Southern Union Company One PEI Center Wilkes-Barre, PA 18711
Exhibit 10.1
Southern
Union Company
Xxx
XXX Xxxxxx
Xxxxxx-Xxxxx,
XX 00000
July 1,
2005
Xxxx X.
Xxxxxxx
39
O’Xxxxxxx Xxxx
Xxx
Xxxxxx, XX 00000
Dear Xx.
Xxxxxxx:
This will
confirm the agreement (the “Agreement”) that has been reached with you in
connection with your separation of employment from Southern
Union Company (the “Company”).
| 1. |
You
hereby confirm that your last day of employment with the Company
was
June 1, 2005. Moreover, this is to confirm your prior resignation from
your position as Vice-Chairman of the Board of Directors of the Company,
effective March 30, 2005, and Corporate Secretary, effective May 9, 2005.
To the extent that you presently hold any other positions as officer or
director of the Company or any of its subsidiaries, divisions, joint
ventures or other affiliates, you hereby resign such positions, effective
immediately, and
agree that you shall take such further actions as may be necessary or
desirable to effectuate the foregoing. |
| 2. |
In
consideration of your obligations set forth in this Agreement, including,
but not limited to your consent to the General Release set forth in
paragraph 8 below, the Company and you have agreed as
follows: |
| (a) |
In
the event that you elect to receive continuation coverage in the Company’s
medical and dental plans pursuant to the provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the
Company agrees to reimburse you for the cost of such continuation coverage
for a period of eighteen (18) months following the last day of the month
in which your employment
ceases with the Company (i.e.,
through December 31, 2006). In the event that you obtain medical and/or
dental benefits or coverage from another employer during this 18-month
period, you agree to report any such benefits or coverage to the Company
and the Company’s reimbursement obligation shall cease. Following December
31, 2006, any further continuation of coverage pursuant to COBRA shall be
at your own expense. Except as set forth herein, continuation coverage
shall in all respects be subject to the requirements, conditions and
limitations of COBRA and of the medical and dental plans of the Company,
which may be amended from time to time. |
| (b) |
The
Company agrees to pay you for any unused vacation time that has accrued as
of June
1, 2005,
and the
Company agrees to reimburse you for any legitimate unreimbursed business
expenses incurred by you prior to June 1, 2005 following your
submission of proper documentation of such expenses to the Company.
|
| (c) |
The
Company agrees to engage you as a consultant, and you agree to accept such
engagement, to perform services as the Company may reasonably request with
respect to operation of the Company’s business, for
a period of two (2) years commencing June 2, 2005, to and including June
1, 2007 (the
“Consulting Period”). As
compensation for your services as a consultant during the Consulting
Period, you shall be paid at the rate of $37,500 per month, in arrears;
provided,
however,
that the foregoing payments for consulting services shall cease if and to
the extent that you obtain other employment with, or otherwise provide
services as a consultant to, any business, entity, or individual during
the Consulting Period other than “Permitted Services” (as defined below).
For purposes of this Agreement, “Permitted Services” shall mean your
provision of services to (1) an educational, not-for-profit or charitable
organization, (2) a governmental organization that does not have any
regulatory or oversight function with respect to the Company or any of its
subsidiaries or affiliates or (3) a company that (i) is not publicly
traded or listed on a national securities exchange or quoted on the
automated quotation system of the National Association of Securities
Dealers and (ii) which does not compete in any way, directly or
indirectly, with any businesses of the Company or any of its subsidiaries
or affiliates, and provided
that
your provision of such services does not adversely affect your
availability to provide consulting services to the Company as required
herein. You agree to promptly notify the Company in writing upon securing
any other employment or consultancy engagements (whether or not they
involve Permitted Services), and the Company shall have the right to stop
any payment not yet due and recoup payments already made in the event that
you fail to notify the Company of other employment or consultancy
engagements as provided herein. The Company acknowledges that from time to
time you may have personal commitments (e.g., travel, vacation) during the
Consulting Period and the Company agrees to work with you to accommodate
any such commitments in scheduling or otherwise requesting your consulting
services. |
| (d) |
Nothing
herein shall be construed to constitute an employer/employee relationship
during the Consulting Period, or to authorize you to act as an agent on
behalf of the Company, at any time following June
1, 2005 without the express written consent of the Company.
Your relationship with the Company during the Consulting Period shall only
be that of an independent contractor, and you shall not receive or be
entitled to any unemployment, disability, workers’ compensation or medical
insurance or any other employee benefits (including but not limited to
vacation) as a result of your performing consulting services for the
Company pursuant to this Agreement. You
shall be entitled to reimbursement, upon receipt by the Company of
suitable documentation, for reasonable and necessary travel and other
expenses which you may incur during the Consulting Period at the specific
request of the Company and as approved by the Company, in accordance with
its policies and procedures established from time to
time. |
| 3. |
You
acknowledge that the payments and benefits referred to in paragraph 2
above are in lieu of and in full satisfaction of any amounts that might
otherwise be payable under any contract, plan, policy or practice, past or
present, of the Company, or any of its subsidiaries and affiliates,
including but not limited to the Southern Union Company Severance Plan,
the Southern Union Company Severance Pay Plan and the Southern Union
Company Corporate Reorganization Plan. You shall not be eligible to
receive benefits under any employee benefit plans or compensation
arrangements of the Company, or any of its subsidiaries or affiliates,
subsequent to June 1, 2005, with the exception of (a) your right to elect
COBRA continuation coverage as described above, and (b) any vested
benefits you may have, as of June 1, 2005, in the Southern Union Savings
Plan, the Southern Union Company Supplemental Deferred Compensation Plan,
the Employees’ Retirement Plan of Southern Union Company Pennsylvania
Division, the Southern Union Company ProvEnergy Pension Plan for
Non-Bargaining Unit Employees, the Southern Union Company Retirement
Income Plan, the Southern Union Company Employee Stock Purchase Plan
and/or the Southern Union Company Executive Deferred Stock
Plan. |
| 4. |
You
hereby relinquish and convey to the Company any
and all rights and interests you have or may have with respect to options
to purchase shares of stock of the Company or any of its subsidiaries or
affiliates including but not limited to with respect to the Southern Union
1992 Long Term Stock Incentive Plan or the Southern Union Company 2003
Stock and Incentive Plan (the “Option Plans”), as amended or restated from
time to time, and acknowledge and agree that such options shall be
forfeited as
of June
1, 2005; provided,
however,
that during the period commencing at the close of business on June 1, 2005
and ending December 1, 2006, you may exercise any such options that have
vested on or prior to June 1, 2005 in accordance with the terms of the
Option Plans. Any vested options that have not been exercised prior to the
end of such eighteen month
period shall thereafter expire and be forfeited in accordance with the
terms of the Option Plans. Nothing contained in this paragraph 4 shall be
deemed to amend the terms of the Option Plans or any applicable notices of
stock option awards or agreements. |
| 5. |
You
agree that in the course of your employment with the Company you have had
access, and during the Consulting Period you may have access, to
confidential and proprietary information (“Confidential Information”)
relating to the Company, its subsidiaries and affiliates, and their
respective businesses, clients, finances, operations, strategic or other
plans, employees, trade practices, trade secrets, know how or other
matters that are not publicly known outside the Company, which are
integral to the operations and success of the Company, and that such
Confidential Information has been disclosed or will be disclosed to you in
confidence and only for the use of the Company. You hereby represent and
warrant that you have not disclosed any such Confidential Information to
date to anyone other than your counsel and that your counsel has not
disclosed any such Confidential Information to any third party. You
further understand and agree that (a) you will keep such Confidential
Information confidential at all times during and after your employment
with the Company, (b) you will not make use of such Confidential
Information on your own behalf, or on behalf of any third party, and (c)
you have returned or will return to the Company any and all copies,
duplicates, reproductions or excerpts of such Confidential Information
within your possession, custody or control on or before June 1, 2005 (or,
to the extent provided to you during the Consulting Period, on or before
expiration of the Consulting Period). You further agree to keep the terms
of this Agreement confidential and not to disclose the Agreement or the
terms thereof to any person, except (a) to your immediate family and as
may be required for obtaining legal or tax advice; (b) for the filing of
income tax returns or required financial disclosures; or (c) as may be
required by law or in any proceeding to enforce this Agreement. In the
case of any disclosure to immediate family or a legal or tax advisor, you
shall require any person receiving such information to maintain its
confidentiality. |
| 6. |
All
documents (electronic, paper or otherwise), records (electronic, paper or
otherwise), materials, software, equipment, and other physical property,
and all copies of the foregoing, whether or not otherwise containing
Confidential Information, that have come into your possession or been
produced by you in connection with your employment (“Property”), have been
and remain the sole property of the Company or its subsidiaries or
affiliates, as applicable. You agree that you have returned all such
Property to the Company (or, to the extent that you have not, that you
will do so promptly). |
| 7. |
You
agree not to make, or knowingly cause to be made, any statement or
communication, written or oral, with the intention of disparaging or
otherwise impugning the business or management of the Company or any of
its subsidiaries or affiliates, or any of their respective officers,
directors, agents, representatives or employees. You further agree not to
make, or knowingly cause to be made, any statement or communication,
written or oral, with the intention of damaging the business or reputation
of the Company or any of its subsidiaries or affiliates, or the personal
or business reputations of any of their respective officers, directors,
agents, representatives or employees, or of interfering with, impairing or
disrupting the normal operations of the Company or any of its subsidiaries
or affiliates. The Company agrees that it will not knowingly permit its
senior officers and directors to make,
or knowingly cause to be made, any statement or communication, written or
oral, with the intention of disparaging or otherwise impugning you, your
business or your reputation. |
| 8. |
You,
your heirs, successors, and assigns, hereby knowingly and voluntarily
remise, release and forever discharge the Company and its subsidiaries and
affiliates, together with all of their respective current and former
officers, directors, agents, representatives and employees, and each of
their predecessors, successors and assigns (collectively, the
"Releasees"), from any and all debts, demands, actions, causes of actions,
accounts, covenants, contracts, agreements, claims, damages, omissions,
promises, and any and all claims and liabilities whatsoever, of every name
and nature, known or unknown, suspected or unsuspected, both in law and
equity (“Claims”), which you ever had, now have, or may hereafter claim to
have against the Releasees by reason of any matter, cause or thing
whatsoever arising from the beginning of time to the time you sign this
Agreement (the "General Release"). This General Release of Claims shall
apply to any Claim of any type, including, without limitation, any and all
Claims of any type that you may have arising under the common law, under
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991,
the Age Discrimination in Employment Act of 1967, the Older Workers
Benefit Protection Act, the Americans With Disabilities Act of 1990, the
Rehabilitation Act of 1973, the Family and Medical Leave Act of 1993, the
Worker Adjustment Retraining and Notification Act, the Employee Retirement
Income Security Act of 1974, the Xxxxxxxx-Xxxxx Act of 2002,
or the
New York State and City Human Rights laws, each as amended, and any other
federal, state or local statutes, regulations, ordinances or common
law,
or under any plan, program, policy, agreement, contract, understanding or
promise, written or oral, formal or informal, between any of the Releasees
and you, including but not limited to the Southern Union Company Severance
Plan, the Southern Union Company Severance Pay Plan, the Southern Union
Company Corporate Reorganization Plan, any Claim for bonus or incentive
compensation, attorneys’ fees, costs, and/or any other fringe benefit of
the Company or any of the other Releasees, and shall further apply,
without limitation, to any and all Claims in connection with, related to
or arising out of your employment, or the termination of your employment,
with the Company, and all Claims for alleged tortious, defamatory or
fraudulent conduct; provided,
however,
that nothing contained in this Agreement shall (i) impair any vested
benefits you may have, as of June 1, 2005, in the Southern Union Savings
Plan, the Southern Union Company Supplemental Deferred Compensation Plan,
the Employees’ Retirement Plan of Southern Union Company Pennsylvania
Division, the Southern Union Company ProvEnergy Pension Plan for
Non-Bargaining Unit Employees, the Southern Union Company Retirement
Income Plan, the Southern Union Company Employee Stock Purchase Plan
and/or the Southern Union Company Executive Deferred Stock
Plan;
(ii) impair your continuing rights to indemnification by the Company, if
any, to the same extent currently available to you pursuant to the
Company’s by-laws and other organizational documents, any insurance
policies maintained by or on behalf of the Company, or under applicable
law for actions taken or omissions made as an employee or director of the
Company; or (iii) be construed to prohibit you from bringing appropriate
proceedings to enforce this Agreement. You hereby represent and warrant
that you have not filed or caused to be filed any complaints, charges or
lawsuits against the Company or any of the other Releasees, and that no
such complaints, charges or lawsuits are pending. By signing this General
Release, you further represent that you will not be entitled to any
personal recovery in any action or proceeding that may be commenced on
your behalf arising out of the matters released hereby. |
| 9. |
You
hereby represent and warrant that you are not aware of any illegal or
unlawful actions or omissions by any current or former officer, director,
employee, agent, attorney, consultant or representative of the Company
(including yourself) through the date of the execution of this Agreement
that were (individually or collectively) in any way knowingly or
intentionally harmful or detrimental to the Company, its business and/or
its shareholders, including, without limitation, violations of any laws,
regulations or accounting policies or principles, the taking of
unreasonable tax positions, or the furnishing of inaccurate statements,
invoices or other reports to any person or
entity. |
| 10. |
During
and after the termination of your employment, you agree to cooperate fully
with the Company and its subsidiaries and affiliates concerning reasonable
requests for information about the business of the Company or its
subsidiaries or affiliates or your involvement and participation therein;
the defense or prosecution of any claims or actions now in existence or
which may be brought in the future against or on behalf of the Company or
its subsidiaries or affiliates which relate to events or occurrences that
transpired while you were employed by the Company; and in connection with
any investigation or review by any federal, state or local regulatory,
quasi-regulatory or self-governing authority (including, without
limitation, the Securities and Exchange Commission) as any such
investigation or review relates to events or occurrences that transpired
while you were employed by the Company. Your full cooperation shall
include, but not be limited to, being available to meet and speak with
officers or employees of the Company and/or its counsel at reasonable
times and locations, executing accurate and truthful documents and taking
such other actions as may reasonably be requested by the Company and/or
its counsel to effectuate the foregoing. In requesting such services
following expiration of the Consulting Period, the Company will consider
other commitments that you may have at the time of the request and agrees
to work with you to accommodate any such commitments. The Company further
agrees to reimburse you for any reasonable, out-of-pocket travel, hotel
and meal expenses incurred in connection with your performance of
obligations pursuant to this paragraph for which you have obtained prior,
written approval from the Company. |
| 11. |
Nothing
in this Agreement is intended to or shall preclude you from providing
truthful testimony on any non-privileged subject matter in response to a
valid subpoena, court order, regulatory request or other judicial,
administrative or legal process or otherwise as required by law, in which
event you shall notify the Company in writing as promptly as practicable
after receiving any such request of the anticipated testimony and at least
ten (10) business days prior to providing such testimony (or, if such
notice is not possible under the circumstances, with as much prior notice
as is possible) so that the Company may seek a protective order or other
appropriate remedy, and you agree to cooperate with the Company in any
effort the Company undertakes to obtain a protective order or other
remedy. If such a protective order or other remedy is not obtained, or the
Company waives compliance with this Agreement, you shall furnish only that
portion of such subject matter that is legally required and shall exercise
all reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded to the subject matter to be
disclosed. |
| 12. |
The
Company advises you to consult with an attorney of your choosing prior to
signing this Agreement. You understand and agree that you have the right
and have been given the opportunity to review this Agreement and,
specifically, the General Release in paragraph 8 above, with an attorney.
You also understand and agree that the Company is under no obligation to
offer you the payments and benefits set forth in paragraph 2 above and
that you are under no obligation to consent to the General Release. You
acknowledge and agree that the payments and benefits offered by the
Company and set forth in paragraph 2 above are sufficient consideration to
require you to abide with your obligations under this Agreement, including
but not limited to the General Release. You represent that you have read
this Agreement, including the General Release set forth in paragraph 8
above, and understand its terms and that you enter into this Agreement
freely, voluntarily, and without coercion. |
| 13. |
You
acknowledge and represent that you have been given at least twenty-one
(21) days during which to review and consider the provisions of this
Agreement and, specifically, the General Release set forth in paragraph 8
above, although you may sign and return it sooner if you so desire. You
further acknowledge and represent that you have been advised by the
Company that you have the right to revoke this Agreement for a period of
seven (7) days after signing it. You acknowledge and agree that, if you
wish to revoke this Agreement, you must do so in a writing, signed by you
and received by the Company no later than 5:00 p.m. Eastern Time on the
seventh (7th) day of the revocation period. If no such revocation occurs,
the General Release and this Agreement shall become effective on the
eighth (8th) day following your execution of this Agreement. You further
acknowledge and agree that, in the event that you revoke this Agreement,
it shall have no force or effect, and you shall have no right to receive
any of the payments or benefits provided for
hereunder. |
| 14. |
It
is the desire and intent of the parties that the provisions of this
Agreement shall be enforced to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which enforcement
is sought. In the event that any one or more of the provisions of this
Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby. Moreover, if any one or
more of the provisions contained in this Agreement shall be held to be
excessively broad as to duration, scope, activity or subject, such
provisions shall be construed by limiting or reducing them so as to be
enforceable to the maximum extent compatible with applicable
law. |
| 15. |
No
waiver by either party of any breach by the other party of any condition
or provision of this Agreement to be performed by such other party shall
be deemed a waiver of any other provision or condition at the time or at
any prior or subsequent time. This Agreement and the provisions contained
in it shall not be construed or interpreted for or against either party
because that party drafted or caused that party's legal representative to
draft any of its provisions. |
| 16. |
The
terms described in this Agreement set forth the entire agreement and
understanding of the parties and supersede all prior agreements,
arrangements and understandings, written or oral, between the
parties. You
acknowledge and agree that you are not relying on any representations or
promises by any representative of the Company concerning the meaning or
any aspect of this Agreement. This Agreement may not be altered or
modified other than in writing signed by you and an authorized
representative of the Company, and shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without
reference to its choice of law rules. |
| 17. |
The
Company’s offer to you of this Agreement is not, and shall not be
construed as, any admission of liability or of any improper conduct on the
part of the Company or any of the other Releasees, all of which the
Company specifically denies. |
| 18. |
This
Agreement may be executed in counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument. |
| 19. |
Any
notice, demand or other communication which is required or permitted by
this Agreement to be given or made by a party hereto shall be in writing
to the following addresses: |
| (a) |
to
the Company at: |
Southern
Union Company
c/o
Xxxxxx X. Xxxxxxxx, Esq.
0000
Xxxxxxxxxx
Xxxxxxx,
Xxxxx 00000
| (b) |
to
you at the address listed above; |
or at
such other address as any party may from time to time advise the other party by
notice in writing.
8
If the
above sets forth our agreement as you understand it and consent to it, please so
signify by executing the enclosed copy of this letter and return it to me at the
address listed above.
Very
truly yours,
Southern
Union Company
/s/
Xxxxxx X. Xxxxx
By: Xxxxxx X.
Xxxxx
Title: President
& COO
Agreed to
and Accepted:
/s/
Xxxx X. Xxxxxxx
Xxxx X.
Xxxxxxx
Dated:
July 1, 2005
