CONTINGENT
BENEFIT AGREEMENT
WHEREAS:
1. Xxxxxxx X. Xxxxxxx (hereinafter the "Executive") and
National Fuel Gas Company (hereinafter, with any of its subsidiaries,
collectively called the "Company"), are parties to a certain Split Dollar
Insurance Agreement dated August 28, 1991, which has been amended by agreements
dated April 19, 1993 and March 15, 1994, and will be further amended and
restated in its entirety by an Agreement executed contemporaneously with this
Agreement (the "Restated Agreement").
2. By entering into the Restated Agreement, the Executive is
agreeing to a substantial reduction in the benefit to which he (or in the event
of his death, his beneficiaries) would have been entitled under the prior
agreement in effect between the Company and the Executive.
3. The parties entered into these Agreements on the
understanding that federal law governing the taxation of split dollar insurance
plans provides that neither the build-up of cash value within a life insurance
policy subject to such a plan nor the death benefit of any such policy is
included in the taxable income of the insured or any beneficiary of the policy.
4. The parties agree that certain benefits should be provided
to the Executive or to the Beneficiary of the policies subject to the Restated
Agreement in the event of a substantial change in the law governing the taxation
of split dollar insurance plans during the term of the Restated Agreement.
NOW, THEREFORE, in consideration of the promises contained
herein and in the Restated Agreement, and other good and sufficient
consideration, the parties agree as follows:
A. If the federal law governing the taxation of split dollar
insurance plans changes substantially before the termination of the Restated
Agreement, such that the Executive must take into taxable income any portion of
the annual increment in the cash value of any policy subject to the Restated
Agreement, the Company hereby agrees to pay to the Executive the Gross-up
Amount, as hereinafter defined. For each taxable year, the Gross-up Amount will
be the amount that will result in the Executive receiving the same economic
benefit from the Company, after state and federal income taxes, as the Executive
would have received in such year if his taxable income did not include either
the Gross-up Amount or any portion of such annual increment in value.
B. If the Executive dies before the termination of the
Restated Agreement, and if by reason of a substantial change in federal tax law
any portion of the death benefit payable upon the Executive's death under any
policy subject to the Restated Agreement is included in the taxable income of
the beneficiary or beneficiaries of such policy, the Company agrees to pay to
such beneficiary or beneficiaries a Beneficiary Gross-up Amount, as hereinafter
defined. With respect to each such beneficiary, the Beneficiary Gross-up Amount
is the amount that will result in receipt by such beneficiary of the same
amount, after state and federal income taxes, as the beneficiary would have
received if the beneficiary's taxable income did not include either the
Beneficiary Gross-up Amount or any portion of such death benefit.
C. This Agreement is binding upon the Company and the
Executive and their legal representatives, successors, beneficiaries and
assigns. In the event that the Company becomes a party to any merger,
consolidation or reorganization, this Agreement will remain in full force and
effect as an obligation of the Company or its successors in interest.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the dates set opposite their respective signatures.
Date signed June 15, 2000 /s/Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
NATIONAL FUEL GAS COMPANY
Date signed June 15, 2000 By: /s/Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
President
