The Company has executed Change-in-Control Agreements with the
following executive officers of the Company: A. Mark Abramovic,
John C. Gongas, Jr., Dan C. Eaton, Audrey C. Moeller, Gregory R.
Spencer and Jeffrey C. Swoveland. Mr. Abramovic's and Mr.
Gongas' Agreements provide for 24 months of severance benefits
while all other contracts provide for 18 months of severance
benefits.
CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT (the "Agreement") dated as of the ___ day of January,
1996 (the "Effective Date") by and between EQUITABLE RESOURCES, INC., a
Pennsylvania corporation with its principal place of business at Pittsburgh,
Pennsylvania (the "Company"), and____________________________, an individual
(the "Employee");
WHEREAS, the Board of Directors of the Company (the "Board"), has
determined 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. The Board believes 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
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. Therefore, in order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement.
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 expire on the earlier of (i) the date of the Employee's
retirement in accordance with the provisions of the Company's retirement policy
as set forth in the Company Management Manual; or (ii) unless further extended
as hereinafter set forth, the date which is thirty-six (36) months after the
Effective Date. 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 Employee's retirement in
accordance with the provisions of the Company's retirement policy) 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. Notwithstanding the foregoing, the
Employee shall serve in said office(s) at the pleasure of the Board, and the
Employee may be removed from said office(s) at any time with or without Cause
(as hereinafter defined); provided, that such removal shall be without prejudice
to any rights the Employee may have to Salary and Benefits Continuation (as
hereinafter defined) hereunder.
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
(15%) or more of the Company's voting securities, shall not
constitute a Change of Control;
(c) The Company's termination of its business
and liquidation of its assets;
(d) The reorganization, merger or consolidation of the Company
into or with another person or entity, by which reorganization,
merger or consolidation the persons who held one hundred percent
(100%) of the voting securities of the Company prior to such
reorganization, merger or consolidation receive or continue to hold
less than sixty percent (60%) of the outstanding voting shares of the
new or continuing corporation; or
(e) If, during any two-year period, less than a majority of
the members of the Board of Directors are persons who were either (i)
nominated or recommended for election by at least two-thirds vote of
the persons who were members of the Board of Directors or Nominating
Committee of the Board of Directors at the beginning of the period,
or (ii) elected by at least a two-thirds vote of the persons who were
members of the Board of Directors at the beginning of the period.
3. Salary and Benefits Continuation. "Salary and Benefits
Continuation" shall be defined to mean the following: (i) payment of sum equal
to Employee's base salary for a twenty-four (24) month period; (ii) payment of
an amount of cash equal to two (2) times the average incentive earned over the
prior three year period; (iii) immediate vesting of all previously unvested cash
awards and stock incentives; (iv) immediate delivery of Company stock or payment
of an amount of cash equal to two (2) times the value of the average grants
received by Employee over the preceding five (5) years under the applicable
Company long term incentive plans; (v) provision to Employee and his eligible
dependents of medical, 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; (vi) immediate granting to Employee of twenty-four
(24) months of service and age credit for determining benefit amounts and any
early retirement reductions with respect to all applicable Company retirement
benefit plans; in addition, no early retirement reductions will be imposed on
the retirement benefits if age at termination equals or exceeds 55; (vii)
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 in connection with a Change of Control.
All amounts payable by the Company to the Employee in cash pursuant
to Section 3(i), (ii), (iii) and (iv) shall be made in a lump sum unless the
Employee otherwise elects and notifies the Company in writing prior to the
termination of his employment of his desire to have all payments made in
accordance with the Company's regular salary and benefit payment practices,
provided that the lump sum payment or first payment is made within thirty (30)
days after the Employee's termination hereunder. 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. In the event that medical,
disability, dental and life insurance benefits cannot be provided under
appropriate Company group insurance policies, 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 salary payments to Employee.
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 consummation of a 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."
For purposes of this Agreement, "Good Reason" is defined as:
(a) Removal of the Employee from the position he held
immediately prior to the Change of Control (by reason other than
death, disability or Cause), or any other material breach by the
Company of its obligations contained in this Agreement;
(b) 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;
(c) A reduction by the Company in the Employee's annual base
salary as in effect on the date hereof or as the same may be
increased from time to time, except for proportional across-the-board
salary reductions similarly affecting all executives of the Company
and all executives of any person in control of the Company, provided,
however, that in no event shall the Employee's annual base salary be
reduced by an amount equal to ten percent or more of the Employee's
annual base salary as of the end of the calendar year immediately
preceding the year in which the Change of Control occurs, without the
Employee's consent;
(d) 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;
(e) 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
present business travel obligations;
(f) 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 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 (f) 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; or
(g) 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 14 hereof.
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 the preceding
sentence and shall continue as provided, notwithstanding the subsequent
expiration of this Agreement pursuant to Section 1 hereof. The Employee's
subsequent employment, death or disability within the twenty-four (24) month
period 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. The
Company shall be authorized to withhold from any payment to the Employee, his
estate or his 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.
4. Termination of Employee for Cause. 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 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 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 the
Confidentiality provision set forth in Section 8 hereof.
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 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
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 (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. This Agreement contains the entire
understanding of the Company and the Employee with respect to the subject matter
hereof and, 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 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.
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.
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.
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.
(a) Confidentiality of Information and Nondisclosure. The
Employee acknowledges and agrees that his employment by the Company
under this Agreement necessarily involves his 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 hereunder, he 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, any person, corporation or other entity
other than the Company, (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 or which the Employee
should reasonably believe will be damaging 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) Company Remedies. The Employee acknowledges and agrees
that any breach of this Agreement by him will result in immediate and
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 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 any
dispute arising from this Agreement, regardless of whether Employee prevails in
any such contest or dispute.
10. Certain Reductions of Payments by the Company. Notwithstanding
anything herein to the contrary, if the aggregate of the amounts due the
Employee under this Agreement and any other plan or program of the Company
constitutes a "Parachute Payment," as such term is defined in Section 280G of
the Internal Revenue Code of 1986, as amended, then the payments to be made to
the Employee under this Agreement which are contingent on a Change of Control
shall be reduced to an amount which, when added to the aggregate of all other
payments to be made to the Employee which are contingent on a Change of Control,
as a result of the termination of his employment, will make the total amount of
such payment equal to 2.99 times his Base Amount. The determinations to be made
with respect to this paragraph shall be made by an independent auditor (the
"Auditor") jointly selected by the Employee and the Company and paid by the
Company. In the event the payments to be made to the Employee are required to be
reduced pursuant to the limitations in this Section 10, the Company shall allow
the Employee to select which payment or benefits Employee wants the Company to
reduce in order that the total amount of such payment is equal to 2.99 times
such Employee's Base Amount. The Auditor shall be a nationally recognized United
States public accounting firm that has not, during the two years preceding the
date of its selection, acted in any way on behalf of the Company or any of its
subsidiaries.
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. Release. The Employee hereby acknowledges and agrees that prior
to the occurrence of the Employee's or his dependents' right to receive from the
Company or any of its representatives or agents any compensation or benefit to
be paid or provided to him or his 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 with respect to matters relating to his employment and termination of
employment.
13. 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.
14. Assignment. This Agreement 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
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. The Employee may not delegate any of his
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 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.
15. 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 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.
16. Pronouns. Pronouns stated in either the
masculine, feminine or neuter gender shall include the masculine,
feminine and neuter.
17. 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 on such
subject 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.
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 hand, all as of the day and year first above written.
ATTEST: EQUITABLE RESOURCES, INC.
_________________________ _________________________________
By:
Frederick H. Abrew
President and
Chief Executive Officer
WITNESS:
__________________________ __________________________________
Address: ________________________
________________________