1
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made this 8th day of October,
1996 is entered into by Great Bay Power Corporation, a New Hampshire corporation
with its principal place of business at 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxx, Xxx
Xxxxxxxxx 00000 (the "Company"), and Xxxx X. Xxxxxxxxxxx, residing at 00 Xxxxxx
Xxxx, Xxxxx Xxxxxxx, Xxx Xxxxxxxxx 00000 (the "Employee").
The Company desires to employ the Employee, and the Employee desires to be
employed by the Company. In consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
agree as follows:
1. TERM OF EMPLOYMENT. The Company hereby agrees to employ the Employee,
and the Employee hereby accepts employment with the Company, upon the terms set
forth in this Agreement, for the period commencing on January 1, 1997 (the
"Commencement Date") and ending on December 31, 1997 (such period, as it may be
extended, the "Employment Period"), unless sooner terminated in accordance with
the provisions of Section 4. The term of this Employment Agreement shall
automatically "roll over" for an additional period of one year commencing on
January 1, 1998 unless either party wishes to terminate this Agreement and then,
in that event, either party, at its sole discretion, shall give notice to the
other party no later than September 1, 1997 that this Employment Agreement shall
terminate on December 31, 1997.
2. TITLE; CAPACITY. The Employee shall serve as President and Chief
Executive Officer of the Company. The Employee shall be subject to the
supervision of,
2
and shall have such authority as is delegated to him by, the Board of Directors
of the Company (the "Board"). The Employee hereby accepts such employment and
agrees to undertake the duties and responsibilities inherent in such position.
The Employee agrees to devote his time, attention and energies to the business
and interests of the Company during the Employment Period. The Employee will
perform such duties commensurate with his position and title and shall perform
said duties as may be assigned to him by the Board of Directors not less than
forty full time days per quarter and further, the Employee will use his best
judgment and his knowledge of the Company's needs in determining the specific
days upon which the agreed upon forty days per quarter will be performed.
Without limitation of the foregoing, the Company also acknowledges and agrees
that the Employee shall be permitted to serve as a director of other
corporations and businesses to the extent that such service (i) does not
conflict or interfere in any way with the Employee's obligations and duties
under this Agreement, and (ii) is not for or on behalf of any person or entity
engaged in a business which is similar to, or competitive with, the business of
the Company.
3. Compensation and Benefits.
-------------------------
3.1 SALARY. The Company shall pay the Employee, in monthly
installments, an annual salary of $130,000.00 for the Employment Period.
3.2 BENEFITS. The Employee shall be entitled to any employee benefits
that the Board of Directors of the Company has adopted or that may be adopted
during the period of time that this Agreement covers for the benefit of
employees of the
-2-
3
Company generally. The Employee shall not be entitled to any provisions of the
Company vacation policy.
3.3 REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Employee for all reasonable travel, entertainment and other expenses incurred or
paid by the Employee in connection with, or related to, the performance of his
duties, responsibilities or services under this Agreement, upon presentation by
the Employee of documentation, expense statements, vouchers and/or such other
supporting information as the Company may request, provided, however, that the
amount available for such travel, entertainment and other expenses may be fixed
in advance by the Board.
3.4 DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. On or before the
Commencement Date the Company shall obtain, and during the Employment Period the
Company shall maintain in force and effect, a directors' and officers' liability
insurance policy in form and substance reasonably satisfactory to the Employee
and the Employee's personal legal counsel.
3.5 CHANGE OF CONTROL. If, during the term of this Agreement, there
is a change of control of the Company, as is hereinafter defined, this Agreement
shall terminate at the time of change of control and the Employee shall be
entitled to receive as a severance payment for services performed to the Company
a lump sum cash payment in the amount of $130,000.00, said payment to be made on
the date of change of control.
"Change of Control" of the Company, for the purpose of this
Agreement, shall be deemed to have taken place if any person or entity
(excluding a
-3-
4
current owner of 20% or more of the Company's common stock) secures ownership of
50% or more of the total number of outstanding shares of stock of the Company.
4. EMPLOYMENT TERMINATION. The employment of the Employee by the Company
pursuant to this Agreement shall terminate upon the occurrence of any of the
following:
4.1 Expiration of the Employment Period in accordance with Section 1;
4.2 At the election of the Company, for cause, immediately upon
written notice by the Company to the Employee. For the purposes of this Section
4.2, cause for termination shall be deemed to exist upon (a) a good faith
finding by the Board of failure of the Employee to perform his assigned duties
for the Company, dishonesty, gross negligence or misconduct, or (b) the
conviction of the Employee of, or the entry of a pleading of guilty or nolo
contendere by the Employee to, any crime involving moral turpitude or any
felony;
4.3 Thirty days after the death or disability of the Employee. As
used in this Agreement, the term "disability" shall mean the inability of the
Employee, due to a physical or mental disability, for a period of 90 days,
whether or not consecutive, during any 360-day period to perform the services
contemplated under this Agreement. A determination of disability shall be made
by a physician satisfactory to both the Employee and the Company, PROVIDED THAT
if the Employee and the Company do not agree on a physician, the Employee and
the Company shall each select a physician and
-4-
5
these two together shall select a third physician, whose determination as to
disability shall be binding on all parties.
4.4 Change of Control in accordance with Section 3.5.
5. Effect of Termination; Survival.
-------------------------------
5.1 EFFECT OF TERMINATION. In the event the Employee's employment is
terminated pursuant to Section 4 above, the Company shall pay to the Employee
the compensation and benefits otherwise payable to him under Section 3 through
the last day of his actual employment by the Company, except that the option
previously granted to Employee shall be payable as set forth in the Incentive
Stock Option Agreement.
5.2 SURVIVAL. The provisions of Sections 6 and 7 shall survive the
termination of this Agreement.
6. Restrictions.
------------
(a) During the Employment Period and for a period of two years after
the termination or expiration thereof, the Employee will not directly or
indirectly:
(i) recruit, solicit or induce, or attempt to induce, any
employee or employees of the Company to terminate their employment with, or
otherwise cease their relationship with, the Company; or
(ii) solicit, divert or take away, or attempt to divert or to
take away, the business or patronage of any of the clients, customers or
accounts, or prospective clients, customers or accounts, of the Company which
were contacted, solicited or served by the Employee while employed by the
Company, or engage in a
-5-
6
business competitive with the Company's business, whether as a partner,
employee, consultant, or otherwise.
(b) If any restriction set forth in this Section 6 is found by
any court of competent jurisdiction to be unenforceable because it extends for
too long a period of time or over too great a range of activities or in too
broad a geographic area, it shall be interpreted to extend only over the maximum
period of time, range of activities or geographic area as to which it may be
enforceable.
(c) The restrictions contained in this Section 6 are necessary
for the protection of the business and goodwill of the Company and are
considered by the Employee to be reasonable for such purpose. The Employee
agrees that any breach of this Section 6 will cause the Company substantial and
irrevocable damage and therefore, in the event of any such breach, in addition
to such other remedies which may be available, the Company shall have the right
to seek specific performance and injunctive relief.
7. Proprietary Information and Developments.
----------------------------------------
7.1 Proprietary Information.
-----------------------
(a) Employee agrees that all information and know-how, whether
or not in writing, of a private, secret or confidential nature concerning the
Company's business or financial affairs (collectively, "Proprietary
Information") is and shall be the exclusive property of the Company. By way of
illustration, but not limitation, Proprietary Information may include projects,
developments, plans, research data, financial data, personnel data, computer
programs, and customer and supplier lists.
-6-
7
Employee will not disclose any Proprietary Information to others outside the
Company or use the same for any unauthorized purposes without written approval
by an officer of the Company, either during or after his employment, unless and
until such Proprietary Information has become public knowledge without fault by
the Employee.
(b) Employee agrees that all files, letters, memoranda, reports,
records, data, or other tangible material containing Proprietary Information,
whether created by the Employee or others, which shall come into his custody or
possession, shall be and are the exclusive property of the Company to be used by
the Employee only in the performance of his duties for the Company.
(c) Employee agrees that his obligation not to disclose or use
information, know-how and records of the types set forth in paragraphs (a) and
(b) above, also extends to such types of information, know-how, records and
tangible property of customers of the Company or suppliers to the Company or
other third parties who may have disclosed or entrusted the same to the Company
or to the Employee in the course of the Company's business.
7.2 OTHER AGREEMENTS. Employee hereby represents that he is not bound
by the terms of any agreement with any previous employer or other party to
refrain from using or disclosing any trade secret or confidential or proprietary
information in the course of his employment with the Company or to refrain from
competing, directly or indirectly, with the business of such previous employer
or any other party. Employee further represents that his performance of all the
terms of this Agreement and as an employee of the Company does not and will not
breach any
-7-
8
agreement to keep in confidence proprietary information, knowledge or data
acquired by him in confidence or in trust prior to his employment with the
Company.
8. NOTICES. All notices required or permitted under this Agreement shall
be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party at the address shown above, or at
such other address or addresses as either party shall designate to the other in
accordance with this Section 8.
9. PRONOUNS. Whenever the context may require, any pronouns used in this
Agreements shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
versa.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.
11. AMENDMENT. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Employee.
12. GOVERNING LAW. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of New Hampshire.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of both parties and their respective successors and assigns,
including any corporation with which or into which the Company may be merged or
which may succeed to its assets or business, provided, however, that the
obligations of the Employee are personal and shall not be assigned by him.
-8-
9
14. Miscellaneous.
-------------
14.1 No delay or omission by the Company in exercising any right
under this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.
14.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
14.3 In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability
of the remaining provisions shall in no way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.
GREAT BAY POWER CORPORATION
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Title: Director and Authorized Member
of Compensation Committee
EMPLOYEE
/s/ Xxxx X. Xxxxxxxxxxx
--------------------------------------
Xxxx X. Xxxxxxxxxxx
-9-
