AMENDED AND RESTATED
EMPLOYMENT CONTINUATION AND
NONCOMPETITION AGREEMENT
THIS
AGREEMENT between [subsidiary corporation], a [state] corporation
(the “Company”), NATIONAL FUEL GAS COMPANY, a New
Jersey corporation (“National”), and
(the “Executive”), dated as of the
day of
, , and amended and restated
as of the day of
, .
WHEREAS,
the Company and National wish to attract and retain well-qualified
executive and key personnel and to assure continuity of management,
which will be essential to its ability to evaluate and respond to
any actual or threatened Change in Control (as defined below) in
the best interests of shareholders;
WHEREAS,
the Executive is a valuable employee of the Company, an integral
part of its management team and a key participant in the decision
making process relative to short-term and long-term planning and
policy for the Company;
WHEREAS,
the Company and National understand that any actual or threatened
Change in Control will present significant concerns for the
Executive with respect to his financial and job
security;
WHEREAS,
the Company and National wish to encourage the Executive to
continue his career and services with the Company for the period
during and after an actual or threatened Change in Control and to
assure to the Company the Executive’s services during the
period in which such a Change in Control is threatened, and to
provide the Executive certain financial assurances to enable the
Executive to perform the responsibilities of his position without
undue distraction and to exercise his judgment without bias due to
his personal circumstances; and
WHEREAS,
the Board of Directors of National has determined that it would be
in the best interests of National and its shareholders to assure
continuity in the management of National in the event of a Change
in Control by entering into an employment continuation and
noncompete agreement with Executive;
WHEREAS,
to achieve these objectives, the Company, National and the
Executive desire to enter into an agreement providing the Company
and the Executive with certain rights and obligations upon the
occurrence of a Change in Control or Potential Change in Control
(as defined in Section 2).
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NOW,
THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Company,
National and the Executive as follows:
1.
Operation of Agreement. (a) Effective Date. The effective date
of this Agreement shall be the date on which a Change in Control
occurs (the “Effective Date”), provided that, except as
provided in Section 1(b), if the Executive is not employed by
the Company, National or any of their subsidiaries on the Effective
Date, this Agreement shall be void and without effect.
(b) Termination
of Employment Following a Potential Change in Control.
Notwithstanding Section 1(a), if (i) the Executive’s
employment is terminated by the Company Without Cause (as defined
in Section 6(c)) after the occurrence of a Potential Change in
Control and prior to the occurrence of a Change in Control and
(ii) a Change in Control, which also constitutes a
“change in control event” for purposes of
Section 409A of the Code, occurs within two years of such
termination, the Executive shall be deemed, solely for purposes of
determining his rights under this Agreement, to have remained
employed until the date such Change in Control occurs and to have
been terminated by the Company without Cause immediately after the
Change in Control. For this purpose, a Change in Control shall also
be a change of control event for purposes of Section 409A of
the Code if it is a change in the ownership or effective control of
the Company, or a change in the ownership of a substantial portion
of the assets of the Company, as such terms are defined in Treas.
Reg. § 1.409A-3(i)(5) (or any successor provision).
2.
Definitions. (a) Change in Control. For the purposes of this
Agreement, a “Change in Control” shall be deemed to
have occurred if any of the following have occurred:
(i) either
(a) the Company or National shall receive a report on
Schedule 13D, or an amendment to such a report, filed with the
Securities and Exchange Commission pursuant to Section 13(d) of the
Securities Exchange Act of 1934 (the “1934 Act”)
disclosing that any person (as such term is used in Section 13(d)
of the 1934 Act) (“Person”), is the beneficial owner,
directly or indirectly, of twenty (20) percent or more of the
outstanding stock of National or (b) the Company or National
has actual knowledge of facts which would require any Person to
file such a report on Schedule 13D, or to make an amendment to
such a report, with the SEC (or would be required to file such a
report or amendment upon the lapse of the applicable period of time
specified in Section 13(d) of the 1934 Act) disclosing that such
Person is the beneficial owner, directly or indirectly, of twenty
(20) percent or more of the outstanding stock of
National;
(ii) purchase
by any Person, other than National or a wholly-owned subsidiary of
National or an employee benefit plan sponsored or maintained by
National or a wholly-owned subsidiary of National, of shares
pursuant to a tender or exchange offer to acquire any stock
of
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National (or
securities convertible into stock) for cash, securities or any
other consideration provided that, after consummation of the offer,
such Person is the beneficial owner (as defined in Rule 13d-3
under the 1934 Act), directly or indirectly, of twenty
(20) percent or more of the outstanding stock of National
(calculated as provided in paragraph (d) of Rule 13d-3
under the 1934 Act in the case of rights to acquire
stock);
(iii) approval
by the shareholders of National of (a) any consolidation or
merger of National in which National is not the continuing or
surviving corporation or pursuant to which shares of stock of
National would be converted into cash, securities or other
property, other than a consolidation or merger of National in which
holders of its stock immediately prior to the consolidation or
merger have substantially the same proportionate ownership of
common stock of the surviving corporation immediately after the
consolidation or merger as immediately before, or (b) any
consolidation or merger in which National is the continuing or
surviving corporation but in which the common shareholders of
National immediately prior to the consolidation or merger do not
hold at least a majority of the outstanding common stock of the
continuing or surviving corporation (except where such holders of
common stock hold at least a majority of the common stock of the
corporation which owns all of the common stock of National), or
(c) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all the assets of National; or
(iv) a
change in the majority of the members of the Board of Directors of
National (the “Board”) within a 24-month period unless
the election or nomination for election by National’s
shareholders of each new director was approved by the vote of at
least two-thirds of the directors then still in office who were in
office at the beginning of the 24-month period.
(b) Potential
Change in Control. For the purposes of this Agreement, a Potential
Change in Control shall be deemed to have occurred if:
(i) a
Person commences a tender offer (with adequate financing) for
securities representing at least twenty (20) percent of the
outstanding stock of National (calculated as provided in paragraph
(d) of Rule 13d-3 under the 1934 Act in the case of
rights to acquire stock);
(ii) National
enters into an agreement the consummation of which would constitute
a Change in Control;
(iii) proxies
for the election of directors of National are solicited by anyone
other than National; or
(iv) any
other event occurs which is deemed to be a Potential Change in
Control by the Board.
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3.
Employment Period. Subject to Section 6 of this Agreement, the
Company agrees to continue the Executive in its employ, and the
Executive agrees to remain in the employ of the Company, for the
period (the “Employment Period”) commencing on the
Effective Date and ending on the earlier to occur of (i) the
third anniversary of the Effective Date and (ii) the date on
which the Executive attains age 65.
4.
Position and Duties. During the Employment Period, the
Executive’s position (including titles), authority and
responsibilities shall be at least commensurate with those held,
exercised and assigned immediately prior to the Effective Date. It
is understood that, for purposes of this Agreement, such position,
authority and responsibilities shall not be regarded as not
commensurate merely by virtue of the fact that a successor shall
have acquired all or substantially all of the business and/or
assets of the Company as contemplated by Section 12(b) of this
Agreement. The Executive’s services shall be performed in the
United States and within 30 miles of the location where the
Executive was employed immediately preceding the Effective
Date.
5.
Compensation. (a) Base Salary. During the Employment Period,
the Executive shall receive a base salary at a monthly rate at
least equal to the monthly salary paid to the Executive by the
Company and any of its affiliated companies immediately prior to
the Effective Date. The base salary shall be reviewed at least once
each year after the Effective Date, and shall be increased annually
at a rate at least equal to the greater of (i) the average
percentage increase for the same period in the compensation of
salaried employees of National and its subsidiaries who are not
executives and (ii) the percentage increase in the national
Consumer Price Index for the last completed calendar year. The
Executive’s base salary, as it shall be increased from time
to time, shall hereafter be referred to as “Base
Salary”. Neither the Base Salary nor any increase in Base
Salary after the Effective Date shall serve to limit or reduce any
other obligation of the Company hereunder.
(b) Annual
Bonus. During the Employment Period, in addition to the Base
Salary, for each fiscal year of the Company ending during the
Employment Period, the Executive shall be afforded the opportunity
to receive an annual bonus on terms and conditions no less
favorable to the Executive (taking into account reasonable changes
in the Company’s goals and objectives) than the annual bonus
opportunity that had been made available to the Executive for the
fiscal year ended immediately prior to the Effective Date (the
“Annual Bonus Opportunity”). Any amount payable in
respect of the Annual Bonus Opportunity shall be paid as soon as
practicable following the year for which the amount (or prorated
portion) is earned or awarded, unless electively deferred by the
Executive pursuant to any deferral programs or arrangements that
the Company may make available to the Executive.
(c) Long-term
Incentive Compensation Programs. During the Employment Period, the
Executive shall participate in all long-term incentive compensation
programs for key executives at a level that is
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commensurate
with the Executive’s participation in such plans immediately
prior to the Effective Date, or, if more favorable to the
Executive, at the level made available to the Executive or other
similarly situated officers at any time thereafter.
(d) Benefit
Plans. During the Employment Period, the Executive (and, to the
extent applicable, his dependents) shall be entitled to participate
in or be covered under all pension, retirement, deferred
compensation, savings, medical, dental, health, disability, group
life, accidental death and travel accident insurance plans and
programs of the Company and its affiliated companies at a level
that is commensurate with the Executive’s participation in
such plans immediately prior to the Effective Date, or, if more
favorable to the Executive, at the level made available to the
Executive or other similarly situated officers at any time
thereafter.
(e) Expenses.
During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the policies and procedures of
the Company as in effect immediately prior to the Effective Date.
Notwithstanding the foregoing, the Company may apply the policies
and procedures in effect after the Effective Date to the Executive,
if such policies and procedures are not less favorable to the
Executive than those in effect immediately prior to the Effective
Date.
(f) Vacation
and Fringe Benefits. During the Employment Period, the Executive
shall be entitled to paid vacation and fringe benefits at a level
that is commensurate with the paid vacation and fringe benefits
available to the Executive immediately prior to the Effective Date,
or, if more favorable to the Executive, at the level made available
from time to time to the Executive or other similarly situated
officers at any time thereafter.
(g) Indemnification.
During and after the Employment Period, National and the Company
shall indemnify the Executive and hold the Executive harmless from
and against any claim, loss or cause of action arising from or out
of the Executive’s performance as an officer, director or
employee of National or the Company or any of their subsidiaries or
in any other capacity, including any fiduciary capacity, in which
the Executive serves at the request of National or the Company to
the maximum extent permitted by applicable law and the
Company’s Certificate of Incorporation and By-Laws (the
“Governing Documents”), provided that in no event shall
the protection afforded to the Executive hereunder be less than
that afforded under the Governing Documents as in effect
immediately prior to the Effective Date.
6.
Termination. (a) Death, Disability or Retirement. Subject to
the provisions of Section 1 hereof, this Agreement shall
terminate automatically upon the Executive’s death,
termination due to “Disability” (as defined below) or
voluntary retirement under any of the Company’s retirement
plans as in effect from time to time. For purposes of this
Agreement, Disability shall mean the Executive’s
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inability to
perform the duties of his position, as determined in accordance
with the policies and procedures applicable with respect to the
Company’s long-term disability plan, as in effect immediately
prior to the Effective Date.
(b) Voluntary
Termination. Notwithstanding anything in this Agreement to the
contrary, following a Change in Control the Executive may, upon not
less than 30 days’ written notice to the Company,
voluntarily terminate employment for any reason (including early
retirement under the terms of any of the Company’s retirement
plans as in effect from time to time), provided that any
termination by the Executive pursuant to Section 6(d) on account of
Good Reason (as defined therein) shall not be treated as a
voluntary termination under this Section 6(b).
(c) Cause.
The Company may terminate the Executive’s employment for
Cause. For purposes of this Agreement, “Cause” means
the Executive’s gross misconduct, fraud or dishonesty, which
has resulted or is likely to result in material economic damage to
the Company or National, as determined in good faith by a vote of
at least two-thirds of the non-employee directors of National at a
meeting of the Board at which the Executive is provided an
opportunity to be heard (with representation by counsel of his
choosing, should he so desire).
(d) Good
Reason. Following the occurrence of a Change in Control, the
Executive may terminate his employment for Good Reason. For
purposes of this Agreement, “Good Reason” means the
occurrence of any of the following, without the express written
consent of the Executive, after the occurrence of a Change in
Control:
(i) a
material diminution in (A) the Executive’s authority,
duties, or responsibilities, (B) the Executive’s base
compensation or (C) the budget over which the Executive
retains authority;
(ii) a
material diminution in the authority, duties, or responsibilities
of the supervisor to whom the Executive is required to report,
including a requirement that the Executive report to a corporate
officer or employee instead of reporting directly to the board of
directors of a corporation; or
(iii) the
Company’s requiring the Executive to be based at any office
or location outside of the United States and/or more than 30 miles
from that location at which he performed his services specified
under the provisions of Section 4 immediately prior to the
Change in Control, except for travel reasonably required in the
performance of the Executive’s responsibilities;
or
(iv) any
other action or inaction that constitutes a material breach by the
Company of this Agreement;
provided,
however, that to constitute Good Reason the Company shall have a
period of 30 days to cure any acts which would
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otherwise give
Executive the right to terminate his employment for Good Reason.
Such 30-day period shall commence as of the date of receipt by the
Company of the Notice of Termination.
In no event
shall the mere occurrence of a Change in Control, absent any
further impact on the Executive, be deemed to constitute Good
Reason. In the event that the Executive shall in good faith give a
Notice of Termination for Good Reason and it shall thereafter be
determined that Good Reason did not exist, the Executive shall,
unless the Company and the Executive shall otherwise mutually
agree, return to employment with the Company within 5 business days
of such decision, without any impairment or other limitation of his
rights hereunder, except that he shall not be paid his base salary
for any period he did not perform services and his annual bonus
opportunity for such year may be reduced to reflect his period of
absence.
(e) Notice
of Termination. Any termination by the Company for Cause or by the
Executive for Good Reason shall be communicated by Notice of
Termination given in accordance with Section 13(e). For
purposes of this Agreement, a “Notice of Termination”
means a written notice given, in the case of a termination for
Cause, within 30 business days of the Company’s having actual
knowledge of the events giving rise to such termination, and in the
case of a termination for Good Reason, within 90 days of the
Executive’s having actual knowledge of the events giving rise
to such termination, and which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive’s employment
under the provision so indicated, and (iii) specifies the date
the Executive’s employment shall terminate (which date shall
be not less than 30 nor more than 60 days after the giving of
such notice). The failure by the Executive to set forth in the
Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason shall not waive any right of the Executive
hereunder or preclude the Executive from asserting such fact or
circumstance in enforcing his rights hereunder.
(f) Date
of Termination. For the purpose of this Agreement, the term
“Date of Termination” means (i) in the case of a
termination for which a Notice of Termination is required, the date
of receipt of such Notice of Termination or, if later, the date
specified therein, as the case may be, and (ii) in all other
cases, the actual date on which the Executive’s employment
terminates during the Employment Period. For the avoidance of
doubt, if the Executive ceases to be an employee but continues to
provide services to the Company or any of its affiliates following
his Date of Termination, or is reasonably expected (at such Date of
Termination) to provide such services within 12 months of such
Date of Termination, the term Date of Termination (or termination
of employment or any other similar terms used in this Agreement)
shall be deemed to refer to the date at which the Executive incurs
a “separation from service” from the Company within the
meaning of Section 409A of the Code and the regulations
promulgated thereunder. This means that rather than being entitled
to receive any payments or benefits
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hereunder upon,
or at a specified time following, the Date of Termination (or
termination of employment or any other similar terms used in the
Agreement), such a continuing Executive shall be entitled to
receive such payments or benefits upon, or at a specified time
following, such a separation from service.
7.
Obligations of the Company upon Termination. (a) Death or
Disability. If the Executive’s employment is terminated
during the Employment Period by reason of the Executive’s
death or Disability, this Agreement shall terminate without further
obligations to the Executive or the Executive’s legal
representatives under this Agreement other than those obligations
accrued hereunder at the Date of Termination, and the Company shall
pay to the Executive (or his beneficiary or estate) (i) the
Executive’s full Base Salary through the Date of Termination
(the “Earned Salary”), (ii) any vested amounts or
benefits owing to the Executive under the Company’s otherwise
applicable employee benefit plans and programs, including any
compensation previously deferred by the Executive (together with
any accrued earnings thereon) and not yet paid by the Company and
any amounts payable pursuant any individual agreement with
Executive (the “Accrued Obligations”), and
(iii) any other benefits payable due to the Executive’s
death or Disability under the Company’s plans, policies or
programs (the “Additional Benefits”).
Any
Earned Salary shall be paid in cash in a single lump sum as soon as
practicable, but in no event more than 15 days (or at such
earlier date required by law), following the Date of Termination.
Accrued Obligations and Additional Benefits shall be paid in
accordance with the terms of the applicable plan, program or
arrangement.
(b) Cause
and Voluntary Termination. If, during the Employment Period, the
Executive’s employment shall be terminated for Cause or
voluntarily terminated by the Executive (other than on account of
Good Reason following a Change in Control), the Company shall pay
the Executive (i) the Earned Salary in cash in a single lump
sum as soon as practicable, but in no event more than 10 days,
following the Date of Termination, and (ii) the Accrued
Obligations in accordance with the terms of the applicable plan,
program or arrangement.
(c) Termination
by the Company other than for Cause and Termination by the
Executive for Good Reason. Subject to Section 7(f) below, if,
during the Employ
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