Exhibit 10(gg)
AMENDMENT TO
EMPLOYMENT AND SEVERANCE
AGREEMENTS
This Agreement dated October 4, 1999 between fall River Gas Company
(the "Company") and Xxxxxxxx X. Xxxxx (the "Executive") shall be effective upon
the consummation of the merger (the "Merger") of the Company into Southern Union
Company ("SUG").
RECITALS
Whereas, the Executive and the Company are parties to an
employment agreement entered into as of September 30, 1991 and amended as of
January 1, 1999, (the "Employment Agreement") and a Severance Agreement dated as
of January 1, 1999 (the "Severance Agreement"); and
Whereas, the Company desires to assure the continued service of
Executive following the Merger, and Executive is desirous of committing himself
to such service; and
Whereas, the Executive and the Company desire to amend certain
provisions of the Employment Agreement and the Severance Agreement effective
upon consummation of the Merger;
AGREEMENTS
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is acknowledged by the Company and the Executive, the
Company and the Executive hereby agree as follows:
1 .Section 2 of the Employment Agreement shall be amended to read
in its entirety as follows:
"Executive shall have decision making authority, subject to the
control of the board of directors and chief operating officer of the Company,
over the employees and operations that constitute the Fall River Gas Company
business immediately prior to consummation of the Merger (as such business may
be modified by SUG). The Executive shall perform his duties hereunder faithfully
and to the best of his abilities and in furtherance of the business of the
Company and shall devote his full business time, energy, attention and skill to
the business of the Company and to the promotion of its interests. Executive's
title and duties shall be those of a division president of SUG. Executive agrees
that his duties as described in this paragraph shall not constitute "Good
Reason" under the Severance Agreement."
2. Section 3 of the Employment Agreement shall be amended to read
in its entirety as follows:
"The term of the Executive's employment hereunder shall be for a
three-year period beginning on the date of consummation of the Merger."
3. Section 4 of the Employment Agreement shall be amended to read
in its entirety as follows:
"The Company agrees to pay and the Executive agrees
to accept, in accordance with the provisions contained herein, as
compensation for performance of his duties and obligations to the
Company hereunder, a salary at an annual rate as established by
the Executive Committee of the Board of Directors of the Company
from time to time, but in no event less than the annual rate in
effect for the then immediately preceding twelve-month period.
4. Section 5 of the Employment Agreement is amended by adding the
following as a new paragraph (b) thereof:
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"(b) In addition to the foregoing, the Executive
shall be paid a cash bonus of $55,555.56 for each full month of
the eighteen (18) months following consummation of the Merger
($1,000,000 in the aggregate) during which the Executive shall
remain in the employment of the Company. In the event that
Executive's employment is terminated by Executive or the Company
for any reason during the 36-month period following consummation
of the Merger, the Company may set off against any payments due
Executive under the Severance Agreement one hundred percent
(100%) of the cash bonuses received by Executive under this
subsection. Amounts paid under this subsection or under the
Severance Agreement shall not be taken into account (i) as wages
for purposes of the Medicare Tax Reimbursement and related
Gross-Up Payment under subsection 7(f) of the Employment
Agreement, or (ii) as compensation for purposes of any pension or
other benefit plan or program."
5. Subsection 7(a) of the Employment Agreement shall be amended
by replacing the term "Company" with the term "Division" in each place it
appears, and by adding the following to the end of such subsection:
"For this purpose, the term 'Division' shall mean
the Fall River Gas Company Division of SUG. In addition, the
Executive shall be eligible to participate in the Southern Union
Company Supplemental Deferred Compensation Plan and shall be
eligible to be granted awards under the Southern Union 1992 Long
Term Stock Incentive Plan, as amended, in the discretion of the
committee administering such plan, in each case in accordance
with the terms and conditions of the respective plan."
6. Subsection 7(h) of the Employment Agreement shall be amended
to read in its entirety as follows:
"For a period commencing with the month in which
termination of employment for other than Cause shall have
occurred, and ending upon the later of the date of the
Executive's or the Executive's spouse's death, or such earlier
date as the Executive becomes covered by another employer's group
health plan, the Executive, his spouse, and any eligible
dependents (to the extent they continue to be eligible) shall
continue to be entitled to receive all health and dental care
benefits provided from time to time to active employees of the
Fall River Gas Company Division of SUG, at no cost to the
Executive. Benefits under this subsection shall be provided
either under this Agreement or the Severance Agreement, but not
both."
7. Section 9 of the Employment Agreement shall be amended by
adding the following to the end
thereof:
"Notwithstanding the foregoing provisions of this
Section 9, in the event Executive's employment is terminated (by
Executive or the Company) for any reason within 36 months
following consummation of the Merger, Executive shall be entitled
to receive either (but not both) of:
(I) the benefits he is entitled to under the
Severance Agreement (offset by the amount of the bonus payments received under
subsection 5(b) of the Employment Agreement); or
(ii) the benefits he is entitled to under Section 9
of the Employment Agreement.
As a condition to receiving payments under the
Severance Agreement or Section 9 of the Employment Agreement, the
Executive shall execute SUG's standard form of waiver and release
of all claims."
8. The last sentence of Section 15 of the Employment Agreement
shall be amended to read as follows:
"The Parties further agree that all arbitration
costs and expenses, including attorneys' fees for counsel
representing the Executive and counsel representing the Company,
shall be paid by the Company, except that attorneys' fees for
counsel representing the Executive shall not be paid by the
Company in the event the Arbitrator determines that the
employment of the Executive hereunder was properly terminated for
Cause or that Executive's material claim is, or claims are,
frivolous or without merit, in which event the Executive shall
bear all such fees, costs, and expenses."
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9. Section 3(c) of the Severance Agreement shall be amended to
read in its entirety as follows:
"For a period commencing with the month in which
termination of employment as described in paragraph 3 hereof shall
have occurred, and ending upon the later of the date of the
Executive's or Executive's spouse's death, or such earlier date as
the Executive becomes covered by another employer's group health
plan, the Executive, his spouse, and any eligible dependents (to
the extent they continue to be eligible) shall continue to be
entitled to receive all health and dental care benefits provided
from time to time to active employees of the Fall River Gas Company
Division of SUG, at no cost to the Executive. Benefits under this
subsection shall be provided either under this Agreement or the
Employment Agreement, but not both."
10. Section 3 of the Severance Agreement shall be amended by adding
a new subparagraph (d) to the end thereof, which shall read as follows:
"(d) Any payments due to the Executive under this
Severance Agreement shall be reduced by the amount of any bonus
payments made to the Executive under subsection 5(b) of the
Employment Agreement (as amended by the Amendment to Employment and
Severance Agreements dated October 4, 1999). As a condition to
receiving payments under this Severance Agreement, the Executive
shall execute SUG's standard form of waiver and release of all
claims. Amounts paid under this Severance Agreement shall not be
taken into account (i) as wages for purposes of the Medicare Tax
Reimbursement and related Gross-Up Payment under subsection 7(f) of
the Employment Agreement, or (ii) as compensation for purposes of
any pension or other benefit plan or program."
11. The first sentence of Section 7(a) of the Severance Agreement
shall be amended to read as follows:
"Except for the set-off provided for in subsection
5(b) of the Employment Agreement (as amended by the Amendment to
Employment and Severance Agreements dated October 4, 1999), the
Company's obligation to make the payments provided for in this
Severance Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the
Company may have against the Executive or others."
12. Section 11 of the Severance Agreement shall be amended by
adding the following to the end thereof:
"Notwithstanding the foregoing, the definition of Change in
Control shall only apply to the merger of Fall River Gas Company into SUG."
13. The provisions of this Amendment to Employment and Severance
Agreements shall be effective only upon consummation of the Merger. Except as
amended by this document, the provisions of the Employment Agreement and the
Severance Agreement shall remain in effect.
Dated: October 4, 1999 The Executive:
_____________________________
Xxxxxxxx X. Xxxxx
President
FALL RIVER GAS COMPANY
By:_______________________
Xxxxx X. Xxxxxx
Senior Vice President and Treasurer
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