s employment; provided,

however, that if the amounts of such payments cannot be finally

determined on or before such day, the Company shall pay to the Employee on such

day an estimate, as determined in good faith by the Employee, of the minimum

amount of such payments to which the Employee is clearly entitled and shall pay

the remainder of such payments (together with interest at 120% of the rate

provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof

can be determined but in no event later than the thirtieth (30th) day after the

termination of the Employee’s employment. 

In the event that the amount of the estimated payments exceeds the

amount subsequently determined to have been due, such excess shall constitute a

loan by the Company to the Employee, payable on the fifth (5th) business day

after demand by the Company (together with interest at 120% of the rate

provided in Section 1274(b)(2)(B) of the Code).  In the event the Company should fail to pay when due the amounts

described in this

 

14

 

Section 10, the Employee shall also be entitled to

receive from the Company an amount representing interest on any unpaid or

untimely paid amounts from the due date, as determined under this Section 10,

to the date of payment at a rate equal to 120% of the rate provided in Section

1274(b)(2)(B) of the Code.

 

11.                                 Resolution

of Differences Over Breaches of Agreement. 

Except as otherwise provided herein, in the event of any controversy,

dispute or claim arising out of, or relating to this Agreement, or the breach

thereof, or arising out of any other matter relating to the Employee’s

employment with the Company or the termination of such employment, the parties

may seek recourse only for temporary or preliminary injunctive relief to the

courts having jurisdiction thereof and if any relief other than injunctive

relief is sought, the Company and the Employee agree that such underlying

controversy, dispute or claim shall be settled by arbitration conducted in Pittsburgh,

Pennsylvania in accordance with this Section 11 of this Agreement and the

Commercial Arbitration Rules of the American Arbitration Association

(“AAA”).  The matter shall be heard and

decided, and awards rendered by a panel of three (3) arbitrators (the

“Arbitration Panel”).  The Company and

the Employee shall each select one arbitrator from the AAA National Panel of

Commercial Arbitrators (the “Commercial Panel”) and AAA shall select a third

arbitrator from the Commercial Panel. 

The award rendered by the Arbitration Panel shall be final and binding

as between the parties hereto and their heirs, executors, administrators,

successors and assigns, and judgment on the award may be entered by any court

having jurisdiction thereof.

 

12.                                 Treatment

of Certain Incentive Awards.  All

“Awards” held by the Employee under the Company’s 1994 Long-Term Incentive Plan

(the “1994 Plan”) or the Company’s 1999 Long-Term Incentive Plan (the “1999

Plan”) shall, upon a Change of Control, be treated in accordance with the terms

of those Plans as in effect on the date of this Agreement, without regard to

the subsequent amendment of those Plans. 

For purposes of this Section 12, the terms “Award” and “Change of

Control” shall have the meanings ascribed to them in the 1999 Plan and the 1994

Plan, as the case may be.

 

13.                                 Release.  The Employee hereby acknowledges and agrees

that prior to the Employee’s or his/her dependents’ right to receive from the

Company any compensation or benefit to be paid or provided to him/her or his/her

dependents pursuant to Section 3 of this Agreement, the Employee may be

required by the Company, in its sole discretion, to execute a release in a form

reasonably acceptable to the Company, which releases any and all claims (other

than amounts to be paid to Employee as expressly provided for under this

Agreement) the Employee has or may have against the Company or its

subsidiaries, agents, officers, directors, successors or assigns arising under

any public policy, tort or common law or any provision of state, federal or

local law, including, but not limited to, the Pennsylvania Human Relations Act,

the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964,

the Civil Rights Protection Act, Family and Medical Leave Act, the Fair Labor

Standards Act, the Age Discrimination in Employment Act of 1967, or the

Employee Retirement Income Security Act of 1974, all as amended.

 

15

 

14.                                 Waiver.  The waiver by a party hereto of any breach

by the other party hereto of any provision of this Agreement shall not operate

or be construed as a waiver of any subsequent breach by a party hereto.

 

15.                                 Assignment.  This Agreement, including the

non-competition and non-solicitation covenant in Section 8(b) hereof, shall be

binding upon and inure to the benefit of the successors and assigns of the

Company.  The Company shall be obligated

to require any successor (whether direct or indirect, by purchase, merger,

consolidation or otherwise) to all or substantially all of the Company’s

business or assets, by a written agreement in form and substance satisfactory

to the Employee, to expressly assume and agree to perform this Agreement in the

same manner and to the same extent that the Company would be required to perform

if no succession had taken place.  This

Agreement shall inure to the extent provided hereunder to the benefit of and be

enforceable by the Employee or his/her legal representatives, executors,

administrators, successors, heirs, distributees, devisees and legatees.  The Employee may not delegate any of his/her

duties, responsibilities, obligations or positions hereunder to any person and

any such purported delegation by him shall be void and of no force and effect

with respect to matters relating to his/her employment and termination of

employment.  Without limiting the

foregoing, the Employee’s rights to receive payments and benefits hereunder

shall not be assignable or transferable, other than a transfer by Employee’s

will or by the laws of descent and distribution.

 

16.                                 Notices.  Any notices required or permitted to be

given under this Agreement shall be sufficient if in writing, and if personally

delivered or when sent by first class certified or registered mail, postage

prepaid, return receipt requested — in the case of the Employee, to his/her

residence address as set forth below, and in the case of the Company, to the

address of its principal place of business as set forth below, in care of the

Chairman of the Board — or to such other person or at such other address with

respect to each party as such party shall notify the other in writing.

 

17.                                 Pronouns.  Pronouns stated in either the masculine,

feminine or neuter gender shall include the masculine, feminine and neuter.

 

18.                                 Entire

Agreement.  This Agreement contains

the entire agreement of the parties concerning the matters set forth herein and

all promises, representations, understandings, arrangements and prior

agreements regarding the subject matter hereof (including the Existing

Agreement, which the parties agree shall terminate as of the Effective Date

hereof) are merged herein and superseded hereby.  The provisions of this Agreement may not be amended, modified,

repealed, waived, extended or discharged except by an agreement in writing

signed by the party against whom enforcement of any amendment, modification,

repeal, waiver, extension or discharge is sought.  No person acting other than pursuant to a resolution of the Board

of Directors shall have authority on behalf of the Company to agree to amend,

modify, repeal, waive, extend or discharge any provision of this Agreement or

anything in reference thereto or to exercise any of the Company’s rights to

terminate or to fail to extend this Agreement.

 

16

 

IN WITNESS WHEREOF, the Company has caused this

Agreement to be executed by its officers thereunto duly authorized, and the

Employee has hereunto set his/her hand, all as of the day and year first above

written.

 

	

  ATTEST:

  	

   

  	

  EQUITABLE RESOURCES, INC.

  
	

   

  	

   

  	

   

  
	

  /s/ Jean F. Marks

  	

   

  	

  /s/ Gregory R. Spencer

  
	

   

  	

   

  	

  By:

  	

  Gregory R. Spencer

  
	

   

  	

   

  	

  Title:

  	

  Senior Vice President and

  Chief Administrative Officer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Address:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  One Oxford Centre

  
	

   

  	

   

  	

  Suite 3300

  
	

   

  	

   

  	

  Pittsburgh, PA 

  15219

  
	

   

  	

   

  	

   

  
	

  WITNESS:

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  /s/ Carolann Bobash

  	

   

  	

  /s/ Johanna G. O’Loughlin

  
	

   

  	

   

  	

  Name: 

  Johanna G. O’Loughlin

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Address:

  
	

   

  	

   

  	

  9 Dunmogh Place

  
	

   

  	

   

  	

  Pittsburgh, PA

  15207

  
					

 

17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}]]