STOCKHOLDERS AGREEMENT
Exhibit 4.1
Execution Version
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT (this Agreement), dated as of January 29, 2014, is entered into by and among Rice Energy Inc., a Delaware corporation (the Company), and each of the other parties identified on the signature pages hereto (collectively, but subject to Section 3.2 hereof, the Principal Stockholders).
RECITALS
WHEREAS, the Company is currently contemplating an underwritten public offering (the IPO) of shares of Common Stock (as defined below); and
WHEREAS, in connection with, and effective upon, completion of the IPO, the Company and the Principal Stockholders wish to set forth certain understandings among such parties, including with respect to certain corporate governance matters.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Definitions. As used in this Agreement, the following terms shall have the following meanings:
Affiliate of a specified Person is a Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, the Person specified.
Agreement has the meaning set forth in the preamble to this Agreement.
ANR Director has the meaning set forth in Section 2.1(a)(iii) of this Agreement.
ANR Entities has the meaning set forth in Section 2.1(a)(iii) of this Agreement.
Beneficial Owner of a security is a Person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares (i) voting power, which includes the power to vote, or to direct the voting of, such security and/or (ii) investment power, which includes the power to dispose, or to direct the disposition of, such security. The terms Beneficially Own and Beneficial Ownership shall have correlative meanings.
Board means the Board of Directors of the Company.
Common Stock means the common stock, par value $0.01 per share, of the Company.
Company has the meaning set forth in the preamble to this Agreement.
Control (including the terms Controlling, Controlled by and under common Control with) means the possession, direct or indirect, of the power to (a) direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise or (b) vote 10% or more of the securities having ordinary voting power for the election of directors of a Person.
Directors means, collectively, the ANR Director, the NGP Directors and the Rice Holdco Directors.
Equity Securities means any equity securities of the Company or any options, warrants or other securities that are directly or indirectly convertible into, or exercisable or exchangeable for, any equity securities of the Company.
IPO has the meaning set forth in the recitals to this Agreement.
Necessary Action shall mean, with respect to a specified result, all actions (to the extent such actions are permitted by applicable law and, in the case of any action by the Company that requires a vote or other action on the part of the Board, to the extent such action is consistent with the fiduciary duties that the Companys directors may have in such capacity) necessary to cause such result, including (i) voting or providing a written consent or proxy with respect to shares of Common Stock, (ii) causing the adoption of stockholders resolutions and amendments to the organizational documents of the Company, (iii) executing agreements and instruments and (iv) making or causing to be made, with governmental, administrative or regulatory authorities, all filings, registrations or similar actions that are required to achieve such result.
NGP Directors has the meaning set forth in Section 2.1(a)(ii) of this Agreement.
NGP Entities has the meaning set forth in Section 2.1(a)(ii) of this Agreement.
Person means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, any court, administrative agency, regulatory body, commission or other governmental authority, board, bureau or instrumentality, domestic or foreign and any subdivision thereof or other entity, and also includes any managed investment account.
Principal Stockholders has the meaning set forth in the preamble to this Agreement.
Proceeding has the meaning set forth in Section 4.7 of this Agreement.
Rice Holdco Directors has the meaning set forth in Section 2.1(a)(i) of this Agreement.
Rice Holdco Entities has the meaning set forth in Section 2.1(a)(i) of this Agreement.
Selected Courts has the meaning set forth in Section 4.7 of this Agreement.
Sponsor means the Rice Holdco Entities, the NGP Entities or the ANR Entities, and Sponsors means the Rice Holdco Entities, the NGP Entities and the ANR Entities collectively.
Transaction Agreement means that certain transaction agreement by and among Foundation PA Coal Company, LLC, Rice Drilling C LLC and the Company dated as of December 6, 2013.
Section 1.2 Rules of Construction. Unless the context otherwise requires:
(a) References in the singular or to him, her, it, itself or other like references, and references in the plural or the feminine or masculine reference, as the case may be, shall also, when the context so requires, be deemed to include the plural or singular, or the masculine or feminine reference, as the case may be;
(b) References to Articles and Sections shall refer to articles and sections of this Agreement, unless otherwise specified;
(c) The headings in this Agreement are for convenience and identification only and are not intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision thereof;
(d) This Agreement shall be construed without regard to any presumption or other rule requiring construction against the party that drafted and caused this Agreement to be drafted; and
(e) References to including in this Agreement shall mean including, without limitation, whether or not so specified.
ARTICLE II
GOVERNANCE MATTERS
Section 2.1 Designees.
(a) The Company and the Principal Stockholders shall take all Necessary Action to cause the Board to consist of members designated as follows:
(i) Three nominees shall be designated by Rice Energy Holdings LLC (the Rice Holdco Directors); provided, that (A) the number of nominees designated by Rice Energy Holdings LLC shall be reduced to two directors at such time as Rice Energy Holdings LLC and its Affiliates (the Rice Holdco Entities) collectively Beneficially Own less than 15% and greater than or equal to 5% of the outstanding shares of Common Stock, at which point one Rice Holdco Director shall tender his resignation to the Board, and (B) Rice Energy Holdings LLC shall no longer be entitled to designate a nominee at such time as the Rice Holdco Entities collectively Beneficially Own less than 5% of the outstanding shares of Common Stock, at which point the Rice Holdco Directors shall tender their resignations to the Board. At any given time, and provided that the directors are allocated among separate classes, the Rice Holdco Directors shall be in different classes of directors;
(ii) Two nominees shall be designated by NGP Rice Holdings, LLC (the NGP Directors); provided, that (A) the number of nominees designated by NGP Rice Holdings, LLC shall be reduced to one director at such time as NGP Rice Holdings, LLC and its
Affiliates (the NGP Entities) collectively Beneficially Own less than 15% and greater than or equal to 5% of the outstanding shares of Common Stock at which point one NGP Holdco Director shall tender his resignation to the Board, and (B) that NGP Rice Holdings, LLC shall no longer be entitled to designate a nominee at such time as the NGP Entities collectively Beneficially Own less than 5% of the outstanding shares of Common Stock, at which point the NGP Director shall tender his resignation to the Board; and
(iii) One nominee shall be designated by Alpha Natural Resources, Inc. (the ANR Director); provided, that Alpha Natural Resources, Inc. shall no longer be entitled to designate a nominee at such time as Alpha Natural Resources, Inc. and its Affiliates (the ANR Entities) collectively Beneficially Own less than 5% of the outstanding shares of Common Stock, at which point the ANR Director shall tender his resignation to the Board; provided, further, however, that if immediately following the consummation of the IPO, the ANR Entities collectively Beneficially Own less than 5% of the outstanding shares of Common Stock, Alpha Natural Resources, Inc. shall nevertheless be entitled to designate one ANR Director until the earlier to occur of (x) the first anniversary of the IPO and (y) the date on which the ANR Entities have divested more than 75% of the Alpha Shares (as defined in the Transaction Agreement). In any event, the ANR Director must be either (i) the Chief Executive Officer of Alpha Natural Resources, Inc. at the time of the designation of such ANR Director or (ii) a member of senior management (with a title of Senior Vice President or greater) of Alpha Natural Resources, Inc. that is reasonably satisfactory to the Company.
(b) So long as the Rice Holdco Entities collectively Beneficially Own 15% or more of the outstanding shares of Common Stock, the Board shall include at least one Rice Holdco Director on each committee of the Board as designated by Rice Energy Holdings LLC (subject to any independence requirement imposed by law or by the rules of any national securities exchange on which the Common Stock may be listed or traded).
(c) So long as a Sponsor is entitled to designate a nominee pursuant to Section 2.1(a), the Sponsor shall have the right to remove such nominee (with or without cause), from time to time and at any time, from the Board, exercisable upon written notice to the Company. Should a director designated by a Sponsor be removed for any reason, whether by such Sponsor or otherwise in accordance with the Companys certificate of incorporation and bylaws, as either may be amended or restated from time to time, the Sponsor shall be entitled to designate an individual to fill the vacancy created by such removal so long as the Sponsor is entitled to designate a nominee pursuant to Section 2.1(a) on the date of such replacement designation; provided, that the ANR Director must meet the requirements of Section 2.1(a)(iii).
(d) Each Principal Stockholder hereby agrees to vote, in respect of the Board, such Principal Stockholders shares of Common Stock and Equity Securities for any nominee designated by a Sponsor so long as the Sponsor is entitled to designate such nominee pursuant to Section 2.1(a). In the event that a Sponsor wishes to remove its designee to the Board in accordance with Section 2.1(c), each Principal Stockholder hereby agrees to vote, in respect of the Board, its shares of Common Stock or Equity Securities for the removal of such designee from the Board.
(e) In connection with the required resignation of any director appointed by a Sponsor pursuant to this Section 2.1, such director may tender his resignation in advance of the date on which such resignation is required pursuant to this Section 2.1 and the Board shall have the right to decline to accept such resignation, in which case such director shall continue to serve on the Board until the earlier of his subsequent resignation, death or removal. Notwithstanding the foregoing, any director appointed by a Sponsor may elect to have his resignation be effective immediately upon tender.
Section 2.2 Restrictions on Other Agreements. No Principal Stockholder shall grant any proxy or enter into or agree to be bound by any voting trust, agreement or arrangement of any kind with respect to its shares of Common Stock or Equity Securities if and to the extent the terms thereof conflict with the provisions of this Agreement (whether or not such proxy, voting trust, agreement or arrangements are with other Principal Stockholders, holders of shares of Common Stock or Equity Securities that are not parties to this Agreement or otherwise).
Section 2.3 Reimbursement of Expenses. The Company shall reimburse each Director for all reasonable and documented out-of-pocket expenses incurred in connection with such Directors participation in the meetings of the Board or any committee of the Board, including all reasonable and documented travel, lodging and meal expenses.
Section 2.4 D&O Insurance. The Company shall use its best efforts to maintain in effect at all times directors and officers indemnity insurance coverage reasonably satisfactory to the Board.
ARTICLE III
EFFECTIVENESS AND TERMINATION
Section 3.1 Effectiveness. Upon the closing of the IPO, this Agreement shall thereupon be deemed to be effective. However, to the extent the closing of the IPO does not occur, the provisions of this Agreement shall be without any force or effect.
Section 3.2 Termination. This Agreement shall terminate upon the earlier to occur of (a) such time as none of the Principal Stockholders Beneficially Own any shares of Common Stock and (b) the delivery of written notice to the Company by all of the Principal Stockholders, requesting the termination of this Agreement. Further, at such time as a particular Principal Stockholder no longer Beneficially Owns any shares of Common Stock, all rights and obligations of such Principal Stockholder under this Agreement shall terminate.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Notices. All notices, requests, consents and other communications hereunder to any party shall be in writing and shall be personally delivered, sent by nationally recognized overnight courier or mailed by registered or certified mail to such party at the address set forth below (or such other address as shall be specified by like notice). Notices will be deemed to have been given hereunder when personally delivered, one calendar day after deposit with a nationally recognized overnight courier and five calendar days after deposit in U.S. mail.
(a) | if to the Company, to: |
Rice Energy Inc.
171 Hillpointe Drive, Suite 301
Canonsburg, Pennsylvania 15317
Fax: (724)  ###-###-####
Attention: General Counsel
(b) | if to Rice Energy Holdings LLC, to: |
Rice Energy Holdings LLC
171 Hillpointe Drive, Suite 301
Canonsburg, Pennsylvania 15317
Fax: (724)  ###-###-####
Attention: Chief Executive Officer
(c) | if to NGP Rice Holdings, LLC, to: |
NGP Rice Holdings, LLC
5221 N. OConnor Blvd., Suite 1100
Irving, Texas 75039
Fax: (972)  ###-###-####
Attention: Tony R. Weber
(d) | if to Alpha Natural Resources, Inc., to: |
Alpha Natural Resources, Inc.
One Alpha Place,
P.O. Box 16429
Bristol, VA 24209
Fax: (276)  ###-###-####
Attn: General Counsel
(e) | if to Rice Energy Family Holdings, LP, to: |
Rice Energy Family Holdings, LP
171 Hillpointe Drive, Suite 301
Canonsburg, Pennsylvania 15317
Fax: (724)  ###-###-####
Attn: Daniel J. Rice III
Section 4.2 Severability. The provisions of this Agreement shall be deemed severable, and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is found to be invalid or unenforceable in any jurisdiction, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.
Section 4.3 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall be considered one and the same agreement.
Section 4.4 Entire Agreement; No Third Party Beneficiaries. This Agreement (a) constitutes the entire agreement and supersedes all other prior agreements, both written and oral, among the parties with respect to the subject matter hereof and (b) is not intended to confer upon any Person, other than the parties hereto, any rights or remedies hereunder.
Section 4.5 Further Assurances. Each party shall execute, deliver, acknowledge and file such other documents and take such further actions as may be reasonably requested from time to time by the other parties hereto to give effect to and carry out the transactions contemplated herein.
Section 4.6 Governing Law; Equitable Remedies. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE (WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF). The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or was otherwise breached. It is accordingly agreed that the parties hereto shall be entitled to an injunction or injunctions and other equitable remedies to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any of the Selected Courts (as defined below), this being in addition to any other remedy to which they are entitled at law or in equity. Any requirements for the securing or posting of any bond with respect to such remedy are hereby waived by each of the parties hereto. Each party further agrees that, in the event of any action for an injunction or other equitable remedy in respect of such breach or enforcement of specific performance, it will not assert the defense that a remedy at law would be adequate.
Section 4.7 Consent To Jurisdiction. With respect to any suit, action or proceeding (Proceeding) arising out of or relating to this Agreement, each of the parties hereto hereby irrevocably (a) submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware and the United States District Court for the District of Delaware and the appellate courts therefrom (the Selected Courts) and waives any objection to venue being laid in the Selected Courts whether based on the grounds of forum non conveniens or otherwise and hereby agrees not to commence any such Proceeding other than before one of the Selected Courts; provided, however, that a party may commence any Proceeding in a court other than a Selected Court solely for the purpose of enforcing an order or judgment issued by one of the Selected Courts; (b) consents to service of process in any Proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, or by recognized international express carrier or delivery service, to the Company or the Principal Stockholders at their respective addresses referred to in Section 4.1 hereof; provided, however, that nothing herein shall affect the right of
any party hereto to serve process in any other manner permitted by law; and (c) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AND AGREES THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE THE RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT AND TO HAVE ALL MATTERS RELATING TO THIS AGREEMENT BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
Section 4.8 Amendments; Waivers.
(a) No provision of this Agreement may be amended or waived unless such amendment or waiver is in writing and signed, in the case of an amendment, by each of the parties hereto, or in the case of a waiver, by each of the parties against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 4.9 Assignment. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties; provided, however, that a Sponsor may assign any of its respective rights hereunder to any of its Affiliates. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered, all as of the date first set forth above.
RICE ENERGY INC. | ||
/s/ Daniel J. Rice IV | ||
Name: | Daniel J. Rice IV | |
Title: | Chief Executive Officer | |
RICE ENERGY HOLDINGS LLC | ||
/s/ Daniel J. Rice IV | ||
Name: | Daniel J. Rice IV | |
Title: | Chief Executive Officer | |
NGP RICE HOLDINGS, LLC | ||
/s/ Tony R. Weber | ||
Name: | Tony R. Weber | |
Title: | Authorized Person | |
ALPHA NATURAL RESOURCES, INC. | ||
/s/ Frank J. Wood | ||
Name: | Frank J. Wood | |
Title: | Executive Vice President, Chief Financial | |
Officer, Treasurer and Assistant Secretary |
SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT
RICE ENERGY FAMILY HOLDINGS, LP | ||
By: | Rice Energy Management LLC, General Partner | |
By: | /s/ Daniel J. Rice III | |
Name: | Daniel J. Rice III | |
Title: | Manager |