EXHIBIT 10.13
EMPLOYMENT AGREEMENT
This Agreement, made and entered into as of the 1st day of July, 1995
by and between Xxxxxxx X. Xxxx (the "Executive") of Nashua, New Hampshire
and Pennichuck Corporation (the "Corporation"), a New Hampshire corporation
with principal offices in Nashua, New Hampshire.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and in consideration of the mutual covenants
and promises set forth in this Agreement, the parties agree as follows:
ARTICLE I
EMPLOYMENT
1.1. The Corporation hereby employs the Executive and the Executive
hereby accepts employment with the Corporation on the date hereof for the
Term (as defined below) of the Agreement, in the position and with the
duties and responsibilities set forth in Article II below and upon the other
terms and subject to the conditions hereinafter set forth.
ARTICLE II
POSITION, DUTIES AND RESPONSIBILITIES
2.1. During the Term of this Agreement, the Executive shall serve as
the President and Chief Executive Officer of the Corporation, and of its
subsidiaries Pennichuck Water Works, Inc., The Southwood Corporation and
Pennichuck Water Service Corporation. Subject only to the supervision,
control and guidance of the Board of Directors of the Corporation (the
"Board"), the Executive shall have all of the duties, responsibilities and
authorities typically enjoyed by a president and chief executive officer of
a corporation to control the day-to-day operations of the Corporation,
including, by example but not by way of limitation, the responsibility for
the overall operations of the Corporation, the supervision over the
property, business and affairs of the Corporation and the power to hire and
dismiss other employees.
2.2. The Executive shall devote substantially all of his business
time and attention to the business and affairs of the Corporation consistent
with his executive position with the Corporation, except for vacations
permitted pursuant to Section 5.4. and Disability (as defined in Section 8.3
hereof). Nothing in this Agreement, however, shall preclude the Executive
from engaging in charitable activities, community affairs and corporate
boards, or giving attention to his investments provided that such activities
do not interfere with the performance of his duties and responsibilities
enumerated within this Agreement.
ARTICLE III
TERM
3.1. The term of employment under this Agreement ("Term") shall be
for the period commencing on July 1, 1995 ("Effective Date") and ending
three (3) years from the Effective Date; provided, however, that commencing
on the first anniversary of the Effective Date and on or about each
anniversary of the Effective Date, the term of this Agreement shall be
extended for subsequent one (1) year periods by vote of the Board of
Directors, unless terminated sooner in accordance with the terms hereof, and
the provisions hereof shall remain applicable for each of such subsequent
three-year periods.
ARTICLE IV
COMPENSATION
4.1. Base Salary. The Executive shall be paid a base salary (the
"Base Salary") equal to $130,000 per annum for the Term. The Base Salary
shall be payable to the Executive in installments on the date on which the
Corporation's other executive officers are paid, but in no event less
frequently than monthly. The Base Salary shall be reviewed by the Board
each year and shall be subject to adjustment in the absolute discretion of
the Board taking into account additional responsibilities, if any, which may
have been assigned to him, corporate and individual performance and general
business conditions.
4.2. Incentive Compensation. During the Term, the Executive shall be
entitled to participate in bonus and incentive compensation plans made
available to executive officers of the Corporation.
4.3. Stock Options. During the Term, the Executive shall be entitled
to participate in any stock option plan or plans made available by the
Corporation.
Federal, state, and local withholding, social security, and other
appropriate taxes shall be deducted from all compensation paid to, or
provided by the Corporation for, Executive as and to the extent required by
law.
ARTICLE V
FRINGE BENEFIT PLANS
5.1. Employee Benefit Programs. The Executive shall be entitled to
(A) receive medical and dental insurance coverage, as and to the extent
provided by the Corporation to its executive officers; (B) receive group
life and disability coverage, as and to the extent provided by the
Corporation to its executive officers; (C) receive insurance on the life of
the Executive in the amount of four (4) times his annual salary, and (D) be
a full participant in (1) all of the Corporation's other benefit plans which
may be in effect from time to time, and (2) all of the Corporation's pension
and other retirement plans and profit-sharing plans, if any, or equivalent
successor plans, if any, that may hereafter be adopted and maintained by the
Corporation, in each case with at least the same opportunity to participate
therein as shall be applicable to other executive officers of the
Corporation. The Corporation acknowledges that the Executive currently
meets the eligibility criteria for participation in all of the Corporation's
present employee benefit programs.
5.2. Reimbursement of Expenses. It is contemplated that in
connection with the Executive's Employment hereunder, the Executive may be
required to incur business, entertainment and travel expenses. The
Corporation agrees to promptly reimburse the Executive in full for all
reasonable out-of-pocket business, entertainment and other related expenses
(including all expenses of travel and living expenses while away from home
on business at the request of, and in the service of, the Corporation)
incurred or expended by the Executive incident to the performance of his
duties hereunder; provided, that the Executive properly accounts for such
expenses in accordance with the policies and procedures established by the
Board and applicable to the executive officers of the Corporation.
5.3 Automobile. The Executive shall be provided the use of a company
automobile. The Corporation shall pay all gas, upkeep and maintenance on
said vehicle, provided, however, that the value of any personal use shall be
included in the Executive's taxable wages reported by the Corporation as and
to the extent required by applicable law.
5.4. Vacation. The Executive shall be entitled, in each year during
the Term, to the number of unpaid vacation days determined by the
Corporation from time to time to be appropriate for its executive officers,
but in no event less than four (4) weeks in any such year (pro-rated, as
necessary, for partial calendar years during the Term). The Executive may
take his allotted vacation days at such times as are mutually convenient for
the Corporation and the Executive, consistent with respect to its executive
officers. The Executive shall also be entitled to all paid holidays given
by the Corporation to its executive officers.
5.5 Membership. The Corporation will provide a membership for
Executive at the Nashua Country Club for business use. The Corporation will
reimburse Executive for all reasonable out-of-pocket expenses incurred by
Executive in connection with his business duties on behalf of Corporation.
ARTICLE VI
INDEMNIFICATION
The Executive shall be entitled, at all times, to the benefit of the
maximum indemnification and advancement of expenses available from time to
time under the Corporation's Articles of Incorporation and Bylaws, and under
the laws of the State of New Hampshire. Such indemnification shall survive
the termination of this Agreement unless such termination is for "Cause" (as
that term is defined in Section 8.2 below). In addition, the Corporation
shall have in full force and effect an officers' liability insurance policy
providing such coverages, exclusions and deductibles as the Corporation and
the Executive shall reasonably agree and as is available on a reasonable
premium basis.
ARTICLE VII
SUPPLEMENTAL RETIREMENT AGREEMENT
The parties acknowledge that they have entered into an Insurance
Funded Deferred Compensation Agreement as of the 13th day of June, 1994
("Supplemental Retirement Agreement"). The parties agree that the
Supplemental Retirement Agreement shall not be affected by any of the terms
hereof.
ARTICLE VIII
TERMINATION
8.1. Termination by the Executive. The Executive may terminate his
employment hereunder for any reason at any time upon at least thirty (30)
days prior written notice to the Corporation. In the event the Executive
terminates his employment, the Executive shall receive accrued but unpaid
salary, bonus (if any) and benefits through the last day of employment only.
8.2. Termination by the Corporation. The Corporation may terminate
Executive's employment hereunder at any time upon thirty (30) days prior
written notice to the Executive, and with or without Cause, with no
liability whatsoever with respect to such date of termination, other than
the obligation to pay or cause to be paid accrued but unpaid salary and
bonus, if any, as provided in Section 8.1 above; provided, however, that if
the Corporation terminates the Executive other than for Cause, or the
Executive's employment is terminated by the Corporation within six (6)
months before or after a "Change of Control" (as that term is defined
below), the Corporation shall provide the Executive with severance benefits,
payable as a lump sum, a series of installments or as salary continuation,
at the Corporation's election, equal to the Executive's then current salary
and fringe benefits for the period of twenty-four (24) months from the date
of termination; and provided further that if the Executive's employment is
terminated for Cause, the Corporation shall after the date of such
termination have no further obligations under this Agreement.
For purposes hereof, "Cause" shall have the same meaning as set forth
in the Supplemental Retirement Agreement, and "Change of Control" shall be
defined as a merger or consolidation which results in the shares of the
Corporation held by the stockholders of the Corporation immediately prior to
such transaction being converted into less than 50% of the outstanding
capital stock of the surviving corporation, or as the sale of substantially
all of the assets of the Corporation, or a transaction or series of related
transactions in which more than 50% of the voting power of the Corporation
is disposed of.
8.3. Disability of the Executive. In the event the Executive shall
be prevented from rendering the essential functions of this position, with
or without reasonable accommodation, unless such accommodation would cause
the Corporation undue hardship, by reason of Disability, the Corporation
shall have the right to declare upon two (2) weeks prior written notice
rendered to the Executive, a Disability termination, whereupon the Executive
shall receive the Disability compensation provided by the Corporation's
disability insurance coverage. The Corporation may in its sole discretion,
accelerate the payment of any amount payable under this Section 8.3. For
purposes hereof "Disability" shall have the same meaning as set forth in the
Supplemental Retirement Agreement.
8.4. Death of the Executive. In the event the Executive dies during
the Term, this Agreement shall automatically terminate without notice on the
date of his death, and the Corporation shall have no further obligations
hereunder except that the Corporation shall pay or cause to be paid to the
Executive's designated beneficiary, or, failing such designation, his
estate, any salary, bonus and benefits due to the Executive in the amounts
and to the extent such payments are provided by the Corporation.
ARTICLE IX
NOTICES
Any notice or other communication ("Notice") pursuant to this
Agreement shall be in writing and shall be deemed to have been given or made
when personally delivered, or when mailed by registered or certified mail,
postage prepaid, return receipt requested, to the other party. In the case
of the Corporation, any such notice shall be delivered or mailed to its
principal office. In the case of the Executive, any such notice shall be
delivered in person or mailed to his last known address as reflected in the
records of the Corporation.
ARTICLE IX
ASSIGNMENT
The Executive acknowledges that the services to be rendered by him are
unique and personal. Accordingly, the Executive may not assign any of his
rights or delegate any of his duties or obligations under this Agreement or
otherwise assign this Agreement. The rights and obligations of the
Corporation under this Agreement shall inure to the benefit of, and shall be
binding upon, the successors and assigns of the Corporation.
ARTICLE X
ARBITRATION
Any dispute, controversy or claim arising out of or relating to this
Agreement shall be settled by arbitration conducted in Nashua, New Hampshire
or other mutually agreeable location. The matter will be heard promptly by
a single arbitrator selected by mutual agreement by the Corporation and the
Executive. Should the Corporation and the Executive be unable to agree upon
an arbitrator within a 30 day period, an arbitrator will be selected in
accordance with the commercial arbitration rules of the American Arbitration
Association. Unless the parties mutually agree otherwise, once appointed,
the arbitrator will make all rulings on procedural and evidentiary matters
and will determine the date, time and place of any hearings. The arbitrator
will issue a written decision within 30 days of the hearing or submission to
him. The arbitrator's decision will be final and binding on all parties.
Any arbitration conducted hereunder is subject to the provisions of RSA 542.
ARTICLE XI
MISCELLANEOUS
11.1. Entire Agreement. This Agreement constitutes the entire
agreement between the parties, relating to the subject matter hereof and
replaces all prior agreements (except the Supplemental Retirement Agreement)
relating to said subject matter.
11.2. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Hampshire without
reference to its conflicts of law provisions.
11.3. Waivers and Modifications. This Agreement, may not, in whole
or in part, be waived, changed, amended, discharged or terminated orally or
by any course of dealing between the parties, but only by an instrument in
writing signed by the parties hereto. No waiver by either party of any
breach by the other or any provision hereof shall be deemed to be a waiver
of any later or other breach hereof or as a waiver of any other provision of
this Agreement.
11.4. Severability. In any case any one or more of the provisions
contained in this Agreement for any reason shall be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or
unenforceable provisions had never been contained herein.
11.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but which taken
together shall constitute one instrument.
11.6. Section Headings. The descriptive section headings herein have
been inserted for convenience only and shall not be deemed to define, limit,
or otherwise affect the construction of any provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first written above.
WITNESS: PENNICHUCK CORPORATION
/s/ Xxxx XxXxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Chairman of Compensation and
Benefits Committee of
Board of Directors
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxx
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Executive
