AGREEMENT
This Agreement is made this 28th day of December, 1998 by and between
Xxxxxxx X. Xxxxx ("Xx. Xxxxx") and Energy Corporation of America ("ECA").
WHEREAS, Xx. Xxxxx presently owns numerous shares of stock of ECA (both
common stock and Class A nonvoting common stock) and may in the future acquire
additional shares (all such shares currently owned together with any and all
shares hereafter acquired are collectively referred to as the "Shares"); and
WHEREAS, Xx. Xxxxx and ECA previously have entered into agreements relating
to the purchase by ECA of some or all of the Shares; and
WHEREAS, Xx. Xxxxx and ECA are entering into this agreement for the purpose
of establishing ECA's purchase rights, Xx. Xxxxx'x sale rights, and the purchase
price of the Shares in the event of and upon Xx. Xxxxx'x death.
NOW THEREFORE, in consideration of the mutual promises made herein and
other good and valuable consideration not herein mentioned, Xx. Xxxxx and ECA
agree that in the event of and upon Xx. Xxxxx'x death, Xx. Xxxxx'x heirs and the
legal representative of his estate shall sell, and ECA shall purchase, all of
the Shares upon the following terms and conditions:
1. Purchase Price.
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a. The Purchase Price for 17,400 shares of ECA Common Stock shall be $75.00
per share, payable as provided in paragraph 3 below.
b. The Purchase Price for the remainder of the shares of ECA Common Stock
shall be the "Shares' Pro Rata Share" (as defined below) of an amount equal to
six (6) times the average Earnings for the most recent three (3) fiscal years of
ECA.
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"Earnings" shall mean ECA's earnings (net of extraordinary items, Windfall
Profits Taxes, and other similar and/or substituted taxes, and state and local
taxes, but before provisions for federal income taxes) as determined in
accordance with generally accepted accounting principles consistently applied by
ECA's regularly engaged accountants, which determination shall be final and
binding upon Xx. Xxxxx, Xx. Xxxxx'x estate, Xx. Xxxxx'x donees and ECA.
The "Shares' Pro Rata Share" shall be a fraction, the numerator of which is
the number of Shares owned by Xx. Xxxxx as of the date of his death and the
denominator of which is the aggregate number of common and Class A shares of ECA
stock issued and outstanding as of the date of Xx. Xxxxx'x death.
c. The Purchase Price for all Class A nonvoting common stock shall be
governed by and subject to the terms and provisions of ECA's Class "A" Stock
Ownership Program Resolution of the Board of Directors of ECA, as amended from
time to time.
2. Notice of Purchase. All Shares shall be subject to the following in the
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event of and upon Xx. Xxxxx'x death:
a. For a period of two (2) years, commencing on the first day of the month
following Xx. Xxxxx'x death, the legal representative of Xx. Xxxxx'x estate, if
acting, otherwise the donee of Xx. Xxxxx'x Shares shall have the right to tender
the Shares to ECA by tendering written notice of such intention to ECA. The
Purchase Price, Closing, and Payments shall be as herein set forth.
b. If the Shares are not tendered to ECA during the two (2) year period
described in (a) above, then on the expiration of such two (2) year period, ECA
shall forthwith purchase the Shares by giving five (5) days notice to the then
owner of the Shares in accordance with the Purchase Price, Closing and Payment
provisions and other conditions herein set forth.
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3. Closing and Payment. The purchase of the ECA Shares shall take place at
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the main office of ECA on the Closing date designated by ECA in its written
notice of exercise, which shall not be later than thirty (30) days from the date
of the notice. The legal representative of Xx. Xxxxx'x estate shall deliver to
ECA at Closing the stock certificates representing the Shares with appropriate
transfer documents transferring the Shares to ECA, free and clear of all liens
and encumbrances. Payment shall be made in twenty (20) equal quarterly
installments of principal, commencing on the closing date and quarterly
thereafter, until paid in full, with interest payable on such dates on the
unpaid principal balance outstanding at the rate from time to time announced by
the Chase Manhattan Bank, N.A. as its prime rate. For purposes hereof, the rate
announced on the first business day of any month shall be the rate in effect for
that month. Notwithstanding the foregoing, ECA shall have the right to prepay,
without interest or penalty, at any time or times during the payment period.
4. Legend. The certificate(s) representing the Shares shall be legended as
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follows:
The Shares represented by this stock certificate are subject to an Agreement
dated December 28, 1998, between Xxxxxxx X. Xxxxx and Energy Corporation of
America.
5. Assignability; Binding Effect. ECA shall have the right to assign and
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transfer its rights hereunder to one or more persons or entities who are then
shareholders of ECA, provided however, that any such assignment or transfer does
not circumvent any preemptive rights of other shareholders. Xx. Xxxxx'x rights
and obligations hereunder shall be binding on his heirs, assigns, legal
representatives and donees.
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6. Governing Law. This Agreement shall be governed by, and construed in
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accordance with, the internal laws of West Virginia and shall be binding upon
the heirs, successors and assigns of the parties.
7. Notices. All notices to be given hereunder shall be personally delivered
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or sent by express or overnight mail, or by postage prepaid, to the parties at
the following addresses (or to such other or further addresses as the parties
may hereafter designate by like notice similarly sent):
TO XX. XXXXX: X. X. XXXXX
c/o 0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
TO ENERGY CORPORATION
OF AMERICA: ENERGY CORPORATION OF AMERICA
Attention: Xxxx Xxxx, President
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
All notices sent by mail shall be deemed effectively given on the business day
next following the date of such mailing. All notices personally delivered shall
be deemed effectively given on the date of such delivery.
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8. Conflicts with Other Agreements. In the event of a conflict between the
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terms of this Agreement and any agreement previously entered into between Xx.
Xxxxx and ECA, the terms of this Agreement shall govern.
/s/ Xxxxxxx X. Xxxxx
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XXXXXXX X. XXXXX
ENERGY CORPORATION OF AMERICA
/s/ Xxxx Xxxx
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BY: XXXX XXXX
ITS: President and CEO
STATE OF COLORADO,
COUNTY OF DENVER, TO-WIT:
Taken, subscribed and sworn to before me by the said Xxxxxxx X. Xxxxx this
28th day of December, 1998.
My commission expires: November 14, 2000.
(SEAL) /s/ Xxxxxx X. Xxxxx
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Notary Public
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STATE OF COLORADO,
COUNTY OF DENVER, TO-WIT:
I, Xxxxxx X. Xxxxx, a Notary Public in and for the State and County
aforesaid, do hereby certify that Xxxx Xxxx, President and Chief Executive
Officer of Energy Corporation of America, whose name is signed to the writing
above, has this day acknowledged the same before me to be the act and deed of
said corporation.
My commission expires: November 14, 2000.
(SEAL) /s/ Xxxxxx X. Xxxxx
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Notary Public
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