Contract
EXHIBIT 10.109
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this 30th day of June, 1997,
by and between Central Maine Power Company, a Maine corporation with its
principal place of business in Augusta, Maine (hereinafter referred to as the
"Company"), and XXXXXXX X. XXXXXX of Readfield, Maine (hereinafter
referred to as the "Executive").
WHEREAS, the Company recognizes that the Executive is a valued
employee because of his knowledge of the Company's affairs and his experience and
leadership capabilities, and desires to encourage his continued employment with
the Company to assure itself of the continuing advantage of that knowledge,
experience and leadership for the benefit of customers and shareholders,
particularly during a period of transition in various aspects of the Company's
business and in the event of a Change of Control of the Company; and
WHEREAS, the Executive desires to serve in the employ of the Company on
a full-time basis for a period provided in this Employment Agreement (hereinafter
referred to as the "Agreement") on the terms and conditions hereinafter set forth;
and
WHEREAS, to these ends the Company desires to provide the Executive
with certain payments and benefits in the event of the termination of his
employment in certain circumstances; and
WHEREAS, the Company and the Executive wish to set forth the terms and
conditions under which such employment and payments and benefits will occur.
NOW, THEREFORE, in consideration of the continued offer of employment
by the Company and the continued acceptance of employment by the Executive, and
the mutual promises and covenants contained herein, the Company and the
Executive hereby agree as follows:
1. Term of Agreement. a. Term. The term of this Agreement shall begin
on June 1, 1997 (hereinafter referred to as the "Effective Date") and shall expire on
May 31, 2000; provided, however, that if a Change of Control occurs during the
period commencing June 1, 1999 and ending May 31, 2000, this Agreement shall be
extended and shall thereafter expire 365 days after the date of said Change of
Control (the "Extended Expiration Date").
b. Expiration. Notwithstanding anything to the contrary in this Section 1,
except as to vested benefits, this Agreement and all obligations of the Company
hereunder shall terminate on the earliest to occur of (i) the date of the Executive's
death, (ii) thirty (30) days after the Company gives notice to the Executive that the
Company is terminating the Executive's employment for reason of Total Disability
or Cause; or (iii) May 31, 2000 (or the Extended Expiration Date specified in Section
1.a above, if applicable, if a Change of Control occurs during the year prior to May
31, 2000.)
2. Definitions. The following terms shall have the meanings set forth
below:
"Affiliate" means a person that directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common control with the
Company.
"Board" means the Board of Directors of the Company.
"Cause" means any of the following events or occurrences:
(i) Any act of material dishonesty taken by, or committed at the request of,
the Executive.
(ii) Any illegal or unethical conduct which would impair the Executive's
ability to perform his duties under this Agreement or would impair the
business reputation of the Company.
(iii) Conviction of a felony.
(iv) The continued failure of the Executive to perform his responsibilities
and duties under this Agreement in a satisfactory manner, after
demand for performance has been delivered in writing to the Executive
specifying the manner in which the Company believes that the
Executive is not performing.
"Change of Control" means the occurrence of any of the following events:
(i) Any "person," as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Company or any Affiliate or any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company or any Affiliate), is or becomes the beneficial owner, as defined
in Rule 13d-3 under the Exchange Act, directly or indirectly, of stock of
the Company representing thirty percent (30%) or more of the combined
voting power of the Company's then outstanding stock eligible to vote.
(ii) The stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation which would result in the voting stock of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the combined voting
power of the outstanding voting stock of the Company or such surviving
entity immediately after such merger or consolidation; provided,
however, that a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than thirty percent
(30%) of the combined voting power of the Company's then outstanding
securities shall not constitute a Change of Control of the Company.
(iii) The stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale, lease, exchange or other
disposition by the Company of all or substantially all of the Company's
assets (or any transaction having a similar effect).
"Constructive Discharge" means, so long as no Change of Control has
occurred, any reduction in the Executive's annual base salary in effect as of the
Effective Date of this Agreement, or as the same may be increased from time to
time, other than any across-the-board base salary reduction for a group or all of the
executive officers of the Company, and also means, on or after a Change of Control,
(i) any reduction in the Executive's annual base salary in effect as of the
Effective Date of this Agreement, or as the same may be increased from
time to time;
(ii) a substantial reduction in the nature or scope of the Executive's
responsibilities, duties or authority from those described in Section 3.c of
this Agreement;
(iii) a material adverse change in the Executive's title or position; or
(iv) relocation of the Executive's place of employment from the Company's
principal executive offices to a place more than twenty-five (25) miles
from Augusta, Maine without the Executive's consent.
"Severance Benefits" means the benefits set forth in Section 5.a or 5.c of this
Agreement.
"Total Disability" means the complete and permanent inability of the
Executive to perform all of his duties under this Agreement on a full-time basis for
a period of at least six (6) consecutive months, as determined upon the basis of such
evidence, which may include independent medical reports and data.
3. Employment. a. Position. The Company hereby agrees to continue its
employment of the Executive in the capacity of General Counsel, and the Executive
hereby agrees to remain in the employ of the Company for the period beginning on
the Effective Date and ending on the date on which the Executive's employment is
terminated in accordance with this Agreement (the "Employment Period"). This
Agreement shall not restrict in any way the right of the Company to terminate the
Executive's employment at whatever time and for whatever reason it deems
appropriate, nor shall it limit the right of the Executive to terminate employment at
any time for whatever reason he deems appropriate.
b. Performance. The Executive agrees that during the Employment Period
he shall devote substantially all his business attention and time to the business and
affairs of the Company, and use his best efforts to perform faithfully and efficiently
the duties and responsibilities of the Executive under this Agreement. It is
expressly understood that (i) the Executive may devote a reasonable amount of time
to such industry associations and charitable and civic endeavors as shall not
materially interfere with the services that the Executive is required to render under
this Agreement, and (ii) the Executive may serve as a member of one or more
boards of directors of companies that are not affiliated with the Company and do
not compete with the Company or any of its Affiliates.
c. Job Duties. The following listing of job duties shall represent the
Executive's primary responsibilities. Such responsibilities may be expanded and, so
long as no Change of Control has occurred, may be decreased as the business needs
of the Company require. The Executive's primary job responsibilities shall include,
but not be limited to, the supervision and coordination of all legal matters handled
by the General Counsel's in-house staff and adjunct outside counsel and the
representation of the Company in legal matters in regulatory and judicial forums.
4. Compensation and Benefits. a. During the Employment Period, the
Executive shall be compensated as follows:
(i) Salary. The Executive shall receive an annual base salary, the amount
of which shall be reviewed regularly and determined from time to time,
but which shall not be less than $128,500.00. His salary shall be
payable in accordance with Company payroll practices.
(ii) Participation in Executive Plans. He shall be entitled to participate in
any and all plans and programs maintained by the Company from time
to time to provide benefits for its executives, including without limitation
any short-term or long-term incentive plan or program, in accordance
with the terms and conditions of any such plan or program or the
administrative guidelines relating thereto, as may be amended from
time to time.
(iii) Participation in Salaried Employee Plans. The Executive shall be
entitled to participate in any and all plans and programs maintained by
the Company from time to time to provide benefits for its salaried
employees generally, including without limitation any savings and
investment, stock purchase or group medical, dental, life, accident or
disability insurance plan or program, subject to all eligibility
requirements of general applicability, to the extent that executives are
not excluded from participation therein under the terms thereof or
under the terms of any executive plan or program or any approval or
adoption thereof.
(iv) Other Fringe Benefits. The Executive shall be entitled to all fringe
benefits generally provided by the Company at any time to its full-time
salaried employees, including without limitation paid vacation, holidays
and sick leave but excluding severance pay, in accordance with
generally applicable Company policies with respect to such benefits.
b. Retention Bonus. If the Executive is actively employed by the Company
on the earlier to occur of (i) the date of the sale of the Transmission and
Distribution Business Unit, or (ii) May 31, 2000, the Executive shall be entitled to
receive a lump sum cash payment of one-half (1/2) of the Executive's annual base
salary then in effect, which shall be paid within fifteen (15) working days after the
applicable date specified in subsection (i) or (ii) above. If the Executive's
employment is terminated for any reason whatsoever prior to the earlier of such
dates, he shall not be entitled to receive the retention bonus described herein,
although he may be entitled to receive Severance Benefits as provided in Section 5
below.
c. Withholding. All compensation payable under this Section 4 shall be
subject to normal payroll deductions for withholding income taxes, social security
taxes and the like.
5. Severance Benefits. a. Change of Control. If, on or after a Change of
Control, the Executive's employment with the Company is terminated during the
Employment Period by the Company and/or any successor for any reason other than
death, Total Disability or Cause, or by the Executive within twelve (12) calendar
months of a Constructive Discharge, Severance Benefits shall be provided as
follows:
(i) The Company shall pay the Executive, in one lump sum cash payment,
within sixty (60) days following the date of termination of employment
as defined in Section 6 below, an amount equal to 2.0 times the
Executive's then-current base salary.
(ii) The Company shall provide the Executive with so-called COBRA medical
continuation coverage paid by the Company for a period up to eighteen
(18) months, or until the Executive obtains coverage under another
group medical plan with another employer, whichever occurs first.
(iii) The Company shall pay a fee to an independent outplacement firm
selected by the Executive for outplacement services in an amount
equal to the actual fee for such services up to a total of $10,000.
b. Parachute Provision. Notwithstanding the provisions of Section 5.a
hereof, if, in the opinion of tax counsel selected by the Company's independent
auditors,
(i) the Severance Benefits set forth in said Section 5.a and any payments or
benefits otherwise payable to the Executive would constitute "parachute
payments" within the meaning of Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended (the "Code") (said Severance Benefits
and other payments or benefits being hereinafter collectively referred to
as "Total Payments"), and
(ii) the aggregate present value of the Total Payments would exceed 2.99
times the Executive's base amount, as defined in Section 280G(b)(3) of
the Code,
then, such portion of the Severance Benefits described in Section 5.a hereof as, in
the opinion of said tax counsel, constitute "parachute payments" shall be reduced as
directed by tax counsel so that the aggregate present value of the Total Payments is
equal to 2.99 times the Executive's base amount. The tax counsel selected pursuant
to this Section 5.b may consult with tax counsel for the Executive, but shall have
complete, sole and final discretion to determine which Severance Benefits shall be
reduced and the amounts of the required reductions. For purposes of this Section
5.b, the Executive's base amount and the value of the Total Payments shall be
determined by the Company's independent auditors in accordance with the
principles of Section 280G of the Code and based upon the advice of tax counsel
selected thereby.
c. No Change of Control. If no Change of Control has occurred, and the
Executive's employment with the Company is terminated during the Employment
Period either (i) by the Company for any reason other than death, Total Disability
or Cause, or (ii) by the Executive within six (6) calendar months of a Constructive
Discharge, the Company shall pay the Executive, in one lump sum payment within
sixty (60) days following the date of termination of employment as defined in
Section 6 below, an amount equal to one (1) times the Executive's annual base
salary in effect on the date immediately preceding the date of termination, or
preceding the date of a Constructive Discharge attributable to a base salary
reduction if applicable.
6. Date of Termination. For purposes of this Agreement, the date of
termination of the Executive's employment shall be the date notice is given to the
Executive by the Company and/or any successor or, in the case of a Constructive
Discharge, the date set forth in a written notice given to the Company by the
Executive, provided that the Executive gives such notice within twelve (12)
calendar months of the Constructive Discharge in the case of a Change of Control,
and within six (6) calendar months of the Constructive Discharge in other cases,
and specifies therein the event constituting the Constructive Discharge.
7. Taxes. x. Xxxxx-Up Amount. In the event that any portion of the
Severance Benefits provided in Section 5 is subject to tax under Code § 4999, or any
successor provision thereto (the "Excise Tax"), the Company shall pay to the
Executive an additional amount (the "Gross-Up Amount") which, after payment of
all federal and State income taxes thereon (assuming the Executive is at the
highest marginal federal and applicable State income tax rate in effect on the date
of payment of the Gross-Up Amount) and payment of any Excise Tax on the Gross-
Up Amount, is equal to the Excise Tax payable by the Executive on such portion of
the Severance Benefits. Any Gross-Up Amount payable hereunder shall be paid by
the Company coincident with the payment of the Severance Benefits described in
Section 5.a of this Agreement.
b. Tax Withholding. All amounts payable to the Executive under this
Agreement shall be subject to applicable withholding of income, wage and other
taxes.
8. Non-Competition, Confidentiality and Cooperation. a. The
Executive agrees that:
(i) During the Employment Period and for one (1) year after the termination
of the Executive's employment with the Company for any reason other
than a Change of Control, the Executive shall not serve as a director,
officer, employee, partner or consultant or in any other capacity in any
business that is a competitor of the Company, or solicit Company
employees for employment or other participation in any such business,
or take any other action intended to advance the interests of such
business; provided, however, that this Section 8.a.(i) shall not apply after
the termination of the Executive's employment if the Executive
voluntarily terminates employment and is not eligible to receive a
Severance Benefit under Section 5.c. above.
(ii) During and after the Executive's employment with the Company, he
shall not divulge or appropriate to his own use or the use of others any
secret, proprietary or confidential information or knowledge pertaining
to the business of the Company, or any of its Affiliates, obtained during
his employment with the Company.
(iii) During the Employment Period, he shall support the Company's
interests and efforts in all regulatory, administrative, judicial or other
proceedings affecting the Company and, after the termination of his
employment with the Company, he shall use best efforts to comply with
all reasonable requests of the Company that he cooperate with the
Company, whether by giving testimony or otherwise, in regulatory,
administrative, judicial or other proceedings affecting the Company
except any proceeding in which he may be in a position adverse to that of
the Company. After the termination of employment, the Company shall
reimburse the Executive for his reasonable expenses and his time, at a
reasonable rate to be determined, for the Executive's cooperation with
the Company in any such proceeding.
(iv) The term "Company" as used in this Section 8 shall include Central
Maine Power Company, any Affiliate of Central Maine Power Company
(determined as of the date of termination), any successor to the business
or operations of Central Maine Power and any business entity spun-off,
divested, or distributed to shareholders which shall continue the
operations of Central Maine Power Company.
The provisions of this Section 8 shall survive the expiration or termination of this
Agreement. The Executive agrees that the Company shall be entitled to injunctive
relief to prevent any breach or threatened breach of these provisions. In the event
of a failure to comply with part (i), (ii) or (iii) of this Section 8, the Executive agrees
that the Company shall have no further obligation to pay the Executive any
Severance Benefits under Section 5.c. of this Agreement.
9. No Mitigation. The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other
employment.
10. Assignment. This Agreement and the rights and obligations of the
Company hereunder shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company, including without limitation any
corporation or other entity acquiring all or substantially all of the business or assets
of the Company whether by operation of law or otherwise. This Agreement and the
rights of the Executive hereunder shall not be assignable by the Executive, and any
assignment by the Executive shall be null and void.
11. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in Augusta, Maine,
in accordance with the rules of the American Arbitration Association then in effect.
The pendency of any such dispute or controversy shall not affect any rights or
obligations under this Agreement. Judgment may be entered on the arbitrator's
award in any court having jurisdiction.
12. Waiver; Amendment. The failure of either party to enforce, or any
delay in enforcing, any rights under this Agreement shall not be deemed to be a
waiver of such rights, unless such waiver is an express written waiver which has
been signed by the waiving party. Waiver of any one breach shall not be deemed to
be a waiver of any other breach of the same or any other provision hereof. This
Agreement can be amended only by written instrument signed by each party hereto
and no course of dealing or practice or failure to enforce or delay in enforcing any
rights hereunder may be claimed to have effected an amendment of this Agreement.
13. Singular Contract. This Agreement is a singular agreement between
the Executive and the Company, and is not part of a general "plan" or "program" for
employees as a group. This Agreement shall, under no circumstances, be deemed to
be an "employee welfare benefit plan" or an "employee pension benefit plan" as
defined in the Employee Retirement Income Security Act of 1974 (hereinafter
referred to as "ERISA"). Notwithstanding, the Company may submit a letter to the
Department of Labor indicating the possible establishment of a so-called unfunded
"top hat" plan for the benefit of a select group of management and highly
compensated employees to avoid the costs and uncertainties which may occur in the
event of a Department of Labor audit and challenge relative to compliance with any
allegedly applicable provisions of ERISA. The Executive specifically acknowledges
and agrees that the filing of the so-called "top hat" letter notice by the Company
shall not be construed or interpreted as an admission on the part of the Company
that this Agreement constitutes an ERISA plan, and the Company hereby
categorically states, and the Executive hereby agrees, that this Agreement is an ad
hoc individual contract with the Executive.
14. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by first-class, registered or
certified mail or hand-delivered to the Executive at the last residence address he
has provided to the Company or, in the case of the Company, at its principal
executive offices to the attention of the Corporate Secretary.
15. Titles and Captions. The section and paragraph titles and captions
contained herein are for convenience only and shall not be held to explain, modify,
amplify, or aid in the interpretation, construction or meaning of the provisions of
this Agreement.
16. Miscellaneous. This Agreement shall be construed and enforced in
accordance with the laws of the State of Maine. In the event that any provisions of
this Agreement shall be held to be invalid, the other provisions hereof shall remain
in full force and effect.
17. Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the employment
of the Executive by the Company and may not be contradicted by evidence of any
prior or contemporaneous oral or written agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
WITNESS:
_____________________________ /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
WITNESS:
CENTRAL MAINE POWER COMPANY
_____________________________ /s/ Xxxxx X. Xxxxxx
By: Xxxxx X. Xxxxxx
Chairman of the Board
of Directors
