EMPLOYMENT AGREEMENT
AGREEMENT dated as of December 1, 1998, between
ENERGYNORTH, INC., a New Hampshire corporation (the "Company") and
XXXXXX X. XXXXXXXX, residing in Bedford, New Hampshire (the
"Executive').
WHEREAS, the Executive has been employed by the Company
or its subsidiaries for more than thirty (30) years in various
executive positions and has performed valuable services to the
Company; and
WHEREAS, the Executive is willing to continue in the
employ of the Company, and the Company desires to retain the
services of the Executive;
NOW, THEREFORE, in consideration of the foregoing and the
respective covenants and agreements of the Executive and the
Company herein contained, the parties hereto agree as follows:
1. Employment.
The Company agrees to employ the Executive and may assign
the Executive to work for it and for any subsidiary or affiliated
company, and the Executive agrees to perform the duties assigned to
him upon the terms and conditions herein provided.
2. Position and Responsibilities.
The Company shall employ the Executive and the Executive
agrees to serve, as President & Chief Executive Officer or any
other comparable office to which he is elected for the term and on
the conditions hereinafter set forth. The Executive agrees to
perform such services not inconsistent with his position as shall
be assigned to him by the Board of Directors of the Company
("Board'). If elected, the Executive shall also serve as an
officer of any of the Company's subsidiary or affiliated
corporations.
3. Term of Employment:
The period of the Executive's employment under this
Agreement shall be deemed to have commenced as of the date first
mentioned above and shall continue through March 31, 2003.
4. Compensation.
For all services to be rendered by the Executive in any
capacity during the period of his employment under this Agreement,
including, without limitation, services as an executive, officer,
director, or member of any committee of the Company or of any
subsidiary, affiliate or division thereof, the Company will pay or
cause to be paid to the Executive and will provide or cause to be
provided to the Executive the following:
(a) Salary. The Executive shall be compensated by
the Company for his services in such capacities at the aggregate
base salary rate of two hundred seventy thousand dollars ($270,000)
per year or such higher rate as the Board may, in its discretion,
determine, payable in equal installments no less frequently than
monthly. In addition, the Executive shall be compensated by the
Company crediting to his Deferred Compensation Account, maintained
in accordance with the Deferred Compensation Agreement between the
Executive and the Company, as amended or replaced, such amount as
the Board may, in its discretion, determine, payable in equal
installments no less frequently than monthly.
(b) Incentive Compensation. The Executive shall be
entitled to participate in any existing or future incentive
compensation, stock option, stock purchase or other bonus plans
covering the employees of the Company (or any subsidiary or
affiliate) on the same basis as other officers, but in any event,
no less favorable than that in effect on December 1, 1998 and where
applicable, in any such plans of any subsidiary, affiliate or
division thereof from which he receives compensation.
(c) Deferred Compensation. The Executive shall
have the right to defer what would otherwise be current
compensation in accordance with a Deferred Compensation Agreement
entered into between the Executive and the Company effective as of
November 30, 1993, as amended or replaced. The Executive, may, in
addition, be compensated by the Company crediting amounts to his Deferred
Compensation Account, maintained in accordance with such Deferred
Compensation Agreement, as such intervals during each year as the
Company may determine.
(d) Automobile. The Company shall provide to the
Executive an automobile for his exclusive use in accordance with
Company policy, and in any event on a basis no less favorable than
that enjoyed by him at the date of this Agreement.
(e) Vacations. The Executive shall be entitled to
vacation pursuant to that policy applicable to other employees of
similar rank and stature at the Company.
5. Expenses.
The Company (or its subsidiaries or affiliates, as the
case may be) shall reimburse the Executive for all reasonable
expenses, including travel, and other disbursements incurred by him
for or on behalf of the Company (or its subsidiaries or affiliates)
in the performance of his duties hereunder consistent with the
current reimbursement policies of the Company, but in no event less
favorable than the reimbursement policies in existence on the
effective date of this Agreement.
6. Participation in Benefit and Incentive Plans.
The Executive shall participate in any retirement, pension, group
life, health or accident insurance, stock option, stock purchase,
restricted stock, bonus or any other employee benefit or incentive
plans generally available to the executives and employees of the
Company (or any subsidiary or affiliate), whether now in force or
hereafter adopted, in accordance with their terms. In the event
the Executive is employed by the Company pursuant to this Agreement
and elects to retire under the provisions of the EnergyNorth, Inc.
Retirement Plan for Salaried Employees ("Pension Plan"), the
Executive shall be entitled to the same post-retirement medical,
life and other applicable benefits that
other officer level executives at the Company receive upon
retirement in accordance with the Company's then existing
administrative policies; and further, the Executive shall be
entitled to receive post-retirement medical, life and other
applicable benefits that other officer level executives at the
Company receive upon retirement in accordance with the Company's
then existing administrative policies if within five years after a
Change of Control of the Company, the Executive is discharged
without Cause or resigns for Good Reason as each of those terms is
defined in the Management Continuity Agreement ("MCA") between the
Executive and the Company, dated as of December 7, 1995 as amended.
7. Termination of Employment.
(a) Discharge for Cause. Notwithstanding any of
the foregoing provisions of this Agreement, the Executive may, at
any time during the term of this Agreement, be discharged by the
Board for Cause. For the purposes of this Section 7 cause shall
mean: conviction of a felony or crime involving an act of moral
turpitude, dishonesty, or misfeasance which substantially
interferes with the orderly business of the Company or any of its
subsidiaries, action that directly or indirectly
causes the Company or its subsidiaries to suffer substantial loss or
damage, refusal to follow or material neglect of reasonable
requests of the Company made pursuant to this Agreement, and conduct
that substantially interferes with or damages the standing or
reputation of the Company or any of its subsidiaries. In the event
of termination of employment for Cause, this Agreement and all of the
rights and obligations of the parties hereto shall forthwith terminate,
except where this Agreement expressly provides that any provisions survive
termination of this Agreement.
(b) Termination by the Company. If the Company
terminates the Executive prior to termination of this Agreement
(except for Cause), the Company shall pay semi-
monthly to the Executive, or if he is not living, to his estate or
to his beneficiary designated hereunder, as the case may be, as
severance pay and as liquidated damages an amount equal to the
average monthly rate of salary paid and accrued plus one-twenty-
fourth (1/24) of the previous three years' annual average total
incentive compensation award earned under the EnergyNorth, Inc.
Key Employee Performance and Equity Incentive Plan to the
Executive, including any amounts the Executive has elected to
defer, during the 12 months immediately prior to his termination of
employment. Such payments shall commence on the last day of the
month following the date of his termination of employment and shall
continue through the end of the term of this Agreement. The
Executive shall continue to receive medical, dental, vision and
life insurance benefits paid by the Company which shall continue
through the end of the term of this Agreement and at the time the
Executive elects to retire under the provisions of the Pension
Plan, the Executive shall receive post-retirement medical benefits
in accordance with the Company's administrative policies in effect
at the date of termination.
The Executive shall be required to mitigate his damages
by attempting to secure comparable employment, and if he does
accept other employment, any benefits or payments received pursuant
to this Section 7 shall be reduced by any compensation earned
and/or the value of other benefits received (other than qualified
pension benefit plans) as a result of such employment.
In addition to the severance payment described in the
first paragraph of this Section 7(b), if the Company terminates the
Executive prior to the termination of this Agreement (except for
Cause), the Company shall pay to the Executive in one payment,
within ten days of the Date of Termination (as defined below), an
amount of cash equal to the product of (1) the number of shares of
Company Common Stock forfeited by the Executive pursuant to Section
9.1 of the EnergyNorth, Inc. Key Employee Performance and Equity
Incentive Plan and (2) the average closing prices of
Company Common Stock on the New York Stock Exchange on the five
trading days ending on the Date of Termination (as defined below).
If the Company terminates the Executive prior to the
termination of this Agreement, the Company's obligations to the
Executive shall be limited to those specified in this Section 7(b).
It is understood that the Company shall not be under any obligation
to make payments pursuant to this Section 7(b) upon any termination
of employment which gives rise to payments under the MCA.
(c) Executive Default or Death. If the Executive
defaults hereunder, or is unwilling to perform services hereunder,
or dies while employed, the Company shall have no further
obligation hereunder to make payments to the Executive beyond the
Date of Termination (as defined below) of employment.
(d) Disability.
(i) In the event that the Executive, because
of accident, disability or physical or mental illness, is incapable
of performing the essential functions of the job with or without
reasonable accommodation, the Company shall have the right to
terminate the Executive's employment under this agreement upon
thirty (30) days' written notice to the Executive. In the event of
such determination, the Company shall make semi-monthly payments to
the Executive in an amount equal to the monthly rate of salary paid
and accrued to the Executive in the most recent month in which he
was paid prior to the determination of his disability plus one-
twenty-fourth (1/24) of the previous three years' annual average
total incentive compensation award earned under the EnergyNorth,
Inc. Key Employee Performance and Equity Incentive Plan, reduced by
the amount of monthly payments made under any long-term disability
insurance or plan, if any. Such semi-monthly payments shall
continue for the number of months remaining in the term of the
agreement following
the date of his disability. In addition, if the Executive becomes
disabled and the Executive has twenty (20) years or more of service
at the time of disability, the Company will continue to provide the
same medical, dental and life insurance benefits as provided to
other active employees until such time as the Executive elects to
retire under the provisions of the Pension Plan. Disability for
purposes of this section shall have the same meaning as provided
under any long-term disability policy of the Company which covers
the Executive, or, if none, as defined in the EnergyNorth, Inc.
Retirement Plan for Salaried Employees.
(ii) Prior to a determination of disability as
provided in Subsection (i) of this Section 7(d), if the Executive
fails to perform under this contract due to mental or physical
illness, the period of such failure to perform prior to such
determination of disability but subsequent
to any accrued sick days, vacation days and reasonable leaves of
absence shall be considered paid leave, and the Company shall continue
to make salary payments to the Executive for the duration of such paid
leave. Any period during which the Executive is receiving benefits
under any long-term disability plan of the Company shall be
considered unpaid leave.
(e) Notice of Termination. Any termination by the
Company for Cause (as such term is defined in Section 7(a)
hereunder), shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 15. For
purposes of this Agreement, a "Notice of Termination" means a
written notice which
(i) indicates the specific termination
provision in this Agreement relied upon,
(ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the
provision so indicated, and
(iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than 15 days
after the giving of such notice).
(f) Date of Termination. "Date of Termination" means
(i) if the Executive's employment is terminated
by the Company for Cause, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may
be,
(ii) if the Executive's employment is
terminated by the Company other than for Cause, death or disability
pursuant to Section 7 (d), the Date of Termination shall be the
date on which the Company notifies the Executive of such
termination, and
(iii) if the Executive's employment is
terminated by reason of death or disability pursuant of Section 7
(d), the Date of Termination shall be the date of death of the
Executive or the date the Executive is determined to be incapable
of performance in accordance with Section 7(d) of this Agreement,
as the case may be.
(g) Nothing under this Agreement shall affect the
Executive's right to receive payments under his Deferred
Compensation Agreement.
8. Executive's Obligations.
(a) Non-Competition. While receiving payments from
the Company under this Agreement or under the MCA, and for a period
of twelve months thereafter, the Executive will
not directly or indirectly, own, manage, operate, control or
participate in the ownership, management, operation or control of,
or be connected as an officer, employee, partner, director or
otherwise with, or have any financial interest in, or aid or assist
anyone else in the conduct of, any business (other than the
businesses of the Company) which is in direct competition with the
business conducted by the Company or any of its subsidiaries, in
any geographic area where such business is being conducted during
such period. Nothing in this Section 8, however, shall restrict
the right of the Executive to own, whether for himself or as a
fiduciary, not more than 1% of the equity securities of a company
any of the securities of a company any of the securities of which
are registered under Sections 11(b) or 11(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(b) Non-Disclosure. During the term of this
Agreement and thereafter, the Executive shall not, without the
written consent of the Board or a person authorized thereby,
disclose or use (except in the course of his employment hereunder
and in furtherance of the business of the Company or any
subsidiaries or affiliates thereof) any confidential information or
proprietary data of the Company or any of its subsidiaries or
affiliates thereof, including, without limitation, customer lists,
cost information or pricing information.
(c) Solicitation for Employment. While he is
receiving payments from the Company under this Agreement or under
the MCA, and for a period of six months thereafter, the Executive
will not, directly or indirectly, employ, solicit for employment,
or advise or recommend to any other person that they employ or
solicit for employment, any person employed at the time by the
Company or any of its subsidiaries for the purpose of competing
with the Company in such manner as is described in Subsection (a)
of this Section 8.
9. Successor.
The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the
Company to assume expressly 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 successor had taken place. As used in
this Agreement, "Company" shall mean the company as hereinbefore
defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
10. Entire Agreement.
This Agreement contains the entire understanding of the
Company and the Executive with respect to the subject matter
hereof. This Agreement shall supersede the agreement between the
Company and the Executive dated as of December 1, 1995 (the "Prior
Agreement") in all respects, unless this Agreement is held invalid
or unenforceable by a court of competent jurisdiction, in which
case the Prior Agreement shall remain, and shall be deemed to have
remained at all times, in full force and effect.
11. Arbitration.
Any dispute or controversy between the parties relating
to this Agreement shall be settled by binding arbitration in the
City of Manchester, State of New Hampshire, pursuant to the
governing rules of the American Arbitration Association and shall
be subject to the provisions of New Hampshire Revised Statutes
Annotated Chapter 542. Judgment upon the award may be entered in
any court of competent jurisdiction.
12. Assignability.
This Agreement is binding on and is for the benefit of
the parties hereto and their respective successors, heirs,
executors, administrators and other legal representatives. Neither
this Agreement nor any right or obligation hereunder may be
assigned by the Company (except to any subsidiary or affiliate) or
by the Executive.
13. Withholding.
The Company may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as shall be
permitted to be withheld pursuant to any applicable law or
regulation. The Company may withhold such other amounts as may be
permitted by law.
14. Amendment; Waiver.
This Agreement may be amended only by an instrument in
writing signed by the parties hereto, and any provision hereof may
be waived only by an instrument in writing signed by the party or
parties against whom or which enforcement of such waiver is sought.
The failure of either party hereto at any time to require the
performance by the other party hereto of any provision hereof shall
in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by either party hereto of a
breach of any provision hereof be taken or held to be a waiver of
any succeeding breach of such provision or a waiver of the
provision itself or a waiver of any other provision of this
Agreement.
15. Notices.
All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party
or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive:
Xxxxxx X. Xxxxxxxx
00 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
If to the Company:
Vice President of Human Resources
EnergyNorth, Inc.
0000 Xxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Copy:
Xxxxxxx Xxxxxxx, Esquire
McLane, Graf, Xxxxxxxxx & Middleton
000 Xxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
16. Validity.
The invalidity 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, nor shall the invalidity or
unenforceability of a portion of any provision of this Agreement
affect the validity or enforceability of the balance of such
provision. If any provision of this Agreement, or portion thereof
is so broad, in scope or duration, as to be unenforceable, such
provision or portion thereof shall be interpreted to be only so
broad as is enforceable.
17. Beneficiary.
The Executive hereby designates as his beneficiary under
this Agreement Xxxxxxxxx X. Xxxxxxxx, provided that the Executive
may change his beneficiary, or provide for alternate beneficiaries,
at any time by notifying the Company in writing of such change, and
no consent shall be required from the beneficiary or from the
Company.
18. Independent Covenants.
The obligations of the Executive set forth in paragraph 8
represent independent covenants by which the Executive is and will
remain bound notwithstanding any breach by the Company, and shall
survive the termination of this Agreement.
19. Applicable Law.
This Agreement shall be governed by and construed in
accordance with the substantive internal law and not the conflict
of law provisions of the State of New Hampshire.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date first mentioned above.
ENERGYNORTH, INC.
BY: /S/ XXXXXX X. XXXXX
XXXXXX X. XXXXX
Chairman - Board of Directors
/S/ XXXXXX X. XXXXXXXX
XXXXXX X. XXXXXXXX
