Contract
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EXHIBIT
A 10.5.1
FORM
OF CHANGE OF CONTROL AGREEMENT
(As
Amended May 6, 2008)
WHEREAS,
_________________, (“Executive”) and Central Vermont Public Service
Corporation (“Company”) entered into a Change of Control Agreement dated
____________ (the “Agreement”):
WHEREAS,
the Agreement is scheduled to expire by its terms on ____________ and
Executive and Company have executed a Change in Control Agreement on
_________ which agreement will take effect on April 6, 2009, and supersede
all prior agreements;
WHEREAS,
the American Jobs Creation Act of 2004 included new statutory rules under
Section 409A of the Internal Revenue Code of 1986, as amended (“Section
409A”) that substantially altered the income tax treatment of compensation
that is regarded, under those rules, as deferred pursuant to a
nonqualified deferred compensation plan;
WHEREAS,
under Section 409A, unless certain limitations on payment and other
requirements are provided for in a deferred compensation plan,
participants may be subject to regular income tax on amounts payable
pursuant to such deferred compensation plan before payments are made as
well as a 20% excise tax;
WHEREAS,
the Agreement is subject to the requirements of Section
409A;
WHEREAS,
the Executive and Company have determined that it is in their best
interest to amend the Agreement so as to bring it into compliance with
Section 409A;
NOW
THEREFORE, Executive and Company hereby agree to the following
amendments:
Section
1 of the Agreement shall be amended to read as follows:
1. General
Conditions
No
benefit shall be payable hereunder pursuant to Section 5 unless there
shall have been both a Change of Control of the Company, as set forth in
Section 3, and
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a
Termination Event, as set forth in Section 4 that results in Executive’s
“Separation From Service” (as hereinafter defined). For
purposes of this Agreement a Separation From Service means the termination
of employment with the Company or any subsidiary of the Company in a
manner that constitutes a “separation from service” within the meaning of
Section 409A and the Treasury Regulations promulgated
thereunder. In construing the terms of the Agreement, it is the
intent of the parties to this Agreement to provide the Executive with
financial protection in the event significant changes in his employment
status occur following a Change of Control of the Company, and it is
agreed that provisions of the Agreement are therefore to be construed
using a reasonable man standard and not on narrow technical
grounds.
The
first paragraph of Section 5A. of the Agreement shall be amended to read
as follows:
5. Severance
Compensation
A. If
within three (3) years following a Change of Control, (i) a Termination
Event shall have occurred that results in Executive’s Separation from
Service or (ii) the Company requires Executive’s Separation from Service
without Cause (either of (i) or (ii) occurring within three years
following a Change of Control being a “Payment Event”), the Company agrees
to make payment in a lump sum ("Severance Compensation") to the Executive
of an amount equal to (1) times (2), where:
Section
6B. of the Agreement shall be amended to read as follows:
B.
Date
of Payment of Severance Benefits
The
Company shall pay to the Executive the Severance Compensation provided in
Section 5 on the first business day of the seventh month following the
Termination Date (the “Regulatory Period”) except in the event that the
Executive shall die during the Regulatory Period, the Severance
Compensation shall be paid within 30 days of the Company’s receipt of
notice of Executive’s death.
Section
6C. (3) and the first paragraph of Section 6C. (4) of the Agreement shall
be amended to read as follows:
(3)
Without
Cause, that date on which the Executive’s employment was terminated
by the company without Cause in a manner that constitutes a Separation
from Service.
(4)
For
a Termination Event, the date on which occurs a Separation from
Service resulting from a Termination Event as described in Section
4A.
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Section
7A. and Section 7B 1. of the Agreement shall be amended to read as
follows:
7. Future
Services and Compensation
A.
Executive shall receive the benefits provided for in Section 7B if, in
connection with the occurrence of a Payment Event, Executive
agrees:
(1)
To refrain from entering into competition with the Company or from working
for a competitor of the Company for a period of one year following the
date on which the Payment Event occurs, and
(2)
To provide such consulting services as may be reasonably requested by the
Company for a period of one year following the date on which the Payment
Event occurs.
B.
As compensation to the Executive for his promises in Section 7A. hereof,
the Company agrees to cause the following actions to be carried
out:
(1)
As respects the status of the Executive as a participant in the Company’s
Officers’ Supplemental Retirement and Deferred Compensation Plan as
amended and restated effective January 1, 2005 (the “2005 SERP”), the
payment of the benefit provided for under Section 3.4 of the 2005 SERP and
at the time provided therein except that the last two sentences
of Section 3.4(b) of the 2005 SERP (pertaining to the Executive’s and
the Company’s ability to alter the method and/or time for such
payment) shall be inapplicable and without effect for all
purposes.
Section
8 of the Agreement shall be amended to include the following new Section
8I:
I.
Notwithstanding any provision of this Section 8 to the contrary, in the
event Executive is entitled to a Gross-Up Payment as otherwise provided
for under Section 8, no such Gross-Up Payment shall be made to Executive
before the first business day of the seventh month following the
Termination Date.
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New
Section 14 of the Agreement shall be added to read as
follows:
14. Compliance
with Code Section 409A.
The
parties intend that this Agreement shall at all times comply with the
requirements of Code Section 409A. Accordingly the parties
agree that it shall be construed, administered and governed in a manner
that effects such intent. Although Company shall use its best
efforts to avoid the imposition of taxation, interest and penalties under
Code Section 409A, the tax treatment of the benefits provided under this
Agreement is not warranted or guaranteed. Neither Company, its
subsidiaries nor their respective directors, officers, employees or
advisors shall be held liable for any taxes, interest, penalties or other
monetary amounts owed by Executive or other taxpayer as a result of the
Agreement.
Except
as hereby amended, the Agreement shall remain unchanged and in full force
in effect until April 5, 2009.
Dated
at Rutland, Vermont this ______ day of May,
2008.
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________________________
Witness
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CENTRAL
VERMONT PUBLIC
SERVICE
CORPORATION
By ____________________________
For
the Company
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________________________
Witness
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______________________________
Executive
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