AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT
10.7
AMENDED
AND RESTATED
THIS
AGREEMENT ( the “Agreement”) is
made
as of the first day of March, 2005, between The United Illuminating Company,
a
Connecticut Corporation (the “Company”) and Xxxxxxx Xxxxxx (the
“Executive”),
WITNESSETH
THAT
WHEREAS,
the Executive previously has been employed by UIL Holdings Corporation (“UIL”)
as its Vice President and Controller, and is covered by the terms of a certain
employment agreement with UIL dated as of November 8, 2004, and
WHEREAS,
as part of its finance reorganization, UIL Holdings Corporation wishes to
transfer the Executive’s employment to The United Illuminating Company (the
“Company”), effective as of March 1, 2005, where the Executive will be employed
as Vice President and Controller of both the Company and UIL, and the Executive
desires to be so employed, and
WHEREAS,
the Company and the Executive desire to be bound by the terms of this revised
employment Agreement (the “Agreement”), which shall supersede and replace all
provisions of the prior employment agreement;
NOW
THEREFORE, in consideration of the foregoing and the respective covenants
and
agreements of the parties herein contained, and the services to be rendered
to
the Company pursuant hereto, the parties hereby agree as follows:
(1) EMPLOYMENT;
TERM
(a) The
Company hereby agrees to employ the Executive, and the Executive hereby agrees
to serve the Company, at the pleasure of the Board of Directors of the Company
(the “Company Board”) and UIL Holdings Corporation (the “ UIL Board”), all upon
the terms and conditions set forth herein.
(b) The
term
of this Agreement shall be for a period commencing on March 1, 2005 and ending
on the second anniversary of the date hereof, unless this Agreement is earlier
terminated as provided in Section 5 (the “Initial Term”). Unless the Company has
provided the Executive with at least ninety (90) days prior written notice
of
its decision not to renew this Agreement after the Initial Term or any
subsequent term, this Agreement shall be automatically renewed for a successive
one (1) year term (the Initial Term and any renewal term being referred to
as
the “Term”). For
purposes of this Agreement, a non-renewal at the election of the Company
at the
end of a Term shall constitute a termination of this Agreement without cause,
and shall be governed by the provisions of Section 6(d). In no event shall
the
Company give notice of a non-
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renewal
from the time that an impending Change in Control (as hereinafter defined)
is
announced through the date of the consummation of such Change in
Control.
(2) POSITION
AND DUTIES
(a)
The
Executive shall be employed by the Company as its Vice President and Controller,
and shall also serve as the Vice President and Control of UIL, or in such
other
equivalent or higher executive position as the UIL Board may determine. The
Executive shall:
(i)
accept such employment and perform and discharge, faithfully, diligently
and to
the best of the Executive's abilities, the duties and obligations of the
Executive's office and such other duties as may from time to time be assigned
to
the Executive by, or at the direction of, the Company Board and UIL Board;
and
(ii)
devote substantially all of the Executive's working time and efforts to the
business and affairs of the Company and UIL.
(b)
Prior
to a Change in Control, in the event that the Executive is named by the UIL
Board to an executive position higher in rank or compensation than that
applicable at the commencement of the Initial Term, nothing in this Agreement
shall obligate the Company or UIL to continue such Executive in such higher
position; and the Company shall not be deemed in “Breach” of the Agreement (as
defined in Section 5(d)) for failure to continue the Executive in such higher
position.
(c)
If
the Executive is a participant in the UIL Holdings Corporation Change in
Control
Severance Plan (the “UIL CIC Plan II”) as of a Change in Control as therein
defined, then for the twenty-four month period after such Change in Control,
the
Company’s employment of the Executive shall be without diminishment in the
Executive's management responsibilities, duties or powers. In the event that
the
Executive’s employment is not so continued, the Executive may claim to have
suffered a Constructive Termination, in accordance with the terms of the
UIL CIC
Plan II.
(3) PLACE
OF PERFORMANCE
In
his
employment by the Company, the Executive shall be based within a fifty (50)-mile
radius of the current executive offices of the Company in New Haven,
Connecticut.
(4) COMPENSATION
(a)
Base
Salary.
During
the Initial Term of the Executive's employment hereunder, the Executive shall
receive a base salary (“Base Salary”) at an annual rate of One Hundred Seventy
Six Thousand Eight Hundred Dollars ($176,800.00), increasing to One Hundred
Eighty-Five Thousand Dollars ($185,000.00) effective April 1, 2005, payable
in
accordance with the then customary payroll practices of the Company. The
Executive's
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performance
and Base Salary shall be reviewed by the UIL Board at least annually, and
may be
adjusted as a result of any such review.
(b)
Incentive
Compensation.
During
the Term of the Executive’s employment hereunder, the Executive shall be
eligible to be designated by Company Board, or by the UIL Board in the event
that the program is a UIL Plan, as a participant in each annual short-term
incentive compensation program, and any long-term incentive program, maintained
for management employees of the Company; provided, however, that entitlement
to
participation, and continued participation, in any long-term equity incentive
program shall be conditioned upon the Executive fully complying with any
stock
ownership and retention guidelines from time to time established and promulgated
by the UIL Board.
For
purposes of this Agreement, the Executive’s “Accrued
Incentive Compensation”
shall
mean the amount of any annual short-term incentive compensation earned with
respect to the calendar year ended prior to the Date of Termination (as defined
in Section 5) but not yet paid as of the Executive’s Date of
Termination.
The
Executive’s “Stub-Period
Incentive Compensation”
shall
mean the annual short-term incentive compensation being earned in the year
in
which the Executive terminates employment, pro-rated for the year in which
he
terminates service, and shall be equal to that short-term annual incentive
compensation payment to which the Executive would be entitled, if any, under
the
terms of the Company’s executive incentive compensation plan, calculated as if
he had been employed by the Company on the last day of the year including
his
Date of Termination, and had achieved personal goals ‘at target’, but based on
actual performance with respect to the achievement of Company and UIL financial
goals (referred to as “Company goals”), multiplied by a fraction, the numerator
of which is the number of days which have elapsed in such year through the
Date
of Termination and the denominator of which is 365. UIL shall determine in
its
discretion the composition of the Executive’s scorecard, and what constitutes a
‘personal goal’ and ‘Company goal’; provided generally that an Executive’s
‘personal goals’ shall include, for example, his strategic opportunities,
leadership, and balance scorecard goals, other than business unit and UIL
total
financial goals, and Company goals shall include, for example, UIL and Company
financial goals based on earnings per share, cash flow, and all other goals
not
defined as personal goals. In the event that the ‘gate’, if any, is not achieved
with respect to Company goals, then no Stub-Period Incentive Compensation
will
be paid. Any Stub-Period Incentive Compensation payable upon termination
of the
Executive shall be paid in accordance with Section 6(e) of this
Agreement.
(c)
Change
in Control Severance Plan.
The
Executive has been designated by the UIL Board as an individual covered by
the
UIL Holdings Corporation Change in Control Severance Plan II of the Company
(the
“UIL CIC Plan II”), subject to all of the terms and provisions of the UIL CIC
Plan II as it may be amended from time to time. For purposes of this Agreement,
“Change in Control” shall have the meaning set forth in the UIL CIC Plan
II.
Nothing
in this subsection, however, shall entitle the Executive to continued
participation in such Plan should the UIL Board determine otherwise in
accordance with the terms of that Plan.
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(d)
Business
Expenses.
During
the Term, the Executive shall be entitled to receive prompt reimbursement
for
all reasonable employment- related business expenses incurred by the Executive,
in accordance with the policies and procedures established by the Company
Board
from time to time for all of the Company's management employees, provided
that
the Executive properly accounts therefor.
(e)
Benefit
Programs.
During
the Term of the Executive's employment hereunder and to the extent he meets
the
applicable eligibility requirements, the Executive shall be entitled to
participate in and receive benefits under all of the Company's employee benefit
plans, programs and arrangements for its similarly situated executives on
the
same terms and conditions that apply to such executives, including, without
limitation, any plan or program of an affiliated company in which the Company
is
a participating employer, but only for so long as the Company remains a
participating employer. Nothing
in this Agreement shall require the Company to maintain a particular benefit
plan or program, or preclude the Company from amending or terminating any
such
plans, programs or arrangements, including its participation therein, or
eliminating, reducing or otherwise changing any benefit provided thereunder,
so
long as such change similarly affects all similarly situated employees of
the
Company and is in compliance with applicable law.
(f)
Vacations
and Holidays.
The
Executive shall be entitled to that number of weeks of paid vacation in each
calendar year determined by the Company Board from time to time to be available
to similarly situated Company executives, and shall also be entitled to all
paid
holidays afforded by the Company to its management employees, all in accordance
with applicable Company policies.
(5) TERMINATION
(a)
Death
or Disability.
The
Executive's employment hereunder shall terminate upon the Executive's death
or
termination due to disability (as described in Section 6(a) of this
Agreement).
(b)
Termination
by Company for Cause.
The
Company may at any time by written notice to the Executive terminate the
Executive’s employment for Cause in accordance with the following provisions:
(i)
Termination
for Cause Prior to a Change in Control.
Prior
to the date of a Change in Control, the Company shall be deemed to have “Cause”
to terminate the Executive’s employment hereunder only upon the Executive’s:
(1)
failure to comply with any material term of this Agreement, or to perform
and
discharge the duties or obligations of the Executive’s office, or such other
duties as may from time to time be assigned to the Executive by, or at the
direction of, the UIL Board, faithfully, diligently, and competently, unless
any
such failure is cured in all material respects to the reasonable satisfaction
of
the UIL Board within sixty (60) days after the Executive receives written
notice
of such failure; or
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(2)
failure to devote substantially all of his working time and efforts to the
business and affairs of the Company unless any such failure is cured in all
material respects to the reasonable satisfaction of the UIL Board within
sixty
(60) days after the Executive receives written notice of such failure;
or
(3)
misconduct that is demonstrably injurious to the interests of the Company
or its
Affiliates (as that term is defined in Section 9) unless such misconduct
is
rectified in all material respects to the reasonable satisfaction of the
UIL
Board within thirty (30) days after the Executive receives written notice
of
such misconduct; or
(4)
commission of a serious crime, such as an act of fraud, misappropriation
of
funds, embezzlement, or a crime involving personal dishonesty or moral turpitude
(ii)
Termination
for Cause After a Change in Control.
During
the period that commences on a Change in Control and for twenty-four (24)
months
thereafter (the “Change in Control Protective Period”), and subject to the same
notice and cure provisions specified above, the Company (or its successor
or
other entity employing the Executive following such Change in Control) shall
be
deemed to have Cause to terminate the Executive’s employment hereunder only upon
the Executive’s:
(1)
commission of a serious crime, such as an act of fraud, misappropriation
of
funds, embezzlement, or a crime involving personal dishonesty or moral
turpitude; or
(2)
misconduct that is demonstrably injurious to the interests of the Company
or its
Affiliates; or
(3)
willful failure of the Executive to substantially perform his duties (other
than
by reason of incapacity due to physical or mental illness or
injury).
(c) Termination
by Company without Cause.
The
Company may terminate the Executive’s employment at any time, without cause,
upon ninety (90) days prior written notice to the Executive.
(d) Termination
by Executive.
(i)
If
the Executive is not in default of any of the Executive’s obligations under
Sections (2), (9), (10) or (11) hereof, the Executive may terminate employment
hereunder upon at least thirty (30) days’ prior notice, for failure of the
Company to observe and perform one or more of its obligations under Sections
(2), (3) and/or (4) hereof, which failure the Company fails to remedy within
such notice period (a “Breach by the Company”).
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(ii)
If
the Executive is not in default of any of the Executive’s obligations under
Sections (2), (9), (10) or (11) hereof, the Executive may terminate employment
hereunder in the absence of a Breach by the Company, effective upon at least
ninety
(90) days prior
written notice.
(e) Date
of Termination.
For
purposes of this Agreement, the “Date of Termination” is defined as (i) the
Executive’s date of death, in the event of his death; or the date of his
termination due to disability, in the case of disability, or (ii) the date
specified in the notice of termination, in the case of the Executive’s
termination pursuant to Sections (5)(b), (5)(c), 5(d) hereof.
(6) CONSEQUENCES
OF TERMINATION OR NON-RENEWAL.
(a)
Termination
on Death, Disability or Retirement; or by the Executive in the Absence of
a
Breach by the Company upon Adequate Notice.
If the
Executive’s employment terminates by reason of the Executive’s death, or his
total or partial physical or mental disability such
that
the Executive becomes entitled to long-term disability benefits under the
Company’s long-term disability plan,
or if
the Executive retires on or after becoming eligible to retire under the terms
of
the Company’s Pension Plan, or terminates employment hereunder in the absence of
a Breach by the Company upon ninety (90) days prior written notice, the Company
shall pay to the Executive or, in the event of death or disability, the
Executive’s personal representative and/or spouse:
(i)
the
Executive’s Base Salary earned but unpaid as of the Date of Termination, and
Accrued Incentive Compensation (as defined in Section 4(b));
(ii)
Stub-Period Incentive Compensation (as defined in Section 4(b)) earned, but
unpaid, as of the Date of Termination, but only in the case of the Executive’s
death, termination due to disability or retirement (as hereinbefore defined),
and not in case of his voluntary termination other than on account of such
retirement; plus
(iii)
any
amounts payable pursuant to (4)(d) (unreimbursed business expenses), (4)(e)
(employee benefits due and owing) and (4)(f) (accrued, but unpaid vacation
or
holidays) hereof, plus
(iv)
any
benefits or amounts payable on account of the Executive’s (A) participation in
any long-term incentive compensation plan and equity compensation plan or
arrangement, and (B) participation in any deferred compensation plan in which
he
was a participant as of his termination of service, all as determined in
accordance with the terms and conditions of such plans and arrangements.
Pending
a
determination that the Executive is entitled to long-term disability benefits,
the Executive’s short-term disability benefits shall be extended, as necessary
at 50% of Base Salary, if his length of employment with the Company is of
such
short duration that his short term disability benefits would otherwise expire
before his entitlement to long-term disability benefits is
determined.
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Upon
payment of these amounts, the Company shall have no further obligation to
the
Executive, the Executive’s personal representative and/or spouse under this
Agreement or on account of, or arising out of, the termination of the
Executive’s employment.
(b)
Upon
Termination for Cause; or by the Executive on fewer than 90 days
notice.
If the
Company terminates the Executive’s employment for Cause, or the Executive
terminates employment hereunder in the absence of a Breach by the Company
and
upon fewer than ninety
(90) days prior
written notice, the Company shall pay to the Executive:
(i)
the
Executive’s Base Salary earned, but unpaid, as of the Date of Termination;
plus
(ii)
any
amounts payable pursuant to Sections (4)(d), (4)(e) and 4(f) hereof, and
(iii)
any
benefits payable under any elective non-qualified deferred compensation plan
in
which the Executive had been a participant, other than any benefit under
any
supplemental executive retirement plan of the Company or an Affiliate,
whereupon
the Company shall have no further obligation to the Executive under this
Agreement or on account of, or arising out of, the termination of the
Executive’s employment.
(c)
Upon
Termination Without Cause, or Upon Breach by the Company, not on account
of a
Change in Control.
If the
Company terminates the Executive's employment hereunder without Cause, or
if the
Executive terminates the Executive's employment hereunder on account of a
Breach
by the Company, and in either case the termination is not upon a Change in
Control or within the Change in Control Protective Period, the Company shall
pay
or provide (as applicable) to the Executive, the following:
(i)
the
Executive’s Base Salary, Accrued Incentive Compensation and Stub-Period
Incentive Compensation earned, but unpaid, as of the Date of Termination;
plus
(ii)
any
amounts payable pursuant to Sections 4(d), 4(e), and 4(f) hereof;
plus
(iii)
any
benefits or amounts payable on account of the Executive’s (A) participation in
any long-term incentive compensation plan and equity compensation plan or
arrangement, and (B) participation in any deferred compensation plan in which
he
was a participant as of his termination of service, all as determined in
accordance with the terms and conditions of such plans and arrangements;
plus
(iv)
lump
sum severance equal to one (1) times the
sum
of:
(1)
the
Executive’s annual Base Salary rate in effect immediately prior to the
Executive’s Date of Termination, as determined by the UIL Board’s most recent
review of salary rates pursuant to Section 4(a); and
(2)
the
short-term annual incentive compensation payment to which the Executive would
be
entitled, calculated as if he had been employed by the
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Company
on the last day of the year of his Termination, as both personal goals and
Company goals had been achieved ‘at target’, without pro-ration for the fact
that the Executive was employed only a portion of such year. Except for the
assumption that such goals shall have been achieved ‘at ‘target’, personal and
Company goals shall be defined and determined as set forth in Section 4(b)
of
this Agreement.
(v)
for
the period ending on the first anniversary
of the date of the Executive’s Date of Termination, continued participation in
the medical and dental plan(s) in which he was a participant as of his Date
of
Termination on the same basis as if he remained an active employee, provided
that such participation is possible under the terms and provisions of such
plans
and programs and applicable law. Such period of continued participation shall
run concurrently with, and reduce day- for-day, any obligation that the Company
or any Affiliate would have to provide “COBRA” continuation coverage with
respect to the Executive’s termination of employment. If the Executive’s
participation in any such plan or program is barred as a result of the
Executive’s termination, the Company shall arrange to provide the Executive with
benefits substantially similar on an after-tax basis to those that the Executive
would have been entitled to receive under such plan or program, provided
that
with respect to any benefit to be provided on an insured basis, the value
of
such coverage shall be based on the present value of the premiums expected
to be
paid for such coverage, and with respect to other benefits, such value shall
be
the present value of the expected cost to the Company of providing such
benefits.
(d)
Upon
Non-renewal of Agreement at end of Term.
If the
Executive’s employment hereunder is terminated due to non-renewal of this
Agreement, the Company shall pay or provide (as applicable) to the Executive
the
same payments and benefits to which the Executive would have been entitled
had
he been terminated without cause in accordance with Section 6(c) of this
Agreement.
(e)
Timing
of Payment.
Any
cash
amount that is due and owing to the Executive upon his termination of service
pursuant to Section 6 will be paid as soon as administratively feasible
following the effective date (including any revocation period) of the Release
provided for in Section 6(f); provided, however, that (i) any Stub-Period
Incentive Compensation, and (ii) that portion of any severance payment that
is
based on annual short-term incentive compensation shall be paid following
the
close of the year in which the Date of Termination occurs, at the same time
that
incentive compensation generally would be payable upon authorization of the
UIL
Board to all other employees.
(f)
Release.
All
payments and obligations of the Company under Section (6) and (7) shall be
conditioned upon the execution and delivery by Executive to the Company of
a
full and effective release by Executive of any liability by the Company to
Executive in form and substance reasonably satisfactory to the
Company.
(7) CHANGE
IN CONTROL
(a)
If
on, or within twenty-four (24) months following a Change in Control, the
Company
(or its successor or other entity employing the Executive following such
Change
in Control) either terminates the Executive's employment hereunder without
Cause
or fails to renew
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this
Agreement on substantially identical terms, or if the Executive terminates
the
Executive's employment on account of a Constructive Termination (as defined
in
the UIL CIC Plan II), then the Executive shall be entitled to the
following:
(i)
the
Executive’s Base Salary, Accrued Incentive Compensation and Stub-Period
Incentive Compensation earned, but unpaid, prior to the Date of Termination;
plus
(ii)
any
amounts payable pursuant to Sections 4(d), 4(e), and 4(f) hereof;
plus
(iii)
any
benefits or amounts payable on account of the Executive’s (A) participation in
any long-term incentive compensation plan and equity compensation plan or
arrangement, and (B) participation in any deferred compensation plan in which
he
was a participant as of his termination of service, all as determined in
accordance with the terms and conditions of such plans and arrangements;
plus
(iv)
those payments, and benefits, if any, to which the Executive is entitled
by
reason of having been designated a Participant in the UIL CIC Plan II. The
severance payments, pension supplements and other benefit provisions under
such
Plan (the “Total UIL CIC Plan Package”) shall be controlling and shall supplant
the payments and benefits to which the Executive would be entitled assuming
the
Executive were terminated without Cause pursuant to the terms of this Agreement,
including without limitation any severance benefits, supplemental retirement
benefits, short-term incentive compensation and other compensation and benefits
(other than long-term incentive compensation) under this Agreement (the
“Employment Agreement Termination Package”); expressly provided, however, that
in the event that the Employment Agreement Termination Package exceeds the
value
of the Total UIL CIC Plan Package, then the Executive shall be entitled to
select one or the other Package, but shall not be entitled to both, and shall
not be entitled to select among compensation elements in each
Package.
(b)
For
purposes of this Agreement, Change in Control shall mean “Change in Control” as
defined with respect to the Company employing the Executive in the UIL CIC
Plan
II, as amended from time to time.
(c)
Payment of benefits under this Section 7 shall be subject to, and conditioned
upon, the provisions of Section 6(e) and (f) hereof.
(8)
TAX SAVINGS PROVISION
If
any
portion of the payments which the Executive has the right to receive from
the
Company, or any affiliated entity, hereunder would constitute "excess parachute
payments" (as defined in Section 280G of the Internal Revenue Code, and not
governed by the terms defined in this Agreement) subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code, such excess parachute
payments shall be reduced to the largest amount that will result in no portion
of such excess parachute payments being subject to the excise tax imposed
by
Section 4999 of the Internal Revenue Code.
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(9)
CONFIDENTIAL INFORMATION
The
Executive recognizes that the Executive’s employment by the Company is one of
highest trust and confidence by reason of his access to certain trade secrets,
confidential business practices, and proprietary information concerning the
Company or any person or entity that directly, or indirectly through one
or more
intermediaries, controls or is controlled by, or is under common control
with,
the Company (an “Affiliate”), including, without limitation, the Company’s
methods of doing business, marketing and strategic business plans, employees’
compensation and contract terms, customer lists and customer characteristics
(collectively referred to as “Proprietary Information”). The Executive agrees
and covenants to exercise utmost diligence to protect and safeguard the trade
secrets, confidential business practices and Proprietary Information concerning
the Company and any Affiliate. The Executive further agrees and covenants
that,
except with the prior written consent of the Company, he will not, either
during
the Term hereof or thereafter, directly or indirectly, use for his own benefit
or for the benefit of any other person or organization, or disclose, disseminate
or distribute to any other person or organization, any of the Proprietary
Information (whether or not acquired, learned, obtained or developed by the
Executive alone or in conjunction with another), unless and until such
Proprietary Information has become a matter of public knowledge through no
action or fault of the Executive or unless otherwise required by court order
to
comply with legal process. All memoranda, notes, records, drawings, documents
or
other writings whatsoever made, compiled, acquired or received by the Executive
during the Term hereof arising out of, in connection with, or related to
any
activity or business of the Company are and shall continue to be the sole
and
exclusive property of the Company, and shall, together with all copies thereof,
be returned and delivered to the Company by the Executive immediately, when
he
ceases to be employed by the Company, or at any other time upon the Company’s
demand.
(10)
NON-COMPETITION
The
Executive agrees and covenants that, during the Term of this Agreement and
for a
period of twelve (12) months following the month during which the Executive
ceases to be employed by the Company and its Affiliates (the “time in
question”), the Executive will not, in any capacity, directly or
indirectly,
whether
as a consultant, employee, officer, director, partner, member, principal,
shareholder, or otherwise:
(a)
become employed by, enter into a consulting arrangement with, or otherwise
perform services for, manage, acquire an ownership in, or participate in
the
management or ownership of, a Competitor; or
(b)
directly or indirectly divert or attempt to divert from the Company or any
Affiliate any business in which the Company or any Affiliate has been actively
engaged during the Term hereof, or in any way interfere with the relationships
that the Company or any Affiliate has with its sources of supply or customers;
or
(c)
directly or indirectly interfere or attempt to interfere with the relationship
between the Company or any Affiliate and any of such entity’s employees;
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unless
the Company has granted prior written approval which may be withheld for
any
reason.
For
purposes of this Section “Competitor” means any person or entity (a ‘business’)
that sells goods or services that are directly competitive with those goods
or
services sold or provided by the Company or any Affiliate, in a geographic
area
in which the Company or Affiliate is doing business and such Competitor is
also
doing business at the time in question, and such goods or services were being
sold or provided at the Date of Termination, and, for the Company’s most
recently completed fiscal year ending with, or immediately prior to, the
Date of
Termination, contributed more than 10% of the revenue of the Company and
its
Affiliates. Notwithstanding anything to the contrary in this Section, a business
shall not deemed to be a Competitor with the Company if the Executive is
employed by, or otherwise associated with such business, and that business
has a
unit that is in competition with the Company or an Affiliate, but the Executive
does not have direct or indirect responsibilities for the services or goods
involved in the competition.
Nothing
in this Section shall be construed to prohibit the ownership by the Executive
of
less than five percent (5%) of any class of securities of any entity that
is
engaged in any of the foregoing businesses having a class of securities
registered pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”),
provided that such ownership represents a passive investment and that neither
the Executive, nor any group of persons including the Executive, in any way,
directly or indirectly, manages or exercises control of such entity, guarantees
any of its financial obligations, or otherwise takes any part in its business,
other than through exercising the Executive’s rights as a
shareholder.
For
purposes of this Section “Affiliate” means any entity that directly or
indirectly controls, is controlled by, or is under common control with the
Company.
As
used
in Sections 9-11, the term the “Company” shall mean UIL Holdings Corporation,
The United Illuminating Company and any successor to, or acquirer of, the
business or assets of either of them.
(11)
DISCLOSURE AND ASSIGNMENT OF INVENTIONS AND DISCOVERIES.
(a)
Disclosure
of Inventions.
The
Executive agrees to make prompt and complete disclosure to the Company of
all
inventions and discoveries made or conceived by him, alone or with others,
while
this Agreement is in effect, or within a reasonable time thereafter, which
arise
out of or relate to the services rendered pursuant to this Agreement. The
Executive also agrees to keep necessary records, including notes, sketches,
drawings, models and data supporting all such
inventions and discoveries made by him, alone or with others, during the
course
of performing the services pursuant to this Agreement, and the Executive
agrees
to furnish the Company, upon request, all such records.
(b)
Assignment
of Inventions and Discoveries.
The
Executive also agrees that he will assign to the Company all inventions and
discoveries made by him which arise out of and pertain to the services rendered
pursuant to this Agreement, together with all domestic and
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foreign
patents as may be obtained on these inventions and discoveries. The Executive
further agrees that, upon request of the Company, he will execute all necessary
papers and cooperate in the fullest degree with the Company in securing,
maintaining and enforcing any such patents which arise out of his services
under
this Agreement. It is understood, however, that these obligations undertaken
by
Executive will be at no expense to him.
(12)
MISCELLANEOUS.
(a)
Equitable
Remedies.
The
Executive acknowledges that the restrictions provided for in Sections (9)
through (11) are reasonable and necessary in order to protect the legitimate
interests of the Company and its Affiliates, and that any violation thereof
would result in serious damage and irreparable injury to the Company and
its
Affiliates. Further, the
Executive acknowledges that the services to be rendered by him are of such
unique and extraordinary nature, and the resulting injury to the Company
from a
breach of Sections (9) through (11), inclusive, by the Executive would be
of
such a nature, that an action at law for the collection of damages would
not
provide adequate relief to the Company for the enforcement of its rights
in the
event of an actual or threatened violation by the Executive of his commitments
and obligations under Sections (9) through (11). The Executive agrees that
upon
the actual or threatened breach
or
violation of any of the commitments under Section (9) through (11), the Company
shall be entitled to both preliminary and permanent injunctive relief, in
any
action or proceeding brought in an appropriate court having jurisdiction
over
the Executive, to restrain him from committing any violation of any such
commitments and obligations.
(b)
Effect
Of Breach.
All
payments and other benefits payable but not yet distributed to Executive
under
Sections (6) or (7)) shall be forfeited and discontinued in the event that
the
Executive violates Sections (9) through (11) of this Agreement, or willfully
engages in conduct which is materially injurious to the Company, monetarily
or
otherwise, all as determined in the sole discretion of the Company.
(c)
Successors;
Binding Agreement; Assignment.
(i)
The
Company will require the acquirer of all or substantially all of the business
or
assets of the Company (whether directly or indirectly, by purchase of stock
or
assets, merger, consolidation or otherwise), by agreement in form and substance
reasonably satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
If the Company fails to obtain such agreement prior to the effective date
of any
such succession, the Executive may terminate his employment with in thirty
(30)
days of such succession and treat such termination as a Breach by the Company
and termination without cause on account of a Change in Control entitling
the
Executive to payments and benefits under Section 7 of this Agreement. For
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination.
(ii) This
Agreement, and the Executive’s rights and obligations hereunder, may not be
assigned by the Executive. Any attempted assignment of this Agreement by
the
Executive shall be void and of no force or effect. This
Agreement and all rights of the Executive hereunder shall inure to the benefit
of and be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.
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As
used
in this Section, the term the “Company” shall include The
United Illuminating Company, UIL Holdings Corporation, and any successor
to, or
acquirer of, the business or assets of the Company that executes and delivers
the agreement provided for in this Section (12)(c) or which otherwise becomes
bound by all the terms and provisions of this Agreement by operation of
law.
(d) Notices.
For the
purpose of this Agreement, notices and all other communications to either
party
hereunder provided for in the Agreement shall be in writing and shall be
deemed
to have been duly given when delivered or mailed by United States certified
or
registered mail, return receipt requested, postage prepaid, addressed, in
the
case of the Company, to the Secretary of the Company at 000 Xxxxxx Xxxxxx,
Xxx
Xxxxx, Xxxxxxxxxxx 00000, or, in the case of the Executive, to the Executive
at
his residence, or to such other address as either party shall designate by
giving written notice of such change to the other party.
(e) Waiver;
Amendment.
No
provision of this Agreement may be modified, waived or discharged unless
such
waiver, modification or discharge is approved by the UIL Board and agreed
to in
a writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other
party shall be deemed a waiver of any similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements
or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party that are not set forth
expressly in this Agreement.
(f)
Governing
Law; Severability.
The
validity, interpretation, construction and performance of this Agreement
shall
be governed by the laws of the State of Connecticut. The validity or
unenforceability of any provision or provisions of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect. In the event one or more of
the
provisions of this Agreement should, for any reason, be held to be invalid,
illegal or unenforceable in any respect, the parties agree that such provisions
shall be legally enforceable to the extent permitted by applicable law, and
that
any court of competent jurisdiction shall so enforce such provision, or shall
have the authority hereunder to modify it to make it enforceable to the greatest
extent permitted by law.
(g) No
Conflict.
The
Executive hereby represents and warrants to the Company that neither the
execution nor the delivery of this Agreement, nor the employment of the
Executive by the Company will result in the breach of any agreement to which
the
Executive is a party.
(h) Survival.
The
provisions of this Agreement shall not survive the termination of this Agreement
or of the Executive’s employment hereunder, except that the provisions of
Sections (6) through (12) hereof shall survive such termination and shall
be
binding upon the Executive, the Executive’s personal representative and/or
spouse, the Company, and the Company’s successors and assigns.
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(i) Counterparts;
Facsimile Execution.
This Agreement may be executed in two or more counterparts, each of which
shall
be deemed an original but all of which together shall constitute one
and the
same instrument. Facsimile execution and delivery of this Agreement is
legal,
valid and binding execution and delivery for all purposes.
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|
Date:
|
July
8, 2005
|
THE
UNITED ILLUMINATING COMPANY
Attest:
|
/s/
Xxxxx X. Xxxxx
|
By:
|
/s/
Xxxxxxxxx X. Xxxxxxx
|
|
|
Xxxxx
X. Xxxxx
|
Xxxxxxxxx
X. Xxxxxxx
|
||
|
Vice
President Investor Relations, Corporate Secretary &
Treasurer
|
Its
Chairman and Chief Executive
Officer
|
Grant
of
Performance Shares on
foregoing
terms acknowledged.
|
Date:
|
July
8, 2005
|
/s/
Xxxxxxx X. Xxxxxx
|
|
|
Xxxxxxx
X. Xxxxxx
|
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