Item 1.01. Entry Into a Material Definitive Agreement.
Amendments to Transportation Service Agreement
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The Amendments provide, among other things, that: (i) effective as of
The potential extension of the primary term of the Existing Agreement through
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.
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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 AwardThomas F. Karam 379,260Kirk R. Oliver 101,480Diana M. Charletta 143,170Stephen M. Moore 82,200Brian 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
· 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
Item 7.01. Regulation FD Disclosure.
The information set forth in Item 1.01 is incorporated herein by reference.
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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
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
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
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
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 Exhibit No. Description
10.1 Amendment, dated as ofDecember 6, 2021 , to Transportation Service Agreement Applicable to Firm Transportation Service Under Rate Schedule FTS, Contract No. EQTR 20242-852, dated as ofSeptember 24, 2014 , by and betweenEquitrans, L.P. andEQT Energy, LLC (as amended). 10.2 Amendment, dated as ofDecember 6, 2021 , to Transportation Service Agreement Applicable to Firm Transportation Service Under Rate Schedule FTS, Contract No. EQTR 20242-852, dated as ofSeptember 24, 2014 , by and betweenEquitrans, L.P. andEQT Energy, LLC (as amended). 10.3 Form ofEquitrans Midstream Corporation Senior Executive 2021 MVP Performance Share Units Award Agreement. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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