CHANGE OF CONTROL AGREEMENT BY AND BETWEEN JULIE H. EDWARDS AND SOUTHERN UNION COMPANY
Exhibit 10.2
CHANGE
OF CONTROL AGREEMENT BY AND BETWEEN
XXXXX
X. XXXXXXX AND SOUTHERN UNION COMPANY
This
Change of Control Agreement (this "Agreement") is made and entered into
effective July 5, 2005 (the “Effective Date”), among XXXXX X. XXXXXXX (the
"Employee"), an individual residing at 0000 Xxxxxxxxx, Xxxxxxx, Xxxxx 00000, and
SOUTHERN UNION COMPANY (the "Company"), a corporation organized under the laws
of the state of Delaware.
WHEREAS,
the Employee is currently employed by the Company as Senior Vice President and
Chief Financial Officer;
WHEREAS,
the Company desires to enter into this Agreement with the Employee to provide an
additional incentive for the Employee to remain employed with the Company during
any period in which the Company may consider and/or may enter into a transaction
resulting in the sale or other disposition of the Company;
WHEREAS,
the Employee desires to enter into this Agreement to obtain financial protection
in the event that a Change of Control of the Company, as defined below, results
in termination of the Employee's employment; and
WHEREAS,
the Company will provide the benefits set forth herein to the Employee upon a
Triggering Event, as defined below, following a Change of Control of the Company
under the terms and conditions set forth in this Agreement.
NOW
THEREFORE, in consideration thereof and of the mutual covenants contained
herein, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Consequences
of Change of Control.
A. "Change
of Control" shall mean the closing of a transaction pursuant to which all or
substantially all of the assets or stock of the Company are sold or otherwise
transferred to an Independent Third Party. "Independent Third Party" means any
entity, other than the Company or any affiliate of the Company.
B. In the
event of a Change of Control during the Term (as hereinafter defined), the
Employee shall be entitled to a cash payment equal to the product of (x)
$41,666.67 and (y) the number of months remaining in the Term at the time of a
Triggering Event (the "Amount"), payable as described below in Section 1(D),
upon the occurrence of any of the following three (3) events (each a "Triggering
Event"):
|
i. |
The
Employee is not offered a position effective upon and after the Change of
Control; or |
|
ii. |
The
Employee is offered, and declines, a position effective upon and after the
Change of Control with responsibilities and compensation that are not
substantially equivalent to those held by the Employee before the Change
of Control; or |
|
iii. |
Within
twelve (12) months of the Change of Control, (a) the Employee is
involuntarily terminated without Cause (as hereinafter defined), (b) the
Employee is transferred to a position with responsibilities and
compensation that are not substantially equivalent to those held by the
Employee before the Change of Control, and the Employee voluntarily
terminates her employment within thirty (30) days following such transfer,
or (c) the Employee is relocated to a place of employment that is greater
than fifty (50) miles from the location of her current place of
employment, and the Employee voluntarily terminates her employment within
thirty (30) days following notice of such
relocation; |
provided,
however, under
no circumstances shall the Employee's death or disability constitute a
Triggering Event for purposes of this Agreement. For purposes of this Agreement,
“disability” shall mean a medical condition that qualifies the Employee for
benefits under the then existing short- or long-term disability plans or
policies of the Company. For purposes of this Agreement, compensation will be
deemed to be substantially equivalent if, following the Change of Control, the
Employee is eligible to receive total direct compensation (including base
salary, bonus opportunity and incentive compensation (both short and
long-term)), that is at least ninety percent (90%) of the value of the total
direct compensation that the Employee was eligible to receive from the Company
immediately prior to the Change of Control. Whether the Employee's
responsibilities are substantially equivalent will be determined in good faith
by the Company's Board of Directors.
C. Upon a
Triggering Event, payment of any Amount shall offset any severance, separation
or termination payments otherwise due from the Company or any of its affiliates
under any other contract, plan, policy, arrangement or severance plan, but shall
not be in lieu of any other benefits to which the Employee is entit1ed under the
terms of the Company's compensation and/or benefit plans that do not provide for
duplicative payments and benefits. Any payments provided for hereunder shall be
paid net of any applicable withholding required under federal, state or local
law.
D. Upon a
Triggering Event, fifty percent (50%) of the Amount shall be divided into three
(3) equal payments, which shall be paid in three consecutive monthly payments
commencing on the last day of the month in which the Triggering Event occurs,
and the remaining fifty percent (50%) of the Amount shall be paid in a single
lump-sum payment at the end of such three-month period, provided that the
Employee executes and does not revoke a waiver and release of claims as
described below.
E. In the
event the Employee accepts any offer of employment with the Company, its
affiliates or an Independent Third Party acquirer of all or substantially all of
the assets or stock of the Company (an "Acquirer"), even if the position does
not have substantially equivalent responsibilities and compensation, the
Employee shall not be eligible for any severance, separation or similar
termination payments whether pursuant to Section 1(B)(ii) of this Agreement or
any other contract, plan, policy, arrangement or severance plan of the Company
or its affiliates.
F. If,
during the Term (as hereinafter defined), the Employee's employment with the
Company is terminated due to a voluntary separation or termination for Cause,
such separation shall not be deemed to be due to a Change of Control and shall
not entitle the Employee to payment of the Amount as described in Section 1(D)
above. If, during the Term, the Employee's employment with the Company is
involuntarily terminated without Cause prior to a Change in Control, but in
connection with, or in contemplation of, a Change of Control, such termination
shall be deemed to be due to a Change of Control and shall entitle the Employee
to payment of the Amount as described in Section 1(D) above, and the Employee
shall not be entitled to such severance, separation or similar termination
payments, if any, under such other contract, plan, policy, arrangement or
severance plan of the Company or its affiliates applicable to the
Employee.
G. In the
event that the Employee is paid all or any portion of the Amount in accordance
with the terms of this Agreement and subsequently accepts a position with an
Acquirer, or an affiliate of an Acquirer, on or before the first anniversary of
the Triggering Event that entitled the Employee to payment of the Amount, the
Employee will be required to repay all payments made pursuant to this Agreement
within thirty (30) days of the Employee's hire date with the
Acquirer.
H. "Cause"
means a good faith determination by the Company or an Acquirer of the
Employee's: (i) gross negligence, willful misconduct, or neglect in the
performance of her duties and services as an employee; (ii) conviction of a
felony or other crime involving moral turpitude; (iii) breach of any provision
of this Agreement; (iv) violation of any material policy of the Company or an
Acquirer, their affiliates or their successors; (v) violation of any federal,
state, or local law or regulation in the performance of her employment duties;
or (vi) continued failure to satisfactorily perform her employment duties
following thirty (30) days notice by the Company, an Acquirer or their
respective affiliates or successors.
I. Waiver
and Release of Claims. Prior
to, and as a condition of, the receipt of any Amount under this Agreement, the
Employee shall be required to, and acknowledges that she shall, execute a waiver
and release of all rights and claims against the Company and its affiliates,
parent corporations, predecessors, successors and assigns, officers, directors
and other employees, provided by the Company and substantial1y in the form
annexed hereto as Exhibit "A".
J. Upon a
Triggering Event, in the event that the Employee elects 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 the Employee for the cost of such
continuation coverage for a period equal to the remainder of the Term (i.e.,
through June 30, 2007). In the event that the Employee obtains medical and
dental coverage from another employer during this period, the Employee agrees to
report any such coverage to the Company and the Company’s reimbursement
obligation shall cease. Following June 30, 2007, any further continuation of
coverage pursuant to COBRA shall be at the Employee’s 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.
2. Term
of Agreement.
This
Agreement shall commence as of the Effective Date and shall continue for a
period of two (2) years unless earlier terminated in accordance with the terms
hereof (the "Term"). Notwithstanding the immediately preceding sentence, upon
any Change of Control during the Term, this Agreement will remain effective for
a period of one (1) year following the Change of Control. The Employee's
repayment obligations in Section 1(G) shall survive the termination of this
Agreement.
3. Miscellaneous.
A. Assignment
or Anticipation of Amount. Neither
the Employee, nor any person claiming any right under this Agreement by or on
behalf of the Employee, shall have the power to anticipate, encumber or dispose
of any right, title, interest or benefit hereunder in any manner or any time,
until the same shall have been actually distributed free and clear of the terms
of this Agreement.
B. No
Right to Continued Employment. Nothing
in this Agreement shall confer on the Employee any right to continued employment
or affect in any way the right of the Company to terminate the Employee's
employment at any time with or without cause or notice.
C. Effect
on Other Compensation. The
payments under this Agreement are neither intended nor should be construed as
being additions to base salary or included in calculations of benefits, salary
increases, other bonus
payments or severance.
.
D. Governing
Law; Venue. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, notwithstanding any conflict of law principles, and without
regard to the place of execution or performance of employment duties, or
residence of the parties. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York. The Employee and Company agree to submit to the nonexclusive jurisdiction
of the state and/or federal courts located in New York City for the resolution
of any dispute which may arise hereunder.
E. Entire
Agreement. This
Agreement constitutes the entire agreement of the parties with regard to the
specific subject matter hereof and contains all of the covenants, promises,
representations, warranties and agreements between the parties with respect to
such subject matter. Each party to this Agreement acknowledges that (x) no
representation, inducement, promise or agreement, oral or written, has been made
by either party with respect to such subject matter, that is not embodied
herein, and (y) no agreement, statement or promise relating to the subject
matter hereof that is not contained in this Agreement shall be valid or binding.
Any modification of this Agreement will be effective only if it is in writing
and signed by each party whose rights hereunder are affected
thereby.
F. Successors
and Assigns. This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective heirs, executors and administrators or successors and permitted
assigns, as the case may be.
G. Notice. For the
purpose of this Agreement, notices and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, (x) as to the Company, addressed to the Chief
Operating Officer and the General Counsel of the Company at the Company's
headquarters, and (y) as to the Employee, to the address set forth in the
Company's employment records for the
Employee.
H. Validity. The
invalidity or unenforceability of any provision 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.
I. Amendment;
Modification. No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by the
parties hereto. No waiver by either party hereto at any time of any breach by
the other party hereto of, or compliance with, any conditions or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
J. Counterparts. This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together will constitute one and the same
instrument.
8
IN
WITNESS WHEREOF, the parties hereto have caused the Agreement to be executed and
effective on the day and year first above written.
SOUTHERN
UNION COMPANY
By: /s/Xxxxxx
X. Xxxxx
Xxxxxx X.
Xxxxx
President
and
Chief
Operating Officer
Dated: July 1,
2005
XXXXX
X. XXXXXXX
/s/Xxxxx
X. Xxxxxxx
Dated: July 1,
2005
8
EXHIBIT
A
GENERAL
RELEASE
As a
condition to receiving any portion of the Amount under and as defined in that
certain Change of Control Agreement dated as of July 5, 2005 (the “Agreement”)
by and between the Company and Xxxxx X. Xxxxxxx (the “Employee”), I, Xxxxx X.
Xxxxxxx, 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 I 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 I sign this General Release.
This
General Release shall apply to any Claim of any type, including, without
limitation, any and all Claims of any type that I 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, the Texas Labor Code, the
Texas Commission on Human Rights Act, the New York State and New York City Human
Rights Laws, the
Pennsylvania Human Relations Act, 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 me, and
shall further apply, without limitation, to any and all Claims in connection
with, related to or arising out of my employment, or the termination of my
employment, with the Company, and all Claims for alleged tortious, defamatory or
fraudulent conduct; provided,
however, that
nothing contained in this General Release shall (i) except as otherwise
expressly set forth in the Agreement, impair any vested benefits I may have, as
of the date hereof, under any “employee benefit plans” as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974 (as amended),
maintained by the Company in the course of my employment; or (ii) be construed
to prohibit me from bringing appropriate proceedings to enforce the Agreement.
By signing this General Release, I represent that I will not be entitled to any
personal recovery in any action or proceeding that may be commenced on my behalf
arising out of the matters released hereby.
I have
been advised that I have the right to consult with an attorney of my choosing
prior to signing this General Release and that I have been given the opportunity
to review this General Release with an attorney and have availed myself of such
right. I also understand and agree that the Company is under no obligation to
offer me the payment described herein and that I am under no obligation to
consent to this General Release. I understand the terms of this General Release
and have signed this General Release freely and voluntarily.
I
understand that I have twenty-one (21) calendar days to consider the terms of
this General Release, although I may sign it sooner if I wish. Furthermore, once
I have signed this General Release, I shall have seven (7) calendar days from
the date that I sign to revoke my consent by delivering timely written notice of
revocation to the Company. In the event I revoke my consent, I shall not be
entitled to receive the payment described herein. After such seven (7) day
period expires, this General Release becomes final.
__________________________________
Xxxxx X.
Xxxxxxx
Sworn to
before me this
_________
day of __________________, 200__
__________________________________
Notary
Public
