EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the 28th day of January, 2002, between UIL
Holdings Corporation, a Connecticut Corporation (the Company) and Xxxxxxx X.
Xxxxxxxx, an individual (the Officer),
WITNESSETH THAT
WHEREAS, the Company desires to employ the Officer as Vice President
Corporate Development and Administration of the Company, and the Officer desires
to be employed by the Company as its Vice President Corporate Development and
Administration,
NOW THEREFORE, in consideration of the foregoing and the respective
covenants and agreements of the parties herein contained, and the services to be
rendered to the Company pursuant hereto, and in order to provide an incentive to
the Officer to remain in the employ of the Company hereafter and, in particular,
in the event of any Change in Control (as herein defined) of the Company,
thereby establishing and preserving continuity of management, the Parties hereby
agree as follows:
(1) EMPLOYMENT
The Company hereby agrees to employ the Officer, and the
Officer hereby agrees to serve the Company, at the pleasure of the Board of
Directors of the Company, all upon the terms and conditions set forth herein.
(2) POSITION AND DUTIES
The Officer shall be employed by the Company as its Vice President
Corporate Development and Administration, or in such other equivalent or higher
officership position as the Company's Board of Directors may determine. The
Officer shall accept such employment and shall perform and discharge,
faithfully, diligently and to the best of the Officer's abilities, the duties
and obligations of the Officer's office and such other duties as may from time
to time be assigned to the Officer by, or at the direction of, the Board of
Directors of the Company; shall be or become the beneficial owner, directly or
indirectly, of shares of Common Stock of the Company in such amounts and within
such time periods as may be prescribed by, or determined in accordance with the
prescriptions of, the Board of Directors of the Company from
time to time and shall devote substantially all of the Officer's working time
and efforts to the business and affairs of the Company. Although a Change in
Control of the Company shall not affect the obligations of the Company and the
Officer as set forth in the two preceding sentences, at and after the date of
any Change in Control the Company's employment of the Officer shall also be
without diminishment in the Officer's management responsibilities, duties or
powers.
(3) PLACE OF PERFORMANCE
In his employment by the Company, the Officer shall be based within a
fifty(50)-mile radius of the current executive offices of the Company in New
Haven, Connecticut.
(4) COMPENSATION
(a) Base Salary. During the term of the Officer's employment
hereunder, the Officer shall receive a base salary (Base Salary) at an annual
rate of One Hundred Forty Thousand Dollars ($140,000). The Officer's Base Salary
rate shall be reviewed by the Board of Directors of the Company
contemporaneously with each review of the salary rates of the Company's other
officers by said Board of Directors, and may be revised upwards as a result of
any such review. The Officer's Base Salary may be revised downwards by said
Board of Directors contemporaneously with any general reduction of the salary
rates of the Company's other officers.
(b) Incentive Compensation. During the term of the Officer's
employment hereunder, the Officer shall be eligible to be designated by the
Board of Directors of the Company as a participant in each incentive
compensation program established for all officers of the Company.
For purposes of this Agreement, Total Compensation is defined,
as the sum of the Officer's Base Salary and any amount paid or payable pursuant
to this Section (4)(b).
(c) Change in Control Severance Plan. The Employee shall be
designated by the Board of Directors of the Company as a person covered by the
Change in Control Severance Plan of the Company (the UIL Plan), subject to all
of the terms and provisions of the UIL Plan. As used in this Section 4(c) only,
"Change in Control" shall have the meaning set forth in Section 4.1 of the UIL
Plan.
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(d) Business Expenses. During the term of the Officer's
employment hereunder, the Officer shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Officer (in accordance
with the policies and procedures established by the Board of Directors of the
Company from time to time for all of the Company's officers) in performing
services hereunder, provided that the Officer properly accounts therefor.
(e) Benefit Programs. During the term of the Officer's
employment hereunder, the Officer shall be entitled to participate in and
receive full benefits under all of the Company's employee benefit plans,
programs and arrangements for its officers, including, without limitation, its
retirement and pension plan programs. Nothing paid to the Officer under any such
plan, program or arrangement presently in effect or made available by the
Company in the future shall be deemed to be in lieu of compensation to the
Officer under any other Section of this Agreement.
(f) Vacations and Holidays. During the term of the Officer's
employment hereunder, the Officer shall be entitled to a maximum of five (5)
weeks paid vacation in each calendar year as determined by the Board of
Directors of the Company from time to time for all of the Company's officers,
and shall also be entitled to all paid holidays afforded by the Company to its
employees.
(5) TERMINATION
(a) The Officer's employment hereunder shall terminate upon
the Officer's death.
(b) The Board of Directors of the Company may terminate the
Officer's employment hereunder at any time, with or without Cause. Prior to the
date of a Change in Control, the Company shall be deemed to have Cause to
terminate the Officer's employment hereunder only upon the Officer's (A)
continued failure to perform and discharge the duties or obligations of the
Officer's office, or such other duties as may from time to time be assigned to
the Officer by, or at the direction of, the Board of Directors, faithfully,
diligently, and to the best of the Officer's abilities, in the opinion of a
majority of the members of the Board of Directors of the Company; or his failure
to be or become the beneficial owner, directly or indirectly, of shares of
Common Stock of the Company in such amounts or within such time periods as may
be prescribed by, or determined in accordance with the prescriptions of, the
Board of Directors of the Company from time to time; or his failure to devote
substantially all of his working time and efforts to the business and affairs of
the
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Company; or (B) misconduct that is injurious to the Company, or (C)
conviction of a felony involving the personal dishonesty or moral turpitude of
the Officer, or (D) total and permanent physical or mental disability, or (E)
absence from work on a full-time basis, due to physical or mental illness, for
an uninterrupted 365-day period. On and after the date of a Change in Control,
the Company shall be deemed to have Cause to terminate the Officer's employment
hereunder only upon the Officer's (F) conviction of a felony involving the
personal dishonesty or moral turpitude of the Officer, or (G) total and
permanent physical or mental disability, or (H) absence from work on a full-time
basis, due to physical or mental illness, for an uninterrupted 365-day period.
(c) The Officer may terminate the Officer's employment
hereunder, upon at least thirty (30) days' prior Notice of Termination delivered
to the Company, for failure of the Company to observe and perform one or more of
its obligations under Sections (1), (2), (3) and/or (4) hereof, which failure
the Company fails to remedy within such notice period (a Breach by the Company)
at a time when the Officer is not in default of any of the Officer's obligations
under Sections (1) and/or (2) hereof. The Officer may terminate his employment
hereunder in the absence of a Breach by the Company, effective upon at least six
(6) months' prior Notice of Termination delivered to the Company.
(d) Notice of Termination. Any termination of employment, by
the Company or by the Officer, shall be communicated by delivery of a written
Notice of Termination to the other party.
(e) Date of Termination. For purposes of this Agreement, the
Date of Termination is defined as: if the Officer's employment is terminated (A)
by his death, the date of his death, or (B) pursuant to Section (5)(b) or
Section (5)(c) hereof, the date specified in the Notice of Termination.
(6) CONSEQUENCES OF TERMINATION
(a) If the Officer's employment terminates by reason of the
Officer's death, the Company shall pay to the personal representative and/or
spouse of the Officer the Officer's Total Compensation earned prior to the Date
of Termination, any amounts payable pursuant to Sections (4)(c), (4)(d), 4(e),
and 4(f) hereof and any benefits or amounts payable on account of the Officer's
exercise of his phantom equity share rights under his long-term incentive
compensation arrangement phantom equity share agreement and/or under any
deferred compensation plan in which
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the Officer had been a participant, and the Company shall have no further
obligation under this Agreement.
(b) If the Officer terminates the Officer's employment
hereunder in the absence of a Breach by the Company and upon at least six (6)
months' prior Notice of Termination, the Company shall pay to the Officer and/or
the Officer's personal representative and/or spouse the Officer's Total
Compensation earned prior to the Date of Termination, any benefits or amounts
payable pursuant to sections (4)(c), (4)(d), 4(e) and 4(f) hereof and any
benefits or amounts payable on account of the Officer's exercise of his phantom
equity share rights under his long-term incentive compensation arrangement
phantom equity share agreement and/or under any deferred plan in which the
Officer had been a participant, and the company shall have no further obligation
to the Officer and/or Officer's personal representative and/or spouse under this
Agreement or on account of, or arising out of, the termination of the Officer's
employment.
(c) If the Company terminates the Officer's employment
hereunder with Cause, or if the Officer terminates the Officer's employment
hereunder in the absence of a Breach by the Company and upon less than six (6)
months' prior Notice of Termination, the Company shall pay to the Officer the
Officer's full Base Salary earned prior to the Date of Termination, any amounts
payable pursuant to Sections (4)(d), 4(e), and 4(f) hereof and any benefits or
amounts payable under any deferred compensation plan in which the Officer had
been a participant, and, provided that the Company are not in default of any of
its obligations hereunder, the Company shall have no further obligation to the
Officer under this Agreement or on account of, or arising out of, the
termination of the Officer's employment.
(d) If the Company terminates the Officer's employment
hereunder without Cause, or if the Officer terminates the Officer's employment
hereunder on account of a Breach by the Company:
(i) The Company shall pay to the Officer the
Officer's Total Compensation earned prior to the Date of Termination, any
amounts payable pursuant to Sections 4(c), 4(d), 4(e), and 4(f) hereof and any
benefits or amounts payable, on account of the Officer's exercise of his phantom
equity share rights under his long-term incentive compensation arrangement
phantom equity share agreement and/or under any deferred compensation plan in
which the Officer had been a participant.
(ii) The Company shall afford the Officer the
severance benefits set forth on Schedule A attached hereto.
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(iii) The payment to, and acceptance by, the Officer
of any sum of money or benefit prescribed in this Section (6)(d) shall effect
and evidence a release by the Officer of any and all claims against the Company
on account of, or arising out of, the termination of the Officer's employment.
(7) CHANGE IN CONTROL
For purposes of this Agreement, Change in Control of the Company shall
mean any of the following events:
(a) any merger or consolidation of the Company with any
corporate shareowner or group of corporate shareowners holding twenty-five
percent (.25) or more of the Common Stock of the Company (or a successor to the
Company, whether direct or indirect, by purchase, merger, consolidation or
otherwise - a "Successor"), or with any other corporation or group of
corporations that is, or after such merger or consolidation would be, or be
affiliated with, a shareowner or group of shareowners owning at least
twenty-five percent (.25) of the Common Stock of the Company or a Successor, or
(b) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition of any assets of the Company having an aggregate fair market
value of $50 million or more to or with any shareowner or group of shareowners
holding twenty-five percent (.25) or more of the Common Stock of the Company or
a Successor, or to or with any affiliate of any such shareowner or group of
shareowners; or
(c) the issuance or sale by the Company or a Successor, in
exchange for cash, securities or other consideration having an aggregate fair
market value of $50 million or more, of any securities of the Company to any
shareowner or group of shareowners holding twenty-five percent (.25) or more of
the Common Stock of the Company or a Successor, or to any affiliate of any such
shareowner or group of shareowners; or
(d) the implementation of any plan or proposal for the
liquidation or dissolution of the Company or a Successor, proposed by or on
behalf of any shareowner or group of shareowners owning at least twenty-five
percent (.25) of the Common Stock of the Company or a Successor, or by or on
behalf of any affiliate of any such shareowner or group of shareowners; or
(e) any reclassification of securities (including a reverse
stock split), or recapitalization, of the Company or a Successor, or any other
transaction, which has the effect,
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directly or indirectly, of increasing the proportionate share of outstanding
shares of any class of equity securities, or securities convertible into any
equity securities, of the Company or a Successor, which class of securities is
directly or indirectly owned by a shareowner or group of shareowners owning at
least twenty-five percent (.25) of the Common Stock of the Company or a
Successor, or by any affiliate of any such shareowner or group of shareowners.
The Board of Directors of the Company may, from time to time, by the
affirmative vote of not less than a majority of the entire membership of said
Board of Directors, at a meeting of said Board of Directors called and held for
the purpose, modify the phrase "twenty-five percent (.25)" in one or more of the
foregoing Sections (7)(a), (7)(b), (7)(c), (7)(d) and/or (7)(e) to a lesser
percentage, but not less than twenty percent (.20).
(8) ADDITIONAL CONSEQUENCES OF A CHANGE IN CONTROL
(a) In the event that a Change in Control has been approved by
all necessary shareholder, creditor and regulatory actions, the Company will,
not later than the day prior to the date of the Change in Control, pay to the
Trustee of The United Illuminating Company Supplemental Retirement Benefit Trust
established pursuant to the Agreement, made as of the 1st day of June, 1995
between the Company and State Street Bank and Trust Company, as Trustee, for the
benefit of the Officer, cash in an amount equal to: (A) In the event that the
Officer's employment has been terminated or will be terminated prior to the date
of the Change in Control, a sum, calculated by the Company's independent
certified public accountants, reasonably sufficient to pay and discharge the
largest of the Company's future obligations, if any, to the Officer and/or his
personal representative and/or spouse, under Section (6)(a), Section (6)(b) or
Section (6)(d) hereof; or (B) in the event that the Officer's employment has not
been terminated and will not be terminated prior to the date of the Change in
Control, a sum, calculated by the Company's independent certified public
accountants, reasonably sufficient to pay and discharge the Company's
obligations to the Officer under Section (6)(d) hereof assuming, for purposes of
such calculation, that the Officer's employment is terminated under said Section
(6)(d) by a Notice of Termination delivered on the date of the Change in Control
and specifying an immediate Date of Termination.
(b) On and after the date of the Change in Control, the
Officer's Base Salary may not be reduced by the Board of Directors to an annual
rate less than the rate fixed by the Board of Directors of the Company as a
result of its most recent review
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of salary rates, pursuant to Section (4)(a) hereof, prior to the date of the
Change in Control.
(9) TAX SAVINGS PROVISION
If any portion of the payments which the Officer has the right to
receive from the Company, or any affiliated entity, hereunder would constitute
"excess parachute payments" (as defined in Section 280G of the Internal Revenue
Code, and not governed by the terms defined in this Agreement) subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code, such excess
parachute payments shall be reduced to the largest amount that will result in no
portion of such excess parachute payments being subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code.
(10) CONFIDENTIAL INFORMATION
The Officer recognizes that Officer's employment by the Company is one
of the highest trust and confidence by reason of his access to and contract with
certain trade secrets and confidential and proprietary information of and
concerning the Company. The Officer agrees and covenants to use his best efforts
and exercise utmost diligence to protect and safeguard the trade secrets,
confidential business practices and proprietary information of and concerning
the Company, including, but not limited to, methods of doing business and
employees' compensation and contract terms (all of which are referred to as
"Proprietary Information") that are practices of or owned by either the Company
or any person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the Company. The
Officer further agrees and covenants that, except with the prior written consent
of the Company, he will not, either during the term hereof or thereafter,
directly or indirectly, use for his own benefit or for the benefit of any other
person or organization, or disclose, disseminate or distribute to any other
person or organization, any of the Proprietary Information (whether or not
acquired, learned, obtained or developed by the Officer alone or in conjunction
with another), unless and until such Proprietary Information has become a matter
of public knowledge through no action or fault of the Officer or unless
otherwise required by court order to comply with legal process. All memoranda,
notes, records, drawings, documents or other writings whatsoever made, compiled,
acquired or received by the Officer during the term hereof arising out of, in
connection with, or related to any activity or business of the Company are and
shall continue to be the sole and exclusive property of the Company, and shall,
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together with all copies thereof, be returned and delivered to the Company by
the Officer immediately, when he ceases to be employed by the Company, or at any
other time upon the Company's demand.
(11) NON-INTERFERENCE
The Officer agrees and covenants that, for a period of twelve (12)
months following the month during which he ceases to be employed by the Company,
he will not, unless the Company shall have granted prior written approval (which
may be withheld for any reason), for any reason whatsoever, in any capacity,
directly or indirectly:
(A) interfere with the relationship between the Company and any of its
employees, agents or representatives; or
(B) directly or indirectly divert or attempt to divert from the
Company any business in which the Company has been actively
engaged during the term hereof, or interfere with the
relationship between the Company and any other person in doing
business.
(12) ENFORCEMENT; SUCCESSORS; BINDING AGREEMENT
(a) The Company shall pay to the Officer and/or the Officer's
personal or legal representative and/or spouse all legal fees and expenses and
court costs, if any, incurred by the Officer and/or the Officer's personal or
legal representative and/or spouse in successful litigation to enforce the
Officer's rights under this Agreement.
(b) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, by agreement in form
and substance reasonably satisfactory to the Officer, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place. Failure of the Company to obtain such agreement by the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Officer to compensation from the Company in the same amount and upon the same
terms as the Officer would be entitled to hereunder if the Officer terminated
the Officer's employment upon Breach by the Company, except that, for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in this Agreement,
the term "the Company" shall include UIL Holdings Corporation and any successor
as aforesaid to the business or assets of UIL Holdings
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Corporation which executes and delivers the agreement provided for in this
Section (12) or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.
(c) This Agreement and all rights of the Officer hereunder
shall inure to the benefit of and be enforceable by the Officer's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, divisees and legatees. If the Officer should die while any amounts
would still be payable to the Officer hereunder if the Officer had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Officer's devisee, legatee or
other designee or, if there be no such designee, to the Officer's estate.
(13) NOTICES
For the purpose of this Agreement, notices and all other communications
to either party hereunder provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States certified or registered mail, return receipt requested, postage prepaid,
addressed, in the case of the Company, UIL Holdings Corporation, 000 Xxxxxx
Xxxxxx, Xxx Xxxxx, Xxxxxxxxxxx, Attention: Secretary, or, in the case of the
Officer, to the Officer at his residence, or to such other address as either
party shall designate by giving written notice of such change to the other
party.
(14) MISCELLANEOUS
(a) This Agreement supercedes and replaces the Employment
Agreement between the Officer and United Capital Investments, Inc. dated as of
May 1, 2001, which earlier agreement is hereby terminated as of the date of this
Agreement.
(b) No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is approved by the
Board of Directors of the Company and agreed to in a writing signed by the
Officer and such officer of the Company as may be specifically authorized by the
Board of Directors of the Company. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of any similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party that are not
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set forth expressly in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Connecticut.
(15) VALIDITY
The validity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
(16) SURVIVAL
The provisions of this Agreement shall not survive the termination of
this Agreement or of the Officer's employment hereunder, except that the
provisions of Sections (4), (6), (7), (8), (9), (10), (11), (12) and (13) hereof
shall survive such termination and shall be binding upon the Company's
successors and assigns.
(17) COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
UIL HOLDINGS CORPORATION
Attest:
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxxxx X. Xxxxxxx
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Secretary Chairman of the Board of
Directors, President and
Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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SCHEDULE A
Severance Benefits
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The Company shall:
(i) pay to the Officer, within 30 days, a lump sum payment in an amount
equal to two (2) times the sum of the Officer's Base Salary rate
immediately prior to the date of the Officer's termination and the
target amount payable to the Officer under any annual Executive
Incentive Compensation Program of the Company; and (ii) maintain in
full force and effect, for the continued benefit of the Officer for the
period ending on the second anniversary of the date of the Officer's
termination, all employee benefit plans and programs in which the
Officer was entitled to participate immediately prior to the date of
the Officer's termination, provided that the Officer's continued
participation is possible under the general terms and provisions of
such plans and programs and applicable law and, if the Officer's
participation in any such plan or program is barred as a result of the
Officer's termination, the Company shall arrange to provide the Officer
with benefits substantially similar on an after-tax basis to those that
the Officer would have been entitled to receive under such plan or
program; and (iii) afford the Officer the addition of two (2) years of
service deemed as an employee of the Company in the calculation of the
benefits payable to the Officer under the retiree medical benefit
plan(s) of the Company and in the calculation of the benefits payable
to the Officer as a supplemental retirement benefit under the Officer's
Employment Agreement.
