Attached files
| file | filename |
|---|---|
| 8-K - RE STOCK BONUS - DELTA NATURAL GAS CO INC | form8kaugust202010.htm |
| EX-10.3 - AWARD OF STOCK BONUS - DELTA NATURAL GAS CO INC | brownnotice.htm |
| EX-10.6 - AWARD OF STOCK BONUS - DELTA NATURAL GAS CO INC | ramseynotice.htm |
| EX-10.4 - AWARD OF STOCK BONUS - DELTA NATURAL GAS CO INC | caudillnotice.htm |
| EX-10.5 - AWARD OF STOCK BONUS - DELTA NATURAL GAS CO INC | jenningsnotice.htm |
| EX-10.2 - NOTICE OF STOCK BONUS - DELTA NATURAL GAS CO INC | formofstockbonusaward.htm |
This
Document constitutes part of a prospectus covering securities that have been
registered under the Securities and Exchange Act of 1933.
Exhibit 10.1
Delta
Natural Gas Company, Inc.
Equity
Award Grant Documents
under
Incentive
Compensation Plan
(August 16, 2010)
Documents
Attached
1. Award
Agreement
2. Summary
Plan Information
3. Incentive
Compensation Plan
4. Our
Annual Report on Form 10-K for the year ended June 30, 2009
******IMPORTANT
NOTICE BELOW******
At your
request (in writing or orally), we will provide to you at no charge a copy of
any or all of the following documents. All of such
documents may also be found at www.deltagas.com.
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(i)
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Our
Quarterly Reports on Form 10-Q for the quarters ended September 30, 2009;
December 31, 2009; and March 31,
2010;
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(iii)
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Our
Current Reports on Form 8-K filed on November 23, 2009; March 4, 2010;
April 27, 2010; April 29, 2010 and May 13,
2010;
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(iii)
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The
portions of our proxy statement on Schedule 14A filed on September 25,
2009, that are incorporated by reference into Items 10, 11, 12, 13 and 14
of our Annual Report on Form 10-K for the year ended June 30,
2009;
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(iv)
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The
description of our common stock, par value $1.00 per share, contained in
our Current Report on Form 8-K filed on March 4,
2010.
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All of
the documents described above in items (i)-(iv) are incorporated by reference
into the attached document called “Summary Plan
Information.” Additionally, these documents have been incorporated by
reference into our registration statement that we filed with the Securities and
Exchange Commission on March 4, 2010 to register the shares of stock that you
are receiving or may receive under our Incentive Compensation Plan.
If you
would like to receive any of the documents identified above, please contact
Emily P. Bennett, Director – Corporate services, Delta Natural Gas Company,
Inc., 3617 Lexington Road, Winchester, Kentucky 40391, 859-744-6171, extension
116 (e-mail: ebennett@deltagas.com.
This
Document constitutes part of a prospectus covering securities that have been
registered under the Securities and Exchange Act of 1933.
Summary
Plan Information
of
Delta Natural Gas Company,
Inc.’s Incentive Compensation Plan
August
16, 2010
On November 19, 2009, the shareholders
of Delta Natural Gas Company, Inc. (the “Company”) approved
the Delta Natural Gas Company, Inc. Incentive Compensation Plan (the “Plan”). The
Plan is a nonqualified benefit plan.
1. Purpose. The
Plan provides for the grant of incentive compensation awards to our directors
and certain of our employees in order to promote equity ownership through both
short-term and long-term incentives. The short-term incentives are accomplished
through potential payment of stock bonus awards. The long-term
incentive compensation is achieved through potential awards of restricted shares
and performance shares. We believe that the Plan helps promote the
Company’s interests and our shareholders’ interests through (a) the attraction
and retention of employees and directors essential to our success, (b) the
motivation of employees and directors using both short-term and long-term
performance-related incentives linked to performance goals and the interests of
our shareholders and (c) enabling such individuals to share in our growth and
success.
2. Definitions. Defined
terms not otherwise defined in this Summary Plan Information shall have the
meanings set forth in Article II of the
Plan.
3. Administration
of Plan. The Plan is administered by the Corporate Governance
and Compensation Committee (the “Committee”) of our
Board of Directors. The Committee is a standing committee of our
Board of Directors. All members of the Committee are independent as
defined in the listing standards of the NASDAQ OMX Group. Members of
the Committee are appointed and removed by our Board of Directors.
Subject to certain limitations
described in the Plan, the Committee has complete discretion in determining
which of our directors, officers, managers or other employees may participate in
the Plan (each a “Participant” and
collectively, the “Participants”), as
well as the type, amount, terms and conditions of each
award. Further, the Committee, in its sole and complete discretion,
may adopt, suspend and repeal any administrative rules, regulations, guidelines,
and practices governing the operation of the Plan as it shall from time to time
deem advisable.
4. Term. The
Plan, which became effective on January 1, 2010, will remain in effect until all
awards permitted to be granted under the Plan have been satisfied, expired or
canceled under the terms of the Plan and any restrictions imposed on shares in
connection with their issuance under the Plan have lapsed.
5. Award
Agreement. Each award granted under the Plan shall be
evidenced by a corresponding award agreement, which shall specify the terms,
conditions and rules applicable to the award.
6. Maximum
Number of Shares that May be Issued under the Plan. The number
of shares of our common stock which may be issued pursuant to the Plan may not
exceed in the aggregate 500,000 shares. The aggregate number of
shares that may be granted to any “Covered Participant” during any fiscal year
shall be 50,000. A “Covered Participant” is a “covered employee” as
defined in Section 162(m)(3) of the Internal Revenue Code of 1986, as amended
(the “Code”). Currently
“covered employee” means our chief executive officer and our four (4) most
highly compensated officers, in addition to our chief executive
officer.
7. Source of
Shares Issued Under the Plan. Shares of our common stock may
be available from our authorized but unissued shares, shares issued and
reacquired by us or shares that we purchase in the open market for purposes of
the Plan.
8. Resale
and Transfer Restrictions. No award under the Plan may be
sold, transferred, pledged, assigned or otherwise transferred, except by will or
the laws of descent and distribution. No lien, obligation, or
liability of the Participant may be assigned to any right or interest of the
Participant in any award under the Plan. No share of restricted stock
may be sold, transferred, pledged, assigned or otherwise transferred until the
termination of the applicable restriction period or earlier satisfaction of
other conditions specified by the Committee in the award agreement.
9. Tax
Effects of Plan Participation. We shall have the right to
deduct or withhold, or require a participant to remit to us, any taxes, subject
to the statutory minimum, required by law to be withheld from awards made under
the Plan. Additional tax effects for each type of award are described
below:
(a) Restricted
Stock. A Participant
who has been granted restricted stock under the Plan will not realize taxable
income at the time of grant, and we will not be entitled to a deduction at that
time, assuming that the restrictions constitute a substantial risk of forfeiture
for federal income tax purposes. Upon expiration of the forfeiture
restrictions (i.e., as shares become vested), the Participant will realize
ordinary income in an amount equal to the excess of the fair market value of the
shares at such time over the amount, if any, paid for such shares, and, subject
to the application of Section 162(m) of the Code, we will be entitled to a
corresponding deduction. During the period that the forfeiture
restrictions apply, the Participant shall be entitled to receive all dividends
and other distributions paid with respect to the shares of restricted
stock. Thus, the Participant will realize taxable income on such
dividends paid during the period that the forfeiture restrictions
apply.
However,
the recipient of restricted stock may elect to be taxed at the time of grant of
the restricted stock based upon the fair market value of the shares on the date
of the award. If the Participant makes this election, (a) we
will be entitled to a deduction at the same time and in the same amount subject
to the limitations contained in Section 162(m) of the Code,
(b) dividends paid to the Participant during the period the forfeiture
restrictions apply will be taxable as dividends and will not be deductible by us
and (c) there will be no further federal income tax consequences when the
forfeiture restrictions lapse.
(b) Performance
Shares. A Participant who has been granted performance shares
under the Plan will not realize taxable income at the time of grant, and we will
not be entitled to a deduction at that time, assuming that the performance
criteria constitute a substantial risk of forfeiture so there is not
constructive receipt for federal income tax purposes. Upon the
expiration of the performance period and the corresponding satisfaction of the
performance criteria which results in the receipt of shares of our common stock,
the Participant will realize ordinary income in an amount equal to the fair
market value of the shares at such time, and, subject to the application of
Section 162(m) of the Code, we will be entitled to a corresponding
deduction.
(c) Bonus
Stock. A Participant
who has been granted a stock bonus award under the Plan will generally realize
taxable income at the time of receipt of any stock, and we will be entitled to a
deduction at that time, subject to Section 162(m). The measure
of this income and deduction will be the fair market value of the shares at the
time the stock bonus awards are granted.
10. Effect of
Section 162(m) of the Internal Revenue
Code. Section 162(m) of the Code precludes a public
corporation from taking a deduction for compensation in excess of one million
dollars ($1,000,000) paid to its chief executive officer or any of its four
other highest-paid officers. However, compensation that qualifies under
Section 162(m) as “performance-based” is specifically exempt from the
deduction limit. The Plan has been designed to provide flexibility
with respect to whether restricted stock awards or performance awards will
qualify as performance-based compensation under
Section 162(m). We believe that certain awards of restricted
stock and of performance awards under the Plan will so qualify and our
deductions with respect to such awards should not be limited by
Section 162(m). The Plan does provide that all awards under the
Plan to employees covered by Section 162(m) are subject to other
conditions, restrictions, and requirements as the Committee may determine to be
necessary to avoid the loss of deduction by us under
Section 162(m). However, certain awards of restricted stock or
of performance awards may not qualify as performance-based compensation and,
therefore, our compensation expense deductions relating to such awards will be
subject to the Section 162(m) deduction limitation.
11. Forfeiture
of Awards if Participant Competes Against Company. All awards
granted to a Participant under the Plan that still retain restrictions,
performance conditions or have not yet been settled into shares of our common
stock shall be immediately forfeited and canceled in their entirety if the
Participant, while employed by us and without our consent, competes against
us. A Participant will be deemed to be competing against us if he is
associated with, employed by, renders services to, consults with, or acquires
ownership of more than five percent (5%) of the earnings or profits of any
entity which, in the Committee’s judgment, competes directly or indirectly with
us or any or any of our subsidiaries in any of their lines of
business.
12. No Right
to Employment. Neither the Plan, nor any award made or other
action taken in connection with the Plan, shall be construed as giving any
Participant or other person any right of employment or continued employment with
us.
13. Death,
Disability or Retirement. Except as otherwise provided in a
Participant’s award agreement, in the event of the Participant’s death,
Disability (defined below), or Retirement (defined below) while an Employee or
an Outside Director of the Company, the following shall apply:
(a) Restricted
Stock. (1) In the event of the
Participant’s Disability or Retirement before the Restriction Period has ended,
the restrictions on the shares of restricted stock awarded to the Participant
shall be removed upon expiration of the Restriction Period, and the number of
shares the Participant shall be entitled to, if any, shall equal (i) the
number of shares of our common stock, if any, the Participant would otherwise be
entitled to had the individual been an active Participant at the end of the
Restriction Period (i.e., as adjusted or forfeited based on the Performance
Criteria) multiplied by (ii) the portion of the Restriction Period the
Participant was an active Participant under the Plan; or
(2) In
the event of the Participant’s death before the Restriction Period has ended,
the restrictions on the shares of restricted stock awarded to the Participant
shall be removed upon the Participant’s date of death, and the number of shares
of our common stock the Participant shall be entitled to, if any, shall equal
the number of shares contingently granted to the Participant, without any
further adjustment.
(b) Performance
Shares. (1) In the event of a Participant’s Disability or
Retirement before the Performance Period has ended, the number of shares of our
common stock the Participant shall be entitled to, if any, shall equal
(i) the number of shares, if any, the Participant would otherwise be
entitled to had the individual been an active Participant at the end of the
Performance Period (i.e., as adjusted or forfeited based on the actual
Performance Criteria) multiplied by (ii) the portion of the Performance
Period during which the Participant was an active Participant; or
(2) In
the event of a Participant’s death while an Employee or Outside Director before
the Performance Period has ended, the Company will be assumed to have achieved a
target performance level for the Performance Period in which death occurs, and
the number of shares of our common stock the Participant’s
beneficiary shall be entitled to, if any, shall equal the number of shares the
Participant would otherwise be entitled to had the Participant been an active
Participant at the end of the Performance Period, and such shares shall be
distributed within a reasonable period following death; or
(3) In
the event of a Participant’s Disability, Retirement or death after the end of
the Performance Period, but before the date the shares of our common stock are
distributed, the number of shares the Participant shall be entitled to, if any,
shall be based on the actual Performance Criteria for the entire Performance
Period.
(c) Stock
Bonus Award. In the event of a Participant’s Disability,
Retirement or death after the award of a stock bonus but before the date the
shares of our common stock are distributed, the Participant or his or her
respective beneficiaries, as applicable, shall receive payment of the shares
within the time period referenced in the Plan.
“Disability” shall
mean (a) the mental or physical disability of the Participant defined as
“Disability” under the terms of the long-term disability plan sponsored by the
Company and in which the Participant is covered, as amended from time to time in
accordance with the provisions of such plan; or (b) a determination by the
Committee, in its sole discretion, of total disability (based on medical
evidence) that precludes the Participant from engaging in his or her full-time
position at the Company for wage or profit for at least twelve months and
appears to be permanent. All decisions by the Committee relating to a
Participant’s Disability (including a decision that a Participant is not
disabled), shall be final and binding on all parties.
“Retirement” shall
mean the termination of employment for a Participant consistent with the
provisions for early or normal retirement under the defined benefit pension plan
sponsored by the Company. Notwithstanding the foregoing, “Retirement”
before the Participant is eligible for normal retirement under such plan shall
require prior approval by the Committee. With respect to a Participant who is an
Outside Director, “Retirement” shall mean the end of the director’s term of
office upon attaining the mandatory retirement age for directors.
14. Resignation;
Termination; Leaves of Absence. If a Participant
ceases to be an Employee or Outside Director for any reason other than death,
Disability, Retirement or Change of Control, then the following provisions apply
to awards granted to the Participant under the Plan:
(a) Restricted
Stock. If a Participant resigns, is otherwise terminated from
the Company, or, in the case of an Outside Director is not re-elected to our
Board or otherwise resigns as a member of the Board, prior to the end of the
Restriction Period, he or she will forfeit all interests in the award of
restricted stock.
(b) Performance
Shares. (1) Other
Terminations. No Participant shall have a right to receive
payment in respect of an award of performance shares for a Performance Period if
the Participant resigns or is otherwise terminated from the Company or, in the
case of an Outside Director, is not re-elected (i) before the end of the
Performance Period, or (ii) after the end of the Performance period but before
the performance award is paid.
(2) Short-Term Disability; Other
Authorized Leaves of Absence. Absence of a Participant from employment
during a Performance Period and entitling the Participant to (i) reemployment
rights following military service under the Uniformed Services Employment and
Reemployment Rights Act (USERRA) (or any other similar applicable federal or
state law) or (ii) sickness allowance and/or short-term disability benefits
under the Company’s employee benefit plans, shall not affect any award of
performance shares. In the event a Participant is absent from employment during
a Performance Period due to an authorized leave of absence not described in the
immediately preceding sentence, the amount or number of shares of our common
stock the Participant shall be entitled to, if any, under any award of
performance shares shall equal (i) the amount or number of shares of our
common stock, if any, to which the Participant would otherwise be entitled had
the individual been an active Participant during the entire Performance Period (
i.e., as adjusted or forfeited based on the Performance Criteria) multiplied by
(ii) the portion of the Performance Period during which the Participant was
an active Participant (i.e., excluding the period of the authorized leave of
absence).
(c) Stock
Bonus Award. In the event an Employee’s employment or an
Outside Director’s term is terminated for any other reason after the award of a
Stock Bonus but before the payment of the Shares, the payment shall be
forfeited.
15. Special
Restrictions on Payment of Awards of Performance Shares. No
distributions in respect of performance shares shall be made, and such
distribution shall be forfeited, if at the time a distribution would otherwise
have been made:
(1) The
regular quarterly dividend on any outstanding common or preferred shares of the
Company has been omitted and not subsequently paid; or
(2) The
estimated consolidated net income of the Company for the immediately preceding
twelve-month period is less than the sum of (i) the aggregate amount to be
distributed plus (ii) dividends on all outstanding preferred and common
shares of the Company applicable to such twelve-month period (either paid,
declared or accrued at the most recently paid rate).
16. Change In
Control. Upon a Change In Control, the following shall
apply:
(a) The
awards of restricted stock and of performance shares previously granted shall be
immediately vested, treated as earned, if applicable, and not subject to
forfeiture due to any subsequent termination from employment or removal or
resignation from the Board; provided, however:
(i) Performance
Shares. With respect to performance shares:
(i) If
the Change in Control occurs before the end of the Performance Period, the
amount of the performance shares shall be determined assuming the Company has
achieved a target performance level, and the amount shall then be multiplied by
the portion of the Performance Period the individual was an active Participant
under the Plan.
(ii) If
the Change in Control occurs after the end of the Performance Period but before
the performance shares are paid, the amount payable shall be determined based on
the actual performance level.
(ii) Restricted
Stock. Restrictions on any restricted stock shall be
eliminated as of such event.
17. Definition
of Change In Control. Change In Control shall have one of the
following meanings:
(a) Employment
Agreement. If Participant has an employment agreement with us,
the Change In Control shall have the same meaning as such term or similar term
is defined in such agreement which relates to such Participant’s compensation
and benefits upon the occurrence of a change in ownership of the Participating
Company or similar event.
(b) No
Employment Agreement. In the event there is no employment
agreement between the Participant and us, then Change in Control shall
mean:
(i) The
acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of twenty percent (20%) or more of either (A) the then
outstanding shares of our common stock (the “Outstanding Company Common
Stock”) or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting
Securities”); provided,
however, that the following acquisitions shall not constitute an
acquisition of control: any acquisition directly from us (excluding an
acquisition by virtue of the exercise of a conversion privilege), any
acquisition by us, any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by us or any corporation controlled by us or any
acquisition by any corporation pursuant to a reorganization, merger, share
exchange or consolidation, if, following such reorganization, merger or
consolidation, the conditions described in clauses (A), (B) and (C) of
subsection (iii) of this section are satisfied; or
(ii) Individuals who, as of the
effective date, constitute the Board of Directors (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board of
Directors; provided,
however, that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company’s shareholders,
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
(iii) Consummation of a
reorganization, merger, share exchange or consolidation, in each case, unless,
following such reorganization, merger, share exchange or consolidation,
(A) more than fifty percent (50%) of, respectively, the then outstanding
shares of common stock of the corporation resulting from such reorganization,
merger, share exchange or consolidation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such reorganization,
merger, share exchange or consolidation in substantially the same proportions as
their ownership, immediately prior to such reorganization, merger, share
exchange or consolidation, of the Outstanding Company Stock and Outstanding
Company Voting Securities, as the case may be, (B) no person (excluding the
Company, any employee benefit plan or related trust of the Company, or such
corporation resulting from such reorganization, merger, share exchange or
consolidation and any person beneficially owning, immediately prior to such
reorganization, merger, share exchange or consolidation, directly or indirectly,
twenty percent (20%) or more of the Outstanding Company Common Stock or
Outstanding Voting Securities, as the case may be) beneficially owns, directly
or indirectly, twenty percent (20%) or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger, share exchange or consolidation or the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors and (C) at least a majority of
the members of the board of directors of the corporation resulting from such
reorganization, merger, share exchange or consolidation were members of the
Incumbent Board at the time of the execution of the initial agreement providing
for such reorganization, merger, share exchange or consolidation;
or
(iv) Approval by the shareholders
of the Company and consummation of (A) a complete liquidation or
dissolution of the Company or (B) the sale or other disposition of all or
substantially all of the assets of the Company, other than to a corporation,
with respect to which following such sale or other disposition (1) more
than fifty percent (50%) of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (2) no person
(excluding the Company and any employee benefit plan or related trust of the
Company, or such corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, twenty percent
(20%) or more of the Outstanding Company Common Stock or Outstanding Company
Voting Securities, as the case may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors and (3) at least a majority of the
members of the board of directors of such corporation were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition of assets of the
Company; or
(v) The closing, as defined in the
documents relating to, or as evidenced by a certificate of any state or federal
governmental authority in connection with, a transaction approval of which by
the shareholders of the Company would constitute a “Change in Control” under
subsection (iii) or (iv) of this Section.
If,
however, the Participant’s employment is terminated before a Change in Control
(as defined in paragraph (b) above) and the Participant reasonably demonstrates
that such termination (i) was at the request of a third party who has
indicated an intention or taken steps reasonably calculated to effect a “Change
in Control” and who effectuates a “Change in Control” or (ii) otherwise
occurred in connection with, or in anticipation of, a “Change in Control” which
actually occurs, then for all purposes of this Agreement, the date of a “Change
in Control” with respect to the Participant shall mean the date immediately
prior to the date of such termination of the Participant’s
employment.
18. Amendments
to the Plan. The Committee or our Board of Directors may amend
the Plan at any time, except that no amendment may be made to outstanding awards
without the written consent of the affected Participant. Further, all amendments
are subject to the requirements of our bylaws, stock exchange rules and federal
and state laws and regulations. Notwithstanding the preceding, the
Committee may amend or modify the Plan or any outstanding award to the extent
necessary to cause the Plan or such award to comply with the requirements of the
Code or applicable stock exchange rules.
19. Additional
Information. Additional information about the Plan and the
Committee may be obtained by contacting John B. Brown, CFO, Treasurer and
Secretary, Natural Gas Company, Inc., 3617 Lexington Road,
Winchester, Kentucky 40391; 859-744-6171, extension 109
(e-mail: jbrown@deltagas.com).
005522.135297/3912397.1