EMPLOYMENT AGREEMENT
AGREEMENT dated as of December 1, 1995, between ENERGYNORTH,
INC., a New Hampshire corporation (the "Company") and XXXXXXX X.
XXXXXXX, XX., residing in Litchfield, New Hampshire (the
"Executive').
WHEREAS, the Executive has been employed by the Company or its
subsidiaries in various executive positions and has performed
valuable services to the Company; and
WHEREAS, the Executive is willing to continue in the employ of
the Company, and the Company desires to retain the services of the
Executive;
NOW, THEREFORE, in consideration of the foregoing and the
respective covenants and agreements of the Executive and the
Company herein contained, the parties hereto agree as follows:
1. Employment.
The Company agrees to employ the Executive and may assign the
Executive to work for it and for any subsidiary or affiliated
company, and the Executive agrees to perform the duties assigned to
him upon the terms and conditions herein provided.
2. Position and Responsibilities.
The Company shall employ the Executive and the Executive agrees
to serve, as Senior Vice President Officer or any other office to
which he is elected for the term and on the conditions hereinafter
set forth. The Executive agrees to perform such services not
inconsistent with his position as shall be assigned to him by the
Board of Directors of the Company ("Board'). If elected, the
Executive shall also serve as an officer of any of the Company's
subsidiary or affiliated corporations.
3. Term of Agreement and Duties.
(a) Term of Employment. The period of the Executive's
employment under this Agreement shall be deemed to have commenced
as of the date first mentioned above and shall continue for a
period of at least twenty-four (24) full calendar months
thereafter, subject to renewal in accordance with Section 3(b)
below.
(b) One-Year Evergreen Provision. This Agreement shall be
reviewed annually by the Board at its meeting held for the review
of compensation and in all events prior to December 1 of each year.
At such yearly review, the Board shall consider whether or not to
extend the term of this Agreement for an additional year. Unless
the Board affirmatively votes not to extend this Agreement, the
term of employment and the termination of this Agreement shall be
extended for a period of one year from the previous termination
date. In the event the Board votes not to extend this Agreement,
the termination date of this Agreement shall be the later of the
expiration of twenty-four (24) months from the effective date of
this Agreement or twenty-four months (24) from December 1st of the
year in which this Agreement was last extended.
(c) Duties. During such period of his employment hereunder,
except for illness, vacation periods, and reasonable leaves of
absence, the Executive shall devote substantially all of his
business time, attention, skill and efforts to the faithful
performance of his duties. With the approval of the Board,
however, the Executive may serve, or continue to serve, on the
boards of directors of, and hold any other offices or positions in,
companies or organizations, when, in the Board's judgment, that
service will not conflict with the interests of the Company or any
of its subsidiaries or affiliates or divisions or materially affect
the performance of the Executive's duties pursuant to this
Agreement.
4. Compensation.
For all services to be rendered by the Executive in any capacity
during the period of his employment under this Agreement,
including, without limitation, services as an executive, officer,
director, or member of any committee of the Company or of any
subsidiary, affiliate or division thereof, the Company will pay or
cause to be paid to the Executive and will provide or cause to be
provided to the Executive the following:
(a) Salary. The Executive shall be compensated by the
Company for his services in such capacities at the aggregate base
salary rate of one hundred seventeen thousand five hundred dollars
($117,500) per year or such higher rate as the Board may, in its
discretion, determine, payable in equal installments no less
frequently than monthly. In addition, the Executive shall be
compensated by the Company crediting to his Deferred Compensation
Account, maintained in accordance with the Deferred Compensation
Agreement between the Executive and the Company dated November 30,
1993, as amended or replaced, such amount as the Board may, in its
discretion, determine, payable in equal installments no less
frequently than monthly.
(b) Incentive Compensation. The Executive shall be entitled
to participate in any existing or future incentive compensation,
stock option, stock purchase or other bonus plans covering the
employees of the Company (or any subsidiary or affiliate) on the
same basis as other officers; and where applicable, in any such
plans of any subsidiary, affiliate or division thereof from which
he receives compensation.
(c) Deferred Compensation. The Executive shall have the
right to defer what would otherwise be current compensation in
accordance with a Deferred Compensation Agreement entered into
between the Executive and the Company effective as of November 30,
1993, as amended or replaced. The Executive, may, in addition, be
compensated by the Company crediting amounts to his Deferred
Compensation Account, maintained in accordance with such Deferred
Compensation Agreement, as such intervals during each year as the
Company may determine.
(d) Automobile. The Company shall provide to the Executive
an automobile for his exclusive use on the same basis as other
officers and in any event on a basis no less favorable than that
enjoyed by him at the date of this Agreement.
(e) Vacations. The Executive shall be entitled to vacation
pursuant to that policy applicable to other employees of similar
rank and stature at the Company.
5. Expenses.
The Company (or its subsidiaries or affiliates, as the case may
be) shall reimburse the Executive for all reasonable expenses,
including travel, and other disbursements incurred by him for or on
behalf of the Company (or its subsidiaries or affiliates) in the
performance of his duties hereunder consistent with the current
reimbursement policies of the Company, but in no event less
favorable than the reimbursement policies in existence on the
effective date of this Agreement.
6. Participation in Benefit and Incentive Plans.
The Executive shall participate in any retirement, pension, group
life, health or accident insurance, stock option, stock purchase,
restricted stock, bonus or any other employee benefit or incentive
plans generally available to the executives and employees of the
Company (or any subsidiary or affiliate), whether now in force or
hereafter adopted, in accordance with their terms. In the event
the Executive is employed by the Company pursuant to this Agreement
and elects to retire under the provisions of the EnergyNorth, Inc.
Retirement Plan for Salaried Employees ("Pension Plan"), the
Executive shall be entitled to the same post-retirement medical,
life and other applicable benefits that other officer level
executives at the Company receive upon retirement in accordance
with the Company's then existing policies. Further, the Executive
shall be entitled to receive post-retirement medical, life and
other applicable benefits that other officer level executives at
the Company receive upon retirement in accordance with the
Company's then existing policies and at the time the Executive
elects to retire under the provisions of the Pension Plan if within
two years after a Change of Control of the Company, the Executive
is discharged without Cause or resigns for Good Reason as each of
those terms is defined in the Management Continuity Agreement
("MCA") between the Executive and the Company, dated as of
December 7, 1995 as amended.
7. Termination of Employment.
(a) Discharge for Cause. Notwithstanding any of the
foregoing provisions of this Agreement, the Executive may, at any
time during the term of this Agreement, be discharged by the Board
for Cause. For the purposes of this Section 7 cause shall mean:
conviction of a felony or crime involving an act of moral
turpitude, dishonesty, or misfeasance which substantially
interferes with the orderly business of the Company or any of its
subsidiaries, action that directly or indirectly causes the Company
or its subsidiaries to suffer substantial loss or damage, refusal
to follow or material neglect of reasonable requests of the Company
made pursuant to this Agreement, and conduct that substantially
interferes with or damages the standing or reputation of the
Company or any of its subsidiaries. In the event of termination of
employment for Cause, this Agreement and all of the rights and
obligations of the parties hereto shall forthwith terminate, except
where this Agreement expressly provides that any provisions survive
termination of this Agreement.
(b) Termination by the Company. If the Company terminates
the Executive prior to termination of this Agreement (except for
Cause), the Company shall pay semi-monthly to the Executive, or if
he is not living, to his estate or to his beneficiary designated
hereunder, as the case may be, as severance pay and as liquidated
damages an amount equal to the average monthly rate of salary paid
and accrued plus one-twenty-fourth (1/24) of the previous three
years' annual average total incentive compensation award earned
under the EnergyNorth, Inc. Key Employee Performance and Equity
Incentive Plan to the Executive, including any amounts the
Executive has elected to defer, during the 12 months immediately
prior to his termination of employment. Such payments shall
commence on the last day of the month following the date of his
termination of employment and shall continue through the end of the
term of this Agreement. The Executive shall continue to receive
medical, dental, vision and life insurance benefits paid by the
Company which shall continue through the end of the term of this
Agreement and at the time the Executive elects to retire under the
provisions of the Pension Plan, the Executive shall receive post-
retirement medical benefits in accordance with the Company's then
existing policies.
The Executive shall be required to mitigate his damages by
attempting to secure comparable employment, and if he does accept
other employment, any benefits or payments received pursuant to
this Section 7 shall be reduced by any compensation earned and/or
the value of other benefits received (other than qualified pension
benefit plans) as a result of such employment.
In addition to the severance payment described in the first
paragraph of this Section 7(b), if the Company terminates the
Executive prior to the termination of this Agreement (except for
Cause), the Company shall pay to the Executive in one payment,
within ten days of the Date of Termination (as defined below), an
amount of cash equal to the product of (1) the number of shares of
Company Common Stock forfeited by the Executive pursuant to Section
9.1 of the EnergyNorth, Inc. Key Employee Performance and Equity
Incentive Plan and (2) the average closing prices of Company Common
Stock on the New York Stock Exchange on the five trading days
ending on the Date of Termination (as defined below).
If the Company terminates the Executive prior to the termination
of this Agreement, the Company's obligations to the Executive shall
be limited to those specified in this Section 7(b). It is
understood that the Company shall not be under any obligation to
make payments pursuant to this Section 7(b) upon any termination of
employment which gives rise to payments under the MCA.
(c) Executive Default or Death. If the Executive defaults
hereunder, or is unwilling to perform services hereunder, or dies
while employed, the Company shall have no further obligation
hereunder to make payments to the Executive beyond the Date of
Termination (as defined below) of employment.
(d) Disability.
(i) In the event that the Executive, because of accident,
disability or physical or mental illness, is incapable of
performing the essential functions of the job with or without
reasonable accommodation, the Company shall have the right to
terminate the Executive's employment under this agreement upon
thirty (30) days' written notice to the Executive. In the event of
such determination, the Company shall make semi-monthly payments to
the Executive in an amount equal to the monthly rate of salary paid
and accrued to the Executive in the most recent month in which he
was paid prior to the determination of his disability plus one-
twenty-fourth (1/24) of the previous three years' annual average
total incentive compensation award earned under the EnergyNorth,
Inc. Key Employee Performance and Equity Incentive Plan, reduced by
the amount of monthly payments made under any long-term disability
insurance or plan, if any. Such semi-monthly payments shall
continue for the number of months remaining in the term of the
agreement following the date of his disability. In addition, if
the Executive becomes disabled and the Executive has twenty (20)
years or more of service at the time of disability, the Company
will continue to provide the same medical, dental and life
insurance benefits as provided to other active employees until such
time as the Executive elects to retire under the provisions of the
Pension Plan. Disability for purposes of this section shall have
the same meaning as provided under any long-term disability policy
of the Company which covers the Executive, or, if none, as defined
in the EnergyNorth, Inc. Retirement Plan for Salaried Employees.
(ii) Prior to a determination of disability as provided in
Subsection (i) of this Section 7(d), if the Executive fails to
perform under this contract due to mental or physical illness, the
period of such failure to perform prior to such determination of
disability but subsequent to any accrued sick days, vacation days
and reasonable leaves of absence shall be considered paid leave,
and the Company shall continue to make salary payments to the
Executive for the duration of such paid leave. Any period during
which the Executive is receiving benefits under any long-term
disability plan of the Company shall be considered unpaid leave.
(e) Notice of Termination. Any termination by the Company
for Cause (as such term is defined in Section 7(a) hereunder),
shall be communicated by Notice of Termination to the other party
hereto given in accordance with Section 15. For purposes of this
Agreement, a "Notice of Termination" means a written notice which
(i) indicates the specific termination provision in this
Agreement relied upon,
(ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so
indicated, and
(iii) if the Date of Termination (as defined below) is other
than the date of receipt of such notice, specifies the termination
date (which date shall be not more than 15 days after the giving of
such notice).
(f) Date of Termination. "Date of Termination" means
(i) if the Executive's employment is terminated by the
Company for Cause, the date of receipt of the Notice of Termination
or any later date specified therein, as the case may be,
(ii) if the Executive's employment is terminated by the
Company other than for Cause, death or disability pursuant to
Section 7 (d), the Date of Termination shall be the date on which
the Company notifies the Executive of such termination, and
(iii) if the Executive's employment is terminated by reason
of death or disability pursuant to Section 7 (d), the Date of
Termination shall be the date of death of the Executive or the date
the Executive is determined to be incapable of performance in
accordance with Section 7(d) of this Agreement, as the case may be.
(g) Nothing under this Agreement shall affect the Executive's
right to receive payments under his Deferred Compensation
Agreement.
8. Executive's Obligations.
(a) Non-Competition. While receiving payments from the
Company under this Agreement or under the MCA, and for a period of
twelve months thereafter, the Executive will not directly or
indirectly, own, manage, operate, control or participate in the
ownership, management, operation or control of, or be connected as
an officer, employee, partner, director or otherwise with, or have
any financial interest in, or aid or assist anyone else in the
conduct of, any business (other than the businesses of the Company)
which is in direct competition with the business conducted by the
Company or any of its subsidiaries, in any geographic area where
such business is being conducted during such period. Nothing in
this Section 8, however, shall restrict the right of the Executive
to own, whether for himself or as a fiduciary, not more than 1% of
the equity securities of a company any of the securities of which
are registered under Sections 11(b) or 11(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(b) Non-Disclosure. During the term of this Agreement and
thereafter, the Executive shall not, without the written consent of
the Board or a person authorized thereby, disclose or use (except
in the course of his employment hereunder and in furtherance of the
business of the Company or any subsidiaries or affiliates thereof)
any confidential information or proprietary data of the Company or
any of its subsidiaries or affiliates thereof, including, without
limitation, customer lists, cost information or pricing
information.
(c) Solicitation for Employment. While he is receiving
payments from the Company under this Agreement or under the MCA,
and for a period of six months thereafter, the Executive will not,
directly or indirectly, employ, solicit for employment, or advise
or recommend to any other person that they employ or solicit for
employment, any person employed at the time by the Company or any
of its subsidiaries for the purpose of competing with the Company
in such manner as is described in Subsection (a) of this Section 8.
9. Successor.
The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of the Company
to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to
perform it if no successor had taken place. As used in this
Agreement, "Company" shall mean the company as hereinbefore defined
and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law,
or otherwise.
10. Entire Agreement.
This Agreement contains the entire understanding of the Company
and the Executive with respect to the subject matter hereof. This
Agreement shall supersede the agreement between the Company and the
Executive dated as of December 1, 1988 (the "Prior Agreement") in
all respects, unless this Agreement is held invalid or
unenforceable by a court of competent jurisdiction, in which case
the Prior Agreement shall remain, and shall be deemed to have
remained at all times, in full force and effect.
11. Arbitration.
Any dispute or controversy between the parties relating to this
Agreement shall be settled by binding arbitration in the City of
Manchester, State of New Hampshire, pursuant to the governing rules
of the American Arbitration Association and shall be subject to the
provisions of New Hampshire Revised Statutes Annotated Chapter 542.
Judgment upon the award may be entered in any court of competent
jurisdiction.
12. Assignability.
This Agreement is binding on and is for the benefit of the
parties hereto and their respective successors, heirs, executors,
administrators and other legal representatives. Neither this
Agreement nor any right or obligation hereunder may be assigned by
the Company (except to any subsidiary or affiliate) or by the
Executive.
13. Withholding.
The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be permitted
to be withheld pursuant to any applicable law or regulation. The
Company may withhold such other amounts as may be permitted by law.
14. Amendment; Waiver.
This Agreement may be amended only by an instrument in writing
signed by the parties hereto, and any provision hereof may be
waived only by an instrument in writing signed by the party or
parties against whom or which enforcement of such waiver is sought.
The failure of either party hereto at any time to require the
performance by the other party hereto of any provision hereof shall
in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by either party hereto of a
breach of any provision hereof be taken or held to be a waiver of
any succeeding breach of such provision or a waiver of the
provision itself or a waiver of any other provision of this
Agreement.
15. Notices.
All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or
by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
Xxxxxxx X. Xxxxxxx, Xx.
00 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
If to the Company:
Xxxxxx X. Xxxxxxxx
President and CEO
EnergyNorth, Inc.
0000 Xxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Copy:
Xxxxxxx Xxxxxxx, Esquire
McLane, Graf, Xxxxxxxxx & Xxxxxxxxx
000 Xxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
16. Validity.
The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in
full force and effect, nor shall the invalidity or unenforceability
of a portion of any provision of this Agreement affect the validity
or enforceability of the balance of such provision. If any
provision of this Agreement, or portion thereof is so broad, in
scope or duration, as to be unenforceable, such provision or
portion thereof shall be interpreted to be only so broad as is
enforceable.
17. Beneficiary.
The Executive hereby designates as his beneficiary under this
Agreement Xxxxxxx X. Xxxxxxx, Xx., provided that the Executive may
change his beneficiary, or provide for alternate beneficiaries, at
any time by notifying the Company in writing of such change, and no
consent shall be required from the beneficiary or from the Company.
18. Independent Covenants.
The obligations of the Executive set forth in paragraph 8
represent independent covenants by which the Executive is and will
remain bound notwithstanding any breach by the Company, and shall
survive the termination of this Agreement.
19. Applicable Law.
This Agreement shall be governed by and construed in accordance
with the substantive internal law and not the conflict of law
provisions of the State of New Hampshire.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first mentioned above.
ENERGYNORTH, INC.
BY: Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
President & CEO
Xxxxxxx X. Xxxxxxx, Xx.
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Xxxxxxx X. Xxxxxxx, Xx.
