EXHIBIT 10.25
SEPARATION AGREEMENT AND GENERAL RELEASE
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THIS SEPARATION AGREEMENT AND GENERAL RELEASE is made as of the 29th day of
September, 1998 (hereinafter referred to as the "Settlement Agreement"), by and
among ▇▇▇▇▇▇ ▇▇▇▇▇▇ (hereinafter referred to as "▇▇▇▇▇▇") and Yankee Energy
System, Inc. (hereinafter referred to as "YES") and Yankee Gas Services Company
(hereinafter referred to as "Yankee Gas").
W I T N E S S E T H:
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WHEREAS, ▇▇▇▇▇▇, YES and Yankee Gas are parties to an Employment Agreement
dated September 15, 1994 pursuant to which ▇▇▇▇▇▇ has been serving as Chairman,
Chief Executive Officer and a Director of Yankee Gas and Chairman, President,
Chief Executive Officer and a Director of YES (the "Employment Agreement");
WHEREAS, ▇▇▇▇▇▇ is a participating member in YES' existing Long-Term Incentive
Compensation Plans (the "Plans");
WHEREAS, ▇▇▇▇▇▇ has elected to resign his employment with Yankee Gas and YES
effective at the close of business on September 29, 1998 (the "Resignation
Date"); and
WHEREAS, ▇▇▇▇▇▇, Yankee Gas and YES desire to settle fully and finally any
differences, rights and duties arising among them, including, but in no way
limited to, any differences, rights, and duties that have arisen or might arise
out of or are in any way related to the Employment Agreement, the Plans,
▇▇▇▇▇▇'▇ employment with Yankee Gas and YES, and the conclusion of such
employment;
NOW, THEREFORE, in consideration of the covenants and mutual promises herein
contained, it is agreed as follows:
FIRST: This Settlement Agreement shall not in any way be construed as an
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admission by Yankee Gas, YES or ▇▇▇▇▇▇ that any party has any valid claims
whatsoever against the other party, and Yankee Gas, YES and ▇▇▇▇▇▇ specifically
deny any liability to or for any wrongful acts against one another.
SECOND: ▇▇▇▇▇▇ represents that he has not filed against Yankee Gas and YES
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or any of their respective, parents, subsidiaries and affiliates and each of
their respective stockholders, predecessors, successors, assigns, agents,
directors, officers, employees and representatives, (collectively, the "Related
Persons"), any complaints, charges or lawsuits with any governmental agency or
any court arising out of ▇▇▇▇▇▇'▇ employment by Yankee Gas and YES, any
ownership or purported ownership of any stock of Yankee Gas and YES or any of
their parents, subsidiaries or affiliates or any other matter arising on or
prior to the date hereof. ▇▇▇▇▇▇ covenants and
agrees that he will not, directly or indirectly, commence or prosecute, or
assist in the filing, in any court or local and state administrative agency any
claim or charge, against Yankee Gas and YES or any of their Related Persons,
arising out of any of the matters set forth in this Settlement Agreement or
based upon any common law or statutory claim against Yankee Gas and YES or any
of the Related Persons that can be brought under Federal law or the law of any
state; provided, however, that this shall not limit ▇▇▇▇▇▇ from commencing a
proceeding for the sole purpose of enforcing his rights under this Settlement
Agreement.
THIRD: Yankee Gas hereby agrees to pay ▇▇▇▇▇▇ in a lump sum, an amount
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equal to twice ▇▇▇▇▇▇'▇ current base salary (excluding any bonus or other
compensation amounts), less all applicable payroll deductions, such payment to
be made on a date selected by Yankee Gas not later than October 15, 1998, but in
no event earlier than the expiration of the seven-day period referred to in
Section Twenty-Second (the "Separation Payment"). ▇▇▇▇▇▇ acknowledges and
agrees that the Separation Payment and the provision of the other benefits
described herein exceed any payment to which ▇▇▇▇▇▇ would otherwise have been
entitled under the Employment Agreement or otherwise. ▇▇▇▇▇▇ further
acknowledges and agrees that he shall not be entitled to receive any additional
bonus payments other than those that have been previously paid and that other
than as specifically set forth in this Settlement Agreement, he is not due any
compensation, including compensation for unpaid salary, unpaid bonus, or accrued
or unused vacation time or vacation pay.
FOURTH: YES covenants and agrees that all of ▇▇▇▇▇▇'▇ unvested stock
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options to purchase stock of YES shall vest on or prior to the Resignation Date.
▇▇▇▇▇▇ shall be entitled to exercise all of his options to purchase stock in YES
in accordance with the terms and conditions of YES' stock option agreements and
the Plans. Notwithstanding the foregoing or anything else contained in the
stock option agreements or the Plans, ▇▇▇▇▇▇ acknowledges and agrees that
▇▇▇▇▇▇'▇ options to purchase stock in YES shall expire on the first anniversary
of the Resignation Date. In addition, ▇▇▇▇▇▇'▇ 4,000 restricted common shares
of YES shall vest and be deemed unrestricted on or prior to the Resignation
Date.
FIFTH: Yankee Gas shall provide ▇▇▇▇▇▇ with continued medical coverage
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under its medical plan as amended from time to time by Yankee Gas in its sole
discretion until the earliest of (i) March 31, 1999; or (ii) the date that
▇▇▇▇▇▇ becomes eligible to receive health care coverage offered by a subsequent
employer. Thereafter, ▇▇▇▇▇▇ shall be entitled to extend his medical coverage,
at his expense, in accordance with the terms and conditions of COBRA and the
limitations thereof.
SIXTH: YES, at its sole expense, shall provide reasonable outplacement
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service through ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to ▇▇▇▇▇▇ for a period of six (6) months
following the Resignation Date.
SEVENTH: Yankee Gas shall pay ▇▇▇▇▇▇ the amount of $18,462, less all
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applicable withholding taxes, such sum representing the unused portion of
▇▇▇▇▇▇'▇ 1998 vacation days, such payment to be made within thirty (30) days of
the Resignation Date.
EIGHTH: Yankee Gas and YES shall deem ▇▇▇▇▇▇ to be fully vested, as of
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December 31,
1998, in ten (10) years of service under YES' Retirement Plan and Excess Benefit
Plan.
NINTH: ▇▇▇▇▇▇ shall return to Yankee Gas the leased vehicle that is
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currently being provided to him no later than October 2, 1998. ▇▇▇▇▇▇ shall
have the right, until October 30, 1998, to purchase said vehicle for a price
equal to the cost Yankee Gas would incur itself to purchase the vehicle under
the terms of the related lease.
TENTH: (a) ▇▇▇▇▇▇ agrees and acknowledges that during the course of his
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employment with Yankee Gas and YES he had confidential information about and
which is the property of Yankee Gas and YES. Such confidential information
includes, but is not limited to, customers, trade practices, pricing and other
competitive practices, trade secrets, computer access and source codes,
financial data and know-how of Yankee Gas and YES, their parents, subsidiaries
and affiliates.
(b) ▇▇▇▇▇▇ agrees and acknowledges that Yankee Gas and YES are
engaged in a competitive business and that any disclosure, divulgence, use or
revelation of any confidential information would be highly detrimental to Yankee
Gas and YES and that serious loss of business and other damage may result
therefrom.
(c) At all times hereafter, ▇▇▇▇▇▇ will maintain the
confidentiality of all information relating to the business, customers, trade
practices, pricing and other competitive practices, trade secrets, computer
access and source codes, financial data and know-how of Yankee Gas and YES,
their parents, subsidiaries and affiliates, and ▇▇▇▇▇▇ will not, directly or
indirectly, make any disclosure thereof to anyone, or make any use thereof, on
his own behalf or on behalf of any third party, without Yankee Gas' and YES'
prior written consent. ▇▇▇▇▇▇ has returned or will immediately return to Yankee
Gas and YES all computers (except the Dell laptop currently in ▇▇. ▇▇▇▇▇▇'▇
possession), pagers, portable telephones, facsimile machines, customer lists,
computer disks, reports, files, memoranda, records and software, credit cards,
cardkey passes, door and file keys, computer access codes or disks and
instructional manuals, and other physical or personal property which he received
or prepared or helped prepare in connection with his employment with Yankee Gas
and YES or his service as an employee of Yankee Gas and YES, their subsidiaries
and affiliates, and ▇▇▇▇▇▇ has not retained and will not retain any copies,
duplicates, reproductions or excerpts thereof. ▇▇▇▇▇▇ agrees to take all
necessary actions, if required by and at the cost of Yankee Gas and YES, to vest
such property rights in Yankee Gas and YES. This subsection (c) shall not apply
to speeches and articles on utility industry topics written by ▇▇▇▇▇▇ during the
course of his employment and available to the public as of the date of this
Agreement.
ELEVENTH: Not later than October 2, 1998, ▇▇▇▇▇▇ shall submit an itemized
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listing of any unreimbursed business expenses incurred by him on behalf of
Yankee Gas and YES. Within five business days following receipt of such list,
Yankee Gas or YES will reimburse ▇▇▇▇▇▇ for all such ordinary and reasonable
business expenses incurred by him through the Resignation Date.
TWELFTH: Effective as of the Resignation Date, ▇▇▇▇▇▇ hereby resigns all
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positions with Yankee Gas and YES and their respective subsidiaries and
affiliates as an officer, employee
or member of any board of directors. As used herein, the term "affiliates" shall
include all utility industry-related organizations with respect to which ▇▇▇▇▇▇
serves at the request of or in connection with the business of either Yankee Gas
or YES but shall not include other non-profit organizations in which ▇▇. ▇▇▇▇▇▇
continues to serve solely in an individual capacity.
THIRTEENTH: ▇▇▇▇▇▇ agrees that he shall not make any statements or
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comments to the media concerning Yankee Gas, YES, any of the of the Related
Parties, his employment with Yankee Gas and YES, or the termination thereof
without the prior written consent of Yankee Gas or YES, except to generally
endorse and explain the "Statement of ▇▇▇▇▇▇ ▇▇▇▇▇▇" referred to below. Nothing
in this Agreement shall prohibit ▇▇▇▇▇▇ from media discussions concerning his
plans or planning for future employment nor inhibit him from sharing his
opinions concerning the natural gas industry without mention, directly or
indirectly, of Yankee Gas, YES or any of the Related Persons.
The parties agree that a mutually-agreed press release relating to ▇▇▇▇▇▇'▇
termination of employment shall be publicly released by Yankee Energy, and that
concurrently with such release ▇▇▇▇▇▇ shall be entitled to publicly release a
separate statement which will be reviewed in advance and approved by Yankee
Energy, such approval not to be unreasonably withheld.
FOURTEENTH: The parties recognize that in view of the nature of ▇▇▇▇▇▇'▇
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employment and the nature of the confidential information of Yankee Gas and YES
to which he has had access during the course of his employment, that in the
event of a breach or threatened breach by ▇▇▇▇▇▇ of his obligations hereunder,
Yankee Gas or YES shall be entitled, if it so elects to institute and prosecute
proceedings in any court of competent jurisdiction, either in law or in equity,
to obtain damages for any breach or to enforce the specific performance thereof.
Without limiting the generality of the foregoing, the parties acknowledge that a
breach or threatened breach by ▇▇▇▇▇▇ of any of the obligations set forth in
paragraph TENTH of this Settlement Agreement would cause irreparable harm to
Yankee Gas and YES, that Yankee Gas and YES have no adequate remedy at law, and,
therefore, Yankee Gas and YES would be entitled to injunctive relief with
respect thereto.
FIFTEENTH: The parties agree to keep the terms of this Settlement
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Agreement completely confidential except that (i) such terms may be disclosed to
legal counsel or tax accountants on a confidential basis or as may be necessary
to obtain enforcement thereof, (ii) Yankee Gas and YES may disclose the terms
hereof to the extent required, in the opinion of counsel, by applicable law or
regulation, and (iii) ▇▇▇▇▇▇ may disclose the terms hereof to members of his
family (and ▇▇▇▇▇▇ shall be responsible for any violation of the confidentiality
provisions of this Agreement by family members) or, upon prior notice to Yankee
Energy, in response to a subpoena or court order which Yankee Energy shall have
a reasonable opportunity to contest.
SIXTEENTH: As a material inducement to enter into this Settlement
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Agreement and to make the Separation Payment and provide the other benefits set
forth herein, ▇▇▇▇▇▇ knowingly and voluntarily releases, acquits and forever
discharges Yankee Gas, YES and the Related Persons, from any and all charges,
complaints, claims, liabilities, obligations, promises,
agreements, controversies, damages, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses of any nature whatsoever, known or
unknown, suspected or unsuspected, foreseen or unforeseen, matured or unmatured
(collectively, "Claims"), which, from the beginning of the world up to and
including the date hereof, exists, have existed, or may arise from any matter
whatsoever occurring, including, but not limited to, any Claims arising out of
or in any way related to (i) the Employment Agreement; (ii) the ownership or
purported ownership of any stock of Yankee Gas and YES or any of their parents,
subsidiaries or affiliates; (iii) the Plans; and (iv) ▇▇▇▇▇▇'▇ employment with
Yankee Gas and YES and the conclusion thereof, which ▇▇▇▇▇▇ or any of his heirs,
executors, administrators, successors and assigns ever had, now has or at any
time hereafter may have, own or hold against Yankee Gas, YES or any of the
Related Persons. By executing this Settlement Agreement, ▇▇▇▇▇▇ is waiving all
Claims against Yankee Gas, YES and the Related Persons arising under federal,
state and local labor and anti-discrimination laws and any other restriction on
the right to terminate employment, including, without limitation, the Age
Discrimination in Employment Act ("ADEA"), the Family and Medical Leave Act,
Title VII of the Civil Rights Act, the Americans with Disabilities Act, the
Employees Retirement Income Security Act of 1974, and the Connecticut Fair
Employment Practices Act, all as amended, including but not limited to, claims
based upon race, color, age, religion, sex, national origin, ancestry, sexual
orientation, marital status, mental or physical disability and harassment based
on any of these categories or any other protected category and any Claims based
on the right to the payment of wages, vacation, pension benefits or any other
employee benefit. Nothing herein shall release any party from any obligation
under this Settlement Agreement.
SEVENTEENTH: The parties and Related Persons agree that they will not
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make, or cause to be made, any statements, observations or opinions, or
communicate any information (whether written or oral) that disparages or is
likely in any way to harm the reputation of any party or any of the Related
Persons.
EIGHTEENTH: In the event of any breach by Yankee Gas and YES, ▇▇▇▇▇▇ may
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only institute an action for specific enforcement of the terms of this
Settlement Agreement and seek damages resulting from such breach. ▇▇▇▇▇▇ may
not institute any proceeding based on the claims related to his employment with
Yankee Gas and YES or the termination thereof.
NINETEENTH: In the event that ▇▇▇▇▇▇ breaches any of his obligations set
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forth in this Settlement Agreement, Yankee Gas and YES will no longer be
obligated to pay the Separation Payment (if it has not already been paid), and
Yankee Gas and YES shall be entitled to recover the Separation Payment as
liquidated damages for any such breach, together with all costs and attorneys'
fees incurred by Yankee Gas and YES or any of the Related Persons.
TWENTIETH: In the event of ▇▇▇▇▇▇'▇ death, ▇▇▇▇▇▇'▇ estate, designated
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beneficiary or legal representative shall be entitled to receive the Separation
Payment and other benefits set forth in this Settlement Agreement.
TWENTY-FIRST: The parties represent to the other that in executing this
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Settlement Agreement he or it does not rely and has not relied upon any
representation or statement not set
forth herein made by the other party or by any of the other party's agents,
representatives, or attorneys with regard to the subject matter, basis or effect
of this Settlement Agreement or otherwise.
TWENTY-SECOND: Yankee Gas and YES have advised ▇▇▇▇▇▇ to consult with an
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attorney of his choosing prior to the signing of this Settlement Agreement and
▇▇▇▇▇▇ hereby represents to Yankee Gas and YES that he has been offered an
opportunity to consult with an attorney prior to the execution of this
Settlement Agreement. ▇▇▇▇▇▇ acknowledges that he has been given an opportunity
to consider the waiver of his rights under the ADEA and once he has signed this
Settlement Agreement, ▇▇▇▇▇▇ shall have seven additional days from the date of
execution to revoke his consent to the waiver of his rights under the ADEA.
This Settlement Agreement will not become effective or enforceable until the
seven-day period has expired.
TWENTY-THIRD: This Settlement Agreement will be governed by and construed
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and enforced under the laws of the State of Connecticut, without regard to its
conflict of laws rules.
TWENTY-FOURTH: In the event that any one or more of the provisions of this
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Settlement Agreement is held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions will not in
any way be affected or impaired thereby. Moreover, if any one or more of the
provisions contained in this Settlement Agreement is held to be excessively
broad as to duration, scope, activity or subject, such provisions will be
construed by limiting and reducing them so as to be enforceable to the maximum
extent compatible with applicable law.
TWENTY-FIFTH: ▇▇▇▇▇▇ expressly represents and warrants that he has
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carefully read and fully understands that this Settlement Agreement is a general
release of all claims, whether known or unknown, and that he has executed this
Settlement Agreement voluntarily, without duress, coercion or undue influence
and with such advise from his attorney as appropriate.
TWENTY-SIXTH: This Settlement Agreement sets forth the entire agreement
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between the parties hereto and may not be changed without the written consent of
the parties. This Settlement Agreement supersedes all prior agreements and
understandings concerning the subject matter hereof and the parties acknowledge
and agree that the Employment Agreement shall be of no further force and effect
and that the parties shall have no further obligations under the Employment
Agreement. The parties may execute this Settlement Agreement in counterparts.
TWENTY-SEVENTH: This Settlement Agreement is intended to be binding upon
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and shall inure to the benefit of the parties hereto and their respective
successors and assigns.
TWENTY-EIGHTH: Any dispute regarding this Agreement shall be exclusively
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resolved by arbitration under the American Arbitration Association's rules and
procedures for resolution of employment disputes. The results of such
arbitration shall be final and binding.
▇▇▇▇▇▇ ▇▇▇▇▇▇ YANKEE GAS SERVICES COMPANY
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
___________________________ By:____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
YANKEE ENERGY SYSTEM, INC.
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:____________________________
Name:
Title:
