UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 6, 2021
Equitrans Midstream Corporation
(Exact name of registrant as specified in its charter)
| Pennsylvania | 001-38629 | 83-0516635 |
|
(State or other jurisdiction
of incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.) |
|
2200 Energy Drive Canonsburg, Pennsylvania |
15317 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (724) 271-7600
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| Common Stock, no par value | ETRN | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01. Entry Into a Material Definitive Agreement.
Amendments to Transportation Service Agreement
On December 6, 2021, Equitrans, L.P., a wholly owned subsidiary of Equitrans Midstream Corporation (the Company), entered into two amendments (collectively, the Amendments) to that certain Transportation Service Agreement Applicable to Firm Transportation Service Under Rate Schedule FTS, Contract No. EQTR 20242-852, dated as of September 24, 2014 (as amended, restated, extended, supplemented or otherwise modified from time to time, the Existing Agreement) with EQT Energy, LLC (EQT Energy). EQT Energy is a subsidiary of EQT Corporation (EQT), which is the former parent and, as of December 1, 2021, a shareholder of the Company.
The Amendments provide, among other things, that: (i) effective as of January 1, 2022, (a) the primary term of the Existing Agreement will expire on the first day of the month immediately following the date on which Equitrans, L.P. is authorized by the Federal Energy Regulatory Commission (FERC) to commence service on the Company’s Ohio Valley Connector Expansion (OVCx) project (the OVCx In-Service Date), which in-service is anticipated to occur in the fourth quarter of 2023; (b) the current maximum daily quantity (MDQ) of throughput on the mainline Equitrans transmission system provided for under the Existing Agreement of 1,035,000 dekatherms (Dth) per day will continue through the OVCx In-Service Date at its current rate (instead of the MDQ and its associated rate stepping down at certain dates as previously contractually provided); and (c) receipt and delivery points will be updated; and (ii) effective upon and subject to the OVCx In-Service Date, the primary term would be extended through December 31, 2030, at the contract MDQ of 1,035,000 Dth per day and without change to the rate, and receipt and delivery points would be further updated.
The potential extension of the primary term of the Existing Agreement through December 31, 2030 is a result of the binding open season conducted by the Company during the summer of 2021, which primarily related to the OVCx project. The Company expects to file with the FERC an application in respect of the OVCx project in early 2022.
The Amendments are attached as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K (this Current Report) and are incorporated into this Item 1.01 by reference. The foregoing summary has been included to provide investors and security holders with information regarding the terms of the Amendments and is qualified in its entirety by the terms and conditions of the Amendments and the Existing Agreement. It is not intended to provide any other factual information about the Company, its subsidiaries or its affiliates or EQT, its subsidiaries or its affiliates.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 6, 2021, the Board of Directors (Board) of the Company, upon recommendation of its Management Development and Compensation Committee (Compensation Committee), approved a companywide performance award program (Program) for the benefit of all employees, which is intended to provide an opportunity for each employee to be rewarded if the Company’s most significant strategic project, the Mountain Valley Pipeline (MVP), is placed in-service. Although approximately 75% of the Program’s $27.5 million value (measured at grant), is to be awarded to employees other than the Company’s named executive officers (NEOs), awards were approved for the Company’s NEOs in the form of Performance Share Units (PSUs), as described below, under the Company’s 2018 Long-Term Incentive Plan, as amended from time to time (LTIP). Each PSU represents the right to earn one share of the Company’s common stock.
The Board believes that this one-time Program will help to reward the Company’s employees for the achievement of a significant milestone and promote retention of the Company’s employees and executive officers with respect to the potential completion and in-service of the MVP. While the Program was designed for companywide participation, the form of awards made to the Company’s senior executives, including the NEOs, have more stringent vesting, service and post-vesting holding requirements than those awards granted to other program participants.
The Board, based on recommendation of the Compensation Committee, approved the following grants to the Company’s NEOs:
| Named Executive Officer | Shares Subject to Award |
| Thomas F. Karam | 379,260 |
| Kirk R. Oliver | 101,480 |
| Diana M. Charletta | 143,170 |
| Stephen M. Moore | 82,200 |
| Brian P. Pietrandrea | 23,530 |
Vesting of PSUs
Vesting of all awards under the companywide Program, including the PSUs, is related to the achievement of a timely MVP in-service. If Mountain Valley Pipeline, LLC (the MVP Joint Venture), the joint venture through which the Company holds ownership interests in the MVP project, is authorized by the FERC to commence service on the MVP (such date of authorization, MVP In-Service Date) and the Compensation Committee certifies that such date has occurred on or before the Expiration Date (as defined in the award agreement), then the PSUs will vest and become non-forfeitable as follows (Vesting Date):
| · | fifty percent (50%) on a date selected by the Company that is no later than ninety (90) days after the MVP In-Service Date, but in no event prior to the first anniversary of the grant date, provided grantee has continued in the employment of the Company or its affiliates through such Vesting Date; |
| · | twenty-five percent (25%) on or following the first anniversary of the MVP In-Service Date on a date selected by the Company that is no later than thirty (30) days after the first anniversary of the MVP In-Service Date, provided grantee has continued in the employment of the Company or its affiliates through such Vesting Date; and |
| · | as to the remaining award, on or following the second anniversary of the MVP In-Service Date on a date selected by the Company that is no later than thirty (30) days after the second anniversary of the MVP In-Service Date, provided grantee has continued in the employment of the Company or its affiliates through such Vesting Date. |
Termination Prior to MVP In-Service-Date
| · | In the event of death, disability, or retirement prior to the MVP In-Service Date, the PSUs will vest on or following the MVP In-Service Date, provided such MVP In-Service Date occurs on or before the Expiration Date, on a date selected by the Company that is no later than ninety (90) days after the MVP In-Service Date, but in no event prior to the first anniversary of the grant date, and will equal the total number of PSUs awarded to grantee multiplied by a fraction, the numerator of which is the number of full months of continuous employment with the Company and/or an affiliate from the grant date through the date of grantee’s death, disability, or retirement, and the denominator of which is the total number of full months from the grant date to the MVP In-Service Date. |
| · | Upon the occurrence of the qualifying change of control (as defined in the award agreement) prior to the MVP In-Service Date, 100% of the award will be forfeited. |
| · | In the event that a change of control (as defined in the award agreement) that is not a qualifying change of control (e.g., the PSUs are assumed by the surviving entity or the Company is the surviving entity) occurs prior to the MVP In-Service Date and (i) grantee’s employment is terminated without cause (as defined in the award agreement) or (ii) grantee resigns for good reason (as defined in the award agreement), in each case prior to the second anniversary of the change of control, the PSUs will vest in full on or following the MVP In-Service Date, provided such MVP In-Service Date occurs on or before the Expiration Date, on a date selected by the Company that is no later than ninety (90) days after the MVP In-Service Date, but in no event prior to the first anniversary of the grant date. |
| · | If grantee’s employment is terminated prior to the MVP In-Service Date for any reason not otherwise discussed above, all PSUs awarded to grantee will be forfeited on the date of the termination. |
Termination on or after MVP In-Service Date
| · | In the event of grantee’s death, disability, or retirement on or after the MVP In-Service Date, provided such MVP In-Service Date occurs on or before the Expiration Date, all unvested PSUs will vest in full on a date that is thirty (30) days following grantee’s termination of employment due to death, disability, or retirement, but in no event prior to the first anniversary of the grant date. |
| · | Upon the occurrence of the qualifying change of control (as defined in the award agreement) on or after the MVP In-Service Date, provided such MVP In-Service Date occurs on or before the Expiration Date, 100% of the unvested PSUs vest upon the closing date of such qualifying change of control, but in no event prior to the first anniversary of the grant date, provided grantee has continued in the employment of the Company or its affiliates through such date. |
| · | In the event that a change of control (as defined in the award agreement) that is not a qualifying change of control occurs on or after the MVP In-Service Date, provided such MVP In-Service Date occurs on or before the Expiration Date, and (i) grantee’s employment is terminated without cause (as defined in the award agreement) or (ii) grantee resigns for good reason (as defined in the award agreement), in each case prior to the second anniversary of the change of control, the unvested PSUs will vest in full on the date of such termination without cause or resignation for good reason, but in no event prior to the first anniversary of the grant date. |
| · | If grantee’s employment is terminated on or after the MVP In-Service Date for any reason not otherwise discussed above, all unvested PSUs awarded to grantee will be forfeited on the date of the termination. |
Shares of the Company common stock awarded to senior executives, including the NEOs, in connection with the Program discussed above are subject to a one year holding period from the applicable payment date.
The foregoing summary is qualified in its entirety by reference to the Equitrans Midstream Corporation Senior Executive 2021 MVP Performance Share Units Award Agreement form filed as Exhibit 10.3 to this Current Report and incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
The information set forth in Item 1.01 is incorporated herein by reference.
On February 26, 2020, the Company and EQT executed a new gas gathering agreement (EQT Global GGA), which provided enhanced operational efficiencies to the Company and consolidated various gathering agreements and simplified the gathering rate structure for EQT. The EQT Global GGA provides for, among other things, a fee credit to the gathering rate for certain gathered volumes that also receive separate transmission services under certain transmission contracts, including the Existing Agreement. In total, the combined gathering and transmission fees expected to be ultimately billed and collected under the EQT Global GGA and certain transmission contracts are unchanged. However, the potential extension of the primary term of the Existing Agreement impacts the Company’s expected gathering fee credit assumptions and, as a result of the impacts to such assumptions, the Company expects total gathering consideration under the EQT Global GGA to be reduced. As a result, the Company expects, for full year 2021, deferred revenue to be approximately $125 million to $130 million higher than previously expected, and in connection therewith, net income to be approximately $90 million to $100 million lower than previously expected and adjusted EBITDA to be approximately $125 million to $130 million lower than previously expected. The Company does not expect the Amendments to impact its previously expected net cash provided by operating activities, free cash flow or retained free cash flow for full year 2021.
The information in this Item 7.01 of this Current Report shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liability of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (Securities Act), or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.
Cautionary Statement Regarding Forward-Looking Information
Disclosures in this Current Report contain certain forward-looking statements within the meaning of Section 21E of the Exchange Act and Section 27A of the Securities Act. Statements that do not relate strictly to historical or current facts are forward-looking. Words such as “could,” “will,” “may,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” “project,” “target,” “budget,” “potential,” or “continue,” and similar expressions are used to identify forward-looking statements. These statements are subject to various risks and uncertainties, many of which are outside the Company’s control. Without limiting the generality of the foregoing, forward-looking statements contained in this Current Report specifically include the expectations of plans, events, strategies, objectives and growth and anticipated financial and operational performance of the Company and its subsidiaries and affiliates, including the modification or effectiveness of certain commercial arrangements with EQT, the effect of such arrangements on the Company’s consolidated financial statements, net income, adjusted EBITDA, deferred revenue, net cash provided by operating activities, free cash flow and retained free cash flow, the ability to expand Equitrans’ system and achieve, and the timing for achieving, the OVCx In-Service Date, and the ability to achieve, and timing for achieving, MVP in-service, as well as the ability of the compensatory program discussed in this Current Report to promote retention and incentivize the Company’s employees. These statements involve risks and uncertainties that could cause actual results to differ materially from projected results.
Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company has based these forward-looking statements on current expectations and assumptions about future events. While the Company considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory, judicial and other risks and uncertainties, many of which are difficult to predict and beyond the Company’s control. The risks and uncertainties that may affect the operations, performance and results of the Company’s business and forward-looking statements include, but are not limited to, those set forth in the Company’s publicly filed reports with the Securities and Exchange Commission (the SEC), including those set forth under Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC and the Company’s Quarterly Reports on Form 10-Q for each of the quarters ending March 31, 2021, June 30, 2021 and September 30, 2021 filed with the SEC, and the Company’s subsequent filings.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. The Company assumes no obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Non-GAAP Measures
As used in this Current Report, adjusted EBITDA means, as applicable, net income, plus income tax expense, net interest expense, loss on extinguishment of debt, depreciation, amortization of intangible assets, impairments of long-lived assets, payments on the preferred interest in EQT Energy Supply, LLC (Preferred Interest) and non-cash long-term compensation expense, less equity income, AFUDC-equity, unrealized gain on derivative instruments and adjusted EBITDA attributable to noncontrolling interest.
As used in this Current Report, free cash flow means net cash provided by operating activities plus principal payments received on the Preferred Interest, and less net cash provided by operating activities attributable to noncontrolling interest, premiums paid on debt extinguishment, capital expenditures (excluding the noncontrolling interest share (40%) of Eureka Midstream Holdings, LLC capital expenditures), capital contributions to the MVP Joint Venture, and dividends paid to Series A Preferred shareholders. As used in this Current Report, retained free cash flow means free cash flow less dividends paid to common shareholders.
The Company is unable to provide a reconciliation of projected adjusted EBITDA from projected net income, the most comparable financial measure calculated in accordance with GAAP. The Company has not provided such reconciliation due to the inherent difficulty and impracticability of predicting certain amounts required by GAAP with a reasonable degree of accuracy. Net income includes the impact of depreciation expense, income tax expense, the revenue impact of changes in the projected fair value of derivative instruments prior to settlement, potential changes in estimates for certain contract liabilities and unbilled revenues and certain other items that impact comparability between periods and the tax effect of such items, which may be significant and difficult to project with a reasonable degree of accuracy. Therefore, a reconciliation of projected adjusted EBITDA to projected net income is not available without unreasonable effort.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EQUITRANS MIDSTREAM CORPORATION | |||
| Date: December 6, 2021 | By: | /s/ Kirk R. Oliver | |
| Name: | Kirk R. Oliver | ||
| Title: | Senior Vice President and Chief Financial Officer | ||
Signature Page to Form 8-K
Exhibit 10.1
EXHIBIT
A
to the
TRANSPORTATION SERVICE AGREEMENT
between EQUITRANS, L.P.
and
EQT ENERGY, LLC,
pursuant
to Rate Schedule FTS
Contract No. 852 Dated 09/24/2014
Date of this Exhibit A: 12/ 6 /2021
Effective Date of this Exhibit A: 1/1/2022
Supersedes
Exhibit A Dated: 8/12/2020
1. Notices and Correspondence shall be sent to:
Equitrans, L.P.
2200
Energy Drive
Canonsburg, PA 15317
Attn: Gas Transportation Dept.
Phone: (412) 395-3230
E-mail Address: TransportationServices@equitransmidstream.com
EQT ENERGY, LLC
Address:
625 Liberty Avenue Suite 1700
Pittsburgh,
PA 15222
Representative: EQT Energy Scheduling
Phone: 412-395-2609
E-mail Address: EEScheduling@eqt.com
DUNS: 03-585-8708
Federal Tax I.D. No.: 02-0750473
Other contact information if applicable:
2. Service Under this Agreement is provided on:
|
X |
Mainline System (includes the Sunrise Transmission System and the Ohio Valley Connector) | ||
| Allegheny Valley Connector | |||
3. Maximum Daily Quantity (MDQ):
| Base MDQ (Dth) | Winter MDQ (Dth) | Effective Date | ||
| 1,035,000 | 1,035,000 | 1/1/2022 |
4. Primary Receipt and Delivery Point(s)
|
Primary Receipt Point(s)** (Meter No. and/or Meter Name) |
Base
Allocation |
Winter
Allocation |
Effective
Date |
|||||||||
| 24605 – Mobley | 40,000 dth | 40,000 dth | 1/1/2022 | |||||||||
| M5259543 – McIntosh | 100,000 dth | 100,000 dth | 1/1/2022 | |||||||||
| 17172 – Hopewell Ridge | 125,000 dth | 125,000 dth | 1/1/2022 | |||||||||
| 17112 – Callisto | 300,000 dth | 300,000 dth | 1/1/2022 | |||||||||
| M5414023 – Flower | 80,000 dth | 80,000 dth | 1/1/2022 | |||||||||
| M5414021 – Bowlby | 80,000 dth | 80,000 dth | 1/1/2022 | |||||||||
| 11795 – Jupiter | 270,000 dth | 270,000 dth | 1/1/2022 | |||||||||
| M5424301 – White’s Ridge | 40,000 dth | 40,000 dth | 1/1/2022 |
** Receipt point MDQs do not include quantities required for retainage.
|
Primary Delivery Point(s)
(Meter No. and/or Meter Name) |
Base MDQ Allocation |
Winter MDQ Allocation |
Effective Date |
|||||||||
| 11027 – Pratt to DTI | 230,000 dth | 230,000 dth | 1/1/2022 | |||||||||
| 73705 – Morris 2 | 425,000 dth | 425,000 dth | 1/1/2022 | |||||||||
| 73713 – Jefferson | 330,000 dth | 330,000 dth | 1/1/2022 | |||||||||
| 24438 – Pickenpaw to TCO | 50,000 dth | 50,000 dth | 1/1/2022 |
5. Effective Date and Term: This Exhibit A is effective 1/1/2022 and continues in full force and effect through the first day of the month immediately following the date on which Equitrans, L.P. is authorized by FERC to commence service on the OVCX Project (“OVCX In-Service Date”).* For agreements twelve (12) months or longer, Customer and/or Equitrans may terminate the agreement at the end of the primary term by providing at least six (6) months prior written notice of such intent to terminate.
At the expiration of the primary term, this Exhibit A has the following renewal term
(choose one):
_X___ no renewal term
____ through _______________ *
____ for a period of _______________ *
____ year to year* (subject to termination on six (6) months prior written notice)
____ month to month (subject to termination by either party upon ___ days written notice prior to contract expiration)
____ other (described in section 6 below)
* In accordance with Section 6.28 of the General Terms and Conditions, a right of first refusal may apply; any contractual right of first refusal will be set forth in Section 6 of this Exhibit A.
6. Other Special Provisions:
None.
IN WITNESS WHEREOF, Customer and Equitrans have executed this Exhibit A by their duly authorized officers, effective as of the date indicated above.
| CUSTOMER: | EQUITRANS, L.P.: | |||||
| By | /s/ Keith Shoemaker | 12/4/2021 | By | /s/ Diana M. Charletta | 12/6/2021 | |
| Keith Shoemaker | (Date) | Diana M. Charletta | (Date) | |||
| Title: |
Senior Vice President, Commercial
EQT Energy, LLC |
Title: | President and Chief Operating Officer |
OPTIONAL EXHIBIT C
to the
TRANSPORTATION SERVICE AGREEMENT
between EQUITRANS, L.P.
and
EQT ENERGY, LLC,
pursuant to Rate Schedule FTS
Contract No. 852 Dated 9/24/2014
Date of this Exhibit C: 12/ 6 /2021
Effective Date of this Exhibit C: 1/1/2022
Supersedes Exhibit C Dated: 04/01/2019
Negotiated Rate Agreement
1. In accordance with Section 6.30 of the General Terms and Conditions of Equitrans’ Tariff, Equitrans and Customer agree that the following negotiated rate provisions will apply under the Agreement:
| Monthly Reservation Rate | 9.133 per Dth | |
| Commodity Rate | $0.00 per Dth | |
| Authorized Overrun Rate | $0.25 per Dth | |
| Customer shall pay the applicable FERC ACA surcharge. | ||
In addition, Customer shall pay the fuel usage, lost and unaccounted for gas percentage retainage factor to recover actual fuel usage, lost and unaccounted for gas based on the following calculation. Equitrans will initially retain 0.63% of Customer’s nominated receipts volumes to recover fuel, lost and unaccounted for gas. Equitrans will track the actual experienced fuel and lost and unaccounted for gas experienced to provide transportation service on the Mainline System. Equitrans will account for the under or over recovered fuel and lost and unaccounted for gas associated with this Agreement in FERC Account 186. Beginning with the Effective Date, Equitrans shall adjust the Retainage Factor from time to time, but at least on an annual basis, to more accurately reflect actual experienced fuel and lost and unaccounted for gas; however, in no event will the Retainage Factor be less than zero. Equitrans shall file with the Commission for approval to adjust the Retainage Factor to reflect changes in the actual experienced fuel and unaccounted for gas on the Mainline System. The resulting Retainage Factor shall be effective until the effective date of Equitrans’ next succeeding filing to update the Retainage Factor for this Agreement.
The negotiated rates including the retainage rates to recover actual fuel and lost and unaccounted for gas will only apply to nominations to off-system interstate pipeline interconnects. Any nominations to other points will be subject to the posted Tariff Retainage Rates and the Pipeline Safety Cost Rate.
| Page 1 of 2 |
Shipper shall also be subject to any FERC mandated surcharges, imposed by FERC on an industry wide and generally applicable basis to shippers on interstate pipelines. Transporter shall assess the impact of any such FERC proposed surcharge on its Shippers and use commercially reasonable efforts to minimize the application or impact of such surcharge on Transporter’s Shippers, provided that such efforts by Transporter shall not include any obligation on or risk to Transporter of cost responsibility for such surcharge.
Except as expressly stated herein, Equitrans’ applicable maximum rates and charges set forth in the Statement of Rates of its Tariff continue to apply.
2. Customer acknowledges that it is electing Negotiated Rates as an alternative to the rates and charges set forth in the Statement of Rates of Equitrans’ Tariff applicable to Rate Schedule FTS, as revised from time to time.
3. This Exhibit C is effective 1/1/2022 and continues in full force and effect through the first day of the month immediately following the date on which Equitrans, L.P. is authorized by FERC to commence service on the OVCX Project (“OVCX In-Service Date”).
4. In the event any provision of this Exhibit C is held to be invalid, illegal or unenforceable by any court, regulatory agency, or tribunal of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions, terms or conditions shall not in any way be affected or impaired thereby, and the term, condition, or provision which is held illegal or invalid shall be deemed modified to conform to such rule of law, but only for the period of time such order, rule, regulation, or law is in effect.
5. Other Special Provisions:
None.
IN WITNESS WHEREOF, Customer and Equitrans have executed this Exhibit C by their duly authorized officers, effective as of the date indicated above.
| CUSTOMER: | EQUITRANS, L.P.: | |||||
| By | /s/ Keith Shoemaker | 12/4/2021 | By | /s/ Diana M. Charletta | 12/6/2021 | |
| Keith Shoemaker | (Date) | Diana M. Charletta | (Date) | |||
| Title: |
Senior Vice President, Commercial
EQT Energy, LLC |
Title: | President and Chief Operating Officer |
| 852(1) Page 2 of 2 |
Exhibit 10.2
EXHIBIT A
to the
TRANSPORTATION SERVICE AGREEMENT
between EQUITRANS, L.P.
and
EQT ENERGY, LLC,
pursuant to Rate Schedule FTS
Contract No. 852 Dated 09/24/2014
Date of this Exhibit A: 12/ 6 /2021
Effective Date of this Exhibit A: OVCX In-Service Date (as defined below)
Supersedes Exhibit A Dated: 12/6/2021 (effective 1/1/2022)
1. Notices and Correspondence shall be sent to:
Equitrans, L.P.
2200 Energy Drive
Canonsburg, PA 15317
Attn: Gas Transportation Dept.
Phone: (412) 395-3230
E-mail Address: TransportationServices@equitransmidstream.com
EQT ENERGY, LLC
Address:
625 Liberty Avenue Suite 1700
Pittsburgh, PA 152222
Representative: EQT Energy Scheduling
Phone: 412-395-2609
E-mail Address: EEScheduling@eqt.com
DUNS: 03-585-8708
Federal Tax I.D. No.: 02-0750473
Other contact information if applicable:
2. Service Under this Agreement is provided on:
| X | Mainline System (includes the Sunrise Transmission System and the Ohio Valley Connector) | ||
| Allegheny Valley Connector |
3. Maximum Daily Quantity (MDQ):
| Base MDQ (Dth) | Winter MDQ (Dth) | Effective Date | |
| 1,035,000 | 1,035,000 | OVCX In-Service Date (as defined below) |
4. Primary Receipt and Delivery Point(s)
|
Primary Receipt Point(s)**
(Meter No. and/or Meter Name) |
Base
MDQ Allocation |
Winter
MDQ Allocation |
Effective
Date |
|||
| M5259543 – McIntosh | 100,000 dth | 100,000 dth | OVCX In-Service Date (as defined below) | |||
| 17172 – Hopewell Ridge | 125,000 dth | 125,000 dth | OVCX In-Service Date (as defined below) | |||
| 17112 – Callisto | 300,000 dth | 300,000 dth | OVCX In-Service Date (as defined below) | |||
| M5440680 – Aurora | 110,000 dth | 110,000 dth | OVCX In-Service Date (as defined below) | |||
| TBD – Beacon H-111 (LP) | 50,000 dth | 50,000 dth | OVCX In-Service Date (as defined below) | |||
| TBD – Beacon H-302 (HP) | 250,000 dth | 250,000 dth | OVCX In-Service Date (as defined below) | |||
| M5414023 – Flower (Polecat) | 50,000 dth | 50,000 dth | OVCX In-Service Date (as defined below) | |||
| M5414021 – Bowlby (Drift Ridge) | 50,000 dth | 50,000 dth | OVCX In-Service Date (as defined below) |
** Receipt point MDQs do not include quantities required for retainage.
|
Primary Delivery Point(s)
(Meter No. and/or Meter Name) |
Base
MDQ Allocation |
Winter
MDQ Allocation |
Effective
Date |
|||
| 11027 – Pratt to DTI | 285,000 dth | 285,000 dth | OVCX In-Service Date (as defined below) | |||
| 73705 – Morris 2 | 425,000 dth | 425,000 dth | OVCX In-Service Date (as defined below) | |||
| 73713 – Jefferson | 275,000 dth | 275,000 dth | OVCX In-Service Date (as defined below) | |||
| 11169 – Rhinehart (To TCO) | 50,000 dth | 50,000 dth | OVCX In-Service Date (as defined below) |
5. Effective Date and Term: This Exhibit A is effective the first day of the month immediately following the date on which Equitrans, L.P. is authorized by FERC to commence service on the OVCX Project (“OVCX In-Service Date”), which is anticipated to be October 1, 2023, and continues in full force and effect through 12/31/2030.* For agreements twelve (12) months or longer, Customer and/or Equitrans may terminate the agreement at the end of the primary term by providing at least six (6) months prior written notice of such intent to terminate.
At the expiration of the primary term, this Exhibit A has the following renewal term
(choose one):
__X_ no renewal term
____ through _______________ *
____ for a period of _______________ *
___ year to year* (subject to termination on six (6) months prior written notice)
____ month to month (subject to termination by either party upon ___ days written notice prior to contract expiration)
____ other (described in section 6 below)
* In accordance with Section 6.28 of the General Terms and Conditions, a right of first refusal may apply; any contractual right of first refusal will be set forth in Section 6 of this Exhibit A.
6. Other Special Provisions:
None.
IN WITNESS WHEREOF, Customer and Equitrans have executed this Exhibit A by their duly authorized officers, effective as of the date indicated above.
| CUSTOMER: | EQUITRANS, L.P.: | |||
| By | /s/ Keith Shoemaker 12/4/2021 | By | /s/ Diana M. Charletta 12/6/2021 | |
| Keith Shoemaker (Date) | Diana M. Charletta (Date) | |||
|
Title: |
Senior
Vice President, Commercial
|
Title: |
President and Chief Operating Officer |
|
852(2)
OPTIONAL EXHIBIT C
to the
TRANSPORTATION SERVICE AGREEMENT
between EQUITRANS, L.P.
and EQT ENERGY, LLC,
pursuant to Rate Schedule FTS
Contract No. 852 Dated 9/24/2014
Date of this Exhibit C: 12/ 6 /2021
Effective Date of this Exhibit C: OVCX In-Service Date (as defined below)
Supersedes Exhibit C Dated: 12/6/2021 (effective 1/1/2022)
Negotiated Rate Agreement
1. In accordance with Section 6.30 of the General Terms and Conditions of Equitrans’ Tariff, Equitrans and Customer agree that the following negotiated rate provisions will apply under the Agreement:
| Monthly Reservation Rate | 9.133 per Dth |
| Commodity Rate | $0.00 per Dth |
| Authorized Overrun Rate | $0.25 per Dth |
| Customer shall pay the applicable FERC ACA surcharge. | |
In addition, Customer shall pay the fuel usage, lost and unaccounted for gas percentage retainage factor to recover actual fuel usage, lost and unaccounted for gas based on the following calculation. Equitrans will initially retain 0.53522% of Customer’s nominated receipts volumes to recover fuel, lost and unaccounted for gas. Equitrans will track the actual experienced fuel and lost and unaccounted for gas experienced to provide transportation service on the Mainline System. Equitrans will account for the under or over recovered fuel and lost and unaccounted for gas associated with this Agreement in FERC Account 186. Beginning with the Effective Date, Equitrans shall adjust the Retainage Factor from time to time, but at least on an annual basis, to more accurately reflect actual experienced fuel and lost and unaccounted for gas; however, in no event will the Retainage Factor be less than zero. Equitrans shall file with the Commission for approval to adjust the Retainage Factor to reflect changes in the actual experienced fuel and unaccounted for gas on the Mainline System. The resulting Retainage Factor shall be effective until the effective date of Equitrans’ next succeeding filing to update the Retainage Factor for this Agreement.
The Rates and Retainage Factor will be considered negotiated rates, subject to FERC’s negotiated rate policies, and will only apply to nominations on Equitrans’ System from Aurora Receipt Point (Meter# M5440680), Beacon H-111 (LP) Receipt Point (Meter# TBD), Beacon H-302 (HP) Receipt Point (Meter# TBD), Callisto Receipt Point (Meter# 17112), McIntosh Receipt Point (Meter# M5259543), Hopewell Ridge (Meter# 17172), Flower (Polecat) Receipt Point (Meter# M5414023), Bowlby (Drift Ridge) Receipt Point (Meter# M5414021) to Pratt to DTI Delivery Point (Meter# 11027), Rhinehart to TCO Delivery Point (Meter# 11169), Jefferson Delivery Point (Meter# 73713) or Morris 2 Delivery Point(Meter# 73705).
Shipper shall also be subject to any FERC mandated surcharges, imposed by FERC on an industry wide and generally applicable basis to shippers on interstate pipelines. Transporter shall assess the impact of any such FERC proposed surcharge on its Shippers and use commercially reasonable efforts to minimize the application or impact of such surcharge on Transporter’s Shippers, provided that such efforts by Transporter shall not include any obligation on or risk to Transporter of cost responsibility for such surcharge.
Except as expressly stated herein, Equitrans’ applicable maximum rates and charges set forth in the Statement of Rates of its Tariff continue to apply.
2. Customer acknowledges that it is electing Negotiated Rates as an alternative to the rates and charges set forth in the Statement of Rates of Equitrans’ Tariff applicable to Rate Schedule FTS, as revised from time to time.
3. This Exhibit C is effective the first day of the month immediately following the date on which Equitrans, L.P. is authorized by FERC to commence service on the OVCX Project (“OVCX In-Service Date”) , which is anticipated to be October 1, 2023, and continues in effect through 12/31/2030.
4. In the event any provision of this Exhibit C is held to be invalid, illegal or unenforceable by any court, regulatory agency, or tribunal of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions, terms or conditions shall not in any way be affected or impaired thereby, and the term, condition, or provision which is held illegal or invalid shall be deemed modified to conform to such rule of law, but only for the period of time such order, rule, regulation, or law is in effect.
5. Other Special Provisions:
None.
IN WITNESS WHEREOF, Customer and Equitrans have executed this Exhibit C by their duly authorized officers, effective as of the date indicated above.
| CUSTOMER: | EQUITRANS, L.P.: | |||
| By | /s/ Keith Shoemaker 12/4/2021 | By | /s/ Diana M. Charletta 12/6/2021 | |
| Keith Shoemaker (Date) | Diana M. Charletta (Date) | |||
|
Title: |
Senior
Vice President, Commercial
|
Title: |
President and Chief Operating Officer |
|
852(2)
Exhibit 10.3
EQUITRANS MIDSTREAM CORPORATION
SENIOR EXECUTIVE
2021 MVP PERFORMANCE SHARE UNITS AWARD AGREEMENT
Common Stock-Settled & Non-transferable
G R A N T T O
(“Grantee”)
DATE OF GRANT: [●], 2021
(“Grant Date”)
by Equitrans Midstream Corporation (the “Company”) of Performance Share Units (the “Performance Share Units”), representing the right to earn the number of shares of the Company’s common stock (the “Common Stock”) set forth herein, pursuant to and subject to the provisions of the Equitrans Midstream Corporation 2018 Long-Term Incentive Plan (as amended from time to time, the “Plan”), and the terms and conditions in this award agreement (this “Agreement”).
The number of Performance Share Units subject to this award is [_________] (as more fully described herein, the “Award”). Depending on the Company’s achievement of timely Mountain Valley Pipeline in-service status, Grantee may earn and vest in the Award in accordance with this Agreement.
Grantee’s Performance Share Units under this Agreement shall not be effective unless, no later than 45 days after the Grant Date, Grantee accepts the Performance Share Units through the Fidelity NetBenefits website, which can be found at www.netbenefits.com.
When Grantee accepts the Performance Share Units awarded under this Agreement, Grantee shall be deemed to have (i) acknowledged receipt of the Performance Share Units granted on the Grant Date (the terms of which are subject to the terms and conditions of this Agreement and the Plan) and copies of this Agreement and the Plan, and (ii) agreed to be bound by all the provisions of this Agreement and the Plan.
TERMS AND CONDITIONS
1. Defined Terms. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan. In addition, and notwithstanding any contrary definition in the Plan, for purposes of this Agreement:
| (a) | “Cause” means: (i) Grantee’s conviction of a felony, a crime of moral turpitude or fraud or Grantee’s having committed fraud, misappropriation or embezzlement in connection with the performance of Grantee’s duties; (ii) Grantee’s willful and repeated failures to substantially perform assigned duties; or (iii) Grantee’s violation of any provision of a written employment-related agreement between Grantee and the Company or express significant policies of the Company. If the Company terminates Grantee’s employment for Cause, the Company shall give Grantee written notice setting forth the reason for Grantee’s termination not later than 30 days after such termination. |
| (b) | “Expiration Date” means January 1, 2024. |
| (c) | “Good Reason” means Grantee’s resignation within 90 days after: (i) a reduction in Grantee’s base salary of 10% or more (unless the reduction is applicable to all similarly situated employees); (ii) a reduction in Grantee’s annual short-term bonus target by the greater of (A) 10% and (B) 5 percentage points of Grantee’s target bonus percentage, unless the reduction is applicable to all similarly situated employees; (iii) a significant diminution in Grantee’s job responsibilities, duties or authority; (iv) a Company requested change in the geographic location of Grantee’s primary reporting location of more than 50 miles (but excluding any requirement to work remotely); and/or (v) any other action or inaction that constitutes a material breach by the Company of this Agreement. |
A termination by Grantee shall not constitute termination for Good Reason unless Grantee first delivers to the General Counsel of the Company written notice: (i) stating that Grantee intends to resign for Good Reason pursuant to this Agreement; and (ii) setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 90 days after the initial occurrence of such event). The Company shall have a reasonable period of time (not less than 30 days) to take action to correct, rescind or substantially reverse the occurrence supporting termination for Good Reason as identified by Grantee. Failure by the Company to act or respond to the written notice shall not be deemed to be an admission that Good Reason exists.
| (d) | “In-Service Date” means the date on which Mountain Valley Pipeline, LLC, the joint venture through which the Company holds ownership in the Mountain Valley Pipeline, is authorized by the Federal Energy Regulatory Commission to commence service on the Mountain Valley Pipeline, provided that the Committee certifies that such date has occurred on or before the Expiration Date. |
| (e) | “Mountain Valley Pipeline” means the approximately 300-mile, 42-inch diameter natural gas interstate pipeline project with a targeted capacity of 2.0 Bcf per day that will span from the Company’s existing transmission and storage system in Wetzel County, West Virginia to Pittsylvania County, Virginia. |
| (f) | “Payment Date” is defined in Section 6 of this Agreement. |
| (g) | “Qualifying Change of Control” means a Change of Control (as then defined in the Plan) unless (i) all outstanding Performance Share Units awarded pursuant to the Senior Executive 2021 MVP Performance Share Units Award Agreements are assumed by the surviving entity of the Change of Control (or otherwise equitably converted or substituted in connection with the Change of Control in a manner approved by the Committee) or (ii) the Company is the surviving entity of the Change of Control. |
| (h) | “Retirement” means Grantee’s voluntary termination of employment with the Company and its Affiliates after Grantee has (i) a length of service of at least 10 years and (ii) a combined age and length of service equal to at least 60 years. Grantee’s length of service will be determined by the Company, in its sole discretion, based on the Company’s internal payroll records. For purposes of this Section 1(h), service with EQT Corporation prior to November 13, 2018 shall be treated the same as service with the Company and its Affiliates. The termination of Grantee’s employment by the Company shall not qualify as Retirement. |
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2. Earning and Vesting of Performance Share Units. The Performance Share Units have been credited to a bookkeeping account on behalf of Grantee and do not represent actual shares of Common Stock. Grantee shall have no right to exchange the Performance Share Units for cash, stock or any other benefit and shall be a mere unsecured creditor of the Company with respect to such Performance Share Units and any future rights to benefits. The Performance Share Units represent the right to earn and vest in the amounts described below, payable in shares of Common Stock on the applicable Payment Date depending on (i) the Company’s attainment of the In-Service Date on or prior to the Expiration Date, and (ii) Grantee’s continued employment with the Company and/or any of its Affiliates through the applicable Payment Date (as defined below, and subject to Section 4, as applicable). Any Performance Share Units that do not vest will be immediately forfeited without further consideration or any act or action by Grantee. If the In-Service Date has not occurred on or prior to the Expiration Date, the Performance Share Units will be immediately forfeited without further consideration or any act or action by Grantee.
Except as otherwise provided in this Agreement, or under any written employment-related agreement with Grantee (including any confidentiality, non-solicitation, non-competition, change of control or similar agreement, as required by the Company), the Performance Share Units will vest and become non-forfeitable as follows (each, a “Vesting Date”):
| (a) | as to fifty percent (50%) of the Award, upon the Payment Date specified in Section 6(a) on or following the In-Service Date, provided Grantee has continued in the employment of the Company or its Affiliates through such Vesting Date; |
| (b) | as to twenty-five percent (25%) of the Award, upon the Payment Date specified in Section 6(b) on or following the first anniversary of the In-Service Date, provided Grantee has continued in the employment of the Company or its Affiliates through such Vesting Date; and |
| (c) | as to the remaining Award, upon the Payment Date specified in Section 6(c) on or following the second anniversary of the In-Service Date, provided Grantee has continued in the employment of the Company or its Affiliates through such Vesting Date. |
3. Voluntary Termination with Continued Board Service. Notwithstanding the foregoing, if Grantee’s employment is terminated voluntarily, including for Retirement, and Grantee remains on the board of directors of the Company or any Affiliate of the Company whose equity is publicly traded on the New York Stock Exchange or the NASDAQ Stock Market following such termination of employment, Grantee shall retain all unpaid Performance Share Units, contingent upon achievement of the In-Service Date, for as long as Grantee remains on such board of directors, in which case any references herein to Grantee’s employment shall be deemed to include Grantee’s continued service on such board. Except as otherwise provided in this Agreement, the Performance Share Units shall be forfeited upon Grantee’s resignation as an employee of the Company or an Affiliate. For the avoidance of doubt, if Grantee transitions from employee status to board service, the applicable Vesting Dates and Payment Dates will be determined as if Grantee’s employment status with the Company was unchanged. Furthermore, in the case of Grantee’s death, Disability, or Retirement, during Grantee’s board service, the Award will be subject to Section 4(a) and Section 5.
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4. Vesting Upon Change in Status Prior to the In-Service Date. In making decisions regarding the extent to which the Performance Share Units are payable in the event that Grantee’s employment ceases prior to payment, the Committee may consider any factors that it deems to be relevant. Unless otherwise determined by the Committee, and subject to the terms of any written employment-related agreement that Grantee has with the Company (including any confidentiality, non-solicitation, non-competition, change of control or similar agreement, as required by the Company), the following shall apply with respect to all Performance Share Units in the event that Grantee’s employment ceases prior to the In-Service Date (each, a “Vesting Date”):
| (a) | Death, Disability, or Retirement. In the event of the Grantee’s death, Disability (as defined in the Plan), or Retirement prior to the In-Service Date, the Performance Share Units awarded pursuant to this Agreement shall vest on the Payment Date specified in Section 6(d) on or following the In-Service Date, according to the terms set forth in this Section 4(a). |
The number of a Grantee’s Performance Share Units that vest pursuant to this Section 4(a) shall equal the total number of Performance Share Units awarded to Grantee pursuant to this Agreement multiplied by a fraction (which shall not be greater than 1), the numerator of which is the number of full months of continuous employment with the Company and/or an Affiliate from the Grant Date through the date of Grantee’s death, Disability, or Retirement, and the denominator of which is the total number of full months from the Grant Date to the In-Service Date. When determining the pro rata amount pursuant to this Section 4(a), the Participant shall be considered to have been employed with the Company and/or an Affiliate for a full calendar month so long as the Participant is employed by such entity for at least one day during such calendar month.
| (b) | Qualifying Change of Control. Notwithstanding Section 9 of the Plan, upon the occurrence of the Qualifying Change of Control prior to the In-Service Date, 100% of the Award shall be forfeited. |
| (c) | Termination Without Cause or Resignation for Good Reason Following Change of Control. Notwithstanding Section 9 of the Plan, in the event that a Change of Control that is not a Qualifying Change of Control occurs prior to the In-Service Date, and (i) Grantee’s employment is terminated without Cause or (ii) Grantee resigns for Good Reason, in each case prior to the second anniversary of the Change of Control, the Performance Share Units shall vest in full on the Payment Date specified in Section 6(d) following the In-Service Date. |
| (d) | Other Termination. If Grantee’s employment is terminated prior to the In-Service Date for any reason not otherwise provided for in this Section 4, all Performance Share Units awarded pursuant to this Agreement shall be forfeited upon the date of the termination. |
As a condition to the vesting of any Performance Share Units pursuant to this Section 4, Grantee may in the Company’s discretion be required to execute and not revoke a full release of claims in a form acceptable to the Company within 30 days of termination. Failure to satisfy this condition will result in forfeiture of such Performance Share Units.
5. Vesting Upon Change in Status On or After the In-Service Date. In making decisions regarding the extent to which the Performance Share Units are payable in the event that Grantee’s employment ceases prior to payment, the Committee may consider any factors that it deems to be relevant. Unless otherwise determined by the Committee, and subject to the terms of any written employment-related agreement that Grantee has with the Company (including any confidentiality, non-solicitation, non-competition, change of control or similar agreement, as required by the Company), the following shall apply with respect to all Performance Share Units in the event that Grantee’s employment ceases on or after the In-Service Date (each, a “Vesting Date”):
| (a) | Death, Disability, or Retirement. In the event of Grantee’s death, Disability, or Retirement on or after the In-Service Date, all unvested Performance Share Units shall vest in full on the Payment Date specified in Section 6(e) following the date of such death, Disability, or Retirement. |
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| (b) | Qualifying Change of Control. Upon the occurrence of the Qualifying Change of Control on or after the In-Service Date, 100% of the unvested Performance Share Units shall vest upon the closing date of such Qualifying Change of Control, provided Grantee has continued in the employment of the Company or its Affiliate through such date. |
| (c) | Termination Without Cause or Resignation for Good Reason Following Change of Control. In the event that a Change of Control that is not a Qualifying Change of Control occurs on or after the In-Service Date and (i) Grantee’s employment is terminated without Cause or (ii) Grantee resigns for Good Reason, in each case prior to the second anniversary of the Change of Control, the unvested Performance Share Units shall vest in full on the date of such termination without Cause or resignation for Good Reason. |
| (d) | Other Termination. If Grantee’s employment is terminated on or after the In-Service Date for any reason not otherwise provided for in this Section 5, all unvested Performance Share Units awarded pursuant to this Agreement shall be forfeited upon the date of the termination. |
As a condition to the vesting of any Performance Share Units pursuant to this Section 5, if any, Grantee will be required to execute and not revoke a full release of claims in a form acceptable to the Company within 30 days of termination. Failure to satisfy this condition will result in forfeiture of such Performance Share Units.
6. Time of Payment. The Performance Share Units awarded pursuant to this Agreement shall be settled in shares of Common Stock pursuant to the following dates (each, the “Payment Date”); provided, in no event will the Payment Date be later than March 15 of the year following the applicable Vesting Date:
| (a) | The Payment Date for Performance Share Units vesting pursuant to Section 2(a) shall be a date selected by the Company that is no later than ninety (90) days after the In-Service Date. |
| (b) | The Payment Date for Performance Share Units vesting pursuant to Section 2(b) shall be a date selected by the Company that is no later than thirty (30) days after the first anniversary of the In-Service Date. |
| (c) | The Payment Date for Performance Share Units vesting pursuant to Section 2(c) shall be a date selected by the Company that is no later than thirty (30) days after the second anniversary of the In-Service Date. |
| (d) | The Payment Date for Performance Share Units vesting pursuant to Section 4(a) or Section 4(c) shall be a date selected by the Company that is no later than ninety (90) days after the In-Service Date. |
| (e) | The Payment Date for Performance Share Units vesting pursuant to Section 5(a) or 5(c) shall be a date that is thirty (30) days following Grantee’s termination of employment pursuant to Grantee’s death, Disability, or Retirement, termination without Cause, or resignation for Good Reason. |
Notwithstanding the foregoing, in no event shall the Payment Date for Performance Share Units vesting pursuant to Section 2(a), 4(a), 4(c), 5(a), 5(b) or 5(c) occur prior to the first anniversary of the Grant Date.
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7. Dividend Equivalents. If the record date for regular dividends or special dividends with respect to Common Stock (whether made in cash or stock, unless made in accordance with any shareholder rights plan or similar arrangement) occurs during the period commencing on the Grant Date through and including the applicable Vesting Date, the cumulative amount of all regular and special dividends paid during such applicable period(s) on Grantee’s Performance Share Units shall be held and Grantee shall earn a right to receive a cash payment in respect of such dividends. Any cash payment Grantee may be entitled to pursuant to this Section 7 shall be subject to the same performance and time-vesting conditions and transfer restrictions as apply to the Performance Share Units with respect to which they relate and shall be paid at the same time as the Performance Share Units to which they relate.
8. Restrictions on Transfer and Pledge; Holding Period. No right or interest of Grantee in the Performance Share Units may be pledged, encumbered, or hypothecated or be made subject to any lien, obligation, or liability of Grantee to any other party other than the Company or its Affiliates. Except as provided in the Plan, the Performance Share Units may not be sold, assigned, transferred, or otherwise disposed of by Grantee other than by will or the laws of descent and distribution. The designation of a beneficiary shall not constitute a transfer.
Other than shares withheld by the Company to satisfy applicable tax withholdings (as described below), no shares of Common Stock awarded pursuant to this Agreement may be transferred or sold by the Grantee until the one-year anniversary of the applicable Payment Date and in any event Grantee shall remain subject to the requirements of any applicable stock ownership guidelines of the Company. Notwithstanding the foregoing, the holding period shall not apply with respect to any Performance Share Units vesting pursuant to Section 4 or 5.
9. Limitation of Rights. The Performance Share Units do not confer to Grantee or Grantee’s beneficiary, executors or administrators any rights of a shareholder of the Company. Grantee shall not have voting or any other rights as a shareholder of the Company with respect to the Performance Share Units.
10. Payment of Taxes. The Company or any Affiliate employing Grantee has the authority and the right to deduct or withhold, or require Grantee to remit to the employer, an amount sufficient to satisfy federal, state, and local taxes (including Grantee’s FICA obligation) required by law to be withheld with respect to any taxable event arising as a result of this Agreement. With respect to withholding required upon any taxable event arising as a result of this Agreement, the employer shall satisfy the tax withholding required by withholding shares of Common Stock, having a Fair Market Value as of the date that the amount of tax to be withheld is to be determined equal to the amount of tax required to be withheld. The obligations of the Company under this Agreement will be conditional on such payment or arrangements, and the Company and, where applicable, its Affiliates will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to Grantee.
11. Plan Controls. Other than as expressly set forth herein, this Agreement and Grantee’s rights hereunder are subject to all the terms and conditions of the Plan and such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to interpret and administer the Plan and this Agreement, and to make all decisions and determinations as it may deem to be necessary or advisable for the administration thereof, all of which shall be final and binding upon Grantee and the Company. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall be controlling and determinative. Any conflict between this Agreement and the terms of a written employment-related agreement with Grantee effective on or prior to the Grant Date shall be decided in favor of the provisions of such employment-related agreement.
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12. Recoupment Policy. Any shares of Common Stock distributed or amounts paid to Grantee hereunder, and any cash or other benefit acquired on the sale of shares of Common Stock distributed hereunder, shall be subject to the terms and conditions of the Equitrans Midstream Corporation Compensation Recoupment Policy, effective June 17, 2019, as may be amended or restated from time to time, to the extent such policy is applicable to Grantee and the Performance Share Units. A copy of such policy is available upon request from the Company’s Corporate Secretary.
13. Relationship to Other Benefits. The Performance Share Units shall not affect the calculation of benefits under the Company’s or its Affiliates’ qualified retirement plans or any other retirement, compensation or benefit plan or program of the Company or its Affiliates, except to the extent specifically provided in such other plan or program. Nothing herein shall prevent the Company or its Affiliates from maintaining additional compensation plans and arrangements.
14. Amendment. Subject to the terms of the Plan, this Agreement may be modified or amended by the Committee; provided that no such amendment shall materially and adversely affect the rights of Grantee hereunder without the consent of Grantee. Notwithstanding the foregoing, Grantee hereby expressly agrees to any amendment to the Plan and this Agreement to the extent necessary to comply with applicable law or changes to applicable law (including, but not limited to, Code Section 409A) and related regulations or other guidance and federal securities laws.
15. Successor. All obligations of the Company under the Plan and this Agreement, with respect to the Performance Share Units, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
16. Applicable Law. This Agreement shall be governed by and construed under the laws of the Commonwealth of Pennsylvania without regard to its conflict of law provisions.
17. Notice. Except as may be otherwise provided by the Plan or determined by the Committee and communicated to Grantee, notices and communications hereunder must be in writing and shall be deemed sufficiently given if either sent by electronic mail, hand-delivered or if sent by overnight courier, or by postage paid first class mail. Notices sent by mail shall be deemed received five business days after mailed, but in no event later than the date of actual receipt. Any notice delivered or made by electronic mail will be deemed to be given on the date of actual delivery as shown by the date of the electronic mail message. Notices shall be directed, if to Grantee, at Grantee’s address (or electronic address, as applicable) indicated by the Company’s records or, if to the Company, at the Company’s principal executive office, Attention: Manager, Compensation and Benefits, or if notice is sent to the Company by electronic mail, to TotalRewards@equitransmidstream.com.
18. Dispute Resolution. Any dispute regarding the payment of benefits under this Agreement or the Plan shall be resolved in accordance with the Equitrans Midstream Corporation Long-Term Incentive Plan Dispute Resolution procedures, effective December 15, 2020, as may be amended or restated from time to time. A copy of such procedures is available upon request from the Company’s Corporate Secretary and is available on the Fidelity NetBenefits website, which can be found at www.netbenefits.com.
19. Tax Consequences to Grantee. It is intended that: (i) until the applicable Payment Date occurs, Grantee’s right to payment for an award under this Agreement shall be considered to be subject to a substantial risk of forfeiture in accordance with those terms as defined or referenced in Sections 83(a), 409A and 3121(v)(2) of the Code; and (ii) until the award is paid on the applicable Payment Date, Grantee shall have merely an unfunded, unsecured promise to receive such award, and such unfunded promise shall not consist of a transfer of “property” within the meaning of Section 83 of the Code.
20. Plan and Company Information. Grantee may access important information about the Company and the Plan through the Company’s website. Copies of the Plan and Plan Prospectus can be found by logging into the Fidelity NetBenefits website, which can be found at www.netbenefits.com, and clicking on the “Menu” tab followed by the “Stock Plans” tab and then following the prompts to the Plan documents. Copies of the Company’s most recent Annual Report on Form 10-K, Proxy Statement and other information generally delivered to the Company’s shareholders can be found at www.equitransmidstream.com by clicking on the “Investors” link on the main page and then “Financial Reporting” and “SEC Filings.” Paper copies of such documents are available upon request made to the Company’s Corporate Secretary.
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