PENN VIRGINIA CORPORATION AMENDED AND RESTATED CHANGE OF LOCATION SEVERANCE AGREEMENT
Exhibit
10.1
AMENDED
AND RESTATED CHANGE OF LOCATION SEVERANCE AGREEMENT
THIS AMENDED AND RESTATED CHANGE OF LOCATION SEVERANCE
AGREEMENT (this “Agreement”) dated as
of March 30, 2010 (the “Effective Date”) by
and between Penn Virginia Corporation, a Virginia corporation (the “Company”), and Xxxxx
X. Xxxxxx (“Executive”).
WHEREAS, the Company and
Executive are parties to an agreement, dated November 5, 2008, pursuant to
which the Company agreed to provide Executive a certain payment in the event
Executive elects to resign from employment with the Company as a result of a
material change in the geographic location at which Executive must perform
services (the “Existing
Agreement”);
WHEREAS, the Company and
Executive desire to amend and restate the Existing Agreement as set forth
herein; and
WHEREAS, the Company and
Executive hereby agree that this Agreement shall supersede and replace the
Existing Agreement as of the Effective Date; and
WHEREAS, the Compensation and
Benefits Committee of the Board of Directors of the Company has approved this
Amended and Restated Agreement.
THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive agree as follows:
1. Certain
Definitions.
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A.
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“Bonus” shall
mean an amount equal to the highest annual cash bonus paid or payable to
Executive by the Company during the two-year period prior to Executive’s
termination of employment.
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B.
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“Code” shall
mean the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.
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C.
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D.
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“Relocation”
shall mean a material change in the geographic location at which Executive
must perform services (which, for purposes of this Agreement, means the
relocation of the Company’s current headquarters in Radnor, Pennsylvania
at which Executive is principally employed to a location more than 50
miles from Radnor, Pennsylvania).
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E.
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“Termination Base
Salary” shall mean that amount equal to Executive’s annual base
salary with the Company at the rate in effect immediately prior to the
Relocation or, if a greater amount, Executive’s annual base salary at the
rate in effect at any time thereafter or during the two-year period prior
thereto.
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2. Termination of
Employment. Executive may initiate a termination of
Executive’s employment with the Company if a Relocation occurs. If
the Company decides to complete a Relocation, the Company must notify Executive
in writing (the “Company Notice”) not less than two months prior to the
commencement of such Relocation. In order for Executive to terminate
Executive’s employment with the Company hereunder, Executive must object in
writing (“Executive’s Notice”) to the Company within 30 days following the date
of the Company Notice, the Company shall have 30 days after the date of
Executive’s Notice in which to remedy the decision to complete a Relocation by
rescinding such decision and give Executive written notice of such rescission,
and Executive’s employment must terminate at the end of such 30-day cure period
(the “Termination Date”) if such decision is not rescinded. If
Executive reasonably determines that the Company has decided to complete a
Relocation, but the Company has failed to send the Company Notice, Executive may
send Executive’s Notice, and the Company shall have 30 days after the date of
such Executive’s Notice in which to notify Executive in writing that the Company
will not complete a Relocation. If the Company does not provide such
written notice within such 30-day period, Executive’s employment must terminate
at the end of such 30-day period and, in such event, such date shall be the
Termination Date. Notwithstanding any provision to the contrary
herein, in the event of a Relocation, the Company may request Executive to
provide services for a specified transition period, upon such terms and
conditions as mutually agreeable to the Company and Executive, consistent with
the requirements of section 409A of the Code.
3. Relocation Severance
Benefits. Upon termination of Executive’s employment as
described in Section 2 above, 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”):
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A.
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The
Company shall, at the time provided in Section 3H, pay to Executive in a
lump sum, in cash, an amount equal to three times the sum of Executive’s
(i) Termination Base Salary and (ii) Bonus; provided, however,
that, if any payment to be made, or benefit to be provided, to or on
behalf of Executive pursuant to 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 this Section 3A shall be reduced so
that the Payments do not result in Executive being subject to the Excise
Tax. One or more determinations as to (a) whether any of the
Payments will be subject to the Excise Tax and (b) 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 will be subject to the Excise Tax, (i) 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 (ii) 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.
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B.
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Except
to the extent any awards related to Company stock have already vested or
become exercisable, as the case may be, under the Plan, or under any
successor or other similar plan, as of the date of Executive’s termination
of employment (i) all restricted shares of Company stock shall become 100%
vested and all restrictions thereon shall lapse and the Company shall
promptly deliver to Executive unrestricted shares of Company stock,
(ii) all Company restricted stock units of Executive shall become
100% vested and all restrictions thereon shall lapse and the Company shall
promptly deliver to Executive cash or unrestricted shares of Company
stock, as applicable, and (iii) each outstanding Company stock option of
Executive shall become 100% exercisable and shall, notwithstanding
anything stated to the contrary in the Plan, 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.
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C.
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The
Company shall pay to Executive in a lump sum, at the time provided in
Section 3H, 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.
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D.
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For
the 24-month period beginning on the Termination Date, 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 will be covered and the
reimbursements paid do not extend beyond the periods set forth in Treas.
Reg. §1.409A-1(b)(9)(v)(E).
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E.
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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 E, the
Release shall be null, void and without effect, and Executive shall still
receive all of the payments and benefits described in subsections A
through D above.
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F.
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If
Executive’s employment with the Company terminates prior to, but within
twelve months of, the date on which a Relocation occurs, and it is
reasonably demonstrated by Executive that such termination of employment
was by the Company in connection with or in anticipation of a Relocation,
then, for all purposes of this Agreement, the
Company’s Notice and Executive’s Notice shall be deemed to have been
given, the Company shall be deemed not to have rescinded its decision to
commence a Relocation and the Relocation shall be deemed to have occurred
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 Relocation 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.
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G.
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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.
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H.
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Payment
of the amounts described in subsections A through C above shall be made
within 30 days after the Termination Date (provided that the Release has
been executed and has not been revoked) and shall be made by mail to the
last address provided for Executive in the Company’s
records. 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.
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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 will
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 will 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.
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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 will
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 will 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.
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4. Assignment. All of
the terms and provisions of this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective heirs, executors,
administrators, legal representatives, successors and assigns of the parties
hereto. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization 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.
5. Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia without regard to conflicts of law
principles.
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6. Entire Agreement. This
Agreement sets forth the entire agreement of the parties hereto and supersedes
any and all existing agreements and understandings (including, without
limitation, the Existing Agreement) concerning the subject matter hereof, it
being understood that the Amended and Restated Change of Control Severance
Agreement existing between the Company and Executive concerns a different
subject matter than this Agreement. This Agreement may be changed
only by a written document signed by Executive and the Company.
7. Counterparts. This Agreement
may be executed in any number of counterparts (including facsimile
counterparts), each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date and year first above
written.
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By: /s/
A. Xxxxx
Xxxxxxxx
Name:
A. Xxxxx Xxxxxxxx
Title:
President and Chief Executive Officer
EXECUTIVE
/s/ Xxxxx X.
Xxxxxx
Xxxxx
X. Xxxxxx
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