EMPLOYMENT AGREEMENT
between
AQUARION COMPANY
and
XXXXXX XXXXXX
dated as of April 23, 1999
THIS AGREEMENT, made effective April 23, 1999 by and
between AQUARION COMPANY (the ACompany@), a Delaware corporation,
and Xxxxxx Xxxxxx
of 000 Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxx, 00000 (the "Executive").
W I T N E S S E T H T H A T :
WHEREAS:
1. The Executive is a principal officer of the Company and an
integral part of its
senior management who participates in the decision making process relative
to short and long term
planning and policy for the Company;
2. The Board of Directors of the Company, at its meeting on
December 15, 1998,
determined that it would be in the best interests of the Company
and its shareholders to enter into an
employment agreement to retain the services of the Executive; and
3. The Executive is willing to serve the Company as a
member of its management on
the terms and conditions set forth herein;
NOW, THEREFORE, it is hereby agreed by and between
the parties hereto as follows:
1. Employment. The Company agrees to continue
the Executive in its employ, and
the Executive agrees to remain in the employ of the Company, for
the period stated in Paragraph 3 hereof
and upon the other terms and conditions herein provided.
2. Position and Responsibilities. During the
period of employment hereunder, the
Executive agrees to serve the Company as Vice President,
Corporate Development and Strategic Planning,
reporting directly to the Chief Executive Officer of the
Company, with such duties and responsibilities,
consistent with such position, as the Board of Directors or the
Chief Executive Officer may from time to
time determine. During said period, the Executive also
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agrees to serve, if elected, as an officer and
director of any other subsidiary or affiliate of the Company.
3. Term and Duties.
(a) Term of Employment. The term of the
Executive's employment under this
Agreement shall be deemed to have commenced as of the date first above
written and shall continue until
April 22, 2000, subject to extension as hereinafter provided. On the first
day of each month following the date first above written, the term
of the Executive's employment under this Agreement shall be
automatically extended unless prior thereto the Company shall deliver
to the Executive or the Executive
shall deliver to the Company written notice that such term of employment
shall not be extended, in which
case such term shall end at the expiration of the then existing term of
employment under this Agreement,
including any previous extensions, and shall not be further extended
except by agreement of the Company
and the Executive. Any such automatic extension shall be for one
additional full calendar month (for a
total term upon such extension of twenty-four full calendar months),
unless the Executive will attain
age 65 prior to completion of twenty-four full calendar months
following the extension date, in which
case the term of the Executive's employment under this Agreement
shall terminate on the last day of the
month in which the Executive attains age 65.
(b) Duties. During the period of employment hereunder and
except for illness
or incapacity and reasonable vacation period (which shall not be
less than 19 days in any calendar
year), the Executive=s business time, attention, skill and efforts
shall be exclusively devoted to the
business and affairs of the Company and its subsidiaries;
provided, however, that nothing in this
Agreement shall preclude the Executive from devoting time
during reasonable periods required for:
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(i) serving as an officer, director or member of a committee of any
company or organization involving no conflict of interest with the
Company or any of its subsidiaries or affiliates,
(ii) delivering lectures and fulfilling speaking engagements, and
(iii) engaging in charitable and community activities, provided that such
activities do not materially affect or interfere with the performance
of the Executive=s obligations to the Company.
4. Compensation.
(a) For all services rendered by the Executive in any capacity during
employment under this Agreement, including services as an executive,
officer, director, or member of any
committee of the Company or any subsidiary or affiliate thereof,
the Company shall pay the Executive a
base salary at the rate of not less than $125,000 per year, subject
to such periodic increases as the Board of Directors of the
Company, or a committee designated by said Board, shall deem appropriate in
accordance with the Company=s customary procedures and practices
regarding the salaries of Company
officers. Such salary shall be payable in accordance with the
customary payroll practices of the
Company, but in no event less frequently than monthly. Such periodic
increases in salary, once granted,
shall not be subject to revocation.
(b) Executive shall be entitled to participate in any Company incentive or
bonus plan covering some or all of its executive officers that is in
effect during the period of his
employment hereunder and to receive benefits thereunder on a basis
consistent with the overall
administration and intent of any such plan and with past practice,
if any, under such plan.
(c) Nothing in this Agreement shall preclude or affect any rights or benefits
that may now or hereafter be provided for the Executive or for
which the Executive may
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be or become eligible under any other form of compensation or
employment benefit plan now existing or that may
hereafter be adopted or awarded by the Company. Specifically,
the Executive shall:
(i) participate in the Company's Retirement Plan for Employees of Aquarion
Company as well as any related program under any Aexcess benefit plan'
that may be adopted during the period of the Executive's employment
hereunder and in which the Executive is designated by the Company's
Board of Directors to participate (hereinafter referred to
collectively as the "Retirement Program");
(ii) participate to the permitted extent the Executive wishes in The
Employee Savings and Investment Plan of the Company and the related
program under any excess benefit plan (hereinafter referred to
collectively as the "Thrift and Savings Program");
(iii) participate in the salary continuation program in the event of death
in accordance with Board policy for Company officers;
(iv) participate in the Company's death and disability benefit plans and
its medical, dental and health and welfare plans; and
(v) participate in equivalent successor plans of the Company for which
senior management employees are eligible;
provided, however, that, subject to Paragraph 7(c)(iv), nothing in this
Agreement shall preclude the
Company from amending or terminating any such plan or program, on the
condition that such amendment or
termination is applicable to all of the Company=s senior management
employees generally.
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5. Business Expenses. The Company shall pay or reimburse the
Executive for all
reasonable travel and other expenses incurred in connection with the
performance of the Executive's
duties under this Agreement in accordance with such procedures as the
Company may from time to time
establish. The Company further agrees to furnish the Executive with a
private office and a private
secretary and such other assistance and accommodations, including an
automobile and appropriate club
membership, as shall be suitable to the character of the Executive's
position with the Company and
adequate for the performance of the Executive=s duties under this Agreement.
6. Additional Benefits. Nothing in this Agreement shall
affect the Executive's
eligibility to participate in all group health, dental, hospitalization,
life, travel or accident or
other insurance plans or programs and all other perquisites, fringe
benefits or retirement plans or
additional compensation, including termination pay programs, which
the Company may hereafter, in its
sole and absolute discretion, elect to make available to its senior
management employees generally, and
the Executive shall be eligible to receive, during the period of
employment under this Agreement, all
benefits and emoluments for which key employees are eligible under
every such plan, program, perquisite
or arrangement to the extent permissible under the general terms
and provisions thereof.
7. Termination of Employment. Notwithstanding any other
provision of this
Agreement, the Executive=s employment under this Agreement may be terminated:
(a) by the Company, in the event of the Executive's serious, willful
misconduct in respect of the Executive=s duties under this Agreement,
including conviction for a felony
or perpetration of a common law fraud which has resulted or is
likely to result in material
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economic damage to the Company or any of its subsidiaries, by written notice
to the Executive, specifying the
event relied upon for such termination;
(b) by either the Company or the Executive, if the Executive accepts
employment or a consulting position with another company; or
(c) by the Executive, in the event of any (i) material change by the Company
of the Executive=s functions, duties or responsibilities, which change
would cause his position with the
Company to become of less dignity, responsibility, importance or scope
from the position and attributes
thereof described in Paragraph 2 above, (ii) assignment or reassignment
by the Company or by one of its
subsidiaries of the Executive to another place of employment
outside of Fairfield County, Connecticut,
(iii) liquidation, dissolution, consolidation, or acquisition or merger
of the Company, or transfer of
all or substantially all of its assets other than a transaction in
which a successor corporation with a
net worth at least equal to that of the Company assumes this Agreement
and all obligations and
undertakings of the Company hereunder, or (iv) reduction in the
Executive's total compensation and
benefits, as specified in Paragraph 4 above and as currently
provided, or other material breach of this
Agreement by the Company or any of its subsidiaries, by thirty (30)
days written notice to the Company,
specifying the event relied upon for such termination and given
within 180 days after such event.
8. Payments Upon Termination of Employment.
In the event of any termination by
the Executive pursuant to Paragraph 7(c) above, or in the
event the Executive's employment under this
Agreement is terminated by the Company for any reason other than
one of those specified in
Paragraphs 7(a) or 7(b) above, the Company shall, as liquidated
damages or severance pay, or both,
promptly pay to the Executive and provide the Executive and the
dependents, beneficiaries and estate of
the Executive as follows:
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(a) The Company shall pay the Executive, at his option, either as a lump sum
or in equal monthly installments over the unexpired portion of the
term of employment provided for in
Paragraph 3(a) above, a cash amount equal to the present value of the
excess of (i) the salary provided
in Paragraph 4(a) above, as in effect at the time of termination, for a
period of 12 months (commencing
with the month in which termination shall have occurred) less the
amounts, if any, the Executive would
have paid in cash in respect of employee benefits provided for in
Paragraph 4(c)(iv) above if the
Executive were still employed, over (ii) the amounts, if any, paid
to the Executive pursuant to any severance or termination pay
program or arrangement of the Company or any of its subsidiaries.
(b) The Company shall also pay the Executive a lump sum cash amount equal to
the present value of the excess of (i) the aggregate benefit that
would have been paid under the
Retirement Program described in paragraph 4(c)(i) above as in effect
on the date first above written, if
the Executive had continued to be employed and to be entitled to
service credit for eligibility and
benefit purposes during the unexpired portion of the term of
employment provided for in Paragraph 3(a)
above, at an annual rate of compensation equal to that used
to calculate the payments provided by
Paragraph 8(a) above, calculated on the basis of the higher
of the Executive's salary for the 12 months
immediately preceding the month in which termination shall have
occurred or the compensation amount used
in the benefit formula under said Retirement Program, and assuming
that the Executive is fully vested in
such benefit, or (ii) the aggregate benefit actually payable under
the Retirement Program and any
successor retirement program of the Company consisting of a
tax-qualified pension plan and a related
excess benefit plan. In clarification of the immediately preceding
sentence, the aggregate benefit that
would have been paid under the Retirement Program shall be calculated
as of the normal or early
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retirement date for which the Executive would have qualified, assuming
the Executive were still employed
on that date and were fully vested in such benefit, and which would
produce the highest present value.
(c) The Company shall also pay the Executive a lump sum
cash amount equal to
the present value of the aggregate contributions or payments, if any,
that would have been made by the
Company or any of its subsidiaries under the Thrift and Savings
Program described in Paragraph 4(c)(ii)
above, or any successor program of the Company in effect on the
date on which termination shall have
occurred, if the Executive had continued to be employed, and to
participate in the Thrift and Savings
Program or such successor program to the same extent as the
Executive participated for the last month
during which the Executive was permitted to participate, during the
unexpired portion of the term of
employment provided for in Paragraph 3(a) above, at an annual rate of
compensation equal to that used to
calculate the payments provided in Paragraph 8(a) above.
(d) For purposes of calculating the lump such cash payments provided in
Paragraphs 8(a), (b) and (c) above, present value shall be
determined by using a discount factor equal to one percentage
point below the prime rate as published in The Wall Street
Journal as of the date on
which termination shall have occurred.
(e) For a period of 24 months (commencing with the
month in which termination
shall have occurred), the Executive shall continue to be
entitled to all employee benefits provided for
in paragraph 4(c)(iv) above, as if the Executive were still employed
during such period under this
Agreement, with benefits based upon the compensation used to
calculate the payments provided by
Paragraph 8(a) above, and if and to the extent that such benefits
shall not be payable or provided under
any such plan, the Company shall pay or provide such benefits
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on an individual basis. The medical,
dental, health and welfare benefits provided for in
Paragraph 4(c)(iv) above, in accordance with this
Paragraph 8(e) shall be secondary to any comparable benefits
provided by another employer provided that
an appropriate refund is made of any reduction in the amount paid
pursuant to Paragraph 9(a)(i) which
had assumed that such benefits would be primary.
9. Source of Payments; Interest. All payments provided
for in Paragraphs 4, 5, 6
and 8 above shall be paid in cash from the general funds of the Company.
Any payments not made within
thirty (30) days after termination or such time as they may otherwise
be due hereunder shall bear
interest at the interest rate used to establish the discount factor
provided for in Paragraph 8(d). The
Company shall not be required to establish a special or separate fund or
other segregation of assets to
assure such payments.
10. Litigation Expense.
(a) In the event of any litigation or other proceeding
between the Company and
the Executive with respect to the subject matter of this Agreement
and the enforcement of rights
hereunder, the Company shall reimburse the Executive for all reasonable
costs and expenses relating to
such litigation or other proceeding, including reasonable
attorneys' fees and expenses, provided that
such litigation or proceeding results in any
(i) settlement requiring the Company to make a payment to the Executive,
or
(ii) judgment or order in favor of the Executive enforcing any provision of
this Agreement or awarding any payment or other consideration to the
Executive, regardless of whether such judgment or order is
subsequently reversed on appeal or in a collateral proceeding.
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In no event shall the Executive be required to reimburse the
Company for any of the costs and expenses
relating to such litigation or other proceeding. The obligation
of the Company under this Paragraph 10
shall survive the termination for any reason of this Agreement
(whether such termination is by the
Company, by the Executive, upon the expiration of this Agreement or otherwise).
11. Income Tax Withholding. The Company may withhold from any
payments made under
this Agreement all Federal, State, City or other taxes as shall be
required pursuant to any law or
governmental regulation or ruling.
12. Entire Understanding. This Agreement contains
the entire understanding between
the Company and the Executive with respect to the subject matter
hereof and supersedes any prior
employment agreement between the Company and the Executive, except
that this agreement shall not affect
or operate to reduce any benefit or compensation inuring to the
Executive of a kind elsewhere provided
and not expressly provided in this Agreement.
13. Severability. If, for any reason, any one or more of
the provisions or part of
a provision contained in this Agreement shall be held to be
invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability
shall not affect any other provision or part of
a provision of this Agreement not held so invalid, illegal or
unenforceable, and each other provision or
part of a provision shall to the full extent consistent with
law continue in full force and effect. If
this Agreement is held invalid or cannot be enforced, then to the
full extent permitted by law any prior
agreement between the Company and the Executive shall be deemed
reinstated as if this Agreement had not
been executed.
14. Consolidation, Merger, or Sale of Assets. Nothing
in this Agreement shall
preclude the Company from consolidating or merging into or with,
or transferring all or
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substantially all of its assets to, another corporation or
acquiring entity which assumes this Agreement and all
obligations and undertakings of the Company hereunder. Upon such a
consolidation, merger or transfer of assets and assumption,
the term, "the Company", as used herein shall mean such other corporation or
acquiring entity and this Agreement shall continue in full force and effect.
15. Notices. All notices, requests, demands and other
communications required or
permitted hereunder shall be given in writing and shall be deemed to have
been duly given if delivered
or mailed, postage prepaid, first class as follows:
(a) to the Company:
Aquarion Company
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Secretary
(b) to the Executive:
Xxxxxx Xxxxxx
000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
or to such other address as either party shall have previously
specified in writing to the other.
16. No Attachment. Except as required by law, no right to
receive payments under
this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment,
encumbrances, charge, pledge, or hypothecation or to execution, attachment,
levy, or similar process or
assignment by operation of law, or any attempt, voluntary or
involuntary, to effect any such action
shall be null, void and of no effect.
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17. Binding Agreement. This Agreement shall be binding upon,
and shall inure to
the benefit of, the Executive and the Company and their respective
permitted successors and assigns.
18. Modification and Waiver. This Agreement may not be
modified or amended except
by an instrument in writing signed by the parties hereto. No term or
condition of this Agreement shall
be deemed to have been waived, nor shall there be any estoppel
against the enforcement of any provision
of this Agreement except by written instrument signed by the party charged
with such waiver or estoppel.
No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each
such waiver shall operate only as to the specific term or condition
waived and shall not constitute a
waiver of such term or condition for the future or as to any act
other than that specifically waived.
19. Headings of No Effect. The paragraph headings contained
in this Agreement are
included solely for convenience of reference and shall not in
any way affect the meaning or
interpretation of any of the provisions of this Agreement.
20. Governing Law. This Agreement and its validity,
interpretation, performance,
and enforcement shall be governed by the laws of the State of Connecticut.
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IN WITNESS WHEREOF, the Company has caused this Agreement
to be executed and its seal
to be affixed hereunto by its officers thereunto duly authorized, and
the Executive has signed this
Agreement, all as of the date first above written.
ATTEST: AQUARION COMPANY
By______________________________
______________________________ Name:
Secretary Title:
By______________________________
Xxxxxx Xxxxxx
