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Exhibit 10.19
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 25th day of May, 2000, by and between BayCorp
Holdings, Ltd., a Delaware corporation with its principal place of business
located at 00 Xxxxxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000-0000 (the
"Company") , and Xxxxx X. Xxxxxx Xx., residing at 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000 ("Executive").
Recital
The Company and Executive are parties to an Employment Agreement dated
as of May 5, 1998, as amended (the "Prior Agreement"). The parties hereto wish
to enter into this Agreement in substitution for the Prior Agreement.
1. Employment.
The Company hereby employs Executive, and Executive hereby accepts such
employment, in accordance with the terms and subject to the conditions set forth
in this Agreement.
2. Position and Duties.
a. Subject to the provisions of this Agreement, the Company
shall employ Executive, and Executive shall serve the Company, as Chairman,
President and Chief Executive Officer and/or any other titles as may be
designated from time to time by the Board of Directors (the "Board") of the
Company. Executive shall report to the Board.
b. Executive shall have primary authority and responsibility
for operational, management and general business matters of the Company and
shall perform such executive duties and responsibilities on behalf of the
Company and its Affiliates (as defined below) as may be prescribed from time to
time by the Board. Executive shall devote his full-time best efforts to the
business of the Company so as to increase the profitability and shareholder
value of the Company; and Executive shall not during the term of this Agreement
be engaged in any other business activity, other than providing services as a
senior officer of HoustonStreet Exchange, Inc., unless written approval is first
secured from the Board. The preceding sentence shall not be deemed to prohibit
Executive's activities relating to his ownership and management of a certain
residential apartment building located in Oneonta, New York, provided that the
ownership and management of such building does not interfere with Executive's
duties hereunder. As used herein, "Affiliates" shall mean entities controlling,
controlled by or under common control with the company. The Executive agrees
upon the Board's request, to serve on the Board (or any Affiliates' boards of
directors) for no additional consideration.
3. Term of Employment. Unless sooner terminated as provided in Section
6 below, the term of this Agreement shall be approximately three (3) years,
commencing on May 25, 2000 (the "Commencement Date") and ending on July 31, 2003
(the "Expiration Date") . As used herein, the word "Term" shall refer to the
period beginning on the Commencement Date and
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ending on the effective date of the termination of Executive's employment with
the Company as provided in this Agreement.
4. Compensation; Benefits. For all services rendered by Executive
pursuant to this Agreement, the Company shall compensate Executive, during the
Term of Executive's employment hereunder, as follows:
a. Annual Salary; Discretionary Bonus. From and after the
Commencement Date, Executive shall be paid an annual base salary of $160,000 per
year, which shall be payable in equal bi-weekly installments. After the first
anniversary of the Commencement Date, such base salary shall be increased to
$175,000 per year and after the second anniversary to $200,000 per year. The
Executive shall also be eligible to receive, from time to time, one or more
discretionary bonuses to be determined by the Board. All salary and bonus
payments to Executive shall be subject to payroll tax and related deductions as
required by law.
b. Insurance. During the Term, the Company shall continue to
pay life insurance and disability insurance premiums with respect to the
Executive, consistent with past practices and subject to the Executive's
continued eligibility for coverage at reasonable rates.
c. Executive Benefits; Vacation. During the term of his
employment hereunder, Executive shall be entitled to participate in all employee
pension and welfare benefit plans and programs made available to executive
employees of the. Company, as such plans or programs may be in effect from time
to time and as determined by the Board, including, without limitation, 401(k)
plans and health insurance and life insurance plans not covered above. Executive
shall be entitled to three (3) weeks of paid vacation per calendar year or a pro
rata number of vacation days for a period that is less than a complete calendar
year in accordance with the Company's vacation policy in effect from time to
time.
d. Reimbursement of Expenses. Executive shall he reimbursed
for reasonable business expenses incurred in connection with carrying out the
business of the Company, subject to authorization and documentation in
accordance with the Company's policies in effect from time to time.
5. Confidential Information; Non-Competition; Anti-Raiding.
a. Executive agrees that all operating and/or financial data
and projections, plans, contracts, agreements, literature, manuals, brochures,
books, schedules, correspondence and other materials furnished, disclosed or
otherwise made available to Executive by the Company or its Affiliates, or
secured through the efforts of Executive, relating to the business conducted by
the Company and/or its Affiliates, are and shall remain the property of the
Company and/or its Affiliates, and Executive agrees to deliver all such
materials, including all copies or abstracts thereof, to the Company upon the
termination of Executive's employment hereunder, or at any other time at the
Company's request.
b. Executive agrees that, except in the good faith performance
of his duties and responsibilities under this Agreement or as required by order
of a court or governmental
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agency having jurisdiction, he will not at any time during or after his
employment with the Company use, reveal, divulge or make known to any person or
entity any confidential or proprietary knowledge or information concerning the
Company or its Affiliates, including without limitation any such information
concerning any equipment, facilities, contracts, leases, operating and/or
financial data and projections, processes, developments, schedules, lists, plans
or other matters relating to the business of the Company or its Affiliates and
will retain all knowledge and information Executive acquired during his
employment therewith relating to the business of the Company or its Affiliates
in trust in a fiduciary capacity for the sole benefit of the Company, its
Affiliates and their respective successors and assigns. Executive's obligations
under this Section 5.b. shall not apply to any information that (i) is or
becomes known to the general public under circumstances involving no breach by
Executive of this Agreement, (ii) is generally disclosed to third parties
(excluding counsel, accountants, financial advisors, employees, agents and
material creditors of the Company) by the Company without restriction on such
third parties, or (iii) is approved for release by written authorization of the
Board.
c. During the Term and for a period of one (1) year
thereafter, Executive shall not (i) enter into the employment of, or act as a
consultant, director, officer, or employee of, or render any service or advice
to, any other business, partnership, association, corporation or other entity
engaged in the "public utility" industry within one or more of the six New
England States, other than the Company or any Affiliate (a "Competing
Business"), or (ii) invest or otherwise acquire any interest, whether as a
shareholder, lender, partner, proprietor, vendor or otherwise, in any Competing
Business (excluding ownership of less than 2% of a class of securities of a
publicly-traded company) "Public utility" shall mean for the purposes of this
Section 5.c. any company which directly or indirectly conducts the business of
or owns or operates facilities used for the generation, transmission, sale or
distribution of electric energy for sale.
d. During the Term and for a period of two (2) years
thereafter, Executive will not, directly or indirectly, entice, induce or in any
manner influence any person who is, or shall have been during such period, in
the service of the Company, to leave such service for the purpose of engaging in
a Competing Business, or being employed or engaged by or otherwise associated
with any person or entity which is a Competing Business.
e. The provisions of this Section 5 shall survive the
termination of this Agreement and the termination of Executive's employment with
the Company and shall run to and inure to the benefit of the Company and its
successors and assigns. Executive represents, warrants and acknowledges that he
has carefully read this Section 5, that he has had an opportunity to have the
provisions contained herein explained to him by his attorney, and that he
understands the provisions contained herein. Executive further acknowledges
that, by reason of his training, skills, experience and employment hereunder,
the services to be rendered by him under the provisions of this Agreement and
their value to the Company are of a special, unique and extraordinary character
and that it would be difficult or impossible to replace such services, and he
further acknowledges that a violation by him of any of the provisions of this
Section 5 could cause continuing material and irreparable injury to the Company
and that in such event money damages would not be readily calculable and the
Company would not have an adequate remedy at law. Executive acknowledges and
agrees that (i) the restrictions under this Section 5
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are reasonable and will not interfere with Executive's ability to earn a
livelihood or impose upon him any undue hardship, and (ii) any breach of the
covenants, provisions and restrictions contained in this Section 5 shall cause,
and shall he deemed to be, a fundamental and material breach of Executive's
fiduciary and contractual obligations to Employer. Therefore, Executive agrees
that the Company shall be authorized and entitled to obtain from any court of
competent jurisdiction, interim and permanent equitable relief, including
without limitation, injunctive relief, in the event of any such breach or
threatened breach, together with payment of reasonable attorneys' fees and
disbursements and any other costs of enforcement incurred in connection with
such breach or threatened breach. These rights and remedies shall be cumulative
and shall be in addition to any other rights or remedies whatsoever to which the
Company shall otherwise be entitled hereunder, at law or otherwise, including
the right to seek damages (including any consequential damages) which any court
of competent jurisdiction may deem appropriate.
6. Termination of Employment. The term of employment may terminate upon
the occurrence of any of the following events:
a. Termination Due to Death. Executive's employment hereunder
shall terminate upon his death. In such event his estate or his beneficiaries,
as the case may be, shall be entitled to:
(1) Salary accrued through the date of death;
and
(2) The right to exercise any or all of his
outstanding stock options (the "Options"),
subject to the terms of the Stock Option
Agreements (the "Option Agreements") and the
applicable Stock Option Plans.
b. Termination Due to Disability. The Company may terminate
Executive's employment at any time on written notice after his "Disability."
"Disability" shall mean Executive's inability by reason of illness or injury
substantially to perform his duties and responsibilities under this Agreement,
as reasonably determined by a majority of the Board based upon the report of a
reputable physician designated by the Board (whom Executive shall permit to
examine him) , for a period of eight-four (84) consecutive days or one hundred
(100) days in any twelve (12) month period. In the event Executive's employment
is terminated due to his Disability, he shall be entitled to receive the
following:
(1) The amount of any disability or retirement
benefits provided to Executive by the
Company under the provisions of any Company
plan for its employees with respect to which
Executive is qualified; and
(2) Any accrued and unpaid salary through the
effective date of termination.
c. Involuntary Termination for Cause. The Company may
terminate Executive's employment at any time for "Cause" on written notice.
"Cause" shall mean (i) Executive is convicted of a felony, or a misdemeanor
involving moral turpitude; or (ii) the Board
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determines in good faith, after reasonable notice to Executive and an
opportunity for Executive to present his views of the relevant facts and
circumstances, that Executive has (A) materially failed or refused to perform
competently his duties and responsibilities (after notice and opportunity to
cure if such material failure or refusal can be cured) as provided in this
Agreement; (B) has breached his duty of loyalty to, or committed any act of
fraud, theft or dishonesty against, the Company or any of its Affiliates; or (C)
has violated any of his material obligations under this Agreement after written
notice and a reasonable opportunity (not to be less than ten (10) days) to cure
such default. In the event of such termination for Cause, all rights and
benefits of Executive under this Agreement (including without limitation all
unexercised options) shall immediately terminate and in no event shall the
Company be obligated to pay Executive any compensation (other than salary and
accrued and vested benefits through the date of termination) with respect to any
period before or after the date of such termination.
d. Voluntary Termination by Executive. Executive may terminate
this Agreement in a "Qualifying Termination" (as defined in Section 7.d. below).
e. Other Termination. In the event of the termination of
Executive's employment (i) by the Company other than pursuant to the provisions
of Subsection 6.a., b. or c. above, or (ii) by Executive following a material
breach by the Company of its obligations under this Agreement which remains
uncured after written notice to the Company and a reasonable opportunity (not to
be less than ten (10) days) to cure such breach:
(1) Executive shall be entitled to receive in
cash an amount equal to his annual salary
from the effective date of such termination
through the Expiration Date; provided,
however, that such sum shall be offset by
the amount of any compensation earned by
Executive through other employment from the
effective date of such termination through
the Expiration Date (it being understood
that Executive shall be under no obligation
to mitigate his damages in such event);
(2) All Options previously issued to Executive
(other than the 25,000 "contingent options"
awarded to the Executive in 1996 (the
"Contingent Options")) shall immediately
become exercisable (as provided in the
Option Agreements); and
(3) The covenants contained in Subsections 5.c.
and 5.d. shall not apply.
If this Agreement expires by its terms on the Expiration Date, the
covenant contained in Subsection 5.c. shall only remain in force (i) for (6)
months instead of one year and then only if (ii) the Company elects, in its sole
discretion, to continue paying the Executive 50% of his then-currently bi-weekly
base salary during such restricted period.
7. Change of Control.
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a. In the event that Executive's employment by the Company
terminates in a Qualifying Termination (as defined in Subsection 7.d. below):
(1) Executive shall be entitled to receive in
cash upon the Qualifying Termination an
amount equal to the greater of (a) the sum
of his annual salary from the date of the
Qualifying Termination through the
Expiration Date or (b) twice his annual
salary immediately prior to the date of the
Change in Control;
(2) All Options (including the Contingent
options) previously issued to Executive
shall immediately become exercisable in
accordance with the option Agreements; and
(3) The covenants contained in Subsections 5.c
and 5.d. shall not apply;
Provided, however, that if $500,000 exceeds the sum of (a) the amount payable to
Executive under Section 7.a(l), plus (b) the Net Value of the Options (as
defined below) exercisable under 7.a(2), the Company will also, subject to
subsection 7.b. below, make a cash payment to the Executive equal to the amount
of such excess. As used herein, the "Net Value of the Options" shall be equal to
the difference obtained by subtracting the aggregate exercise price payable by
Executive upon the exercise of the Options from the aggregate fair market value
(as of the date of Change of Control) of the Common Shares issuable upon such
exercise.
b. Payments under this Subsection 7.a. shall be made without
regard to whether the deductibility of such payments (or any other "parachute
payments," as that term is defined in Section 28OG of the Internal Revenue Code
of 1986, as amended (the "Code"), to or for the Executive's benefit) would be
limited or precluded by Section 280G and without regard to whether such payments
(or any other "parachute payments" as so defined) would subject the Executive to
the federal excise tax levied on certain "excess parachute payments 11 under
Section 4999 of the Code; provided that if the total of all "parachute payments"
to or for the Executive's benefit, after reduction for all federal, state and
local taxes (including the tax described in Section 4999 of the Code, if
applicable) with respect to such payments (the "Total After-Tax Payments"),
would be increased by the limitation or elimination of any payment under this
Subsection 7.a., amounts payable under this Subsection 7.a. shall be reduced to
the extent, and only to the extent, necessary to maximize the Total After-Tax
Payments. The determination as to whether and to what extent payments under this
Subsection 7.a. are required to be reduced in accordance with the preceding
sentence shall be made at the Company's expense by Xxxxxx Xxxxxxxx or by such
other certified public accounting or law firm as the Board may designate prior
to a Change of Control of the Company. In the event of any underpayment or
overpayment under this Subsection 7.a. as determined by Xxxxxx Xxxxxxxx (or such
other firm as may have been designated in accordance with the preceding
sentence) , the amount of such underpayment or overpayment shall forthwith be
paid to the Executive or refunded to the Company, as the case may be, with
interest at the applicable federal rate provided for in Section 7872 of the
Code.
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c. For purposes of this Agreement, a "Change of Control"
occurs upon the occurrence prior to the Expiration Date of any event specified
below:
(1) any corporation, person or other entity
(other than the Company, a majority-owned
subsidiary of the Company, any employee
benefit plan maintained by the Company or
any subsidiary or one of the two largest
shareholders as of the Commencement Date
(any such person, a "Permitted Acquiror")
acquires or becomes the holder of more than
fifty percent (50%) of the Company's voting
equity securities, or
(2) the stockholders of the Company approve a
definitive agreement to merge or consolidate
the Company with or into another corporation
(other than a subsidiary of the Company) or
to sell or otherwise dispose of all or
substantially all of its assets.
For the purposes of clarification and without limiting the preceding sentence,
the sale of all of the outstanding capital stock or assets of Great Bay Power
Corporation and Little Bay Power Corporation shall not constitute a sale of
substantially all of the Company's assets if, after such transaction, the
Company continues to have material business operations; provided that ownership
of securities of HoustonStreet Exchange, alone, shall not constitute material
business operations.
d. For purposes of this Agreement, a "Qualifying Termination"
occurs if, prior to the earlier of the Expiration Date or the second anniversary
of a Change of Control, (a) the employment of Executive is terminated other than
for Cause or (b) Executive resigns following any material impairment or material
adverse change in his working conditions, -authority, autonomy, compensation or
benefits immediately prior to the Change of Control, as the same may from time
to time have been improved, or otherwise altered with the written consent of
Executive such that his position within the Company or its successor is no
longer reasonably comparable (a "Material Adverse Change"). An assignment by the
Company of all rights and obligations hereunder to an entity into or with which
the Company merges or consolidates or to which the Company transfers
substantially all of its assets shall not constitute a Material Adverse Change
in and of itself so long as such entity fully assumes the Company's obligations
under this Agreement. In the event that both Subsection 6.e. and this Subsection
7.d. are applicable, the provisions of this Section shall exclusively govern
Executive's rights and remedies.
8. Miscellaneous.
a. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New Hampshire without
reference to principles of conflict of laws. Any dispute, action or proceeding
arising hereunder shall be maintained in the state or federal courts located in
New Hampshire and each party hereto consents to service of process in the manner
provided in Subsection b. of this Section 8 (which shall constitute "personal
service").
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b. Any notice given to a party shall be in writing and shall
be deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the party concerned at the address indicated below or to such other address as
to which such party may subsequently give such notice:
If to the Company:
BayCorp Holdings, Ltd.
00 Xxxxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Attention: Compensation Committee Chairman
If to Executive: 000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000
Copies of all notices to the Company shall be sent to Xxxxxxx X. Xxxxxxx,
McLane, Graf, Xxxxxxxxx & Middleton Professional Association, 000 Xxx Xxxxxx, XX
Xxx 000, Xxxxxxxxxx, XX 00000-0000.
c. This Agreement is personal to Executive and shall not be
assignable by Executive, except that Executive's rights to compensation and
benefits may be transferred in the event of death or Disability by will or
operation of law (subject to the terms hereof and of the applicable plans).
Subject to the provisions of Section 7.d. above, the Company may assign (without
Executive's consent) all rights and obligations hereunder to an entity into or
with which the Company merges or consolidates or to which the Company transfers
substantially all of its assets. This Agreement shall be binding upon and inure
to the benefit of Executive's heirs and legal representatives and shall be
binding upon and inure to the benefit of the Company and its successors and
assigns.
d. Executive and the Company each represents and warrants to
the other that such party is fully authorized and empowered to enter into this
Agreement and that the entry into and performance of such party's obligations
hereunder will not violate any agreement between such party and any other person
or entity. Executive represents and warrants that he has made a thorough
investigation of and is knowledgeable about the facts and circumstances
affecting the business and prospects of the Company.
e. This Agreement contains the entire understanding and
agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect thereto.
No provision hereof may be amended unless such amendment is agreed to in writing
and signed by Executive and an authorized officer of the Company acting at the
direction of the Board. No waiver by either party of any breach by the other
party of any condition or provision contained herein to be performed by such
other party shall be deemed a waiver of a similar or dissimilar condition or
provision at the same or any prior or subsequent
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time. Any waiver must be in writing and signed by Executive or an authorized
officer of the Company, as the case may be.
f. Any provision of this Agreement that may be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions thereof. Any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by law, the parties hereby waive any
provision of law that renders any provision of this Agreement prohibited or
unenforceable in any respect. in addition, in the event of any such prohibition
or unenforceability, the parties agree that it is their intention and agreement
that any such provision, as written, in any jurisdiction shall nonetheless be in
force and binding to the fullest extent permitted by the law of such
jurisdiction as though such provision had been written in such a manner and to
such an extent as to be enforceable therein under the circumstances. Without
limitation of the foregoing, with respect to the restrictive covenant contained
herein, if it is determined that any such provision is excessive as to duration,
scope or area, it is intended that it nonetheless be enforced for such shorter
duration or with such narrower scope or area as will render it enforceable, and
the court making such determination shall have the power to modify such
duration, scope or area, or all of them, and/or to delete specific words or
phrases, and such provision shall then be applicable and enforceable in such
modified form.
g. The Prior Agreement (except with respect to Section 4.b
thereof) is hereby terminated and of no further force or effect.
The parties hereto have signed this Employment Agreement as of the date
first written above.
BAYCORP HOLDINGS, LTD.
By: /s/ Xxxxxxxx X. Xxxxxxx
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Xxxxxxxx X. Xxxxxxx, Director
/s/ Xxxxx X. Xxxxxx Xx.
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Xxxxx X. Xxxxxx Xx.
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