TRANSFER AGREEMENT
Exhibit
10.3
This Agreement Regarding Change of Position (“Agreement”) is made as of January 24,
2007 between Xxxx X. Bench (“Employee”) and CNX Gas Corporation., a Delaware corporation
(the “Company”).
WHEREAS, Employee desires to transfer from his position as Senior Vice President and Chief
Financial Officer of the Company to the position of Director of Tax and Treasury (the “Transfer”);
and
WHEREAS, this change of position requires certain changes in the compensation arrangements
between the Company and Employee, which changes the parties desire to set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual undertakings set forth below, the receipt,
adequacy and legal sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, this Agreement will set forth the understanding and agreement of the parties with respect
to the Transfer, including the changes to the compensation of employee resulting from such change
of position.
1. Transfer of Employment. a. Effective February 28, 2007 (the “Effective
Date”), Employee resigns his office as Senior Vice President and Chief Financial Officer of the
Company, and from all other positions as an officer, director and/or committee member of (a) the
Affiliated Companies (meaning the Company and CONSOL Energy Inc. (“CONSOL”) and any current
direct or indirect subsidiary or affiliate of the Company or CONSOL and any company in which the
Company or CONSOL or any such subsidiary or affiliate is a shareholder or investor), and (b) any
company or entity which Employee serves as an officer, director, trustee, member or in any other
capacity at the request of an Affiliated Company, and to become the Director of Tax and Treasury of
the Company. Employee covenants and agrees that he will execute any documents necessary to
formally effect any such resignations.
b. Notwithstanding subsection (a), immediately after the Effective Date, Employee will
continue as an employee of the Company with no break in service for any reason and he will as of
such time assume the position of Director of Tax and Treasury. As Director of Tax and Treasury,
Employee will report to the Chief Financial Officer of the Company and he will have such duties and
responsibilities as may be assigned to him by the Chief Financial Officer of the Company.
2. Modifications to Compensation. In connection with Employee’s Transfer, the
parties agree as follows:
a. The Employee will continue to be compensated at his current base salary through the
Effective Date, in accordance with the Company’s regular payroll practices.
b. Employee shall receive the short-term incentive payout award for 2006 under the Company’s
2006 Short-Term Incentive Compensation program in the ordinary course in his capacity as and for
his performance as Senior Vice President and Chief Financial Officer of the Company in 2006.
c. Effective immediately after the Effective Date, as Director of Tax and Treasury, Employee
will (i) be a Salary Grade 13 employee, (ii) have a base salary of $120,000 per year, payable in
accordance with the Company’s regular payroll practices, (iii) have a short-term incentive
opportunity of 20% of base salary, (iv) have a long-term incentive opportunity of 30% of base
salary, and (v) be entitled to such other benefits as other employees in similar positions in
accordance with the personnel policies of the Company (which benefits do not include a car
allowance or financial planning assistance). The Employee acknowledges and agrees that the
foregoing terms are subject to change from time to time in the sole and absolute discretion of the
Company.
d. Immediately after the Effective Date, Employee shall continue to accrue and be entitled to
benefits accrued under any tax qualified retirement plans of the Company in which he participates,
if any, in accordance with the terms of such plans.
3. Modifications to Employee Stock Options. The following describes all of the
Company stock options granted to Employee by the Company prior to the Effective Date (“Employee
Options”).
Number of | Number of | |||||||||||||||||||||||
Vested, | Number of | No. of | Unvested | |||||||||||||||||||||
Number of | Unexercised | Unvested | Unvested | Options | ||||||||||||||||||||
Shares | Options as of | Options as | Options | Retained | ||||||||||||||||||||
Underlying | the | of the | Surrendered | after | ||||||||||||||||||||
Date of | Unexercised | Option | Agreement | Agreement | as of Effective | Effective | ||||||||||||||||||
Grant | Options | Price | Date | Date | Date | Date | ||||||||||||||||||
8/8/05 |
79,074 | $ | 16.00 | 19,768 | 59,306 | 0 | 59,306 | |||||||||||||||||
4/28/06 |
45,779 | $ | 28.50 | 0 | 45,779 | 16,531 | 25,248 |
All Employee Options were granted under the CNX Gas Corporation Equity Incentive Plan
(“LTIC Plan”) and pursuant to the applicable Award Agreement (the “Award
Agreement”). As summarized in the above table, in connection with Employee’s Transfer and in
consideration of his continued employment, Employee agrees to surrender 16,531 options with a Grant
Date of April 28, 2006 as of the Effective Date. At the Company’s request, Employee shall execute
an amended Award Agreement to reflect such change. Employee shall retain all other Employee
Options he now holds, subject to the terms of the LTIC Plan and the Award Agreement, including the
applicable vesting schedule.
4. Modifications to Performance Share Units under the Long-Term Incentive Program.
The following describes all of the performance share units under the Company’s Long-Term Incentive
Compensation Program for the performance period from October 11, 2006 to December 31, 2009 granted
to Employee by the Company prior to the Effective Date (“PSUs”).
Number of Unvested | Number of PSUs | Number of PSUs | ||||||||||
PSUs as of the | Surrendered as of | Retained after the | ||||||||||
Grant Date | Agreement Date | Effective Date | Effective Date | |||||||||
10/11/06 |
23,892 | 18,892 | 5,000 |
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All PSUs were granted under the LTIC Plan and pursuant to the applicable Award Agreement (the
“PSU Award Agreement”). As summarized in the above table, in connection with Employee’s
Transfer and in consideration of his continued employment, Employee agrees to surrender 18,892 PSUs
with a Grant Date of October 11, 2006 as of the Effective Date. At the Company’s request, Employee
shall execute an amended PSU Award Agreement to reflect such change. Employee shall retain 5,000
PSUs which he now holds, subject to the terms of the LTIC Plan and the LTIC Award Agreement,
including the applicable vesting schedule.
5. Intentionally Omitted.
6. No Right to Continued Employment. Notwithstanding anything in this Agreement to
the contrary, Employee acknowledges and agrees that both before and after the Effective Date, he is
an employee “at will” and nothing in this Agreement or otherwise grants Employee any rights to
continued employment with any Affiliated Company.
7. Transition Duties. From the date of this Agreement to the Effective Date, Employee
shall continue to perform and carry out the duties and responsibilities of his position as Senior
Vice President and Chief Financial Officer in good faith, in a diligent manner to the best of his
ability. Without limiting the generality of the foregoing, such duties and responsibilities shall
include (i) the execution of the Company’s Annual Report on Form 10-K for the year ended December
31, 2006, in his capacity as Chief Financial Officer, and the execution of the certifications
required to be filed and/or furnished by the Chief Financial Officer in connection therewith, and
(ii) cooperating in the transition of his duties and responsibilities within his department and to
his successor. Following the Effective Date, Employee agrees to assist his successor to the
office of Chief Financial Officer as to matter related to the Company of which Employee has
knowledge, as requested by the Chief Financial Officer.
8. Waiver of Other Compensation. Except as provided in this Agreement, Employee does
not waive any compensation, benefits or rights that may have accrued in his capacity as an
employee, contractually or otherwise, including, without limit, any right to any salary,
contributions, fees or benefits, or any right to continued participation in any compensation plans,
programs or arrangements of any of the Affiliated Companies, subject to the terms of such plans,
programs or arrangements.
9. Publicity. Employee acknowledges that the Company is required by law to publicly
disclose this Agreement and the terms hereof. Employee hereby agrees to refrain from directly or
indirectly engaging in publicity or any other action or activity (whether such action or activity
reflects adversely or not upon any Affiliated Company) with respect to any Affiliated Company,
their respective officers, directors, employees, and business, or with regard to his employment or
the change in the status of his employment or any of the matters set forth herein.
10. Confidentiality. Except to the extent disclosure is required by law, Employee
agrees to keep the terms of this Agreement strictly confidential. Employee shall not, unless
compelled by law or judicial process to do so, disclose or discuss, directly or indirectly, its
terms with anyone other than his attorney and financial advisors, provided that they, as a
condition of receiving such information, also agree to keep such terms confidential.
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11. Authority/Non-Disparagement/Return of Materials/Cooperation/. Employee and the
Company hereby agree to the following:
a. Employee acknowledges that effective as of the date of this Agreement, he is not authorized
to speak for or otherwise obligate the Company with the express written approval of the Company’s
President and Chief Executive Officer.
b. Except as otherwise required by law, Employee will not make, publish or disseminate any
derogatory statements or comments (including, without limitation, to an Affiliated Company’s
customers, prospective customers, employees and vendors), whether orally or in writing, about any
of the Affiliated Companies or their business, officers, directors, shareholders or employees, or
take any action which a reasonable person would expect, directly or indirectly, to impair the
goodwill, business reputation or good name of any of them; and the officers and directors of the
Company will not make, publish or disseminate any derogatory statements or comments, whether orally
or in writing, about Employee, or take any action which a reasonable person would expect, directly
or indirectly, to impair his good will, business reputation or good name.
c. Promptly following the Effective Date, Employee will deliver to the Company (and each
Affiliated Company where applicable) the originals and all copies of documents, records, notebooks,
notes, memoranda, correspondence, computer disks and computer tapes, and inventions (collectively,
the “Company Materials”) then in Employee’s possession or under Employee’s control, whether
prepared by Employee or by others, relating to his duties as Senior Vice President and Chief
Financial Officer of the Company.
12. Remedies. In the event that either party breaches or otherwise fails to observe
any covenant, agreement or duty herein described, as determined by an arbitrator, a court or any
other body of competent jurisdiction, the other party shall be entitled to any remedy set forth
herein, as well as any other remedy available at law or in equity.
13. Unfair Treatment; Acknowledgement of Alternative Arrangement. a. By entering into
this Agreement, neither Employee nor the Company (including its directors, officers, and other
agents) admits, in any way, that he or it treated the other party unlawfully, wrongfully, or
unfairly. To the contrary, the Transfer is being effected at the request of Employee and each
party expressly denies having violated the other party’s rights or having harmed the other party in
any way.
b. Employee acknowledges and agrees that if he resigned his position as Senior Vice President
and Chief Financial Officer and did not remain an employee of the Company, he would have been
eligible to receive a one-time separation arrangement from the Company, including separation
compensation and special treatment of his Employee Options; that he has elected to remain an
employee of the Company and to forego such separation arrangement; and that the form and amount of
such separation compensation will not be offered or paid to him in the future if he or the Company
terminates his employment in the future. The Transfer is Employee’s voluntary election.
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14. Consultation with Counsel. Employee acknowledges that he has carefully read and
fully understands all the provisions and effects of this Agreement after having had the opportunity
to consult and thoroughly discuss all its aspects with an attorney of his own choice; that he is
voluntarily entering into this Agreement; and that neither the Company (or any Affiliated Company)
nor its (or their) agents or attorneys made any representation or promise concerning the terms or
effects of this Agreement other than those contained herein.
15. Arbitration. Employee and the Company waive any right to a court (including jury)
proceeding and instead agree to submit any dispute over the application, interpretation, validity,
or any other aspect of this Agreement to binding arbitration in Pittsburgh, Pennsylvania consistent
with the application of the Federal Arbitration Act and the employment discrimination or comparable
procedural rules of the American Arbitration Association (“AAA”) before an arbitrator who
is a member of the National Academy of Arbitrators (“NAA”) out of a Pittsburgh area panel
of fifteen (15) arbitrators to be supplied by the AAA. Only true neutrals will be eligible for
consideration as arbitrators, and under no circumstances will AAA furnish the names of individuals
who represent employees, unions or companies. The fees and costs charged by AAA and the fees
charged and the expenses incurred by the neutral arbitrator selected shall be borne equally by the
Company and Employee. This section will not limit the Company’s ability to seek immediate and/or
preliminary injunctive relief against Employee in court for Employee’s breach of his
post-employment obligations hereunder.
16. Modification. If any arbitrator, court, or other authority determines that any
term, condition, clause, or other provision of this Agreement is void or invalid, he, she or it
will have discretion to modify such term, condition, clause, or other provision of this Agreement
to make it valid, or, alternatively, if he, she or it declines to make such a modification and
leaves it invalid, the remaining portions of this Agreement will remain in full force and effect.
17. Governing Law. Except as preempted by federal law, this Agreement will be subject
to interpretation and application consistent with Pennsylvania law, without regard to its conflict
of laws principles.
18. Entire Agreement. This Agreement, together with the LTIC Plan and all applicable
Award Agreements except as modified by this Agreement, represent the entire agreement of the
parties with respect to the subject matter contained herein, and any amendments shall be
ineffective unless they are written and signed by all parties and/or their duly authorized
representatives.
19. Successors and Assigns. This Agreement is binding on the Company’s successors and
assigns, including any change in control of the Company.
20. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which together shall constitute one and
the same agreement.
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This TRANSFER AGREEMENT is made effective the date first above written.
EMPLOYEE | ||||||
Xxxxxxx X. Xxxxxxx
|
/s/ Xxxx X. Bench | |||||
Witness
|
Xxxx X. Bench |
Attest: | CNX GAS CORPORATION | |||||||
Xxxxxxx X. Xxxxxxx
|
By: | /s/ Xxxxxxxx X. XxXxxxxx | ||||||
Name: Xxxxxxxx X. XxXxxxxx | ||||||||
Title: President and Chief Executive Officer |
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