EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS EMPLOYMENT AGREEMENT (the
“Agreement”) is entered into by and between XXXXXX X. XXXXXXX, a resident
of the State of Tennessee (“Executive”), and PENN VIRGINIA RESOURCE GP,
LLC., a Delaware limited liability company (the “Company”), as of this
23rd
day of March, 2010 (the “Commencement Date”).
WHEREAS, the Company desires
to retain Executive, and Executive desires to be retained, to serve as Executive
Vice President and Chief Financial Officer of the Company on the terms set forth
herein.
NOW, THEREFORE, in
consideration of the mutual covenants and obligations contained herein, and
intending to be legally bound, the parties agree as follows:
1. Duties. Executive
shall have the title of Executive Vice President and Chief Financial Officer of
the Company. Executive shall report to and receive instructions from
the Chief Executive Officer and shall have such duties and responsibilities
customary for the positions of executive vice president and chief financial
officer of public companies similarly situated.
2. Term of
Employment. The term of employment (the “Term”) shall be for a
period of three years commencing on the Commencement Date and ending at midnight
on March 22, 2013, unless terminated earlier pursuant to the terms of this
Agreement; provided, however, that commencing 365 days following the
Commencement Date and on each day thereafter, the Term of this Agreement shall
automatically be extended for one additional day unless the Company shall give
written notice to Executive that the Term shall cease to be so extended in which
event this Agreement shall terminate on the second anniversary of the date such
notice is given. Notwithstanding anything in this Agreement to the
contrary, if a Change of Control occurs during the Term of this Agreement, the
Term shall automatically be extended until, and shall terminate on, the 24-month
anniversary of the date of the Change of Control. Furthermore,
Executive’s employment may be terminated at any time prior to the end of the
Term for the following reasons:
(a) Termination for
Cause. Notwithstanding the Term of this Agreement, the Company
may discharge Executive for Cause, which shall immediately terminate this
Agreement, and the Company shall not have any further liability hereunder except
to (i) pay to Executive the total amount of Base Salary pursuant to Section 3(a)
hereof, if any, accrued up to the date of termination and (ii) reimburse to
Executive any expenses then reimbursable to Executive under Section 3(f)
hereof.
(b) Death or
Disability. In the event of the Disability of Executive for a
total of 180 consecutive days during the Term or in the event of the death of
Executive, this Agreement shall immediately terminate and the Company shall not
have any further liability hereunder except to (i) pay to Executive or his
estate the total amount of Base Salary pursuant to Section 3(a) hereof, if any,
accrued up to the date of termination and (ii) reimburse to Executive or
his estate any expenses then reimbursable to Executive under Section 3(f)
hereof.
3. Compensation
and Benefits.
(a) Base Salary. The
Company shall pay to Executive a salary (the “Base Salary”) at the annual rate
of two hundred seventy-five thousand dollars ($275,000) effective as of the
Commencement Date, payable in accordance with the Company’s normal
practice. The Base Salary shall be inclusive of all applicable
income, Social Security and other taxes and charges which are required by law or
requested to be withheld by Executive and which shall be withheld and paid in
accordance with the Company’s normal practice.
(b) Annual Cash Incentive
Compensation. Executive shall be eligible to participate in
the Company’s cash incentive compensation program, which shall enable
Executive to earn cash bonus compensation in such amounts, if any, and payable
at such times, if any, as determined in the normal course by the Compensation
and Benefits Committee (the “Committee”) of the Board of Directors (the
“Board”). Executive’s target annual bonus shall be 50% of his Base
Salary.
(c) Annual Equity
Incentives. Executive shall be eligible to participate in the
Company’s equity-based incentive program, which shall enable Executive to earn
equity-based bonus compensation in such amounts, if any, and payable at such
times, if any, as determined in the normal course by the
Committee. Executive’s target annual equity-based bonus shall be 100%
of his Base Salary.
(d) Initial Equity
Grant. On the Commencement Date, the Committee shall grant to
Executive $275,000 worth of phantom units (the “Initial Units”) of the
Partnership pursuant to the Penn Virginia Resource GP, LLC Fifth Amended and
Restated Long-Term Incentive Plan (the “PVR LTIP”). Executive agrees
that this award of Initial Units shall be subject to all of the terms and
conditions set forth in the PVR LTIP and the Initial Unit Award
Agreement.
(e) Fringe
Benefits. Executive shall be entitled to participate in any
other benefit plans, programs, policies and fringe benefits which may be made
available from time to time to the Company’s executive officers, including,
without limitation, disability, medical, dental and life insurance, annual
physicals and benefits under the Company’s 401(k) savings plan. In
addition, the Company shall pay to Executive an automobile allowance of $1,700
per month.
(f) Reimbursement of
Expenses. The Company shall reimburse Executive for all
reasonable and necessary business expenses incurred and advanced by him in
carrying out his duties under this Agreement. Executive shall present to
the Company an itemized account of all expenses in such form as may be required
by the Company from time to time.
(g) Vacation
Days. Executive shall be entitled to four weeks paid vacation
during each calendar year.
4. Other
Business Activities. Executive shall serve the Company
faithfully and shall devote his reasonable best efforts and all of his business
time, attention, skill and efforts to the performance of the duties required by
or appropriate for his position as Chief Financial Officer. In
furtherance of the foregoing, and not by way of limitation, for so long as
Executive remains Chief Financial Officer of the Company, Executive shall not
directly or indirectly engage in any other business activities, except for such
other activities as would not interfere with Executive’s ability to carry out
his duties under this Agreement.
5. Restrictive
Covenants.
(a) Confidential
Information. Executive recognizes and acknowledges that, by
reason of his employment by and service to the Company, he has had and shall
continue to have access to confidential information of the Company and its
Affiliates, including, without limitation, analyses, interpretations,
compilations, reports, reservoir data, geologic and geophysical data, maps,
models, financial data, environmental data, information and knowledge pertaining
to products and services offered, plans, trade secrets, proprietary information,
customer lists and relationships among the Company and its Affiliates and
distributors, customers, suppliers and others who have business dealings with
the Company and its Affiliates (“Confidential
Information”). Executive acknowledges that such Confidential
Information is a valuable and unique asset and covenants that he shall not,
either during or after his employment by the Company, disclose any such
Confidential Information to any Person for any reason whatsoever without the
prior written consent of the Board, unless such information is in the public
domain through no fault of Executive or except as may be required by
law.
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(b) Non-Solicitation. Executive
shall not, directly or indirectly during the Term and for a period of two years
thereafter, solicit or divert business from, or attempt to convert any account
or customer of the Company or any of its Affiliates, whether existing at the
date hereof or acquired during Executive’s employment.
6. Equitable
Relief.
(a) Executive
acknowledges that the restrictions contained in Section 5 hereof are reasonable
and necessary to protect the legitimate interests of the Company and its
Affiliates, that the Company would not have entered into this Agreement in the
absence of such restrictions and that any violation of any provision of Section
5 shall result in irreparable injury to the Company. Executive
further represents and acknowledges that (i) he has been advised by the
Company to consult his own legal counsel in respect of this Agreement and
(ii) he has had full opportunity, prior to execution of this Agreement, to
review thoroughly this Agreement with his counsel.
(b) Executive
agrees that the Company or any Affiliate shall be entitled to preliminary and
permanent injunctive relief, without the necessity of proving actual damages or
posting a bond, as well as to an equitable accounting of all earnings, profits
and other benefits arising from any violation of Section 5 hereof, which rights
shall be cumulative and in addition to any other rights or remedies to which the
Company or any Affiliate may be entitled. In the event that any of
the provisions of Section 5 hereof should ever be adjudicated to exceed any
limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum
limitations permitted by applicable law.
(c) Executive
irrevocably and unconditionally (i) agrees that any suit, action or other
legal proceeding arising out of Section 5 hereof, including without limitation,
any action commenced by the Company or any Affiliate for preliminary and
permanent injunctive relief or other equitable relief, may be brought in the
United States District Court for the Eastern District of Pennsylvania, or if
such court does not have jurisdiction or shall not accept jurisdiction, in any
court of general jurisdiction in Xxxxxxxxxx County, Pennsylvania,
(ii) consents to the non-exclusive jurisdiction of any such court in any
such suit, action or proceeding and (iii) waives any objection which
Executive may have to the laying of venue of any such suit, action or proceeding
in any such court. Executive also irrevocably and unconditionally
consents to the service of any process, pleadings, notices or other papers in a
manner permitted by the notice provisions of Section 12 hereof. In the event of
a lawsuit by either party to enforce the provisions of Section 5 of this
Agreement, the prevailing party shall be entitled to recover reasonable costs,
expenses and attorneys’ fees from the other party.
(d) Executive
agrees that he shall provide, and that the Company may similarly provide, a copy
of Section 5 hereof to any business or enterprise (i) which he may directly
or indirectly own, manage, operate, finance, join, control or participate in the
ownership, management, operation, financing or control of or (ii) with
which he may be connected as an officer, director, employee, partner, principal,
agent, representative, consultant or otherwise, or in connection with which he
may use or permit his name to be used.
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7. Change of
Control Severance Benefits.
(a) If
at any time on or after the one year anniversary of the Commencement Date,
(i) Executive terminates his employment with the Company during the
Protected Period for a Good Reason event or (ii) the Company terminates
Executive’s employment during the Protected Period other than (x) for Cause
or (y) due to Executive’s inability to perform the primary duties of his
position for at least 180 consecutive days due to the Disability of Executive,
Executive shall receive the following compensation and benefits from the Company
subject to the execution (and non-revocation within eight days thereafter) and
delivery to the Company of a release, substantially in the form attached as
Exhibit A
hereto, with such changes as the Company reasonably determines must be made to
comply with applicable law at the time of such execution (the
“Release”):
(A) The
Company shall, at the time provided in Section 7(e), pay to Executive in a lump
sum, in cash, an amount equal to three times the sum of Executive’s
(1) Termination Base Salary and (2) Bonus. This payment
shall satisfy any and all obligations of the Company to pay Executive
compensation provided in Section 3(a), (b), (c) and (e) above during the
Term.
(B) Except
to the extent any awards related to common units of Penn Virginia GP Holdings,
L.P., a Delaware limited partnership (“PVG”), or common units of the Partnership
have already vested or become exercisable, as the case may be, under the PVG GP,
LLC Amended and Restated Long-Term Incentive Plan (the “PVG LTIP”) or the PVR
LTIP, or under any successor or other similar plan, as of the date of
Executive’s termination of employment (1) all restricted PVG units and all
restricted Partnership units of Executive shall become 100% vested and all
restrictions thereon shall lapse and PVG and the Partnership shall promptly
deliver to Executive unrestricted PVG common units and unrestricted Partnership
common units, (2) all PVG phantom units and all Partnership phantom units
of Executive shall become 100% vested and all restrictions thereon shall lapse
and PVG and the Partnership shall promptly deliver to Executive cash or
unrestricted PVG common units or unrestricted Partnership common units, as
applicable, and (3) each outstanding PVG unit option and Partnership unit
option of Executive shall become 100% exercisable and shall, notwithstanding
anything stated to the contrary in the PVG LTIP, the PVR LTIP, any successor or
other similar plan or any option agreement related thereto, remain exercisable
for the remainder of such option’s term or three years, whichever is
less.
(C) The
Company shall pay to Executive in a lump sum, at the time provided in Section
7(e), that amount equal to three times the product of (x) the total medical
and dental insurance premiums paid or payable by the Company with respect to
Executive and Executive’s eligible family members during the month in which
Executive’s employment terminates times (y) 12.
(D) For
the 24-month period beginning on the date on which Executive’s employment
terminates, or until Executive begins other full-time employment with a new
employer, whichever occurs first, Executive shall be entitled to receive
outplacement services that are directly related to Executive’s termination of
employment and are actually provided by an outplacement services firm, paid by
the Company, with a nationally prominent executive outplacement service firm
selected by the Company and reasonably acceptable to Executive; provided,
however, that the period during which the outplacement services shall be covered
and the reimbursements paid do not extend beyond the periods set forth in Treas.
Reg. §1.409A-1(b)(9)(v)(E).
(b) If
at any time prior to the one year anniversary of the Commencement Date a Change
of Control occurs and (i) Executive terminates his employment with the Company
for a Good Reason event or (ii) the Company terminates Executive’s employment
other than (x) for Cause or (y) due to Executive’s inability to perform the
primary duties of his position for at least 180 consecutive days due to the
Disability of Executive, Executive shall receive the following compensation and
benefits from the Company subject to the execution (and non-revocation within
eight days thereafter) and delivery to the Company of the
Release:
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(A) The
Company shall, at the time provided in Section 7(e), pay to Executive $275,000
in cash. This payment shall satisfy any and all obligations of the
Company to pay Executive compensation provided in Section 3(a), (b), (c) and (e)
above during the Term.
(B) The
Initial Units shall become 100% vested and all restrictions thereon shall lapse
and the Partnership shall promptly deliver to Executive cash or unrestricted
Partnership common units, as applicable, all in accordance with the Initial Unit
Award Agreement.
(c) Within
one week following the eighth day after the execution (without revocation) of
the Release, the Company shall provide to Executive a release substantially in
the form attached hereto as Exhibit B, with such
changes as the Company reasonably determines must be made to comply with
applicable law at the time of such execution. If the Company does not provide
the release required pursuant to this subsection (c), the Release shall be null,
void and without effect, and Executive shall still receive all of the payments
and benefits described in subsections (a) or (b), as applicable,
above.
(d) The
Company may withhold from any amounts or benefits payable under this Agreement
all such amounts as it shall be required to withhold pursuant to any applicable
law or regulation.
(e) Payment
of the amounts described in subsections (a) or (b) above, as applicable, shall
be made within 30 days of Executive’s date of termination (provided that the
Release has been executed and has not been revoked) and shall be made by mail to
the last address provided for notices to Executive pursuant to Section 12 of
this Agreement. Any payment not timely made by the Company under this
Agreement shall bear interest at 18% per annum or, if less, at the highest
nonusurious rate permitted by applicable law.
(f)
If any payment to be
made, or benefit to be provided, to or on behalf of Executive pursuant to
Section 7 of this Agreement (the “Payments”) results in Executive being subject
to the excise tax imposed by Section 4999 of the Code (or any successor or
similar provision) (the “Excise Tax”), the amount payable to Executive under
Section 7(a) or (b), as applicable, shall be reduced so that the Payments do not
result in Executive being subject to the Excise Tax. One or more
determinations as to (i) whether any of the Payments shall be subject to
the Excise Tax and (ii) the amount of the Excise Tax imposed thereon, shall
be made by the Company in consultation with such accounting and tax
professionals as the Company considers necessary (with all costs related thereto
paid by the Company). For purposes of determining whether any of the
Payments shall be subject to the Excise Tax, (A) all of the Payments shall
be treated as “parachute payments” (within the meaning of section 280G of the
Code) unless and to the extent that, in the written advice of an independent
accountant selected (and paid for) by the Company and reasonably acceptable to
Executive (the “Accountant”), certain Payments should not constitute parachute
payments, and (B) all “excess parachute payments” (within the meaning of
section 280G of the Code) shall be treated as subject to the Excise Tax unless
and only to the extent that the Accountant advises the Company that such excess
parachute payments are not subject to the Excise Tax.
(g) To
the extent payment with respect to any restricted or phantom unit award under
clause (1) or clause (2) of subsections 7(a)(ii)(B) and 7(b)(ii)(B)
constitutes a payment event for purposes of section 409A of the Code, payment
shall be made at the time specified hereunder only if the transaction
constituting a Change of Control is a “change in control event” within the
meaning given such term under section 409A of the Code. If the
transaction constituting a Change of Control is not a “change in control event”
within the meaning given such term under section 409A of the Code, payment with
respect to any such restricted or phantom unit awards shall be made at such time
or times as set forth in the PVG LTIP or the PVR LTIP, or any successor or other
similar plan or any grant agreement related thereto.
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(h) If
Executive’s employment with the Company terminates prior to, but within six
months of, the date on which a Change of Control occurs, and it is reasonably
demonstrated by Executive that such termination of employment was (1) by
the Company in connection with or in anticipation of the Change of Control or
(2) by Executive under circumstances which would have constituted Good
Reason if the circumstances arose on or after the Change of Control, then for
all purposes of this Agreement the Change of Control shall be deemed to have
occurred, and the Protected Period shall be deemed to have commenced, on the
date immediately prior to the date of such termination of Executive’s
employment; provided, however, that the amount of payments and benefits that
Executive is entitled to receive hereunder as a result of such Change of Control
shall be reduced by the amount of all other severance payments and benefits
previously received by Executive in connection with such termination and,
notwithstanding any provision to the contrary herein, shall be paid to Executive
within 30 days after the six-month anniversary of the date of Executive’s
termination of employment. If Executive’s employment with the Company terminates
as set forth in this Section 7(h), the amount of payments and benefits that
Executive is entitled to receive hereunder as a result of a Change of Control
shall be paid in the form of a lump sum only if the transaction constituting a
Change of Control is a “change in control event” within the meaning given such
term under section 409A of the Code. If the transaction constituting a Change of
Control is not a “change in control event” within the meaning given such term
under section 409A of the Code, the amount of payments and benefits that
Executive is entitled to receive hereunder as a result of a Change of Control
shall be paid in the same form as the other severance payments and benefits
previously received by Executive in connection with such
termination.
8. Defined
Terms. For purposes of this Agreement:
(a) “Affiliate” shall
mean, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries controls, is controlled by or is under common
control with, the Person in question. As used herein, the term “control” means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
(b) “Bonus” shall mean an
amount equal to the highest annual cash bonus paid to Executive by the Company
pursuant to Section 3(b) during the two-year period prior to Executive’s
termination of employment.
(c) “Cause” shall mean
(i) the willful and continued failure by Executive to substantially perform
Executive’s duties with the Company or any Affiliate (other than any such
failure resulting from a Disability), (ii) Executive is convicted of a
felony, (iii) Executive willfully engages in gross misconduct materially
and demonstrably injurious to the Company or any Affiliate or
(iv) Executive commits one or more significant acts of dishonesty as
regards the Company or any Affiliate. For purposes of clause (i) above, no
act, or failure to act, on Executive’s part shall be deemed “willful” unless
done, or omitted to be done, by Executive not in good faith and without
reasonable belief that Executive’s act, or failure to act, was in the best
interest of the Company. In the case of clauses (i), (iii) and
(iv) above, the determination of whether Cause exists shall only be made by
a resolution duly adopted by the affirmative vote of not less than two-thirds of
the entire membership of the Board at a meeting of the Board that was called for
the purpose of considering such termination (after reasonable notice to
Executive and an opportunity for Executive, together with Executive’s counsel,
to be heard before the Board and, if possible, to cure the breach that was the
alleged basis for Cause) finding that, in the good faith opinion of the Board,
Executive was guilty of conduct constituting Cause and specifying the
particulars thereof in detail.
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(d) “Change of Control”
shall mean:
(i) Any
sale, lease, exchange or other transfer (in one or a series of related
transactions) of all or substantially all of the assets of the PVG General
Partner, PVG, the Company or the Partnership;
(ii) Any
Person or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) other than Penn Virginia or its Affiliates becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of (A) equity securities of the PVG General Partner or the Company
representing more than 50% of the combined voting power of the PVG General
Partner or the Company or (B) equity securities of the Partnership or PVG
representing more than 75% of the combined voting power of PVG or the
Partnership; provided, however, that, notwithstanding the foregoing, if, at any
time during the Change of Control Waiver Period, Penn Virginia enters into an
agreement with any Person or group pursuant to which such Person or group would,
upon the consummation of the transaction contemplated by such agreement, become
the beneficial owner of equity securities described in this Section 8(d)(ii), no
Change of Control shall be deemed to have occurred, and no payment shall be due
to Executive under this Agreement, in connection with such
transaction.
(iii) The
equity security holders of PVG or the Partnership approve the consummation of a
merger or consolidation of PVG or the Partnership with any other entity, other
than a merger or consolidation which would result in the voting securities of
PVG or the Partnership immediately outstanding prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 75% of the combined voting power of
the voting securities of PVG or the Partnership outstanding immediately after
such merger or consolidation; or
(iv) A
Penn Virginia Change of Control if, at the time of such Penn Virginia Change of
Control, the Company is an Affiliate of Penn Virginia.
(e) “Change of Control Waiver
Period” shall mean the period commencing on the Commencement Date and
ending on the two month anniversary of the Commencement Date.
(f)
“Code” shall mean the
Internal Revenue Code of 1986, as amended and the regulations promulgated
thereunder.
(g) “Disability” shall
have the meaning given such term in Section 409A(a)(2)(C) of the
Code.
(h) “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.
(i)
“Good Reason” shall
mean:
(i) a
reduction in Executive’s authority, duties, titles, status or responsibilities
from those in effect immediately prior to the Change of Control or the
assignment to Executive of duties or responsibilities inconsistent in any
respect from those of Executive in effect immediately prior to the Change of
Control, but excluding any action or omission by the Company that is immaterial,
isolated, insubstantial and inadvertent and which was not taken in bad faith by
the Company and is remedied by the Company promptly after receipt of notice
thereof given by Executive;
(ii) a
material breach of this Agreement by the Company;
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(iii) the
Company fails to obtain a written agreement from any successor or assigns of the
Company to assume and perform this Agreement as provided in Section 11 hereof;
or
(iv) the
relocation by more than 100 miles of the Company’s Radnor, Pennsylvania office
or the Company requires Executive, without Executive’s written consent, to be
based at any office other than the Company’s Radnor, Pennsylvania office if the
new office location is more than 50 miles away from the original office
location.
Executive
shall give the Company notice in accordance with Section 12 below within 90 days
following an act or omission to act by the Company constituting Good Reason
hereunder of Executive’s intent to resign for Good Reason, and the Company shall
have 30 days from the date of such notice to cure the circumstances or events
giving rise to Executive’s right to resign for Good Reason, if capable of being
cured, so as to eliminate the existence of Good Reason for Executive’s
resignation, and, in the event the Company does not cure such circumstances or
events, then unless Executive terminates his employment upon the expiration of
the foregoing 30-day cure period, Executive’s continued employment after the
expiration of such 30-day cure period shall constitute Executive’s consent to,
and a waiver of Executive’s rights with respect to, such act or failure to
act. Executive’s right to terminate Executive’s employment for Good
Reason shall not be affected by Executive’s incapacity due to physical or mental
illness. Executive’s determination that an act or failure to act
constitutes Good Reason shall be presumed to be valid unless such determination
is deemed by an arbitrator to be unreasonable and not to have been made in good
faith by Executive.
For
purposes of this Agreement, the Company shall be in material breach of this
Agreement pursuant to Section 8(i)(ii), if (A) the Company reduces
Executive’s Base Salary by an amount which results in Executive receiving a Base
Salary which is less than 95% of Executive’s Termination Base Salary or
(B) the Company fails to continue in effect any material incentive
compensation plan or arrangement (unless replacement plans providing Executive
with substantially similar benefits are adopted) or the Company takes any action
that would adversely affect Executive’s participation in any such plan or
arrangement or reduce Executive’s incentive compensation opportunities under
such plan or arrangement, as the case may be.
(j)
“Initial Unit Award
Agreement” shall mean the agreement pursuant to which the Initial Units
are granted and shall be in the form of Exhibit C
hereto.
(k) “PVG” shall mean Penn
Virginia GP Holdings, L.P., a Delaware limited partnership.
(l)
“PVG General Partner”
shall mean the general partner of PVG.
(m) “Partnership” shall
mean Penn Virginia Resource Partners, L.P., a Delaware limited
partnership.
(n) “Penn Virginia” shall
mean Penn Virginia Corporation, a Virginia corporation.
(o) “Penn Virginia Change of
Control” shall mean the occurrence of any of the following:
(i) any
Person or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act), other than a trustee or other fiduciary holding securities under
an employee benefit plan of Penn Virginia, becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Penn Virginia representing 25% or more of the combined voting
power of Penn Virginia’s then outstanding voting securities;
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(ii) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of Penn Virginia (the “Penn Virginia
Board”), and any new director (other than a director designated by a person who
has entered into an agreement with Penn Virginia to effect a transaction
described in clause (i), (iii) or (v) of this Penn Virginia Change of
Control definition and excluding any individual whose initial assumption of
office occurs as a result of either (x) an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act), or (y) an actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Penn Virginia
Board) whose election by the Penn Virginia Board or nomination for election by
Penn Virginia’s shareholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason (other than retirement) to constitute at least a
majority thereof;
(iii) the
shareholders of Penn Virginia approve the consummation of a merger or
consolidation of Penn Virginia with any other corporation, other than a merger
or consolidation which would result in the voting securities of Penn Virginia
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 75% of the combined voting power of the voting
securities of Penn Virginia (or such surviving entity or parent entity, as the
case may be) outstanding immediately after such merger or consolidation;
or
(iv) the
shareholders of Penn Virginia approve a plan of complete liquidation of Penn
Virginia.
(p) “Person” shall mean an
individual or a corporation, limited liability company, partnership, joint
venture, trust, unincorporated organization, association, government agency or
political subdivision thereof or other entity.
(q) “Protected Period”
shall mean the 24-month period beginning on the effective date of a Change of
Control.
(r)
“Termination Base
Salary” shall mean that amount equal to Executive’s Base Salary with the
Company at the rate in effect immediately prior to the Change of Control or, if
a greater amount, Executive’s Base Salary at the rate in effect at any time
thereafter.
9. Representation
of Executive. Executive hereby represents and warrants to
Company that he is not now under any contractual or other obligation that is
inconsistent with or in conflict with this Agreement or that would prevent,
limit or impair the Executive’s performance of his obligations under this
Agreement.
10. Survival
of Provisions. The provisions of this Agreement shall survive
the termination of Executive’s employment hereunder and the payment of all
amounts payable and delivery of all post-termination compensation and benefits
pursuant to this Agreement incident to any such termination of
employment.
11. Successors
and Assigns. This Agreement shall inure to the benefit of and
be binding upon Company and its successors or permitted assigns and Executive
and his executors, administrators or heirs. The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to, and each successor shall, assume expressly in writing prior to the
effective date of such succession 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. Failure of the successor to so
assume as provided herein shall constitute a breach of this Agreement and
entitle Executive to the payments and benefits hereunder as if triggered by a
termination of Executive by the Company other than for Cause on the date of such
succession. Executive may not assign any obligations or
responsibilities under this Agreement or any interest herein, by operation of
law or otherwise, without the prior written consent of the
Company.
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12. Notices. All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as set forth below or to
such other address as either party shall have furnished to the other in writing
in accordance herewith. Notices and communications shall be effective
when actually received by the addressee:
(a) If
to Executive:
Address
on file at the offices of the Company
(b) If
to the Company:
0
Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx,
Xxxxxxxxx 00000
Attn:
Chairman, Compensation and Benefits Committee
13. Mitigation. Executive
shall not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise nor shall the amount of any
payment or benefit provided for in this Agreement be reduced as the result of
employment by another employer or self-employment or offset against any amount
claimed to be owed by Executive to the Company or otherwise, except that
Executive shall waive, in a manner acceptable to the Company in its reasonable
judgment, all rights to receive any severance payments or benefits that
Executive is entitled to receive pursuant to any other Company severance plan or
program.
14. Entire
Agreement; Amendments. This Agreement and any other documents,
instruments or other writings delivered or to be delivered in connection with
this Agreement as specified herein constitute the entire agreement among the
parties with respect to the subject matter of this Agreement and supersede all
prior and contemporaneous agreements, understandings, and negotiations, whether
written or oral, with respect to the terms of Executive’s employment by the
Company. This Agreement may be amended or modified only by a written instrument
signed by the Company and Executive that is approved by the Chairperson of the
Committee. Termination of this Agreement shall not alter or impair
any rights of Executive arising hereunder on or before such
termination.
15. Waiver. The
waiver of the breach of any term or provision of this Agreement shall not
operate as or be construed to be a waiver of any other or subsequent breach of
this Agreement.
16. Governing
Law. This Agreement shall be governed and construed as to its
validity, interpretation and effect by the laws of the State of Delaware,
without regard to conflicts of laws principles.
17. Severability. Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such provisions, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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18. Section Headings. The
section headings in this Agreement are for convenience only; they form no part
of this Agreement and shall not affect its interpretation.
19. Counterparts. This
Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one and the same instrument.
20. Indemnification. In
any situation where under applicable law the Company has the power to indemnify,
advance expenses to and defend Executive in respect of any judgments, fines,
settlements, losses, costs or expenses (including attorneys’ fees) of any nature
related to or arising out of Executive’s activities as an agent, employee,
officer or director of the Company or any Affiliate or in any other capacity on
behalf of or at the request of the Company or any Affiliate, then the Company or
any Affiliate shall promptly on written request, fully indemnify Executive,
advance expenses (including attorneys’ fees) to Executive and defend Executive
to the fullest extent permitted by applicable law, including but not limited to
making such findings and determinations and taking any and all such actions as
the Company or any Affiliate may, under applicable law, be permitted to take so
as to effectuate such indemnification, advancement or defense. Such agreement by
the Company shall not be deemed to impair any other obligation of the Company
respecting Executive’s indemnification or defense otherwise arising out of this
or any other agreement or promise of the Company under any statute.
21. Arbitration. Any dispute about the
validity, interpretation, effect or alleged violation of this Agreement, other
than with respect to Section 5 or 6 (an “arbitrable dispute”), must be submitted
to confidential arbitration in Philadelphia, Pennsylvania. Arbitration shall
take place before an experienced employment arbitrator licensed to practice law
in such state and selected in accordance with the Model Employment Arbitration
Procedures of the American Arbitration Association. Arbitration shall be the
exclusive remedy of any arbitrable dispute. The Company shall bear all fees,
costs and expenses of arbitration, including its own, those of the arbitrator
and those of Executive unless the arbitrator provides otherwise with respect to
the fees, costs and expenses of Executive; in no event shall Executive be
chargeable with the fees, costs and expenses of the Company or the arbitrator.
The Company shall advance to Executive all expenses incurred by Executive in
connection with an arbitrable dispute and, if the arbitrator determines that
Executive is the losing party in such dispute, Executive shall reimburse such
expenses to the Company unless the arbitrator provides otherwise. Should any
party to this Agreement pursue any arbitrable dispute by any method other than
arbitration, the other party shall be entitled to recover from the party
initiating the use of such method all damages, costs, expenses and attorneys’
fees incurred as a result of the use of such method. Notwithstanding anything
herein to the contrary, nothing in this Agreement shall purport to waive or in
any way limit the right of any party to seek to enforce any judgment or decision
on an arbitrable dispute in a court of competent jurisdiction. Each party hereby
irrevocably submits to the exclusive jurisdiction of the federal courts in
Philadelphia, Pennsylvania and the state courts in Xxxxxxxxxx County,
Pennsylvania for the purposes of any proceeding arising out of this
Agreement.
22. Section
409A of the Internal Revenue Code.
(a) This
Agreement shall be interpreted to avoid any penalty sanctions under section 409A
of the Code. If any payment or benefit cannot be provided or made at the time
specified herein without incurring sanctions under section 409A of the Code,
then such benefit or payment shall be provided in full at the earliest time
thereafter when such sanctions shall not be imposed. For purposes of section
409A of the Code, all payments to be made upon a termination of employment under
this Agreement may only be made upon a “separation from service” within the
meaning of such term under section 409A of the Code and each payment under this
Agreement shall be treated as a separate payment. All reimbursements and in-kind
benefits provided under this Agreement shall be made or provided in accordance
with the requirements of section 409A of the Code, including, where applicable,
the requirement that (i) any reimbursement shall be for expenses incurred
during Executive’s lifetime (or during a shorter period of time specified in
this Agreement), (ii) the amount of expenses eligible for reimbursement, or
in-kind benefits provided, during a calendar year may not affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other
calendar year, (iii) the reimbursement of an eligible expense shall be made
on or before the last day of the calendar year following the year in which the
expense is incurred and (iv) the right to reimbursement or in-kind benefits
is not subject to liquidation or exchange for another benefit.
-11-
(b) Notwithstanding
any provision of this Agreement to the contrary, if, at the time of Executive’s
“separation from service” with the Company, the Company has securities which are
publicly traded on an established securities market and Executive is a
“specified employee” (as defined in section 409A of the Code) and it is
necessary to postpone the commencement of any compensation payments or benefits
otherwise payable pursuant to this Agreement as a result of such “separation
from service” to prevent any accelerated or additional tax under section 409A of
the Code, then the Company shall postpone the commencement of the payment of any
such compensation payments or benefits hereunder (without any reduction in such
payments or benefits ultimately paid or provided to Executive) that are not
otherwise paid within the “short-term deferral exception” under Treas. Reg.
section 1.409A-1(b)(4) and the “separation pay exception” under Treas. Reg.
section 1.409A-1(b)(9)(iii), until the first payroll date that occurs after the
date that is six months following Executive’s “separation from service” with the
Company. If any payments or benefits are postponed due to such requirements,
such amounts shall be paid in a lump sum to Executive on the first payroll date
that occurs after the date that is six months following Executive’s “separation
from service” with the Company. If Executive dies during the postponement period
prior to the payment of the postponed amount, the amounts postponed on account
of section 409A of the Code shall be paid to the personal representative of
Executive’s estate within 60 days after the date of Executive’s death. In no
event shall Executive, directly or indirectly, designate the calendar year of
payment.
[Remainder
of page intentionally left blank.]
-12-
IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed the day and year first written
above.
|
COMPANY:
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||
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PENN
VIRGINIA RESOURCE GP, LLC
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||
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By:
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/s/ Xxxxx X. Xxxxxx
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Name:
Xxxxx X. Xxxxxx
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||
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Title:
Vice President, Chief Administrative Officer and
Assistant Secretary |
||
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EXECUTIVE:
|
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By:
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/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
|
||
JOINDER:
PVG GP, LLC hereby agrees to comply
with the provisions of Section 7(a)(ii)(B) hereof.
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PVG
GP, LLC
|
||
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By:
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/s/ Xxxxx X. Xxxxxx
|
|
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Name:
Xxxxx X. Xxxxxx
|
||
|
Title:
Vice President, Chief Administrative Officer
and
Assistant Secretary |
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