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CHANGE OF CONTROL AGREEMENT

Change of Control Agreement

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This Change of Control Agreement involves

EQUITABLE RESOURCES, INC

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Title: CHANGE OF CONTROL AGREEMENT
Governing Law: Pennsylvania     Date: 2/25/2005
Industry: NATGAS     Sector: UTILIT

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Exhibit 10.26 (a)

 

CHANGE OF CONTROL AGREEMENT

 

THIS AGREEMENT (the “Agreement”) dated as of the first day of December, 1999 (the “Effective Date”) by and between EQUITABLE RESOURCES, INC., a Pennsylvania corporation with its principal place of business at Pittsburgh, Pennsylvania (the “Company”), and John A. Bergonzi, an individual (the “Employee”);

 

WHEREAS, the Company and certain of its employees, including possibly the Employee, are parties to (i) a Change of Control Agreement, 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 and/or (ii) an Employment Agreement, which provides for the payment of severance benefits in certain circumstances (whether or not the Employee’s termination of employment is in connection with a Change of Control) and includes a provision pursuant to which Employee agrees not to compete with the Company for a stated period of time (to the extent the Employee is a party to one or both of such agreements as of the date of this Agreement, they are referred to as the “Existing Agreements”); 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 order to more fully accomplish the foregoing objectives, the Company and the Employee desire to terminate the Existing Agreements and to enter into this Agreement, which, among other things, clarifies and enhances in certain respects the benefits payable to the Employee if the Employee’s employment terminates in certain circumstances following a Change in Control of the Company;

 

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

 

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

 

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

 

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(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 the Company, any employee benefit plan sponsored or maintained by the Company or, if reference was made to equity ownership of any Parent Company for purposes of determining whether clause (i) above is satisfied in connection with the transaction, such Parent Company) beneficially owns, directly or indirectly, 20% or more of the outstanding shares of common stock or the combined voting power of the voting securities entitled to vote generally in the election of directors of the corporation resulting from such transaction and (iii) individuals who were members of the Company’s Board of Directors immediately prior to the consummation of the transaction constitute at least a majority of the members of the board of directors resulting from such transaction (or, if reference was made to equity ownership of any Parent Company for purposes of determining whether clause, (i) above is satisfied in connection with the transaction, such Parent Company); or

 

(e)                                   The following individuals cease for any 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.

 

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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 two (2) times the Employee’s annual base salary 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 two (2) times the highest annual incentive (bonus) payment earned by the Employee for any year in the three years prior to the termination of Employee’s employment; (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 twenty-four (24) months; (iv) contribution by the Company to Employee’s account under the Company’s defined contribution retirement plan (known as 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 had the Employee continued to be employed by the Company for an additional twenty-four (24) months at a base salary equal to the Employee’s base salary immediately prior to the Change of Control or the termination of Employee’s employment, whichever is higher, 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; (vii) reimbursement to Employee of reasonable costs incurred by Employee for outplacement services in the twelve (12) month period following termination of Employee’s employment.

 

(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 hereunder, and (ii) the Employee may elect to defer such payments pursuant to the Company’s then-existing deferred compensation plan(s).  All other 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, an

 

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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)).

 

(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 o









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